EXHIBIT 2.1
MERGER AGREEMENT
DATE: October 7, 1996
PARTIES: PFC Acquisition Corp.
0000 Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000 ("PFC Acquisition")
United Community Bancshares, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000 ("United")
Park Financial Corporation
0000 Xxxxxxx Xxxxxxxxx
Xx. Xxxxx Xxxx, XX 00000 (the "Company")
The Park Financial Corporation Common
Stock Revocable Trust, Under Agreement
Dated May 28, 1980
c/o J. Xxxxx Xxxxxxx, Esq.
Xxxxxxxxx & Xxxxxx P.L.L.P.
0000 XXX Xxxxxx
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000 (the "Trust")
RECITALS:
A. United is a corporation organized and existing under the laws of the
State of Minnesota and is a registered bank holding company under the Bank
Holding Company Act of 1956, as amended, and owns 100% of the issued and
outstanding capital stock of PFC Acquisition, a Minnesota corporation.
B. The Company is a corporation organized and existing under the laws of
the State of Minnesota and is a registered bank holding company under the Bank
Holding Company Act of 1956, as amended.
C. The Company currently owns 130,000 shares (which represents 100%) of
the issued and outstanding capital stock of Park National Bank ("Bank"), a
banking corporation organized and existing under the laws of the United States
of America and having its principal place of business in St. Louis Park,
Minnesota.
D. The Trust currently owns 340,000 shares (which represent 70.07% on a
fully-diluted basis) of the issued and outstanding capital stock of the Company.
E. If the conditions for the merger contemplated herein are satisfied,
the parties desire that PFC Acquisition be merged with and into the Company (the
"Merger"), such that all current shareholders of the Company receive cash (but
no stock) in connection with the Merger, pursuant to this Agreement.
F. The Board of Directors of each of PFC Acquisition and of the Company
has determined that it would be in the best interests of such party and its
shareholders, for PFC Acquisition to merge with and into the Company.
G. The Board of Directors of each of PFC Acquisition and of the Company
has approved this Agreement and the Plan of Merger attached hereto as Exhibit A
(the "Plan of Merger"), has authorized the execution, delivery and performance
of this Agreement and the Plan of Merger on behalf of such party, and has
directed the submission of the terms of this Agreement and the Plan of Merger to
the shareholders of such party.
AGREEMENTS:
IN CONSIDERATION for the mutual covenants set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS.
(a) SPECIFIC DEFINITIONS. For purposes of this Agreement, the
following terms shall have the following meanings:
"AGREEMENT" means this Merger Agreement.
"ARTICLES OF MERGER" means the Articles of Merger in the form
attached hereto as Exhibit B.
"BANK" means Park National Bank.
"CLOSING" and "CLOSING DATE" are defined in Section 4.
"COMPANY" means Park Financial Corporation.
"COMPANY BOOK VALUE" means that amount equal to the sum of the
Company's capital, surplus and undivided profits account, plus
year-to-date earnings through the Valuation Date, but excluding the
net unrealized gains or losses on available-for-sale securities
(recorded under the provisions of FASB 115), calculated in accordance
with GAAP, or as required by regulatory accounting principles,
consistently applied.
"EMPLOYEE PLAN" is defined in Section 5(p).
"FINANCIAL STATEMENT" is defined in Section 5(k).
"GAAP" means generally accepted accounting principles.
"MBCA" means the Minnesota Business Corporation Act, as currently
in effect and as it may be hereafter amended.
"MERGER" means the merger of PFC Acquisition with and into the
Company as contemplated herein.
"MERGER CONSIDERATION" is defined in Section 3(c).
"MERGER EFFECTIVE TIME" is defined in Section 4.
"PFC ACQUISITION" means PFC Acquisition Corp., a Minnesota
corporation and a wholly-owned subsidiary of United.
"PLAN OF MERGER" means the Plan of Merger in the form attached
hereto as Exhibit A.
"SHARES" means all of the issued and outstanding capital stock of
the Company, consisting of an aggregate of 485,210 shares of common
stock on a fully-diluted basis, owned by Company shareholders other
than PFC Acquisition.
"SURVIVING CORPORATION" means the Company following the Merger.
"TRUST" means The Park Financial Corporation Common Stock
Revocable Trust, Under Agreement Dated May 28, 1980.
"UNITED" means United Community Bancshares, Inc., a Minnesota
corporation.
"VALUATION DATE" means the close of business on November 30,
1996.
"VALUATION DATE FINANCIAL STATEMENTS" is defined in Section 3(c).
"XYZ LOAN AMOUNT" and "XYZ LOAN AGENT" are each defined in
Section 9(f).
(b) OTHER DEFINITIONAL PROVISIONS.
(i) The words "hereof," "herein," and "hereunder" and words of
similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provisions of this
Agreement.
(ii) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vise versa.
(iii) References to an "Exhibit" or to a "Schedule" are,
unless otherwise specified, to one of the Exhibits or Schedules
attached to or referenced in this Agreement, and references to a
"Recital" or a "Section" are, unless otherwise specified, to one of
the Recitals or Sections of this Agreement.
2. MERGER. At the Merger Effective Time, pursuant to the provisions of
this Agreement and the Plan of Merger and pursuant to the provisions of the
MBCA, PFC Acquisition shall be merged with and into the Company, which shall be
the surviving corporation in the Merger (the "Surviving Corporation"), and the
separate existence of PFC Acquisition shall thereupon cease. After the Merger
Effective Time, the existence and corporate organization of Park Financial
Corporation shall continue in effect as the Surviving Corporation. The name of
the Surviving Corporation shall be "Park Financial Corporation."
(a) ARTICLES OF INCORPORATION OF SURVIVING CORPORATION. At the
Merger Effective Time, the Articles of Incorporation of the Company then in
effect shall constitute and be the Articles of Incorporation of the
Surviving Corporation until amended or changed as provided therein or by
law.
(b) BYLAWS OF SURVIVING CORPORATION. At the Merger Effective Time,
the Bylaws of the Company then in effect shall constitute and be the Bylaws
of the Surviving Corporation until amended or changed as provided therein
or by law.
(c) BOARD OF DIRECTORS OF SURVIVING CORPORATION. At the Merger
Effective Time and continuing thereafter, the members of the Board of
Directors of the Surviving Corporation shall be: R. Xxxxx Xxxxx, Xxxxx X.
Xxxx, Xxxxxx X. X'Xxxxx, Xxxx X. XxXxx, and Xxxxxx X. Xxxxxx, until such
board may be changed or reconstituted as provided by the Articles of
Incorporation or Bylaws of the Surviving Corporation, or by law.
(d) OFFICERS OF SURVIVING CORPORATION. At the Merger Effective Time
and continuing thereafter, the individuals holding officer positions in the
Surviving Corporation shall be: Xxxxx X. Xxxx as Chairman, R. Xxxxx Xxxxx
as President, Xxxxxx X. X'Xxxxx as Chief Financial Officer, Xxxxxx X.
Xxxxxx as Vice President, and Xxxx X. XxXxx as Secretary, until such
officers may be changed as provided by the Articles of Incorporation or
Bylaws of the Surviving Corporation, or by law.
(e) CERTAIN EFFECTS OF THE MERGER. At the Merger Effective Time, the
Surviving Corporation shall succeed to and possess all the rights,
privileges, powers, franchises and immunities of a public as well as of a
private nature, and be subject to all liabilities, restrictions,
disabilities, and duties of both of PFC Acquisition and the Company; and
all and singular, the rights, privileges, powers, franchises and immunities
of both of PFC Acquisition and the Company and all properties, real,
personal and mixed, and all other things in action of or belonging to
either of PFC Acquisition or the Company on whatever account, shall be
vested in the Surviving Corporation; and all properties, assets, rights,
privileges, powers, franchises, immunities and all and every other interest
shall be thereafter as effectively the property of the Surviving
Corporation as they were or would be of PFC Acquisition and the Company or
either of them; and title to any real estate or any interest therein vested
by deed or otherwise in either of PFC Acquisition and the Company shall not
revert or be in any way impaired by any reason of the Merger; provided,
however, that all rights of creditors and all liens upon any property of
either of PFC Acquisition or the Company shall be preserved unimpaired,
limited in lien to the property affected by such liens at the Merger
Effective Time, and all debts, liabilities and duties of either of PFC
Acquisition or the Company shall thenceforth become those of the Surviving
Corporation and may be enforced against the Surviving Corporation to the
same extent as if such debts, liabilities and duties had been incurred or
contracted by the Surviving Corporation.
(f) FURTHER ASSURANCES. If at any time after the Merger Effective
Time the Surviving Corporation shall consider or be advised that any
instruments of further assurance are desirable in order to evidence the
vesting in it of the title of either of PFC Acquisition or the Company to
any of the property rights of PFC Acquisition or the Company, the
appropriate officers or directors of PFC Acquisition or of the Company, as
the case may be, are hereby authorized to execute, acknowledge and deliver
all such instruments of further assurance and to do all other acts or
things, either in the name of PFC Acquisition, in the name of the Company,
or in the name of the Surviving Corporation, as may be requisite or
desirable to carry out the provisions of this Agreement and the Plan of
Merger.
3. CONVERSION OF SHARES. The manner and basis of converting the shares
of stock of PFC Acquisition into shares of stock of the Surviving Corporation,
and the manner and basis of converting the shares of stock of the Company into
money and the payment therefor, in the Merger, shall be as follows:
(a) PFC ACQUISITION SHARES. At the Merger Effective Time, each share
of Common Stock of PFC Acquisition then outstanding shall, by virtue of the
Merger and without any further action on the part of the holder thereof, be
converted into and thereafter shall constitute one issued and outstanding
share of the Common Stock of the Surviving Corporation.
(b) THE COMPANY SHARES. At the Merger Effective Time, each share of
Common Stock of the Company then outstanding (and held by a shareholder
other than PFC Acquisition) shall, by virtue of the Merger and without any
further action on the part of the holder thereof, be converted into and
thereafter shall constitute the right to receive a cash payment equal to
(i) the Merger Consideration less the XYZ Loan Amount, divided by (ii) the
number of Shares.
(c) MERGER CONSIDERATION. The total merger consideration for the
Shares (the "Merger Consideration") shall be the sum of:
(i) the Company Book Value as of the Valuation Date;
(ii) plus a premium of $21,110,000.00;
(iii) plus $8,000 per day from the Valuation Date through
December 31, 1996;
(iv) plus $9,500 per day from January 1, 1997 through the Closing
Date.
On or before December 11, 1996, the Company shall deliver to PFC
Acquisition the Company's balance sheet as of, and the Company's income
statement for the period ending on, the Valuation Date (the "Valuation Date
Financial Statements"). Any objection by PFC Acquisition to the Valuation
Date Financial Statements must be raised in a written notice delivered to
the Company on or before December 20, 1996. In the event any such
objection is raised, the parties will work together in good faith to
resolve the dispute as promptly as possible. Promptly upon receipt of
undisputed Valuation Date Financial Statements or, if there is any dispute,
upon resolution of such dispute, the parties will cooperate to calculate
the Merger Consideration. The Valuation Date Financial Statements shall
reflect the exercise of the options referred to in Section 9(j).
