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AGREEMENT AND PLAN OF CONSOLIDATION
BY AND AMONG
BAY BANCSHARES, INC.,
BAYSHORE NATIONAL BANK,
AND
FIRST BANK OF DEER PARK
DATED AS OF AUGUST 7, 1997
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TABLE OF CONTENTS
INTRODUCTION................................................................1
I. THE CONSOLIDATIONS.......................................................2
Section 1.1. Initial Merger..........................................2
Section 1.2. Articles of Association, Bylaws and Facilities of
First Surviving Bank....................................2
Section 1.3. Effect of Initial Merger................................2
Section 1.4. Liabilities of the First Surviving Bank.................3
Section 1.5. Final Consolidation.....................................3
Section 1.6. Articles of Association, Bylaws and Facilities of
Continuing Bank.........................................3
Section 1.7. Effect of Final Consolidation...........................3
Section 1.8. Liabilities of Continuing Bank..........................4
Section 1.9. Consolidation Consideration.............................4
Section 1.10. Dissenting Shares.......................................5
Section 1.11. Ratification by Shareholders............................5
Section 1.12. Xxxxxxx Money Deposit...................................5
II. REPRESENTATIONS AND WARRANTIES OF FIRST BANK............................6
Section 2.1. Organization............................................6
Section 2.2. Capitalization..........................................7
Section 2.3. Approvals; Authority....................................7
Section 2.4. Financial Statements....................................8
Section 2.5. Title...................................................8
Section 2.6. Environmental Laws......................................8
Section 2.7. Litigation and Other Proceedings........................9
Section 2.8. Taxes...................................................9
Section 2.10. Insurance..............................................10
Section 2.11. No Conflict With Other Instruments.....................11
Section 2.12. Laws...................................................11
Section 2.13. Conduct................................................11
Section 2.14. Allowance for Possible Loan Losses.....................12
Section 2.15. Employment Relations...................................12
Section 2.16. ERISA..................................................12
Section 2.17. Loans and Investments..................................12
Section 2.18. Accurate and Complete Records..........................13
Section 2.19. Performance of Obligations.............................13
Section 2.20. No Misleading Statements...............................13
Section 2.21. Absence of Changes.....................................13
Section 2.22. Brokers and Finders....................................13
Section 2.23. Regulatory Approvals...................................13
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III. REPRESENTATIONS AND WARRANTIES OF BANCSHARES AND BAYSHORE.............14
Section 3.1. Organization...........................................14
Section 3.2. Approvals; Authority...................................14
Section 3.3. No Conflict With Other Instruments.....................14
Section 3.4. Regulatory Approvals...................................15
Section 3.5. Litigation.............................................15
Section 3.6. Due Diligence..........................................15
IV. COVENANTS OF FIRST BANK................................................15
Section 4.1. Shareholder Approval and Best Efforts..................15
Section 4.2. Invitation to Meetings.................................15
Section 4.3. Conduct of Business Prior to Closing...................16
Section 4.4. Litigation and Claims..................................18
Section 4.5. Confidentiality........................................18
Section 4.6. Standstill Provision...................................18
Section 4.7. Access to Properties and Records.......................18
Section 4.8. Information for Applications...........................18
Section 4.9. Additional Disclosures and Information.................19
Section 4.10. Proxies................................................19
Section 4.11. Releases...............................................19
V. COVENANTS OF BANCSHARES AND BAYSHORE...................................20
Section 5.1. Best Efforts...........................................20
Section 5.2. Information for Applications and Proxy Solicitation....20
Section 5.3. Confidentiality........................................21
Section 5.4. Notices................................................21
Section 5.5. Releases...............................................21
VI. CLOSING...............................................................21
Section 6.1. Closing................................................21
Section 6.2. Initial Merger Effective Time..........................22
Section 6.3. Effective Date.........................................22
VII. TERMINATION..........................................................22
Section 7.1. Termination............................................22
Section 7.2. Right to Cure. .......................................24
VIII. CONDITIONS TO OBLIGATIONS OF BANCSHARES AND BAYSHORE................24
Section 8.1. Compliance with Representations and Covenants..........24
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Section 8.2. Material Adverse Change................................24
Section 8.3. Legal Opinion..........................................24
Section 8.4. Registration of Bancshares Common Stock................25
Section 8.5. Successful Initial Public Offering.....................25
Section 8.6. Releases...............................................25
Section 8.7. Proceedings and Documents..............................25
Section 8.8. Litigation.............................................25
Section 8.9. Resignation............................................25
Section 8.10. No Pending Actions.....................................25
Section 8.11. No Default.............................................26
Section 8.12. OCC Letter.............................................26
Section 8.13. Covenant Not to Compete................................26
IX. CONDITIONS TO OBLIGATIONS OF FIRST BANK...............................26
Section 9.1. Compliance with Representations and Covenants..........26
Section 9.2. Legal Opinion..........................................26
Section 9.3. Releases...............................................26
Section 9.4. Proceedings and Documents..............................27
Section 9.5. Payment of Consideration...............................27
X. CONDITIONS TO RESPECTIVE OBLIGATIONS OF BANCSHARES, BAYSHORE AND
FIRST BANK...........................................................27
Section 10.1. Government Approvals...................................27
Section 10.2. Shareholder Approval...................................27
XI. MISCELLANEOUS.........................................................27
Section 11.1. Notices................................................27
Section 11.2. Effect of Termination..................................28
Section 11.3. Entire Agreement Modification; Waiver..................28
Section 11.4. Governing Law..........................................28
Section 11.5. Legal Construction.....................................29
Section 11.6. Attorney's Fees........................................29
Section 11.7. Cooperation............................................29
Section 11.8. Assignability..........................................29
Section 11.9. Singular, Plural, Headings.............................29
Section 11.10. Commissions............................................29
Section 11.11. Effective Date.........................................29
Section 11.12. Expenses...............................................29
Section 11.13. Binding Effect.........................................30
Section 11.14. Representation by Counsel..............................30
Section 11.15. Non-Survival of Representations........................30
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Section 11.16. Facsimile Signatures...................................30
Section 11.17. Modifications or Waiver................................30
Section 11.18. Severability...........................................30
Section 11.19. Counterparts...........................................30
Section 11.20. Gender.................................................30
Section 11.21. Publicity..............................................31
Section 11.22. Disclosures............................................31
Section 11.23. Agreement Regarding Certain Participations.............31
Section 11.24. Indemnification........................................32
SCHEDULE 2.5 TO THE CONSOLIDATION AGREEMENT:
Title - First Bank...............................................35
SCHEDULE 2.6 TO THE CONSOLIDATION AGREEMENT:
Environmental Laws - First Bank..................................36
SCHEDULE 2.7 TO THE CONSOLIDATION AGREEMENT:
Litigation and Other Proceedings - First Bank....................37
SCHEDULE 2.8 TO THE CONSOLIDATION AGREEMENT:
Taxes - First Bank...............................................38
SCHEDULE 2.9 TO THE CONSOLIDATION AGREEMENT:
Contracts - First Bank...........................................39
SCHEDULE 2.10 TO THE CONSOLIDATION AGREEMENT:
Insurance - First Bank...........................................40
SCHEDULE 2.12 TO THE CONSOLIDATION AGREEMENT:
Laws - First Bank................................................41
SCHEDULE 2.13 TO THE CONSOLIDATION AGREEMENT:
Conduct - First Bank.............................................42
SCHEDULE 2.15 TO THE CONSOLIDATION AGREEMENT:
Employment Relations - First Bank................................43
SCHEDULE 2.17 TO THE CONSOLIDATION AGREEMENT:
Loans and Investments - First Bank...............................44
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SCHEDULE 2.21 TO THE CONSOLIDATION AGREEMENT:
Absence of Changes - First Bank..................................45
SCHEDULE 4.10 TO THE CONSOLIDATION AGREEMENT:
Proxies..........................................................46
SCHEDULE 4.11 TO THE CONSOLIDATION AGREEMENT:
Releases.........................................................47
SCHEDULE 5.5 TO THE CONSOLIDATION AGREEMENT:
Releases.........................................................48
SCHEDULE 8.3 TO THE CONSOLIDATION AGREEMENT:
Legal Opinion to be Delivered by First Bank......................49
SCHEDULE 9.2 TO THE CONSOLIDATION AGREEMENT:
Legal Opinion to be Delivered by Bancshares......................51
EXHIBIT A
PLAN OF MERGER BETWEEN BAYSHORE ACQUISITION CORPORATION AND FIRST
BANK OF DEER PARK....................................................A-1
EXHIBIT B
PLAN OF CONSOLIDATION BETWEEN FIRST BANK OF DEER PARK AND BAYSHORE
NATIONAL BANK........................................................B-1
EXHIBIT C
ESCROW AGREEMENT.....................................................C-1
EXHIBIT D
VOTING AGREEMENT AND IRREVOCABLE PROXY...............................D-1
EXHIBIT E
RELEASE OF CLAIMS....................................................E-1
EXHIBIT F
RELEASE OF CLAIMS....................................................F-1
EXHIBIT G
OUTLINE OF TERMS OF NON-COMPETITION AGREEMENT........................G-1
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AGREEMENT AND PLAN OF CONSOLIDATION
This Agreement and Plan of Consolidation ("Agreement") dated as of
August 7, 1997, is by and among Bay Bancshares, Inc., a Texas corporation
("Bancshares"), Bayshore National Bank, a national banking association
("Bayshore"), and First Bank of Deer Park, a Texas banking association
located in Deer Park, Texas ("First Bank").
WHEREAS, First Bank desires to affiliate with Bancshares and Bayshore and
Bancshares and Bayshore desire to affiliate with First Bank in the manner
provided in this Agreement; and
WHEREAS, Bancshares, Bayshore, and First Bank believe that the
acquisition of First Bank by Bancshares in the manner provided by, and
subject to the terms and conditions set forth in, this Agreement and all
exhibits, schedules and supplements hereto is desirable and in the best
interests of their respective shareholders;
NOW, THEREFORE, in consideration of such premises and the mutual
representations, warranties, covenants and agreements contained herein, the
parties agree as set forth below.
INTRODUCTION
Following the execution of this Agreement by Bancshares, Bayshore, and
First Bank, Bancshares will charter and organize as a wholly-owned subsidiary
a Texas corporation ("Acquisition") solely for the purpose of consummating
the consolidation transaction described herein. This Agreement provides for
(i) the merger of Acquisition with and into First Bank with First Bank as the
survivor (the "Initial Merger"), all pursuant to this Agreement and related
Plan of Merger by and between Acquisition and First Bank, a form of which is
attached hereto as Exhibit "A" and all terms of which are incorporated herein
by reference for all purposes and, immediately thereafter, (ii) the
consolidation of First Bank with and into Bayshore, with Bayshore as the
survivor (the "Final Consolidation"), all pursuant to this Agreement and the
Plan of Consolidation by and between First Bank and Bayshore, a form of which
is attached hereto as Exhibit "B" and all of the terms of which are
incorporated herein by reference for all purposes. The Initial Merger and
the Final Consolidation shall sometimes be referred to collectively as the
"Consolidations." In connection with the Consolidations, Bancshares will
acquire all issued and outstanding shares of common stock, $5.00 par value,
of First Bank ("First Bank Common Stock") in exchange for the payment in cash
to the shareholders of First Bank a total consideration of $7,970,000 or
approximately $69.0043 per share based on 115,500 shares of First Bank Common
Stock outstanding.
I. THE CONSOLIDATIONS
Section 1.1. INITIAL MERGER. Acquisition shall merge with and into
First Bank (the resulting bank being herein referred to as the "First
Surviving Bank") as of the Initial Merger Effective Time, as defined in
Section 6.2, under the charter and Articles of Association of First Bank, as
determined by the Texas Department of Banking ("Banking Department") and each
of the outstanding shares of common stock of Acquisition shall and without
any action on the part of Bancshares be canceled and be converted into shares
of common stock of the First Surviving Bank. The shares of common stock of
the First Surviving Bank into which such Acquisition common stock is
converted shall represent ownership of 100% of the issued and outstanding
capital stock of the First Surviving Bank, all of which shall be owned by
Bancshares.
Section 1.2. ARTICLES OF ASSOCIATION, BYLAWS AND FACILITIES OF FIRST
SURVIVING BANK. At the Initial Merger Effective Time and until thereafter
amended in accordance with law, the Articles of Association of the First
Surviving Bank shall be the Articles of Association of First Bank as in
effect at the Initial Merger Effective Time. Until altered, amended or
repealed as provided therein and in the Articles of Association of the First
Surviving Bank, the Bylaws of the First Surviving Bank shall be the Bylaws of
First Bank as in effect at the Initial Merger Effective Time. The main
office of the First Surviving Bank shall be the main office of First Bank as
of the Initial Merger Effective Time, and all corporate acts, plans,
policies, contracts, approvals and authorizations of First Bank and
Acquisition and their respective shareholders, boards of directors,
committees elected or appointed thereby, officers and agents, which were
valid and effective immediately prior to the Initial Merger Effective Time,
shall be taken for all purposes as the acts, plans, policies, contracts,
approvals and authorization of the First Surviving Bank and shall be as
effective and binding thereon as the same were with respect to First Bank and
Acquisition respectively, as of the Initial Merger Effective Time.
