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EXHIBIT 1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
MAGNA GROUP, INC.
AND
UNION PLANTERS CORPORATION
DATED AS OF FEBRUARY 22, 1998
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TABLE OF CONTENTS
PAGE
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Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Execution of Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 - TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Bylaws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 3 - MANNER OF CONVERTING SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Conversion of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Anti-Dilution Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Shares Held by Magna or UPC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Dissenting Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.6 Conversion of Stock Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 4 - EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Rights of Former Magna Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF MAGNA . . . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.4 Magna Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.5 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.6 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.7 Absence of Certain Changes or Events. . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.9 Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.10 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.11 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.12 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.13 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.14 Material Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.15 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.16 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.17 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.18 Accounting, Tax, and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . 18
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5.19 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.20 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.21 Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.22 Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.23 Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF UPC. . . . . . . . . . . . . . . . . . . . . . . 19
6.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.4 UPC Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 21
6.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 22
6.7 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . 22
6.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.9 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.10 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.11 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.12 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.13 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.14 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.15 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.16 Accounting, Tax, and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . 26
6.17 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.18 Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.19 Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION . . . . . . . . . . . . . . . . . . . . . 27
7.1 Affirmative Covenants of Both Parties . . . . . . . . . . . . . . . . . . . . . . 27
7.2 Negative Covenants of Magna . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.3 Adverse Changes in Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.4 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 8 - ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.1 Registration Statement; Joint Proxy Statement; Stockholder Approvals . . . . . . . 30
8.2 Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.4 Filings with State Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.5 Agreement as to Efforts to Consummate . . . . . . . . . . . . . . . . . . . . . . 31
8.6 Investigation and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 32
8.7 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.8 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.9 Accounting and Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.10 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.11 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.12 Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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8.13 Agreement of Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.14 Employee Benefits and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.15 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.16 Certain Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.17 Pending Magna Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE. . . . . . . . . . . . . . . . . 37
9.1 Conditions to Obligations of Each Party . . . . . . . . . . . . . . . . . . . . . 37
9.2 Conditions to Obligations of UPC . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.3 Conditions to Obligations of Magna . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 10 - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.3 Non-Survival of Representations and Covenants . . . . . . . . . . . . . . . . . . 42
ARTICLE 11 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.6 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
11.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
11.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
11.12 Interpretations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
11.13 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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LIST OF EXHIBITS
EXHIBIT NUMBER DESCRIPTION
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1. Form of Stock Option Agreement. (Section 1.4).
2. Form of Plan of Merger. (Section 1.1)
3. Form of Affiliate Agreement. (Sections 8.13, 9.2(d)).
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is
made and entered into as of February 22, 1998, by and between MAGNA GROUP, INC.
("Magna"), a corporation organized and existing under the Laws of the State of
Delaware, with its principal office located in St. Louis, Missouri; and UNION
PLANTERS CORPORATION ("UPC"), a corporation organized and existing under the
Laws of the State of Tennessee, with its principal office located in Memphis,
Tennessee.
PREAMBLE
The Boards of Directors of Magna and UPC are of the opinion that
the transactions described herein are in the best interests of the parties to
this Agreement and their respective stockholders. This Agreement provides for
the acquisition of Magna by UPC pursuant to the merger (the "Merger") of Magna
with and into Union Planters Holding Corporation ("UPHC"), a wholly-owned
subsidiary of UPC organized under the Laws of the State of Tennessee. At the
effective time of the Merger, the outstanding shares of the common stock of
Magna shall be converted into shares of the common stock of UPC (except as
provided herein) and the outstanding shares of preferred stock of Magna shall
be converted into cash payments. As a result, stockholders of Magna shall
become stockholders of UPC, and UPHC shall continue to conduct the business and
operations of Magna as a wholly-owned subsidiary of UPC. The transactions
described in this Agreement are subject to the approvals of the stockholders of
Magna, the stockholders of UPC, the Board of Governors of the Federal Reserve
System, and certain state regulatory authorities, and the satisfaction of
certain other conditions described in this Agreement. It is the intention of
the parties to this Agreement that the Merger (i) for federal income tax
purposes shall qualify as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code and (ii) for accounting purposes shall
qualify for treatment as a pooling of interests.
Immediately after the execution and delivery of this Agreement, as
a condition and inducement to UPC's willingness to enter into this Agreement,
Magna and UPC are entering into a stock option agreement (the "Stock Option
Agreement"), in substantially the form of Exhibit 1, pursuant to which Magna is
granting to UPC an option to purchase shares of Magna Common Stock.
Certain terms used in this Agreement are defined in Section 11.1
of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
Parties agree as follows:
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ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, Magna shall be merged with and into UPHC in
accordance with the provisions of Section 252 of the DGCL and with the effect
provided in Section 259 of the DGCL and in accordance with the provisions of
Section ▇▇-▇▇-▇▇▇ of the TBCA and with the effect provided in Section ▇▇-▇▇-▇▇▇
of the TBCA (the "Merger"). UPHC shall be the Surviving Corporation resulting
from the Merger and shall continue to be governed by the Laws of the State of
Tennessee. The Merger shall be consummated pursuant to the terms of this
Agreement, which has been approved and adopted by the respective Boards of
Directors of Magna and UPC, and the Plan of Merger, in substantially the form
of Exhibit 2, which has been approved and adopted by the Board of Directors of
Magna and will be approved and adopted by the Board of Directors of UPHC prior
to the Effective Time.
1.2 TIME AND PLACE OF CLOSING. The consummation of the Merger
(the "Closing") shall take place at 9:00 A.M. on the date that the Effective
Time occurs (or the immediately preceding day if the Effective Time is earlier
than 9:00 A.M.), or at such other time as the Parties, acting through their
duly authorized officers, may mutually agree. The place of Closing shall be at
such location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and the other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Certificate of Merger shall become effective with the Secretary of
State of the State of Delaware and the Articles of Merger shall become
effective with the Secretary of State of the State of Tennessee (the "Effective
Time"). Subject to the terms and conditions hereof, unless otherwise mutually
agreed upon in writing by the duly authorized officers of each Party, the
Parties shall use their reasonable efforts to cause the Effective Time to occur
on or before the 15th business day (as designated by UPC) following the last to
occur of (i) the effective date (including expiration of any applicable waiting
period) of the last required Consent of any Regulatory Authority having
authority over and approving or exempting the Merger and (ii) the date on which
the stockholders of UPC and Magna approve the matters relating to this
Agreement required to be approved by such stockholders by applicable Law.
1.4 EXECUTION OF STOCK OPTION AGREEMENT. Immediately after the
execution of this Agreement and as a condition hereto, Magna is executing and
delivering to UPC the Stock Option Agreement.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Charter of UPHC in effect immediately prior to
the Effective Time shall be the Charter of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
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2.2 BYLAWS. The Bylaws of UPHC in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of UPHC in office
immediately prior to the Effective Time, together with such additional
individuals thereafter elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation. The officers of UPHC in office immediately prior to
the Effective Time, together with such additional individuals thereafter
elected, shall serve as the officers of the Surviving Corporation from and
after the Effective Time in accordance with the Bylaws of the Surviving
Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of UPC or Magna, or the stockholders of either of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of UPC Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of UPHC Common Stock issued and
outstanding immediately prior to the Effective Time shall remain issued
and outstanding from and after the Effective Time.
(c) Each share of Magna Common Stock (including any
associated Preferred Stock Purchase Rights, but excluding shares held by
any Magna Company or any UPC Company, in each case other than in a
fiduciary capacity or as a result of debts previously contracted) issued
and outstanding at the Effective Time shall be converted into .9686 of a
share of UPC Common Stock (the "Exchange Ratio"). Pursuant to the UPC
Rights Agreement, each share of UPC Common Stock issued in connection
with the Merger upon conversion of Magna Common Stock shall be
accompanied by a UPC Right.
(d) Each share of Magna Class B Preferred Stock
(excluding any shares held by any Magna Company or any UPC Company, in
each case other than in a fiduciary capacity as a result of debts
previously contracted) issued and outstanding at the Effective Time,
shall be converted into the right to receive a check from UPC in the
amount of the Preferred Stock Cash Payment Amount.
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3.2 ANTI-DILUTION PROVISIONS. In the event Magna changes the
number of shares of Magna Common Stock or Magna Class B Preferred Stock issued
and outstanding prior to the Effective Time as a result of a stock split, stock
dividend, recapitalization, or similar transaction with respect to such stock,
the Exchange Ratio and the Preferred Stock Cash Payment Amount, as the case may
be, shall be proportionately adjusted. In the event UPC changes the number of
shares of UPC Common Stock issued and outstanding prior to the Effective Time
as a result of a stock split, stock dividend, recapitalization, or similar
transaction with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 SHARES HELD BY MAGNA OR UPC. Each of the shares of Magna
Capital Stock held by any Magna Company or by any UPC Company, in each case
other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 DISSENTING STOCKHOLDERS. Any holder of shares of Magna
Class B Preferred Stock who perfects such holder's dissenters' rights of
appraisal in accordance with and as contemplated by Section 262 of the DGCL
shall be entitled to receive the value of such shares in cash as determined
pursuant to such provision of Law; provided, however, that no such payment
shall be made to any dissenting stockholder unless and until such dissenting
stockholder has complied with the applicable provisions of the DGCL and
surrendered to Magna the certificate or certificates representing the shares
for which payment is being made. In the event that after the Effective Time a
dissenting stockholder of Magna fails to perfect, or effectively withdraws or
loses, such holder's right to appraisal of and payment for such holder's
shares, UPC shall issue and deliver the consideration to which such holder of
shares of Magna Class B Preferred Stock is entitled under this Article 3
(without interest) upon surrender by such holder of the certificate or
certificates representing shares of Magna Class B Preferred Stock held by such
holder. Magna will establish an escrow account with an amount sufficient to
satisfy the maximum aggregate payment that may be required to be paid to
dissenting stockholders. Upon satisfaction of all claims of dissenting
stockholders, the remaining escrowed amount, reduced by payment of the fees and
expenses of the escrow agent, will be returned to the Surviving Corporation.
3.5 FRACTIONAL SHARES. Notwithstanding any other provision of
this Agreement, each holder of shares of Magna Common Stock exchanged pursuant
to the Merger who would otherwise have been entitled to receive a fraction of a
share of UPC Common Stock (after taking into account all certificates delivered
by such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of UPC Common Stock multiplied
by the market value of one share of UPC Common Stock at the Effective Time.
The market value of one share of UPC Common Stock at the Effective Time shall
be the last sale price of UPC Common Stock on the NYSE-Composite Transactions
List (as reported by The Wall Street Journal or, if not reported thereby, any
other authoritative source selected by UPC) on the last trading day preceding
the Effective Time. No such holder will be entitled to dividends, voting
rights, or any other rights as a stockholder in respect of any fractional
shares.
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3.6 CONVERSION OF STOCK RIGHTS.
(a) At the Effective Time, each award, option, or other
right to purchase or acquire shares of Magna Common Stock pursuant to stock
options, stock appreciation rights, or stock awards ("Magna Rights") granted by
Magna under the Magna Stock Plans, which are outstanding at the Effective Time,
whether or not exercisable, shall be converted into and become rights with
respect to UPC Common Stock, and UPC shall assume each Magna Right, in
accordance with the terms of the Magna Stock Plan and stock option agreement by
which it is evidenced, except that from and after the Effective Time, (i) UPC
and its Salary and Benefits Committee shall be substituted for Magna and the
Committee of Magna's Board of Directors (including, if applicable, the entire
Board of Directors of Magna) administering such Magna Stock Plan, (ii) each
Magna Right assumed by UPC may be exercised solely for shares of UPC Common
Stock (or cash in the case of stock appreciation rights), (iii) the number of
shares of UPC Common Stock subject to such Magna Right shall be equal to the
number of shares of Magna Common Stock subject to such Magna Right immediately
prior to the Effective Time multiplied by the Exchange Ratio and rounding down
to the nearest whole share, and (iv) the per share exercise price (or similar
threshold price, in the case of stock awards) under each such Magna Right shall
be adjusted by dividing the per share exercise (or threshold) price under each
such Magna Right by the Exchange Ratio and rounding up to the nearest cent.
Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence
of this Section 3.6, each Magna Right which is an "incentive stock option"
shall be adjusted as required by Section 424 of the Internal Revenue Code, so
as not to constitute a modification, extension, or renewal of the option,
within the meaning of Section 424(h) of the Internal Revenue Code. UPC agrees
to take all necessary steps to effectuate the foregoing provisions of this
Section 3.6.
(b) As soon as reasonably practicable after the Effective
Time, UPC shall deliver to the participants in each Magna Stock Plan an
appropriate notice setting forth such participant's rights pursuant thereto and
the grants pursuant to such Magna Stock Plan shall continue in effect on the
same terms and conditions (subject to the adjustments required by Section
3.6(a) after giving effect to the Merger), and UPC shall comply with the terms
of each Magna Stock Plan to ensure, to the extent required by, and subject to
the provisions of, such Magna Stock Plan, that Magna Rights which qualified as
incentive stock options prior to the Effective Time continue to qualify as
incentive stock options after the Effective Time. At or prior to the Effective
Time, UPC shall take all corporate action necessary to reserve for issuance
sufficient shares of UPC Common Stock for delivery upon exercise of Magna
Rights assumed by it in accordance with this Section 3.6. As soon as
reasonably practicable after the Effective Time, UPC shall file a registration
statement on Form S-3 or Form S-8, as the case may be (or any successor or
other appropriate forms), with respect to the shares of UPC Common Stock
subject to such options and shall use its reasonable efforts to maintain the
effectiveness of such registration statements (and maintain the current status
of the prospectus or prospectuses contained therein) for so long as such
options remain outstanding. With respect to those individuals who subsequent
to the Merger will be subject to the reporting requirements under Section 16(a)
of the 1934 Act, where applicable, UPC shall administer the Magna Stock Plan
assumed pursuant to this Section 3.6 in a manner that complies with Rule 16b-3
promulgated under the ▇▇▇▇ ▇▇▇.