(d) PAYMENT. The Merger Consideration for the Shares shall be paid
as follows:
(i) XYZ LOAN AMOUNT. An amount equal to the XYZ Loan Amount
shall be paid to the XYZ Loan Agent on the Closing Date, all as
described in Section 9(f).
(ii) FINAL CASH PAYMENT. The Merger Consideration, reduced by
the amount specified in (i) above, shall be paid to the Company's
shareholders entitled thereto on the Closing Date, by certified or
bank cashier's check, or in the case of the Trust, by wire transfer to
an account or accounts designated by the Trust.
(e) COMPANY DISSENTING SHARES. Each Share outstanding immediately
prior to the Merger Effective Time, the holder of which has perfected such
holder's dissenters' rights (under MBCA Section 302A.471 ET SEQ.) to be
paid fair value for such holder's shares, and as of the Closing Date has
continued to preserve such holder's right to exercise such rights (such
shares referred to as "Company Dissenting Shares"), shall not represent a
right to receive the cash payment pursuant to Section 3(b). The holders of
Company Dissenting Shares shall be entitled only to such rights as are
granted by MBCA Section 302A.471 ET SEQ. Each holder of Company Dissenting
Shares who becomes entitled to payment for such holder's Shares pursuant to
MBCA Section 302A.471 ET SEQ. shall receive payment therefor from the
Surviving Corporation (but only pursuant to the MBCA or as otherwise agreed
upon by such holder and the Surviving Corporation). Company Dissenting
Shares shall be considered as being outstanding immediately prior to the
Valuation Date for purposes of calculating the Merger Consideration.
4. EFFECTIVE TIME; CLOSING. The Merger shall become effective on the
later of (a) the close of business on the date of filing of the executed
Articles of Merger with the Secretary of State of Minnesota in the manner
described in MBCA Section 302A.011, Subd. 11 and MBCA Section 302A.615, Subd. 2,
and (b) 12:01 a.m. January 16, 1997 (the "Merger Effective Time"). The parties
acknowledge that United is conducting a public offering of its securities, and
in connection therewith the parties intend to pre-file the Articles of Merger on
January 13, 1997, which is the date the underwriter intends to price the
securities. The closing ("Closing") of the transaction contemplated by this
Agreement will take place in the offices of Xxxxxxxxxx & Xxxxx, P.A., 1100
International Centre, 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, at
10:00 a.m. on January 16, 1997, or on such other day or at such other time or
place as may mutually agreed upon by the Company and PFC Acquisition ("Closing
Date").
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE TRUST. As an
inducement to United and PFC Acquisition to enter into this Agreement, each of
the Company and the Trust, jointly and severally, makes the following
representations and warranties to United and to PFC Acquisition which shall be
true and correct as of the date hereof and as of the Closing Date.
(a) ORGANIZATION OF THE COMPANY. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Minnesota with the requisite power and authority necessary or
required by law to carry on the business activity in which it is presently
engaged. There have been no acts or omissions which may, and there are no
pending proceedings or actions to, limit or impair any of the Company's
powers, rights and privileges. The Company has no subsidiaries other than
the Bank and is not a partner in any partnership or a party to any joint
venture.
(b) ORGANIZATION OF THE BANK. The Bank is an association duly
organized, validly existing and in good standing under the laws of the
United States of America with all requisite power and authority necessary
or required by law to carry on the business activity in which it is
presently engaged. The Bank is not in default under its charter, the
effect of which might materially adversely affect its right to conduct its
business as presently conducted. There have been no acts or omissions
which may, and there are no pending proceedings or actions to, limit or
impair any of the Bank's powers, rights and privileges. The Bank has no
subsidiaries and is not a partner in any partnership or a party to any
joint venture.
(c) AUTHORITY FOR AGREEMENT. The Company and the Trust has the
requisite power and authority to execute and deliver, and perform the
Company's and the Trust's respective obligations under, this Agreement.
This Agreement has been duly executed and delivered by the Company and by
the Trust and constitutes the valid and legally binding obligation of the
Company and the Trust and is enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by the Company and by
the Trust, and the consummation of the transactions contemplated hereby,
will not conflict with or result in any violation of or default under (i)
the Articles of Incorporation or Bylaws of the Company, (ii) the Articles
of Association or Bylaws of the Bank, or (iii) any trust, guardianship,
custody or other agreement, or any understanding, instrument or order to
which the Trust, the Company or the Bank is a party or by which the Shares
or the property of the Trust, the Company or the Bank is bound. No
consent, approval, order or authorization of, or registration, declaration
or filing with, any governmental authority is required in connection with
the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except in connection
with applications or notices which United and PFC Acquisition must file for
the prior approval of all necessary state and federal bank regulatory
agencies.
(d) CAPITALIZATION. The Company has authorized capital consisting of
5,000,000 shares of $1.00 per share par value common stock, of which no
more than 485,210 shares are issued and outstanding on a fully-diluted
basis (472,710 shares are issued and outstanding on the date hereof, and
12,500 shares are issuable upon exercise of outstanding stock options); and
all shareholders and optionholders and their respective addresses and the
number of Shares or stock options owned by each are set forth on Schedule
5(d). The Bank has authorized capital consisting of 130,000 shares of
$1.00 per share par value stock, of which no more than 130,000 shares are
issued and outstanding. There are no other classes of stock, and except as
disclosed on Schedule 5(d) there are no options, warrants, conversion
privileges or other rights, agreements, arrangements or commitments
obligating the Trust, the Company or the Bank to issue, sell, purchase or
redeem any shares of stock of the Company or the Bank or securities or
obligations of any kind convertible into or exchangeable for any shares of
stock of the Company or the Bank, nor are there any stock appreciation,
phantom or similar rights outstanding based upon the book value or any
other attribute of the Company's or the Bank's stock. As of the Closing
Date, there will be no options, warrants, conversion privileges or other
rights, agreements, arrangements or commitments obligating the Trust, the
Company or the Bank to issue, sell, purchase or redeem any shares of stock
of the Company or the Bank or securities or obligations of any kind
convertible into or exchangeable for any shares of stock of the Company or
the Bank, nor on the
Closing Date will there be any stock appreciation, phantom or similar
rights outstanding based upon the book value or any other attribute of the
Company's or the Bank's stock.
(e) OWNERSHIP. All of the Shares have been duly authorized and
validly issued and are fully paid and nonassessable. The Company has good
and marketable title to 130,000 shares (100%) of the issued and outstanding
stock of the Bank, all of which have been duly authorized and validly
issued and are fully paid and nonassessable.
(f) INSURED STATUS. The Bank is an insured bank under the provisions
of Chapter 16 of Title XII of the United States Code relating to the
Federal Deposit Insurance Corporation ("FDIC"). No act, default or event
has occurred which could adversely affect the status of the Bank as an
insured bank under federal law.
(g) LITIGATION. Except as disclosed in Schedule 5(g), there is no
pending or threatened litigation or proceeding before any court, arbitrator
or federal, state or other governmental commission, board or other agency
against or affecting the Company or the Bank; and there is no judgment,
decree, order, writ, or injunction of any court or governmental department,
board, agency or instrumentality against or affecting the Company or the
Bank.
(h) RECORD BOOKS. The minute books and stock record books of the
Company and the Bank are complete and correct in all respects and reflect
all transactions required to be recorded under any and all applicable state
and federal laws or regulations.
(i) TAXES. The Company and the Bank have filed all federal, state
and local tax returns and all other returns with respect to taxes which are
required to be filed by the Company or the Bank on or before the date
hereof, and have paid all taxes as set forth on such returns. All such
returns were accurately prepared, and no amounts will become due and
payable in the event of an audit of any such tax return by any state or
federal agency. All other taxes, assessments and other governmental
charges due on or before the date hereof upon the Company or the Bank, or
upon any of their income, properties or assets, have been duly paid or will
be paid within the statutory filing periods. The Company and the Bank have
not received any notice of deficiency or assessment of additional taxes.
The Company and the Bank have not granted any waiver of any statute of
limitation with respect to, or any extension of a period for the assessment
of, any federal, state or other tax. The Company and the Bank have
withheld proper and accurate amounts from their employees and deposited
such sums in full and complete compliance with the tax withholding
provisions of applicable federal and state laws, and have maintained
adequate accruals and reserves to cover the liability of the Company and
the Bank for all federal and state income and other taxes.
(j) CONSOLIDATED STATUS. The Company and the Bank have filed
consolidated federal income tax returns and unitary or bank-affiliate state
income tax returns, have entered into a consolidated income tax sharing
agreement (a complete copy of which has been provided to PFC Acquisition)
and have made all required elections in compliance with all applicable
sections of the Internal Revenue Code and all regulations issued
thereunder, qualifying the Company and the Bank as members of a
consolidated group for purposes of the Internal Revenue Code. The
consolidated income tax sharing agreement between the Company and the Bank
complies with the Federal Reserve Board's policy statement concerning tax
sharing agreements and no tax or benefit payments have been made by the
Bank to the Company or any local, state or federal tax authority in
violation of such policy statement and no amounts are owed by the Company
to the Bank as a result of any such payment.
(k) FINANCIAL STATEMENTS. The Bank's Consolidated Reports of
Condition and Reports of Income for the periods ending December 31, 1994
and December 31, 1995; the Bank's daily statement as of June 30, 1996; the
Company's Annual Report of Bank Holding Companies (FR Y-6) for the period
ending December 31, 1995; and the Company's audited consolidated financial
statements for the periods ending December 31, 1994 and December 31, 1995,
true and correct copies of which are
attached hereto as Schedule 5(k), and any subsequent Consolidated Report of
Condition and Report of Income of the Bank, Annual Report of Bank Holding
Companies (FR Y-6) of the Company, Semi-Annual Report of Bank Holding
Companies (FR Y-9SP) and any subsequent quarterly or monthly report
prepared by or on behalf of the Company or the Bank, copies of which are
delivered by the Company to PFC Acquisition in accordance with this
Agreement (collectively referred to hereinafter as the "Financial
Statements"), have been prepared in accordance with GAAP, except as
otherwise required by bank regulatory accounting principles, in a manner
consistently applied and present fairly the financial condition of the
Company and the Bank as of the date indicated. As of the date of each of
the Financial Statements, the Company and the Bank have no liabilities or
obligations of any nature, whether absolute, accrued, contingent or
otherwise, and whether due or to become due, which are not reflected or
reserved against in the Financial Statements, or have otherwise been
accepted by United and PFC Acquisition in other provisions of this
Agreement or in the acceptance of the December 31, 1995 Company Book Value.