Section 1.3. EFFECT OF INITIAL MERGER. At the Initial Merger Effective
Time, the corporate existence of First Bank and Acquisition shall be merged
into and continued in the First Surviving Bank, and the First Surviving Bank
shall be deemed to be a continuation in entity and identity of First Bank and
Acquisition. All rights, franchises and interests of First Bank and
Acquisition, respectively, in and to any type of property and chooses in
action shall be transferred to and vested in the First Surviving Bank by
virtue of the Initial Merger without any deed or other transfer. First
Surviving Bank, without any order or other action on the part of any court or
otherwise, shall hold and enjoy all rights of property, franchises and
interest, including appointments, designations and nominations, and all other
rights and interests as trustee, executor, administrator, transfer agent or
registrar of stocks and bonds, guardian of estates, assignee, receiver and
committee of estates and lunatics, and in every other fiduciary capacity, in
the same manner and to the same extent as such rights, franchises and
interests were held or enjoyed by First Bank and Acquisition, respectively,
as of the Initial Merger Effective Time.
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Section 1.4. LIABILITIES OF THE FIRST SURVIVING BANK. At the Initial
Merger Effective Time, the First Surviving Bank shall be liable for all
liabilities of First Bank and Acquisition. All deposits, debts, liabilities
and obligations of First Bank and of Acquisition, respectively, accrued,
absolute, contingent or otherwise, and whether or not reflected or reserved
against on balance sheets, books of account or records of First Bank or
Acquisition, as the case may be, shall be those of the First Surviving Bank
and shall not be released or impaired by the Initial Merger. All rights of
creditors and other obligees and all liens on property of either First Bank
or Acquisition shall be preserved unimpaired.
Section 1.5. FINAL CONSOLIDATION. Immediately after the Initial Merger
Effective Time, the First Surviving Bank shall be consolidated with and into
Bayshore (which, as the receiving association, is hereinafter referred to as
"Continuing Bank" whenever reference is made to it at or after the Effective
Date (as defined in Section 6.3 of this Agreement)) under the charter and
Articles of Association of Bayshore, pursuant to the provisions of, and with
the effect provided in the National Bank Act, as amended.
Section 1.6. ARTICLES OF ASSOCIATION, BYLAWS AND FACILITIES OF
CONTINUING BANK. On the Effective Date and until thereafter amended in
accordance with law, the Articles of Association of Continuing Bank shall be
the Articles of Association of Bayshore as in effect on the Effective Date.
Until altered, amended or repealed as therein provided and in the Articles of
Association of Continuing Bank, the Bylaws of Continuing Bank shall be the
Bylaws of Bayshore as in effect on the Effective Date. Unless and until
changed by the Board of Directors of Continuing Bank, the main office of
Continuing Bank shall be the main office of Bayshore as of the Effective
Date. The established offices and facilities of the First Surviving Bank
immediately prior to the Final Consolidation shall become established offices
and facilities of the Continuing Bank. Until thereafter changed in
accordance with law or the Articles of Association or Bylaws of Continuing
Bank, all corporate acts, plans, policies, contracts, approvals and
authorizations of the First Surviving Bank and Bayshore and their respective
shareholders, boards of directors, committees elected or appointed thereby,
officers and agents, which were valid and effective immediately prior to the
Effective Date, shall be taken for all purposes as the acts, plans, policies,
contracts, approvals and authorizations of Continuing Bank and shall be as
effective and binding thereon as the same were with respect to the First
Surviving Bank and Bayshore, respectively, as of the Effective Date.
Section 1.7. EFFECT OF FINAL CONSOLIDATION. On the Effective Date, the
corporate existence of the First Surviving Bank and Bayshore shall, as
provided in the provisions of law heretofore mentioned, be consolidated with
and continued in Continuing Bank, and Continuing Bank shall be deemed to be a
continuation in entity and identity of the First Surviving Bank and Bayshore.
All rights, franchises and interests of the First Surviving Bank and
Bayshore, respectively, in and to any type of property and chooses in action
shall be transferred to and vested in Continuing Bank by virtue of such Final
Consolidation without any deed or other transfer. Continuing Bank, without
any order or other action on the part of any court or otherwise, shall hold
and enjoy all rights of property,
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franchises and interest, including appointments, designations and
nominations, and all other rights and interests as trustee, executor,
administrator, transfer agent or registrar of stocks and bonds, guardian of
estates, assignee, receiver and committee of estates and lunatics, and in
every other fiduciary capacity, in the same manner and to the same extent as
such rights, franchises, and interests were held or enjoyed by First Bank and
Bayshore, respectively, as of the Effective Date.
Section 1.8. LIABILITIES OF CONTINUING BANK. On the Effective Date of
the Final Consolidation, Continuing Bank shall be liable for all liabilities
of the First Surviving Bank and Bayshore. All deposits, debts, liabilities,
obligations and contracts of the First Surviving Bank and of Bayshore,
respectively, matured or unmatured, whether accrued, absolute, contingent or
otherwise, and whether or not reflected or reserved against on balance
sheets, books of account, or records of the First Surviving Bank or Bayshore
shall be those of Continuing Bank and shall not be released or impaired by
the Consolidations. All rights of creditors and other obligees and all liens
on property of either the First Surviving Bank or Bayshore shall be preserved
unimpaired subsequent to the Consolidations.
Section 1.9. CONSOLIDATION CONSIDERATION. The total consolidation
consideration payable for all of the capital stock of First Bank referenced
below shall be $7,970,600, or $69.0043 per share of First Bank Common Stock
(based on 115,500 shares issued and outstanding) to be payable in the
following manner:
At the Initial Merger Effective Time and upon and by reason of the
Initial Merger becoming effective, each of the 115,500 shares of First Bank
Common Stock issued and outstanding immediately prior to the Initial Merger
Effective Time, excluding any Dissenting Shares (as defined in Section 1.10
of this Agreement), and any and all rights arising out of the ownership of
such shares shall, without any action on the part of the holder thereof, be
canceled and converted into the right to receive $69.0043 in cash payable
upon tender of the stock certificates evidencing such shares as set forth in
the following paragraph. The aggregate consideration to be paid for all of
the shares of First Bank Common Stock shall hereafter sometimes be referred
to as the "Consolidation Price."
On or immediately prior to the Initial Merger Effective Time, Bancshares
or Bayshore shall have available cash in sufficient amount to pay the
aggregate Consolidation Price. At least ten (10) days in advance of the
Closing Date (as defined in Section 6.1 of this Agreement), Bancshares will
send to each shareholder of First Bank a letter of transmittal for use in
exchanging such holder's certificates for his pro rata amount of the
Consolidation Price. Commencing immediately after the Effective Date (as
defined in Section 6.3 of the Agreement), each shareholder of First Bank
shall be entitled to receive payment for his shares upon surrender of the
certificates representing his shares of First Bank Common Stock or after
providing an appropriate Affidavit of Lost Certificate and Indemnity
Agreement and/or a bond as may be required in each case by Bancshares. Until
so surrendered, each First Bank Common Stock certificate will be deemed for
all corporate purposes
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to represent and evidence solely the right to receive the amount of the
Consolidation Price to be paid therefor pursuant to this Agreement without
interest thereon.
Upon the consummation of the Consolidations, the par value and number of
issued and outstanding shares of capital stock of the Continuing Bank shall
be the same as the par value and number of issued and outstanding shares of
capital stock of Bayshore as of the Effective Date.
Section 1.10. DISSENTING SHARES. Each share of First Bank Common Stock
issued and outstanding immediately prior to the Effective Date, the holder of
which has not voted in favor of the Initial Merger and who has properly
perfected his dissenters' rights of appraisal by following the procedures set
forth in the Texas Business Corporation Act ("TBCA") is referred to herein as
a "Dissenting Share." Dissenting Shares owned by each holder thereof who has
not exchanged his certificates representing shares of First Bank Common Stock
for the Consolidation Price and otherwise has not effectively withdrawn or
lost his dissenter's rights, shall not be converted into or represent the
right to receive the Consolidation Price pursuant to Section 1.9 hereof and
shall be entitled only to such rights as are available to such holder
pursuant to the applicable provisions of the TBCA. Each holder of Dissenting
Shares shall be entitled to receive the value of such Dissenting Shares held
by him in accordance with the applicable provisions of the TBCA, provided
such holder complies with the procedures contemplated by and set forth in the
applicable provisions of the TBCA. If any holder of Dissenting Shares shall
effectively withdraw or lose his dissenter's rights under the applicable
provisions of the TBCA, such Dissenting Shares shall be converted into the
right to receive the Consolidation Price in accordance with the provisions of
Section 1.9 hereof.
Section 1.11. RATIFICATION BY SHAREHOLDERS. This Agreement shall be
submitted to the shareholders of First Bank and, if required, to Bancshares
as the sole shareholder of Acquisition and Bayshore in accordance with
applicable provisions of law and the respective Articles of Association and
Bylaws of First Bank, Acquisition and Bayshore. First Bank and Bancshares
and Bayshore shall proceed expeditiously and cooperate fully in the
procurement of any other consents and approvals and the taking of any other
actions in satisfaction of all other requirements prescribed by law or
otherwise necessary for consummation of the Consolidations on the terms
herein provided, including, without limitation, the preparation and
submission of all necessary filings, requests for waivers and certificates
with the Board of Governors of the Federal Reserve System ("Federal Reserve
Board"), the Federal Deposit Insurance Corporation ("FDIC"), the Banking
Department and the Office of the Comptroller of the Currency ("OCC").
Section 1.12. XXXXXXX MONEY DEPOSIT.
(a) Upon the execution of this Agreement by First Bank, Bancshares
shall deliver One Hundred Fifty Thousand Dollars ($150,000) to First Bank as
an xxxxxxx money deposit and expression of Bancshares' good faith interest in
First Bank and as compensation for the standstill set forth in Section 4.6 of
this Agreement (the "Xxxxxxx Money"). First Bank will deliver the Xxxxxxx
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Money to an independent escrow agent ("Escrow Agent") who will hold it
pursuant to the terms of the Escrow Agreement ("Escrow Agreement") set forth
as Exhibit "C" to this Agreement. As set forth in the Escrow Agreement, the
Xxxxxxx Money will not become subject to the disbursement provisions of the
Escrow Agreement or this Agreement until First Bank has delivered to the
Escrow Agent and Bancshares evidence satisfactory to the Escrow Agent and
Bancshares that each of the directors, officers and owners of 5% or more of
the issued and outstanding First Bank Common Stock have executed the Voting
Agreement and Irrevocable Proxy set forth as Exhibit "D" to this Agreement.
If the Consolidations are completed, the Xxxxxxx Money will be credited
against the Consolidation Price at the Closing.
(b) In the event that despite the fact that all of Bancshares'
conditions to Closing set forth in Articles VIII and X of this Agreement have
been satisfied and Bancshares has not elected to terminate this Agreement
pursuant to Article VII of this Agreement, the Closing does not occur by
December 31, 1997, or such other later date mutually agreed to in writing by
the parties hereto, First Bank shall be entitled to retain the Xxxxxxx Money.
(c) Bancshares shall be entitled to a return of the Xxxxxxx Money
and both First Bank and Bancshares shall be relieved of any further
obligations pursuant to this Agreement if the Consolidations do not close as
a result of any of Bancshares' conditions to Closing set forth in Articles
VIII and X not being satisfied or if the Agreement is terminated under the
provisions of Sections 7.1(a), (c), (d) or (e). Any other failure to close
the transactions contemplated by this Agreement for any reason whatsoever
will entitle First Bank to retain the Xxxxxxx Money. It is specifically
provided, however, that First Bank shall not be entitled to retain the
Xxxxxxx Money if First Bank was the cause of or contributed to the failure of
a condition precedent or event of termination that serves as the basis for
Bancshares' claim of the Xxxxxxx Money.
II. REPRESENTATIONS AND WARRANTIES OF FIRST BANK
First Bank makes each of the following representations and warranties to
Bancshares and Bayshore. First Bank agrees that, at the Closing, it shall
provide Bancshares with supplemental Schedules reflecting any changes in the
information contained in the Schedules attached to this Agreement on the date
of its execution which have occurred in the period from the date of execution
of this Agreement to the date of Closing.
Section 2.1. ORGANIZATION. (a) First Bank is a Texas banking
association duly organized, validly existing and in good standing under the
laws of Texas. First Bank has full corporate power and authority to own and
lease its properties, to engage in the business and activities now conducted
by it and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or
location of the properties and assets owned or leased by it makes such
licensing or qualification necessary.
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(b) True and complete copies of the Articles of Association and
Bylaws of First Bank, as amended to date, have been delivered or made
available to Bancshares.
(c) First Bank (i) does not have any subsidiaries or affiliates,
(ii) is not a general partner or material owner in any joint venture, general
partnership, limited partnership, trust or other non-corporate entity (other
than in the capacity as a participating lender in multi-bank loans in the
ordinary course of business) and (iii) does not know of any arrangement
pursuant to which the stock of any corporation is or has been held in trust
(whether express, constructive, resulting or otherwise) for the benefit of
all stockholders of First Bank.
(d) The deposit accounts of First Bank are insured by the FDIC
through the Bank Insurance Fund to the fullest extent permitted by law, and
all premiums and assessments required in connection therewith have been paid
by First Bank.
Section 2.2. CAPITALIZATION. The authorized capital stock of First Bank
consists of 115,500 shares of First Bank Common Stock, all of which shares
are issued and outstanding. As of the date of this Agreement, no shares of
other classes of stock or other securities of First Bank are authorized,
issued or outstanding. There are no shares of First Bank Common Stock or
other classes of stock or other securities of First Bank held in treasury.