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(c) All restrictions or limitations on transfer with
respect to Magna Common Stock awarded under the Magna Stock Plans or any other
plan, program, or arrangement of any Magna Company, to the extent that such
restrictions or limitations shall not have already lapsed, and except as
otherwise expressly provided in such plan, program, or arrangement, shall
remain in full force and effect with respect to shares of UPC Common Stock into
which such restricted stock is converted pursuant to Section 3.1 of this
Agreement.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, UPC
and Magna shall cause the exchange agent selected by UPC (the "Exchange Agent")
to mail to the former stockholders of Magna appropriate transmittal materials
(which shall specify that delivery shall be effected, and risk of loss and
title to the certificates theretofore representing shares of Magna Capital
Stock shall pass, only upon proper delivery of such certificates to the
Exchange Agent). After the Effective Time, each holder of shares of Magna
Capital Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement or as to which the holder thereof has perfected dissenters' rights of
appraisal as contemplated by Section 3.4 of this Agreement) issued and
outstanding at the Effective Time shall surrender the certificate or
certificates representing such shares to the Exchange Agent and shall promptly
upon surrender thereof receive in exchange therefor the consideration provided
in Section 3.1 of this Agreement, together with all undelivered dividends or
distributions in respect of such shares (without interest thereon) pursuant to
Section 4.2 of this Agreement. To the extent required by Section 3.5 of this
Agreement, each holder of shares of Magna Common Stock issued and outstanding
at the Effective Time also shall receive, upon surrender of the certificate or
certificates representing such shares, cash in lieu of any fractional share of
UPC Common Stock to which such holder may be otherwise entitled (without
interest). UPC shall not be obligated to deliver the consideration to which
any former holder of Magna Capital Stock is entitled as a result of the Merger
until such holder surrenders such holder's certificate or certificates
representing the shares of Magna Capital Stock for exchange as provided in this
Section 4.1. The certificate or certificates of Magna Capital Stock so
surrendered shall be duly endorsed as the Exchange Agent may require. Any
other provision of this Agreement notwithstanding, neither the Surviving
Corporation nor the Exchange Agent shall be liable to a holder of Magna Capital
Stock for any amounts paid or property delivered in good faith to a public
official pursuant to any applicable abandoned property Law.
4.2 RIGHTS OF FORMER MAGNA STOCKHOLDERS. At the Effective Time,
the stock transfer books of Magna shall be closed as to holders of Magna
Capital Stock immediately prior to the Effective Time and no transfer of Magna
Capital Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1 of
this Agreement, each certificate theretofore representing shares of Magna
Capital Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement or as to which the holder thereof has perfected dissenters' rights of
appraisal as contemplated by Section 3.4 of this Agreement) shall from and
after the Effective Time represent for all purposes only the right to
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receive the consideration provided in Sections 3.1 and 3.5 of this Agreement in
exchange therefor, subject, however, to the Surviving Corporation's obligation
to pay any dividends or make any other distributions with a record date prior
to the Effective Time which have been declared or made by Magna in respect of
such shares of Magna Capital Stock in accordance with the terms of this
Agreement and which remain unpaid at the Effective Time. To the extent
permitted by Law, former stockholders of record of Magna shall be entitled to
vote after the Effective Time at any meeting of UPC stockholders the number of
whole shares of UPC Common Stock into which their respective shares of Magna
Common Stock are converted, regardless of whether such holders have exchanged
their certificates representing Magna Common Stock for certificates
representing UPC Common Stock in accordance with the provisions of this
Agreement. Whenever a dividend or other distribution is declared by UPC on the
UPC Common Stock, the record date for which is at or after the Effective Time,
the declaration shall include dividends or other distributions on all shares
issuable pursuant to this Agreement, but beginning 30 days after the Effective
Time no dividend or other distribution payable to the holders of record of UPC
Common Stock as of any time subsequent to the Effective Time shall be delivered
to the holder of any certificate representing shares of Magna Common Stock
issued and outstanding at the Effective Time until such holder surrenders such
certificate for exchange as provided in Section 4.1 of this Agreement.
However, upon surrender of such Magna Common Stock certificate, both the UPC
Common Stock certificate (together with all such undelivered dividends or other
distributions without interest) and any undelivered dividends and cash payments
to be paid for fractional share interests (without interest) shall be delivered
and paid with respect to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MAGNA
Except as set forth in the Magna Disclosure Memorandum referencing
a specific section of this Agreement, Magna hereby represents and warrants to
UPC as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Magna is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Delaware, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its Material Assets.
Magna is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Magna.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Magna has the corporate power and authority necessary
to execute, deliver, and perform its obligations under this Agreement and the
Plan of Merger and to consummate the transactions contemplated hereby and
thereby. The execution, delivery, and performance of this Agreement and the
Plan of Merger, and the consummation of the transactions
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contemplated herein and therein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Magna, subject to the approval of this Agreement and the Plan of Merger
by holders of the requisite number of shares of Magna Capital Stock , voting
together as one class, as required by Law, which is the only stockholder vote
required for approval of this Agreement and the Plan of Merger and consummation
of the Merger by Magna. Subject to such requisite stockholder approval, this
Agreement and the Plan of Merger represent legal, valid, and binding
obligations of Magna, enforceable against Magna in accordance with their
respective terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement
and the Plan of Merger by Magna, nor the consummation by Magna of the
transactions contemplated hereby or thereby, nor compliance by Magna with any
of the provisions hereof or thereof, will (i) conflict with or result in a
breach of any provision of Magna's Certificate of Incorporation or Bylaws or
(ii) constitute or result in a Default under, or require any Consent pursuant
to, or result in the creation of any Lien on any Asset of any Magna Company
under, any Contract or Permit of any Magna Company, where such Default or Lien,
or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Magna, or (iii)
subject to receipt of the requisite Consents referred to in Section 9.1(b) of
this Agreement, violate any Law or Order applicable to any Magna Company or any
of their respective Material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and securities
Laws, and rules of the NYSE, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings,
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Magna, no
notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by Magna of the Merger and the other
transactions contemplated in this Agreement and the Plan of Merger.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Magna consists, as of
the date of this Agreement, of (i) 80,000,000 shares of Magna Common Stock, of
which 32,649,181 shares were issued and outstanding as of February 20, 1998
and, excluding shares of Magna Common Stock issuable in connection with the
transaction referenced in Section 8.17 of this Agreement and without taking
into account any shares of Magna Common Stock repurchased by Magna prior to the
Effective Time, not more than 35,257,887 shares will be issued and outstanding
at the Effective Time, (ii) 1,000,000 shares of Magna Preferred Stock, of which
no shares are issued and outstanding as of the date of this Agreement and no
shares will be issued and outstanding as of
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the Effective Time, (iii) 49,500 shares of Magna Class B Preferred Stock, of
which 1,981 shares are issued and outstanding as of the date of this Agreement
and not more than 1,981 shares will be issued and outstanding at the Effective
Time, and (iv) 1,000,000 shares of Magna Class C Preferred Stock, of which no
shares are issued and outstanding as of the date of this Agreement and no
shares will be issued and outstanding at the Effective Time. All of the issued
and outstanding shares of Magna Capital Stock are duly and validly issued and
outstanding and are fully paid and nonassessable under the DGCL. None of the
outstanding shares of Magna Capital Stock has been issued in violation of any
preemptive rights of the current or past stockholders of Magna.
(b) Except (i) as set forth in Section 5.3(a) of this
Agreement, (ii) with respect to shares of Magna Common Stock issuable under the
Magna Dividend Reinvestment Plan and the Magna Employee Stock Purchase Plan and
1,337,194 shares of Magna Common Stock subject to outstanding options under the
Magna Stock Plans, (iii) as provided pursuant to the Stock Option Agreement or
the Magna Rights Agreement, or (iv) pursuant to the 7% Convertible Subordinated
Capital Notes and 8-3/4% Convertible Subordinated Debentures of Magna, there
are no shares of capital stock or other equity securities of Magna outstanding
and no outstanding Rights relating to the capital stock of Magna.
5.4 MAGNA SUBSIDIARIES. Magna has disclosed in Section 5.4 of
the Magna Disclosure Memorandum all of the Magna Subsidiaries as of the date of
this Agreement. Magna or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each Magna Subsidiary. No equity
securities of any Magna Subsidiary are or may become required to be issued
(other than to another Magna Company) by reason of any Rights, and there are no
Contracts by which any Magna Subsidiary is bound to issue (other than to
another Magna Company) additional shares of its capital stock or Rights or by
which any Magna Company is or may be bound to transfer any shares of the
capital stock of any Magna Subsidiary (other than to another Magna Company).
There are no Contracts relating to the rights of any Magna Company to vote or
to dispose of any shares of the capital stock of any Magna Subsidiary. All of
the shares of capital stock of each Magna Subsidiary held by a Magna Company
are duly authorized, validly issued, and fully paid and, except as provided in
statutes pursuant to which depository institution Subsidiaries are organized,
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the Magna Company
free and clear of any Lien. Each Magna Subsidiary is either a bank or a
corporation, and is duly organized, validly existing, and (as to corporations)
in good standing under the Laws of the jurisdiction in which it is incorporated
or organized, and has the corporate power and authority necessary for it to
own, lease, and operate its Assets and to carry on its business as now
conducted. Each Magna Subsidiary is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Magna. Each Magna Subsidiary that is a depository
institution is an "insured institution" as defined in the Federal Deposit
Insurance Act and applicable regulations thereunder, and the deposits in which
are insured by the Bank Insurance Fund or Savings Association Insurance Fund.
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5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Magna has filed and made available to UPC all forms,
reports, and documents required to be filed by Magna with the SEC since
December 31, 1993 (collectively, the "Magna SEC Reports"). The Magna SEC
Reports (i) at the time filed, complied in all Material respects with the
applicable requirements of the 1933 Act and the 1934 Act, as the case may be
and (ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a Material fact or omit to state a Material
fact required to be stated in such Magna SEC Reports or necessary in order to
make the statements in such Magna SEC Reports, in light of the circumstances
under which they were made, not misleading. Except for Magna Subsidiaries that
are registered as a broker, dealer, or investment advisor or filings required
due to fiduciary holdings of the Magna Subsidiaries, none of Magna's
Subsidiaries is required to file any forms, reports, or other documents with
the SEC.
(b) Each of the Magna Financial Statements (including, in
each case, any related notes) contained in the Magna SEC Reports, including any
Magna SEC Reports filed after the date of this Agreement until the Effective
Time, complied or will comply as to form in all Material respects with the
applicable published rules and regulations of the SEC with respect thereto, was
prepared or will be prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
to such financial statements, or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC), and fairly presented or will fairly present
the consolidated financial position of Magna and its Subsidiaries as at the
respective dates and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be Material in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Magna Company has
any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Magna, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Magna as of
September 30, 1997, included in the Magna Financial Statements or reflected in
the notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to September 30, 1997. No Magna Company has incurred or
paid any Liability since September 30, 1997, except for such Liabilities
incurred or paid in the ordinary course of business consistent with past
business practice and which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Magna.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30,
1997, except as disclosed in the Magna Financial Statements, (i) there have
been no events, changes, or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Magna and (ii) the Magna Companies have conducted their respective businesses
in the ordinary and usual course (excluding the incurrence of expenses in
connection with this Agreement and the transactions contemplated hereby).
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5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf
of any of the Magna Companies have been timely filed, or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1996, and, to the Knowledge of Magna, all Tax
Returns filed are complete and accurate in all Material respects. All Tax
Returns for periods ending on or before the date of the most recent fiscal year
end immediately preceding the Effective Time will be timely filed or requests
for extensions will be timely filed. All Taxes shown on filed Tax Returns have
been paid. There is no audit examination, deficiency, or refund Litigation
with respect to any Taxes, that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Material
Adverse Effect on Magna, except to the extent reserved against in the Magna
Financial Statements dated prior to the date of this Agreement. All Taxes and
other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid.
(b) None of the Magna Companies has executed an extension
or waiver of any statute of limitations on the assessment or collection of any
Tax due (excluding such statutes that relate to years currently under
examination by the Internal Revenue Service or other applicable taxing
authorities) that is currently in effect.
(c) Adequate provision for any Taxes due or to become due
for any of the Magna Companies for the period or periods through and including
the date of the respective Magna Financial Statements has been made and is
reflected on such Magna Financial Statements.
(d) Each of the Magna Companies is in compliance with,
and its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable information
reporting and Tax withholding requirements under federal, state, and local Tax
Laws, and such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Magna.
(e) None of the Magna Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code.
(f) There are no Material Liens with respect to Taxes
upon any of the Assets of the Magna Companies.
(g) No Magna Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible corporations.
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5.9 ASSETS. The Magna Companies have good and marketable title,
free and clear of all Liens, to all of their respective Assets, except where
the failure to have such good and marketable title is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Magna.
All tangible properties used in the businesses of the Magna Companies are in
good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with Magna's past practices. All Assets
which are Material to Magna's business on a consolidated basis, held under
leases or subleases by any of the Magna Companies, are held under valid
Contracts enforceable in accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceedings may be brought), and each
such Contract is in full force and effect. The Magna Companies currently
maintain insurance in amounts, scope, and coverage reasonably necessary for
their operations. None of the Magna Companies has received notice from any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated or (ii) premium costs with respect to
such policies of insurance will be substantially increased. The Assets of the
Magna Companies include all Assets required to operate the business of the
Magna Companies as presently conducted.
5.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Magna, each Magna Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except those violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Magna.
(b) There is no Litigation pending or, to the Knowledge
of Magna, threatened before any court, governmental agency, or authority, or
other forum in which any Magna Company or any of its Participation Facilities
has been or, with respect to threatened Litigation, may reasonably be expected
to be named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release into
the environment of any Hazardous Material, whether or not occurring at, on,
under, or involving a site owned, leased, or operated by any Magna Company or
any of its Participation Facilities, except for such Litigation pending or
threatened that is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Magna.