(l) TITLE TO PROPERTIES AND ASSETS. The Company and the Bank have
good and marketable title to all of the real and personal property recorded
on their books and records, free and clear of all mortgages, pledges,
leases, charges, liens, encumbrances, defects or rights of third parties
with the exception of (i) liens for taxes, assessments or other
governmental charges not yet delinquent, and (ii) such imperfections of the
title and minor easements, defects, exceptions and encumbrances, if any, as
do not detract from the value of, or interfere with the intended use of,
such properties and assets. All Company and Bank property is in good and
usable condition and is maintained in accordance with and complies with all
applicable laws, ordinances, codes, rules and regulations. All property
and assets held by the Company and the Bank under leases are held under
valid and enforceable leases, the Company and the Bank are not in default
in any respect under any such lease, each lease will continue in full force
and effect immediately after the consummation of the transactions
contemplated by this Agreement, and there is no dispute between the Company
and the Bank, on the one hand, and other parties to such leases or the
owners of the leased property, on the other hand.
(m) ENVIRONMENTAL COMPLIANCE. All real property owned or operated by
the Company or the Bank has been operated in compliance with all applicable
federal, state and local environmental laws, ordinances, rules and
regulations, relating to the handling, storage and disposal of hazardous,
toxic or contaminating wastes or substances. The Company's or the Bank's
operation of any real property is in compliance with all such environmental
laws, ordinances, rules and regulations, including but not limited to the
maintenance of all required permits and approvals. The Company and the
Bank have not used or stored hazardous, toxic or contaminating wastes or
substances on any real property nor has the Company or the Bank discharged
or released any such substances upon any real property, including, but not
limited to, underground injection of such substances, in violation of any
federal, state or local environmental law, ordinance, rule or regulation.
To the best knowledge of the Company and the Trust, no other party has
engaged in any such use, storage, discharge or release on real property
owned or controlled by the Bank or Company. All real property held by the
Company or the Bank is free of any petroleum products, underground storage
tanks and xxxxx. To the best knowledge of the Company and the Trust, the
Bank has not "controlled" or "directed" any borrower such that the Bank
would be subject to any liability with respect to any environmental matters
in connection with any borrower or any borrower's property.
(n) NOTES AND OTHER EVIDENCES OF INDEBTEDNESS. All loans, leases and
loan commitments extended by the Bank (the "Loans") have been made and
maintained in the ordinary course of business, in accordance with the
Bank's customary lending standards and policies and in compliance with all
applicable laws and regulations. The Bank's loan files contain all notes,
leases and other evidences of any indebtedness or lease arrangement,
including without limitation all loan agreements, loan participation
agreements and certificates, security agreements, mortgages, guarantees,
UCC financing statements and similar documents evidencing collateral or
other financial accommodations relating to the Loans ("Loan Documents"),
other than any minor Loan Document the absence of which does not adversely
affect the collectability of any Loan. All Loan Documents are correct in
amount, genuine as
to signatures of every party thereto, including, but not limited to
lessees, makers and endorsers, and were given for valid consideration and
to the best knowledge of the Company and the Trust are enforceable in
accordance with their respective terms, and none of the obligations
represented by the Loan Documents have been modified, altered, forgiven,
discharged or otherwise disposed of except as indicated by the Loan
Documents or as a result of bankruptcy or other debtor's relief laws of
general application. To the best knowledge of the Company and the Trust,
none of the Loans is subject to any offsets or claims of offset, or claims
of other liability on the part of the Bank. No Loans have been sold
subject to an agreement to repurchase. Notwithstanding the foregoing,
except as expressly provided in the second sentence of this paragraph, no
representation or warranty is made with respect to the collectability of
any Loan.
(o) REGULATORY FILINGS. The Company and the Bank have filed all
applicable reports, returns, information and data with state or federal
banking authorities and regulatory agencies which are required by state or
federal law or regulations or as may be requested by such authorities or
agencies.
(p) EMPLOYEE PLANS. Except as disclosed on Schedule 5(p), the
Company and the Bank have not established any oral or written Employee Plan
for the directors, officers or employees of the Company or the Bank. For
purposes of this Agreement, "Employee Plan" means any pension, retirement,
disability, medical, dental or other health insurance plan, life insurance
or other death benefit plan, profit sharing, deferred compensation, stock
option, bonus or other incentive plan, vacation policy, severance plan, or
other employee benefit plan or arrangement, including, without limitation,
any "pension plan" or "welfare plan" as defined by the Employee Retirement
Income Security Act of 1974, as amended from time to time ("ERISA"), which
has been established or operated by the Company or the Bank or offered to
any directors, officers or employees of the Company or the Bank. Each
Employee Plan has been administered to date or terminated, as the case may
be, in compliance with the requirements of the Internal Revenue Code and
ERISA. Where applicable, each Employee Plan is fully funded on a
termination basis, no prohibited transactions or reportable events have
occurred, and all reports required by any government agency with respect to
any Employee Plan have been timely filed. Notwithstanding anything to the
contrary contained in an Employee Plan, all benefits, liabilities and
obligations of the Company or the Bank under an Employee Plan have been
fully accrued as of the date hereof and are reflected on the Financial
Statements.
(q) INSURANCE POLICIES. The Company and the Bank have continually
maintained insurance policies and bonds insuring the Company and the Bank
against losses relating to all real and personal property owned by the
Company or the Bank, as the case may be, and any acts of dishonesty by its
employees, officers and directors (the "Insurance"). All of the Insurance
is for such amounts as are reasonable and customary for institutions of a
similar size and is currently in full force and effect. No application
filed for the Insurance contains any misstatement of fact or fails to state
any fact which may adversely affect the coverage provided. The Company and
the Bank have properly and adequately notified all insurance carriers of
any and all claims known to the Company or the Bank with respect to the
employees, operations and properties of the Company or the Bank for which
the Company or the Bank is insured, have complied with all other
requirements and conditions of the Insurance, and have received no notice
of cancellation of the Insurance.
(r) DATA PROCESSING EQUIPMENT AND OPERATIONS. The Bank has good and
marketable title to all of the computer hardware and software used in the
Bank's data processing operations and located on the Bank's premises.
(s) COMPLIANCE WITH LAWS. The Company and the Bank have complied in
all respects with all applicable laws and regulations of foreign, federal,
state and local governments and all agencies thereof which affect the
business or any owned or leased properties of the Company or the Bank and
to which the Company or the Bank may be subject (including without
limitation the Occupational Safety and Health Act of 1970, and all other
state or federal acts, including rules and regulations thereunder,
regulating or otherwise affecting employee health and safety), and there
are no currently pending claims by any such governments or agencies against
the Company or the Bank alleging a violation of any such law or regulation.
(t) CONTRACTS AND OTHER AGREEMENTS. Except as disclosed on Schedule
5(t), neither the Company nor the Bank is a party to or bound by any
written or oral (i) contract with any labor union, (ii) employment, agency,
consulting or similar contract, (iii) material lease, whether as lessor or
lessee, with respect to any real or personal property, (iv) material
contract or commitment, (v) guaranty, suretyship, indemnification or
contribution agreement, other than its obligations to indemnify its
officers and directors in accordance with their Articles of Incorporation
or Association and Bylaws, (vi) other contract not made in the ordinary
course of business, (vii) contract for the purchase or sale of real or
personal property other than in the ordinary course of business, or (viii)
contracts for the sale of credit life or disability insurance policies.
For purposes of this Section 5(t), any agreement or lease involving an
amount in excess of $10,000 or a remaining term extending beyond twelve
(12) months from the date of this Agreement, shall be deemed material.
(u) CREDIT AGREEMENTS. Neither the Company nor the Bank is a party
to or bound by any written or oral long-term debt agreement, credit
agreement, sale-leaseback agreement, revolving credit agreement, financing
agreement or mortgage on real property, in which the Company or the Bank,
as the case may be, is named debtor or mortgagor.
(v) CONTRACTUAL DEFAULTS. Neither the Company nor the Bank is in
default, and no event has occurred which, with the passage of time or the
giving of notice, or both, would constitute a default on its part, in any
respect under any agreement, indenture, loan agreement or other instrument
to which it is a party or by which it or any of its assets is bound or to
which any of its assets is subject, the result of which would have an
adverse effect upon the Company or the Bank, and to the best knowledge of
the Company and the Trust, all parties with whom the Company and the Bank
have leases, agreements or contracts or who owe obligations to the Company
and the Bank (other than under the Loan Documents) are in compliance
therewith in all respects.
(w) AFFILIATE AND INSIDER TRANSACTIONS. Except as disclosed on
Schedule 5(w), no executive officer or director of the Company or the Bank,
trustee of any trust holding Company or Bank stock, beneficial owner who,
together with such beneficial owner's immediate family, owns 10% or more of
the outstanding common stock of the Company or the Bank ("Principal
Shareholder"), member of the immediate family of any such executive
officer, director or Principal Shareholder, or entity in which any of such
persons own any beneficial interest (other than a publicly-held corporation
with stock traded on a national securities exchange or in the
over-the-counter market and less than 5% of the stock of which is
beneficially owned by any such persons) (collectively the "Insiders"), has
any loan agreement, note or borrowing arrangement or any other agreement
with the Company or the Bank (other than normal employment arrangements
complying with all applicable laws and regulations) or any interest in any
property, real, personal or mixed, tangible or intangible, used and/or
pertaining to the business of the Company or the Bank. For purposes of
this paragraph, (i) "executive officer" means an officer designated as an
executive officer by the Company's or Bank's Board of Directors and (ii)
the members of the immediate family of any executive officer, director or
Principal Shareholder will consist of the spouse, minor children and adult
children (residing at the residence) of such executive officer, director or
Principal Shareholder.
(x) FIDUCIARY DUTIES. The Bank has properly administered all
accounts for which it acts as a fiduciary, including but not limited to
accounts for which it serves as trustee, agent, custodian, personal
representative, guardian or investment advisor, in accordance with the
terms of the documents governing such relationships, applicable state and
federal laws and regulations and common law. Neither the Bank nor any of
its directors, officers and employees has committed any breach of trust
with respect to any such fiduciary account and the accountings for each
such fiduciary account are true and correct statements and accurately
reflect the assets of such fiduciary account.
(y) NO BROKER'S OR FINDER'S FEES. There are no claims for broker's
commissions, finder's fees, investment advisory fees or similar
compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement made by or on behalf of the
Trust, the Company or the Bank except such fees and commissions payable by
the Trust or the Company, as the case may be.
(z) ADVERSE CHANGE. There has been no adverse change in the
business, properties, assets or condition, financial or otherwise, of the
Company or the Bank since April 30, 1996.
For purposes of the representations and warranties contained in this Section 5,
the personal knowledge of each of the executive officers of the Company is
attributed to, and shall be deemed to constitute the knowledge of, the Company;
and the personal knowledge of each of the Trustees and the beneficiaries of the
Trust is attributed to, and shall be deemed to constitute the knowledge of, the
Trust. The representations and warranties contained in this Section 5 shall
survive from the date of this Agreement through the Closing Date, and shall be
true and correct on the Closing Date, but shall automatically terminate on the
Closing Date following completion of the Closing. The Company and the Trust
shall have no indemnification obligations whatsoever after the Closing Date.
All claims, if any, against the Company and/or the Trust must be resolved prior
to the Closing Date.