All of the issued and outstanding shares of First Bank Common Stock are
validly issued, fully paid and non-assessable and, to the best knowledge of
First Bank, were not issued in violation of the securities laws of the United
States or any other applicable jurisdiction or in violation of the preemptive
rights of any person. There are no authorized or outstanding subscriptions,
options, warrants, calls, convertible securities or commitments of any kind
obligating First Bank to issue any shares of First Bank Common Stock or other
classes of stock or other securities of First Bank nor does First Bank have
any outstanding commitment or obligation to repurchase, reacquire or redeem
any shares of its outstanding capital stock. There are no voting trusts,
voting agreements, buy-sell agreements or other similar arrangements
affecting either the First Bank Common Stock or, to the best knowledge of
First Bank, any of the other shares of the common stock of First Bank.
Section 2.3. APPROVALS; AUTHORITY. The Board of Directors has approved
this Agreement and the transactions contemplated herein subject to the
approval thereof by the shareholders of First Bank as required by law, and,
other than shareholder approval, no further corporate proceedings of First
Bank are needed to deliver this Agreement and consummate the Consolidations.
Neither the execution and delivery of this Agreement nor the consummation of
the Consolidations contemplated hereby nor compliance by First Bank with any
of the provisions hereof will conflict with or result in a breach of any
provisions of its Articles of Association or By-laws. This Agreement has
been duly executed and delivered by First Bank and, when all requisite
regulatory and shareholder approvals have been obtained, it will be a binding
agreement of First Bank enforceable against First Bank in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
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moratorium or other similar laws relating to creditors' rights generally and
general equitable principles.
Section 2.4. FINANCIAL STATEMENTS. First Bank has furnished or made
available to Bancshares true and complete copies of First Bank's (i)
unaudited balance sheet (the "Balance Sheet) as of June 30, 1997 (the
"Balance Sheet Date") and the related statements of income and changes in
stockholders' equity for the six months then ended, together with the notes
thereto, (ii) audited balance sheets as of December 31, 1996, December
31,1995 and December 31,1994 and the related statements of income and changes
in stockholders' equity for the years then ended, together with the notes
thereto and (iii) First Bank's Call Report as filed with the FDIC as of and
for the period ended June 30, 1997. The financial information referred to in
this Section 2.4 is collectively referred to herein as the "Financial
Statements". The Financial Statements fairly present the financial position
and results of operations of First Bank at the dates and for the periods
indicated. First Bank had, as of the dates of the Financial Statements, no
liabilities, fixed or contingent, which were material and were not fully
disclosed or adequately provided for in the Financial Statements. No event
has occurred since the Balance Sheet Date which would have a material adverse
effect on First Bank.
Section 2.5. TITLE. True and complete copies of the deed and title
insurance policy for the real property owned by First Bank have been provided
to Bancshares and such real property is not subject to any mortgages, deeds
of trust and security agreements. Except as set forth on Schedule 2.5 of
this Agreement, First Bank has unencumbered, good, legal and indefeasible
title to all of its properties and assets, real and personal, including
without limitation all of the properties and assets reflected in the
Financial Statements, except (i) as noted in the Financial Statements or as
set forth in the documents delivered or made available to Bancshares referred
to above, (ii) statutory liens not yet delinquent, (iii) minor defects and
irregularities in title and encumbrances which do not materially impair the
use thereof for the purposes for which they are held, and (iv) those assets
and properties disposed of for fair value in the ordinary course of business
since the dates of the Financial Statements. First Bank owns no securities
of or interest in any commercial bank, financial institution or other entity
except as set forth in Schedule 2.5 of this Agreement.
Section 2.6. ENVIRONMENTAL LAWS. First Bank is in compliance with all
terms and conditions of all applicable federal, state and local environmental
statutes, regulations or ordinances required thereunder ("Environmental
Laws"), except to the extent that failure to comply would not have a material
adverse effect on First Bank. There is no legal, administrative or other
proceeding, claim or legal action of any nature pending, or to the best
knowledge of First Bank, threatened which seeks to impose on First Bank any
liability arising from (i) any violation of any Environmental Laws or (ii)
the release of Hazardous Materials (as hereinafter defined) under any
Environmental Laws. To the best knowledge of First Bank, First Bank is not
subject to any claim or lien under any Environmental Laws. To the best
knowledge of First Bank, no real estate currently owned, operated or leased
by First Bank, or owned, operated or leased by First Bank within ten years
preceding the date of this Agreement, has been designated by any federal,
state or local agency as requiring any
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environmental remediation or other response action to comply with
Environmental Laws, or to the best knowledge of First Bank, has been the site
of the release or discharge of any Hazardous Materials except as set forth in
Schedule 2.6 hereto. For purposes of this Section 2.6, First Bank shall not
be considered "owning" or "operating" real estate if it merely maintains a
security interest in that real estate. As used in this Agreement, the term
"Hazardous Materials" means petroleum and all petroleum products as well as
any pollutant, contaminant or hazardous substance under the Comprehensive
Environmental Response, Compensation and Liability Act, or any similar state
law.
Section 2.7. LITIGATION AND OTHER PROCEEDINGS. Except as otherwise
noted in Schedule 2.7 hereto, there are no legal, quasi judicial or
administrative proceedings of any kind or nature now pending or, to the best
knowledge of First Bank, threatened before any court or administrative body
in any manner against First Bank, or any of its properties or capital stock,
which could reasonably be expected to have a material adverse effect on First
Bank, its financial condition, assets, operations or earnings or the
transactions proposed by this Agreement. Except as previously disclosed to
Bancshares in writing, First Bank has no knowledge of any basis on which any
litigation or proceeding could be brought which could have a material adverse
effect on First Bank or which could question the validity of any action taken
or to be taken in connection with this Agreement and the transactions
contemplated hereby. Except for any uncompleted requirements of First Bank's
Cease and Desist Order issued by the FDIC (the "Cease and Desist Order"),
First Bank is not in default with respect to any judgment, order, writ,
injunction, decree, award, rule or regulation of any court, arbitrator or
governmental agency or instrumentality. There are no suits, actions, claims,
proceedings or investigations pending, or to the best knowledge of First
Bank, threatened, seeking to prevent or challenge the transactions
contemplated by this Agreement.
Section 2.8. TAXES. Except as set forth on Schedule 2.8, First Bank has
filed with the appropriate federal, state and local governmental agencies all
tax returns and reports required to be filed, and has paid all taxes and
assessments shown or claimed therein to be due. Except as described in
Schedule 2.8 hereto, First Bank has not executed or filed with the Internal
Revenue Service any agreement extending the period for assessment and
collection of any federal tax, nor is First Bank a party to any action or
proceeding by any governmental authority for assessment or collection of
taxes, nor has any claim for assessment or collection of taxes been asserted
against First Bank. First Bank has not waived any statute of limitations
with respect to any tax or other assessment or levy, and except as set forth
on Schedule 2.8, all such taxes and other assessments and levies which First
Bank is required by law to withhold or to collect have been duly withheld and
collected and have been paid over to the proper governmental agency, domestic
and foreign, or segregated and set aside for such payment and, if so
segregated and set aside will be so paid by First Bank, as required by law.
True and complete copies of the federal income tax returns of First Bank
as filed with the Internal Revenue Service for the years ended December 31,
1996 (when available), December 31,
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1995, December 31, 1994 and December 31, 1993 have been delivered or made
available to Bancshares.
Section 2.9. CONTRACTS. Except as otherwise noted in Schedule 2.9
hereto, First Bank is not a party to or bound by any (i) employment contract
(including without limitation any collective bargaining contract or union
agreement), consulting or similar agreement which is not terminable by First
Bank on less than sixty (60) days notice without payment of any amount on
account of such termination; (ii) bonus, stock option, deferred compensation
or profit-sharing, pension or retirement plan or other employee benefit
arrangement; (iii) material lease or license with respect to any property,
real or personal, whether as landlord, tenant, licensor or licensee; (iv)
contract or commitment for capital expenditures in excess of $10,000 for any
one project; (v) contract or commitment for the purchase of materials or
supplies or for the performance of services over a period of more than sixty
(60) days from the date of this Agreement involving an annual expenditure in
excess of $50,000; (vi) contract or option to purchase or sell any real or
personal property other than in the ordinary course of business; (vii)
contract, order, memorandum, agreement or letter with respect to the
management of First Bank imposed by any Bank regulatory authority having
supervisory jurisdiction over First Bank, (viii) agreement, contract or
indenture related to the borrowing by First Bank of money other than those
entered into in the ordinary course of business; (ix) guaranty of any
obligation for the borrowing of money, excluding endorsements made for
collection, repurchase or resell agreements, letters of credit and guaranties
made in the ordinary course of business; (x) agreement with or extension of
credit to any executive officer or director of First Bank or holder of more
than ten percent (10%) of the First Bank Common Stock, or any affiliate of
such person, which is not on substantially the same terms (including, without
limitation, in the case of lending transactions, interest rates and
collateral) as, and following credit underwriting practices that are not less
stringent than, those prevailing at the time for comparable transactions with
unrelated parties or which involve more than the normal risk of
collectability or other unfavorable features; (xi) agreement between First
Bank and any present or former officer, director, employee or agent of First
Bank or any business in which any of such persons has an interest; or (xii)
material contracts, other than the foregoing, involving more than $25,000 not
made in the ordinary course of business and not otherwise disclosed in this
Agreement or in any schedule attached hereto. Complete and correct copies of
all contracts, commitments, leases, agreements and other documents described
in Schedule 2.9 have been delivered or made available to Bancshares. First
Bank has in all material respects performed all material obligations required
to be performed by it to date and is not in default under, and to the best
knowledge of First Bank, no event has occurred which, with the lapse of time
or action by a third party could result in default under, any indenture,
mortgage, contract, lease or other agreement to which First Bank is a party
or by which its properties or assets are bound or under any provision of its
Articles of Association or Bylaws.
Section 2.10. INSURANCE. Schedule 2.10 hereto is a true and complete
list of all insurance policies owned or held by or on behalf of First Bank
(other than credit-life policies), including policy numbers, retention
levels, insurance carriers and effective and termination dates. Such
policies are
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in full force and effect and contain standard cancellation or termination
clauses. First Bank has received no notice of cancellation or termination of
any such policies. Complete and correct copies of such policies have been
delivered or made available to Bancshares.
Section 2.11. NO CONFLICT WITH OTHER INSTRUMENTS. Neither the execution
and delivery of this Agreement nor the consummation of the purchase
contemplated thereby will conflict with or result in a breach of any
provision of First Bank's Articles of Association, Bylaws, or other
constituent documents, if applicable. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
subject to obtaining all regulatory approvals, will not violate any provision
of, or constitute a default under, any law, or any order, writ, injunction or
decree of any court or other governmental agency, or any contract, agreement
or instrument to which First Bank is a party or by which it is bound or
constitute an event which, with the lapse of time or action by a third party,
could result in any default under any of the foregoing or result in the
creation of any lien, charge or encumbrance upon the assets or properties of
First Bank or upon the First Bank Common Stock.
Section 2.12. LAWS. Except as otherwise noted in Schedule 2.12 hereto,
First Bank is in compliance with all applicable federal, state and local
laws, rules, regulations and orders, except to the extent that failure to
comply would not have a material adverse effect on First Bank. First Bank
has filed all reports, registrations and statements, together with any
amendments required to be made thereto, that are required to be filed with
the Banking Department, the FDIC or any other regulatory authority having
jurisdiction over First Bank, and such reports, registrations and statements
are, to the best knowledge of First Bank, true and correct in all material
respects.
Section 2.13. CONDUCT. Since the Balance Sheet Date and except as
otherwise disclosed on Schedule 2.13 hereto, First Bank has not (i) issued or
sold any of its capital stock or corporate debt obligations (excluding
insured deposits) or granted any options for the purchase of its capital
stock; (ii) declared or set aside or paid any dividend or made any other
distribution in respect of or, directly or indirectly, purchased, redeemed or
otherwise acquired any shares of its issued and outstanding capital stock;
(iii) incurred any obligations or liabilities (fixed or contingent), except
obligations or liabilities incurred in the ordinary course of business, or
mortgaged, pledged or subjected any of its assets to a lien or encumbrance
(other than in the ordinary course of business and other than statutory liens
not yet delinquent); (iv) discharged or satisfied any lien or encumbrance or
paid any obligation or liability (fixed or contingent), other than accruals,
accounts and notes payable included in the Balance Sheet, accruals, accounts
and notes payable incurred since the Balance Sheet Date in the ordinary
course of business and accruals, accounts and notes payable incurred in
connection with the transactions contemplated by this Agreement; (v) sold,
exchanged or otherwise disposed of any of its capital assets other than in
the ordinary course of business; (vi) made any general or individual wage or
salary increase (except in the ordinary course of business and in accordance
with prior practices of First Bank), paid any bonus, entered into any
employment contract or made any accrual or arrangement for or payment of
bonuses or special compensation of any kind or any severance or
-11-
termination pay to any present or former officer or salaried employee or
instituted or amended any employee welfare, retirement or similar plan or
arrangement; (vii) materially increased the rate of compensation payable or
to become payable by First Bank to any of its directors, officers, employees
or agents; (viii) made any significant change in any method of management,
operation or accounting of First Bank; (ix) suffered any damage, destruction
or casualty loss, whether or not covered by insurance, which had or could
have a material adverse effect on First Bank; (x) except in the ordinary
course of business, entered into any agreement or arrangement granting any
preferential rights to purchase any of its assets, properties or rights or
requiring the consent of any party to the transfer and assignment of any such
assets, properties or rights; or (xi) agreed to do any of the foregoing.