(c) There is no Litigation pending, or to the Knowledge
of Magna, threatened before any court, governmental agency, or board, or other
forum in which any of its Loan Properties (or Magna in respect of such Loan
Property) has been or, with respect to threatened Litigation, may reasonably be
expected to be named as a defendant or potentially responsible party (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release into the environment of any Hazardous Material,
whether or not occurring at, on, under, or involving a Loan Property, except
for such Litigation pending or threatened that is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Magna.
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(d) To the Knowledge of Magna, there is no reasonable
basis for any Litigation of a type described in subsections (b) or (c), except
such as is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Magna.
(e) To the Knowledge of Magna, during the period of (i)
any Magna Company's ownership or operation of any of their respective current
properties, (ii) any Magna Company's participation in the management of any
Participation Facility, or (iii) any Magna Company's holding of a security
interest in a Loan Property, there have been no releases of Hazardous Material
in, on, under, or affecting (or potentially affecting) such properties, except
such as are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Magna. To the Knowledge of Magna, prior to the
period of (i) any Magna Company's ownership or operation of any of their
respective current properties, (ii) any Magna Company's participation in the
management of any Participation Facility, or (iii) any Magna Company's holding
of a security interest in a Loan Property, to the Knowledge of Magna, there
were no releases of Hazardous Material in, on, under, or affecting any such
property, Participation Facility, or Loan Property, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Magna.
5.11 COMPLIANCE WITH LAWS. Magna is duly registered as a bank
holding company under the BHC Act. Each Magna Company has in effect all
Permits necessary for it to own, lease, or operate its Material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Magna, and there has occurred no Default under any
such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Magna. None of
the Magna Companies:
(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its business, except
for violations which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Magna; and
(b) has received any notification or communication from
any agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any Magna
Company is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Magna, (ii) threatening to revoke
any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Magna, or
(iii) requiring any Magna Company (x) to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or (y) to adopt any Board
resolution or similar undertaking, which restricts materially the conduct
of its business, or in any manner relates to its capital adequacy, its
credit or reserve policies, its management, or the payment of dividends.
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5.12 LABOR RELATIONS. No Magna Company is the subject of any
Litigation asserting that it or any other Magna Company has committed an unfair
labor practice (within the meaning of the National Labor Relations Act or
comparable state Law) or seeking to compel it or any other Magna Company to
bargain with any labor organization as to wages or conditions of employment,
nor is any Magna Company a party to or bound by any collective bargaining
agreement, Contract, or other agreement or understanding with a labor union or
labor organization, nor is there any strike or other labor dispute involving
any Magna Company, pending or, to the Knowledge of Magna, threatened, or to the
Knowledge of Magna, is there any activity involving any Magna Company's
employees seeking to certify a collective bargaining unit or engaging in any
other organization activity.
5.13 EMPLOYEE BENEFIT PLANS.
(a) Magna has disclosed to UPC in writing prior to the
execution of the Agreement and in Section 5.13 of the Magna Disclosure
Memorandum, and has delivered or made available to UPC prior to the execution
of this Agreement correct and complete copies in each case of, all Material
Magna Benefits Plans. For purposes of this Agreement, "Magna Benefit Plans"
means all pension, retirement, profit-sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, bonus, or other
incentive plan, all other written employee programs or agreements, all medical,
vision, dental, or other health plans, all life insurance plans, and all other
employee benefit plans or fringe benefit plans, including, without limitation,
"employee benefit plans" as that term is defined in Section 3(3) of ERISA
maintained by, sponsored in whole or in part by, or contributed to by, any
Magna Company for the benefit of employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and under which
employees, retirees, dependents, spouses, directors, independent contractors,
or other beneficiaries are eligible to participate. Any of the Magna Benefit
Plans which is an "employee welfare benefit plan," as that term is defined in
Section 3(l) of ERISA, or an "employee pension benefit plan," as that term is
defined in Section 3(2) of ERISA, is referred to herein as a "Magna ERISA
Plan." Any Magna ERISA Plan which is also a "defined benefit plan" (as defined
in Section 414(j) of the Internal Revenue Code or Section 3(35) of ERISA) is
referred to herein as a "Magna Pension Plan." Neither Magna nor any Magna
Company has an "obligation to contribute" (as defined in ERISA Section 4212) to
a "multiemployer plan" (as defined in ERISA Sections 4001(a)(3) and 3(37)(A)).
Each "employee pension benefit plan," as defined in Section 3(2) of ERISA,
maintained by any Magna Company at any time during the last six years that was
intended to qualify under Section 401(a) of the Internal Revenue Code and with
respect to which any Magna Company has any Liability, is disclosed as such in
Section 5.13 of the Magna Disclosure Memorandum.
(b) Magna has delivered or made available to UPC prior to
the execution of this Agreement correct and complete copies of the following
documents: (i) all trust agreements or other funding arrangements for such
Magna Benefit Plans (including insurance contracts), and all amendments
thereto, (ii) with respect to any such Magna Benefit Plans or amendments
thereto, all determination letters, rulings, opinion letters, information
letters, or advisory opinions issued by the Internal Revenue Service, the
United States Department of Labor, or the Pension Benefit Guaranty Corporation
after December 31, 1994, (iii) annual reports or returns, audited or
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unaudited financial statements, actuarial valuations and reports, and summary
annual reports prepared for any Magna Benefit Plan with respect to the most
recent plan year, and (iv) the most recent summary plan descriptions and any
modifications thereto.
(c) All Magna Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Magna. Each
Magna ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service, and Magna is not aware of any circumstances which
could reasonably result in revocation of any such favorable determination
letter. Each trust created under any Magna ERISA Plan has been determined to
be exempt from Tax under Section 501(a) of the Internal Revenue Code and Magna
is not aware of any circumstance which could reasonably result in revocation of
such exemption. With respect to each Magna Benefit Plan to the Knowledge of
Magna, no event has occurred which could reasonably give rise to a loss of any
intended Tax consequences under the Internal Revenue Code or to any Tax under
Section 511 of the Internal Revenue Code that is reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect on Magna.
There is no Material pending or, to the Knowledge of Magna, threatened
Litigation (other than routine claims for benefits) relating to any Magna ERISA
Plan.
(d) No Magna Company has engaged in a transaction with
respect to any Magna Benefit Plan that, assuming the Taxable Period of such
transaction expired as of the date of this Agreement, would subject any Magna
Company to a Material tax or penalty imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Magna. Neither Magna nor, to the Knowledge of Magna, any
administrator or fiduciary of any Magna Benefit Plan (or any agent of any of
the foregoing) has engaged in any transaction, or acted or failed to act in any
manner which could subject Magna to any direct or indirect Liability (by
indemnity or otherwise) for breach of any fiduciary, co-fiduciary, or other
duty under ERISA, where such Liability, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect on Magna. Except as
disclosed under Section 5.13 of the Magna Disclosure Memorandum, no oral or
written representation or communication with respect to any aspect of the Magna
Benefit Plans has been made to employees of any Magna Company which is not in
accordance with the written or otherwise preexisting terms and provisions of
such plans, where any Liability with respect to such representation or
disclosure is reasonably likely to have a Material Adverse Effect on Magna.
(e) No Magna Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and the
fair market value of all benefits (whether vested or not) accrued to date by
all present or former participants in such Magna Pension Plan exceeds the
plan's "benefit liabilities" as that term is defined in Section 4001(a)(16) of
ERISA. For this purpose, the assumptions for valuing plan Assets or
Liabilities shall be the assumptions set forth in the most recent actuarial
valuations and reports with respect to any such Magna Pension Plan. Since the
date of the most recent actuarial valuation, there has been (i) no Material
change in the financial position or funded status of any Magna Pension Plan,
(ii) no change in the
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actuarial assumptions with respect to any Magna Pension Plan, and (iii) no
increase in benefits under any Magna Pension Plan as a result of plan
amendments or changes in applicable Law, any of which is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Magna.
Neither any Magna Pension Plan nor any "single-employer plan," within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by
any Magna Company, or the single-employer plan of any entity which is
considered one employer with Magna under Section 4001 of ERISA or Section 414
of the Internal Revenue Code or Section 302 of ERISA (a "Magna ERISA
Affiliate") has an "accumulated funding deficiency" within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA (whether or
not waived). All contributions with respect to a Magna Pension Plan or any
single-employer plan of a Magna ERISA Affiliate have or will be timely made and
there is no lien or expected to be a lien under Internal Revenue Code Section
412(n) or ERISA Section 302(f) or Tax under Internal Revenue Code Section 4971.
No Magna Company has provided, or is required to provide, security to a Magna
Pension Plan or to any single-employer plan of a Magna ERISA Affiliate pursuant
to Section 401(a)(29) of the Internal Revenue Code. All premiums required to
be paid under ERISA Section 4006 have been timely paid by Magna, except to the
extent any failure would not have a Material Adverse Effect on Magna.
(f) No Liability under Title IV of ERISA has been or is
expected to be incurred by any Magna Company with respect to any defined
benefit plan currently or formerly maintained by any of them or by any Magna
ERISA Affiliate that has not been satisfied in full (other than Liability for
Pension Benefit Guaranty Corporation premiums, which have been paid when due)
except to the extent any failure would not have a Material Adverse Effect on
Magna.
(g) Except as set forth in Section 5.13(g) of the Magna
Disclosure Memorandum, no Magna Company has any obligations for retiree health
and retiree life benefits under any of the Magna Benefit Plans other than with
respect to benefit coverage mandated by applicable Law.
(h) Except as set forth in Section 5.13(h) of the Magna
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will, by themselves,
(i) result in any payment (including, without limitation, severance, golden
parachute, or otherwise) becoming due to any director or any employee of any
Magna Company from any Magna Company under any Magna Benefit Plan or otherwise,
(ii) increase any benefits otherwise payable under any Magna Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any such
benefit.
5.14 MATERIAL CONTRACTS. Except as set forth in Section 5.14 of
the Magna Disclosure Memorandum, none of the Magna Companies, nor any of their
respective Assets, businesses, or operations, is a party to, or is bound or
affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for aggregate
payments to any Person in any calendar year in excess of $100,000, (ii) any
Contract relating to the borrowing of money by any Magna Company or the
guarantee by any Magna Company of any such obligation (other than Contracts
evidencing deposit liabilities, purchases of federal funds, fully-secured
repurchase agreements, and Federal Home Loan Bank advances of
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depository institution Subsidiaries, trade payables, and Contracts relating to
borrowings or guarantees made in the ordinary course of business), and (iii)
any other Contract or amendment thereto that would be required to be filed as
an exhibit to a Form 10-K filed by Magna with the SEC as of the date of this
Agreement that has not been filed as an exhibit to Magna's Form 10-K filed for
the fiscal year ended December 31, 1996, or in another SEC Document (together
with all Contracts referred to in Sections 5.9 and 5.13(a) of this Agreement,
the "Magna Contracts"). With respect to each Magna Contract: (i) the Contract
is in full force and effect; (ii) no Magna Company is in Default thereunder,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Magna; (iii) no Magna Company has
repudiated or waived any Material provision of any such Contract; and (iv) no
other party to any such Contract is, to the Knowledge of Magna, in Default in
any respect, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Magna, or has
repudiated or waived any Material provision thereunder.
5.15 LEGAL PROCEEDINGS.
(a) There is no Litigation instituted or pending, or, to
the Knowledge of Magna, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome to any Magna Company) against any Magna Company, or
against any Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Magna, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Magna Company, that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Magna.
(b) Section 5.15(b) of the Magna Disclosure Memorandum
includes a summary report of all Litigation as of the date of this Agreement to
which any Magna Company is a party and which names a Magna Company as a
defendant or cross-defendant and where the maximum exposure is estimated to be
$250,000 or more.
5.16 REPORTS. Since January 1, 1994, or the date of organization
if later, each Magna Company has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with any Regulatory Authorities, except failures to file
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Magna. As of their respective dates, each of such
reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all Material respects with all applicable Laws.
5.17 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by any Magna Company regarding Magna for inclusion
in the Registration Statement to be filed by UPC with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect
to any Material fact, or contain any untrue statement of a Material fact, or
omit to state any Material fact required to be stated thereunder or necessary
to make the statements therein not misleading. None of the information
supplied or to be supplied by any Magna Company for inclusion in the Joint
Proxy Statement to be mailed to UPC's and Magna's
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stockholders in connection with the Stockholders' Meetings will, when first
mailed to the stockholders of UPC and Magna, be false or misleading with
respect to any Material fact, or contain any misstatement of Material fact, or
omit to state any Material fact required to be stated thereunder or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or, in the case of the Joint Proxy Statement or any
amendment thereof or supplement thereto, at the time of the Stockholders'
Meetings, be false or misleading with respect to any Material fact, or omit to
state any Material fact required to be stated thereunder or necessary to
correct any Material statement in any earlier communication with respect to the
solicitation of any proxy for the Stockholders' Meetings. All documents that
any Magna Company is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all Material respects with the provisions of applicable Law.
5.18 ACCOUNTING, TAX, AND REGULATORY MATTERS. No Magna Company
has taken or agreed to take any action, and Magna has no Knowledge of any fact
or circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to
in Section 9.1(b) of this Agreement or result in the imposition of a condition
or restriction of the type referred to in the last sentence of such Section.
5.19 STATE TAKEOVER LAWS. Each Magna Company has taken all
necessary action to exempt the transactions contemplated by this Agreement and
the Plan of Merger from any applicable "moratorium," "control share," "fair
price," "business combination," or other anti-takeover laws and regulations,
including Section 203 of the DGCL, of the State of Delaware (collectively,
"Takeover Laws").
5.20 CHARTER PROVISIONS. Each Magna Company has taken all action
so that the entering into of this Agreement and the Plan of Merger and the
consummation of the Merger and the other transactions contemplated by this
Agreement and the Plan of Merger do not and will not result in the grant of any
rights to any Person under the Articles of Incorporation, Bylaws, or other
governing instruments of any Magna Company or restrict or impair the ability of
UPC or any of its Subsidiaries to vote, or otherwise to exercise the rights of
a stockholder with respect to, shares of any Magna Company that may be directly
or indirectly acquired or controlled by it.