6. COMPLETENESS OF DISCLOSURES. No representation or warranty of the
Company or the Trust in this Agreement or the Schedules hereto, and no
statement, certificate or Schedule furnished or to be furnished by or on behalf
of the Trust, the Company or the Bank to United or PFC Acquisition or their
agents pursuant hereto or in connection with the transactions contemplated by
this Agreement, including, without limitation, the Financial Statements,
contains or will contain any untrue statement of material fact or omits or will
omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading. All Schedules to this Agreement,
including without limitation the Financial Statements, completely and correctly
present in all material respects the information required by this Agreement to
be set forth therein.
7. REPRESENTATIONS AND WARRANTIES OF UNITED AND PFC ACQUISITION. As an
inducement to the Trust and the Company to enter into this Agreement, each of
United and PFC Acquisition, jointly and severally, makes the following
representations and warranties to the Trust and to the Company, which shall be
true and correct as of the date hereof and as of the Closing Date.
(a) AUTHORITY FOR AGREEMENT. Each of United and PFC Acquisition has
all requisite power and authority to execute and deliver this Agreement and
to carry out its obligations hereunder, subject to prior approval by
applicable bank regulatory agencies. This Agreement has been duly executed
and delivered by each of United and PFC Acquisition and constitutes the
valid and legally binding obligation of United and PFC Acquisition
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by United and by PFC Acquisition, and the
consummation of the transactions contemplated hereby, will not conflict
with or result in any violation of or default under any agreement,
understanding, instrument or order to which United or PFC Acquisition is a
party or by which United's or PFC Acquisition's property is bound. No
consent, approval, order or authorization of, or registration, declaration
or filing with, any governmental authority is required in connection with
the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for the
receipt of all necessary state and federal bank regulatory approvals.
(b) NO BROKER'S OR FINDER'S FEES. There are no claims for broker's
commissions, finder's fees, investment advisory fees or similar
compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement made by or on behalf of
United or PFC Acquisition, except those which are payable by United or PFC
Acquisition, as the case may be.
(c) ACCOUNTING POLICIES AND PRACTICES. Each of United and PFC
Acquisition has reviewed the accounting policies and practices of the
Company and the Bank utilized in connection with the
calculation of Company Book Value and agrees that Company Book Value is
calculated to be $22,386,184 as of December 31, 1995. The Company's
accounting policies and practices as utilized for the calculation of
Company Book Value as of December 31, 1995 are acceptable to United and PFC
Acquisition, except for any personal holding company tax matters.
(d) PERSONAL HOLDING COMPANY TAX MATTERS. United and PFC Acquisition
will not seek indemnification from the Trust or the Company with respect to
any personal holding company tax matters. Each of United and PFC
Acquisition agrees to waive any objection it may have to the Company's or
the Bank's financial records or otherwise with respect to any personal
holding company tax matters.
(e) FINANCING. United has received a commitment letter from Firstar
Bank Milwaukee, N.A. to provide up to $24 million in debt financing which
is contingent upon United raising satisfactory equity, no adverse change in
United's business or financial condition, and United's executing loan
documents customary in debt transactions of this type, and United will
diligently pursue the same. United and PFC Acquisition have investigated
the availability of equity financing in an amount sufficient to enable
United and PFC Acquisition to consummate the transaction contemplated
hereunder, and have no reason to believe such equity financing will not be
obtained, and United and PFC Acquisition will diligently pursue the same.
(f) DISCOVERIES. Each of United and PFC Acquisition acknowledges
that in the course of its due diligence review to date, United and PFC
Acquisition have not discovered anything contrary to the representations
and warranties of the Trust and the Company contained in Section 5, other
than any personal holding company tax matters.
The representations and warranties contained in this Section 7 shall survive
from the date of this Agreement through the Closing Date, and shall be true and
correct on the Closing Date, but shall automatically terminate on the Closing
Date following completion of the Closing. United and PFC Acquisition shall have
no indemnification obligations whatsoever after the Closing Date. All claims,
if any, against United and/or PFC Acquisition must be resolved prior to the
Closing Date.
8. OPERATIONS PENDING CLOSING.
(a) OPERATING COVENANTS. The Company and the Trust, jointly and
severally, hereby covenants and agrees with United and PFC Acquisition
that, from the date of this Agreement through the Closing Date or the
earlier termination of this Agreement, except with the prior written
consent of United and PFC Acquisition, the Company or the Bank will not:
(i) Declare or pay any dividends or distributions with respect
to any shares of their capital stock, except that the Bank shall
declare and pay a dividend to the Company in an amount consistent with
past practice;
(ii) Borrow any amount or incur or become subject to any
liability, except liabilities incurred in the ordinary course of
business, but in no event shall the Company or the Bank enter into any
long-term borrowings or obligations, other than deposit obligations;
(iii) Discharge or satisfy any lien or encumbrance on the
properties or assets of the Company or the Bank or pay any liability,
other than in the ordinary course of business;
(iv) Sell, assign or transfer any tangible assets, except in the
ordinary course of business and for fair and reasonable consideration;
(v) Amend their Articles of Association or Incorporation or
Bylaws;
(vi) Cancel any debt or claim or waive any right of value, except
in the ordinary course of business and for fair and reasonable
consideration;
(vii) Repurchase or enter into any agreement to repurchase
all or any portion of any loan previously participated to any other
financial institution;
(viii) Originate any loan which is thereafter participated to
another financial institution providing for payment upon default on
any basis other than pro rata;
(ix) Except in the ordinary course of business and consistent
with the Bank's current loan policies and safe and sound banking
practices, make or commit to make any further advances on any loan
which is either in default or classified, whether such classification
is a result of a federal bank regulatory examination or internal
classification by the Bank's officers or directors, unless the Bank is
under a legal obligation to do so;
(x) Except in the ordinary course of business and consistent
with the Bank's current loan policies and safe and sound banking
practices, release or agree to release any collateral securing any
loan, except where the collateral released is replaced by collateral
with an equal or greater value or where the Bank is under a legal
obligation to do so;
(xi) Make, renew or agree to make or renew any loan or advance on
any existing loan, except in substantial conformity with the Bank's
current loan policies and safe and sound banking practices (where any
nonconformity has been approved by the Bank's loan committee);
(xii) Pay or incur any obligation or liability with respect
to capital expenditures which exceed $100,000 in the aggregate;
(xiii) Fail to timely pay and discharge all federal and state
taxes and other accounts payable for which it is liable, provided that
the Company or the Bank may deposit an amount equal to any such taxes,
in lieu of the payment thereof, into a reserve account from which such
taxes will be paid when and to the extent they are found to be
properly due and payable;
(xiv) Pay or commit to pay any additional salary or other
compensation to any of the Company or the Bank's officers, directors
or employees, other than normal pay raises in the ordinary course of
business and an appreciation bonus to the employees of the Bank in an
amount calculated by a formula approved by the parties hereto (which
amount shall be inclusive of the bonus plus the matching 401(k)
contributions with respect to the bonus plus the FICA payroll taxes
relating to the bonus) that will be fully accrued on the books of the
Company or the Bank prior to the Valuation Date and an incentive bonus
to the employees of the Bank in an amount calculated by a formula
approved by the parties hereto that will be fully accrued on the books
of the Bank prior to the Valuation Date;
(xv) Make or grant any increase in any Employee Plan, amend or
terminate any existing Employee Plan, or adopt any new Employee Plan,
except as required by law;
(xvi) Make any investments, including derivatives or
structured notes, except in the ordinary course of business and
consistent with prior practices, or sell or agree to sell any
investment securities prior to maturity;
(xvii) Incur or permit to be entered against the Company or
the Bank any default judgment, or permit any unsatisfied judgment to
remain unsatisfied, provided, however, that the Company or the Bank
may deposit an amount equal to any such judgment, in lieu of the
payment thereof, into a reserve account from which such judgments will
be paid when and to
the extent they are found to be properly due and payable and upon
exhaustion of the Company's or the Bank's rights to appeal or seek
review of such judgments;
(xviii) Take any other action or enter into any other
transaction or agreement, other than in the ordinary course of
business; or
(xix) Fail to conduct its business in, and only in, the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted and in accordance with the terms and conditions
of this Agreement.
(b) OPERATING REPRESENTATIONS. The Company and the Trust, jointly
and severally, represents and warrants to United and to PFC Acquisition
that, except as disclosed on Schedule 8(b), for the period from April 30,
1996 through the date of this Agreement, the Company and the Bank have not
acted or failed to act in a manner which would constitute a violation of
Section 8(a) if such action or inaction occurred after the date of this
Agreement.
9. AFFIRMATIVE COVENANTS.
(a) COOPERATION WITH UNITED AND PFC ACQUISITION. The Trust and the
Company shall, and shall cause the Bank to, cooperate with United and PFC
Acquisition in support of United's and PFC Acquisition's applications for
prior approval of the merger contemplated by this Agreement.
(b) DELIVERY OF FINANCIAL STATEMENTS. The Company shall, and shall
cause the Bank to, deliver copies of each Consolidated Report of Condition
and Report of Income of the Bank, the Semi-Annual Report of Bank Holding
Companies (FR Y-9SP) and each quarterly or monthly report prepared by or on
behalf of the Company or the Bank after the date of this Agreement to
United and PFC Acquisition within ten (10) days after such reports have
been prepared.
(c) NOTIFICATION OF CERTAIN MATTERS. Each party shall give prompt
notice to the others of (i) the occurrence or nonoccurrence of any event,
act or omission or the discovery of any information which would be likely
to cause any representation or warranty on its part and contained in this
Agreement, the Financial Statements or Schedules to be materially untrue or
inaccurate when made, or at any time on or before the Closing Date and (ii)
any material failure of any such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder.
(d) CONSULTATION. The Company shall cause Xxxx Xxxxxxxx (or a person
designated by Xxxx Xxxxxxxx) to confer on a regular and frequent basis with
Xxx Xxxxxx (or a person designated by United and PFC Acquisition) (as
representative of United and PFC Acquisition) to report operational matters
and the general status of the ongoing operations of the Company and the
Bank.
(e) LOAN LOSS PROVISIONS. For the period from January 1, 1996
through the Valuation Date, the Company shall cause the Bank to continue to
make its budgeted $40,000 monthly provisions to its Loan Loss Reserve
consistent with the Bank's policies and past practices, which will result
in a total provision for the period of Four Hundred Forty Thousand Dollars
($440,000) or such greater amount as may be recommended by any federal or
state regulatory agency, exclusive of the amount of any recoveries received
or charge-offs made by the Bank, and continue to charge off loans on the
books of the Bank as a loss or as uncollectible, in accordance with the
Bank's loan policies and as required by any federal or state bank
regulations, policy statements or bulletins.