Section 2.14. ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for
possible loan losses of First Bank has been calculated in accordance with
regulatory accounting principles as applied to banking institutions and in
accordance with all applicable rules and regulations. At the Closing Date, no
material facts relevant to the adequacy of the allowance for possible loan
losses as of that date will have been withheld from Bancshares.
Section 2.15. EMPLOYMENT RELATIONS. The relations of First Bank with
its employees are satisfactory, and First Bank has not received any notice of
any controversies with, or organizational efforts or other pending actions
by, representatives of its employees. Except as disclosed on Schedule 2.15,
First Bank has complied in all material respects with all laws relating to
employment or labor concerning its employees, including any provisions
thereof relating to wages, hours, collective bargaining and the payment of
workers' compensation insurance and social security and similar taxes, and no
person has asserted that First Bank is liable for any arrearage of wages,
workers' compensation insurance premiums or any taxes or penalties for
failure to comply with any of the foregoing.
Section 2.16. ERISA. First Bank has no employee pension benefits plans
and welfare benefit plans that are subject to the provisions of ERISA.
Section 2.17. LOANS AND INVESTMENTS. First Bank is not aware of any
defense to or excuse for First Bank's enforcement of the documents and
instruments which evidence loans and investments of First Bank in accordance
with their terms (subject to bankruptcy, insolvency, moratorium or other laws
affecting creditors generally or by the exercise of judicial discretion, and
authorized under applicable federal and state laws and regulations) and First
Bank has no notice whatsoever of any claim or objection to the enforcement of
such documents and instruments by the obligors thereunder. For the purposes
of this Section 2.17, First Bank makes no representation or warranty of any
kind or nature concerning whether any borrower or other obligor of First Bank
has the financial ability to pay a loan or that the collateral is sufficient
in value to result in payment of the loan secured thereby.
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Section 2.18. ACCURATE AND COMPLETE RECORDS. The books, ledgers,
financial records and other records of First Bank for the period of time
which is not less than three years prior to the date hereof or any such
longer period as may be required by applicable laws or regulations:
(a) are, or will be prior to the Closing Date, in the possession of
First Bank;
(b) have been, in all material respects, maintained in accordance
with all applicable laws, rules and regulations and generally accepted
standards of practice; and
(c) are accurate and complete and do not contain or reflect any
material discrepancies.
Section 2.19. PERFORMANCE OF OBLIGATIONS. Except as otherwise noted in
Schedule 2.19 hereto, First Bank has performed in all material respects all
of the obligations required to be performed by it to date under, and First
Bank is not in default under or in breach of, any term or provision of any
covenant, contract, lease, indenture or any other covenant to which it is a
party, is subject or is otherwise bound, and no event has occurred that, with
the giving of notice or the passage of time or both, would constitute such
default or breach, where such default or breach or failure to perform would
have a material adverse effect on First Bank. To First Bank's knowledge, no
party with whom First Bank has an agreement that is of material importance to
the business of First Bank is in default thereunder.
Section 2.20. NO MISLEADING STATEMENTS. The representations and
warranties of First Bank contained in this Agreement, the schedules hereto
and all other documents and information furnished to Bancshares and its
representatives pursuant hereto are complete and accurate and do not and will
not include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements made and to be made not
misleading.
Section 2.21. ABSENCE OF CHANGES. Since the Balance Sheet Date, except
as disclosed in Schedule 2.21 to this Agreement, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of First Bank. Since such date, the
business of First Bank has been conducted only in the ordinary course
consistent with prior practices.
Section 2.22. BROKERS AND FINDERS. Neither First Bank nor any of its
officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees
in connection with the Consolidations contemplated herein.
Section 2.23. REGULATORY APPROVALS. First Bank has no reason to believe
that it will not be able to obtain all requisite regulatory approvals (if
any) necessary to consummate the Consolidations as set forth in this
Agreement.
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III. REPRESENTATIONS AND WARRANTIES OF
BANCSHARES AND BAYSHORE
Bancshares and Bayshore represent and warrant to First Bank as follows:
Section 3.1. ORGANIZATION. Bancshares is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas
and a Bank holding company duly registered under the Bank Holding Company Act
of 1956, as amended, subject to all laws, rules and regulations applicable to
Bank holding companies. Bancshares owns 100% of the issued and outstanding
common stock of Bayshore. Bayshore is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States. Bayshore is an insured Bank as defined in the Federal Deposit
Insurance Act. Upon the organization of Acquisition, Bancshares will own 100%
of the issued and outstanding capital stock of Acquisition. When organized,
Acquisition will be duly organized, validly existing and in good standing
under the laws of the State of Texas. Bancshares and Bayshore have full
power and authority (including all licenses, franchises, permits and other
governmental authorizations which are legally required) to own their
properties, to engage in the business and activities now conducted by them
and to enter into and perform this Agreement.
Section 3.2. APPROVALS; AUTHORITY. The Boards of Directors of
Bancshares and Bayshore have each approved this Agreement and the
transactions contemplated herein subject to the approval thereof by the
shareholders of Bancshares and Bayshore as required by law, and, other than
shareholder approval required by law, no further corporate proceedings of
Bancshares or Bayshore are needed to deliver this Agreement and consummate
the Consolidations. This Agreement has been duly executed and delivered by
Bancshares and Bayshore and, when all requisite regulatory and shareholder
approvals have been obtained, it will be a binding agreement of Bancshares
and Bayshore enforceable against each entity in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to creditors' rights generally and general
equitable principles.
Section 3.3. NO CONFLICT WITH OTHER INSTRUMENTS. Neither the execution
and delivery of this Agreement nor the consummation of the Consolidations
contemplated thereby, subject to obtaining all required shareholder consents,
will conflict with or result in a breach of any provision of any Articles of
Incorporation or Association of Bancshares, Bayshore, or Acquisition, as
applicable, or their respective Bylaws. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
subject to obtaining all required shareholder and regulatory approvals, will
not violate any provision of, or constitute a default under, any law, or any
order, writ, injunction or decree of any court or other governmental agency,
or any contract, agreement or instrument to which Bancshares, Bayshore, or
Acquisition is a party or by which it is bound or constitute an event which,
with the lapse of time or action by a third party, could result in any
default under any of the foregoing or result in the creation of any lien,
charge or encumbrance
-14-
upon the assets or properties of Bancshares or Bayshore or upon the stock of
Bancshares or Bayshore.
Section 3.4. REGULATORY APPROVALS. Bancshares and Bayshore have no
reason to believe that they will not be able to obtain all requisite
regulatory approvals necessary to consummate the Consolidations as set forth
in this Agreement.
Section 3.5. LITIGATION. There is no pending or threatened litigation,
arbitration, or other action or proceeding to which Bancshares is a party
that seeks to prevent or delay the execution and delivery of this Agreement
or the completion of the transactions contemplated by this Agreement.
Section 3.6. DUE DILIGENCE. Bancshares has had, or by the Closing Date
will have had adequate opportunity to examine the books and records of First
Bank, including, without limitation, the loan records of First Bank, and as a
result of that examination, Bancshares has arrived at its own evaluation of
the quality of First Bank's loan portfolio and the adequacy of First Bank's
loan loss reserve. Consequently, in so far as the quality of First Bank's
loan portfolio and the adequacy of First Bank's loan loss reserve is
concerned, Bancshares is relying on its own evaluation and not upon any
statements, representations, or warranties of First Bank.
IV. COVENANTS OF FIRST BANK
First Bank covenants and agrees with Bancshares and Bayshore as follows:
Section 4.1. SHAREHOLDER APPROVAL AND BEST EFFORTS. First Bank will, as
soon as practicable, present for the approval of its shareholders this
Agreement and the transactions contemplated hereby. First Bank will take all
reasonable action to arrange for a meeting of its shareholders for the
purpose of considering the Agreement and, if the transaction is approved by
such shareholders, to aid and assist in the consummation of the
Consolidations, and will use its best efforts to take or cause to be taken
all other actions necessary, proper or advisable to consummate the
transactions contemplated by this Agreement, including such actions as
Bancshares reasonably considers necessary, proper or advisable in connection
with filing applications or obtaining approvals from, all regulatory
authorities having jurisdiction over the transactions contemplated by this
Agreement.
Section 4.2. INVITATION TO MEETINGS. A designee of Bancshares (the
"Bancshares Designee") shall be entitled to attend as an invited guest all
regular and special meetings of the Boards of Directors of First Bank. The
Bancshares Designee shall also be entitled to prior notice of and attendance
as an invited guest at all meetings of the executive, loan and discount, and
any other committees of First Bank. In addition, the Bancshares Designee
shall be allowed to be present in First Bank from time to time in manner so
as not to interfere with the normal operation of First
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Bank to review all financial reports, watch loan lists, new loan lists and
other documents generated by First Bank in its day-to-day operations.
Section 4.3. CONDUCT OF BUSINESS PRIOR TO CLOSING. Without Bancshares'
prior written consent to the contrary, which consent shall not be
unreasonably withheld, prior to the date of the Closing, First Bank will
operate so as:
(a) To carry on its business in substantially the same manner as it
has been conducted since June 30, 1997;
(b) To maintain and keep its properties in as good repair and
condition as at present, except for deterioration due to ordinary
wear and tear and damage due to casualty;
(c) To maintain in full force and effect insurance comparable in
amount and scope of coverage to that currently maintained for
First Bank;
(d) To make no alteration in the manner of maintaining its books,
accounts or records, or in the accounting practices relating to
its business, properties or assets;
(e) To perform all of its material obligations under contracts,
leases and documents relating to or affecting its assets,
properties and business, except such obligations as First Bank
may in good faith reasonably dispute;
(f) To maintain and preserve its business organization intact, use
its best efforts to retain its present employees and maintain
relationships with depositors and customers of First Bank;
(g) To comply with and perform all obligations and duties imposed
upon First Bank by all federal, state and local laws, and all
rules, regulations and orders imposed by federal, state or local
governmental authorities; provided, however, that Bancshares
agrees that the current steps being taken by First Bank to
achieve compliance with the Cease and Desist Order shall
constitute compliance with this subsection;
(h) To notify Bancshares immediately upon commencement of any
compliance, safety and soundness or the other type of examination
conducted by the FDIC, the Banking Department or any other agency
having supervisory authority over First Bank;
-16-
(i) Not to mortgage, pledge or encumber any asset, nor sell nor
transfer any of its assets, except in the ordinary course of
business;
(j) Not to declare or pay during 1997 any dividends in an amount in
excess of First Bank's earnings for the year, measured through
the end of the month prior to Closing if the Closing takes place
at any time before the sixteenth day of a given month, and
measured as of the fifteenth day of the month in which the
Closing takes place if the Closing occurs on or after the
sixteenth day of the month; provided that on the Closing Date
First Bank's total equity capital accounts shall be at least
$3,623,000. It is specifically provided that any increase or
decrease in the value of the securities held available-for-sale
will not affect the calculation of total equity capital for
purposes of this Section 4.3(j);
(k) Not to make or authorize any change in First Bank's authorized
stock or in its articles of association or bylaws;
(l) Not to make any capital expenditures in an amount greater than
$10,000.00;
(m) Not to make any investment portfolio transactions;
(n) Not to enter into or amend or allow First Bank to enter into or
amend any contract agreement or other instrument of any of the
types listed in Section 2.9 of this Agreement other than in the
ordinary course of business with prior notice to Bancshares;
(o) Not take or allow First Bank to take any action described or do
any of the things listed in Section 2.13 of this Agreement
(except with respect to Section 2.13(ix)) other than in the
ordinary course of business with prior notice to Bancshares;
(p) Not to increase the compensation paid or to be paid to any
officer or employee of First Bank;
(q) To take such action as may be reasonably necessary to maintain,
preserve, renew and keep in full force and effect their corporate
existence and rights; and
(r) Not to purchase from or sell a participation in any loan or other
extension of credit to First National Bank of Bellaire, Texas
National Bank of Baytown, Texas Coastal Bank or Mayde Creek Bank,
N.A.
-17-
Section 4.4. LITIGATION AND CLAIMS. First Bank will promptly notify
Bancshares of (i) any litigation or any claim, controversy or contingent
liability that may become the subject of litigation against First Bank or
affecting First Bank's property, if such litigation or potential litigation
may, in the event of an unfavorable outcome, have a material adverse effect
on First Bank, (ii) any violation or alleged violation of any state or
federal environmental laws or regulations, or (iii) any correspondence from a
state or federal Bank regulatory authority severely criticizing First Bank
management or proposing a formal or informal regulatory enforcement action.
Section 4.5. CONFIDENTIALITY. Without the prior written consent of
Bancshares, First Bank shall not release, disseminate or transfer, either
verbally or by any other means, any part of the information regarding
Bancshares acquired as a result of the execution and performance of this
Agreement, to any party not a party hereto, other than as necessary to
consummate the Consolidations.
