AGREEMENT AND PLAN OF REORGANIZATION
by and between
BT Financial Corporation,
and
First Xxxxxxx Financial Corporation
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TABLE OF CONTENTS
ARTICLE I - DEFINITIONS 1
1.01. Definitions 1
1.02. Accounting Terms 5
ARTICLE II - THE MERGER 6
2.01. Merger 6
2.02. Conversion of Shares of Common Stock 6
2.03. Articles of Incorporation; By-Laws 7
2.04. Directors and Officers 7
2.05. Closing 8
2.06. Exchange of Certificates for Stock and Cash 8
2.07. Termination of this Reorganization Agreement 9
2.08. Consequences of Termination 10
2.09. Confidentiality 11
2.10. Public Disclosure 11
ARTICLE III - SHAREHOLDER APPROVAL 11
3.01. First Xxxxxxx Shareholders Meeting 11
3.02. BT Financial Shareholders Meeting 12
ARTICLE IV - REPRESENTATIONS, WARRANTIES AND COVENANTS 12
4.01. Representations and Warranties of First Xxxxxxx 12
4.02. Representations and Warranties of BT Financial 26
4.03. Covenants of All Parties 30
4.04. Covenants of First Xxxxxxx 33
4.05. Covenants of BT Financial 38
ARTICLE V - CONDITIONS PRECEDENT 42
5.01. Conditions Precedent to the Obligations of BT
Financial 42
5.02. Conditions Precedent to the Obligations of
First Xxxxxxx 47
5.03. Waivers 50
ARTICLE VI - BROKERS AND EXPENSES 51
6.01. Brokers 51
6.02. Expenses 51
ARTICLE VII - MISCELLANEOUS 51
7.01. Further Assurances 51
7.02. Survival of Representations, Warranties and
Covenants 51
7.03. Notices 52
7.04. Binding Effect 52
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7.05. Headings 53
7.06. Counterparts 53
7.07. Integration; No Third-Party Beneficiaries 53
7.08. Severability 53
7.09. Amendments 53
7.10. Governing Law 54
7.11. Incorporation by Reference 54
Schedules and Exhibits
----------------------
Schedule 4.01(f) First Xxxxxxx - Financial Statements
Schedule 4.01(m) First Xxxxxxx - Loans
Schedule 4.01(p) First Xxxxxxx - Real Property
Schedule 4.01(q) First Xxxxxxx - Environmental Conditions
Schedule 4.01(q)(iii) First Xxxxxxx - Governmental Filings
Schedule 4.01(s) First Xxxxxxx - Leases
Schedule 4.01(t) First Xxxxxxx - Material Contracts
Schedule 4.01(v) First Xxxxxxx - Employee Benefits
Schedule 4.01(w) First Xxxxxxx - Employment Contract
Schedule 4.01(y) First Xxxxxxx - Xxxx Claim
Schedule 4.01(cc) First Xxxxxxx - Investments
Exhibit A First Xxxxxxx Financial Corporation Affiliates
Agreement
Exhibit B BT Financial Corporation Affiliates Agreement
----------------
[FN]
The Table of Contents is not part of this Agreement.
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, is made and
entered into as of this 23rd day of February, 1999(the
"Reorganization Agreement"), by and among BT Financial
Corporation, a business corporation organized and existing under
the laws of the Commonwealth of Pennsylvania with its principal
office at 000 Xxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("BT Financial"),
AND
First Xxxxxxx Financial Corporation, a corporation organized and
existing under the laws of Delaware with its principal office at
000 Xxxx Xxxxxx, Xxxxxx, XX 00000 ("First Xxxxxxx").
WITNESSETH:
WHEREAS, the respective Boards of Directors of BT
Financial and First Xxxxxxx have determined that it would be in
the best interests of their respective organizations,
shareholders and customers and the communities served by them for
First Xxxxxxx to be merged with and into BT Financial (the
"Merger") pursuant to this Reorganization Agreement, whereby the
shareholders of First Xxxxxxx will receive shares of common stock
of BT Financial in exchange for their First Xxxxxxx Common Stock;
and
WHEREAS, the respective Boards of Directors of BT
Financial and First Xxxxxxx have approved the proposed merger of
First Xxxxxxx with and into BT Financial upon the terms and
conditions set forth in this Reorganization Agreement; and
WHEREAS, the parties intend that the Merger will (i) be
accounted for as a pooling of interests under generally accepted
accounting principals and (ii) qualify as a reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code").
NOW, THEREFORE, in consideration of the premises and
the representations, warranties, covenants, conditions and
actions hereinafter set forth, the parties hereto, each intending
to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
1.01. Definitions. The terms defined in this Section
1.01 shall have the meanings herein specified, unless the context
clearly requires otherwise. Other terms used herein are defined
elsewhere in this Reorganization Agreement.
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"Affiliate" of a Party means a Person that,
directly or indirectly through one or more
intermediaries, controls, or is controlled by, or
is under common control with, such Party.
"AMEX" means the American Stock Exchange.
"Articles of Merger" means the Articles of Merger
delivered to the Department of State of the
Commonwealth of Pennsylvania for filing pursuant to
Sections 1921 et seq. of the BCL.
"Bank" means First Xxxxxxx Bank, N.A.
"Banking Code" means the Pennsylvania Banking
Code of 1965, as amended.
"Bank Merger" means the merger of Bank with and
into Laurel Bank, with Laurel Bank as the Resulting
Institution.
"BCL" means the Pennsylvania Business Corporation
Law of 1988, as amended.
"BT Financial Common Stock" means the common
stock, par value $5.00 per share, of BT Financial.
"CERCLA" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as
amended.
"Certificate of Merger" means the Certificate of
Merger delivered to the Secretary of State of Delaware
for filing pursuant to Section 252 of the GCL.
"Closing Date" shall have the meaning set forth
in Section 2.05(a).
"COBRA" means the Consolidated Omnibus Budget
Reconciliation Act of 1986.
"Comptroller" means the Office of the Comptroller
of the Currency.
"Computer Systems" means the hardware, software
and embedded microcontrollers in noncomputer equipment.
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"Department of Banking" means the Pennsylvania
Department of Banking.
"Effective Time" means the date and time specified
in the Articles of Merger and Certificate of Merger.
"Environmental Condition" shall have the meaning
set forth in Section 4.01(q).
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"FDIA" means the Federal Deposit Insurance Act,
as amended.
"FDIC" means the Federal Deposit Insurance
Corporation.
"Federal Reserve Board" means the Board of
Governors of the Federal Reserve System.
"FHLMC" means the Federal Home Loan Mortgage
Corporation.
"First Xxxxxxx Common Stock" means the common
stock, $2.50 par value per share, of First Xxxxxxx.
"FNMA" means the Federal National Mortgage
Association.
"GCL" means the Delaware General Corporation Law,
as amended.
"GNMA" means the Government National Mortgage
Association.
"NASD" means the National Association of
Securities Dealers, Inc.
"NASDAQ" means the NASD Automated Quotations
System.
"Option" means the Option granted to BT Financial
by First Xxxxxxx under the Stock Option Agreement of
even date herewith between BT Financial and First
Xxxxxxx.
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"Owned Real Property" shall have the meaning set
forth in Section 4.01(p).
"Parties" means BT Financial and First Xxxxxxx.
"PBG" means the Pension Benefit Guaranty
Corporation.
"Person" means a corporation, an association, a
partnership, an organization, a business, an
individual, a government or a subdivision thereof or
a governmental agency.
"Permitted Dividend" means (a) a regular quarterly
cash dividend declared and paid in accordance with
First Xxxxxxx'x past practices as to time of
declaration, payment and amount, whose aggregate
amount shall not exceed the lower of (A) the higher of
(i) $.13 1/2 per share, and (ii) the subtrahend of
$.13 1/2 per share minus the amount of quarterly dividends
paid since the date of this Agreement multiplied by the
number of calendar quarters ending after the date of
this Agreement, and (B) the higher of (i) the amount by
which net income per share for the quarter ending immediately
before the quarter in which such dividend is paid
exceeded $.53 1/2 per share and (ii) the amount by which
cumulative net income for each quarter ending after the date of
this Agreement and before the quarter in which such dividend
is paid shall have exceeded $.53 1/2 per share multiplied
by the number of quarters ending after the date of this
Agreement. The quarterly dividend for December 31,
1999, may be increased in accordance with First
Xxxxxxx'x past practices by an aggregate amount not to
exceed $.01 per share, provided that the net income for
the quarter ending September 30, 1999 shall have
exceeded $.40 per share.
"Joint Proxy Statement/Prospectus" means the
Prospectus/Proxy Statement, together with any
supplements thereto, to be sent to the shareholders of
each of First Xxxxxxx and BT Financial to solicit their
votes in connection with the transactions contemplated
by this Reorganization Agreement.
"Registration Statement" means the registration
statement on Form S-4 (or other appropriate form) of BT
Financial, including any amendments or supplements
thereto, as declared effective by the SEC under the
Securities Act with respect to the issuance of BT
Financial Common Stock in connection with the Merger
and the approval by the shareholders of the
transactions contemplated by this Reorganization
Agreement, which Registration Statement shall include
the Joint Proxy Statement/Prospectus.
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"Regulatory Approvals" means all necessary
approvals of the Merger by state and federal agencies,
including the Department of Banking, the Federal
Reserve Board, the FDIC and the Comptroller.
"Schedules" means the disclosure schedules
attached hereto and made a part hereof.
"SEC" means the United States Securities and
Exchange Commission.
"Securities Act" means the Securities Act of 1933,
as amended.
"Service" means the United States Internal Revenue
Service.
"Subsidiary" means any corporation or other
entity, the securities or other ownership interests
having ordinary voting power to elect a majority of the
board of directors or other persons performing similar
functions of such corporation or other entity are at
the time directly or indirectly owned or controlled
by a Party.
"Surviving Corporation" means BT Financial after
consummation of the Merger.
"Taxes" means all federal, state and local taxes
and similar governmental charges.
"Transactions" means the negotiation and execution
of this Reorganization Agreement and the consummation
of the transactions contemplated hereby, and all
related transactions.
"Year 2000 Compliant" means all of the Computer
Systems will correctly differentiate between years in
different centuries that end in the same two digits,
and will accurately process date/time data (including
but not limited to calculating, comparing and
sequencing) from into and between the twentieth and
twenty-first centuries, including leap year
calculations.
1.02. Accounting Terms. For all purposes of this
Reorganization Agreement, unless the context clearly requires
otherwise, any accounting term not specifically defined in this
Reorganization Agreement shall have the meaning given to it in
accordance with generally accepted accounting principles and
practices within the banking industry as in effect as of the date
of this Reorganization Agreement.
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ARTICLE II
THE MERGER
2.01. Merger. Upon satisfaction of the conditions set
forth herein, at the Effective Time, First Xxxxxxx shall merge
with and into BT Financial in accordance with the provisions and
procedures set forth herein, and BT Financial shall be the
Surviving Corporation (the "Merger"). At the Effective Time, the
separate corporate existence of First Xxxxxxx shall cease and BT
Financial shall succeed to all the rights, privileges, immunities
and franchises, and all the property and assets, real, personal
and mixed, of First Xxxxxxx without the necessity for any
separate conveyance or other transfer. Except as set forth in
Section 4.05(g), the Surviving Corporation shall thereafter be
responsible and liable for all liabilities and obligations of
every kind and description, and neither the rights of creditors
nor any liens on the property of First Xxxxxxx shall be impaired
by the Merger.
2.02. Conversion of Shares of Common Stock.
(a) At the Effective Time, each share of First Xxxxxxx
Common Stock then outstanding, except treasury shares, shall be
converted into the right to receive 1.667 shares of BT Financial
Common Stock (the "Exchange Ratio"), unless the average closing
price per share of BT Financial Common Stock on the NASDAQ
National Market as reported in the Wall Street Journal for the
thirty (30) consecutive trading days ending on the fifth trading
day immediately preceding the mutually agreed upon mailing date
of the Joint Proxy/Prospectus (the "Mailing Date")(the "Valuation
Period") is less than $24 or more than $32.
(i) If the average per share price of BT
Financial Common Stock is less than $24 for the
Valuation Period, BT Financial shall have the
option to adjust the Exchange Ratio by increasing
the number of shares of BT Financial Common Stock
included in the Exchange Ratio, so as to maintain
a total consideration of $24 per share of Common
Stock based on the average price per share for BT
Financial Common Stock for the Valuation Period.
If BT Financial does not elect to so adjust the
Exchange Ratio, First Xxxxxxx may elect to
terminate this Agreement, and neither party shall
have any further liability hereunder; or
(ii) If the average price per share of BT
Financial Common Stock for the Valuation Period is
more than $32, BT Financial shall have the option
to adjust the Exchange Ratio by reducing the
number of shares of BT Financial Common Stock
included in the Exchange Ratio, so that the total
consideration does not exceed $32 per share of
Common Stock based on the average price per share
of BT Financial Common Stock for the Valuation
Period.
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(b) At the Effective Time, by virtue of the Merger, and
without any action on the part of the shareholders of First
Xxxxxxx, each of the then issued and outstanding shares of First
Xxxxxxx Common Stock shall cease to exist and shall be deemed
canceled, retired and eliminated, and all rights in respect
thereof shall cease except the right to receive BT Financial
Common Stock, regardless of whether the certificates representing
such shares are surrendered to BT Financial by the shareholders
of First Xxxxxxx.
(c) The Exchange Ratio shall be adjusted at the Effective
Time to reflect any consolidation, split-up, other subdivision or
combination of BT Financial Common Stock, any dividend payable in
BT Financial Common Stock, or any capital reorganization
involving the reclassification of BT Financial Common Stock
subsequent to the date of this Reorganization Agreement and prior
to such time. BT Financial shall register under the Securities
Act all shares of BT Financial Common Stock to be issued in the
Merger prior to the Effective Time.
2.03. Articles of Incorporation; By-Laws. At the
Effective Time, the articles of incorporation and bylaws of BT
Financial as in effect immediately prior to the Effective Time
shall be the articles of incorporation and bylaws of the
Surviving Corporation.
2.04. Directors and Officers.
(a) The directors and principal officers of BT
Financial immediately prior to the Effective Time shall be the
directors and principal officers of the Surviving Corporation
from and after the Effective Time. In addition, two directors of
First Xxxxxxx designated by First Xxxxxxx, who shall be
acceptable to BT Financial, shall become directors of BT
Financial at the Effective Time to serve for such terms as may be
determined by BT Financial consistent with its director
retirement policies.
(b) In addition, two directors of First Xxxxxxx
designated by First Xxxxxxx, (who may include those persons
selected to be directors pursuant to clauses (a) or (c) of this
Section 2.04), shall be acceptable to BT Financial, shall become
directors of Laurel Trust Company at the Effective Time to serve
until the 2001 annual meeting of the shareholders of BT
Financial.
(c) Immediately after the Bank Merger, two directors
of First Xxxxxxx, selected by First Xxxxxxx (who may include
those persons selected to be directors of BT Financial pursuant
to clauses (a) or (b) of this Section 2.04) and acceptable to BT
Financial shall be appointed to the Board of Directors of Laurel
Bank, each to serve until the 2001 annual meeting of the
shareholders of BT Financial.
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2.05. Closing.
(a) The closing hereunder ("Closing") shall take place at
the offices of Xxxxxx Xxxxxxxx LLP, Xxx Xxxxxx Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000, or such other place agreed upon
by the Parties, on the Closing Date selected by the Parties which
shall be the latest of:
(i) Any business day within five business days after
the receipt of the approval of the Merger by the
Department of Banking;
(ii) Any business day between the thirtieth and thirty-seventh day
following receipt of the last Regulatory
Approval, if all other conditions set forth in Article
VI have been satisfied or waived;
(iii) The fifth business day after any stay of any
Regulatory Approval or any injunction against
consummation of the Merger is lifted, discharged or
dismissed, if all other conditions set forth in Article
VI have been satisfied or waived;
(iv) Such other date as shall be mutually agreed to in
writing by the Parties on which all other conditions
set forth in Article V shall have been satisfied or
waived.
(b) Any Party may postpone the Closing Date fixed under
Section 2.05(a) once for a reasonable period of time (which shall
be no more than thirty (30) days but in no event ending later
than the day of automatic termination in accordance with Section
2.07(h)) if (i) necessary to enable it to perform any obligations
hereunder, provided, that such Party provides prompt written
notice to the other Parties of such postponement, stating the
reasons therefor, or (ii) the other Party would have the right to
terminate this Reorganization Agreement on the basis of the
average per share price of BT Financial Common Stock for the
Valuation Period under Section 2.02.
(c) If First Xxxxxxx or BT Financial shall fail to close
because all the conditions precedent to its obligation to close
shall not have been met on the Closing Date as postponed, such
Party may immediately terminate this Reorganization Agreement by
giving written notice of such termination to the other Party.
2.06. Exchange of Certificates for Stock and Cash.
(a) Common Stock. After the Effective Time, each holder of
a certificate for theretofore outstanding shares of First Xxxxxxx
Common Stock will be entitled to receive in exchange therefor a
certificate or certificates representing the number of whole
shares of BT Financial Common Stock to which such shareholder is
entitled as provided in Section 2.02 plus cash (payable by check)
in lieu of any fractional share of BT Financial Common Stock to
which such holder would otherwise be entitled. Such exchange
will be effected upon surrender of such
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certificate to BT Financial or its exchange agent, together with
a duly executed and completed Letter of Transmittal, which will
be mailed to each holder of a certificate for theretofore
outstanding shares of First Xxxxxxx Common Stock by BT Financial
or its exchange agent promptly following the Effective Time.