(f) XYZ LOANS. Simultaneous with the Closing, a portion of the
aggregate Merger Consideration equal to the sum of (1) the book value of
that certain loan identified by the parties hereto (referred to herein as
the "XYZ Loan") held by the Bank (calculated as the aggregate outstanding
principal amount plus all accrued but unpaid interest less the loan loss
reserve amount for such loan, all as reflected in the Valuation Date
Financial Statements), and (2) the book value of that certain loan
identified by the parties hereto (referred to herein as the "XYZ Loan")
held by the Company (calculated as the aggregate outstanding principal
amount plus all accrued but unpaid interest, all as reflected in the
Valuation Date Financial Statements) (collectively, the "XYZ Loan Amount")
shall be paid to an entity mutually acceptable to the Company and PFC
Acquisition as escrow agent (the "XYZ Loan Agent"). The XYZ Loan Agent
shall then immediately purchase the XYZ Loan held by the Bank and the XYZ
Loan held by the Company at an aggregate purchase price equal to the XYZ
Loan Amount. Upon receipt of the XYZ Loan Amount, the Bank and the Company
shall assign and endorse, all without recourse, to the XYZ Loan Agent each
and every loan document in their possession relating to the XYZ Loans.
(g) PURCHASE OF DESIGNATED LOANS. On or before the Valuation Date,
the Trust shall purchase from the Bank each Designated Loan. As used
herein, a "Designated Loan" means any loan or any commitment to make a loan
or any increase in any line of credit (but does not mean a renewal of an
existing loan, commitment or line of credit [provided such renewal is made
consistent with the Bank's current loan policies and safe and sound banking
practices], nor a draw down on an existing line of credit), in the amount
of $250,000 or more, made or entered into or increased after the date of
this Agreement which PFC Acquisition did not consent to in writing at the
time the loan was made or the commitment was entered into or the line of
credit increased. The parties agree that in connection with any potential
Designated Loan, the Trust shall provide PFC Acquisition with the
information required by the form attached hereto as Exhibit D (the "Consent
Form"), and PFC Acquisition will attend the loan committee meeting where
such loan will be discussed. Following the presentation of such loan, PFC
Acquisition will indicate its consent to, or the withholding of its consent
to, such loan on the Consent Form. If PFC Acquisition receives two (2)
business days advance written notice of a regularly scheduled loan
committee meeting where any Designated Loan will be discussed, and PFC
Acquisition fails to attend such loan committee meeting, then PFC
Acquisition shall be deemed to have consented to the Designated Loan as
described in such notice.
(h) COMPANY SHAREHOLDER MEETING. On or before November 6, 1997, the
Company shall duly call and hold a special shareholder's meeting for the
purpose of voting upon the Plan of Merger pursuant to notice duly given in
accordance with MBCA Section 302A.613, Subd. 1 (which notice shall inform
each shareholder of the right to dissent as provided in MBCA Section
302A.473, Subd. 2). At such special shareholder's meeting, the Trust shall
vote all of the shares of stock of the Company owned of record by it
approving and authorizing the execution and delivery of this Merger
Agreement and the Plan of Merger, and approving each other transaction
contemplated by this Agreement.
(i) CAMBRIDGE TAX REFUND CLAIM. On or before the Valuation Date, the
Company shall cause the Bank to assign to all of the Company's shareholders
all of the Bank's right, title and interest in and to any refund of
Minnesota income taxes for the years 1979 through 1983 for which a claim
for refund may be submitted relating to the "Cambridge" case (the
"Cambridge Tax Refund Claim"). Simultaneous with such assignment, the
Trust shall deliver to the Bank an agreement by the Trust's beneficiaries
to indemnify the Bank for any costs, expenses, interest, penalties or fines
that may be assessed against the Bank in the event that any taxing
authority deems the Cambridge Tax Refund Claim "received" by the Bank. In
the event that the Trust requests the Bank to provide information to the
Trust to enable the Trust to pursue the Cambridge Tax Refund Claim, the
Trust shall reimburse the Bank for the cost and expense of providing such
information at a rate of $50 per hour per person on the Bank's staff
compiling the information, any actual out-of-pocket costs paid by the Bank
to professionals engaged by the Bank to provide such information and the
Bank's then customary copying charges. The reimbursement amount shall be
due and payable upon delivery to the Trust of the requested information.
(j) EXERCISE OF STOCK OPTIONS. On or before the Valuation Date, the
Company shall cause the holder of each outstanding stock option described
in Section 5(d) to exercise such option. The holder of such option shall
pay the exercise price specified in such option in cash or in a note
payable to the Company (such note to carry a prevailing market rate of
interest). The Surviving
Corporation shall have the right to apply the Merger Consideration payable
to the holder for such holder's Shares in prepayment of the note and
accrued interest thereon.
10. ACCESS TO INFORMATION AND PRE-CLOSING EXAMINATION.
(a) The Company shall permit and shall cause the Bank to permit
United and PFC Acquisition reasonable access upon reasonable advance notice
to the Company's and the Bank's properties, board of directors and outside
consultants, including attendance at board of directors' and loan committee
meetings, and shall disclose and make available (together with the right to
copy) to United and PFC Acquisition and to the internal auditors, loan
review officers, employees, attorneys, accountants and other
representatives of United and PFC Acquisition, all books, papers and
records relating to the assets, stock, properties, operations, obligations
and liabilities of the Company and the Bank including, but not limited to,
all books of account (including the general ledger), tax records, minute
books of directors' and shareholders' meetings, organizational documents,
bylaws, contracts and agreements, filings with any regulatory authority,
accountants' work papers, litigation files including legal research
memoranda, documents relating to assets, titles, abstracts, plans affecting
employees, securities transfer records, shareholder lists and other assets,
business activities or prospects in which United and PFC Acquisition may
have a reasonable interest. Absent a writing to the contrary executed by
an authorized representative of United and PFC Acquisition, United's and
PFC Acquisition's investigation or lack thereof shall not result in a
waiver of any of United's and PFC Acquisition's rights or claims against
the Trust or the Company arising as a result of such breach. In addition,
the Company shall instruct, and shall cause the Bank to instruct, its
officers, employees, counsel and accountants to be available for, and
respond to any questions of, such representatives of United and PFC
Acquisition.
(b) All information furnished to United and PFC Acquisition pursuant
hereto or as otherwise provided to United and PFC Acquisition by the Trust,
the Company, the Bank or their representatives will be treated as
confidential in accordance with the provisions of that certain
Confidentiality Agreement, dated as of April 2, 1996, a copy of which is
attached hereto as Exhibit F. The Trust and the Company acknowledges that
United will be preparing a securities disclosure document in connection
with the equity financing described in Section 7(e). To the extent such
disclosure document includes confidential information, United will provide
the Trust and the Company with an opportunity to review the relevant
portions of the disclosure document and the Trust and the Company shall
promptly provide reasonable comments to United with respect to such
portions.
11. Intentionally omitted.
12. CLOSING CONTINGENT UPON OBTAINING REGULATORY APPROVAL. As soon as
practicable, but in no event later than ten (10) days after the date all of the
parties have executed this Agreement, United and PFC Acquisition shall file
notices and applications with the appropriate bank regulatory agencies, for
prior approval of the proposed Merger as required by applicable laws and
regulations, and use its best efforts to obtain such approvals. United and PFC
Acquisition shall provide the Company with copies of all applications and
notices filed pursuant to this Section. The Company agrees to provide United
and PFC Acquisition with any information regarding the Company and the Bank that
United and PFC Acquisition may request in the preparation of such application.
All applications submitted by United and PFC Acquisition shall be prepared in
accordance with all written state and federal policies and regulations relating
thereto. Except as otherwise provided herein, all of United's or PFC
Acquisition's obligations under this Agreement are contingent upon successfully
obtaining all necessary regulatory approvals for the Merger.
13. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY. All of the
agreements and obligations of the Company under this Agreement are subject to
the fulfillment, on or prior to the Closing Date, of the following conditions
precedent, any or all of which may be waived in whole or in part in writing by
the Company:
(a) The representations and warranties of United and PFC Acquisition
set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as if
made at and as of each of such dates;
(b) Each of United and PFC Acquisition shall have materially
performed and complied with all of the agreements, covenants and conditions
required by this Agreement to be performed or complied with by it on or
prior to the Closing Date;
(c) All necessary state and federal bank regulatory agencies have
approved the Merger and all waiting and appeal periods prescribed by
applicable law or regulation shall have expired; and
(d) No court or governmental authority of competent jurisdiction
shall have issued a permanent order restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this
Agreement.
14. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNITED AND PFC ACQUISITION.
All of the agreements and obligations of United and PFC Acquisition under this
Agreement are subject to the fulfillment, on or prior to the Closing Date, of
the following conditions precedent, any or all of which may be waived in whole
or in part in writing by United and PFC Acquisition:
(a) The representations and warranties of the Trust and the Company
set forth in this Agreement and all of the Schedules hereto shall have been
true and correct in all material respects as of the date hereof and as of
the Closing Date as if made at and as of each of such dates;
(b) The Trust and the Company shall each have materially performed
and complied with all of the agreements, covenants and conditions required
by this Agreement to be performed or complied with by it on or prior to the
Closing Date;
(c) United and PFC Acquisition shall have received approval by all
state and federal bank regulatory agencies as may be required by law for
the Merger and all waiting and appeal periods prescribed by applicable law
or regulation shall have expired, such approvals shall be consistent with
the applications as described in Section 12, and no approval, licenses or
consent granted by any regulatory authority shall contain any requirement,
covenant or condition which materially alters or impairs the consummation
of this transaction, as described in the applications, or which in the
reasonable judgment of United and PFC Acquisition would be unduly
burdensome to United and PFC Acquisition;
(d) United and PFC Acquisition shall have received a favorable
opinion of the Company's special counsel as of the Closing Date in form and
substance satisfactory to counsel for United and PFC Acquisition, to the
effect that:
(i) The Company is duly organized, validly existing and in good
standing under the laws of the State of Minnesota; and
(ii) The Bank is duly organized, validly existing and in good
standing under the laws of the United States, is in good standing
under the laws of the State of Minnesota, and has the requisite
banking association power and authority to carry on the business of
banking; and
(iii) The execution, delivery and performance of this
Agreement by the Company and consummation by the Company of the
transactions contemplated by this Agreement will not constitute a
default by the Company or the Bank under their Articles of
Incorporation or Association or Bylaws;
(iv) The Shares are fully paid and nonassessable; and
(v) The Company has properly and completely complied with the
provisions of MBCA Section 302A.613, Subd. 1 and MBCA Section
302A.473, Subd. 2;
(e) No court or governmental authority of competent jurisdiction
shall have issued a permanent order restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this
Agreement;
(f) The Company shall have delivered to PFC Acquisition evidence
satisfactory to PFC Acquisition that the Company has good and marketable
title to the Bank's building and premises located at 0000 Xxxx Xxxx Xxxx,
Xxx Xxxx, Xxxxxxxxx;
(g) As of the Valuation Date, the Company Book Value will not be less
than Twenty-Three Million Eight Hundred Thousand Dollars ($23,800,000); and
(h) The Company shall have caused the repayment or sale of each and
every loan and lease and the termination of each and every agreement or
arrangement described on Schedule 5(w) and designated by PFC Acquisition in
writing at least sixty (60) days prior to the Closing Date for repayment or
termination.
15. DELIVERY OF DOCUMENTS. On the Closing Date, PFC Acquisition and the
Company shall execute and/or deliver to the other party the following documents,
instruments and agreements, together with such other documents, instruments and
agreements as the other party (or its/their counsel) may reasonably request to
consummate the Merger contemplated hereby:
(a) BY PFC ACQUISITION:
(i) Cash, certified or bank cashier's checks, or confirmation of
the wire transfer of the amounts set forth in Section 3(d).