Section 4.6. STANDSTILL PROVISION. So long as this Agreement is in
effect, First Bank will not provide any information to or negotiate with any
other party with respect to the merger, acquisition, or sale of all or
substantially all of the assets or capital stock of First Bank. First Bank
agrees to notify Bancshares immediately of any such unsolicited acquisition
proposals and provide reasonable detail as to the identity of the proposed
acquiror and the nature of the proposed transaction.
Section 4.7. ACCESS TO PROPERTIES AND RECORDS. To the extent permitted
by law, First Bank shall afford Bancshares and authorized representatives
(including legal counsel, accountants and consultants) of Bancshares full
access in a reasonable manner and at reasonable times to its properties,
books and records in order that Bancshares may have full opportunity to make
such reasonable investigation as it shall desire to make of First Bank's
affairs and officers of First Bank will furnish Bancshares with such
additional financial and operating data and other information as to its
business and properties as Bancshares shall, from time to time, request.
Bancshares shall not disclose any confidential information furnished by First
Bank to Bancshares except and to the extent required by law in the reasonable
judgment of Bancshares; the parties acknowledge that appropriate disclosure
must be made to governmental entities. In the event of termination of this
Agreement, Bancshares shall return to First Bank all documents and other
information obtained pursuant hereto and shall keep confidential and not use
any information obtained pursuant to this Agreement. This Section is not
applicable to any information that was or becomes generally available to the
public other than through a breach of this Agreement.
Section 4.8. INFORMATION FOR APPLICATIONS. First Bank shall, to the
extent permitted by law, furnish Bancshares with all information required for
inclusion in (i) any application, statement or document to be made or filed
by Bancshares or Bayshore with any governmental entity in connection with the
transactions contemplated by this Agreement during the pendency of this
Agreement ("Regulatory Applications"), and (ii) any registration statement
and amendments thereto
-18-
("Registration Statement") to be filed by Bancshares with the Securities and
Exchange Commission ("SEC") or any state securities authorities in order to
register the shares of common stock of Bancshares ("Bancshares Common Stock")
to be sold in order to obtain the proceeds to pay the Consolidation Price
("Securities Filings"). First Bank represents and warrants to Bancshares
that all information to be furnished by First Bank for inclusion in any
Regulatory Applications or Securities Filings shall be true and correct in
all material respects and shall not contain any statement which, at the time
and in light of the circumstances under which it is made, is false or
misleading with respect to any material fact, or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances in which they are made, not misleading. First Bank agrees at
any time, upon the request of Bancshares, to furnish to Bancshares a written
letter or statement confirming the accuracy of the information with respect
to First Bank contained in any application or filing referred to in Sections
4.1 or 4.8 of this Agreement, and confirming that the information with
respect to First Bank contained in such document or draft was furnished by
First Bank expressly for use therein or, if such is not the case, indicating
the inaccuracies contained in such document or indicating the information not
furnished by First Bank expressly for use therein.
Section 4.9. ADDITIONAL DISCLOSURES AND INFORMATION. First Bank shall
give Bancshares prompt written notice if at any time on or prior to the
Closing there is a change in any state of facts, or there is the occurrence,
nonoccurrence or existence of any event subsequent to the date of this
Agreement (or any event prior to the date of this Agreement which First Bank
become aware of subsequent to the date of such Agreement), which change or
event is known to First Bank and which would (i) make any representation or
warranty (including the information set forth in the Schedules) made by First
Bank to Bancshares not true or correct in any material respect or (ii) have a
material adverse effect on First Bank, it being the intention of the parties
to this Agreement that First Bank shall engage in a continuous disclosure
process from the date of this Agreement through the Closing.
Section 4.10. PROXIES. First Bank acknowledges that to the best of its
knowledge the persons listed on Schedule 4.10 have agreed that they will vote
the shares of First Bank Common Stock owned by them in favor of this
Agreement and the transactions contemplated hereby, subject to required
regulatory approvals, and that they will retain the right to vote such shares
of First Bank Common Stock during the term of this Agreement and have given
X.X. Xxxxxxx a proxy to vote such shares of First Bank Common Stock in favor
of the Agreement if they should fail to do so, pursuant to a Voting Agreement
and Irrevocable Proxy substantially in the form attached hereto as EXHIBIT D.
Section 4.11. RELEASES. First Bank acknowledges that the persons listed
on Schedule 4.11 have agreed that they will release and discharge First Bank
from any action or claim that they may have against First Bank (except as to
deposits, accounts and loans with First Bank, any rights to indemnification
pursuant to the Articles and Bylaws of First Bank and any rights of such
person with respect to the Agreement) pursuant to the Release of Claims
substantially in the form attached hereto as EXHIBIT E.
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V. COVENANTS OF BANCSHARES AND BAYSHORE
Bancshares and Bayshore covenant and agree with First Bank as follows:
Section 5.1. BEST EFFORTS. If required, Bayshore and Acquisition will,
as soon as practicable, present for the approval of their respective
shareholders, this Agreement and the transactions contemplated thereby.
Bancshares and Bayshore will take all reasonable action to aid and assist in
the consummation of the Consolidations and the transactions contemplated
hereby, and will use its best efforts to take or cause to be taken all other
actions necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, including such actions which are necessary,
proper or advisable in connection with filing applications with, or obtaining
approvals from, all regulatory authorities having jurisdiction over the
transactions contemplated by this Agreement including, but not limited to,
filing the Registration Statement with the SEC and having the Bancshares
Common Stock registered with the SEC.
Section 5.2. INFORMATION FOR APPLICATIONS AND PROXY SOLICITATION. To
the extent permitted by law, Bancshares will furnish First Bank with all
information concerning Bancshares and Bayshore required for inclusion in (a)
any application, statement or document to be made or filed by First Bank with
any federal or state regulatory or supervisory authority in connection with
the transactions contemplated by this Agreement during the pendency of this
Agreement and (b) any proxy materials to be furnished to the shareholders of
First Bank in connection with their consideration of the Consolidations.
Each of Bancshares and Bayshore represent and warrant that all information so
furnished for such statements and applications shall, to the best of its
knowledge, be true and correct in all material respects without omission of
any material fact required to be stated to make the information not
misleading. Bancshares will indemnify and hold harmless First Bank from and
against any and all losses, claims, damages, expenses or liabilities to which
First Bank may become subject under applicable laws, rules and regulations
and will reimburse First Bank for any legal or other expenses reasonably
incurred by First Bank in connection with investigating or defending any
actions whether or not resulting in liability, insofar as such losses,
claims, damages, expenses, liabilities or actions arise out of or are based
on any untrue statement or alleged untrue statement of a material fact
contained in any such application or proxy materials or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary in order to make the statements
therein not misleading, but only insofar as such statement or omission was
made in reliance upon and in conformity with information expressly furnished
by Bancshares expressly for use therein. Bancshares agrees, upon the request
of First Bank, to furnish to First Bank a written letter or statement
confirming to the best of its knowledge the accuracy of the information with
respect to Bancshares and Bayshore contained in any report or other
application or statement referred to in Sections 5.1 or 5.2 of this
Agreement, and confirming that the information with respect to Bancshares and
Bayshore contained in such document or draft was furnished expressly for use
therein or, if such is not the case, indicating the inaccuracies contained in
such document or indicating the information not furnished by Bancshares
expressly for use therein.
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Section 5.3. CONFIDENTIALITY. Bancshares shall not release, disseminate
or transfer either verbally or by any other means any part of the information
regarding First Bank acquired as a result of execution and performance of
this Agreement, to any party not a party hereto, other than as necessary to
consummate the Consolidations or have the Bancshares Common Stock registered
with the SEC. Furthermore, Bancshares agrees (i) not to use any information
or forms of documentation obtained from First Bank in any way, directly or
indirectly, damaging to the interests of First Bank; (ii) not to use,
directly or indirectly, any of the information obtained from First Bank for
its own benefit or for the benefit of another, separate and apart from the
purposes of this Agreement; and (iii) not to disclose any of the information
obtained from First Bank to anyone without the express, prior, written
permission of First Bank. In the event this Agreement is terminated, any and
all copies of the books and records of First Bank in the possession of
Bancshares shall be returned to First Bank.
Section 5.4. NOTICES. Bancshares will promptly give notice to First
Bank of the occurrence of any event or the failure of any event to occur that
results in a breach of any representation or warranty by Bancshares or a
failure by Bancshares to comply with any covenant, condition or agreement
contained in this Agreement.
Section 5.5. RELEASES. Bancshares will release and discharge the
persons listed on Schedule 5.5 from any action or claim that they may have
against such persons (except as to deposits and accounts with First Bank and
any rights of Bancshares pursuant to the Agreement) pursuant to the Release
of Claims substantially in the form attached hereto as EXHIBIT F.
VI. CLOSING
Section 6.1. CLOSING. Subject to the other provisions of this Section
VI, on a mutually acceptable date ("Closing Date") as soon as practicable
within a thirty-day period commencing with the latest of the following dates:
(a) the receipt of shareholder approval and the last approval from
any requisite regulatory or supervisory authority and the expiration of any
statutory or regulatory waiting period which is necessary to effect the
Consolidations; or
(b) if the transactions contemplated by this Agreement are being
contested in any legal proceeding and Bancshares or First Bank, pursuant to
Section 10.1 herein, have elected to contest the same, then the date that
such proceeding has been brought to a conclusion favorable, in the judgment
of each of Bancshares and First Bank, to the consummation of the transactions
contemplated herein, or such prior date as each of Bancshares and First Bank
shall elect whether or not such proceeding has been brought to a conclusion;
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a meeting ("Closing") will take place at which the parties to this Agreement
will exchange certificates, opinions, letters and other documents in order to
determine whether any condition exists which would permit the parties hereto
to terminate this Agreement. If no such condition then exists or if no party
elects to exercise any right it may have to terminate this Agreement, then
and thereupon the appropriate parties shall execute such documents and
instruments as may be necessary or appropriate to effect the transactions
contemplated by this Agreement.
The Closing shall take place at the offices of Bracewell & Xxxxxxxxx,
L.L.P. in Houston, Texas, or at such other place to which the parties hereto
may mutually agree.
Section 6.2. INITIAL MERGER EFFECTIVE TIME. Subject to the terms and
upon satisfaction of all requirements of law and the conditions specified in
this Agreement including, among other conditions, the receipt of any
requisite approval of the shareholders of Acquisition and First Bank and the
regulatory approvals of the Federal Reserve Board, the FDIC, Banking
Department, and any other federal or state regulatory agency whose approval
must be received in order to consummate the Initial Merger, the Initial
Merger shall become effective, and the effective time of the Initial Merger
shall occur, at the date and time specified in the certificate approving the
Initial Merger to be issued by the Banking Department and the Secretary of
State of Texas ("Initial Merger Effective Time"). It is anticipated by
Bancshares and First Bank that the Closing, the Initial Merger Effective Time
and the Effective Date will occur on the same day.
Section 6.3. EFFECTIVE DATE. Subject to the terms and upon satisfaction
of all requirements of law and the conditions specified in this Agreement
including, among other conditions, the receipt of any requisite approvals of
the shareholders of Bayshore and First Bank and the regulatory approvals of
the Federal Reserve Board, the OCC, the FDIC, Banking Department and any
other federal or state regulatory agency whose approval must be received in
order to consummate the Consolidations, the Final Consolidation shall become
effective, and the effective date of the Final Consolidation shall occur, at
the date and time specified in the certificate approving the Final
Consolidation to be issued by the OCC ("Effective Date"). It is anticipated
by Bancshares and First Bank that the Closing, the Initial Merger Effective
Time and the Effective Date will occur on the same day.
VII. TERMINATION
Section 7.1. TERMINATION.
(a) This Agreement may be terminated by action of the Board of
Directors of either Bancshares, Bayshore or First Bank at any time prior to
the Initial Merger Effective Time if:
(i) there shall be any actual or threatened action or proceeding
by or before any court or any other governmental body which shall seek
to restrain, prohibit or
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invalidate the transactions contemplated by this Agreement and which,
in the judgment of such Board or Boards of Directors, makes it
inadvisable to proceed with the Consolidations;
(ii) any of the transactions contemplated by this Agreement are
disapproved by any regulatory authority or other person whose approval
is required to consummate any of such transactions;
(iii) the Consolidations shall not have become effective on or
before December 31, 1997, or such later date as shall have been
approved in writing by the Boards of Directors of Bancshares, Bayshore
and First Bank; provided, however, that the right to terminate under
this Section 7.1(a)(iii) shall not be available to any party whose
failure to fulfill any material obligation under this Agreement has
been the cause of, or has resulted in, the failure of the
Consolidations to become effective on or before such date; or
(iv) Purchaser has not received all required regulatory approvals
as set forth in Section 10.1 of this Agreement by November 30, 1997;
provided however, that the right to terminate under this Section
7.1(a)(iv) shall not be available to any party whose failure to
fulfill any material obligation under this Agreement has been the
cause of, or has resulted in, the failure to obtain such approvals on
or before such date.
(b) This Agreement may be terminated at any time prior to the
Initial Merger Effective Time by the Board of Directors of First Bank if
Bancshares or Bayshore shall fail to comply in any material respect with any
of their covenants or agreements contained in this Agreement, or if any of
the representations or warranties of Bancshares or Bayshore contained herein
shall be defective in any material respect.