5.21 RIGHTS AGREEMENT. Magna has taken all necessary action
(including, if required, redeeming all of the outstanding Preferred Stock
Purchase Rights or amending or terminating the Magna Rights Agreement) so that
the entering into of this Agreement and the Plan of Merger, the acquisition of
shares pursuant to, or other exercise of rights under, the Stock Option
Agreement and consummation of the Merger and the other transactions
contemplated hereby and thereby do not and will not result in any Person
becoming able to exercise any Preferred Stock Purchase Rights under the Magna
Rights Agreement or enabling or requiring the Preferred Stock Purchase Rights
to be separated from the shares of Magna Common Stock to which they are
attached or to be triggered or to become exercisable.
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5.22 DERIVATIVES. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for Magna's own account, or for the account
of one or more the Magna Subsidiaries or their customers, were entered into (i)
in accordance with prudent business practices and all applicable Laws and (ii)
with counterparties believed to be financially responsible.
5.23 YEAR 2000. Magna has disclosed to UPC a complete and
accurate copy of Magna's plan, including an estimate of the anticipated
associated costs, for implementing modifications to Magna's hardware, software,
and computer systems, chips, and microprocessors, to ensure proper execution
and accurate processing of all date-related data, whether from years in the
same century or in different centuries. Between the date of this Agreement and
the Effective Time, Magna shall endeavor to continue its efforts to implement
such plan.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF UPC
UPC hereby represents and warrants to Magna as follows:
6.1 ORGANIZATION, STANDING, AND POWER. UPC is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Tennessee, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its Material Assets.
UPC is duly qualified or licensed to transact business as a foreign corporation
in good standing in the States of the United States and foreign jurisdictions
where the character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) UPC has the corporate power and authority necessary
to execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
UPC, subject to the approval of (i) the UPC Charter Amendment and (ii) the
issuance of the shares of UPC Common Stock pursuant to the Merger by holders of
the requisite number of shares of UPC Common Stock required by Law, which is
the only stockholder vote required for the consummation of the Merger by UPC.
Subject to such requisite stockholder approval, this Agreement represents a
legal, valid, and binding obligation of UPC, enforceable against UPC in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
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(b) Neither the execution and delivery of this Agreement
by UPC, nor the consummation by UPC of the transactions contemplated hereby,
nor compliance by UPC with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of UPC's Restated Charter of
Incorporation or Bylaws (subject to the amendment of the UPC Restated Charter
of Incorporation pursuant to the UPC Charter Amendment to increase the number
of authorized shares of UPC Common Stock), (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of any UPC Company under, any Contract or Permit of any
UPC Company, where such Default or Lien, or any failure to obtain such Consent,
is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC, or (iii) subject to receipt of the requisite Consents
referred to in Section 9.1(b) of this Agreement, violate any Law or Order
applicable to any UPC Company or any of their respective Material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and securities
Laws, and rules of the NYSE, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings,
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC, no
notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by UPC of the Merger and the other transactions
contemplated in this Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of UPC consists
of (i) 100,000,000 shares of UPC Common Stock, of which 81,650,946 shares are
issued and outstanding as of December 31, 1997 and (ii) 10,000,000 shares of
UPC Preferred Stock, of which 2,188,358 shares of UPC Series E Preferred Stock
are issued and outstanding. All of the issued and outstanding shares of UPC
Capital Stock are, and (subject to the amendment of UPC's Restated Charter of
Incorporation pursuant to the UPC Charter Amendment) all of the shares of UPC
Common Stock to be issued in exchange for shares of Magna Common Stock upon
consummation of the Merger when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and fully paid and
nonassessable under the TBCA. None of the outstanding shares of UPC Capital
Stock has been, and none of the shares of UPC Common Stock to be issued in
exchange for shares of Magna Common Stock upon consummation of the Merger will
be, issued in violation of any preemptive rights of the current or past
stockholders of UPC.
6.4 UPC SUBSIDIARIES. Except with respect to Capital Factors,
Inc., UPC or one of its Subsidiaries owns all of the issued and outstanding
shares of capital stock of each UPC Subsidiary. No equity securities of any
UPC Subsidiary are or may become required to be issued (other than to another
UPC Company) by reason of any Rights, and there are no Contracts by which any
UPC Subsidiary is bound to issue (other than to another UPC Company) additional
shares of its capital stock or Rights or by which any UPC Company is or may be
bound to transfer any shares of the capital stock of any UPC Subsidiary (other
than to another UPC Company).
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There are no Contracts relating to the rights of any UPC Company to vote or to
dispose of any shares of the capital stock of any UPC Subsidiary. All of the
shares of capital stock of each UPC Subsidiary held by a UPC Company are fully
paid and, except as provided in statutes pursuant to which depository
institution Subsidiaries are organized, nonassessable under the applicable
corporation Law of the jurisdiction in which such Subsidiary is incorporated or
organized and are owned by the UPC Company free and clear of any Lien. Each
UPC Subsidiary is either a bank or a corporation, and is duly organized,
validly existing, and (as to corporations) in good standing under the Laws of
the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate its
Assets and to carry on its business as now conducted. Each UPC Subsidiary is
duly qualified or licensed to transact business as a foreign corporation in
good standing in the States of the United States and foreign jurisdictions
where the character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC. Each
UPC Subsidiary that is a depository institution is an "insured institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits in which are insured by the Bank Insurance Fund or
Savings Association Insurance Fund.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) UPC has filed and made available to Magna all forms,
reports, and documents required to be filed by UPC with the SEC since December
31, 1993 (collectively, the "UPC SEC Reports"). The UPC SEC Reports (i) at the
time filed, complied in all Material respects with the applicable requirements
of the 1933 Act and the 1934 Act, as the case may be and (ii) did not at the
time they were filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any untrue
statement of a Material fact or omit to state a Material fact required to be
stated in such UPC SEC Reports or necessary in order to make the statements in
such UPC SEC Reports, in light of the circumstances under which they were made,
not misleading. Except for UPC Subsidiaries that are registered as a broker,
dealer, or investment advisor or filings required due to fiduciary holdings of
the UPC Subsidiaries, none of UPC Subsidiaries is required to file any forms,
reports, or other documents with the SEC.
(b) Each of the UPC Financial Statements (including, in
each case, any related notes) contained in the UPC SEC Reports, including any
UPC SEC Reports filed after the date of this Agreement until the Effective
Time, complied or will comply as to form in all Material respects with the
applicable published rules and regulations of the SEC with respect thereto, was
or will be prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to
such financial statements or, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC), and fairly presented or will fairly present the
consolidated financial position of UPC and its Subsidiaries as at the
respective dates and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be Material in amount or effect.
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6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No UPC Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of UPC as of
September 30, 1997, included in the UPC Financial Statements or reflected in
the notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to September 30, 1997. No UPC Company has incurred or paid
any Liability since September 30, 1997, except for such Liabilities incurred or
paid in the ordinary course of business consistent with past business practice
and which are not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on UPC.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30,
1997, except as disclosed in the UPC Financial Statements delivered prior to
the date of this Agreement, (i) there have been no events, changes or
occurrences which have had, or are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on UPC and (ii) the UPC Companies
have conducted their respective businesses in the ordinary and usual course
(excluding the incurrence of expenses in connection with this Agreement and the
transactions contemplated hereby).
6.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf
of any of the UPC Companies have been timely filed, or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before December 31, 1996, and, to the Knowledge of UPC, all Tax Returns filed
are complete and accurate in all Material respects. All Tax Returns for
periods ending on or before the date of the most recent fiscal year end
immediately preceding the Effective Time will be timely filed or requests for
extensions will be timely filed. All Taxes shown on filed Tax Returns have
been paid. There is no audit examination, deficiency, or refund Litigation
with respect to any Taxes, that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Material
Adverse Effect on UPC, except to the extent reserved against in the UPC
Financial Statements dated prior to the date of this Agreement. All Taxes and
other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid.
(b) None of the UPC Companies has executed an extension
or waiver of any statute of limitations on the assessment or collection of any
Tax due (excluding such statutes that relate to years currently under
examination by the Internal Revenue Service or other applicable taxing
authorities) that is currently in effect.
(c) Adequate provision for any Taxes due or to become due
for any of the UPC Companies for the period or periods through and including
the date of the respective UPC Financial Statements has been made and is
reflected on such UPC Financial Statements.
(d) Each of the UPC Companies is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal,
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state, and local Tax Laws, and such records identify with specificity all
accounts subject to backup withholding under Section 3406 of the Internal
Revenue Code, except for such instances of noncompliance and such omissions as
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC.
(e) None of the UPC Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code.
(f) There are no Material Liens with respect to Taxes
upon any of the Assets of the UPC Companies.
(g) No UPC Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible corporations.
6.9 ASSETS. The UPC Companies have good and marketable title,
free and clear of all Liens, to all of their respective Assets, except where
the failure to have such good and marketable title is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC. All
tangible properties used in the businesses of the UPC Companies are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with UPC's past practices. All Assets which are
Material to UPC's business on a consolidated basis, held under leases or
subleases by any of the UPC Companies, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or other Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceedings may be brought), and each such Contract is in full
force and effect. The UPC Companies currently maintain insurance similar in
amounts, scope, and coverage reasonably necessary for their operations. None
of the UPC Companies has received notice from any insurance carrier that (i)
such insurance will be canceled or that coverage thereunder will be reduced or
eliminated or (ii) premium costs with respect to such policies of insurance
will be substantially increased. The Assets of the UPC Companies include all
Assets required to operate the business of the UPC Companies as presently
conducted.
6.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of UPC, each UPC Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except those violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC.
(b) There is no Litigation pending or, to the Knowledge
of UPC, threatened before any court, governmental agency, or authority, or
other forum in which any UPC Company
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or any of its Participation Facilities has been or, with respect to threatened
Litigation, may reasonably be expected to be named as a defendant (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release into the environment of any Hazardous Material,
whether or not occurring at, on, under, or involving a site owned, leased, or
operated by any UPC Company or any of its Participation Facilities, except for
such Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC.
(c) There is no Litigation pending or, to the Knowledge
of UPC, threatened before any court, governmental agency, or board, or other
forum in which any of its Loan Properties (or UPC in respect of such Loan
Property) has been or, with respect to threatened Litigation, may reasonably be
expected to be named as a defendant or potentially responsible party (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release into the environment of any Hazardous Material,
whether or not occurring at, on, under, or involving a Loan Property, except
for such Litigation pending or threatened that is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC.
(d) To the Knowledge of UPC, there is no reasonable basis
for any Litigation of a type described in subsections (b) or (c), except such
as is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC.
(e) To the Knowledge of UPC, during the period of (i) any
UPC Company's ownership or operation of any of their respective current
properties, (ii) any UPC Company's participation in the management of any
Participation Facility, or (iii) any UPC Company's holding of a security
interest in a Loan Property, there have been no releases of Hazardous Material
in, on, under, or affecting (or potentially affecting) such properties, except
such as are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC. To the Knowledge of UPC, prior to the period
of (i) any UPC Company's ownership or operation of any of their respective
current properties, (ii) any UPC Company's participation in the management of
any Participation Facility, or (iii) any UPC Company's holding of a security
interest in a Loan Property, to the Knowledge of UPC, there were no releases of
Hazardous Material in, on, under, or affecting any such property, Participation
Facility, or Loan Property, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC.
6.11 COMPLIANCE WITH LAWS. UPC is duly registered as a bank
holding company under the BHC Act. Each UPC Company has in effect all Permits
necessary for it to own, lease, or operate its Material Assets and to carry on
its business as now conducted, except for those Permits the absence of which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC, and there has occurred no Default under any such Permit,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on UPC. None of the UPC Companies:
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(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its business, except
for violations which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on UPC; and
(b) has received any notification or communication from
any agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any UPC
Company is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC, (ii) threatening to revoke
any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC, or
(iii) requiring any UPC Company (x) to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or (y) to adopt any Board
resolution or similar undertaking, which restricts materially the conduct
of its business, or in any manner relates to its capital adequacy, its
credit or reserve policies, its management, or the payment of dividends.
6.12 LABOR RELATIONS. No UPC Company is the subject of any
Litigation asserting that it or any other UPC Company has committed an unfair
labor practice (within the meaning of the National Labor Relations Act or
comparable state Law) or seeking to compel it or any other UPC Company to
bargain with any labor organization as to wages or conditions of employment,
nor is any UPC Company a party to or bound by any collective bargaining
agreement, Contract, or other agreement or understanding with a labor union or
labor organization, nor is there any strike or other labor dispute involving
any UPC Company, pending or, to the Knowledge of UPC, threatened, or to the
Knowledge of UPC, is there any activity involving any UPC Company's employees
seeking to certify a collective bargaining unit or engaging in any other
organization activity.
6.13 LEGAL PROCEEDINGS. There is no Litigation instituted or
pending, or, to the Knowledge of UPC, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome to any UPC Company) against any UPC
Company, or against any Asset, employee benefit plan, interest, or right of any
of them, that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any UPC Company, that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC.
6.14 REPORTS. Since January 1, 1994, or the date of organization
if later, each UPC Company has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with any Regulatory Authorities, except failures to file
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC. As of their respective dates, each of such
reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all Material respects with all applicable Laws.
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6.15 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by any UPC Company regarding UPC for inclusion in
the Registration Statement to be filed by UPC with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect
to any Material fact, or contain any untrue statement of a Material fact, or
omit to state any Material fact required to be stated thereunder or necessary
to make the statements therein not misleading. None of the information
supplied or to be supplied by any UPC Company for inclusion in the Joint Proxy
Statement to be mailed to Magna's and UPC's stockholders in connection with the
Stockholders' Meetings, will, when first mailed to the stockholders of Magna
and UPC, be false or misleading with respect to any Material fact, or contain
any misstatement of Material fact, or omit to state any Material fact required
to be stated thereunder or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, or, in the
case of the Joint Proxy Statement or any amendment thereof or supplement
thereto, at the time of the Stockholders' Meetings, be false or misleading with
respect to any Material fact, or omit to state any Material fact required to be
stated thereunder or necessary to correct any Material statement in any earlier
communication with respect to the solicitation of any proxy for the
Stockholders' Meetings. All documents that any UPC Company is responsible for
filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all Material respects with the
provisions of applicable Law.