(b) Fractional Shares. Neither certificates nor scrip
certificates for fractions of shares of BT Financial Common Stock
shall be issued. Holders of First Xxxxxxx Common Stock who would
but for Section 2.06(a) be entitled to receive fractions of
shares of BT Financial Common Stock shall have none of the rights
with respect to such fractions of shares (including, without
limitation, the right to receive dividends) which a holder shall
possess in respect of a full share of BT Financial Common Stock
issuable as a result of the Merger, and each such holder shall
receive, in lieu of the applicable fraction of a share of BT
Financial Common Stock, a cash payment equal to such fraction of
a share of BT Financial Common Stock multiplied by the closing
sales price on NASDAQ for a share of BT Financial Common Stock on
the Closing Date as reported in the Wall Street Journal, or, if
the BT Financial Common Stock is not traded on such date, the
next succeeding day on which such stock is traded. No interest
will be paid or accrued on cash payable upon surrender of
certificates previously representing Common Stock.
(c) Failure to Surrender Certificates. Until surrendered
in accordance with the provisions of this Section 2.06, the
certificates which immediately prior to the Effective Time
represented issued and outstanding shares of Common Stock (except
for certificates representing treasury shares) shall from and
after the Effective Time represent for all purposes only the
right to receive BT Financial Common Stock. Upon surrender of a
certificate for theretofore outstanding shares of First Xxxxxxx
Common Stock, there shall be paid to the record holder of the
certificate for shares of BT Financial Common Stock issued in
exchange therefor (i) on the date of such exchange, the amount of
dividends theretofore accrued and payable with respect to such
full shares of BT Financial Common Stock as of any date
subsequent to the Effective Time which have not yet been paid to
a public official pursuant to abandoned property laws and (ii) at
the appropriate payment date, the amount of dividends with a
record date after the Effective Time but prior to such surrender
and a payment date subsequent to such surrender. No interest
shall be payable with respect to such dividends.
(d) Treasury Shares. At the Effective Time, each share of
First Xxxxxxx Common Stock held in treasury shall be canceled,
retired and cease to exist and no consideration shall be paid
therefor.
2.07. Termination of this Reorganization Agreement.
This Reorganization Agreement and the transactions contemplated
hereby may be terminated:
(a) At any time prior to the Effective Time by mutual
consent of the Boards of Directors of BT Financial and First
Xxxxxxx;
(b) As provided in Section 2.02(a);
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(c) As provided in Section 2.05(c);
(d) At any time, by either Party hereto in writing, if the
applications for prior approval referred to in Section 4.03(e)
hereof have been denied, and the time period for appeals and
requests for reconsideration has run;
(e) At any time, by either Party hereto in writing, if the
stockholders of either First Xxxxxxx or BT Financial do not
approve the transactions contemplated herein at the annual or
special meetings duly called for that purpose;
(f) At any time, by either Party in writing, if any of the
conditions precedent to such Party's obligations to consummate
the Merger has not been satisfied, fulfilled or waived by the
Party entitled to so waive on or before the Closing Date, as
postponed under Section 2.05(b);
(g) Upon exercise of the Option in whole or in part; or
(h) In any event, automatically on December 31, 1999, if
the Merger has not been consummated on or before such date,
unless extended by mutual consent of the Parties.
2.08. Consequences of Termination. Upon any termination
hereunder:
(a) Sections 2.08, 2.09 and 2.10 and Article VI hereof
shall survive any termination;
(b) If BT Financial terminates this Reorganization
Agreement under Section 2.05(c) due to the failure of any of the
conditions set forth in Section 5.01 (a), (b), (c), (m) or (n)
and satisfaction of such condition was within the control of
First Xxxxxxx, or if this Reorganization Agreement terminates
under Section 2.07(f), then First Xxxxxxx shall reimburse BT
Financial for attorneys' fees and other expenses reasonably
incurred in connection with the Transactions [to the extent not
already paid by First Xxxxxxx to BT Financial]; any such failure
of condition shall constitute a breach of this Reorganization
Agreement, and BT Financial shall have all rights available in
law and at equity for such breach of contract;
(c) If First Xxxxxxx terminates this Reorganization
Agreement under Section 2.05(c) due to the failure of any of the
conditions set forth in Section 5.02 (a), (b), (c), (l) or (m),
and satisfaction of such condition was within the control of BT
Financial or any of its Subsidiaries, then BT Financial shall
reimburse First Xxxxxxx for attorneys' fees and other expenses
reasonably incurred in connection with the Transactions; such
failure shall constitute a breach of this Reorganization
Agreement, and First Xxxxxxx shall have all rights available in
law and at equity for such breach of contract;
(d) If BT Financial terminates this Reorganization
Agreement under Section 2.05(c) due to the failure of any of the
conditions set forth in Section 5.01 (d), (g), (h), (j), (k), or
(l), then First Xxxxxxx shall reimburse BT Financial for
attorneys' fees and other expenses reasonably
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incurred in connection with the Transactions [to the extent not
already paid by First Xxxxxxx to BT Financial] and upon payment
in full thereof, First Xxxxxxx shall have no further liability or
obligation hereunder to BT Financial; and
(e) If First Xxxxxxx terminates this Reorganization
Agreement under Section 2.05(c) due to the failure of any of the
conditions set forth in Section 5.02 (g), (h) or (i), then BT
Financial shall reimburse First Xxxxxxx for attorneys' fees and
other expenses reasonably incurred in connection with the
Transactions and upon payment in full thereof, BT Financial shall
have no further liability or obligation hereunder to First
Xxxxxxx.
In no event shall the amount reimbursed for attorneys' fees
and other expenses reasonably incurred in connection with the
Transactions under clause (d) or (e) of this Section 2.08 exceed
$250,000.
2.09. Confidentiality. In connection with the Merger,
each Party has furnished and will furnish to the other Party,
pursuant to this Reorganization Agreement or otherwise,
confidential information concerning its business and financial
condition. Each Party shall, and shall cause its employees,
agents, accountants, attorneys and investment advisors to,
maintain the confidentiality of such information received from
the other Parties and shall not use such information for any
purpose except in furtherance of the Merger and the other
transactions contemplated hereby. In the event of a termination
of this Reorganization Agreement, upon request by a Party, the
other Party shall return or destroy all copies of written
confidential information received from such Party, whether
pursuant to this Reorganization Agreement or otherwise, and all
documents prepared by them which contain such information.
2.10. Public Disclosure. Each Party shall consult with
the other Parties before issuing any press release or making any
other public disclosure regarding the proposed Merger or the
other transactions contemplated hereby and shall not issue any
press release or make any other public disclosure prior to such
consultations, except as may be required by law or by the rules
of the AMEX or the NASD in the opinion of counsel. A copy of
such press release or public disclosure (or, if not in written
form, a written description thereof) shall be provided to the
other Parties prior to the dissemination thereof.
ARTICLE III
SHAREHOLDER APPROVAL
3.01. First Xxxxxxx Shareholders Meeting. First Xxxxxxx
shall submit this Reorganization Agreement to its shareholders
for approval in accordance with the GCL at a meeting duly
convened and held on such date as shall be agreed upon by the
Parties. In connection with such meetings, First Xxxxxxx shall
furnish the Joint Proxy Statement/Prospectus to its shareholders.
The Board of Directors of First Xxxxxxx shall recommend the
proposed Merger to its shareholders and use their best efforts to
obtain the affirmative vote of the
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shareholders required to approve the transactions contemplated by
this Reorganization Agreement.
3.02. BT Financial Shareholders Meeting. BT Financial
shall submit this Reorganization Agreement to its shareholders
for approval in accordance with the BCL at a meeting duly
convened and held on such date as shall be mutually agreed upon
by BT Financial and First Xxxxxxx. In connection with such
meeting, BT Financial shall furnish the Joint Proxy
Statement/Prospectus to its stockholders. The Board of Directors
of BT Financial shall recommend the proposed Merger to its
shareholders and use its best efforts to obtain the affirmative
vote of the shareholders of BT Financial required to approve the
transactions contemplated by this Reorganization Agreement.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.01. Representations and Warranties of First Xxxxxxx.
First Xxxxxxx represents and warrants to BT Financial as follows:
(a) Organization and Capitalization. First Xxxxxxx is a
corporation duly organized and validly existing under Delaware
law. First Xxxxxxx has the corporate power and authority to
carry on its business as it is now being operated and to carry
out the transactions contemplated by this Reorganization
Agreement. The authorized capital stock of First Xxxxxxx
consists of 10,000,000 shares of common stock having a par value
of $2.50 per share, of which 1,742,400 shares are issued and
outstanding as of the date hereof and no shares are held in the
treasury of First Xxxxxxx. To the knowledge of First Xxxxxxx,
all issued and outstanding shares of First Xxxxxxx Common Stock
are validly issued, fully paid and nonassessable. There is no
subscription, option, warrant, call, right, stock appreciation
right or commitment of any kind obligating First Xxxxxxx to issue
any of its stock or to acquire any of its stock under any
circumstances or to pay cash on account of stock appreciation.
(b) The Bank. The Bank is a national banking association
duly organized and validly existing under the National Bank Act.
The Bank has the corporate power and authority to carry on its
business as it is now being operated and to carry out the
transactions contemplated by this Reorganization Agreement. The
Bank's deposits are insured by the Bank Insurance Fund of the
FDIC. The authorized capital stock of the Bank consists of
300,000 shares of common stock having a par value of $10 per
share, of which all shares are issued and outstanding as of the
date hereof and no shares are held in the treasury of the Bank.
All issued and outstanding shares of First Xxxxxxx Common Stock
are validly issued, fully paid and nonassessable. There is no
subscription, option, warrant, call, right, stock appreciation
right or commitment of any kind obligating the Bank to issue any
of its stock or to acquire any of its stock under any
circumstances or to pay cash on account of stock appreciation.
First Xxxxxxx owns all of the issued and outstanding common stock
of the Bank.
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(c) Flex Organization and Capitalization. Flex Financial
Consumer Discount Company ("Flex") is a finance company validly
existing under the laws of the Commonwealth of Pennsylvania.
Flex has full power and authority to carry on its business as it
is now being operated and to carry out the transactions
contemplated by this Reorganization Agreement. The authorized,
issued and outstanding capital stock of Flex consists of 1,000
shares of common stock having a par value of $1.00 per share.
All issued and outstanding shares of Flex common stock are
validly issued, fully paid and nonassessable and are owned of
record and beneficially by First Xxxxxxx.
(d) Authority for Transactions. This Reorganization
Agreement has been, and the Articles of Merger and Certificate of
Merger, when executed and delivered, will have been, duly and
validly authorized, executed and delivered by First Xxxxxxx,
subject only to Regulatory Approvals and approval by the
shareholders of First Xxxxxxx, and each constitutes the valid and
binding obligations of First Xxxxxxx and are and will be
enforceable in accordance with their respective terms.
(e) No Conflicts. Neither the execution, delivery and
performance of this Reorganization Agreement nor the consummation
of the transactions contemplated hereby, nor compliance by First
Xxxxxxx and any of its Subsidiaries with any of the provisions
hereof or thereof will (i) violate, or conflict with, or result
in a breach of any provisions of, or constitute a default (or an
event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of
the properties or assets of First Xxxxxxx or any of its
Subsidiaries under any of the terms, conditions or provisions of,
(A) the articles of incorporation or bylaws, as amended, of First
Xxxxxxx or any of its Subsidiaries or (B) any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which First Xxxxxxx or any of
its Subsidiaries is a party or by First Xxxxxxx or any of its
Subsidiaries which is bound or to which any of First Xxxxxxx'x
properties or assets or any of its Subsidiaries' properties or
assets may be subject, except for such violations, conflicts,
breaches, defaults, terminations, accelerations, rights or
creations which would not, in the aggregate, have a material
adverse effect on First Xxxxxxx'x or any of its Subsidiaries'
business or financial condition, or (ii) violate any judgment,
ruling, order, writ, injunction, decree, statute, rule or
regulation applicable to First Xxxxxxx or any of its properties
or assets or any of its Subsidiaries' or their properties or
assets.
(f) Financial Statements and SEC Documents. First
Xxxxxxx'x Annual Reports on Form 10-K for the fiscal years ended
December 31, 1996, 1997 and 1998, and all other reports,
registration statements, definitive proxy statements or
information statements filed or to be filed by it or any of its
Subsidiaries subsequent to December 31, 1995 under the Securities
Act of 1933, as amended (together with the rules and regulations
thereunder, the "Securities Act") or under Sections 13(a), 13(c)
14(d) and 15(d) of the Securities Exchange Act of 1934, as
amended (together with the rules and regulations thereunder, the
"Exchange Act"), in the form filed, or to be filed, with the SEC
(collectively, the "SEC Documents") (i) complied or will comply
in all
PT:#23621 v8($8507!.WPD) 13
material respects as to form with the applicable requirements
under the Securities Act or the Exchange Act, as the case may be,
and (ii) did not and will not, at the time of such filing,
contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances
under which they were made, not misleading; and each of the
balance sheets in or incorporated by reference into any such SEC
Document (including the related notes and schedules thereto)
fairly presents and will fairly present the financial position of
the entity or entities to which it relates as of its date and
each of the statements of income and changes in stockholders'
equity and cash flows or equivalent statements in such report and
documents (including any related notes and schedules thereto)
fairly presents and will fairly present the results of
operations, changes in stockholder's equity and changes in cash
flows, as the case may be, of the entity to entities to which it
relates for the periods set forth therein, in each case in
accordance with generally accepted accounting principles
consistently applied during the periods involved, except in each
case as may be noted therein, subject to normal year-end audit
adjustments in the case of unaudited statements.
(g) Certain Changes. Since December 31, 1998, there has
been (i) no material adverse change in the financial condition,
assets, liabilities, income or operations of First Xxxxxxx, or
any of its Subsidiaries, (ii) no material change in the
organization or key personnel of First Xxxxxxx or any of its
Subsidiaries; (iii) no material damage, destruction or casualty
loss with respect to property owned or leased by First Xxxxxxx
(whether or not covered by insurance) which affected or could
affect the business or financial condition or results of First
Xxxxxxx; (iv) no changes in the authorized or issued shares of
First Xxxxxxx Common Stock and no declaration or payment of
distributions with respect to the First Xxxxxxx Common Stock or
redemption or repurchase of any such shares, except for Permitted
Dividends; or (v) no acquisition by First Xxxxxxx or any of its
Subsidiaries of the assets or more than 5% of the outstanding
voting capital stock of another bank or trust company.
(h) Taxes. First Xxxxxxx and its Subsidiaries have filed
when due all returns ("Returns") for and paid in full all state,
federal and local Taxes to the extent such filings and payments
were required prior to the date of this Reorganization Agreement.
Such filings comply with all applicable laws and are true,
correct and complete in all material respects. Any amounts set
up as accruals or reserves in the audited financial statements of
First Xxxxxxx are sufficient for the payment of all Taxes,
whether or not presently being asserted or assessed, the
liability for which has arisen from any action of First Xxxxxxx
or any of its Subsidiaries prior to the dates of such financial
statements. No claims are currently being made by any taxing
authority with respect to any Return, and First Xxxxxxx has no
knowledge of any basis for any such claims. Proper and accurate
amounts have been withheld and remitted by First Xxxxxxx and its
Subsidiaries from and for their employees for all prior periods
in compliance with the tax withholding provisions of applicable
federal, state and local law. First Xxxxxxx and its Subsidiaries
have not had any Tax deficiencies proposed or assessed against it
and has not executed any waiver or extended the statute of
limitations on the audit of any Return or the assessment or
collection of any Tax. First Xxxxxxx and its Subsidiaries have
not made any payment, nor is either obligated to make any
PT:#23621 v8($8507!.WPD) 14
payment, nor is it a party to any agreement that under certain
circumstances could obligate it to make any payment, that would
not be deductible under Code Sections 280G or 162(m).
(i) Litigation. No action, suit, investigation, claim or
proceeding of any nature or kind whatsoever, whether civil,
criminal or administrative, by or before any governmental body or
arbitrator ("Litigation") is pending or, to the knowledge of
First Xxxxxxx, threatened against or affecting First Xxxxxxx, or
any of its Subsidiaries, or their respective businesses, business
assets, Common Stock, or any of the transactions contemplated by
this Reorganization Agreement, and, to the knowledge of First
Xxxxxxx, there is no basis for any Litigation. There is
presently no outstanding judgment, decree or order of any
governmental body against or affecting First Xxxxxxx or any of
its Subsidiaries, or their respective businesses, business
assets, Common Stock, or any of the transactions contemplated by
this Reorganization Agreement.
(j) Compliance with Laws. First Xxxxxxx and each of its
Subsidiaries are in compliance in all material respects with all
laws and regulations applicable to its operations or with respect
to which compliance is a condition of engaging in the business
thereof. First Xxxxxxx and the Bank have paid all assessments
and filed all reports and statements required to be filed with
respect thereto under the rules and regulations of the
Comptroller.