(c) This Agreement may be terminated any time prior to the
Effective Date by action of the Board of Directors of Bancshares or Bayshore
if (i) First Bank shall fail to comply in any material respect with any of
its covenants or agreements contained in this Agreement, or if any of the
representations or warranties of First Bank contained herein shall be
defective in any material respect, (ii) there shall have been any change
after the Balance Sheet Date in the assets, properties, business or financial
condition of First Bank which individually or in the aggregate have
materially and adversely affected the financial condition, results of
operation or business of First Bank, or (iii) the Board of Directors
determines that necessary approval from a regulatory authority, including but
not limited to the registration of the Bancshares Common Stock with the SEC,
cannot reasonably be obtained or that the terms or conditions of a necessary
approval are unacceptable in its reasonable discretion.
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(d) This Agreement by Bancshares may be terminated within fifteen
(15) days of the date of execution of the Agreement in the event that the
executed Voting Agreement and Irrevocable Proxies described in Section 4.10
have not been obtained.
(e) This Agreement may be terminated at any time prior to the
Effective Date with the mutual written consent of Bancshares, Bayshore, and
First Bank and the approval of such action by their respective Boards of
Directors.
Section 7.2. RIGHT TO CURE. If either Bancshares, Bayshore or First
Bank shall elect to terminate this Agreement pursuant to Section 7.1, then
such party must notify the other party in writing of its intent to terminate
stating the reason therefor and such other party shall have fifteen days from
the receipt of such notice to cure the alleged breach, inaccuracy or change
or satisfy such condition subject to the approval of the party seeking to
terminate the Agreement.
VIII. CONDITIONS TO OBLIGATIONS OF BANCSHARES AND BAYSHORE
The obligations of Bancshares and Bayshore under this Agreement are
subject to the satisfaction, at or prior to the Closing Date of the following
conditions, which may be waived by Bancshares and Bayshore in their sole
discretion:
Section 8.1. COMPLIANCE WITH REPRESENTATIONS AND COVENANTS. The
representations and warranties made by First Bank in this Agreement must have
been true when made and shall be true in all material respects as of the
Closing Date with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and First Bank shall have
performed or complied with all covenants and conditions required by this
Agreement to be performed and complied with prior to or at the Closing.
Bancshares shall have been furnished with a certificate, executed by an
appropriate representative of First Bank and dated as of the Closing Date, to
the foregoing effect.
Section 8.2. MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial
condition, business or operations of First Bank, nor shall any event have
occurred which, with the lapse of time, may cause or create any material
adverse change in the financial condition, business or operations of First
Bank in the reasonable judgment of the Board of Directors of Bancshares.
Bancshares shall have received a certificate to the foregoing effect executed
by an appropriate representative of First Bank and dated as of the Closing
Date.
Section 8.3. LEGAL OPINION. Bancshares shall have received an opinion
of counsel to First Bank, dated as of the Closing Date, in form and substance
satisfactory to counsel for Bancshares, to the effect set forth in Schedule
8.3 hereof.
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Section 8.4. REGISTRATION OF BANCSHARES COMMON STOCK. The Registration
Statement covering the Bancshares Common Stock to be issued to provide funds
for the Consolidation Price shall be effective under the Securities Act of
1933 and any applicable state securities or "blue sky" acts and no stop order
suspending the effectiveness of such Registration Statement shall be in
effect and no proceedings for such purpose, or any proceedings under the SEC
or applicable state securities authorities rules with respect to the
transactions contemplated hereby, shall be pending before or threatened by
the SEC or any applicable state securities or "blue sky" acts and no stop
order suspending the effectiveness of such Registration Statement shall be in
effect and no proceedings for such purpose, or any proceedings under the SEC
or applicable state securities authorities rules with respect to the
transactions contemplated hereby, shall be pending before or threatened by
the SEC or any applicable state securities or blue sky authorities.
Section 8.5. SUCCESSFUL INITIAL PUBLIC OFFERING. Through no fault of
either Bancshares or Xxxxxx & Xxxxxx, the underwriter of Bancshares' proposed
public offering of common stock, Xxxxxx & Xxxxxx fails to perform its firm
commitment to successfully underwrite and complete an initial public offering
of Bancshares Common Stock in which Bancshares shall have received from such
public offering net proceeds of at least $8,500,000 by purchasing the entire
issue as principal (whether or not they are able to subsequently resell the
securities to their institutional and retail clients).
Section 8.6. RELEASES. Bancshares shall have received all of the
releases referred to in Section 4.11.
Section 8.7. PROCEEDINGS AND DOCUMENTS. All actions, proceedings,
instruments and documents required to effectuate this Agreement or incidental
hereto shall be satisfactory in substance and form to Bancshares and its
counsel.
Section 8.8. LITIGATION. First Bank shall have furnished Bancshares
with certificates dated as of the Closing Date signed by an appropriate
officer of First Bank to the effect that to First Bank's knowledge, no
litigation, proceeding, investigation or inquiry, other than that which is
set forth in Schedule 2.7 of this Agreement, is pending or threatened that
might result in action to enjoin or prevent the consummation of the
transaction contemplated by this Agreement or is likely to result in a
material adverse change in First Bank or any of its assets, properties,
business, financial condition, or operations.
Section 8.9. RESIGNATION. Bancshares shall have received the written
resignations effective as of the Closing Date of any officers and directors
of First Bank as may be requested in writing by Bancshares.
Section 8.10. NO PENDING ACTIONS. No proceeding initiated by any person
or governmental authority seeking to restrain or enjoin the transaction shall be
pending.
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Section 8.11. NO DEFAULT. Except for any uncompleted requirements of
that certain Cease and Desist Order, First Bank shall not be in default under
any material order, judgment, award or decree of any court, arbitrator or
governmental authority binding upon or affecting First Bank or by which any
of First Bank's assets may be bound or affected, and no such order, judgment,
award or decree materially adversely affects the ability of First Bank to
carry on its business as now conducted. Bancshares shall have received a
certificate to the foregoing effect executed by First Bank and dated as of
the Closing Date.
Section 8.12. OCC LETTER. Bayshore shall have received an opinion from
the OCC, satisfactory in form and substance to Bancshares and its counsel,
that the loans to Xxxxx X. Xxxxx and his affiliated interests which have been
deemed by the FDIC and Banking Department to have been issued in excess of
First Bank's lending limits, will not represent a violation of 12 U.S.C.
Section 84 to Bayshore and its directors.
Section 8.13. COVENANT NOT TO COMPETE. Each officer of First Bank shall
have executed a Covenant Not to Compete in the form substantially as set
forth as Exhibit G.
IX. CONDITIONS TO OBLIGATIONS OF FIRST BANK
The obligations of First Bank under this Agreement are subject to the
satisfaction, at or prior to the Closing Date, of the following conditions,
which may be waived by First Bank in its sole discretion:
Section 9.1. COMPLIANCE WITH REPRESENTATIONS AND COVENANTS. The
representations and warranties made by Bancshares and Bayshore in this
Agreement must have been true when made and shall be true in all material
respects as of the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing Date, and
Bancshares and Bayshore shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied with by
Bancshares and Bayshore prior to or at the Closing. First Bank shall be
furnished with a certificate, executed by appropriate representatives of
Bancshares and dated as of the Closing Date, to the foregoing effect.
Section 9.2. LEGAL OPINION. First Bank shall have received an opinion
of counsel to Bancshares, dated as of the Closing Date and in form and
substance satisfactory to counsel for First Bank, to the effect set forth in
Schedule 9.2 hereof.
Section 9.3. RELEASES. Bancshares shall have delivered all of the
releases referred to in Section 5.5.
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Section 9.4. PROCEEDINGS AND DOCUMENTS. All actions, proceedings,
instruments and documents required to effectuate this Agreement or incidental
hereto shall be satisfactory in substance and form to First Bank and its
counsel.
Section 9.5. PAYMENT OF CONSIDERATION. Bancshares shall pay the
Consolidation Price by cash, cashiers check, or wire transfer to the
shareholders of First Bank upon the proper surrender of the First Bank Common
Stock.
X. CONDITIONS TO RESPECTIVE OBLIGATIONS OF BANCSHARES,
BAYSHORE AND FIRST BANK
The respective obligations of Bancshares, Bayshore, and First Bank under
this Agreement are subject to the satisfaction of the following conditions
which may be waived by Bancshares, Bayshore and First Bank, respectively, in
their sole discretion:
Section 10.1. GOVERNMENT APPROVALS. Bancshares and First Bank shall
have received the approval, or waiver of approval, of the transactions
contemplated by this Agreement from all necessary governmental agencies and
authorities, including the Federal Reserve Board and any other regulatory
agency whose approval must be received in order to consummate the
Consolidations, which approvals shall not impose any restrictions on the
operations of the Continuing Bank which are unacceptable to Bancshares, and
such approvals and the transactions contemplated hereby shall not have been
contested by any federal or state governmental authority or any third party
(except shareholders asserting dissenters' rights) by formal proceeding. It
is understood that, if any such contest is brought by formal proceeding,
Bancshares or First Bank may, but shall not be obligated to, answer and
defend such contest or otherwise pursue the Consolidations over such
objection.
Section 10.2. SHAREHOLDER APPROVAL. The shareholders of First Bank and
Bancshares as the sole shareholder of Bayshore and Acquisition shall have
voted for the authorization and approval of, or given their respective
written consent to, this Agreement and the transactions contemplated by this
Agreement.
XI. MISCELLANEOUS
Section 11.1. NOTICES. Any notice, request, instruction or other
communication required hereunder shall be given in writing and shall be
deemed to be given and received when delivered personally, or forty-eight
hours after deposit in the United States mail, certified or registered,
return receipt requested, postage prepaid, as follows:
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If to First Bank then to: Xx. X. X. Xxxxxxx
Xxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
With a copy to: Xx. X. Xxxxxx Xxxxx
Xxxxxxxxxxx, Hrdlicka, White, Xxxxxxxx & Xxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Bancshares then to: Xx. X. X. Xxxxxx
Bay Bancshares, Inc.
0000 Xxxxxxx 000
Xx Xxxxx, Xxxxx 00000
With a copy to: Xx. Xxxxxxx X. Xxxxxx XX
Xxxxxxxxx & Xxxxxxxxx, L.L.P.
South Tower Pennzoil Place
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Section 11.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement and the abandonment of the transaction without breach by any party
hereto, this Agreement shall become void and have no effect, without any
liability on the part of any party or its directors, officers, stockholders
or agents, if any; provided, however, that the provisions of Sections 4.5 and
5.3 respecting confidentiality shall remain in force. Nothing contained in
this Section 11.2 shall relieve any party hereto of any liability for a
breach of this Agreement.
Section 11.3. ENTIRE AGREEMENT MODIFICATION; WAIVER. This Agreement
constitutes the entire agreement between the parties hereto pertaining to the
subject matter hereof and supersedes all prior contemporaneous agreements,
undertakings, negotiations and discussions, whether oral or written, and
there are no warranties, representations or agreements between the parties in
connection with the subject matter hereof, except as set forth or referred to
herein. No supplement, modification, waiver or termination of this Agreement
or any provision thereof shall be binding unless executed in writing by the
parties to be bound thereby. No waiver of any of the provisions of this
Agreement shall constitute a waiver of any other provisions (whether or not
similar) nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
Section 11.4. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, and to the
extent applicable, the laws of the United States.
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Section 11.5. LEGAL CONSTRUCTION. In case any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall- not affect any other provisions hereof, and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
Section 11.6. ATTORNEY'S FEES. If any action at law or in equity,
including an action for declaratory relief, is brought to enforce or
interpret the provisions of this Agreement, the prevailing party shall be
entitled to recover reasonable attorney's fees from the other party, which
fees may be set by the Court in the trial of such action or may be enforced
in a separate action brought for that purpose, and which fees shall be in
addition to any other relief that may be awarded.
Section 11.7. COOPERATION. Bancshares and First Bank agree to cooperate
and work together to provide any information required by either party to
consummate this transaction and in negotiating and agreeing upon any other
matters that may arise in connection with the consummation of the
transactions contemplated by this Agreement, and obtaining approval of all
necessary regulatory authorities.
Section 11.8. ASSIGNABILITY. This Agreement and the obligations created
hereunder are assignable by Bancshares to any person or entity, subject to
prior notice to, and the approval of, First Bank, which approval shall not be
unreasonably withheld.
Section 11.9. SINGULAR, PLURAL, HEADINGS. Whenever the singular form of
any word is used in this Agreement, the same shall include the plural form of
such word, whenever appropriate, and vice versa. The headings contained in
this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning of any of the provisions contained herein.
Section 11.10. COMMISSIONS. First Bank and Bancshares agree and
represent to each other that there are no commissions due to any broker or
any other persons related to the transaction that is the subject of this
Agreement, and each party hereto agrees to indemnify and hold harmless the
other party hereto from any commission due as a result of its actions with
respect to this transaction.
Section 11.11. EFFECTIVE DATE. The effective date of this Agreement
shall be the date a copy of this Agreement, fully executed by First Bank, is
returned to and received by Bancshares.
Section 11.12. EXPENSES. Whether or not the transactions provided for
herein are consummated, Bancshares and First Bank shall pay their own
expenses in connection with this Agreement and the transactions contemplated
hereby, including without limitation, all reasonable counsel fees; provided
that, Bancshares will pay up to $5,000 of First Bank's legal fees related to
the consummation of the transactions set forth in this Agreement.