6.16 ACCOUNTING, TAX, AND REGULATORY MATTERS. No UPC Company or
any Affiliate thereof has taken or agreed to take any action, and UPC has no
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to
in Section 9.1(b) of this Agreement or result in the imposition of a condition
or restriction of the type referred to in the last sentence of such Section.
6.17 EMPLOYEE BENEFIT PLANS. All UPC Plans are in compliance
with the applicable terms of ERISA, the Internal Revenue Code, and any other
applicable Laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC. For
purposes of this Agreement, the term "UPC Plan" means each bonus, incentive
compensation, severance pay, medical or other insurance program, retirement
plan, or other employee benefit plan program, agreement, or arrangement
sponsored, maintained, or contributed to by UPC or any trade or business,
whether or not incorporated, that together with UPC or any of its Subsidiaries
would be deemed a "single employer" under Section 4001 of ERISA or Section 414
of the Internal Revenue Code (a "UPC ERISA Affiliate") or under which UPC or
any UPC ERISA Affiliate has any Liability or obligation. No Liability under
Title IV of ERISA has been incurred by UPC or any UPC ERISA Affiliate that has
not been satisfied in full, and no condition exists that presents a Material
risk to UPC or any UPC ERISA Affiliate of incurring any such Liability. With
respect to any UPC Plan that is subject to Title IV of ERISA, full payment has
been made, or will be made in accordance with Section 404(a)(6) of the Internal
Revenue Code, of all amounts that UPC or any UPC ERISA Affiliate is required to
pay under Section 412 of the Internal Revenue Code or under the terms of the
UPC Plans, and no
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accumulated funding deficiency (within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA, whether or not waived) exists
with respect to any UPC Plan. There are no Material actions, suits, or claims
pending, or, to the Knowledge of UPC, threatened or anticipated relating to any
UPC Plan. There has been no Material adverse change in the financial position
or funded status of any UPC Plan that is subject to Title IV of ERISA since the
date of the information relating to the financial position and funded status of
each such plan contained in the most recent Annual Report on Form 10-K filed
by UPC with the SEC.
6.18 DERIVATIVES. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for UPC's own account, or for the account of
one or more the UPC Subsidiaries or their customers, were entered into (i) in
accordance with prudent business practices and all applicable Laws and (ii)
with counterparties believed to be financially responsible.
6.19 YEAR 2000. UPC has disclosed to Magna a complete and
accurate copy of UPC's plan, including an estimate of the anticipated
associated costs, for implementing modifications to UPC's hardware, software,
and computer systems, chips, and microprocessors, to ensure proper execution
and accurate processing of all date-related data, whether from years in the
same century or in different centuries. Between the date of this Agreement and
the Effective Time, UPC shall endeavor to continue its efforts to implement
such plan.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF BOTH PARTIES. From the date of
this Agreement until the earlier of the Effective Time or the termination of
this Agreement, unless the prior written consent of the other Party shall have
been obtained, and except as otherwise expressly contemplated herein, each
Party shall and shall cause each of its Subsidiaries to (i) operate its
business only in the usual, regular, and ordinary course, (ii) preserve intact
its business organization and Assets and maintain its rights and franchises,
(iii) use its reasonable efforts to maintain its current employee
relationships, and (iv) take no action which would (a) adversely affect the
ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the
type referred to in the last sentence of Section 9.1(b) of this Agreement, or
(b) adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement; provided that in the case of UPC, the
provisions of this Section 7.1 (other than the provisions of clause (iv) above)
shall not be deemed to preclude UPC from continuing to implement its program of
acquiring unaffiliated depository and nondepository institutions.
7.2 NEGATIVE COVENANTS OF MAGNA. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, Magna covenants and agrees that it will not do or agree or commit to
do, or permit any of its Subsidiaries to do or agree or commit to do, any of
the following without the prior written consent of the chief executive officer
or chief financial officer of UPC, which consent shall not be unreasonably
withheld:
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(a) amend the Articles of Incorporation, Bylaws, or other
governing instruments of any Magna Company or, except as expressly
contemplated by this Agreement, the Magna Rights Agreement, or
(b) incur, guarantee, or otherwise become responsible
for, any additional debt obligation or other obligation for borrowed
money (other than indebtedness of a Magna Company to another Magna
Company) in excess of an aggregate of $1,000,000 (for the Magna Companies
on a consolidated basis), except in the ordinary course of the business
consistent with past practices (which shall include, for Magna
Subsidiaries that are depository institutions, creation of deposit
liabilities, purchases of federal funds, advances from the Federal
Reserve Bank or Federal Home Loan Bank, and entry into repurchase
agreements fully secured by U.S. government or agency securities), or
impose, or suffer the imposition, on any Asset of any Magna Company of
any Lien or permit any such Lien to exist (other than in connection with
deposits, repurchase agreements, bankers acceptances, "treasury tax and
loan" accounts established in the ordinary course of business, the
satisfaction of legal requirements in the exercise of trust powers, and
Liens in effect as of the date hereof that are disclosed in the Magna
Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities convertible
into any shares, of the capital stock of any Magna Company, or declare or
pay any dividend or make any other distribution in respect of Magna's
capital stock, provided that Magna may (to the extent legally and
contractually permitted to do so), but shall not be obligated to, declare
and pay regular quarterly cash dividends on the shares of (i) Magna
Common Stock at a rate of $0.28 per share and (ii) Magna Class B
Preferred Stock at a rate of $0.375 per share, in each case with usual
and regular record and payment dates in accordance with past practice as
disclosed in Section 7.2(c) of the Magna Disclosure Memorandum and such
dates may not be changed without the prior written consent of UPC;
provided, that, notwithstanding the provisions of Section 1.3 of this
Agreement, the Parties shall cooperate in selecting the Effective Time to
ensure that, with respect to the quarterly period in which the Effective
Time occurs, the holders of Magna Common Stock do not receive both a
dividend in respect of their Magna Common Stock and a dividend in respect
of UPC Common Stock or fail to receive any dividend; or
(d) except for this Agreement, or pursuant to the Stock
Option Agreement or pursuant to the exercise of Rights outstanding as of
the date of this Agreement and pursuant to the terms thereof in existence
on the date of this Agreement, issue, sell, pledge, encumber, authorize
the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of Magna Common Stock or any other
capital stock of any Magna Company, or any stock appreciation rights, or
any option, warrant, conversion, or other right to acquire any such
stock, or any security convertible into any such stock; or
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(e) adjust, split, combine, or reclassify any capital
stock of any Magna Company or issue or authorize the issuance of any
other securities in respect of or in substitution for shares of Magna
Common Stock, or sell, lease, mortgage, or otherwise dispose of or
otherwise encumber (i) any shares of capital stock of any Magna
Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another Magna Company) or (ii) any Asset having a book
value in excess of $250,000 other than in the ordinary course of business
for reasonable and adequate consideration; or
(f) except for purchases of investment securities
acquired in the ordinary course of business consistent with past
practice, purchase any securities or make any Material investment, either
by purchase of stock or securities, contributions to capital, Asset
transfers, or purchase of any Assets, in any Person other than a
wholly-owned Magna Subsidiary, or otherwise acquire direct or indirect
control over any Person, other than in connection with (i) foreclosures
in the ordinary course of business, (ii) acquisitions of control by a
depository institution Subsidiary in its fiduciary capacity, (iii) the
creation of new wholly-owned Subsidiaries organized to conduct or
continue activities otherwise permitted by this Agreement, or (iv),
subject to the provisions of Section 8.17 of this Agreement, that certain
Agreement and Plan of Merger, dated as of November 19, 1997, as amended
December 4, 1997, by and between Magna and Charter Financial, Inc.
("Charter") (the "Charter Agreement"); or
(g) grant any increase in compensation or benefits to the
employees or officers of any Magna Company, except in accordance with the
ordinary course of business consistent with past practice or as required
by Law; pay any severance or termination pay or any bonus other than
pursuant to written policies or written Contracts in effect on the date
of this Agreement; enter into or amend any severance agreements with
officers of any Magna Company; grant any Material increase in fees or
other increases in compensation or other benefits to directors of any
Magna Company except in accordance with the ordinary course of business
consistent with past practice; or voluntarily accelerate the vesting of
any stock options or other stock-based compensation or employee benefits;
or
(h) enter into or amend any employment Contract between
any Magna Company and any Person (unless such amendment is required by
Law or a pre-existing contractual obligation) that the Magna Company does
not have the unconditional right to terminate without Liability (other
than Liability for services already rendered), at any time on or after
the Effective Time; or
(i) adopt any new employee benefit plan of any Magna
Company or make any Material change in or to any existing employee
benefit plans of any Magna Company other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan; or
(j) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
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(k) commence any Litigation other than as necessary for
the prudent operation of its business or settle any Litigation involving
any Liability of any Magna Company for Material money damages or
restrictions upon the operations of any Magna Company; or
(l) except in the ordinary course of business, modify,
amend, or terminate any Material Contract or waive, release, compromise,
or assign any Material rights or claims.
7.3 ADVERSE CHANGES IN CONDITION. Each Party agrees to give
written notice promptly to the other Party upon becoming aware of the
occurrence or impending occurrence of any event or circumstance relating to it
or any of its Subsidiaries which (i) is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on it or (ii) would cause or
constitute a Material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.4 REPORTS. Each Party and its Subsidiaries shall file all
reports required to be filed by it with Regulatory Authorities between the date
of this Agreement and the Effective Time and shall deliver to the other Party
copies of all such reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the SEC, such financial
statements will fairly present the consolidated financial position of the
entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in stockholders' equity, and cash flows for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to normal recurring year-end adjustments that are not
Material). As of their respective dates, such reports filed with the SEC will
comply in all Material respects with the Securities Laws 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 in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any financial statements contained in any other reports to another
Regulatory Authority shall be prepared in accordance with Laws applicable to
such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; JOINT PROXY STATEMENT; STOCKHOLDER
APPROVALS. As soon as reasonably practicable after execution of this
Agreement, UPC shall file the Registration Statement with the SEC, and shall
use its reasonable efforts to cause the Registration Statement to become
effective under the 1933 Act and take any action required to be taken under the
applicable state Blue Sky or securities Laws in connection with the issuance of
the shares of UPC Common Stock upon consummation of the Merger. Magna shall
furnish all information concerning it and the holders of its capital stock as
UPC may reasonably request in connection with such action. Magna shall call a
Stockholders' Meeting, to be held as soon as reasonably practicable after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon approval of (i) this Agreement and the Plan of Merger and (ii) such
other related matters as it deems appropriate. UPC shall call a Stockholders'
Meeting, to be held as soon as
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reasonably practicable after the Registration Statement is declared effective
by the SEC, for the purpose of voting upon approval of (i) the UPC Charter
Amendment (to the extent such amendment is not previously approved at the 1998
annual meeting of stockholders of UPC), (ii) the issuance of shares of UPC
Common Stock pursuant to the Merger, and (iii) such other related matters as it
deems appropriate. In connection with the Stockholders' Meetings, (i) UPC and
Magna shall prepare and file with the SEC a Joint Proxy Statement and mail such
Joint Proxy Statement to their respective stockholders, (ii) the Parties shall
furnish to each other all information concerning them that they may reasonably
request in connection with such Joint Proxy Statement, (iii) the Boards of
Directors of UPC and Magna shall recommend to their respective stockholders the
approval of the matters submitted for approval, and (iv) the Boards of
Directors and officers of UPC and Magna shall use their reasonable efforts to
obtain such stockholders' approvals, provided that each of UPC and Magna may
withdraw, modify, or change in an adverse manner to the other Party its
recommendations if the Board of Directors of such Party, after having consulted
with and based upon the advice of outside counsel, determines in good faith
that the failure to so withdraw, modify, or change its recommendation could
constitute a breach of the fiduciary duties of such Party's Board of Directors
under applicable Law. In addition, nothing in this Section 8.1 or elsewhere in
this Agreement shall prohibit accurate disclosure by either Party of
information that is required to be disclosed in the Registration Statement or
the Joint Proxy Statement or in any other document required to be filed with
the SEC (including, without limitation, a Solicitation/Recommendation Statement
on Schedule 14D-9) or otherwise required to be publicly disclosed by applicable
Law or regulations or rules of the NYSE.
8.2 EXCHANGE LISTING. UPC shall use its reasonable efforts to
list, prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of UPC Common Stock to be issued to the holders of Magna
Capital Stock pursuant to the Merger.
8.3 APPLICATIONS. UPC shall promptly prepare and file, and
Magna shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to
the conditions of this Agreement, UPC shall cause UPHC to execute and file the
Certificate of Merger with the Secretary of State of the State of Delaware and
the Articles of Merger with the Secretary of State of the State of Tennessee.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms
and conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including, without limitation, using its
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9 of this Agreement; provided, that
nothing herein
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shall preclude either Party from exercising its rights under this Agreement.
Each Party shall use, and shall cause each of its Subsidiaries to use, its
reasonable efforts to obtain all Consents necessary or desirable for the
consummation of the transactions contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep
the other Party advised of all Material developments relevant to its business
and to consummation of the Merger and shall permit the other Party to make or
cause to be made such investigation of the business and properties of it and
its Subsidiaries and of their respective financial and legal conditions as the
other Party reasonably requests, provided that such investigation shall be
reasonably related to the transactions contemplated hereby and shall not
interfere unnecessarily with normal operations. No investigation by a Party
shall affect the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as
soon as practicable after any determination by it of any fact or occurrence
relating to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent,
either a Material breach of any representation, warranty, covenant, or
agreement of the other Party or which has had or is reasonably likely to have a
Material Adverse Effect on the other Party.
(d) Neither Party nor any of their respective
Subsidiaries shall be required to provide access to or to disclose information
where such access or disclosure would violate or prejudice the rights of its
customers, jeopardize the attorney-client or similar privilege with respect to
such information or contravene any Law, rule, regulation, Order, judgment,
decree, fiduciary duty, or agreement entered into prior to the date of this
Agreement. The Parties will use their reasonable efforts to make appropriate
substitute disclosure arrangements, to the extent practicable, in circumstances
in which the restrictions of the preceding sentence apply.