(k) Agreements with Banking Authorities. Neither First
Xxxxxxx nor any of its Subsidiaries is a party to any written
agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any
order or directive by, the Federal Reserve or the Comptroller or
any other regulatory agency which restricts its activities in any
manner, or in any manner relates to the capital adequacy, credit
policies or management of First Xxxxxxx or any of its
Subsidiaries, nor has First Xxxxxxx or any of its Subsidiaries
been advised by any such regulatory agency that it is
contemplating, issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order,
directive, agreement, memorandum of understanding, commitment
letter or similar undertaking.
(l) Regulatory Reports. First Xxxxxxx and its Subsidiaries
have made available for inspection by BT Financial (i) copies of
all reports, if any, by First Xxxxxxx or its Subsidiaries to the
Comptroller and (ii) all material notices, reports and review
letters received from the Federal Reserve or Comptroller or any
other governmental agency.
(m) Loans. Each loan outstanding on the books of the Bank
is reflected correctly in all material respects by the loan
documentation relating thereto, was made in the ordinary course
of business, was not known to be uncollectible at the time it was
made, and was made in accordance with the Bank's standard loan
policies. The Bank has not received notice from any obligor on
any such loan of a dispute with respect to the loan or that the
loan may be unenforceable against the obligor. All loans sold by
the Bank, including whole loans and participations, were sold
without recourse.
PT:#23621 v8($8507!.WPD) 15
As of December 31, 1998, except as set forth in
Schedule 4.01(m) attached hereto, the Bank: (i) had no loans, of
any type or character, in its portfolio (A) exceeding its lending
limits under applicable provisions of Pennsylvania and federal
law, or (B) in violation of Regulation 0 or 12 C.F.R. Part 215,
or similar provisions under Pennsylvania law; (ii) had no loans,
of any type or character, in its portfolio in excess of $100,000
which were or should have been as of such date (A) considered
non-performing or placed on a non-accrual status or (B)
classified by as other loans specially mentioned, substandard,
doubtful or loss loans, except in any case such loans as were
listed on the Bank's most recent internal classified asset
report, a copy of which has been made available to BT Financial.
For purposes of this Reorganization Agreement, "non-performing"
and "non-accrual" shall mean any loan delinquent for 90 days or
more as to the payment of interest and/or principal.
(n) Loan Loss Reserve. The loan loss reserve maintained by
the Bank for all loans in its portfolio is in the best judgment
of Bank management, adequate in all material respects under the
requirements of generally accepted accounting principles and
practices within the banking industry to cover all material known
and anticipated risks of nonpayment with regard to the Bank's
loan portfolio.
(o) Core Deposits. The Bank has delivered to, or made
available for inspection by, BT Financial a summary of the total
amounts held by depositors that in the aggregate each have less
than $100,000 on deposit with the Bank ("Core Deposits"). In
addition, the Bank has delivered to, or made available for
inspection by, BT Financial a complete list of all depositors
that have monies on deposit at the Bank that are not Core
Deposits.
(p) Real Property. First Xxxxxxx and its Subsidiaries have
good and marketable title to the real property (including real
estate owned or acquired through foreclosure) listed in Schedule
4.01(p) ("Owned Real Property"), free and clear of all material
liens, leases, security interests, title retention agreements,
encumbrances, restrictions, conditions, charges, equities and
claims, except those referred to in First Xxxxxxx'x statement of
financial condition dated December 31, 1998 or the notes thereto,
liens for current Taxes not yet due and payable, any unfilled
mechanics' liens and such encumbrances and imperfections of
title, if any, as are not substantial in character or amount or
do not otherwise materially impair First Xxxxxxx or any of its
Subsidiaries, as the case may be. The present uses of the Owned
Real Property are in compliance with the present zoning
classifications assigned to such real property, and all
improvements constructed on the land included in the Owned Real
Property have been constructed in all material respects in
accordance with the requirements of all applicable building,
health, safety, environmental, zoning and other federal, state
and local laws, ordinances, regulations, codes, licenses or
permits applicable at the time of such construction, do not
contain any defect in design or construction or otherwise, and
have access to existing highways, roads and utility services.
Neither First Xxxxxxx nor any of its Subsidiaries have received
any notice or request from any governmental authority, utility,
insurer, board of fire authorities or similar organization for
the performance of any work or alteration with respect to the
Owned Real Property or for the termination or limitation of any
access, services or insurance with respect thereto. All such
PT:#23621 v8($8507!.WPD) 16
Owned Real Property is adequately insured against loss, except
with respect to Environmental Conditions. Neither First Xxxxxxx
nor any of its Subsidiaries own any real property not listed in
Schedule 4.01(p).
(q) Environmental. Except as disclosed in Schedule 4.01(q)
attached hereto:
(i) To the best knowledge of First Xxxxxxx and its
Subsidiaries, there are no Environmental Conditions.
The term "Environmental Condition" means (x) the
presence in surface water, groundwater, drinking water
supply, land surface, subsurface strata, above-ground
or underground storage tanks or other containers, or
ambient air of any pollutant, contaminant, industrial
waste, hazardous waste, polychlorinated biphenyls,
radioactive materials, toxic or hazardous substances
("Hazardous Substances") or (y) any violation of any
statute, ordinance, regulation, administrative order,
judicial order or decree or other governmental
requirement relating to the emission, discharge,
deposit, disposal, leaching, migration or release of
any Hazardous Substance into the environment or the
generation, treatment, storage, transportation or
disposal of any Hazardous Substance (i) arising out of
or otherwise related to the operations or other
activities (including the disposition of such materials
or substances) of First Xxxxxxx, or any of its
Subsidiaries, or of any predecessor in title, interest
or line of business to First Xxxxxxx, conducted or
undertaken prior to the Closing, or (ii) existing at or
prior to the Closing at any Owned Real Property, any
real property leased by First Xxxxxxx, or any of its
Subsidiaries, ("Leased Real Property"), any real
property securing outstanding loans ("Secured Real
Property"), or any property previously owned, leased,
occupied, used or foreclosed upon ("Prior Property");
(ii) No investigation, administrative order, consent
order, agreement, litigation or settlement with respect
to any Environmental Condition is proposed, threatened
or in existence, and First Xxxxxxx and its Subsidiaries
have not received any communication from or on behalf
of any governmental authority that alleges that any
such Environmental Condition exists;
(iii) First Xxxxxxx and its Subsidiaries have
obtained, hold, and will maintain all permits,
licenses, authorizations, consents, approvals, waivers,
variances or exemptions ("Governmental Approvals")
issued by any federal, state, local, foreign, regional
or other judicial, governmental, administrative or
regulatory authority or instrumentality ("Governmental
Authority") required under any federal, state, local or
foreign statutory or common law, rule, regulation,
ordinance, code, policy, guidelines or Governmental
Approvals, relating to Environmental Law for the
ownership, use, occupation, operation and other
activities of First Xxxxxxx and any of its
Subsidiaries, any Owned Real Property, Leased Real
Property, Secured Real Property and Prior Property.
First Xxxxxxx
PT:#23621 v8($8507!.WPD) 17
and its Subsidiaries have made to any Governmental
Authority all filings, reports, registrations, notices
or other submissions ("Governmental Filings") required
under Environmental Laws with respect to the ownership,
use, occupation, operation and other activities of
First Xxxxxxx and any of its Subsidiaries and the Owned
Real Property, Leased Real Property, Secured Real
Property and any Prior Property. Such required
Governmental Approvals and Governmental Filings are
listed on Schedule 4.01(q)(iii) attached hereto. The
term "Environmental Law" means all statutory and common
law, rules, regulations, ordinances, Governmental
Approvals, guidelines, policies, judicial or
administrative orders or decrees of any federal, state
or local Governmental Authority relating to the
protection of human health and safety or the
environment.
(iv) Neither First Xxxxxxx nor any of its Subsidiaries
have transported or disposed of any Hazardous
Substances or arranged for the transportation or
disposal of such Hazardous Substances to any location
which is listed or to the knowledge of First Xxxxxxx or
any of its Subsidiaries proposed for listing under
CERCLA, a comparable state statute or other
Environmental Law, or which is the subject of federal,
state or local enforcement actions or other
investigations which may lead to claims against First
Xxxxxxx or any of its Subsidiaries for clean-up costs,
remedial work, damages to natural resources or for
personal injury claims, including, but not limited to,
claims under CERCLA. None of the Owned Real Property,
Leased Real Property, Secured Real Property or Prior
Property is listed or, to the knowledge of First
Xxxxxxx, or any of its Subsidiaries, proposed for
listing under CERCLA or a comparable state or other
Environmental Law.
(v) Each of the Governmental Approvals set forth in
Schedule 4.01(q)(iii) is in full force and effect and
is final, any fixed period for appeal or review having
elapsed (other than as to ongoing compliance or
modification during the term of such Governmental
Approval as otherwise provided by law or as indicated
in Schedule 4.01(q)(iii)). No such Governmental
Approval is subject to any pending suit, action,
investigation of which First Xxxxxxx or its
Subsidiaries has notice, proceeding or appeal (whether
judicial, administrative or otherwise) and, to the best
of First Xxxxxxx'x knowledge, no such matter is
threatened.
(vi) To the knowledge of First Xxxxxxx or its
Subsidiaries, with respect to First Xxxxxxx'x or its
Subsidiaries' operations or other activities, any Owned
Real Property, Leased Real Property, Secured Real
Property or Prior Property, First Xxxxxxx and each of
its Subsidiaries have complied in all material respects
with, and currently are in compliance in all material
respects with: (A) the terms and conditions of all
Governmental Approvals issued or required pursuant to
any Environmental Law, and (B) all other limitations,
restrictions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any
PT:#23621 v8($8507!.WPD) 18
Environmental Law, or in any written notice, order, or
demand letter issued, entered, promulgated, or approved
pursuant to any Environmental Law;
(vii) Neither First Xxxxxxx nor any of its
Subsidiaries have received any notice of violation or
other notification from any Governmental Authority, or
any written notice from any third party, alleging that
First Xxxxxxx or any of its Subsidiaries is now or has
been in violation of any Environmental Law;
(viii) To the knowledge of First Xxxxxxx and its
Subsidiaries, no ozone depleting substances ("ODS"),
polychlorinated biphenyls ("PCBs"), asbestos containing
material ("ACM"), or urea formaldehyde insulation
("UFI") is present on or at any Owned Real Property,
Leased Real Property, Secured Real Property or any
Prior Property and First Xxxxxxx and each of its
Subsidiaries have complied with all regulatory
requirements relating to the storage, removal, disposal
or release, if any, of ODS, ACM, PCB, or UFIs which
currently are or may in the past have been located on
or at any Owned Real Property, Leased Real Property,
Secured Real Property and any Prior Property.
(ix) To the knowledge of First Xxxxxxx and each of its
Subsidiaries, there are not now any underground or
aboveground storage tanks and associated piping
("Storage Tanks") on or at any Owned Real Property,
Leased Real Property, Secured Real Property or Prior
Property, nor has First Xxxxxxx nor any of its
Subsidiaries owned or operated Storage Tanks at any
time.
(x) With respect to the ownership, use, occupation,
operation and other activities of First Xxxxxxx, any
Owned Real Property, Leased Real Property, Secured Real
Property and any Prior Property, neither First Xxxxxxx
nor any of its Subsidiaries have received any written
request for information from any Governmental Authority
or other Person related to any site which is, or may
be, subject to actions for removal, response,
remediation or cleanup of Hazardous Substances,
including, but not limited to, any information request
pursuant to CERCLA, comparable state statutes, or other
Environmental Law;
(xi) To the knowledge of First Xxxxxxx, neither First
Xxxxxxx nor any of its Subsidiaries, nor any other
Person ever caused or permitted any Hazardous
Substances to be placed, stored, treated, handled or
located on, under or at any Owned Real Property, Leased
Real Property, Secured Real Property or Prior Property
or any part thereof other than in the ordinary course
of business and in compliance with all Environmental
Laws.
(xii) First Xxxxxxx and its Subsidiaries have
complied in all material respects with all applicable
provisions of any Environmental Laws that condition,
restrict or prohibit the transfer, sale, lease or
closure of any property for environmental
PT:#23621 v8($8507!.WPD) 19
reasons; no environmental lien has attached to any
portion of First Xxxxxxx or any of its Subsidiaries or
any Owned Real Property, Leased Real Property, Secured
Real Property or Prior Property, and no governmental
actions have been taken or are in progress that could
subject any or all of the foregoing to any such lien.
(xiii) There have been no past and there are no
pending or contemplated claims by First Xxxxxxx or any
of its Subsidiaries, under any Environmental Laws based
on actions of others that may have impacted any Owned
Real Property, Leased Real Property, Secured Real
Property or Prior Property, and neither First Xxxxxxx
nor any of its Subsidiaries have entered into any
agreement with any Person regarding liabilities or
responsibilities with respect to (i) any Environmental
Law, (ii) remedial action or (iii) other environmental
expense (including contingent liabilities).
(xiv) Neither First Xxxxxxx nor any of its
Subsidiaries have agreed to retain, assume or guarantee
the costs of any investigation, removal, response,
remediation or cleanup of any property.
(xv) First Xxxxxxx and its Subsidiaries have provided
copies of all material reports, documents and other
information pertaining to compliance with Environmental
Laws and environmental matters or liabilities arising
out of, resulting from or in connection with the
operations of First Xxxxxxx or any of its Subsidiaries,
any Owned Real Property, Leased Real Property, Secured
Real Property or Prior Property.
(r) Personal Property. All personal property used by First
Xxxxxxx and its Subsidiaries in its business is either owned or
leased by First Xxxxxxx or its Subsidiaries and is suitable for
the operations and business as currently conducted by First
Xxxxxxx and its Subsidiaries.
(s) Leases. All leased real property and leased personal
property of First Xxxxxxx and its Subsidiaries is listed in
Schedule 4.01(s) attached hereto. Except as disclosed in
Schedule 4.01(s), no consents or approvals are required under the
leases for such property in connection with the transactions
contemplated by this Reorganization Agreement.
(t) Material Contracts. True, correct and complete copies
of all material contracts, agreements, plans, loans, leases,
indentures, mortgages, instruments, or other commitments,
arrangements, understandings, letters of credit or undertakings,
oral or written, formal or informal, to which First Xxxxxxx or
any of its Subsidiaries is a party or otherwise bound or to which
its assets may be affected have been submitted or made available
to BT Financial or are included as part of Schedule 4.01(t)
(hereinafter referred to individually as a "Contract" and
collectively as the "Contracts"). There is no breach or default
(or an event which, with notice or lapse of time or both, would
constitute a default) by First Xxxxxxx or any of its Subsidiaries
of or with respect to any provision of any Contract to which
First Xxxxxxx is a party that could have a
PT:#23621 v8($8507!.WPD) 20
material adverse effect upon the financial condition, operations,
results of operations or business of First Xxxxxxx. All such
Contracts, including but not limited to all contracts relating to
the purchase and sale of loans, are or will be assignable to BT
Financial or BT Financial, as the case may be, without further
action thereby effective as of the Closing Date, except as listed
in Schedule 4.01(t). Neither First Xxxxxxx nor any of its
Subsidiaries is currently renegotiating any Contract.
(u) Insurance. Neither First Xxxxxxx nor any of its
Subsidiaries is in default with respect to any provisions of any
liability or other forms of insurance held by each or has failed
to give any notice or present any claim thereunder in a due and
timely fashion. All polices of insurance are in full force and
effect and are carried in an amount and are otherwise adequate to
protect First Xxxxxxx from any material adverse loss on a
consolidated basis. Neither First Xxxxxxx nor any of its
Subsidiaries have been denied any application for insurance or
had any policy of insurance terminated during the past three
years, nor has First Xxxxxxx or any of its Subsidiaries been
notified of any pending termination.
(v) Employee Benefits.
(i) Benefit Plans; Company Plans. Schedule 4.01(v)
discloses all written and unwritten "employee benefit
plans" within the meaning of Section 3(3) of ERISA, and
any other written and unwritten profit sharing,
pension, savings, deferred compensation, consultant,
bonus, fringe benefit, insurance, medical, medical
reimbursement, life, disability, accident, post-retirement
health or welfare benefit, stock option,
stock purchase, sick pay, vacation, employment,
severance, termination or other incentive, welfare or
employee benefit plan, agreement, contract, policy,
trust fund or arrangement (each a "Benefit Plan"),
whether or not funded and whether or not terminated,
(i) maintained or sponsored by First Xxxxxxx or any of
its Subsidiaries, or (ii) with respect to which First
Xxxxxxx or any of its Subsidiaries has or may have
liability or is obligated to contribute, or (iii) that
otherwise covers any of the current or former employees
of First Xxxxxxx or any of its Subsidiaries or their
beneficiaries, or (iv) as to which any such current or
former employees or their beneficiaries participated or
were entitled to participate or accrue or have accrued
any rights thereunder (each, a "Company Plan"). For
each Company Plan, to the extent applicable to each
such Company Plan, complete copies of the following
have been delivered to BT Financial (but in any event,
no later than seven (7) days prior to the Closing
Date): (i) the documents embodying the Company Plans,
including the plan documents, all amendments thereto,
the related trust or funding agreements, investment
management agreements, administrative service
contracts, insurance contracts, union or trade
agreements and, in the case of any unwritten Company
Plans, written descriptions thereof; (ii) annual
reports including Forms 5500 and all schedules thereto
for the last three years; (iii) financial statements
for the last three years; (iv) actuarial reports, if
applicable, for the last three years; and (v) each
PT:#23621 v8($8507!.WPD) 21
communication (other than routine communications)
received by First Xxxxxxx or any of its Subsidiaries
from or furnished by First Xxxxxxx or any of its
Subsidiaries to the Service, DOL, PBGC or other
governmental authorities. First Xxxxxxx and its
Subsidiaries have also furnished to BT Financial a copy
of the current summary plan description and each
summary of material modification prepared in the last
three years for each Company Plan, and all employee
manuals, handbooks, policy statements and other written
materials given to employees relating to any Company
Plans. No oral or written representations or
commitments inconsistent with such written materials
have been made to any employee of by any member of the
Company Group or any employee or agent thereof.