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Section 11.13. BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns as permitted by law.
Section 11.14. REPRESENTATION BY COUNSEL. Both parties acknowledge that
they have had the benefit of representation by legal counsel of their
choosing in negotiating the terms of this agreement, that they have executed
this agreement of their own free will with the intent to be bound hereby.
Section 11.15. NON-SURVIVAL OF REPRESENTATIONS. Bancshares and First
Bank shall satisfy themselves as to the accuracy of the representations and
warranties contained herein prior to Closing. None of the representations or
warranties contained herein shall survive the Closing.
Section 11.16. FACSIMILE SIGNATURES. The signature of any party hereto
transmitted by facsimile shall be effective in all respects to bind such
party in the same manner as an original signature.
Section 11.17. MODIFICATIONS OR WAIVER. No termination, cancellation,
modification, amendment, deletion, addition or other change in this
Agreement, or any provision hereof, or waiver of any right or remedy herein
provided, shall be effective for any purpose unless specifically set forth in
a writing signed by the party or parties to be bound thereby. The waiver of
any right or remedy in respect to any occurrence or event on one occasion
shall not be deemed a waiver of such right or remedy in respect to such
occurrence or event on any other occasion.
Section 11.18. SEVERABILITY. Any provision hereof prohibited by or
unlawful or unenforceable under any applicable law or any jurisdiction shall
as to such jurisdiction be ineffective, without affecting any other provision
of this Agreement, or shall be deemed to be severed or modified to conform
with such law, and the remaining provisions of this Agreement shall remain in
force, provided that the purpose of the Agreement can be effected. To the
fullest extent, however, that the provisions of such applicable law may be
waived, they are hereby waived, to the end that this Agreement be deemed to
be a valid and binding agreement enforceable in accordance with its terms.
Section 11.19. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
shall be deemed to constitute one and the same instrument.
Section 11.20. GENDER. Any pronoun used herein shall refer to any
gender, either masculine, feminine or neuter, as the context requires.
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Section 11.21. PUBLICITY. Subject to written advice of counsel with
respect to legal requirements relating to public disclosure of matters
related to the transactions contemplated by this Agreement, the timing and
content of any announcements, press releases or other public statements
(whether written or oral) concerning this Agreement or the Consolidations
will occur upon, and be determined by, the mutual consent of Bancshares and
First Bank.
Section 11.22. DISCLOSURES. Any disclosure made in any document
delivered pursuant to this Agreement or referred to or described in writing
in any section of this Agreement or any schedule attached hereto shall be
deemed to be disclosure for purposes of any section herein or schedule hereto.
Section 11.23. AGREEMENT REGARDING CERTAIN PARTICIPATIONS. At all times
prior to the Closing, and as required by the Cease and Desist Order, First
Bank and the other participating banks will attempt to sell their
participation interests in certain loans and extensions of credit originally
made to Xxxxx X. Xxxxx and his affiliated interests and later assumed by what
is now CenterAmerica, Inc. (the "Xxxxx Loans") and which loans are, inter
alia, the subject of the Cease and Desist Order. A list of the Xxxxx Loans
and the participations of each bank participant are attached hereto as
Schedule 11.23. Such sale of the Xxxxx Loans may be made individually or in
bulk, and may take place at a purchase price less than the face amount of the
loan or loans. In connection with any such sale of the Xxxxx Loans, First
Bank agrees as follows:
(a) First Bank will use its best efforts to negotiate, and will use
its best efforts to persuade any of the other participants in the Xxxxx Loans
to negotiate, a sale of the loans at the lowest possible discount, provided
however, that First Bank will not sell any Xxxxx Loan participation for a
discount of greater than 10% without the prior written consent of Bancshares.
(b) At all times after the Closing, and for an indefinite period of
time thereafter, Bancshares and Bayshore agree as follows:
(i) Bancshares and Bayshore, and the other participating banks
as required by the Cease and Desist Order, will use their best efforts to
sell the Xxxxx Loans at the lowest possible discount.
(ii) If a written offer to purchase all or any part of the Xxxxx
Loans in which Bancshares and Bayshore have a participating interest is
received by Bancshares or Bayshore or any of the other financial
institutions who have participating interests in the Xxxxx Loans at a
discount not to exceed 10%, and the holders of a majority interest in terms
of aggregate loan dollar amount outstanding with respect to those loans to
which the offer relates desire to accept such offer on the terms and
conditions stated in the written offer (as the same may thereafter be
negotiated in favor of the participating lenders), Bancshares and Bayshore
will sell their participating interest in and to the loans covered by the
written offer
-31-
at the offered price and upon the same terms and conditions as may be
accepted by the holders of a majority interest in terms of aggregate loan
dollar amount outstanding with respect to the loans to which the offer
pertains.
(iii) If a written offer to purchase all or any part of the
Xxxxx Loans at a discount in excess of 10% is received by Bancshares,
Bayshore or any of the other participating banks, all of the participating
banks will have to agree to the sale.
(c) Any purchaser of all or part of the Xxxxx Loans from First
Bank, Bancshares or Bayshore or any of the participating banks will be
expressly required to be bound by the provisions of paragraphs (a) and (b) of
this Section 11.23.
(d) Without the prior written consent of all participating banks,
no sale of any Xxxxx Loan participation at any discount will be made to any
person or entity other than a bona fide third party with no management or
ownership affiliation with any of the banks which own participations in the
Xxxxx Loans.
Section 11.24. INDEMNIFICATION. In consideration for First Bank
entering into this Agreement and agreeing to the consolidation structure
rather than a stock purchase arrangement, Bancshares and Bayshore agree to
protect, defend, indemnify and hold First Bank, its agents, directors,
officers, and employees harmless from and against all losses, claims,
demands, liabilities or causes of action of every kind and character, in
favor of any person, entity or party, for any damages of whatsoever nature
sustained by any person, entity or party, which arises out of or is
incidental to, either directly or indirectly, their activities or work or
documentation in furtherance of the transactions set forth in this Agreement
and regardless of whether the damages, losses, claims, demands, liabilities
or causes of action of every kind or character were caused by or arose out of
the sole, concurrent, active or passive negligence or gross negligence of any
party or entity, strict liability, breaches of express or implied warranties,
and/or any other legal fault of any party or entity, including that of First
Bank, its agents, directors, officers and employees. Bancshares and Bayshore
shall fully defend any such claims, demands or suits at its sole expenses,
including all attorneys' fees, costs, and other related expenses, even if the
same are groundless. It is specifically provided, however, that the
indemnification set forth above shall only apply to actions taken as a result
of this transaction being structured as a consolidation rather than a stock
purchase agreement containing the usual representations, warranties,
covenants and conditions as are set forth in such a stock purchase agreement.
-32-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
BAY BANCSHARES, INC.
By:
---------------------------------------
ATTEST:
By:
---------------------------
BAYSHORE NATIONAL BANK
By:
---------------------------------------
ATTEST:
By:
---------------------------
-00-
XXXXX XXXX XX XXXX XXXX
By:
---------------------------------------
ATTEST:
By:
---------------------------
-34-
SCHEDULE 2.5 TO THE CONSOLIDATION AGREEMENT:
TITLE - FIRST BANK
-35-
SCHEDULE 2.6 TO THE CONSOLIDATION AGREEMENT:
ENVIRONMENTAL LAWS - FIRST BANK
-36-
SCHEDULE 2.7 TO THE CONSOLIDATION AGREEMENT:
LITIGATION AND OTHER PROCEEDINGS - FIRST BANK
-37-
SCHEDULE 2.8 TO THE CONSOLIDATION AGREEMENT:
TAXES - FIRST BANK
-38-
SCHEDULE 2.9 TO THE CONSOLIDATION AGREEMENT:
CONTRACTS - FIRST BANK
-39-
SCHEDULE 2.10 TO THE CONSOLIDATION AGREEMENT:
INSURANCE - FIRST BANK
-40-
SCHEDULE 2.12 TO THE CONSOLIDATION AGREEMENT:
LAWS - FIRST BANK
-41-
SCHEDULE 2.13 TO THE CONSOLIDATION AGREEMENT:
CONDUCT - FIRST BANK
-42-
SCHEDULE 2.15 TO THE CONSOLIDATION AGREEMENT:
EMPLOYMENT RELATIONS - FIRST BANK
-43-
SCHEDULE 2.17 TO THE CONSOLIDATION AGREEMENT:
LOANS AND INVESTMENTS - FIRST BANK
-44-
SCHEDULE 2.21 TO THE CONSOLIDATION AGREEMENT:
ABSENCE OF CHANGES - FIRST BANK
-45-
SCHEDULE 4.10 TO THE CONSOLIDATION AGREEMENT:
PROXIES
The following list comprises individuals who are (i) directors, (ii) officers
or (iii) holders of 5% or more of the First Bank Common Stock, each of whom
has agreed to execute the Voting Agreement.
-46-
SCHEDULE 4.11 TO THE CONSOLIDATION AGREEMENT:
RELEASES
Directors and Officers of First Bank.
-47-
SCHEDULE 5.5 TO THE CONSOLIDATION AGREEMENT:
RELEASES
-48-
SCHEDULE 8.3 TO THE CONSOLIDATION AGREEMENT:
LEGAL OPINION TO BE DELIVERED BY FIRST BANK
The legal opinion of counsel for First Bank which is called for by Section
8.3 of the Agreement shall be to the following effect:
(a) First Bank is a Texas banking association duly organized, validly
existing and in good standing under the laws of Texas and has full
power and authority (including all licenses, franchises, permits and
other governmental authorizations which are legally required) to own
its properties, to engage in the business and activities now conducted
by it and to enter into this Agreement.
(b) The authorized capital stock of First Bank consists of 115,500 shares
of Common Stock, $5.00 par value. As of the date hereof, 115,500
shares of First Bank Common Stock were issued and outstanding. All of
the shares which are issued and outstanding are validly issued, fully
paid and have not been issued in violation of the preemptive rights of
any person. There are no existing options, warrants, calls,
convertible securities or commitments of any kind enabling First Bank
to issue any authorized and unissued First Bank Common Stock nor does
First Bank have any commitment or obligation to repurchase, reacquire
or redeem any of its outstanding capital stock.
(c) The Board of Directors of First Bank has approved the Agreement and
the transactions contemplated thereby. All necessary corporate
proceedings, including all appropriate and legal actions by
shareholders of First Bank to approve and authorize the transactions
set forth in the Consolidation Agreement, have been taken. This
Agreement has been duly executed and delivered by First Bank and is a
binding agreement of First Bank enforceable against First Bank in
accordance with its terms.
(d) Except as otherwise noted in the Agreement, there are no legal,
quasi-judicial or administrative proceedings of any kind or nature now
pending or, to the knowledge of counsel to First Bank, threatened
before any court or administrative body in any manner against First
Bank or any of their properties or capital stock which might have a
material adverse effect on First Bank, its financial condition,
assets, operations or earnings or the transactions proposed by the
Agreement. First Bank is not in default with respect to any judgment,
order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality.
-49-
(e) The execution and delivery of the Agreement and the consummation of
the transactions contemplated thereby will not, to the best knowledge
of counsel to First Bank, violate any provision of, or constitute a
default under, any law, or any order, writ, injunction or decree of
any court or other governmental agency, or any contract, agreement or
instrument to which First Bank is a party or by which it is bound or
constitute an event which with the lapse of time or action by a third
party could result in any default under any of the foregoing or result
in the creation of any lien, charge or encumbrance upon the assets or
properties of First Bank or upon the First Bank Common Stock.
Such opinion shall also cover such other matters incident to the transactions
contemplated by the Agreement as Bancshares may reasonably request. As to
questions of fact material to their opinion, such counsel may rely upon
certificates of officers of the First Bank. Such opinion may contain such
qualifications, exceptions and explanations as are satisfactory in form and
substance to Bancshares.
-50-
SCHEDULE 9.2 TO THE CONSOLIDATION AGREEMENT:
LEGAL OPINION TO BE DELIVERED BY BANCSHARES
The legal opinion of counsel for Bancshares which is called for by Section
9.2 of the Agreement shall be to the following effect:
(a) Bancshares is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas, and has full power
and authority (including all licenses, franchises, permits and other
governmental authorizations which are legally required) to own its
properties, to engage in the business and activities now conducted by
it and to enter into this Agreement.
(b) Bayshore is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of
America, and has full power and authority (including all licenses,
franchises, permits and other governmental authorizations which are
legally required) to own its properties, to engage in the business and
activities now conducted by it and to enter into this Agreement.
(c) The Board of Directors of Bancshares and Bayshore and the shareholder
of Bayshore have approved the Agreement and the transactions
contemplated thereby. The Agreement has been duly executed and
delivered by Bancshares and Bayshore and is a binding agreement of
Bancshares and Bayshore enforceable against Bancshares and Bayshore in
accordance with its terms.
(d) The execution and delivery of the Agreement and the consummation of
the transactions contemplated thereby, will not, to the best knowledge
of counsel to Bancshares, violate any provision of, or constitute a
default under, any law, or any order, writ, injunction or decree of
any court or other governmental agency, or any contract, agreement or
instrument to which either Bancshares or Bayshore is a party or by
which they are bound or constitute an event which with the lapse of
time or action by a third party could result in any default under any
of the foregoing or result in the creation of any lien, charge or
encumbrance upon of the assets or properties of Bancshares or Bayshore
or upon the stock of Bancshares or Bayshore.