8.7 PRESS RELEASES. Prior to the Effective Time, UPC and Magna
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.
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8.8 CERTAIN ACTIONS. Except with respect to this Agreement and
the Plan of Merger and the transactions contemplated hereby and thereby, no
Magna Company nor any Affiliate thereof nor any Representatives thereof
retained by any Magna Company shall directly or indirectly solicit or engage in
negotiations concerning any Acquisition Proposal, or provide any confidential
information or assistance to, or have any discussions with, any Person with
respect to an Acquisition Proposal. Notwithstanding the foregoing, Magna may,
and may authorize and permit its Representatives to, provide Persons with
confidential information, have discussions or negotiations with, or otherwise
facilitate an effort or attempt by such Person to make or implement an
Acquisition Proposal not solicited in violation of this Agreement if Magna's
Board of Directors, after having consulted with, and based upon the advice of,
outside counsel, determines in good faith that the failure to take such actions
could constitute a breach of the fiduciary duties of Magna's Board of Directors
under applicable Law; provided, that Magna shall promptly advise UPC following
the receipt of any Acquisition Proposal and the Material details thereof; and,
provided further, that prior to delivery of confidential information relating
to Magna or access to Magna's books, records, or properties in connection
therewith, the other Person shall have entered into a confidentiality agreement
substantially similar to the Confidentiality Agreement previously entered into
between Magna and UPC. Nothing contained in this Section 8.8 shall prohibit
the Board of Directors of Magna from complying with Rule 14e-2, promulgated
under the 1934 Act. Magna shall (i) immediately cease and cause to be
terminated any existing activities, discussions, or negotiations with any
Persons conducted heretofore with respect to any of the foregoing and (ii)
direct and use its reasonable efforts to cause of all its Representatives not
to engage in any of the foregoing.
8.9 ACCOUNTING AND TAX TREATMENT. Each of the Parties
undertakes and agrees to use its reasonable efforts to cause the Merger, and to
take no action which would cause the Merger not, to qualify for treatment as a
pooling of interests for accounting purposes or as a "reorganization" within
the meaning of Section 368(a) of the Internal Revenue Code for federal income
tax purposes.
8.10 STATE TAKEOVER LAWS. Each Magna Company shall take all
necessary steps to exempt the transactions contemplated by this Agreement and
the Plan of Merger from, or if necessary challenge the validity or
applicability of, any applicable Takeover Laws.
8.11 CHARTER PROVISIONS. Each Magna Company shall take all
necessary action to ensure that the entering into of this Agreement and the
Plan of Merger and the consummation of the Merger and the other transactions
contemplated hereby and thereby do not and will not result in the grant of any
rights to any Person under the Articles of Incorporation, Bylaws, or other
governing instruments of any Magna Company or restrict or impair the ability of
UPC or any of its Subsidiaries to vote, or otherwise to exercise the rights of
a stockholder with respect to, shares of any Magna Company that may be directly
or indirectly acquired or controlled by it.
8.12 RIGHTS AGREEMENT. Magna shall take all necessary action
(including, if required, redeeming all of the outstanding Preferred Stock
Purchase Rights or amending or terminating the Magna Rights Agreement) so that
the entering into of this Agreement, the acquisition of shares pursuant to the
Stock Option Agreement, and consummation of the Merger
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and the other transactions contemplated hereby do not and will not result in
any Person becoming able to exercise any Preferred Stock Purchase Rights under
the Magna Rights Agreement or enabling or requiring the Preferred Stock
Purchase Rights to be separated from the shares of Magna Common Stock to which
they are attached or to be triggered or to become exercisable.
8.13 AGREEMENT OF AFFILIATES. Magna has disclosed in Section
8.13 of the Magna Disclosure Memorandum each Person whom it reasonably believes
may be deemed an "affiliate" of Magna for purposes of Rule 145 under the 1933
Act. Magna shall use its reasonable efforts to cause each such Person to
deliver to UPC not later than 30 days prior to the Effective Time, a written
agreement, in substantially the form of Exhibit 3, providing that such Person
will not sell, pledge, transfer, or otherwise dispose of the shares of Magna
Common Stock held by such Person except as contemplated by such agreement or by
this Agreement and will not sell, pledge, transfer, or otherwise dispose of the
shares of UPC Common Stock to be received by such Person upon consummation of
the Merger except in compliance with applicable provisions of the 1933 Act and
the rules and regulations thereunder and until such time as financial results
covering at least 30 days of combined operations of UPC and Magna have been
published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies. Shares of UPC Common Stock issued to such
affiliates of Magna in exchange for shares of Magna Common Stock shall not be
transferable until such time as financial results covering at least 30 days of
combined operations of UPC and Magna have been published within the meaning of
Section 201.01 of the SEC's Codification of Financial Reporting Policies,
regardless of whether each such affiliate has provided the written agreement
referred to in this Section 8.13 (and UPC shall be entitled to place
restrictive legends upon certificates for shares of UPC Common Stock issued to
affiliates of Magna pursuant to this Agreement to enforce the provisions of
this Section 8.13). UPC shall not be required to maintain the effectiveness of
the Registration Statement under the 1933 Act for the purposes of resale of UPC
Common Stock by such affiliates.
8.14 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective
Time, but in no event earlier than the consolidation of Magna's depository
institution Subsidiaries with UPC's depository institution Subsidiaries, UPC
shall provide to officers and employees of the Magna Companies (the "Continuing
Employees"), employee benefits under employee benefit plans on terms and
conditions which when taken as a whole are substantially similar to those
currently provided by the UPC Companies to their similarly situated officers
and employees. For purposes of participation, vesting, and benefit accruals
(but not accrual of benefits under UPC's tax-qualified retirement plans) under
such employee benefit plans, (i) service under any qualified defined benefit or
contribution plans of Magna shall be treated as service under UPC's qualified
defined benefit or contribution plans and (ii) service under any other employee
benefit plans of Magna shall be treated as service under any similar employee
benefit plans maintained by UPC. UPC shall cause the UPC welfare benefit plans
that cover the Continuing Employees after the Effective Time to (i) waive any
waiting period and restrictions and limitations for preexisting conditions or
insurability and (ii) cause any deductible, co-insurance, or maximum
out-of-pocket payments made by the Continuing Employees under Magna's welfare
benefit plans to be credited to such Continuing Employees under the UPC welfare
benefit plans, so as to reduce the amount of any deductible, co-insurance, or
maximum out-of-pocket payments payable by the Continuing Employees under the
UPC welfare benefit plans. Prior to the commencement of the Continuing
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Employee's participation in the UPC employee benefit plans and programs, the
benefit coverage of, and participation in benefit plans by, the Continuing
Employees shall continue under the Magna Benefit Plans, as in effect
immediately prior to the Effective Time. During such transition period, the
coverage under and participation in the Magna Benefit Plans shall be deemed to
provide the Continuing Employees with benefits that are no less favorable than
those offered to other employees of UPC and its Subsidiaries. Except as
expressly provided in the Supplemental Letter, UPC also shall cause Magna and
its Subsidiaries to honor all employment, severance, consulting, and other
compensation Contracts disclosed in Section 8.14 of the Magna Disclosure
Memorandum to UPC between any Magna Company and any current or former director,
officer, independent contractor, or employee thereof, and all provisions of the
Magna Benefit Plans.
8.15 INDEMNIFICATION.
(a) After the Effective Time, UPC shall indemnify, defend
and hold harmless the present and former directors, officers, employees, and
agents of Magna or any of Magna's Subsidiaries (each, a "Indemnified Party")
(including any person who becomes a director, officer, employee, or agent prior
to the Effective Time) against all Liabilities (including reasonable attorneys'
fees, and expenses, judgments, fines and amounts paid in settlement) arising
out of actions or omissions occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement and the Stock Option
Agreement) to the full extent permitted under Delaware Law and by Magna's
Certificate of Incorporation and Bylaws, as in effect on the date hereof and
any indemnity agreements entered into prior to the date of this Agreement by
any of the Magna Companies and any director, officer, employee, or agent of any
of the Magna Companies, including, without limitation, provisions relating to
advances of expenses incurred in the defense of any Litigation. Without
limiting the foregoing, in any case in which approval by UPC is required to
effectuate any indemnification, UPC shall direct, at the election of the
Indemnified Party, that the determination of any such approval shall be made by
independent counsel mutually agreed upon between UPC and the Indemnified Party.
(b) UPC and the Surviving Corporation shall use their
reasonable efforts (and Magna shall cooperate prior to the Effective Time in
these efforts) to maintain in effect for a period of three years after the
Effective Time, Magna's existing directors' and officers' liability insurance
policy (provided that UPC and the Surviving Corporation may substitute therefor
(i) policies of at least the same coverage and amounts containing terms and
conditions which are substantially no less advantageous or (ii) with the
consent of Magna given prior to the Effective Time, any other policy) with
respect to claims arising from facts or events which occurred prior to the
Effective Time and covering persons who are currently covered by such
insurance; provided, that the Surviving Corporation shall not be obligated to
make aggregate annual premium payments for such three-year period in respect of
such policy (or coverage replacing such policy) which exceed, for the portion
related to Magna's directors and officers, 150% of the annual premium payments
on Magna's current policy in effect as of the date of this Agreement (the
"Maximum Amount"). If the amount of the premiums necessary to maintain or
procure such insurance coverage exceeds the Maximum Amount, UPC shall use its
reasonable efforts to maintain the most advantageous policies of directors' and
officers' liability insurance obtainable for a premium equal to the Maximum
Amount.
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(c) Any Indemnified Party wishing to claim
indemnification under paragraph (a) of this Section 8.15, upon learning of any
such Liability or Litigation, shall promptly notify UPC thereof, provided that
the failure so to notify shall not affect the obligations of UPC under this
Section 8.15 unless and to the extent such failure materially increases UPC's
Liability under this Section 8.15. In the event of any such Litigation
(whether arising before or after the Effective Time), (i) UPC or the Surviving
Corporation shall have the right to assume the defense thereof and UPC shall
not be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified Parties
in connection with the defense thereof, except that if UPC or the Surviving
Corporation elects not to assume such defense or counsel for the Indemnified
Parties advises that there are substantive issues which raise conflicts of
interest between UPC or the Surviving Corporation and the Indemnified Parties,
the Indemnified Parties may retain counsel satisfactory to them, and UPC or the
Surviving Corporation shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received; provided, that UPC shall be obligated pursuant to this paragraph (c)
to pay for only one firm of counsel for all Indemnified Parties in any
jurisdiction, (ii) the Indemnified Parties will cooperate in the defense of any
such Litigation, and (iii) UPC shall not be liable for any settlement effected
without its prior written consent; and provided further that the Surviving
Corporation shall not have any obligation hereunder to any Indemnified Party
when and if a court of competent jurisdiction shall determine, and such
determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
Law.
(d) The Surviving Corporation shall not be liable for any
settlement effected without its prior written consent which shall not be
unreasonably withheld.
(e) If either UPC or the Surviving Corporation or any of
their respective successors or assigns shall consolidate with or merge into any
other Person and shall not be the continuing or surviving Person of such
consolidation or merger or shall transfer all or substantially all of its
Assets to any Person, then and in each case, proper provision shall be made so
that the successors and assigns of either UPC or the Surviving Corporation
shall assume the obligations set forth in this Section 8.15.
(f) UPC shall pay all reasonable costs, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 8.15.
(g) The provisions of this Section 8.15 are intended to
be for the benefit of, and shall be enforceable by, each Indemnified Party and
his or her heirs or representatives.
8.16 CERTAIN MODIFICATIONS. UPC and Magna shall consult with
respect to their loan, litigation, and real estate valuation policies and
practices (including loan classifications and levels of reserves) and Magna
shall make such modifications or changes to its policies and practices, if any,
prior to the Effective Time, as may be mutually agreed upon. UPC and Magna
also shall consult with respect to the character, amount, and timing of
restructuring and Merger-
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related expense charges to be taken by each of the Parties in connection with
the transactions contemplated by this Agreement and shall take such charges in
accordance with GAAP as may be mutually agreed upon by the Parties. Neither
Party's representations, warranties, and covenants contained in this Agreement
shall be deemed to be inaccurate or breached in any respect as a consequence of
any modifications or charges undertaken solely on account of this Section 8.16.
8.17 PENDING MAGNA ACQUISITION. Each of UPC and Magna shall use
its reasonable efforts to modify or amend (or cause to be modified or amended)
this Agreement or the Charter Agreement as necessary or appropriate to ensure
that each of the acquisition of Magna by UPC and the acquisition of Charter by
Magna shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code. Any such amendments or modifications shall be made
as soon as reasonably practicable after the date of this Agreement.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each Party to perform this Agreement and the Plan of Merger and
to consummate the Merger and the other transactions contemplated hereby are
subject to the satisfaction of the following conditions, unless waived by both
Parties pursuant to Section 11.6 of this Agreement:
(a) STOCKHOLDER APPROVALS. The stockholders of Magna
shall have approved this Agreement and the Plan of Merger and the
consummation of the transactions contemplated hereby and thereby,
including the Merger, as and to the extent required by Law, by the
provisions of any governing instruments, and by the rules of the NYSE.
The stockholders of UPC shall have approved the UPC Charter Amendment and
the issuance of shares of UPC Common Stock pursuant to the Merger, as and
to the extent required by Law, by the provisions of any governing
instruments, and by the rules of the NYSE.
(b) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger shall have been obtained or made
and shall be in full force and effect and all waiting periods required by
Law shall have expired. No Consent obtained from any Regulatory
Authority which is necessary to consummate the transactions contemplated
hereby shall be conditioned or restricted in a manner (excluding
requirements relating to the raising of additional capital or the
disposition of Assets or deposits) which in the reasonable good faith
judgment of the Board of Directors of UPC would so materially adversely
impact the economic or business benefits of the transactions contemplated
by this Agreement so as to render inadvisable the consummation of the
Merger.