(ii) Company Group Matters. First Xxxxxxx has never
been a member of a controlled group of corporations
within the meaning of Sections 414(b), (c), (m) or (o)
of the Code.
(iii) Compliance. Each of the Company Plans and
all related trusts, insurance contracts and funds have
been created, maintained, funded and administered in
all material respects in compliance with all applicable
Laws including, without limitation, all applicable
requirements of the Code and any predecessor federal
income tax laws, ERISA, the health care continuation
requirements of COBRA, and any applicable collective
bargaining agreements. Without limiting the generality
of the foregoing, First Xxxxxxx and its Subsidiaries
have provided all notices and other correspondence to
employees and former employees required by the health
care continuation provisions of COBRA. Each of the
Company Plans and all related trusts, insurance
contracts and funds have also been created, maintained,
funded and administered in all material respects in
compliance with applicable law, the plan document,
trust agreement, insurance policy or other writing
creating the same or applicable thereto. To the
knowledge of First Xxxxxxx and its Subsidiaries, no
Company Plan is or is proposed to be under audit or
investigation, and no completed audit of any Company
Plan has resulted in the imposition of any Tax, fine or
penalty.
(iv) Qualified Plans. Schedule 4.01(v) discloses each
Company Plan that purports to be a qualified plan under
Section 401(a) of the Code and exempt from United
States federal income tax under Section 501(a) of the
Code (a "Qualified Plan"). Each Qualified Plan has
received a determination letter (or opinion or
notification letter, if applicable) from the Service
that such plan is qualified under Section 401(a) of the
Code and exempt from federal income tax under Section
501(a) of the Code. No Qualified Plan has been amended
since the date of the most recent such letter in a
manner that might adversely affect the qualification of
such plan under Sections 401(c) and 501(a) of the Code.
No member of the Company Group, nor any fiduciary of
any Qualified Plan, nor any agent of any of
PT:#23621 v8($8507!.WPD) 22
the foregoing, has done anything that would adversely
affect the qualified status of a Qualified Plan or the
qualified status of any related trust.
(v) Defined Benefit Plans; Multi-employer Plans.
Schedule 4.01(v) discloses each Company Plan that is a
defined benefit plan as defined in Section 3(35) of
ERISA (a "Defined Benefit Plan"). No Company Plan is a
multi employer plan as defined in Section 3(37) or
4001(a)(3) of ERISA. Neither First Xxxxxxx nor any of
its Subsidiaries have a material liability for any
Company Plan that is not accrued on the December 31,
1998 Balance Sheet or, that has arisen after December
31, 1998 and on and before the Closing.
(vi) Prohibited Transactions; Fiduciary Duties; Post-Retirement
Benefits. No prohibited transaction (within
the meaning of Section 406 of ERISA and Section 4975 of
the Code) with respect to any Company Plan exists or
has occurred that could subject First Xxxxxxx or any of
its Subsidiaries, directly or indirectly, to any
material liability or Tax under Part 5 of Title I of
ERISA or Section 4975 of the Code. No reportable event
(within the meaning of Section 4043(b) of ERISA) with
respect to any Company Plan exists or has occurred that
could result in any tax or liability material to First
Xxxxxxx or any of its Subsidiaries. No member of the
Company Group, nor any administrator or fiduciary of
any Company Plan, nor any agent of any of the
foregoing, has engaged in any transaction or acted or
failed to act in a manner that could subject First
Xxxxxxx or any of its Subsidiaries, directly or
indirectly, to any material liability for a breach of
fiduciary or other duty under ERISA or any other
applicable law. With the exception of the requirements
of Section 4980B of the Code, no post-retirement
benefits are provided under any Company Plan that is a
welfare benefit plan as described in ERISA Section
3(1).
(vii) Except as set forth on Schedule 4.01(v), the
consummation of the transactions contemplated hereby
will not create, accelerate or increase any liability
under any Company Plan because of the creation,
acceleration or increase of any rights or benefits to
which employees are entitled hereunder, and no payment
required under any Company Plan in connection with the
transactions contemplated hereby shall be non-deductible
for federal income tax purposes by reason of
Section 280G of the Code.
(w) Labor Relations. There are no pending or threatened
labor disputes with any employees of First Xxxxxxx or employees
of any of its Subsidiaries. Neither First Xxxxxxx nor any of its
Subsidiaries are a party to a collective bargaining agreement
with any of its employees. Neither First Xxxxxxx nor any of its
Subsidiaries has existing employment contracts with any of its
current or former employees, directors or officers, with the
exception of those agreements listed in Schedule 4.01(w).
PT:#23621 v8($8507!.WPD) 23
(x) Related Party Transactions. Neither First Xxxxxxx nor
any of its Subsidiaries have current contractual arrangements
with or commitments to or from any officers, directors or
employees of each other than such as are terminable at will. All
current extensions of credit to the shareholders, officers,
directors and employees of First Xxxxxxx or any of its
Subsidiaries as well as business organizations and individuals
associated either have been made in the ordinary course of First
Xxxxxxx'x or any of its Subsidiaries' business on substantially
the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other
banking customers, and did not, at the time they were entered
into, involve more than the normal risk of collectibility or
present other unfavorable features and are in compliance with all
applicable regulations of the FDIC. Since December 31, 1992, all
transactions with the shareholders, officers, directors and
employees of have complied in all material respects with the
rules of the FDIC regarding such transactions, including delivery
of all reports required thereunder. The transactions
contemplated by this Reorganization Agreement will not (either
alone, or upon the occurrence of any act or event, lapse of time
or the giving of notice or failure to cure) result in any payment
(severance or otherwise) becoming due from any of the Parties to
any director, officer or employee of First Xxxxxxx or any of its
Subsidiaries, except as contemplated herein.
(y) Fidelity Bonds. First Xxxxxxx and each of its
Subsidiaries maintained continuously fidelity bonds insuring it
against acts of dishonesty by each of its employees in aggregate
amounts as are customary, usual and prudent for banking
institutions of its size, which coverage currently is
$1,000,000.00. Since December 31, 1992, there have been no
claims under such bonds with the exception of the claim disclosed
in Schedule 4.01(y), and neither First Xxxxxxx nor any of its
Subsidiaries is aware of any facts which would form the basis of
a claim under such bonds. Neither First Xxxxxxx nor any of its
Subsidiaries has reason to believe that its fidelity coverage
will not continue to be available on substantially the same terms
as its existing coverage.
(z) Representations Not Misleading. No representation or
warranty by First Xxxxxxx or any of its Subsidiaries in this
Reorganization Agreement contains, and no written statement,
exhibit or schedule furnished to BT Financial by or on behalf of
First Xxxxxxx or any of its Subsidiaries under this
Reorganization Agreement will contain as of the date thereof, any
untrue statement of a material fact or omits, or will omit, to
state a material fact necessary to make the statements contained
herein or therein not misleading in any material respect, when
taken as a whole.
(aa) Information Provided by First Xxxxxxx. All
information to be provided in writing by First Xxxxxxx or any of
its Subsidiaries for use in the Joint Proxy Statement/Prospectus
in connection with each of the meetings of shareholders of First
Xxxxxxx and BT Financial contemplated hereby or in any
application made by BT Financial to the Service or to any other
governmental or regulatory body in connection with the Merger,
and the information to be provided in writing by First Xxxxxxx or
any of its Subsidiaries for use in the Registration Statement,
including any prospectus contained therein, will comply in all
material respects with
PT:#23621 v8($8507!.WPD) 24
applicable laws and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements made therein, in light of the
circumstances under which they are made, not misleading.
(bb) Consents and Approvals. Except for: (i) the filing
with any federal or state governmental authority of a Joint Proxy
Statement/Prospectus, a Registration Statement and any other
applicable securities filings relating to the issuance of BT
Financial Common Stock and each of the meetings of the
shareholders of First Xxxxxxx and BT Financial; (ii) Regulatory
Approvals; (iii) the approval of the shareholders of First
Xxxxxxx; (iv) the approval of the shareholders of BT Financial;
(v) the obtaining of third party consents as set forth in the
Schedules attached hereto; (vi) the expiration of any regulatory
waiting period and (vii) the notification of AMEX and NASDAQ, no
consents or approvals of or filings or registrations with any
third party or any public body, agency or authority are necessary
in connection with the execution and delivery by First Xxxxxxx of
this Reorganization Agreement and its performance of the
transactions contemplated hereby.
(cc) Investments. Except as set forth in Schedule 4.01(cc)
attached hereto, the investments reflected in First Xxxxxxx'x
statement of financial condition as of December 31, 1998 are a
true, correct and complete list of the investments of First
Xxxxxxx.
(dd) Intellectual Property. First Xxxxxxx and its
Subsidiaries have no (i) patents, trademarks, tradenames, and
copyrights and applications therefor or (ii) trade secrets
(collectively referred to as the "Intellectual Property"). No
claim, suit or action is pending or, to the knowledge of First
Xxxxxxx or any of its Subsidiaries, threatened alleging that
First Xxxxxxx or any of its Subsidiaries is infringing upon the
intangible property rights of others, or that their use of the
Intellectual Property infringes or conflicts with the rights of
others.
(ee) Minute Books. The minute books of First Xxxxxxx and
each of its Subsidiaries, which have been and will continue to be
made available through the Closing Date to BT Financial, contain
true, correct and complete records of all meetings of the
shareholders, the Board of Directors and all committees thereof
and accurately reflect all of the corporate action of the
shareholders, the Board of Directors and all committees thereof.
(ff) Reverse Repurchase Agreements. Neither First Xxxxxxx
nor any of its Subsidiaries have any agreements pursuant to
which purchased securities are subject to an agreement to resell.
(gg) Shareholder and FDIC Reports. First Xxxxxxx and its
Subsidiaries have delivered to, or made available for inspection
by, BT Financial copies of all reports to its shareholders and
the FDIC made by it with respect to the three (3) years ended
December 31, 1998 and for all calendar quarters subsequent
thereto. All such reports do not contain any untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not
misleading.
PT:#23621 v8($8507!.WPD) 25
(hh) Deposit Insurance. The deposits of the Bank are
insured by the Bank Insurance Fund of the FDIC in accordance with
the provisions of the FDIA, and has paid all assessments and
filed all reports required by the FDIA.
(ii) Pooling; Reorganization. First Xxxxxxx is not aware
of any reason why the Merger may not qualify for pooling-of-interests
accounting treatment or as a reorganization under
Section 368(A) of the Code.
(jj) Year 2000 Status. First Xxxxxxx and each of its
Subsidiaries have conducted a thorough inventory and assessment
of the hardware, software and embedded microcontrollers in
noncomputer equipment (collectively, the "Computer Systems") used
by First Xxxxxxx and its Subsidiaries in its business, in order
to determine which parts of the Computer Systems are not Year
2000 Compliant (as defined below) and to estimate the cost of
rendering such Computer Systems Year 2000 Compliant prior to
January 1, 2000 or such earlier date on which the Computer
Systems may shut down or may produce incorrect calculations or
otherwise malfunction without becoming totally inoperable. Based
on the above inventory and assessment, the estimated total cost
of rendering the Computer Systems Year 2000 Compliant is
$100,000, which expenditure has been included in the budget
adopted by First Xxxxxxx for 1999.
4.02. Representations and Warranties of BT Financial.
BT Financial represents and warrants to First Xxxxxxx as
follows:
(a) Organization and Capitalization. BT Financial is
a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania and
has full power and authority to carry on its business as it is
now being operated and to carry out the transactions contemplated
by this Reorganization Agreement. The authorized capital stock
of BT Financial consists of 20,000,000 shares of common stock
having a par value of $5.00 per share, of which 12,985,292 shares
are issued and outstanding as of the date hereof and 2,000,000
shares of preferred stock, none of which are issued and
outstanding. All issued and outstanding shares of BT Financial
Common Stock are validly issued, fully paid and nonassessable and
all shares of BT Financial Common Stock to be issued in the
Merger shall be validly issued, fully paid and nonassessable.
(b) Laurel Bank Organization and Capitalization. Laurel
Bank is a bank and trust company duly organized, validly existing
and in good standing under the laws of the Commonwealth of
Pennsylvania and is a member of the Federal Reserve System.
Laurel Bank has full power and authority to carry on its business
as it is now being operated and to carry out the transactions
contemplated by this Reorganization Agreement. The authorized,
issued and outstanding capital stock of Laurel Bank consists of
981,864 shares of common stock having a par value of $5.00 per
share. All issued and outstanding shares of Laurel Bank common
stock are validly issued, fully paid and nonassessable and are
owned of record and beneficially by BT Financial.
PT:#23621 v8($8507!.WPD) 26
(c) Authority for Transactions. This Reorganization
Agreement has been, and the Articles of Merger and Certificate of
Merger, when executed and delivered, will have been, duly and
validly authorized, executed and delivered by BT Financial,
subject only to receipt of Regulatory Approvals, and each
constitute and will constitute the valid and binding obligations
of BT Financial and are and will be enforceable in accordance
with their respective terms.
(d) No Conflicts. Neither the execution, delivery and
performance of this Reorganization Agreement by BT Financial, nor
the consummation of the transactions contemplated hereby, nor
compliance by BT Financial with any of the provisions hereof will
(i) violate, or conflict with, or result in a breach of any
provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or
acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the
properties or assets of BT Financial or any of its Subsidiaries
under any of the terms, conditions or provisions of, (A) the
articles of incorporation or bylaws, as amended, of BT Financial,
or (B) any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to
which BT Financial or any of its Subsidiaries is a party or by
which any of them is bound or to which any of their respective
properties or assets may be subject, except for such violations,
conflicts, breaches, defaults, terminations, accelerations,
rights or creations which would not, in the aggregate, have a
material adverse effect on BT Financial's business or financial
condition on a consolidated basis, or (ii) subject to compliance
with all applicable statutes and regulations, violate any
judgment, ruling, order, writ, injunction, decree, statute, rule
or regulation applicable to them or any of their respective
properties or assets.
(e) Financial Statements and SEC Documents. BT Financial's
Annual Reports on Form 10-K for the fiscal years ended December
31, 1996, 1997 and 1998, and all other reports, registration
statements, definitive proxy statements or information statements
filed or to be filed by it or any of its Subsidiaries subsequent
to December 31, 1995 under the Securities Act of 1933, as amended
(together with the rules and regulations thereunder, the
"Securities Act") or under Sections 13(a), 13(c) 14(d) and 15(d)
of the Securities Exchange Act of 1934, as amended (together with
the rules and regulations thereunder, the "Exchange Act"), in the
form filed, or to be filed, with the SEC (collectively, the "SEC
Documents") (i) complied or will comply in all material respects
as to form with the applicable requirements under the Securities
Act or the Exchange Act, as the case may be, and (ii) did not and
will not, at the time of such filing, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were
made, not misleading; and each of the balance sheets in or
incorporated by reference into any such SEC Document (including
the related notes and schedules thereto) fairly presents and will
fairly present the financial position of the entity or entities
to which it relates as of its date and each of the statements of
income and changes in stockholders' equity and cash flows or
equivalent statements in such report and documents (including any
related notes and schedules thereto) fairly presents and will
fairly present the results of operations, changes in
stockholder's equity and changes in cash flows, as the case may
be, of the entity or entities to which it relates
PT:#23621 v8($8507!.WPD) 27
for the periods set forth therein, in each case in accordance
with generally accepted accounting principles consistently
applied during the periods involved, except in each case as may
be noted therein, subject to normal year-end audit adjustments in
the case of unaudited statements.
(f) Certain Changes. Since December 31, 1998, there has
been: (i) no material adverse change in the consolidated
financial condition, assets, liabilities, income or operations of
BT Financial taken as a whole; (ii) no material adverse change in
the organization or key personnel of BT Financial or any of its
Subsidiaries, except for changes in the ordinary course of
business, none of which, individually or in the aggregate, has
been material to the business or financial condition of BT
Financial on a consolidated basis; (iii) no material damage,
destruction or casualty loss with respect to property owned or
leased by BT Financial or any of its Subsidiaries (whether or not
covered by insurance) which affected or could affect the business
or financial condition or results of BT Financial on a
consolidated basis; or (iv) no acquisition by BT Financial of the
assets or more than 5% of the outstanding voting capital stock of
another savings association, bank or company.
(g) Litigation. Except for any matters referred to in its
financial statements referred to in Section 4.02(e), (i) there
are no suits, actions, investigations (formal or informal),
proceedings or claims pending or, to the knowledge of BT
Financial, threatened against BT Financial or any of its
Subsidiaries or their respective assets or business or against
their respective officers or directors (in their capacity as
such) in law or at equity or before any governmental agency which
are reasonably expected by BT Financial to have a material
adverse effect on the business, properties, assets, operations or
liabilities of BT Financial on a consolidated basis, or its right
to conduct its business as presently conducted, and (ii) neither
BT Financial nor any of its Subsidiaries is presently subject to
any injunction, order or other decree of any court or other
governmental agency of competent jurisdiction.
