EXHIBIT 2.07
AGREEMENT TO CONSOLIDATE FIRST NATIONAL BANK
AND SURETY BANK, NATIONAL ASSOCIATION UNDER THE
CHARTER OF SURETY BANK, NATIONAL ASSOCIATION AND UNDER
THE TITLE OF SURETY BANK, NATIONAL ASSOCIATION
CONSOLIDATION AGREEMENT made this _____ day of ___________, 199___, between
SURETY BANK, NATIONAL ASSOCIATION ("Surety Bank") and FIRST NATIONAL BANK
("First Bank") and joined in by SURETY ACQUISITION, INC., a Texas corporation
("Newco") (prior to the Holding Company Merger known as "First Midlothian
Corporation") and SURETY CAPITAL CORPORATION, a Delaware corporation ("Surety").
WITNESSETH:
A. Surety Bank is a national banking association duly organized and
existing under the laws of the United States of America having its principal
offices in the City of Lufkin, County of Angelina, State of Texas.
B. First Bank is a national banking association duly organized and
existing under the laws of the United States having its principal offices in the
City of Midlothian, County of Xxxxx, State of Texas.
C. First Bank has, and will have as of the Effective Time, (i) authorized
capital stock of $480,000 consisting of 48,000 shares of common stock, $10.00
par value ("First Bank Common Stock"), of which 48,000 shares are, or will be as
of the Effective Time, issued and outstanding and (ii) surplus of not less than
$1,000,000.
D. All of the issued and outstanding shares of First Bank Common Stock
are and will be as of the Effective Time held of record and beneficially by
Newco.
E. Surety Bank has, and will have as of the Effective Time, (i)
authorized capital stock of $5,460,000 consisting of 6,000,000 shares of common
stock, $0.91 par value ("Surety Bank Common Stock"), of which 3,708,195 shares
are, or will be as of the Effective Time, issued and outstanding and (ii)
surplus of not less than $5,330,000.
F. Over ninety-nine percent (99%) of all of the issued and outstanding
shares of Surety Bank Common Stock are and will be as of the Effective Time held
of record and beneficially by Surety.
G. A majority of the Boards of Directors of First Bank and of Surety Bank
has approved this Consolidation Agreement under which First Bank and Surety Bank
shall be consolidated (the "Bank Consolidation") under the charter of Surety
Bank and has authorized the execution hereof; the Board of Directors of Newco
has approved this Consolidation Agreement, authorized Newco to join in and be
bound by this Consolidation Agreement, and authorized the undertakings herein
made by Newco; and the Board of Directors of Surety
has approved this Consolidation Agreement, authorized Surety to join in and be
bound by this Consolidation Agreement, and authorized the undertakings herein
made by Surety.
H. Surety; Surety Bank; First Midlothian Corporation, a Texas corporation
registered as a bank holding company located in Midlothian, Texas ("First
Midlothian"); certain of the shareholders of First Midlothian (the
"Shareholders"); and First Bank have entered into a Reorganization Agreement
dated October 17, 1995 (the "Reorganization Agreement") which contemplates the
Bank Consolidation provided for in this Consolidation Agreement. All terms not
defined in this Consolidation Agreement shall have the meaning set forth in the
Reorganization Agreement.
I. As and when required by the provisions of this Consolidation Agreement
or the Reorganization Agreement (hereinafter referred to collectively as the
"Consolidation Plan"), all such action as may be necessary or appropriate shall
be taken by Surety Bank, First Bank, Newco and Surety in order to consummate the
Bank Consolidation.
NOW, THEREFORE, in consideration of the premises, Surety Bank and First
Bank, joined by Newco and Surety, hereby agree that First Bank and Surety Bank
shall be consolidated under the charter of Surety Bank on the following terms
and conditions:
1. At the Effective Time, First Bank and Surety Bank shall be
consolidated under the Articles of Association and Charter of Surety Bank. Said
Bank Consolidation shall be pursuant to the provisions of and with the effect
provided in 12 U.S.C. Section 215.
2. At the Effective Time, the name of Surety Bank (hereinafter referred
to as "Continuing Bank" whenever reference is made to it as of the time of Bank
Consolidation or thereafter) shall continue to be "Surety Bank, National
Association"; the Articles of Association of Continuing Bank shall be as set
forth in ANNEX A attached hereto and made a part hereof; the bylaws of Surety
Bank in effect immediately prior to the Bank Consolidation shall become the
bylaws of Continuing Bank; the established office and facilities of First Bank
immediately prior to the Bank Consolidation shall become the established office
and facilities of Continuing Bank; and the established office and facilities of
Surety Bank immediately prior to the Bank Consolidation shall continue and be
operated as a branch of Continuing Bank.