(b) BY THE COMPANY:
(i) Stock certificate issued to United representing shares of
stock in the Surviving Corporation.
(ii) Stock Certificates duly endorsed for transfer representing
the Shares held by the Trust and other nondissenting shareholders; and
(iii) The minute book and other corporate records of the
Company and the Bank as may be requested by PFC Acquisition.
16. TERMINATION; LIQUIDATED DAMAGES. This Agreement may be terminated and
the transactions contemplated hereby abandoned at any time prior to the Closing
Date:
(a) By mutual written consent of the Company, the Trust, PFC
Acquisition and United.
(b) At the written election of United and PFC Acquisition in the
event of any material breach of any of the representations, warranties or
covenants of the Company or the Trust contained in this Agreement which is
not cured within thirty (30) days following United's and PFC Acquisition's
written notice to the Company and the Trust specifying such breach (or such
longer period of time as may be reasonably necessary to cure such breach
provided the Company and the Trust are diligently pursuing such cure).
(c) At the written election of the Company and the Trust in the event
of any material breach of any of the representations, warranties or
covenants of United or PFC Acquisition contained in this Agreement which is
not cured within thirty (30) days following the Company and the Trust's
written notice to United and PFC Acquisition specifying such breach (or
such longer period of time as may be reasonably necessary to cure such
breach provided United and PFC Acquisition is diligently pursuing such
cure).
As used in subparagraph (b) above, "material breach" shall mean (i) the failure
of the Company to deliver the items listed in Sections 15(b)(i) and (ii), free
and clear of all liens, claims and encumbrances, on the Closing Date (January
16, 1997 or such other date as agreed to by the parties pursuant to Section 4),
(ii) the Company Book Value is less than Twenty-Three Million Eight Hundred
Thousand Dollars ($23,800,000) as of the Valuation Date, or (iii) any other
breach, which either alone or when combined with other then existing breaches,
would or could result in a loss, cost or liability in excess of $250,000 which
loss, cost or liability is not reflected on the Valuation Date Financial
Statements.
As used in subparagraph (c) above, "material breach" shall mean (i) the failure
of United or PFC Acquisition to deliver the Merger Consideration to the Trust
and other nondissenting shareholders of the Company, as provided in Section 3(d)
on the Closing Date (January 16, 1997 or such other date agreed to by the
parties pursuant to Section 4), even if such failure is attributable to United's
or PFC Acquisition's failure to obtain any required regulatory approvals, or
(ii) any other breach, which either alone or when combined with other then
existing breaches, would or could result in a loss, cost or liability in excess
of $250,000.
The parties acknowledge that Firstar Bank of Milwaukee, N.A. has issued its
irrevocable letter of credit for the account of United and PFC Acquisition, in
favor of the Company, in the aggregate amount of $1,000,000, a copy of which
letter of credit is attached hereto as Exhibit G (the "Letter of Credit"). The
Company shall be entitled to make one draw, if any, under the Letter of Credit
only as follows: (1) in the event that the Company terminates this Agreement in
accordance with Section 16(c) and United or PFC Acquisition has not obtained
binding commitments for the debt and equity financing necessary to enable United
or PFC Acquisition to consummate the transaction contemplated by this Agreement,
then the Company shall be entitled to draw under the Letter of Credit in the
amount of $1,000,000; or (2) in the event that the Company terminates this
Agreement in accordance with Section 16(c) and United or PFC Acquisition has
obtained binding commitments for the debt and equity financing necessary to
enable United or PFC Acquisition to consummate the transaction contemplated by
this Agreement, then the Company shall be entitled to draw under the Letter of
Credit in the amount of $500,000; or (3) in the event that this Agreement is
terminated in accordance with Section 16(a) or United or PFC Acquisition
terminates this Agreement in accordance with Section 16(b), then the Company
shall not be entitled to any draw under the Letter of Credit.
As used herein, a "binding commitment for the debt and equity financing
necessary to enable United or PFC Acquisition to consummate the transaction"
shall mean legally enforceable agreements whereby United and/or PFC Acquisition
could contractually require third parties to purchase at least $15,000,000 of
United's or PFC Acquisition's equity securities and to lend United or PFC
Acquisition enough money to consummate the transaction contemplated by this
Agreement.
If this Agreement is terminated, as provided in this Section 16, this Agreement
will become void and there will be no liability or further obligation hereunder
on the part of United or PFC Acquisition or the Trust or the Company, except
pursuant to Section 10(b). Without in any way limiting the generality of the
foregoing, EACH OF THE TRUST AND THE COMPANY ACKNOWLEDGES AND AGREES THAT THE
TRUST'S AND THE COMPANY'S SOLE REMEDY AND UNITED'S AND PFC ACQUISITION'S SOLE
LIABILITY IN THE EVENT OF ANY TERMINATION OF THIS AGREEMENT BY THE TRUST, THE
COMPANY OR BY UNITED OR PFC ACQUISITION SHALL BE THE COMPANY'S ENTITLEMENT TO
MAKE A DRAW UNDER THE LETTER OF CREDIT AS EXPRESSLY PROVIDED ABOVE, AND THAT
UNITED AND/OR PFC ACQUISITION SHALL NOT BE LIABLE FOR ANY DAMAGES OF ANY KIND,
WHETHER DIRECT OR INDIRECT, INCLUDING, WITHOUT LIMITATION, ANY SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES.
17. CONFIDENTIALITY. Except where United or PFC Acquisition or the
Company or the Trust may be advised by counsel that disclosure is required under
applicable law, United or PFC Acquisition or the Company or the Trust shall not
make, and shall advise their agents and the Company's and the Bank's directors,
officers, representatives and agents not to make, any public statement
concerning the transactions contemplated by this Agreement without first
consulting with, and obtaining the approval of, the other parties hereto.
18. AMENDMENT. No amendment, modification, termination or waiver of any
provision of this Agreement will be effective unless in writing and signed by
all parties hereto.
19. SUCCESSORS IN INTEREST. This Agreement will be binding upon and inure
to the benefit of the parties hereto and their respective successors, heirs and
permitted assigns.
20. PARTIAL INVALIDITY. Any provision of this Agreement which is
prohibited or unenforceable will be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.
21. ENTIRE AGREEMENT. Except as otherwise specified herein, this
Agreement contains the entire agreement between the parties hereto with respect
to the Merger contemplated hereby and supersedes all prior agreements and
understandings among the parties, if any, with respect to such Merger.
22. HEADINGS. The headings of Sections herein are for purpose of
reference only and shall not limit or otherwise affect the meaning hereof.
23. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Minnesota.
24. EXPENSES. Each party shall each pay their respective expenses
incurred in connection with the negotiation and preparation of this Agreement
and the consummation of the transactions contemplated hereby, including, without
limitation, their respective legal fees, expenses, commissions and filing fees
regardless of whether such transactions are consummated.
25. WAIVERS. No failure or delay on the part of any party in exercising
any right, power or remedy hereunder will operate as a waiver thereof, nor will
any single or partial exercise of any right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy
hereunder.
26. ASSIGNABILITY. No party may assign any of their rights, liabilities
or obligations under this Agreement without the prior written consent of the
other parties hereto.
27. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
personally delivered or deposited in the United States Mail, mailed first class,
certified and return receipt requested, addressed as indicated at the beginning
of this Agreement. Any party may, by notice so given to the other party, change
the address to which notices shall thereafter be sent. In all events, the
postmark date of such notice or notices shall be deemed the effective date of
such notice for all purposes hereunder.
28. NO SHOP. Prior to the Closing Date, or earlier termination of this
Agreement, neither the Trust nor the Company will directly or indirectly
solicit, initiate or encourage the submission of inquiries, proposals or offers
from any person or entity relating to any acquisition or purchase of assets of,
or any equity interest in, the Company and/or the Bank, or any tender offer,
exchange offer, merger, consolidation, business combination, sale of substantial
assets or of a material amount of assets, sale of securities, recapitalization,
liquidation, dissolution or similar transactions involving the Company and/or
the Bank.
29. SPECIFIC PERFORMANCE. The Company and the Trust each acknowledges and
agrees that irreparable damage would occur to United and PFC Acquisition in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
the Company and the Trust each agrees that United and PFC Acquisition shall be
entitled to obtain an injunction or other equitable relief to prevent breaches
of this Agreement and to enforce specifically the terms and provisions hereof,
in addition to any other remedy to which United and PFC Acquisition is entitled
in law or in equity.
30. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[THE SIGNATURE PAGES FOLLOW].
SIGNATURE PAGE
to
MERGER AGREEMENT
dated as of October 7, 1996
Respecting Park Financial Corporation
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
PFC ACQUISITION CORP.
By /s/
-------------------------------
Its
---------------------------
and
By /s/
-------------------------------
Its
---------------------------
PARK FINANCIAL CORPORATION
By /s/
-------------------------------
Its
---------------------------
THE PARK FINANCIAL CORPORATION
COMMON STOCK REVOCABLE TRUST,
UNDER AGREEMENT DATED MAY 28, 1980
By /s/
-------------------------------
Xxxx Xxxxxxxxxx
A Trustee
and
By /s/
-------------------------------
Xxxxx Xxxxxxx Xxxx
A Trustee
[Page 1 of 2]
UNITED COMMUNITY BANCSHARES, INC.
By /s/
-------------------------------
Its
---------------------------
and
By /s/
-------------------------------
Its
---------------------------
[Page 2 of 2]
LIST OF EXHIBITS
Exhibit A: Plan of Merger
Exhibit B: Form of Articles of Merger
Exhibit C: Intentionally Omitted
Exhibit D: Form of Consent for New Credit Accommodations exceeding $250,000
Exhibit E: Intentionally Omitted
Exhibit F: Confidentiality Agreement
Exhibit G: Letter of Credit
LIST OF SCHEDULES
Schedule 5(d) - Capitalization
Schedule 5(g) - Litigation
Schedule 5(k) - Financial Statements
Schedule 5(p) - Employee Plans
Schedule 5(t) - Contracts
Schedule 5(w) - Affiliate Transactions
Schedule 8(b) - Operating Representations
EXHIBIT A
PLAN OF MERGER
PLAN OF MERGER
OF
PFC ACQUISITION CORP.
INTO
PARK FINANCIAL CORPORATION
ARTICLE 1.
THE MERGER
1.1) SURVIVING CORPORATION. In accordance with the provisions of this Plan
and the applicable laws of the State of Minnesota, at the Effective Time (as
defined in Section 1.2), PFC Acquisition Corp. ("PFC Acquisition") shall be
merged with and into Park Financial Corporation ("Park Financial"), and Park
Financial shall be the Surviving Corporation and shall continue its corporate
existence and organization under the laws of the State of Minnesota, and the
separate existence of PFC Acquisition shall thereupon cease. The name of the
Surviving Corporation shall be Park Financial Corporation.