(h) Compliance with Laws. To the knowledge of BT
Financial, BT Financial and each of its Subsidiaries are in
compliance in all material respects with all laws and regulations
applicable to their respective operations or with respect to
which compliance is a condition of engaging in the business
thereof, except for failures to comply which, in the aggregate,
would not have a material adverse effect on the conduct of, or
the financial or other condition of, BT Financial's business on a
consolidated basis. BT Financial and its Subsidiaries have paid
all assessments and filed all reports and statements required to
be filed with respect thereto under the rules and regulations of
the Department of Banking, the Federal Reserve and the FDIC.
(i) SEC and Shareholder Reports. BT Financial has
delivered to First Xxxxxxx, or made available for inspection by
First Xxxxxxx, all reports to its shareholders and the SEC made
by it with respect to the four (4) years ended December 31, 1998.
All such reports do not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not
misleading.
PT:#23621 v8($8507!.WPD) 28
(j) Registration Statement. All information relating to BT
Financial and its Subsidiaries which is included in the
Registration Statement at the time it becomes effective and each
amendment or supplement thereto will be accurate and complete,
and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(k) Representations Not Misleading. No representation or
warranty by BT Financial in this Reorganization Agreement
contains, and no written statement, exhibit or schedule furnished
to, by or on behalf of BT Financial under this Reorganization
Agreement will contain as of the date thereof, any untrue
statement of a material fact or omits, or will omit, to state a
material fact necessary to make the statements contained herein
or therein not misleading in any material respect, when taken as
a whole.
(l) Information Provided by BT Financial. All information
to be provided in writing by BT Financial for use in the Joint
Proxy Statement/Prospectus in connection with each of the
meetings of shareholders of First Xxxxxxx and BT Financial
contemplated hereby or in any application made by BT Financial to
the Service or to any other governmental or regulatory body in
connection with the Merger, and the information to be provided in
writing by BT Financial for use in the Registration Statement,
including any prospectus contained therein, will comply in all
material respects with applicable laws and will not contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in
light of the circumstances under which they are made, not
misleading.
(m) Consents and Approvals. Except for: (i) the filing
with any federal or state governmental authority of a Joint Proxy
Statement/Prospectus, a Registration Statement and any other
applicable securities filings relating to the issuance of BT
Financial Common Stock and each of the meetings of First Xxxxxxx
and BT Financial shareholders at which the Merger is to be
considered and the review and clearance thereof by such
governmental authorities, (ii) receipt of Regulatory Approvals,
and (iii) the expiration of any regulatory waiting period, and
(iv) the notification of AMEX and NASDAQ, no consents or
approvals of or filings or registrations with any third party or
any public body, agency, or authority are necessary in connection
with the execution and delivery by BT Financial of this
Reorganization Agreement and its performance of the transactions
contemplated hereby.
(n) Taxes. BT Financial and its Subsidiaries have filed
when due all returns ("Returns") for and paid in full all Taxes
to the extent such filings and payments were required prior to
the date of this Reorganization Agreement. Such filings comply
with all applicable laws and are true and correct. Any amounts
set up as accruals or reserves in the audited consolidated
financial statements of BT Financial are sufficient for the
payment of all Taxes, whether or not presently being asserted or
assessed, the liability for which has arisen from any action of
BT Financial or any of its Subsidiaries prior to the dates of
such financial statements. No claims are currently being made by
any taxing authority with respect to any Return, and BT Financial
has no
PT:#23621 v8($8507!.WPD) 29
knowledge of any basis for any such claims. Proper and accurate
amounts have been withheld and remitted by BT Financial and its
Subsidiaries from and for their employees for all prior periods
in compliance with the tax withholding provisions of applicable
federal, state and local law. BT Financial has not had any Tax
deficiencies proposed or assessed against it and has not executed
any waiver or extended the statute of limitations on the audit
for any Return or the assessment or collection of any Tax.
(o) Agreements with Banking Authorities. Neither BT
Financial nor any of its Subsidiaries is a party to any written
agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any
order or directive by, the Department of Banking, the Federal
Reserve or the FDIC, which restricts its activities in any
manner, or in any manner relates to the capital adequacy, credit
policies or management of BT Financial and its Subsidiaries, nor
has BT Financial or any of its Subsidiaries been advised by any
such regulatory agency that it is contemplating, issuing or
requesting (or is considering the appropriateness of issuing or
requesting) any such order, directive, agreement, memorandum of
understanding, commitment letter or similar undertaking.
(p) Pooling; Reorganization. BT Financial is not aware of
any reason why the Merger may not qualify for pooling-of-interests
accounting treatment or as a reorganization under
Section 368(A) of the Code.
(q) Employment Matters. BT Financial intends to offer all
employees of First Xxxxxxx and its Subsidiaries with 15 or more
years of employment with First Xxxxxxx or its Subsidiaries,
employment for one year with BT Financial or its Subsidiaries,
and thereafter employment-at-will. Such employment will include
such salaries and benefits commensurate with the salaries in
comparable positions at BT Financial or its Subsidiaries as the
case may be.
(r) Year 2000 Status. BT Financial and each of its
subsidiaries have conducted a thorough inventory and assessment
of the hardware, software and embedded microcontrollers in
noncomputer equipment (collectively, the "Computer Systems") used
by BT Financial and its Subsidiaries in its business, in order to
determine which parts of the Computer Systems are not Year 2000
Compliant and to estimate the cost of rendering such Computer
Systems Year 2000 Compliant prior to January 1, 2000 or such
earlier date on which the Computer Systems may shut down or may
produce incorrect calculations or otherwise malfunction without
becoming totally inoperable. Based on the above inventory and
assessment, the estimated total cost of rendering the Computer
Systems Year 2000 Compliant is $756,000, of which $500,000 has
already been spent and the remaining amount expected for
completion, $256,000 has been included in the budget adopted by
BT Financial for 1999.
4.03. Covenants of All Parties. Each of the Parties
covenants and agrees that:
(a) Conduct of Business. From and after the date hereof
and until the Closing Date, each Party shall, and shall cause
each of its Subsidiaries to:
PT:#23621 v8($8507!.WPD) 30
(i) carry on its business diligently and substantially
in the same manner as heretofore and, except as
otherwise provided in this Reorganization Agreement,
will not institute any unusual or novel methods of
management or operation of its properties or business;
(ii) maintain its books and records in the usual,
ordinary and normal course;
(iii) promptly advise the other Parties in writing
of (A) the initiation of any litigation of any kind
against it or any litigation by it and (B) the
happening of any event which in the reasonable belief
of its management may have an adverse effect on either
First Xxxxxxx, or BT Financial on a consolidated basis,
as the case may be;
(iv) continue in effect its present insurance coverage
at the present levels on all properties, assets,
business and personnel;
(v) use its best efforts to preserve its business
organization intact, to keep available its present
employees, to preserve its relationships with customers
and others having business dealings with it and to
maintain all of its tangible property in customary
repair, order and condition (reasonable wear and tear
excepted); and
(vi) ensure that its executive officers shall meet
periodically with the executive officers of the other
Parties to exchange information on their respective
institutions, and to facilitate an orderly transition
following the Closing Date.
(b) Environmental Studies. Within sixty days following the
date of this Reorganization Agreement, BT Financial shall cause
to be completed, at its sole cost and expense, a Phase I
environmental assessment ("Phase I assessment") of all real
estate owned by First Xxxxxxx (the "Premises") and shall deliver
a copy of each such Phase I assessment to First Xxxxxxx. If BT
Financial should determine pursuant to the results of any such
Phase I assessment that (A) there has been an Environmental
Condition affecting the Premises or any storage, discharge,
disposal, release or emission of any Hazardous Substance in, on
or from the Premises and (B) BT Financial reasonably believes
that it could become responsible for the remediation of such
storage, discharge, disposal, release or emission or become
liable for monetary damages resulting therefrom, and (C) the
remediation costs or potential liability is greater than
$100,000, then BT Financial shall inform First Xxxxxxx in writing
with specificity, including a good faith estimate of the cost of
remediation, within thirty (30) days of BT Financial's receipt of
the Phase I assessment, and BT Financial may, in its sole
discretion, terminate this Reorganization Agreement.
(c) Mutual Cooperation on Tax Matters. First Xxxxxxx and
BT Financial shall each provide the other with such assistance as
may reasonably be requested by any of them in connection with the
preparation of any Tax return, any Tax audit, or any judicial or
PT:#23621 v8($8507!.WPD) 31
administrative proceedings relating to any Tax, and each will
retain and provide the other with any records or information that
may be relevant to such Tax return, Tax audit, proceeding or
determination. The party requesting assistance hereunder shall
reimburse the other for direct expenses incurred in providing
such assistance.
(d) Fulfillment of Agreements. Each party hereto
shall use its best efforts to cause all of those conditions to
the obligations of the other under Article VI that are not beyond
its reasonable control to be satisfied on or prior to the Closing
and shall use its best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the
transactions contemplated by this Reorganization Agreement.
(e) Bank Regulatory Applications. As promptly as
practicable after the date hereof, BT Financial, (i) shall submit
any requisite applications for prior approval of the transactions
contemplated herein and in the Certificate of Merger between
First Xxxxxxx and BT Financial and the Articles of Merger between
Laurel Bank and the Bank to the appropriate federal and state (if
applicable) financial institution regulatory authorities
depending upon the structure of the Merger, (ii) BT Financial
shall submit applications for prior approval of the Merger to the
Federal Reserve Board, and (iii) each of the parties hereto
shall, and they shall cause their respective Subsidiaries to,
submit any applications, notices or other filings to any other
state or federal government agency, department or body the
approval of which is required for consummation of the Merger. BT
Financial and First Xxxxxxx represent and warrant to the other
that all information concerning it, its Affiliates and their
respective directors, officers, shareholders and Subsidiaries
included (or submitted for inclusion) in any such application
shall be true, correct and complete in all material respects.
(f) Adverse Actions. No party will:
(i) take any action that would, or is reasonably
likely to, prevent or impede the Merger from qualifying
(1) for pooling-of-interests accounting treatment or
(2) as a reorganization within the meaning of Section
368(A) of the Code; or
(ii) knowingly take any action that is intended or is
reasonably likely to result in
(A) any of its representations or warranties set
forth in the Plan being or becoming untrue in any
material respect at any time prior to the
Effective Time,
(B) any of the conditions to the Merger set forth
in Article IV not being satisfied, or
(C) a material violation of any provision of this
Plan.
PT:#23621 v8($8507!.WPD) 32
4.04. Covenants of First Xxxxxxx.
First Xxxxxxx hereby covenants and agrees that:
(a) Access to Corporate Records. Until the Closing Date,
First Xxxxxxx and each of its Subsidiaries shall give BT
Financial and its representatives full access during normal
business hours to all their respective property, documents,
contracts and records and such information with respect to their
business affairs and properties as BT Financial from time to time
may reasonably request; provided, however, that First Xxxxxxx and
each of its Subsidiaries shall not be required to give such
access or information to the extent that it is prohibited
therefrom by a rule, regulation or order of any regulatory body.
All documents, contracts, records or information obtained
pursuant to this Section 4.04(a) shall be and remain subject to
the confidentiality provisions of Section 2.09 of this
Reorganization Agreement.
(b) Financial Statements and Internal Audit Reports. First
Xxxxxxx shall promptly provide BT Financial with copies of its
annual, quarterly and monthly financial statements for the
periods ending between the date of this Reorganization Agreement
and the Effective Time. First Xxxxxxx shall promptly forward to
BT Financial copies of its periodic internal audit reports.
First Xxxxxxx shall also promptly provide or permit inspection of
all reports filed by it and the Bank during such period with the
Federal Reserve Board and the Comptroller, and copies of all
notices or reports sent to its shareholders to the extent
permitted by law and all material notices, reports, and review
letters received from the Federal Reserve Board and the
Comptroller. Until the Closing Date, First Xxxxxxx will provide
copies of all such financial statements and notices, reports and
review letters to BT Financial on a prompt and timely basis.
(c) Negative Covenants - Conduct of Business. Except with
the prior written consent of BT Financial, neither First Xxxxxxx
nor any of its Subsidiaries, shall on or after the date hereof:
(i) issue any capital notes or shares of its capital
stock, declare or distribute any dividend, including
any stock dividends, authorize a stock split, or
authorize, issue or make any other distribution of, on,
or with respect to, its capital stock except for (a)
Permitted Dividends whose record dates and payable
dates for such quarterly Permitted Dividends shall be
synchronized with BT Financial's record dates and
payable dates for dividends and First Xxxxxxx shall
confer with BT Financial prior to fixing any such
record dates or payable dates, prior to any quarterly
Permitted Divided distributions, and (b) the Option
granted pursuant to the Stock Option Agreement between
First Xxxxxxx and BT Financial of even date herewith;
(ii) merge with, consolidate with, sell its assets to,
or acquire substantially all the assets of, any other
corporation, bank or Person, or enter into any other
transaction not in the ordinary course of business;
PT:#23621 v8($8507!.WPD) 33
(iii) make any direct or indirect redemption,
purchase or other acquisition of any of its capital
stock;
(iv) create or award any pension or profit sharing
plan, bonus, deferred compensation, death benefit
or retirement plan, or any other employee benefit,
enter into any employment or consulting contract
(written or otherwise), or grant any bonuses to any
officer, director or employee;
(v) amend its articles of incorporation or bylaws
except as may be necessary to consummate the
transactions contemplated by this Reorganization
Agreement or as required by law;
(vi) incur any liability or obligation or make any
commitment or disbursement, acquire or dispose of any
property or asset, make any contract or agreement, or
engage in any transaction, except in the ordinary
course of business;
(vii) increase the rate of compensation of any
director, officer, employee or agent or enter into any
agreement to increase the rate of compensation of any
director, officer or employee, other than normal
increases in the ordinary course of business and
consistent with past practice;
(viii) unless permitted by BT Financial, take any
action that would entitle any employee to receive
severance pay prior to the Closing Date;
(ix) intentionally do anything or intentionally fail to
do anything which will cause a breach or a default
under any contract, agreement, commitment or obligation
to which it is a party or by which it may be bound;
(x) except for securities transactions effected in the
ordinary course of business with the prior consent of
BT Financial (which consent shall not be unreasonably
withheld), make any capital expenditures in excess of
$150,000 in the aggregate;
(xi) modify or extend any service bureau contracts,
hardware/software maintenance agreements, lease
agreements or other contracts that involve annual
payments that exceed $25,000 per contract or $100,000
in the aggregate;
(xii) change its lending, borrowing, investment,
asset/liability management or other material banking
policies in any material respect except as may be
required by changes in applicable law, regulation or
regulatory directives, except that, in connection with
the closing of the transactions contemplated hereby,
shall cooperate in good faith with BT Financial to
adopt policies, practices and procedures consistent
with those utilized by BT Financial and its Affiliates;
PT:#23621 v8($8507!.WPD) 34
(xiii) open or close any branch offices except for
the proposed new office for Flex;
(xiv) fail to pay any tax or any other liability or
charge when due, other than charges contested in good
faith by appropriate proceedings; or
(xv) make, change or revoke any tax election or make
any agreement or settlement with any taxing authority.
(d) Consents and Approvals. First Xxxxxxx and each of its
Subsidiaries shall cooperate with BT Financial in furnishing such
information concerning First Xxxxxxx'x business and affairs and
its directors and officers as is reasonably necessary or
requested in order to enable BT Financial to prepare and file the
Registration Statement and all applications for Regulatory
Approvals, and in obtaining such other consents required under
any agreements which BT Financial shall request to be obtained to
the extent required to consummate the Merger. First Xxxxxxx and
each of its Subsidiaries shall use its best efforts to obtain the
approval or consent of any federal, state or other regulatory
agency having jurisdiction to the extent that such approvals or
consents are required to effect the Merger and the other
transactions contemplated hereby.
(e) Notice of Changes. Until the Effective Time, First
Xxxxxxx and each of its Subsidiaries shall give BT Financial
prompt written notice of any material change or inaccuracies in
any data previously given or made available to BT Financial
pursuant to this Reorganization Agreement. Notice of changes to
Schedule 4.01(m) of this Reorganization Agreement shall be
effected by promptly furnishing to BT Financial current monthly
lists of doubtful, nonperforming or problem loans.
(f) Acquisition Proposals. Neither First Xxxxxxx nor any
of its Subsidiaries, nor any of its officers or directors or the
officers and directors of its Subsidiaries, nor any of its other
affiliates (as defined in Rule 12b-2 under the Exchange Act)
(each, an "Affiliate") shall, and First Xxxxxxx shall cause it
and its Subsidiaries' its employees, agents and representatives
(including, without limitation, any investment banking, legal or
accounting firm retained by and any individual member or employee
of the foregoing) (each, an "Agent") not to,
(i) initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or
implementation of any proposal or offer (including,
without limitation, any proposal or offer to any of
them or their respective shareholders) with respect to
a merger, acquisition, consolidation, recapitalization,
liquidation, dissolution or similar transaction
involving, or any purchase of all or a substantial
portion of the assets or equity securities of, (any
such proposal or offer being hereinafter referred to as
an "Acquisition Proposal") or
PT:#23621 v8($8507!.WPD) 35
(ii) engage in any negotiations concerning, or provide
any confidential information or data to, or have any
discussions with, any Person relating to an Acquisition
Proposal, or
(iii) otherwise cooperate in any effort or attempt
to make, implement or accept an Acquisition Proposal.