(c) CONSENTS AND APPROVALS. Each Party shall have
obtained any and all Consents required for consummation of the Merger
(other than those referred to in Section 9.1(b) of this Agreement) or for
the preventing of any Default under any Contract or Permit
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of such Party which, if not obtained or made, is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on such
Party.
(d) LEGAL PROCEEDINGS. No court or governmental or
Regulatory Authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced, or entered any Law or Order (whether
temporary, preliminary, or permanent) or taken any other action which
prohibits, restricts, or makes illegal consummation of the transactions
contemplated by this Agreement.
(e) REGISTRATION STATEMENT. The Registration Statement
shall be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no
action, suit, proceeding, or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing, and
all necessary approvals under state securities Laws or the 1933 Act or
1934 Act relating to the issuance or trading of the shares of UPC Common
Stock issuable pursuant to the Merger shall have been received.
(f) EXCHANGE LISTING. The shares of UPC Common Stock
issuable pursuant to the Merger shall have been approved for listing on
the NYSE, subject to official notice of issuance.
(g) TAX MATTERS. Magna shall have received a written
opinion from Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇ and UPC shall have received a
written opinion from ▇▇▇▇▇▇ & Bird LLP, in each case in a form reasonably
satisfactory to such Party (the "Tax Opinions"), dated the date of the
Effective Time, substantially to the effect that (i) the Merger will
constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, (ii) no gain or loss will be recognized by holders
of Magna Common Stock who exchange all of their Magna Common Stock solely
for UPC Common Stock pursuant to the Merger (except with respect to any
cash received in lieu of a fractional share interest in UPC Common
Stock), (iii) the tax basis of the UPC Common Stock received by holders
of Magna Common Stock who exchange all of their Magna Common Stock solely
for UPC Common Stock in the Merger will be the same as the tax basis of
the Magna Common Stock surrendered in exchange for the UPC Common Stock
(reduced by an amount allocable to a fractional share interest in UPC
Common Stock for which cash is received), and (iv) the holding period of
the UPC Common Stock received by holders who exchange all of their Magna
Common Stock solely for UPC Common Stock in the Merger will be the same
as the holding period of the Magna Common Stock surrendered in exchange
therefor, provided that such Magna Common Stock is held as a capital
asset at the Effective Time. In rendering such Tax Opinions, such
counsel shall be entitled to rely upon representations of officers of
Magna and UPC reasonably satisfactory in form and substance to such
counsel.
(h) POOLING LETTERS. Each Party shall have received a
letter, dated as of the Effective Time, in a form reasonably acceptable
to such Party, from Price Waterhouse LLP to the effect that the Merger
will qualify for pooling-of-interests accounting treatment. Each Party
shall have received a letter, dated as of the Effective Time, in a form
reasonably
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acceptable to such Party, from Ernst & Young LLP to the effect that such
firm is not aware of any matters relating to Magna and its Subsidiaries
which would preclude the Merger from qualifying for pooling-of-interests
accounting treatment.
9.2 CONDITIONS TO OBLIGATIONS OF UPC. The obligations of UPC to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by UPC pursuant to Section 11.6(a) of this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of
Magna set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as of
the Effective Time (provided that representations and warranties which
are confined to a specified date shall speak only as of such date). The
representations and warranties of Magna set forth in Section 5.3 of this
Agreement shall be true and correct (except for inaccuracies which are de
minimis in amount). The representations and warranties of Magna set
forth in Sections 5.18, 5.19, 5.20, and 5.21 of this Agreement shall be
true and correct in all Material respects. There shall not exist
inaccuracies in the representations and warranties of Magna set forth in
this Agreement (including the representations and warranties set forth in
Sections 5.3, 5.18, 5.19, 5.20, and 5.21) such that the aggregate effect
of such inaccuracies has, or is reasonably likely to have, a Material
Adverse Effect on Magna; provided that, for purposes of this sentence
only, those representations and warranties which are qualified by
references to "material, "Material," "Material Adverse Effect," or
variations thereof, or to the "Knowledge" of Magna or to a matter being
"known" by Magna shall be deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and
all of the agreements and covenants of Magna to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all Material respects.
(c) CERTIFICATES. Magna shall have delivered to UPC (i)
a certificate, dated as of the Effective Time and signed on its behalf by
its duly authorized officers, to the effect that the conditions of its
obligations set forth in Section 9.2(a) and 9.2(b) of this Agreement have
been satisfied and (ii) certified copies of resolutions duly adopted by
Magna's Board of Directors and stockholders evidencing the taking of all
corporate action necessary to authorize the execution, delivery, and
performance of this Agreement and the Plan of Merger, and the
consummation of the transactions contemplated hereby and thereby, all in
such reasonable detail as UPC and its counsel shall request.
(d) AFFILIATE AGREEMENTS. UPC shall have received from
each affiliate of Magna the affiliates agreement referred to in Section
8.12 of this Agreement, to the extent necessary to assure in the
reasonable judgment of UPC that the transactions contemplated hereby will
qualify for pooling-of-interests accounting treatment.
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(e) RIGHTS AGREEMENT. None of the events described in
Sections 3, 7, or 11 of the Magna Rights Agreement shall have occurred,
and the Preferred Stock Purchase Rights shall not have become
non-redeemable or exercisable for capital stock of UPC upon consummation
of the Merger.
9.3 CONDITIONS TO OBLIGATIONS OF MAGNA. The obligations of
Magna to perform this Agreement and the Plan of Merger and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Magna pursuant to
Section 11.6(b) of this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of UPC
set forth in this Agreement shall be assessed as of the date of this
Agreement and as of the Effective Time with the same effect as though all
such representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). The
representations and warranties of UPC set forth in Section 6.3 of this
Agreement shall be true and correct (except for inaccuracies which are de
minimis in amount). The representations and warranties of UPC set forth
in Section 6.16 of this Agreement shall be true and correct in all
Material respects. There shall not exist inaccuracies in the
representations and warranties of UPC set forth in this Agreement
(including the representations and warranties set forth in Sections 6.3
and 6.16) such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, a Material Adverse Effect on UPC; provided
that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "material," "Material,"
"Material Adverse Effect," or variations thereof, or to the "Knowledge"
of UPC or to a matter being "known" by UPC shall be deemed not to include
such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and
all of the agreements and covenants of UPC to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all Material respects.
(c) CERTIFICATES. UPC shall have delivered to Magna (i)
a certificate, dated as of the Effective Time and signed on its behalf by
its duly authorized officers, to the effect that the conditions of its
obligations set forth in Section 9.3(a) and 9.3(b) of this Agreement have
been satisfied and (ii) certified copies of resolutions duly adopted by
UPC's Board of Directors and stockholders evidencing the taking of all
corporate action necessary to authorize the execution, delivery, and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Magna and its
counsel shall request.
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ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this
Agreement and the Plan of Merger, and notwithstanding the approval of this
Agreement by the stockholders of Magna or UPC, this Agreement may be terminated
and the Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of UPC
and the Board of Directors of Magna; or
(b) By the Board of Directors of either Party (provided
that the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of Magna and
Section 9.3(a) of this Agreement in the case of UPC or in Material breach
of any covenant or other agreement contained in this Agreement) in the
event of an inaccuracy of any representation or warranty of the other
Party contained in this Agreement which cannot be or has not been cured
within 30 days after the giving of written notice to the breaching Party
of such inaccuracy and which inaccuracy would provide the terminating
Party the ability to refuse to consummate the Merger under the applicable
standard set forth in Section 9.2(a) of this Agreement in the case of
Magna and Section 9.3(a) of this Agreement in the case of UPC; or
(c) By the Board of Directors of either Party (provided
that the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of Magna and
Section 9.3(a) in the case of UPC) in the event of a Material breach by
the other Party of any covenant or agreement contained in this Agreement
which cannot be or has not been cured within 30 days after the giving of
written notice to the breaching Party of such breach; or
(d) By the Board of Directors of either Party in the
event (i) any Consent of any Regulatory Authority required for
consummation of the Merger and the other transactions contemplated hereby
shall have been denied by final nonappealable action of such authority or
if any action taken by such authority is not appealed within the time
limit for appeal or (ii) the stockholders of UPC or Magna fail to vote
their approval of the matters submitted for the approval by such
stockholders at the Stockholders' Meetings where the transactions were
presented to such stockholders for approval and voted upon; or
(e) By the Board of Directors of either Party in the
event that the Merger shall not have been consummated by December 31,
1998, if the failure to consummate the transactions contemplated hereby
on or before such date is not caused by any breach of this Agreement by
the Party electing to terminate pursuant to this Section 10.1(e); or
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(f) By the Board of Directors of either Party (provided
that the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of Magna and
Section 9.3(a) of this Agreement in the case of UPC or in Material breach
of any covenant or other agreement contained in this Agreement) in the
event that any of the conditions precedent to the obligations of such
Party to consummate the Merger cannot be satisfied or fulfilled by the
date specified in Section 10.1(e) of this Agreement.
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement, the Plan of Merger, and the Supplemental Letter shall become void
and have no effect, except that (i) the provisions of this Section 10.2 and
Article 11 and Section 8.6(b) of this Agreement shall survive any such
termination and abandonment and (ii) a termination pursuant to Sections
10.1(b), 10.1(c), or 10.1(f) of this Agreement shall not relieve the breaching
Party from Liability for an uncured willful breach of a representation,
warranty, covenant, or agreement giving rise to such termination. The Stock
Option Agreement shall be governed by its own terms.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The
respective representations, warranties, obligations, covenants, and agreements
of the Parties shall not survive the Effective Time except this Section 10.3
and Articles 2, 3, 4, and 11 and Sections 8.13 and 8.15 of this Agreement and
the Supplemental Letter.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean
any tender offer or exchange offer or any proposal for a merger,
acquisition of all of the stock or Assets of, or other business
combination involving such Party or any of its Subsidiaries or the
acquisition of a substantial equity interest in, or a substantial portion
of the Assets of, such Party or any of its Subsidiaries.
"AFFILIATE" of a Person shall mean any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person.
"AGREEMENT" shall mean this Agreement and Plan of
Reorganization, including the Exhibits hereto (except the Stock Option
Agreement) delivered pursuant hereto and incorporated herein by
reference.
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"ARTICLES OF MERGER" shall mean the Articles of Merger to be
executed by UPHC and filed with the Secretary of State of the State of
Tennessee relating to the Merger as contemplated by Section 1.1 of this
Agreement.
"ASSETS" of a Person shall mean all of the assets,
properties, businesses, and rights of such Person of every kind, nature,
character, and description, whether real, personal, or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such
Person and wherever located.
"BHC ACT" shall mean the federal Bank Holding Company Act of
1956, as amended.
"CERTIFICATE OF MERGER" shall mean the certificate of merger
to be executed by UPHC and filed with the Secretary of State of the State
of Delaware, relating to the Merger as contemplated by Section 1.1 of
this Agreement.
"CONFIDENTIALITY AGREEMENTS" shall mean those certain
Confidentiality Agreements, entered into prior to the date of this
Agreement, between Magna and UPC.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument,
lease, obligation, plan, practice, restriction, understanding, or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person or its capital stock,
Assets, or business.
"DEFAULT" shall mean (i) any breach or violation of or
default under any Contract, Order, or Permit, (ii) any occurrence of any
event that with the passage of time or the giving of notice or both would
constitute a breach or violation of or default under any Contract, Order,
or Permit, or (iii) any occurrence of any event that with or without the
passage of time or the giving of notice would give rise to a right to
terminate or revoke, change the current terms of, or renegotiate, or to
accelerate, increase, or impose any Liability under, any Contract, Order,
or Permit, where, in any such event, such Default is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on a
Party.
"DGCL" shall mean the Delaware General Corporation Law.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to
pollution or protection of human health or the environment (including
ambient air, surface water, ground water,
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land surface, or subsurface strata) and which are administered,
interpreted, or enforced by the United States Environmental Protection
Agency and state and local agencies with jurisdiction over, and including
common law in respect of, pollution or protection of the environment,
including the Comprehensive Environmental Response Compensation and
Liability Act, as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et
seq. ("RCRA"), and other Laws relating to emissions, discharges,
releases, or threatened releases of any Hazardous Material, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"EXHIBITS" 1 through 3, inclusive, shall mean the Exhibits
so marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument or
document without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR ACT" shall mean Section 7A of the ▇▇▇▇▇▇▇ Act, as added
by Title II of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended.
"JOINT PROXY STATEMENT" shall mean the joint proxy statement
used by UPC and Magna to solicit the approval of their respective
stockholders of the transactions contemplated by this Agreement, which
shall include the prospectus of UPC relating to the issuance of the UPC
Common Stock to holders of Magna Common Stock.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
the personal knowledge of the chairman, president, chief financial
officer, chief accounting officer, chief credit officer, general counsel,
or any executive vice president of such Person.
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"LAW" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities, or business, including those
promulgated, interpreted, or enforced by any Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost, or expense
(including costs of investigation, collection, and defense), claim,
deficiency, guaranty, or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection
or deposit in the ordinary course of business) of any type, whether
accrued, absolute or contingent, liquidated or unliquidated, matured or
unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention, or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
property Taxes not yet due and payable and (ii) for depository
institution Subsidiaries of a Party, pledges to secure deposits, and
other Liens incurred in the ordinary course of the banking business.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any
Person alleging potential Liability or requesting information relating to
or affecting a Party, its business, its Assets (including Contracts
related to it), or the transactions contemplated by this Agreement, but
shall not include regular, periodic examinations of depository
institutions and their Affiliates by Regulatory Authorities.
"LOAN PROPERTY" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in
which such Party or Subsidiary holds a security or other interest
(including an interest in a fiduciary capacity), and, where required by
the context, includes the owner or operator of such property, but only
with respect to such property.
"MAGNA CAPITAL STOCK" shall mean, collectively, Magna Common
Stock, Magna Class B Preferred Stock, and Magna Class C Preferred Stock.