1.2) EFFECTIVE TIME. As used in this Agreement, the term "Effective Time"
shall be the later of (a) the close of business on the date of filing of the
Articles of Merger with the Minnesota Secretary of State in the manner described
in Minnesota Statutes Section 302A.011, Subd. 11 and Section 302A.615, Subd. 2
and (b) 12:01 a.m. January 16, 1997.
1.3) ARTICLES OF INCORPORATION. At the Effective Time, the Articles of
Incorporation of Park Financial then in effect shall constitute and be the
Articles of Incorporation of the Surviving Corporation until amended or changed
as provided therein or by law.
1.4) BYLAWS. At the Effective Time, the Bylaws of Park Financial then in
effect shall constitute and be the Bylaws of the Surviving Corporation until
amended or changed as provided therein or by law.
1.5) BOARD OF DIRECTORS. The Board of Directors of the Surviving
Corporation shall consist of five members as follows: R. Xxxxx Xxxxx, Xxxxx X.
Xxxx, Xxxxxx X. X'Xxxxx, Xxxx X. XxXxx, and Xxxxxx X. Xxxxxx. Such directors
shall serve until such board may be changed or reconstituted as provided by the
Articles of Incorporation or Bylaws of the Surviving Corporation, or by law.
1.6) OFFICERS. The officers of the Surviving Corporation shall consist of:
Xxxxx X. Xxxx as Chairman; R. Xxxxx Xxxxx as President; Xxxxxx X. X'Xxxxx as
Chief Financial Officer; Xxxxxx X. Xxxxxx as Vice President; and Xxxx X. XxXxx
as Secretary. Such officers shall serve until such officers may be changed as
provided by the Articles of Incorporation or Bylaws of the Surviving
Corporation, or by law.
1.7) CERTAIN EFFECTS OF THE MERGER. At the Effective Time, the Surviving
Corporation shall succeed to and possess all the rights, privileges, powers,
franchises and immunities of a public as well as of a private nature, and be
subject to all liabilities, restrictions, disabilities, and duties of both of
PFC Acquisition and Park Financial (collectively the "Constituent
Corporations"); and all and singular, the rights, privileges, powers, franchises
and immunities of both of the Constituent Corporations and all properties, real,
personal and mixed, and all other things in action of or belonging to either of
the Constituent Corporations on whatever account, shall be vested in the
Surviving Corporation; and all properties, assets, rights, privileges, powers,
franchises, immunities and all and every other interest shall be thereafter as
effectively the property of the Surviving Corporation as they were or would be
of the Constituent Corporations or either of them; and title to any real estate
or any interest therein vested by deed or otherwise in either of the Constituent
Corporations shall not revert or be in any way impaired by any reason of the
Merger; provided, however, that all rights of creditors and all liens upon any
property of either of the Constituent Corporations shall be preserved
unimpaired, limited in lien to the property affected by such liens at the
Effective Time, and all debts, liabilities and duties of either of the
Constituent Corporations shall thenceforth become those of the Surviving
Corporation and may be enforced against the Surviving Corporation to the same
extent as if such debts, liabilities and duties had been incurred or contracted
by the Surviving Corporation.
1.8) FURTHER ASSURANCES. If at any time after the Effective Time the
Surviving Corporation shall consider or be advised that any instruments of
further assurance are desirable in order to evidence the vesting in it of the
title of either of the Constituent Corporations to any of the property rights of
the Constituent Corporations, the appropriate officers or directors of PFC
Acquisition or of Park Financial, as the case may be, are hereby authorized to
execute, acknowledge and deliver all such instruments of further assurance and
to do all other acts or things, either in the name of PFC Acquisition, in the
name of Park Financial, or in the name of the Surviving Corporation, as may be
requisite or desirable to carry out the provisions of this Plan.
ARTICLE 2.
MANNER AND BASIS OF CONVERTING SHARES
2.1) PFC ACQUISITION SHARES. At the Effective Time, each share of Common
Stock of PFC Acquisition then outstanding shall, by virtue of the Merger and
without any further action on the part of the holder thereof, be converted into
and thereafter shall constitute one issued and outstanding share of Common Stock
of the Surviving Corporation.
2.2) PARK FINANCIAL SHARES. At the Effective Time, each share of Common
Stock of Park Financial then outstanding (and held by shareholders other than
PFC Acquisition) shall, by virtue of the Merger and without any further action
on the part of the holder thereof, be converted into and thereafter shall
constitute the right to receive a cash payment of $ .*
--------------
* TO BE COMPLETED FOLLOWING THE VALUATION DATE AND CALCULATION OF THE MERGER
CONSIDERATION AS SET FORTH IN THE MERGER AGREEMENT.
EXHIBIT B
FORM OF ARTICLES OF MERGER
ARTICLES OF MERGER
OF
PFC ACQUISITION CORP.
INTO
PARK FINANCIAL CORPORATION
Pursuant to the provisions of Minnesota Statutes Section 302A.615, Subd. 1,
the following Articles of Merger are executed on the date hereinafter set forth:
FIRST: The names of the corporations which are parties to the merger are
PFC Acquisition Corp., a Minnesota corporation ("PFC Acquisition"), and Park
Financial Corporation, a Minnesota corporation and the surviving corporation
("Park Financial").
SECOND: The Plan of Merger attached hereto has been duly approved by each
of PFC Acquisition and Park Financial pursuant to Section 302A.613 of Minnesota
Statutes.
The undersigned swears that the foregoing is true and accurate and that
they have the authority to sign these Articles of Merger on behalf of PFC
Acquisition and Park Financial.
Dated: , 1997 PFC ACQUISITION CORP.
--------------
By
-------------------------------
Its Chief Executive Officer
PARK FINANCIAL CORPORATION
By
-------------------------------
Its Chief Executive Officer
EXHIBIT C
INTENTIONALLY OMITTED
EXHIBIT D
FORM OF CONSENT FOR NEW CREDIT
ACCOMMODATIONS EXCEEDING $250,000
PARK NATIONAL BANK
COMMERCIAL LOAN CONSENT FORM
MEETING DATE:
---------------
Proposed APPROVED
Type of Risk Credit Credit United
Credit Rating Extension Extension Initials
------ ------ --------- --------- --------
Borrower
-------------------------------
Purpose $ $
------------------------------- ------------- ------------ ----------- ------------ -----------
Borrower
-------------------------------
Purpose $ $
------------------------------- ------------- ------------ ----------- ------------ -----------
Borrower
-------------------------------
Purpose $ $
------------------------------- ------------- ------------ ----------- ------------ -----------
Borrower
-------------------------------
Purpose $ $
------------------------------- ------------- ------------ ----------- ------------ -----------
Borrower
-------------------------------
Purpose $ $
------------------------------- ------------- ------------ ----------- ------------ -----------
Borrower
-------------------------------
Purpose $ $
------------------------------- ------------- ------------ ----------- ------------ -----------
Borrower
-------------------------------
Purpose $ $
------------------------------- ------------- ------------ ----------- ------------ -----------
PFC ACQUISITION CONSENT*
---------------------------- -------------------
signature date
*PFC Acquisition's consent to the foregoing shall in no way be deemed or
construed as, participation in such loan approval activity, and shall in
no way result in, or be deemed or construed as, a waiver of any
representation or warranty, or any other covenant, of the Company or the
Trust under the Merger Agreement (other than for the limited purpose
specified in Section 9(g)).
EXHIBIT E
INTENTIONALLY OMITTED
EXHIBIT F
CONFIDENTIALITY AGREEMENT
XXXXXX
XXXXX
WEISHAIR
& CO.
Suite 1000
000-000-0000 000 Xxxxx Xxxxx Xxxxxx
Fax 000-0000 Xxxxxxxxxxx, XX 00000-0000
April 2, 1996
CONFIDENTIALITY AGREEMENT
Park Financial Corporation
c/o Xxxxx X. Xxxxx
Larson, Allen, Weishair & Co., LLP
Suite 1000, 000 X. Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Gentlemen:
In connection with our possible interest in acquiring Park Financial Corporation
("Company") and its subsidiary bank, Park National Bank ("Bank") you are
furnishing us with a Confidential Descriptive Memorandum which contains certain
information relating to the Company and Bank which is either nonpublic,
confidential or proprietary in nature. This Memorandum and any additional
information you may furnish to us in the course of our investigation of the
Company and Bank, together with all analyses, compilations, forecasts, studies,
and other documents prepared by us or our representatives (including our agents,
attorneys, accountants, financing sources, and financial advisors) or employees
which contain, summarize or otherwise reflect such information or our review of
the Company and Bank, is hereinafter referred to as the "Information." In
consideration of your furnishing us with the Information we agree that:
1. The Information will be kept confidential and will not, without your prior
written consent, be disclosed by us, or by our representatives or
employees, in any manner whatsoever, directly or indirectly, in whole or in
part, and will not be used by us, our representatives or employees,
directly or indirectly, for any purpose other than evaluating the
transaction described above. Moreover, we agree to reveal the Information
only to those of our employees and representatives who need to know the
Information for the purpose of evaluating the transaction described above,
who are informed by us of the confidential nature of the Information and
who shall agree to be bound by and to act only in accordance with the terms
and conditions of this Confidentiality Agreement ("Agreement"). We shall
be responsible for any breach of the Agreement by our affiliates,
employees, or representatives.
2. Without your prior written consent, except as required by law, and then
only after prompt notice to you of our intention to disclose, we and our
representatives and employees will not disclose to any person the fact that
the Information has been made available, that discussions or negotiations
are taking place or have taken place concerning a possible transaction
involving us and the Company and Bank or the fact or nature of any offer
made or any of the terms, conditions or other facts with respect to any
such possible transaction, including the status thereof.
3. All copies of the Information, except for that portion of the Information
which consists of our analyses, compilations, forecasts will be returned to
you immediately upon your request. That portion of the Information which
consists of our analyses, compilations, forecasts, studies or other
documents prepared by us, our representatives or employees, will be held by
us and kept confidential and subject to the terms of this Agreement, or
shall be destroyed immediately upon the request of the Company, and any
oral Information will continue to be subject to the terms of this
Agreement. (Such destruction will be confirmed in writing at the Company's
request.)
CONFIDENTIALITY AGREEMENT
April ____, 1996
Page Two
4. We acknowledge that neither you nor any of your representatives or
affiliates have made any express or implied representation or warranty as
to the accuracy or completeness of the Information, and each of you
expressly disclaims any and all liability that may be based on the
Information, errors therein or omissions therefrom. We agree that we are
not entitled to rely on the accuracy or completeness of the Information and
that we shall be entitled to rely solely on the representations and
warranties made to us by the Company and/or its shareholders in the final
written acquisition.
5. In the event that we or anyone to whom we directly or indirectly transmit
Information pursuant to this Agreement becomes legally compelled to
disclose any of the Information, we will provide you with prompt notice so
that you may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of the Agreement. In the event that
such protective order or other remedy is not obtained, or that the Company
expressly in writing waives compliance with the provision of the Agreement,
we will furnish only that portion of the Information that we are advised by
opinion of counsel is legally required and will exercise our best efforts
to obtain reliable assurances that confidential treatment will be accorded
the Information.