Notwithstanding the foregoing, nothing herein shall prohibit
First Xxxxxxx or its board of directors and officers from
fulfilling their fiduciary duties under Delaware or federal law
to the shareholders of First Xxxxxxx. First Xxxxxxx shall notify
BT Financial immediately if any inquiries, proposals or offers
related to an Acquisition Proposal are received by, any
confidential information or data is requested from, or any
negotiations or discussions related to an Acquisition Proposal
are sought to be initiated or continued with, them or any
individual or entity referred to in the first sentence of this
Section 4.04(f).
(g) Indemnification.
(i) First Xxxxxxx will indemnify and hold harmless BT
Financial and each Person, if any, who controls BT
Financial within the meaning of the Securities Act
against any losses, claims, damages or liabilities,
joint or several, to which BT Financial or such
controlling Persons may become subject, under the
Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect
thereof) (A) arise out of or are based upon any untrue
statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Joint
Proxy Statement/Prospectus or any amendment or
supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not misleading
to the extent that any such statement or omission was
provided in writing by First Xxxxxxx or any of its
Subsidiaries to BT Financial or (B) arise out of or are
based upon any untrue statement or alleged untrue
statement of any material fact or any omission or
alleged omission to state a material fact required to
be stated or necessary to make the statements not
misleading in any document distributed to any First
Xxxxxxx shareholder to the extent that any such
statement or omission was provided in writing by First
Xxxxxxx or any of its Subsidiaries to BT Financial, and
First Xxxxxxx will reimburse BT Financial and each such
controlling Person for any legal or other expenses
reasonably incurred by BT Financial or such controlling
Person in connection with investigating or defending
any such loss, claim, damage, liability or action;
provided, however, that First Xxxxxxx will not be
liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any
of the Registration Statement, the Joint Proxy
Statement/Prospectus or any amendment or supplement
PT:#23621 v8($8507!.WPD) 36
thereto, or any related preliminary prospectus that was
made or omitted in reliance upon and in conformity with
written information furnished by the other Parties
specifically for use therein. This indemnity agreement
will be in addition to any liability which First
Xxxxxxx may otherwise have.
(ii) Promptly after receipt by an indemnified party
under this Section 4.04(g) of notice of the
commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made
against the indemnifying party under this Section
4.04(g), notify the indemnifying party of the
commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any
liability which it may have to any indemnified party
otherwise than under this Section 4.04(g). In case any
such action is brought against any indemnified party
and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that
it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such
indemnified party under this Section 4.04(g) for any
legal or other expenses subsequently incurred by such
indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(iii) If recovery is not available under the
foregoing indemnification provisions of this Section
4.04(g) for any reason other than as specified therein,
the parties entitled to indemnification by the terms
thereof shall be entitled to contribution for
liabilities and expenses, except to the extent that
contribution is not permitted under Section 11(f) of
the Securities Act. In determining the amount of
contribution to which the respective parties are
entitled, there shall be considered the relative
benefits received by each party from the transactions
contemplated hereby, the parties' relative knowledge
and access to information concerning the matter with
respect to which the claim was asserted, the
opportunity to correct and prevent any statement or
omission, and any other equitable considerations
appropriate under the circumstances. First Xxxxxxx and
BT Financial agree that it would not be equitable if
the amount of such contribution were determined by pro
rata or per capital allocations.
(h) Deposits. First Xxxxxxx shall offer rates on all
deposits which are in accordance with present institutional
guidelines and which are priced within local competitor
offerings. Further, First Xxxxxxx shall not accept any broker or
out of area deposits and shall price all "jumbo deposits" in
accordance with existing practice. Such jumbo deposits shall be
offered only to local retail, public or corporate accounts.
PT:#23621 v8($8507!.WPD) 37
(i) Furnishing Information. First Xxxxxxx and each of its
Subsidiaries shall cooperate with BT Financial in furnishing such
information concerning the business of First Xxxxxxx and each of
its Subsidiaries as is reasonably necessary or requested in order
to prepare and file the Registration Statement and Joint Proxy
Statement/Prospectus to be used in connection with the meeting of
the stockholders of as provided in Section 3.01 hereof, or to
prepare and file any applications for regulatory or governmental
approvals.
(j) Certain Tax Matters.
(i) Tax Returns and Payment of Taxes for Periods
Through the Closing Date. First Xxxxxxx shall include
its income on its federal income tax return for all
periods up to and including the Closing Date and will
pay any tax due thereon. First Xxxxxxx also shall pay
its state or local income tax for all taxable periods
up to and including the Closing Date. The income of
First Xxxxxxx shall be apportioned for the period up to
and including the Closing Date and the period after the
Closing Date by closing the books of First Xxxxxxx as
of the close of business on the Closing Date.
(ii) Carrybacks. If is required to carry back any item
of loss, deduction or credit that arises in any
taxable period ending after the Closing Date to a tax
return of First Xxxxxxx for any taxable period ending
on or before the Closing Date, BT Financial will be
entitled to an amount equal to the refund or credit of
taxes realized as a result thereof.
4.05. Covenants of BT Financial. BT Financial hereby
covenants and agrees that:
(a) Access to Corporate Records. Until the Closing Date,
BT Financial shall give First Xxxxxxx and its representatives
full access during normal business hours to all its property,
documents, contracts and records and such information with
respect to its business affairs and properties (in each case
including those of its Subsidiaries) as First Xxxxxxx from time
to time may reasonably request; provided, however, that BT
Financial shall not be required to give such access or
information to the extent that it is prohibited therefrom by a
rule, regulation or order of any regulatory body. All documents,
contracts, records or information obtained pursuant to this
Section 4.05(a) shall be and remain subject to the
confidentiality provisions of Section 2.09 of this Reorganization
Agreement.
(b) Financial Statements. BT Financial shall promptly
provide First Xxxxxxx with copies of its annual and quarterly
financial statements, as included in its reports on Form 10-K or
10-Q, respectively, as filed with the SEC pursuant to the
requirements of the Exchange Act, for the periods ending between
the date of this Reorganization Agreement and the Effective Time.
Until the Closing Date, BT Financial will provide copies of any
reports it files with the SEC under the Exchange Act to First
Xxxxxxx on a prompt and timely basis.
PT:#23621 v8($8507!.WPD) 38
(c) Consents and Approvals. BT Financial shall use its
best efforts to obtain the approval or consent of any federal,
state or other regulatory agency having jurisdiction to the
extent that such approvals or consents are required to effect the
Merger and the other transactions contemplated hereby.
(d) Notice of Changes. Until the Effective Time, BT
Financial shall give First Xxxxxxx prompt written notice of any
material change or inaccuracies in any data previously given or
made available to First Xxxxxxx pursuant to this Reorganization
Agreement.
(e) Furnishing Information. BT Financial shall cooperate
with First Xxxxxxx in furnishing such information concerning the
business of BT Financial as is reasonably necessary or requested
in order to prepare and file the Registration Statement and Joint
Proxy Statement/Prospectus to be used in connection with the
meetings of the shareholders of First Xxxxxxx as provided in
Section 3.01 hereof, or to prepare and file any applications for
regulatory or governmental approvals. BT Financial shall provide
to First Xxxxxxx and their respective counsel a copy of the
Registration Statement and each application for regulatory or
governmental approval, including all amendments to such
documents, in draft form prior to filing and, as soon as
practicable after the date of filing, a copy of the filing. BT
Financial shall provide to First Xxxxxxx and their respective
counsel a copy of all correspondence to and from the various
regulatory agencies with respect to the Registration Statement
and the regulatory applications.
(f) Indemnification of and Liability Insurance for Officers
and Directors.
(i) After the Effective Time, BT Financial, as
successor to First Xxxxxxx, shall indemnify and hold
harmless any former directors, officers, employees or
agents of First Xxxxxxx or any of its Subsidiaries who
have rights to indemnification under the articles of
incorporation and bylaws of First Xxxxxxx from and
against any and all claims, losses, liabilities or
damages arising out of or in connection with any of
their activities in such capacities or on behalf of, or
at the request of First Xxxxxxx, prior to the Effective
Time ("Claims") in accordance with and to the extent
required under the articles of incorporation and bylaws
of First Xxxxxxx. This section shall not be construed
to increase, in any manner, any liabilities or
obligations BT Financial would otherwise have as the
successor by merger to First Xxxxxxx.
(ii) BT Financial will indemnify and hold harmless
First Xxxxxxx and each Person, if any, who controls
First Xxxxxxx within the meaning of the Securities Act
against any losses, claims, damages or liabilities,
joint or several, to which BT Financial or such
controlling Persons may become subject, under the
Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect
thereof) (A) arise out of or are based upon any untrue
statement or alleged untrue statement of any material
fact contained in the Joint Proxy Statement/Prospectus
or any amendment or supplement thereto, or any related
PT:#23621 v8($8507!.WPD) 39
preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein
a material fact required to be stated therein or
necessary to make the statements therein not misleading
to the extent that any such statement or omission
relates to BT Financial or (B) arise out of or are
based upon any untrue statement or alleged untrue
statement of any material fact or any omission or
alleged omission to state a material fact required to
be stated or necessary to make the statements not
misleading in any document distributed to any
shareholder to the extent that any such statement or
omission relates to BT Financial, and will reimburse
and each such controlling Person for any legal or other
expenses reasonably incurred by or such controlling
Person in connection with investigating or defending
any such loss, claim, damage, liability or action;
provided, however, that BT Financial will not be liable
in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any of the Joint
Proxy Statement/Prospectus or any amendment or
supplement thereto, or any related preliminary
prospectus that was made or omitted in reliance upon
and in conformity with written information furnished by
First Xxxxxxx specifically for use therein. This
indemnity agreement will be in addition to any
liability which BT Financial may otherwise have.
(iii) Promptly after receipt by an indemnified
party under this Section 4.05(f) of notice of the
commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made
against the indemnifying party under this Section
4.05(f), notify the indemnifying party of the
commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any
liability which it may have to any indemnified party
otherwise than under this Section 4.05(f). In case any
such action is brought against any indemnified party
and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that
it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such
indemnified party under this Section 4.05(f) for any
legal or other expenses subsequently incurred by such
indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(iv) If recovery is not available under the foregoing
indemnification provisions of this Section 4.05(f) for
any reason other than as specified therein, the parties
entitled to indemnification by the terms thereof shall
be entitled to contribution for liabilities and
expenses, except to the extent that contribution is not
permitted
PT:#23621 v8($8507!.WPD) 40
under Section 11(f) of the Securities Act. In
determining the amount of contribution to which the
respective parties are entitled, there shall be
considered the relative benefits received by each party
from the transactions contemplated hereby, the parties'
relative knowledge and access to information concerning
the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any
statement or omission, and any other equitable
considerations appropriate under the circumstances.
First Xxxxxxx and BT Financial agree that it would not
be equitable if the amount of such contribution were
determined by pro rata or per capita allocations.
(g) Employee Matters.
(i) Any full-time employee of First Xxxxxxx, subject to
Section 4.02(q), whose employment with First Xxxxxxx or any
of its Subsidiaries is terminated, other than for cause, by BT
Financial within six months after the Effective Time,
and not offered a comparable job with BT Financial or
an affiliate of BT Financial, will be paid severance
pay equal to one week's W-2 compensation multiplied by
each year of service with First Xxxxxxx or any of its
Subsidiaries not exceeding three months salary. For
purposes of this section, a job shall not be considered
comparable if it requires the employee to work less
than 30 hours per week or is at a location more than 30
miles from First Xxxxxxx'x main office.
(ii) All employees of First Xxxxxxx or any of its
Subsidiaries immediately prior to the Effective Time
who are employed by BT Financial following the
Effective Time ("Transferred Employees") will be
entitled to participate in BT Financial's employee
benefit plans as to which they are eligible without
fulfilling any vesting requirement and shall be
entitled to credit for their length of service,
compensation, job classification or position with First
Xxxxxxx or any of its Subsidiaries, to the extent permissible
under all applicable laws and regulations and the terms
and benefits of BT Financial's current benefit plans or
those of its Affiliates. BT Financial agrees that any
pre-existing condition, limitation or exclusion in its
health plans shall not apply to Transferred Employees or
their covered dependents who are covered under a medical or
hospitalization indemnity plan maintained by First Xxxxxxx on
the date of the Merger and then change coverage to BT
Financial's medical or hospitalization indemnity health
plan at the time such Transferred Employees are first
given the option to enroll in BT Financial's health
plans. Except with respect to any defined benefit
pension plan sponsored by BT Financial or an Affiliate
of BT Financial, a Transferred Employee's service with
First Xxxxxxx or any of its Subsidiaries shall be
recognized as service with BT Financial for purposes of
eligibility, participation, vesting, and benefit
accruals, subject to applicable break-in-service rules
and to the extent permissible under all applicable laws
and regulations and the terms and benefits of BT
Financial's current benefit plans or those of its
Affiliates. With
PT:#23621 v8($8507!.WPD) 41
respect to any defined benefit pension plans sponsored
by BT Financial or an Affiliate of BT Financial, a
Transferred Employee's service with First Xxxxxxx or
any of its Subsidiaries shall be recognized as service
with BT Financial for purposes of eligibility,
participation, vesting, benefit accruals, subject to
the extent permissible under all applicable laws and
regulations and the terms and benefits of BT
Financial's current benefit plans or those of its
Affiliates.
Nothing contained in this Section shall be deemed to be a
contract for employment nor a guaranty or right to employment
with BT Financial or its Affiliates for any Person, nor shall
anything contained in this Section constitute an agreement by BT
Financial or its Affiliates not to revise, amend, revoke, or
terminate any employee benefit plan or arrangement that it may in
the future make available to its employees, including Transferred
Employees. Notwithstanding anything contained herein to the
contrary, the obligations of BT Financial contained in this
Section shall survive the Closing.
(h) Registration Statement and Joint Proxy Statement. BT
Financial shall prepare, and shall file with the SEC, and shall
use its best efforts to cause to become effective, the
Registration Statement covering the shares of BT Financial Common
Stock to be delivered pursuant to this Reorganization Agreement
and shall use its best efforts to register or qualify such
securities, if required, under applicable state securities laws.
If any material change occurs in the facts set forth in the
Registration Statement, BT Financial shall promptly notify First
Xxxxxxx in writing of such change (other than with respect to
information supplied by First Xxxxxxx for inclusion therein) and
shall prepare, in accordance with the requirements of the
Securities Act of 1933, as amended, and file amendments to the
Registration Statement that may be appropriate or required.
ARTICLE V
CONDITIONS PRECEDENT
5.01. Conditions Precedent to the Obligations of BT
Financial. The obligations of BT Financial to consummate the
transactions contemplated by this Reorganization Agreement shall
be subject to the satisfaction, on or before the Closing Date, of
each and every one of the following conditions, all or any of
which may be waived, in whole or in part, by BT Financial to the
extent permitted by law:
(a) Performance of Covenants. Each of the covenants to be
performed by First Xxxxxxx hereunder on or before the Closing
Date shall have been duly performed in all material respects; and
the President and Secretary of First Xxxxxxx shall each have
executed and delivered to BT Financial a certificate, dated as of
the Closing Date, to the effect that such officers have no
knowledge of the nonfulfillment of the foregoing condition.
PT:#23621 v8($8507!.WPD) 42
(b) Representations True at Closing. The representations
and warranties made by First Xxxxxxx herein and in any
certificate provided to BT Financial hereunder shall be true and
correct in all material respects on the Closing Date with the
same force and effect as though such representations and
warranties had been made on and as of such time (or as of the
date when made in the case of any representation and warranty
which specifically relates to an earlier date), except that the
representations made in Section 4.01(q) shall be modified by the
results of the Phase I assessment referred to in Section 4.03(b),
and the President and Secretary of First Xxxxxxx shall each have
executed and delivered to BT Financial a certificate, dated as of
the Closing Date, to the effect that such officers have no
knowledge of the nonfulfillment of the foregoing condition.
(c) Certified Resolutions. First Xxxxxxx and the Bank
shall each have furnished BT Financial with a certified copy of
resolutions duly adopted by each of its Board of Directors
authorizing and approving this Reorganization Agreement and the
transactions contemplated hereby and by the shareholders of the
Bank approving this Reorganization Agreement and the transactions
contemplated thereby.
(d) Shareholder Approval. This Reorganization Agreement
shall have been approved by the affirmative vote of a majority of
the votes cast by all holders of BT Financial Common Stock
entitled to vote thereon. This Reorganization Agreement shall
have been approved by the affirmative vote of the holders of a
majority of the outstanding shares of First Xxxxxxx Common Stock,
and First Xxxxxxx shall have furnished BT Financial with a
certified copy of resolutions duly adopted by its shareholders
authorizing and approving this Reorganization Agreement and the
transactions contemplated hereby.
(e) Government Approvals and Other Consents. BT Financial
and First Xxxxxxx and their Subsidiaries shall have received in
form and substance satisfactory to BT Financial all necessary
federal and state Regulatory Approvals, shareholder or other
consents necessary to permit consummation of the Merger and the
Bank Merger transactions contemplated hereby and all applicable
waiting periods required by law shall have expired or elapsed.