3. At the Effective Time, the corporate existence of Surety Bank and
First Bank shall, as provided in 12 U.S.C. Section 215, be merged into and
continued in Continuing Bank; and Continuing Bank shall be deemed to be the same
corporation as Surety Bank and First Bank. All rights, franchises and interests
of Surety Bank and First Bank, respectively, in and to every type of property
(real, personal and mixed) and choses in action shall be transferred to and
vested in Continuing Bank by virtue of such Bank Consolidation without any deed
or other transfer. Continuing Bank at the
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Effective Time and without any order or other action on the part of any court or
otherwise, shall hold and enjoy all rights of property, franchises and
interests, including appointments, designations and nominations, and all other
rights and interests as trustee, executor, administrator, transfer agent and
registrar of stocks and bonds, guardian of estates, assignee, receiver, and in
every other fiduciary capacity, and in every agency capacity, in the same manner
and to the same extent as such rights, franchises and interests were held or
enjoyed by Surety Bank and First Bank, respectively, at the Effective Time,
subject, however, to the provisions of 12 U.S.C. Section 215(f).
4. At the Effective Time, Continuing Bank shall be liable for all
liabilities of Surety Bank and of First Bank, respectively; and all deposits,
debts, liabilities, obligations and contracts of Surety Bank and of First Bank,
respectively, matured or unmatured, whether accrued, absolute, contingent or
otherwise, and whether or not reflected or reserved against on balance sheets,
books of account or records of Surety Bank or First Bank, as the case may be,
including all liabilities of Surety Bank and First Bank for taxes, whether
existing at the Effective Time or arising as a result of or pursuant to the Bank
Consolidation, shall be those of Continuing Bank and shall not be released or
impaired by the Bank Consolidation; and all rights of creditors and other
obligees and all liens on property of either Surety Bank or First Bank shall be
preserved unimpaired.
5. At the Effective Time:
(a) All shares of First Bank Common Stock outstanding at the
Effective Time held by Newco shall, without any action on the part of Newco, be
cancelled and be of no further force and effect.
(b) Each share of Surety Bank Common Stock outstanding at the
Effective Time held by the shareholders of Surety Bank, other than shares of
Surety Bank Common Stock held of record by Surety and Dissenting Shares (as
hereinafter defined), without any action on the part of the shareholders of
Surety Bank, shall be converted into and exchanged for the right to receive cash
equal to: (i) the product obtained by multiplying the number of shares of
common stock of Surety (the "Surety Common Stock") issued and outstanding on the
date of approval of the Bank Consolidation by the Office of the Comptroller of
the Currency (the "Approval Date") by the average of the high and low prices of
such Surety Common Stock on the American Stock Exchange, Inc. on the Approval
Date, divided by (ii) the number of shares of Surety Bank Common Stock issued
and outstanding on the Approval Date (the "Exchange Price").
(c) Each share of Surety Bank Common Stock issued and outstanding at
the Effective Time and held of record by Surety shall be converted into one
share of common stock of Continuing Bank.
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(d) For purposes of this Merger Agreement, "Dissenting Shares" shall
refer to those shares of Surety Bank Common Stock owned by shareholders of
Surety Bank who, pursuant to 12 U.S.C. Section 215, (i) vote against the Bank
Consolidation at the meeting of the shareholders of Surety Bank to consider and
vote on the Bank Consolidation referred to in Section 4(b) of the Reorganization
Agreement, or who give notice in writing at or prior to such meeting to the
presiding officer of Surety Bank that he dissents from the Bank Consolidation
and (ii) within thirty (30) days after the date of consummation of the Bank
Consolidation, request in writing from Continuing Bank payment of the value of
their shares of Surety Bank Common Stock, accompanied by the surrender of the
stock certificates evidencing such Surety Bank Common Stock. Notwithstanding
anything in this Consolidation Agreement to the contrary, Dissenting Shares
shall not be converted into the right to receive, or be exchangeable for, cash
as provided in SECTION 5(b) hereof, but, instead, the holders thereof shall be
entitled to payment of the value of such Dissenting Shares on the Approval Date
determined in accordance with the provisions of 12 U.S.C. Sections 215(c) and
(d).
6. After the Effective Time:
(a) The shareholders of Surety Bank, other than Surety and the
holders of Dissenting Shares, as the holders of the outstanding certificate or
certificates which prior thereto represented shares of Surety Bank Common Stock,
may surrender same to Continuing Bank, and such shareholders of Surety Bank
shall be entitled upon such surrender to receive from Continuing Bank in
exchange therefor, without cost to such holder, the Exchange Price for each
share of Surety Bank Common Stock represented by such outstanding certificate or
certificates surrendered.