"MAGNA CLASS B PREFERRED STOCK" shall mean the $20.00 par
value Class B Voting Preferred Stock of Magna.
"MAGNA CLASS C PREFERRED STOCK" shall mean the $.10 par
value Class C Non-Voting Preferred Stock of Magna.
"MAGNA COMMON STOCK" shall mean the $2.00 par value common
stock of Magna.
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51
"MAGNA COMPANIES" shall mean, collectively, Magna and all
Magna Subsidiaries.
"MAGNA DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Magna Disclosure Memorandum" delivered prior to the
execution of this Agreement to UPC describing in reasonable detail the
matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section or subsection of this
Agreement under which such disclosure is being made.
"MAGNA FINANCIAL STATEMENTS" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any)
of Magna as of September 30, 1997, and as of December 31, 1996 and 1995,
and the related statements of income, changes in stockholders' equity,
and cash flows (including related notes and schedules, if any) for the
nine months ended September 30, 1997, and for each of the three years
ended December 31, 1996, 1995, and 1994, as filed by Magna in SEC
Documents and (ii) the consolidated statements of condition of Magna
(including related notes and schedules, if any) and related statements of
income, changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) included in SEC Documents filed with
respect to periods ended subsequent to September 30, 1997.
"MAGNA RIGHTS AGREEMENT" shall mean that certain Rights
Agreement, dated November 11, 1988, between Magna and Magna Trust
Company, as Rights Agent.
"MAGNA STOCK PLANS" shall mean the existing stock option and
other stock-based compensation plans of Magna.
"MAGNA SUBSIDIARIES" shall mean the Subsidiaries of Magna,
which shall include the Magna Subsidiaries described in Section 5.4 of
this Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Magna in the future and owned by
Magna at the Effective Time.
"MATERIAL" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the matter in
question; provided that any specific monetary amount stated in this
Agreement shall determine materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event,
change, or occurrence which, individually or together with any other
event, change, or occurrence, has a Material adverse impact on (i) the
financial condition, results of operations, or business of such Party and
its Subsidiaries, taken as a whole or (ii) the ability of such Party to
perform its obligations under this Agreement or to consummate the Merger
or the other transactions contemplated by this Agreement, provided that
"Material Adverse Effect" shall not be deemed to include the impact of
(a) changes in banking and similar Laws of general applicability or
interpretations thereof by courts or governmental authorities, (b)
changes in GAAP or regulatory accounting principles generally applicable
to banks and their holding companies, (c) actions and omissions of a
Party (or any of its Subsidiaries) taken with the
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52
prior informed consent of the other Party in contemplation of the
transactions contemplated hereby, and (d) the Merger and compliance with
the provisions of this Agreement (including the expense associated with
the vesting of benefits under the various employee benefit plans of Magna
as a result of the Merger constituting a change of control) on the
operating performance of the Parties.
"NYSE" shall mean the New York Stock Exchange, Inc.
"1933 ACT" shall mean the Securities Act of 1933, as
amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local, or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates in
the management (including, but not limited to, participating in a
fiduciary capacity) and, where required by the context, said term means
the owner or operator of such facility or property, but only with respect
to such facility or property.
"PARTY" shall mean either Magna or UPC, and "PARTIES" shall
mean both Magna and UPC.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal,
commercial, or governmental entity, such as, but not limited to, a
corporation, general partnership, joint venture, limited partnership,
limited liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"PLAN OF MERGER" shall mean the plan of merger providing for
the Merger, in substantially the form of Exhibit 2.
"PREFERRED STOCK CASH PAYMENT AMOUNT" shall mean an amount
in cash equal to $20.00, plus any accrued but unpaid dividends at the
Effective Time.
"PREFERRED STOCK PURCHASE RIGHTS" shall mean the preferred
stock purchase rights issued pursuant to the Magna Rights Agreement.
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53
"REGISTRATION STATEMENT" shall mean the Registration
Statement on Form S-4, or other appropriate form, including any
pre-effective or post-effective amendments or supplements thereto, filed
with the SEC by UPC under the 1933 Act with respect to the shares of UPC
Common Stock to be issued to the stockholders of Magna in connection with
the transactions contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the
Federal Trade Commission, the United States Department of Justice, the
Board of the Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation,
the Office of Thrift Supervision, all state regulatory agencies having
jurisdiction over the Parties and their respective Subsidiaries, the
NASD, and the SEC.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a
Person.
"RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of a Person or by which a Person is or
may be bound to issue additional shares of its capital stock or other
Rights.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
"STOCK OPTION AGREEMENT" shall mean the stock option
agreement by and between Magna and UPC, in substantially the form of
Exhibit 1.
"STOCKHOLDERS' MEETINGS" shall mean the respective meetings
of the stockholders of UPC and Magna to be held pursuant to Section 8.1
of this Agreement, including any adjournment or adjournments thereof.
"SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 50% or more of the outstanding equity securities either directly
or through an unbroken chain of entities as to each of which 50% or more
of the outstanding equity securities is owned directly or indirectly by
its parent; provided, there shall not be included any such entity
acquired through foreclosure or any such entity the equity securities of
which are owned or controlled in a fiduciary capacity.
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54
"SUPPLEMENTAL LETTER" shall mean the supplemental letter of
even date herewith between the Parties relating to certain understandings
and agreements in addition to those included in this Agreement.
"SURVIVING CORPORATION" shall mean UPHC as the surviving
corporation resulting from the Merger.
"TAX" OR "TAXES" shall mean all federal, state, local, and
foreign taxes, charges, fees, levies, imposts, duties, or other
assessments, including income, gross receipts, excise, employment, sales,
use, transfer, license, payroll, franchise, severance, stamp, occupation,
windfall profits, environmental, federal highway use, commercial rent,
customs duties, capital stock, paid-up capital, profits, withholding,
Social Security, single business and unemployment, disability, real
property, personal property, registration, ad valorem, value added,
alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, imposed or required to be withheld by the United States or
any state, local, or foreign government or subdivision or agency thereof,
including any interest, penalties, or additions thereto.
"TAXABLE PERIOD" shall mean any period prescribed by any
governmental authority, including the United States or any state, local,
or foreign government or subdivision or agency thereof for which a Tax
Return is required to be filed or Tax is required to be paid.
"TAX RETURN" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an affiliated
or combined or unitary group that includes a Party or its Subsidiaries.
"TBCA" shall mean the Tennessee Business Corporation Act.
"UPC CAPITAL STOCK" shall mean, collectively, the UPC Common
Stock, the UPC Preferred Stock and any other class or series of capital
stock of UPC.
"UPC CHARTER AMENDMENT" shall mean the proposal to amend
UPC's Restated Charter of Incorporation to increase the number of
authorized shares of UPC Common Stock by not less than 100,000,000, which
may be submitted to the stockholders of UPC for consideration and
approval at the UPC Stockholders' Meeting or the 1998 annual meeting of
stockholders of UPC.
"UPC COMMON STOCK" shall mean the $5.00 par value common
stock of UPC.
"UPC FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of UPC as
of September 30, 1997, and as of December 31, 1996 and 1995, and the
related statements of earnings, changes in
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55
stockholders' equity, and cash flows (including related notes and
schedules, if any) for the nine months ended September 30, 1997 and for
each of the three years ended December 31, 1996, 1995 and 1994, as filed
by UPC in SEC Documents and (ii) the consolidated balance sheets of UPC
(including related notes and schedules, if any) and related statements of
earnings, changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) included in SEC Documents filed with
respect to periods ended subsequent to September 30, 1997.
"UPC PREFERRED STOCK" shall mean the no par value preferred
stock of UPC and shall include the (i) Series A Preferred Stock and (ii)
Series E 8% Cumulative, Convertible Preferred Stock, of UPC ("UPC Series
E Preferred Stock").
"UPC RIGHTS" shall mean the preferred stock purchase rights
issued pursuant to the UPC Rights Agreement.
"UPC RIGHTS AGREEMENT" shall mean that certain Rights
Agreement, dated January 19, 1989, between UPC and Union Planters Bank,
National Association, as Rights Agent.
"UPC SUBSIDIARIES" shall mean the Subsidiaries of UPC and
any corporation, bank, or other organization acquired as a Subsidiary of
UPC in the future and owned by UPC at the Effective Time.
"UPHC" shall mean the wholly-owned subsidiary of UPC
organized under the Laws of the State of Tennessee.
"UPHC COMMON STOCK" shall mean the $1.00 par value common
stock of UPHC.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
Charter Section 7.2(f)
Charter Agreement Section 7.2(f)
Closing Section 1.2
Effective Time Section 1.3
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Indemnified Party Section 8.15
Magna Benefit Plans Section 5.13(a)
Magna Contracts Section 5.14
Magna ERISA Affiliate Section 5.13(e)
Magna ERISA Plan Section 5.13(a)
Magna Rights Section 3.6(a)
Magna Pension Plan Section 5.13(a)
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56
Magna SEC Reports Section 5.5(a)
Merger Section 1.1
Takeover Laws Section 5.19
Tax Opinion Section 9.1(g)
UPC ERISA Affiliate Section 6.17
UPC SEC Reports Section 6.5(a)
(c) Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the singular. Whenever the words
"include," "includes," or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2,
each of the Parties shall bear and pay all direct costs and expenses incurred
by it or on its behalf in connection with the transactions contemplated
hereunder, including filing, registration, and application fees, printing fees,
and fees and expenses of its own financial or other consultants, investment
bankers, accountants, and counsel, except that each of the Parties shall bear
and pay one-half of the printing costs incurred in connection with the printing
of the Registration Statement and the Joint Proxy Statement.
(b) Nothing contained in this Section 11.2 shall
constitute or shall be deemed to constitute liquidated damages for the willful
breach by a Party of the terms of this Agreement or otherwise limit the rights
of the nonbreaching Party.
11.3 BROKERS AND FINDERS. Except for ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ as to Magna and except for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. as to UPC, each of
the Parties represents and warrants that neither it nor any of its officers,
directors, employees, or Affiliates has employed any broker or finder or
incurred any Liability for any financial advisory fees, investment bankers'
fees, brokerage fees, commissions, or finders' fees in connection with this
Agreement or the transactions contemplated hereby. In the event of a claim by
any broker or finder based upon his, her, or its representing or being retained
by or allegedly representing or being retained by Magna or UPC, each of Magna
and UPC, as the case may be, agrees to indemnify and hold the other Party
harmless of and from any Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to
the transactions contemplated hereunder and supersedes all prior arrangements
or understandings with respect thereto, written or oral (including any
provision of the Confidentiality Agreements which would act to preclude UPC (or
any Holder as defined in the Stock Option Agreement from exercising its rights
under the Stock Option Agreement) to the extent that the Stock Option Agreement
is in force and effect, but excluding the Supplemental Letter). Nothing in
this Agreement expressed or implied, is intended to confer upon any Person,
other than the Parties or their respective successors, any rights,
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57
remedies, obligations, or liabilities under or by reason of this Agreement,
other than as provided in Sections 8.13 and 8.15 of this Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement
may be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before or
after stockholder approval of this Agreement has been obtained; provided, that
the provisions of this Agreement relating to the manner or basis in which
shares of Magna Common Stock will be exchanged for UPC Common Stock shall not
be amended after the Stockholders' Meetings without the requisite approval of
the holders of the issued and outstanding shares of UPC Common Stock and Magna
Common Stock, as the case may be, entitled to vote thereon.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, UPC, acting
through its Board of Directors, chief executive officer, chief financial
officer, or other authorized officer, shall have the right to waive any Default
in the performance of any term of this Agreement by Magna, to waive or extend
the time for the compliance or fulfillment by Magna of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of UPC under this Agreement, except any condition
which, if not satisfied, would result in the violation of any Law. No such
waiver shall be effective unless in writing signed by a duly authorized officer
of UPC.
(b) Prior to or at the Effective Time, Magna, acting
through its Board of Directors, chief executive officer, chief financial
officer, or other authorized officer, shall have the right to waive any Default
in the performance of any term of this Agreement by UPC, to waive or extend the
time for the compliance or fulfillment by UPC of any and all of its obligations
under this Agreement, and to waive any or all of the conditions precedent to
the obligations of Magna under this Agreement, except any condition which, if
not satisfied, would result in the violation of any Law. No such waiver shall
be effective unless in writing signed by a duly authorized officer of Magna.
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same or any other provision of
this Agreement. No waiver of any condition or of the breach of any term
contained in this Agreement in one or more instances shall be deemed to be or
construed as a further or continuing waiver of such condition or breach or a
waiver of any other condition or of the breach of any other term of this
Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any Party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other Party. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by the Parties and their respective successors
and assigns.
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11.8 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
Magna: Magna Group, Inc.
One Magna Place
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: G. ▇▇▇▇▇▇ ▇▇▇▇▇
Chairman, President, and
Chief Executive Officer
Copy to Counsel: WACHTELL LIPTON ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
UPC: UNION PLANTERS CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief
Operating Officer
Copy to Counsel: UNION PLANTERS CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇. ▇▇▇▇▇ House, Jr.
▇▇▇▇▇▇ & BIRD LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
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59
11.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Tennessee, without regard
to any applicable conflicts of Laws, except to the extent that the Laws of the
State of Delaware relate to the consummation of the Merger.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against any Party, whether
under any rule of construction or otherwise. No Party to this Agreement shall
be considered the draftsman. The Parties acknowledge and agree that this
Agreement has been reviewed, negotiated, and accepted by all Parties and their
attorneys and shall be construed and interpreted according to the ordinary
meaning of the words used so as fairly to accomplish the purposes and
intentions of the Parties.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
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60
IN WITNESS WHEREOF, each of the Parties has caused this Agreement
to be executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
ATTEST: MAGNA GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ G. ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------- ------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ G. ▇▇▇▇▇▇ ▇▇▇▇▇
Secretary Chairman, President, and
Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By: /s/ ▇. ▇▇▇▇▇ House, Jr. By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------- -----------------------------------
▇. ▇▇▇▇▇ House, Jr. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Secretary Chairman and Chief Executive
Officer
[CORPORATE SEAL]
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