No such approvals and consents shall require BT Financial or such
Subsidiary to enter into any agreement or stipulation that is
inconsistent with prior Federal Reserve, Comptroller, FDIC or
Department of Banking practice or procedure, Delaware and
Pennsylvania law and all applicable waiting periods required by
law shall have expired or elapsed.
(f) No Injunction. No action, proceeding, regulation or
legislation shall have been instituted or threatened before any
court, governmental agency or legislative body to enjoin,
restrain or prohibit, or to obtain substantial damages in respect
of, or which is related to or arises out of, this Reorganization
Agreement, the consummation of the transactions contemplated
hereby or the Merger, which, in the good faith judgment of BT
Financial, would make it inadvisable to consummate such
transactions.
PT:#23621 v8($8507!.WPD) 43
(g) No Material Misstatements or Omissions. Subject to the
cure provisions of Section 2.07(f), BT Financial shall not have
discovered any material error, misstatement or omission in any
information furnished in writing or to be furnished in writing to
BT Financial hereunder, or in the information to be furnished by
First Xxxxxxx or any of its Subsidiaries and contained in the
Registration Statement.
(h) Changes in Financial Condition. Since the date of this
Reorganization Agreement, there shall not have occurred any
material adverse change in the business, financial condition, or
results of operation of First Xxxxxxx on a consolidated basis,
other than changes resulting from or attributable to changes in
laws or regulations, generally accepted accounting principles, or
interpretations thereof, that affect the banking industry generally.
(i) Registration Statement. The Registration Statement
covering the shares of BT Financial Common Stock to be issued to
the shareholders of First Xxxxxxx under this Reorganization
Agreement shall have been declared effective by the SEC, shall be
exempt or declared effective in each state having jurisdiction
thereon, and no stop order proceeding shall be pending or
threatened with respect thereto.
(j) Opinion of Counsel. An opinion of Xxxxxxx, Xxxxxxx &
Xxxxx, P.C. counsel for First Xxxxxxx shall have been delivered
to BT Financial, dated the Closing Date, and in form and
substance satisfactory to BT Financial and its counsel,
substantially to the effect that:
(i) First Xxxxxxx is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Delaware and has full power and authority
to carry on its business as described in the Joint
Proxy Statement/Prospectus and to carry out the
transactions contemplated by this Reorganization
Agreement. The authorized capital stock of First
Xxxxxxx consists of 10,000,000 shares of common stock
having a par value of $2.50 per share, of which
1,742,400 shares are issued and outstanding as of the
date hereof. All issued and outstanding shares of
First Xxxxxxx Common Stock are validly issued, fully
paid and nonassessable.
(ii) The Bank is a national banking association duly
organized and validly existing under the National Bank
Act. The Bank has the corporate power and authority to
carry on its business as it is now being operated and
to carry out the transactions contemplated by this
Reorganization Agreement. The Bank's deposits are
insured by the Bank Insurance Fund of the FDIC. The
authorized capital stock of the Bank consists of
300,000 shares of common stock having a par value of
$10 per share, of which all shares are issued and
outstanding as of the date hereof and no shares are
held in the treasury of the Bank. All issued and
outstanding shares of the Bank Common Stock are validly
issued, fully paid and nonassessable. There is no
subscription, option, warrant, call, right, stock
appreciation right or commitment of any kind obligating
the Bank to issue any of its stock or to acquire any of
its stock under any circumstances or to pay cash on
PT:#23621 v8($8507!.WPD) 44
account of stock appreciation. First Xxxxxxx owns all
of the issued and outstanding common stock of the Bank.
(iii) Flex Organization and Capitalization. Flex
Financial Consumer Discount Company ("Flex") is a
finance company validly existing under the laws of the
Commonwealth of Pennsylvania. Flex has full power and
authority to carry on its business as it is now being
operated and to carry out the transactions contemplated
by this Reorganization Agreement. The authorized,
issued and outstanding capital stock of Flex consists
of 1,000 shares of common stock having a par value of
$1.00 per share. All issued and outstanding shares of
Flex common stock are validly issued, fully paid and
nonassessable and are owned of record and beneficially
by First Xxxxxxx.
(iv) This Reorganization Agreement has been, and the
Articles and Certificate of Merger, when executed and
delivered, will have been, duly and validly authorized,
executed and delivered by First Xxxxxxx, and constitute
and will constitute the valid and binding obligations
of First Xxxxxxx and are and will be enforceable in
accordance with their respective terms, except as
limited by (a) bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization,
conservatorship, receivership or other similar laws
from time to time in effect affecting the enforcement
of creditors' rights generally or the rights of
creditors of insured depository institutions, (b)
general equitable principles, (c) laws relating to the
safety and soundness of insured depository
institutions, (d) the possible unavailability of
certain remedies in the event of non-material breaches
of such agreements, and (e) the effect or availability
of equitable remedies or injunctive relief (regardless
of whether such enforceability is considered in a
proceeding in equity or at law).
(v) Neither the execution, delivery and performance of
this Reorganization Agreement by First Xxxxxxx, nor the
consummation of the transactions contemplated hereby,
nor compliance by First Xxxxxxx with any of the
provisions hereof will (i) violate, or conflict with,
or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate
the performance required by, or result in a right of
termination or acceleration under, or result in the
creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of
First Xxxxxxx or any of its Subsidiaries under any of
the terms, conditions or provisions of, (A) the
articles of incorporation or bylaws, as amended, of
First Xxxxxxx or the Bank, or (B) any note, bond,
mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which
First Xxxxxxx or any of its Subsidiaries is a party or
by which any of them is bound or to which any of their
respective properties or assets may
PT:#23621 v8($8507!.WPD) 45
be subject, except for such violations, conflicts,
breaches, defaults, etc. which would not, in the
aggregate, have a material adverse effect on First
Xxxxxxx'x business or financial condition on a
consolidated basis, or (ii) to its knowledge, violate
any judgement, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to them or any
of their respective properties or assets.
(vi) First Xxxxxxx has obtained all necessary federal
and state governmental and Regulatory Approvals in
order to consummate the Merger.
(vi) The Registration Statement has become effective
under the Securities Act, and, to the knowledge of such
counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no
proceedings for that purpose have been instituted or
are pending or threatened under the Securities Act.
In expressing such opinion, counsel may rely on certificates
of officers and other representatives of First Xxxxxxx as to
matters of fact and certificates of public officials as to
matters within their jurisdiction. Such opinion shall be
governed by the Legal Opinion Accord of the ABA Section of
Business Law (1991).
(k) Expenses. First Xxxxxxx shall have paid all out-of-pocket
expenses and disbursements, including legal, accounting
and investment banking fees incurred by First Xxxxxxx in
connection with the Transactions, except for reasonable out-of-pocket
expenses actually incurred that the parties acknowledge
have not been billed on or before the Closing Date; and the
President and Secretary of First Xxxxxxx shall each have executed
and delivered to BT Financial a certificate, dated as of the
Closing Date, to the effect that such officers have no knowledge
of the nonfulfillment of the foregoing condition.
(l) Tax Opinion. BT Financial shall have received an
opinion of Xxxxxx Xxxxxxxx LLP, in form and substance reasonably
satisfactory to BT Financial, dated as of the Closing Date,
substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, (i)
the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368 of the Code and
that accordingly no gain or loss will be recognized by BT
Financial or First Xxxxxxx as a result of the Merger; and (ii) no
gain or loss will be recognized by First Xxxxxxx'x shareholders
as a result of the receipt of BT Financial Common Stock in the
Merger. In rendering such opinion, Xxxxxx Xxxxxxxx may require
and rely upon representations contained in certificates of
officers of BT Financial, First Xxxxxxx, and others.
(m) Pooling Letter. BT Financial shall have received from
PricewaterhouseCoopers LLP, independent accountants for BT
Financial, a letter dated the date of or shortly prior to the
mailing date of the Joint Proxy Statement/Prospectus and the
Effective Time, to the effect that such accountants are not aware
of any facts or circumstances which might cause the Merger not to
qualify for pooling of interests accounting treatment.
PT:#23621 v8($8507!.WPD) 46
(n) Affiliates Agreements. BT Financial shall have
received duly executed Affiliates' Agreements from each director
and officer of BT Financial and First Xxxxxxx in the forms of
Exhibits A and B respectively.
5.02. Conditions Precedent to the Obligations of First
Xxxxxxx. The obligations of First Xxxxxxx to consummate the
transactions contemplated by this Reorganization Agreement shall
be subject to the satisfaction, on or before the Closing Date, of
each and every one of the following conditions, all or any of
which may be waived, in whole or in part, by First Xxxxxxx to the
extent permitted by law:
(a) Performance of Covenants. Each of the covenants to be
performed by BT Financial hereunder on or before the Closing Date
shall have been duly performed in all material respects; and the
President and Secretary of BT Financial shall each have executed
and delivered to First Xxxxxxx a certificate, dated as of the
Closing Date, to the effect that such officers have no knowledge
of the nonfulfillment of the foregoing condition.
(b) Representations True at Closing. The representations
and warranties made by BT Financial herein and in any certificate
provided by BT Financial hereunder shall be true and correct in
all material respects on the Closing Date with the same force
and effect as though such representations and warranties had been
made on and as of such time (or as of the date when made in the
case of any representation and warranty which specifically
relates to an earlier date), and the President and Secretary of
BT Financial shall each have executed and delivered to First
Xxxxxxx a certificate, dated as of the Closing Date, to the
effect that such officers have no knowledge of the nonfulfillment
of the foregoing condition.
(c) Certified Resolutions. BT Financial and Laurel Bank
shall each have furnished First Xxxxxxx with a certified copy of
resolutions duly adopted by the Board of Directors of BT
Financial and Laurel Bank authorizing this Reorganization
Agreement and the transactions contemplated hereby and by the
shareholder of Laurel Bank approving this Reorganization
Agreement and the transactions contemplated hereby.
(d) Shareholder Approval. This Reorganization Agreement
shall have been approved by the affirmative vote of a majority of
the votes cast by all holders of First Xxxxxxx Common Stock
entitled to vote thereon. This Reorganization Agreement shall
have been approved by the affirmative vote of the holders of a
majority of the outstanding shares of BT Financial Common Stock,
and BT Financial shall have furnished First Xxxxxxx with a
certified copy of resolutions duly adopted by its shareholders
authorizing and approving this Reorganization Agreement and the
transactions contemplated hereby.
(e) Government Approvals and Other Consents. BT Financial
and First Xxxxxxx and their Subsidiaries shall have received in
form and substance satisfactory to BT Financial all necessary
federal and state governmental and Regulatory Approvals,
shareholder approvals and other consents necessary to permit
consummation of the Merger and the Bank Merger transactions
PT:#23621 v8($8507!.WPD) 47
contemplated hereby, and all applicable waiting periods required
by law shall have expired or elapsed. No such approvals and
consents shall require First Xxxxxxx or its Subsidiaries to enter
into any agreement or stipulation that is inconsistent with prior
Federal Reserve, Comptroller, FDIC, Department of Banking
practice or procedure, or Delaware or Pennsylvania law.
(f) No Injunction. No action, proceeding, regulation or
legislation shall have been instituted or threatened before any
court, governmental agency or legislative body to enjoin,
restrain or prohibit, or to obtain substantial damages in respect
of, or which is related to or arises out of, this Reorganization
Agreement, the consummation of the transactions contemplated
hereby or the Merger, which, in the good faith judgment of First
Xxxxxxx, would make it inadvisable to consummate such
transactions.
(g) No Material Misstatements or Omissions. Subject to the
cure provisions of Section 2.07(f), First Xxxxxxx shall not have
discovered any material error, misstatement or omission in any
information furnished in writing or to be furnished in writing to
hereunder, or in the information to be furnished by BT Financial
or its Subsidiaries and contained in the Registration Statement.
(h) Changes in Financial Condition. Since the date of this
Reorganization Agreement, there shall not have occurred any
material adverse change in the business financial condition, or
results of operation of BT Financial on a consolidated basis,
other than changes resulting from or attributable to changes in
laws or regulations, generally accepted accounting principles,
or interpretations thereof, that affect the banking industry generally.
(i) Registration Statement. The Registration Statement
covering the shares of BT Financial Common Stock to be issued to
the shareholders of First Xxxxxxx under this Reorganization
Agreement shall have been declared effective by the SEC, shall be
exempt or declared effective in each state having jurisdiction
thereon, and no stop order proceeding shall be pending or
threatened with respect thereto.
(j) Opinion of BT Financial and Counsel. An opinion of
Xxxxxx Xxxxxxxx LLP, counsel for BT Financial, shall have been
delivered to First Xxxxxxx, dated the Closing Date, and in form
and substance satisfactory to and its counsel, substantially to
the effect that:
(i) BT Financial is a corporation duly organized,
validly existing and in good standing under the laws of
the Commonwealth of Pennsylvania and has full power and
authority to carry on its business as described in the
Joint Proxy Statement/Prospectus and to carry out the
transactions contemplated by this Reorganization
Agreement. The authorized capital stock of BT
Financial consists of 20,000,000 shares of common stock
having a par value of $5.00 per share, of which
12,985,292 shares are issued and outstanding as of the
date hereof and 2,000,000 shares of preferred stock, no
par value, none of which are issued and
PT:#23621 v8($8507!.WPD) 48
outstanding as of the date hereof. All issued and
outstanding shares of BT Financial Common Stock are
validly issued, fully paid and nonassessable.
(ii) Laurel Bank is a bank and trust company duly
organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania and a
member of the Federal Reserve System. Laurel Bank has
full power and authority to carry on its business as
described in the Joint Proxy Statement/Prospectus and
to carry out the transactions contemplated by this
Reorganization Agreement. The authorized, issued and
outstanding capital stock of Laurel Bank consists of
981,864 shares of common stock having a par value of
$5.00 per share. All issued and outstanding shares of
Laurel Bank Common Stock are validly issued, fully paid
and nonassessable.
(iii) This Reorganization Agreement has been, and
the Articles and Certificate of Merger, when executed
and delivered, will have been, duly and validly
authorized, executed and delivered by BT Financial, and
constitute and will constitute the valid and binding
obligations of BT Financial and are and will be
enforceable in accordance with their respective terms,
except as limited by (a) bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization,
conservatorship, receivership or other similar laws
from time to time in effect affecting the enforcement
of creditors' rights generally or the rights of
creditors of insured depository institutions, (b)
general equitable principles, (c) laws relating to the
safety and soundness of insured depository
institutions, (d) the possible unavailability of
certain remedies in the event of non-material breaches
of such agreements, and (e) the effect or availability
of equitable remedies or injunctive relief (regardless
of whether such enforceability is considered in a
proceeding in equity or at law).
(iv) Neither the execution, delivery and performance of
this Reorganization Agreement by BT Financial, nor the
consummation of the transactions contemplated hereby,
nor compliance by BT Financial with any of the
provisions hereof will (i) violate, or conflict with,
or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate
the performance required by, or result in a right of
termination or acceleration under, or result in the
creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of BT
Financial or any of its Subsidiaries under any of the
terms, conditions or provisions of, (A) the articles of
incorporation or bylaws, as amended, of BT Financial or
Laurel Bank, or (B) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which BT Financial or
any of its Subsidiaries is a party or by which any of
them is bound or to which any of their respective
properties or assets may be subject, except for such
violations, conflicts, breaches, defaults, etc. which
PT:#23621 v8($8507!.WPD) 49
would not, in the aggregate, have a material adverse
effect on BT Financial's business or financial
condition on a consolidated basis, or (ii) to its
knowledge, violate any judgement, ruling, order, writ,
injunction, decree, statute, rule or regulation
applicable to them or any of their respective
properties or assets.
(v) BT Financial has obtained all necessary federal
and state governmental and Regulatory Approvals in
order to consummate the Merger.
(vi) The Registration Statement has become effective
under the Securities Act, and, to the knowledge of such
counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no
proceedings for that purpose have been instituted or
are pending or threatened under the Securities Act.
In expressing such opinion, counsel may rely on certificates of
officers and other representatives of BT Financial as to matters
of fact and certificates of public officials as to matters within
their jurisdiction. Such opinion shall be governed by the Legal
Opinion Accord of the ABA Section of Business Law (1991).
(k) Fairness Opinion. First Xxxxxxx shall have received an
opinion from Xxxxxx Xxxxxxx & Co. dated prior to the date of the
Joint Proxy Statement/Prospectus that the consideration to be
paid to shareholders of First Xxxxxxx pursuant to this
Reorganization Agreement is fair from a financial point of view
to the shareholders of First Xxxxxxx.
(l) Tax Opinion. First Xxxxxxx shall have received an
opinion of Xxxxxx Xxxxxxxx LLP, in form and substance reasonably
satisfactory to First Xxxxxxx, dated as of the Closing Date,
substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, (i)
the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368 of the Code and
that accordingly no gain or loss will be recognized by BT
Financial, Laurel Bank or First Xxxxxxx as a result of the
Merger; and (ii) no gain or loss will be recognized by First
Xxxxxxx'x shareholders as a result of the receipt of BT Financial
Common Stock in the Merger. In rendering such opinion, Xxxxxx
Xxxxxxxx may require and rely upon representations contained in
certificates of officers of BT Financial, First Xxxxxxx, Xxxxxx
Bank and others.