(b) Until so surrendered, each such outstanding certificate which,
prior to the Effective Time, represented shares of Surety Bank Common Stock
shall be deemed for all purposes to evidence solely the right to receive the
amount of cash into and for which such shares of Surety Bank Common Stock shall
have been converted pursuant to SECTION 5(b) hereof. No interest shall be
payable with respect to any such cash payments. If a shareholder of Surety Bank
is unable to locate any of his certificates which prior to the Effective Time
represented shares of Surety Bank Common Stock, Continuing Bank shall issue a
check to such shareholder in the amount which such shareholder would otherwise
be entitled to receive hereunder without surrendering such certificate, upon
receipt by Continuing Bank of an indemnity bond in favor of Continuing Bank and
satisfactory in all respects to Continuing Bank.
(c) The stock transfer books of Surety Bank shall be closed as of the
close of business on the Closing Date (hereinafter defined), and no transfer of
record of any of the shares of Surety Bank Common Stock shall take place
thereafter. From and after the close of business on the Closing Date, shares of
Surety Bank Common
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Stock shall cease to be shares of Surety Bank, irrespective of whether such
shares are ultimately surrendered.
7. The directors, advisory directors and officers, respectively, of
Continuing Bank at the Effective Time shall be those persons who are directors,
advisory directors and officers, respectively, of Surety Bank immediately before
the Effective Time. The committees of the Board of Directors of Continuing Bank
at the Effective Time shall be the same as, and shall be composed of the same
persons who are serving on, committees of the Board of Directors of Surety Bank
as they exist immediately before the Effective Time.
8. This Consolidation Agreement shall be approved by Newco, the sole
shareholder of First Bank pursuant to a Unanimous Consent executed and delivered
by such sole shareholder in accordance with the Reorganization Agreement. This
Consolidation Agreement shall be submitted to the shareholders of Surety Bank,
at a meeting called to be held as promptly as practicable in accordance with the
Reorganization Agreement. Upon approval of the shareholders of Surety Bank and
First Bank, this Consolidation Agreement shall be made effective as soon as
practicable thereafter in the manner provided in SECTION 12 hereof.
9. The Consolidation Plan shall be automatically terminated and abandoned
at any time prior to or on the Closing Date, whether before or after action
thereon by the shareholders of Surety Bank or First Bank, in the event the
Holding Company Merger is not consummated, for any reason whatsoever, and may be
terminated and abandoned at any time prior to or on the Closing Date, whether
before or after action thereon by the shareholders of Surety Bank or First Bank
by the mutual consent in writing of Surety Bank and First Bank.
10. In the event of the termination and abandonment of the Consolidation
Plan pursuant to the provisions of SECTION 9 hereof, the same shall be of no
further force or effect except that the indemnification provisions set forth in
Section 11 and the provisions relating to expenses set forth in Section 9 of the
Reorganization Agreement shall survive any such termination and abandonment.
11. Any of the terms or conditions of the Consolidation Plan may be waived
at any time, whether before or after action thereon by the shareholders of
Surety Bank or First Bank, by the party which is entitled to the benefits
thereof; and this Consolidation Agreement or the Reorganization Agreement may be
modified or amended at any time, whether before or after action thereon by the
shareholders of Surety Bank or First Bank; provided, however, that such action
shall be taken only if, in the judgment of Surety Bank and First Bank, such
waiver, modification or amendment will not have a materially adverse effect on
Surety Bank, First Bank or their respective shareholders. Any waiver,
modification or amendment shall be in writing.
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12. The "Closing Date" shall have the meaning set forth in the Holding
Company Merger Agreement. The closing (the "Closing") shall be held at the
offices of Surety located in Hurst, Texas on the Closing Date. At the Closing,
Newco shall deliver to Surety Bank all of the stock certificates evidencing
issued and outstanding shares of common stock of First Bank. Subject to the
terms, and upon satisfaction on or before the Closing Date of all requirements
of law and the conditions specified in the Consolidation Plan, including receipt
of the approval of the Comptroller of the Currency specified in 12 U.S.C.
Section 215, the Bank Consolidation shall become effective at the time
specified in the certificate to be issued by the Comptroller of the Currency
under the seal of his office approving the Bank Consolidation, such time
being herein called the "Effective Time."
13. For the convenience of the parties hereto and to facilitate the filing
and recording of this Consolidation Agreement, any number of counterparts
thereof may be executed, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument, but only one of
which need be produced.
IN WITNESS WHEREOF, Surety Bank has caused this Consolidation Agreement to
be executed in counterparts by its duly authorized officers and its corporate
seal to be hereunto affixed as of the date first above written, and the
directors constituting all of the Board of Directors of such banking association
have hereunto subscribed their names.