6. We understand and agree that no contract or agreement regarding a possible
acquisition shall be deemed to exist between us unless and until a final
definitive acquisition agreement has been executed. We hereby waive, in
advance, any claims (including, without limitation, claims for breach of
contract) in connection with the transaction described above unless and
until we shall have entered into a final definitive acquisition agreement
with respect thereto. We also agree that unless and until a final
definitive acquisition agreement has been executed, you do not have any
legal obligation to negotiate exclusively with us, or any legal obligation
of any kind whatsoever by virtue of this Agreement except for the matters
specifically agreed to herein.
7. Without the Company's prior written consent, for a period of one year from
and after the date of this Agreement, neither we nor any of our affiliates
will directly or indirectly solicit for employment, employ, or otherwise
contract for the services of any person who is now employed (either as an
employee or full-time consultant) by the Company or Bank.
8. We agree that we will have no discussions, correspondence or other contact
with the Company or any of its customers, employees or shareholders for the
purpose of obtaining information concerning any of the Company's or Bank's
businesses or assets except with the Company's designated representatives.
9. We acknowledge that remedies at law may be inadequate to protect against
breach of the Agreement, and we hereby in advance agree to the granting of
injunctive relief in your favor without proof of actual damages. We agree
to save and hold you harmless from and against actual damages, losses,
liabilities, judgments, costs, and attorney's fees arising out of our
breach of this Agreement.
10. This Agreement shall be governed by and construed in accordance with the
Laws of the State of Minnesota applicable to agreements made and to be
performed within such state.
CONFIDENTIALITY AGREEMENT
April ____, 1996
Page Two
Sincerely,
UNITED COMMUNITY BANCSHARES, INC.
By: /s/
----------------------------------
Its: PRESIDENT
----------------------------
Date: 4/2/96
--------------------------------
Agreed and accepted on behalf of
PFC COMMON STOCK REVOCABLE TRUST
on April 8, 1996.
By: /s/
----------------------------------
Its: AGENT
----------------------------
EXHIBIT G
LETTER OF CREDIT
[FORM OF LETTER OF CREDIT]
THIS LETTER OF CREDIT REPLACES CREDIT ISSUES AUGUST 29, 1996
OCTOBER 7, 1996
BENEFICIARY: APPLICANT:
PARK FINANCIAL CORPORATION UNITED COMMUNITY BANCSHARES, INC.
C/O J. XXXXX XXXXXXX, ESQUIRE AND PFC ACQUISITION CORP.
XXXXXXXXX & XXXXXX P.L.L.P. 0000 XXXXX XXXXX XXXXX
0000 XXX XXXXXX XXXXX 000
80 SOUTH 8TH STREET XXXXX, MN 55121
XXXXXXXXXXX, XX 00000-0000 ATTN: XX. XXXXXX X'XXXXX
EXECUTIVE VICE PRESIDENT
EXPIRY DATE: THE EARLIER OF CONSUMMATION OF
THE MERGER AGREEMENT BETWEEN PARK FINANCIAL
CORPORATION AND PFC ACQUISITION CORP.
OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. S102182
GENTLEMEN/MADAM:
WE HEREBY ESTABLISH IN YOUR FAVOR, OUR IRREVOCABLE STANDBY LETTER OF CREDIT FOR
ACCOUNT AND BY ORDER OF THE APPLICANT, NOT EXCEEDING A TOTAL AMOUNT OF
1,000,000.00 U.S. DOLLARS (ONE MILLION 00/100 U.S. DOLLARS).
PAYMENT UNDER THIS LETTER OF CREDIT IS AVAILABLE BY YOUR DRAFT AT SIGHT ON
FIRSTAR BANK MILWAUKEE, N.A., MILWAUKEE, WI IN THE AMOUNT OF $1,000,000.00
ACCOMPANIED BY A SIGNED STATEMENT FROM THE BENEFICIARY HEREOF, CERTIFYING THAT
IT HAS TERMINATED THAT CERTAIN MERGER AGREEMENT DATED OCTOBER 7, 1996 AMONG
UNITED COMMUNITY BANCSHARES, INC., PFC ACQUISITION CORP., THE PARK FINANCIAL
CORPORATION COMMON STOCK REVOCABLE TRUST, UNDER AGREEMENT DATED MAY 28, 1980 AND
PARK FINANCIAL CORPORATION, (HEREINAFTER REFERRED TO AS THE "AGREEMENT"), IN
ACCORDANCE WITH PARAGRAPH 16(C) OF THE AGREEMENT AND THAT PFC ACQUISITION CORP.
OR UNITED COMMUNITY BANCSHARES, INC. HAS NOT OBTAINED BINDING COMMITMENTS FOR
THE DEBT AND EQUITY FINANCING NECESSARY TO ENABLE PFC ACQUISITION CORP. AND
UNITED COMMUNITY BANCSHARES, INC. TO CONSUMMATE THE TRANSACTION CONTEMPLATED BY
SAID AGREEMENT.
****CONTINUED ON NEXT PAGE****
OUR REF. NO. S102182 PAGE 2
OR IN THE ALTERNATIVE
BY A DRAFT AT SIGHT DRAWN ON FIRSTAR BANK MILWAUKEE, N.A., MILWAUKEE, WI IN THE
AMOUNT OF $500,000.00 ACCOMPANIED BY A SIGNED STATEMENT FROM THE BENEFICIARY
HEREOF, CERTIFYING THAT IT HAS TERMINATED THAT CERTAIN MERGER AGREEMENT DATED
OCTOBER 7, 1996 AMONG UNITED COMMUNITY BANCSHARES, INC., PFC ACQUISITION CORP.,
THE PARK FINANCIAL CORPORATION COMMON STOCK REVOCABLE TRUST, UNDER AGREEMENT
DATED MAY 28, 1980 AND PARK FINANCIAL CORPORATION, (HEREINAFTER REFERRED TO AS
THE "AGREEMENT"), IN ACCORDANCE WITH PARAGRAPH 16(C) OF THE AGREEMENT.
SPECIAL CONDITIONS:
BENEFICIARY SHALL BE ENTITLED TO ONLY ONE DRAWING UNDER THIS LETTER OF CREDIT
AND A DRAWING MADE UNDER EITHER OF THE ALTERNATIVES SET FORTH ABOVE SHALL ALSO
BE ACCOMPANIED BY COPIES OF THE APPROPRIATE NOTICE OF DEFAULT GIVEN BY PARK
FINANCIAL CORPORATION TO UNITED COMMUNITY BANCSHARES, INC. AND PFC ACQUISITION
CORP. AS REQUIRED IN SAID AGREEMENT.
THE AMOUNT OF ANY DRAFT(S) DRAWN UNDER THIS CREDIT MUST BE ENDORSED ON THE
REVERSE OF THE ORIGINAL CREDIT. ALL DRAFTS MUST BE MARKED "DRAWN UNDER FIRSTAR
BANK MILWAUKEE, N.A. STANDBY LETTER OF CREDIT NUMBER S102182 DATED OCTOBER 7,
1996."
WE HEREBY AGREE WITH YOU THAT DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE
TERMS OF THIS CREDIT WILL BE DULY HONORED ON PRESENTATION AND DELIVERY OF
DOCUMENTS, AS SPECIFIED, TO FIRSTAR BANK MILWAUKEE, N.A., LETTER OF CREDIT
DEPARTMENT, X.X. XXX 000, XXXXXXXXX, XX 00000, IF DRAWN AND NEGOTIATED, OR IF
DRAWN AND PRESENTED AT THIS OFFICE ON OR BEFORE EXPIRY DATE AS INDICATED ABOVE.
****CONTINUED ON NEXT PAGE****
OUR REF. NO. S102182 PAGE 3
THIS CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500.
VERY TRULY YOURS,
/s/ /s/
-------------------------- --------------------------
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
INDEX
SCHEDULES TO STOCK PURCHASE AGREEMENT
PARK FINANCIAL CORPORATION
1. SCHEDULE 5(d) - CAPITALIZATION
2. SCHEDULE 5(g) - LITIGATION
3. SCHEDULE 5(k) - FINANCIAL STATEMENTS
4. SCHEDULE 5(p) - EMPLOYEE PLANS
5. SCHEDULE 5(t) - CONTRACTS
6. SCHEDULE 5(w) - AFFILIATE TRANSACTIONS
7. SCHEDULE 8(b) - OPERATING REPRESENTATIONS
ATTACHMENT TO MERGER AGREEMENT
PARK FINANCIAL CORPORATION STOCKHOLDER LISTING
SCHEDULE 5(d) CAPITALIZATION
As Of: October 7, 1996
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Certificate
Owner Certificate Shareholder Shareholder Shareholder Zip ------------- Percent
ID Date Name Address City ST Code # Shares O/S
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
[Detail listing of shareholders follows]
PARK FINANCIAL CORPORATION
ATTACHMENT TO MERGER AGREEMENT
ACHEDULE 5(G) LITIGATION
[Detail of any litigation concerns follows]
PARK FINANCIAL CORPORATION
ATTACHMENTS TO MERGER AGREEMENT
SCHEDULE 5(K) FINANCIAL STATEMENTS
INDEX
12/31/95 Bank's Consolidated Reports of Condition and Income A1
12/31/94 Bank's Consolidated Reports of Condition and Income A2
Bank's Daily Statement as of June 30, 1996 B
Company's Annual Report of Bank Holding Companies (FR Y-6) C
for the Period Ending December 31, 1995
Audited Consolidated Financial Statements December 31, 1995 & 1994 D
ATTACHMENT TO MERGER AGREEMENT
SCHEDULE 5(p) EMPLOYEE PLANS
Following is a summary of employee plans as defined by this agreement:
[Listing of employee plans follows]
ATTACHMENT TO MERGER AGREEMENT
SCHEDULE 5(t) CONTRACTS AND OTHER AGREEMENTS
Description Term Amount Comment
-------------------------------------- ---------------- -------------- -----------------------------------------
PARK NATIONAL BANK
[Listing of contracts and other agreements follows]
PARK FINANCIAL CORPORATION
None
ATTACHMENT TO MERGER AGREEMENT
SCHEDULE 5(w) AFFILIATE AND INSIDER TRANSACTIONS
------------------------------------------- ---------------------------------
Nature of Affiliate Loan Agreement
or Insider Relationship or Borrowing Arrangement
--------------------- -------------------------------
NAME PFC PNB LOAN NAME LOAN # LOAN BALANCE
------------------------------------------- ---------------------------------
[Listing of affiliate/insider relationships and loan agreements or borrowing
arrangements follow]
Note: The names listed above represent executive officers, directors, majority
shareholder, trustees and their related interests as of October 7, 1996.
For the purpose of this schedule, there are no other agreements or
interests in property pertaining to the business of the Company or Bank.
ATTACHMENT TO MERGER AGREEMENT
SCHEDULE 8(b) OPERATING REPRESENTATIONS
Purchase
Description Date Amount
--------------------------------------------- ------------ ----------
In relation to Section 8(a)(xii), the
following capital expenditures should
be noted:
[Listing of material capital expenditures follows]