(m) Pooling Letter. First Xxxxxxx shall have received from
PricewaterhouseCoopers LLP, independent accountants for BT
Financial, a letter dated the date of or shortly prior to the
mailing date of the Joint Proxy Statement/Prospectus and the
Effective Time, to the effect that such accountants are not aware
of any facts or circumstances which might cause the Merger not to
qualify for pooling of interests accounting treatment.
5.03. Waivers. A condition precedent as set forth in
this Article V shall be deemed to be satisfied if it has been
materially and reasonably satisfied, and no Party shall fail to
consummate the transactions described herein by reason of a
breach of any covenant or the
PT:#23621 v8($8507!.WPD) 50
failure to satisfy a condition precedent unless such breach or
failure is material to such transactions as a whole. Any
condition waived in writing by the Party entitled to the benefit
thereof shall thereafter cease to be a condition precedent for
purposes of this Article V.
ARTICLE VI
BROKERS AND EXPENSES
6.01. Brokers. BT Financial represents and warrants to
First Xxxxxxx that no broker or finder has acted for it in
connection with the execution and delivery of this Reorganization
Agreement or the transactions contemplated hereby. First Xxxxxxx
represents and warrants to BT Financial that no broker or finder
has acted for it in connection with the execution and delivery of
this Reorganization Agreement or the transactions contemplated
hereby. Each Party shall be indemnified and held harmless by the
other from any claim, suit, loss or expense resulting from a
breach of the other party's foregoing representation and
warranty.
6.02. Expenses. Except as otherwise provided in this
Reorganization Agreement, all expenses incurred by each Party in
connection with or related to the authorization, preparation and
execution of this Reorganization Agreement, the solicitation of
shareholder approval and all other matters related to the closing
of the transactions contemplated hereby, including without
limiting the generality of the foregoing, all fees and expenses
of agents, representatives, counsel and accountants employed by
any such Party, shall be borne solely and entirely by the Party
which has incurred the same.
ARTICLE VII
MISCELLANEOUS
7.01. Further Assurances. (a) From time to time as and
when requested by BT Financial or Laurel Bank, or their
respective successors or assigns, First Xxxxxxx, or the officers
and directors of First Xxxxxxx last in office prior to
consummation of the Merger, shall execute and deliver such
agreements, documents and other instruments necessary to permit
the Bank Merger to take place, subject to the completion of the
Merger; (b) such further agreements, documents, deeds and other
instruments and shall take or cause to be taken such other
actions, including those as shall be necessary to vest or perfect
in or to confirm of record or otherwise in the Surviving
Corporation title to and possession of all the property,
interests, assets, rights, privileges, immunities, powers,
franchises and authority of First Xxxxxxx, as shall be necessary
or advisable to carry out the purposes of and effect the
transactions contemplated by this Reorganization Agreement.
7.02. Survival of Representations, Warranties and
Covenants. All representations, warranties and covenants in this
Reorganization Agreement or in any instrument delivered
PT:#23621 v8($8507!.WPD) 51
pursuant hereto shall expire on, and be terminated and
extinguished on, the Closing Date, other than covenants that by
their terms are to survive or be performed after the Closing
Date.
7.03 Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if delivered or sent by first-class
registered or certified mail, postage prepaid, with return
receipt requested, as follows:
(a) If to First Xxxxxxx, to:
Xxxxxx X. Xxx
President
First Xxxxxxx Financial Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000
with a copy to:
Xxxxxxx X. Xxxxxxx, Xx., Esquire
Xxxxxxx, Spiegel & Xxxxx, P.C.
Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
(b) If to BT Financial:
Xxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
BT Financial Corporation
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxx, Esquire
Xxxxxx Xxxxxxxx LLP
Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
or to such other address as any such Person may designate in
writing to the other Parties at the addresses listed above, in
accordance with this Section.
7.04. Binding Effect. This Reorganization Agreement
shall be binding upon and inure to the benefit of the Parties
hereto and their respective successors and assigns. This
PT:#23621 v8($8507!.WPD) 52
Reorganization Agreement may not be assigned by any Party without
the express written consent of the other Parties.
7.05. Headings. The Article, Section, paragraph and
other headings in this Reorganization Agreement are inserted
solely as a matter of convenience and for reference and are not a
part of this Reorganization Agreement.
7.06. Counterparts. This Reorganization 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.
7.07. Integration; No Third-Party Beneficiaries. This
Reorganization Agreement constitutes the entire understanding of
the Parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements or communications,
oral or written, between the Parties hereto with respect to the
subject matter hereunder. This Reorganization Agreement is not
intended to confer upon any Person other than the Parties hereto
any rights or remedies hereunder, except for the provisions of
Sections 4.04(g) and 4.05(f).
7.08. Severability. If any term or other provision of
this Reorganization Agreement is held by a court of competent
jurisdiction to be invalid, illegal or incapable of being
enforced under any rule of law in any particular respect or under
any particular circumstances, such term or provision shall
nevertheless remain in full force and effect in all other
respects and under all other circumstances, and all other terms,
conditions and provisions of this Reorganization Agreement shall
nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any
Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this
Reorganization Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the
end that the transactions contemplated hereby are fulfilled to
the fullest extent possible.
7.09. Amendments. This Reorganization Agreement may be
changed, waived, discharged or terminated only by an instrument
in writing signed by the Party against which the enforcement of
such change, waiver, discharge or termination is sought. This
Agreement is not intended to confer upon any Person other than
the Parties hereto any rights or remedies hereunder, except for
the provisions of Sections 4.04(g) and 4.05(f). Any of the terms
or conditions of this Reorganization Agreement may be waived at
any time by the Party which is entitled to the benefit thereof,
or any of such terms or conditions may be amended or modified in
whole or in part at any time before or after the vote of the
shareholders of First Xxxxxxx and BT Financial on this
Reorganization Agreement to the extent permitted by law by
agreement in writing, executed in the same manner as this
Reorganization Agreement after authorization to do so by the
Board of Directors of each Party; provided, however, that such
action shall be taken only if, in the judgment of the Boards of
Directors of each Party taking the action, such waiver or
PT:#23621 v8($8507!.WPD) 53
such amendment or modification will not have a material adverse
effect on the benefits intended under this Reorganization
Agreement to such Party and its shareholders following approval
of this Reorganization Agreement by the shareholders of First
Xxxxxxx, unless this Reorganization Agreement, as modified, is
resubmitted to the shareholders of First Xxxxxxx and BT Financial
for their approval.
7.10. Governing Law. This Reorganization Agreement
shall be governed by and construed and enforced in accordance
with the laws of the Commonwealth of Pennsylvania and, where the
context so requires, under applicable federal law.
7.11. Incorporation by Reference. Any and all
schedules, exhibits, annexes, statements, reports, certificates
or other documents or instruments referred to herein or attached
hereto are incorporated herein by reference thereto as though
fully set forth at the point referred to in this Reorganization
Agreement.
IN WITNESS HEREOF, each Party hereto has caused this
Reorganization Agreement to be executed on its behalf and its
corporate seal to be affixed hereto by its duly authorized
officers, all as of the day and year first above set forth.
ATTEST: First Xxxxxxx Financial Corporation
/s/Xxxxx X. Xxxxxxx /s/Geo. X. Xxx
Xxxxxx X. Xxx
Secretary President and Chief Executive Officer
(Corporate Seal)
ATTEST: BT Financial Corporation
/s/ Xxxxx X. Xxxx /s/Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
Secretary Chairman and Chief Executive Officer
(Corporate Seal)
PT:#23621 v8($8507!.WPD) 54
Schedule 4.01(f) First Xxxxxxx Financial Statements
There are no exceptions to the criteria set forth in Section
4.01(f) with respect to financial statements and other SEC
documents.
PT:#23621 v8($8507!.WPD) 55
Schedule 4.01(m) First Xxxxxxx Loans
None.
PT:#23621 v8($8507!.WPD) 56
Schedule 4.01(p) First Xxxxxxx Real Property
1. Headquarter Xxxxxx
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
2. Berlin Xxxxxx
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
3. Somerset Xxxxxx
000 X. Xxxx Xxxxxx (Xxxxx 00)
Xxxxxxxx, XX 00000
4. Vacant Lot
East side of 000 Xxxx Xxxxxx (Xxxxx 00)
Xxxxxxxx, XX 00000
5. New Centerville Xxxxxx
0000 Xxx Xxxxxxxxxxx Xxxx (Xxxxx 000)
Xxxxxxxx, XX 00000
6. Confluence Xxxxxx
000-000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
7. Old Trails Xxxxxx
0000 Xxxxxxxx Xxxx (Xxxxx 00)
Xxxxxxxxxxxx, XX 00000
8. Indian Head Xxxxxx
0000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000
9. Shanksville Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
10. Stoystown Xxxxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
All documents, including deeds, relating to real estate owned by
First Xxxxxxx have been provided or made available to BT
Financial.
PT:#23621 v8($8507!.WPD) 57
Schedule 4.01(q) First Xxxxxxx Environmental Conditions
None.
PT:#23621 v8($8507!.WPD) 58
Schedule 4.01(q)(iii) First Xxxxxxx Governmental Filings
None.
PT:#23621 v8($8507!.WPD) 59
Schedule 4.01(s) First Xxxxxxx Leases
REAL PROPERTY LEASED:
1. Meyersdale Xxxxxx
0000 Xxxxx Xxxxx Xxxxxxx (Xxxxx 000)
Xxxxxxxxxx, XX 00000
2. Flex Financial Consumer Discount Company
0000 Xxxx Xxxx Xxxxxx (Xxxxx 00)
Xxxxxxxx, XX 00000
PERSONAL PROPERTY LEASED:
1. Paragon II Postage Equipment
Model SP6K
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
2. Time and Temperature Sign
(8 Locations)
000 Xxxx Xxxx Xxxxxx, Xxxxxxxx
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxxx
0000 Xxx Xxxxxxxxxxx Xxxx, Xxxxxxxx
508-510 Hugart Street, Confluence
0000 Xxxxxxxx Xxxx, Xxxxxxxxxxxx
2066 Indian Head Road, Indian Head
0000 Xxxx Xxxxxx, Xxxxxxxxxxx
000 Xxxx Xxxx Xxxxxx, Xxxxxxxxx
3. Credit Report Machine (2)
000 Xxxx Xxxxxx, Xxxxxx
000 Xxxx Xxxx Xxxxxx, Xxxxxxxx
All leases of real and personal property of First Xxxxxxx have
been provided or made available to BT Financial.
PT:#23621 v8($8507!.WPD) 60
Schedule 4.01(t) First Xxxxxxx Material Contracts
All material contracts have been submitted or made available to
BT Financial as provided in Section 4.01(t).
PT:#23621 v8($8507!.WPD) 61
Schedule 4.01(v) First Xxxxxxx Employee Benefits
1. Medical Insurance
Blue Cross/Blue Shield
2. Section 125 (flexible medical and child care expense)
Benefit Coordinators Corporation
3. Dental Insurance
Delta Dental
4. Life Insurance
UNUM Insurance Company
5. Long Term Disability
CNA Insurance
6. Short Term Disability
Self-Insured through the Bank
7. 401k Plan (Cash Op)
First Xxxxxxx Bank, N.A. Cash Op Plan
Self-Directed Investments in Mutual Funds through Xxxxxx
Investments
8. Defined Benefit Plan
First Xxxxxxx Bank, N.A. Pension Plan
9. Employee Stock Ownership Plan
First Xxxxxxx Bank, N.A. Employee Stock Ownership Plan
10. Executive Supplement Income Plan
Massachusetts Mutual Insurance Company (Xxxxxx Xxx and
Xxxxxxxx Xxxxxxxxx -
annual premium being paid)
Reliance Standard Insurance Company (10 current employees
and 6 former employees)
Metropolitan Life (2 former employees)
First Colony Life (3 former employees)
[FN]
The plan has been terminated subject to final approval of
the Internal Revenue Service.
All "employee benefit plans" of First Xxxxxxx have been provided
or made available to BT Financial.
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Schedule 4.01(w) First Xxxxxxx Employment Contracts
First Xxxxxxx and/or the Bank have entered into employment
contracts with Xxxxxx X. Xxx, Xxxxxxxx Xxxxxxxxx, Xxxxx X. Xxxxx
and Xxxxx X. Xxxxxxxxx, copies of which contracts have been
submitted to BT Financial.
PT:#23621 v8($8507!.WPD) 63
Schedule 4.01(y) First Xxxxxxx Xxxx Claim
There is existing one claim against the Bank's fidelity bond
carrier with respect to a defalcating employee. The details of
the matter have been submitted to BT Financial.
PT:#23621 v8($8507!.WPD) 64
Schedule 4.01(cc) First Xxxxxxx Investments
None.
PT:#23621 v8($8507!.WPD) 65
Exhibit A
First Xxxxxxx Financial Corporation
Affiliate's Agreement
The undersigned, in connection with the Agreement and Plan
of Reorganization dated as of (the "Agreement"),
by and between First Xxxxxxx Financial Corporation ("First
Xxxxxxx") and BT Financial Corporation ("BT Financial") does
hereby represent, warrant, undertake and agree as follows:
1. The undersigned has been advised that as of the date
hereof the undersigned may be deemed to be an "affiliate" of
First Xxxxxxx as the term "affiliate" is used in and for purposes
of Section 201.01 of the SEC's Codification of Financial
Reporting Policies (formerly SEC Accounting Series Releases 130
and 135) and Rule 145 of the Securities Act of 1933, as amended
(the "Act"), although nothing contained herein should be
construed as an admission thereof;
2. The shares of BT Financial Common Stock to be issued to
the undersigned upon conversion of shares of First Xxxxxxx Common
Stock (such shares of BT Financial Common Stock to be issued to
the undersigned being referred to herein as the "BT Financial
Shares") are not being acquired with a view toward their
distribution except to the extent and in the manner permitted by
paragraph (d) of Rule 145 of the Act; and
3. Within the 30 days prior to the Effective Time, the
undersigned has not sold, exchanged, transferred, pledged,
disposed of or in any other way reduced his risk relative to, and
will not sell, exchange, transfer, pledge, dispose of or in any
other way reduce his risk relative to, any shares of First
Xxxxxxx Common Stock or BT Financial Common Stock owned of record
or beneficially by the undersigned.
The undersigned does hereby further undertake and agree as
follows:
1. The undersigned will not sell, exchange, transfer,
pledge, dispose of or in any other way reduce his risk relative
to his BT Financial Common Stock until BT Financial, pursuant to
Section 201.01 of the SEC's Codification of Financial Reporting
Policies shall have published combined financial results covering
a period of at least 30 days of post-Merger combined operations
subsequent to the Effective Time; and
2. The undersigned will not sell or otherwise dispose of
his BT Financial Shares except in accordance with applicable
provisions of the Act and the rules and regulations thereunder;
and
3. The certificates representing his BT Financial Shares
will bear the following legend:
PT:#23621 v8($8507!.WPD) 66
"The shares represented by this
certificate have been issued to the
registered holder in a transaction to which
Rule 145 under the Securities Act of 1933, as
amended (the "Act") applies. The shares
represented by this certificate may not be
sold, transferred or assigned, and the issuer
shall not be required to give effect to any
attempted sale, transfer or assignment except
pursuant to (a) a current registration
statement under the Act, or (b) a transaction
which, in the opinion of counsel reasonably
satisfactory to the issuer, is not required
to be registered under the Act."
Such legend shall be subject to prompt removal upon receipt
of an opinion of counsel satisfactory to BT Financial to the
effect that such removal conforms to then existing law.
All capitalized terms which are not defined herein are used
as they are defined in the Agreement.
WITNESS the due execution hereof this ____ day of
__________, 1999.
___________________________________
Accepted and Agreed:
BT Financial Corporation
By:____________________________
PT:#23621 v8($8507!.WPD) 67
Exhibit B
BT Financial Corporation
Affiliate's Agreement
The undersigned, in connection with the Agreement and Plan
of Reorganization dated as of _________ 1999 (the "Agreement"),
by and between First Xxxxxxx Financial Corporation ("First
Xxxxxxx") and BT Financial Corporation ("BT Financial") does
hereby represent, warrant, undertake and agree as follows:
1. The undersigned has been advised that as of the date
hereof the undersigned may be deemed to be an "affiliate" of BT
Financial as the term "affiliate" is used in and for purposes of
Section 201.01 of the SEC's Codification of Financial Reporting
Policies (formerly SEC Accounting Series Releases 130 and 135)
and Rule 145 of the Securities Act of 1933, as amended (the
"Act"), although nothing contained herein should be construed as
an admission thereof;
2. Within the 30 days prior to the Effective Time, the
undersigned has not sold, exchanged, transferred, pledged,
disposed of or in any other way reduced his risk relative to, and
will not sell, exchange, transfer, pledge, dispose of or in any
other way reduce his risk relative to, any shares of First
Xxxxxxx Common Stock or BT Financial Common Stock owned of record
or beneficially by the undersigned; and
3. The undersigned will not sell, exchange, transfer,
pledge, dispose of or in any other way reduce his risk relative
to his BT Financial Common Stock until BT Financial, pursuant to
Section 201.01 of the SEC's Codification of Financial Reporting
Policies shall have published combined financial results covering
a period of at least 30 days of post-Merger combined operations
subsequent to the Effective Time.
All capitalized terms which are not defined herein are used
as they are defined in the Agreement.
WITNESS the due execution hereof this ____ day of
__________, 1999.
___________________________________
Accepted and Agreed:
BT Financial Corporation
By:____________________________
PT:#23621 v8($8507!.WPD) 68