SURETY BANK: SURETY BANK, NATIONAL ASSOCIATION
By:___________________________________________
Xxxxx X. Xxxxxxx, President
ATTEST:
__________________________________
Xxxxxx X. Xxxxx, Cashier
ALL OF THE DIRECTORS OF
SURETY BANK, NATIONAL ASSOCIATION
______________________________________________
C. Xxxx Xxxx
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______________________________________________
Xxxxxxx X. Xxxx
______________________________________________
Xxxxx X. Xxxxxxx
______________________________________________
Xxxxxx X. Xxxxxx
______________________________________________
X. X. Xxxxxxxxxxx, III
______________________________________________
Xxxxxxx X. Xxxxx
______________________________________________
Xxxxxxx Xxxxxx
______________________________________________
Xxxxxx X. Xxxxxx
THE STATE OF TEXAS )
)
COUNTY OF _____________ )
On this _______ day of ______________, 199___, before me, a Notary Public
for the State and County aforesaid, personally came Xxxxx X. Xxxxxxx as
President and Xxxxxx X. Xxxxx as Cashier, of SURETY BANK, NATIONAL ASSOCIATION,
a national banking association, and each in his said capacity acknowledged the
foregoing instrument to be the act and deed of said association and the seal
affixed thereto to be its seal; and came also C. Xxxx Xxxx, Xxxxxxx X. Xxxx,
Xxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx, X. X. Xxxxxxxxxxx, III, Xxxxxxx X. Xxxxx,
Xxxxxxx Xxxxxx and Xxxxxx X. Xxxxxx, being all of the Board of Directors of said
association and each of them acknowledged said instrument to be the act and deed
of said association and of himself as director thereof.
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WITNESS my official seal and signature this day and year aforesaid.
_______________________________________________
Notary Public, State of Texas
_______________________________________________
(Print or Type Notary's Name)
My Commission Expires:
_______________________
IN WITNESS WHEREOF, First Bank has caused this Consolidation Agreement to
be executed in counterparts by its duly authorized officers and its corporate
seal to be hereunto affixed as of the date first above written, and the
directors constituting all of the Board of Directors of such banking association
have hereunto subscribed their names.
FIRST BANK: FIRST NATIONAL BANK
By:____________________________________________
Xxxxx X. Xxxxxxx, President
ATTEST:
__________________________________
Xxxxx Xxxxxx, Cashier
ALL OF THE DIRECTORS OF
FIRST NATIONAL BANK
_______________________________________________
Xxxxxx Xx Xxxxx
_______________________________________________
Xxxxxxx X. Xxxxx
_______________________________________________
X. X. Xxxxxxxxxx, Xx.
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_______________________________________________
Xxxxx X. Xxxxxxx
_______________________________________________
X. X. Xxxxxxx
_______________________________________________
X. X. Xxxxxxx
_______________________________________________
Xxx X. Xxxxxxx
_______________________________________________
E. L. Xxxx
THE STATE OF TEXAS )
)
COUNTY OF ____________ )
On this _______ day of _________________, 199___, before me, a Notary
Public for the State and County aforesaid, personally came Xxxxx X. Xxxxxxx as
President and Xxxxx Xxxxxx as Cashier, of FIRST NATIONAL BANK, a national
banking association, and each in his/her said capacity acknowledged the
foregoing instrument to be the act and deed of said association and the seal
affixed thereto to be its seal; and came also Xxxxxx Xx Xxxxx, Xxxxxxx X. Xxxxx,
X. X. Xxxxxxxxxx, Xx., Xxxxx X. Xxxxxxx, X. X. Xxxxxxx, X. X. Xxxxxxx, Xxx X.
Xxxxxxx and E. L. Xxxx, being all of the Board of Directors of said association
and each of them acknowledged said instrument to be the act and deed of said
association and of himself or herself as director thereof.
WITNESS my official seal and signature this day and year aforesaid.
_______________________________________________
Notary Public, State of Texas
_______________________________________________
(Print or Type Notary's Name)
My Commission Expires:
_________________________
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Newco hereby joins in the foregoing Consolidation Agreement, and undertakes
that it will be bound thereby and will do and perform all acts and things
therein referred to or provided to be done by it.
IN WITNESS WHEREOF, Newco has caused this undertaking to be made in
counterparts by its duly authorized officers and its corporate seal to be
hereunto affixed as of the date first above written.
NEWCO: SURETY ACQUISITION, INC.
By:_______________________________________________
____________________________________, President
ATTEST:
_______________________________
____________________, Secretary
Surety hereby joins in the foregoing Consolidation Agreement, and
undertakes that it will be bound thereby and will do and perform all acts and
things therein referred to or provided to be done by it.
IN WITNESS WHEREOF, Surety has caused this undertaking to be made in
counterparts by its duly authorized officers and its corporate seal to be
hereunto affixed as of the date first above written.
SURETY: SURETY CAPITAL CORPORATION
By:_____________________________________________
X. X. Xxxxxxxxxxx, III, President
ATTEST:
____________________________
Xxxxx X. Xxxxxxx, Secretary
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