Such opinion shall also cover such other matters incident to the transactions
contemplated by the Agreement as First Bank may reasonably request. As to
questions of fact material to their opinion, such counsel may rely upon
certificates of officers of Bancshares and Bayshore. Such opinion may
-51-
contain such qualifications, exceptions and explanations as are satisfactory
in form and substance to First Bank.
-52-
EXHIBIT A
PLAN OF MERGER
BETWEEN BAYSHORE ACQUISITION CORPORATION
AND FIRST BANK OF DEER PARK
This PLAN OF MERGER (the "Plan") is dated as of the ____ day of _________,
1997, by and between First Bank of Deer Park, a Texas banking association
located in Deer Park, Texas ("First Bank") and Bayshore Acquisition Corporation
("Acquisition"), a Texas corporation formed as a wholly-owned subsidiary of
Bayshore Bancshares, Inc. ("Bancshares") solely to facilitate the transactions
contemplated by the Consolidation Agreement, defined below. First Bank and
Acquisition are hereinafter sometimes collectively referred to as the "Merging
Institutions."
This Plan of Merger is being entered into pursuant to the Agreement and
Plan of Consolidation dated as of August __, 1997 (the "Consolidation
Agreement") by and among Bancshares, Bayshore National Bank, and First Bank.
In consideration of the premises, and the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set forth below
shall have the following meanings:
Section 1.1. "Effective Date" shall mean the date at which the merger
contemplated by this Plan of Merger becomes effective as determined by the
certificate approving the merger to be issued by the Texas Department of Banking
("Banking Department") and the Secretary of State of Texas.
Section 1.2. "Acquisition Common Stock" shall mean the common stock, par
value $10.00 per share, of Acquisition owned by Bancshares.
Section 1.3. "First Bank Common Stock" shall mean the common stock, par
value $5.00 per share, of First Bank.
Section 1.4. "The Merger" shall refer to the merger of Acquisition with
and into First Bank as provided in Section 2.1 of this Plan.
Section 1.5. "Surviving Bank" shall refer to First Bank as the
institution surviving the Merger.
ARTICLE 2.
TERMS OF THE MERGER
Section 2.1. THE MERGER. Subject to the terms and conditions set forth
in the Consolidation Agreement, on the Effective Date, Acquisition shall be
merged with and into First Bank, with First Bank as the Surviving Bank, under
the charter and Articles of Association of First Bank, as determined by the
Banking Department, and each of the outstanding shares of common stock of
Acquisition shall and without any action on the part of Bancshares be canceled
and be converted into shares of common stock of the Surviving Bank. The shares
of common stock of the Surviving Bank into which such Acquisition Common Stock
is converted shall represent ownership of 100% of the issued and outstanding
capital stock of the Surviving Bank, all of which shall be owned by Bancshares.
Section 2.2. ARTICLES OF ASSOCIATION, BYLAWS AND FACILITIES OF SURVIVING
BANK. On the Effective Date and until thereafter amended in accordance with
law, the Articles of Association of the Surviving Bank shall be the Articles of
Association of First Bank as in effect on the Effective Date. Until altered,
amended or repealed as provided therein and in the Articles of Association of
the Surviving Bank, the Bylaws of the Surviving Bank shall be the Bylaws of
First Bank as in effect on the Effective Date. The main office of the Surviving
Bank shall be the main office of First Bank as of the Effective Date, and all
corporate acts, plans, policies, contracts, approvals and authorizations of
First Bank and Acquisition and their respective shareholders, boards of
directors, committees elected or appointed thereby, officers and agents, which
were valid and effective immediately prior to the Effective Date, shall be taken
for all purposes as the acts, plans, policies, contracts, approvals and
authorization of the Surviving Bank and shall be as effective and binding
thereon as the same were with respect to First Bank and Acquisition
respectively, as of the Effective Date.
Section 2.3. EFFECT OF CONSOLIDATION. On the Effective Date of the
Merger, the corporate existence of First Bank and Acquisition shall be merged
into and continued in the Surviving Bank, and the Surviving Bank shall be deemed
to be a continuation in entity and identity of First Bank and Acquisition. All
rights, franchises and interests of First Bank and Acquisition, respectively, in
and to any type of property and chooses in action shall be transferred to and
vested in the Surviving Bank
-2-
by virtue of the Merger without any deed or other transfer. Surviving Bank,
without any order or other action on the part of any court or otherwise,
shall hold and enjoy all rights of property, franchises and interest,
including appointments, designations and nominations, and all other rights
and interests as trustee, executor, administrator, transfer agent or
registrar of stocks and bonds, guardian of estates, assignee, receiver and
committee of estates and lunatics, and in every other fiduciary capacity, in
the same manner and to the same extent as such rights, franchises and
interests were held or enjoyed by First Bank and Acquisition, respectively,
as of the Effective Date.
Section 2.4. LIABILITIES OF THE SURVIVING BANK. On the Effective Date,
the Surviving Bank shall be liable for all liabilities of First Bank and
Acquisition. All deposits, debts, liabilities and obligations of First Bank and
of Acquisition, respectively, accrued, absolute, contingent or otherwise, and
whether or not reflected or reserved against on balance sheets, books of account
or records of First Bank or Acquisition, as the case may be, shall be those of
the Surviving Bank and shall not be released or impaired by the Merger. All
rights of creditors and other obligees and all liens on property of either First
Bank or Acquisition shall be preserved unimpaired.
ARTICLE 3.
CONVERSION OF SHARES
Section 3.1. CONVERSION OF FIRST BANK COMMON STOCK. On the Effective
Date, each share of First Bank Common Stock, issued and outstanding immediately
prior to the Effective Date (other than Dissenting Shares as hereinafter
defined) shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into the right to receive $69.0043 in cash
based on 115,500 shares outstanding ("Consolidation Price").
Section 3.2. EXCHANGE OF SHARES. On or immediately prior to the
Effective Date, Bancshares shall have available cash in sufficient amount to pay
the aggregate Consolidation Price. At least ten (10) days in advance of the
Closing Date (as defined in Section 6.1 of the Agreement), Bancshares will send
to each shareholder of First Bank a letter of transmittal for use in exchanging
such holder's certificates for his pro rata amount of the Consolidation Price.
Each shareholder of First Bank shall be entitled to receive payment for his
shares only upon surrender of the certificates representing his shares of First
Bank Common Stock or after providing an appropriate Affidavit of Lost
Certificate and Indemnity Agreement and/or a bond as may be required in each
case by Bancshares. Until so surrendered, each First Bank Common Stock
certificate will be deemed for all corporate purposes to represent and evidence
solely the right to receive the amount of the Consolidation Price to be paid
therefor pursuant to the Consolidation Agreement without interest thereon.
-3-
Section 3.3. DISSENTING SHARES. Each share of First Bank Common Stock
issued and outstanding immediately prior to the Effective Date, the holder of
which has not voted in favor of the Merger and who has properly perfected his
dissenters' rights of appraisal by following the procedures set forth in the
Texas Business Corporation Act ("TBCA") is referred to herein as a "Dissenting
Share." Dissenting Shares owned by each holder thereof who has not exchanged
his certificates representing shares of First Bank Common Stock for the
Consolidation Price and otherwise has not effectively withdrawn or lost his
dissenter's rights, shall not be converted into or represent the right to
receive the Consolidation Price pursuant to Section 3.1 hereof and shall be
entitled only to such rights as are available to such holder pursuant to the
applicable provisions of the TBCA. Each holder of Dissenting Shares shall be
entitled to receive the value of such Dissenting Shares held by him in
accordance with the applicable provisions of the TBCA, provided such holder
complies with the procedures contemplated by and set forth in the applicable
provisions of the TBCA. If any holder of Dissenting Shares shall effectively
withdraw or lose his dissenter's rights under the applicable provisions of the
TBCA, such Dissenting Shares shall be converted into the right to receive the
Consolidation Price in accordance with the provisions of Section 3.1.
Section 3.4. ACQUISITION COMMON STOCK. On the Effective Date, the shares
of Acquisition Common Stock issued and outstanding immediately prior to the
Effective Date shall be converted automatically and without any action on the
part of the holder thereof into _____ shares of common stock of the Surviving
Bank. The shares of common stock of the Surviving Bank into which such
Acquisition Common Stock are converted shall represent ownership of 100% of the
issued and outstanding capital stock of the Surviving Bank, all of which shall
be owned by Bancshares.
ARTICLE 4.
MISCELLANEOUS
Section 4.1. CONDITIONS PRECEDENT. The respective obligations of each
party under this Plan shall be subject to the satisfaction, or waiver by the
party permitted to do so, of the conditions set forth in Articles VIII, IX and X
of the Consolidation Agreement.
Section 4.2. TERMINATION. This Plan shall be terminated upon the
termination of the Consolidation Agreement in accordance with Article VII
thereof; provided, that any such termination of this Plan shall not relieve any
party hereto from liability on account of a breach by such party of any of the
terms hereof or thereof.
Section 4.3. AMENDMENTS. To the extent permitted by law, this Plan may
be amended by a subsequent writing signed by all of the parties hereto upon the
approval of the Board of Directors of each of the parties hereto.
-4-
Section 4.4. SUCCESSORS. This Plan shall be binding on the successors of
Acquisition and First Bank.
IN WITNESS WHEREOF, Acquisition and First Bank have caused this Plan to be
executed by their duly authorized officers and their corporate seals to be
hereunto affixed as of the date first above written.
BAYSHORE ACQUISITION CORPORATION
Attest:
By:
-------------------------------- ------------------------------------
FIRST BANK OF DEER PARK
Attest:
By:
-------------------------------- ------------------------------------
-5-
EXHIBIT B
PLAN OF CONSOLIDATION
BETWEEN
FIRST BANK OF DEER PARK
AND
BAYSHORE NATIONAL BANK
THIS PLAN OF CONSOLIDATION (the "Plan) is dated as of the ____ day of
________, 1997, by and between First Bank of Deer Park ("First Bank"), a Texas
banking association and the surviving bank of the Plan of Merger dated
__________, 1997 between Bayshore Acquisition Corporation and First Bank, and
Bayshore National Bank ("Bayshore").
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement and Plan of Consolidation (the
"Consolidation Agreement") dated as of August __, 1997, by and among Bayshore
Bancshares, Inc. ("Bancshares"), Bayshore, and First Bank and the Plan of
Merger, dated as of __________, 1997, between First Bank and Bayshore
Acquisition Corporation ("Acquisition"), Acquisition will merge with and into
First Bank (the "First Merger"), with the result that First Bank will become a
wholly-owned subsidiary of Bancshares;
WHEREAS, the Consolidation Agreement provides that simultaneously with or
as soon as practicable after the First Merger, First Bank will be consolidated
with and into Bayshore;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, First Bank and Bayshore hereby
agree that, subject to the terms and conditions hereinafter set forth, and in
accordance with all applicable laws and regulations, First Bank shall be
consolidated with and into Bayshore on the Effective Date (as hereinafter
defined) (the "Final Consolidation"). The parties hereto do hereby agree and
covenant as follows:
1. CONDITIONS OF APPROVAL. The Final Consolidation shall not become
effective unless and until all terms and conditions to such effectiveness
contained in the Consolidation Agreement, which conditions are incorporated
herein by reference, shall have been satisfied or waived.
2. IDENTITY OF RESULTING BANK. The resulting Bank as a result of the
Final Consolidation (the "Resulting Bank") shall be Bayshore.
3. ARTICLES OF ASSOCIATION, BYLAWS AND FACILITIES OF CONTINUING BANK. On
the Effective Date and until thereafter amended in accordance with law, the
Articles of Association of Resulting Bank shall be the Articles of Association
of Bayshore as in effect on the Effective Date. Until altered, amended or
repealed as therein provided and in the Articles of Association of Resulting
Bank, the Bylaws of Resulting Bank shall be the Bylaws of Bayshore as in effect
on the Effective Date. Unless and until changed by the Board of Directors of
Resulting Bank, the main office of Resulting Bank shall be the main office of
Bayshore as of the Effective Date. The established offices and facilities of
First Bank immediately prior to the Final Consolidation shall become established
offices and facilities of the Resulting Bank. Until thereafter changed in
accordance with law or the Articles of Association or Bylaws of Resulting Bank,
all corporate acts, plans, policies, contracts, approvals and authorizations of
First Bank and Bayshore and their respective shareholders, boards of directors,
committees elected or appointed thereby, officers and agents, which were valid
and effective immediately prior to the Effective Date, shall be taken for all
purposes as the acts, plans, policies, contracts, approvals and authorizations
of Resulting Bank and shall be as effective and binding thereon as the same were
with respect to First Bank and Bayshore, respectively, as of the Effective Date.
4. EFFECT OF FINAL CONSOLIDATION. On the Effective Date, the corporate
existence of the First Bank and Bayshore shall, as provided by law, be
consolidated into and continued in Resulting Bank, and Resulting Bank shall be
deemed to be a continuation in entity and identity of First Bank and Bayshore.
All rights, franchises and interests of First Bank and Bayshore, respectively,
in and to any type of property and chooses in action shall be transferred to and
vested in Resulting Bank by virtue of such Final Consolidation without any deed
or other transfer. Resulting Bank, without any order or other action on the
part of any court or otherwise, shall hold and enjoy all rights of property,
franchises and interest, including appointments, designations and nominations,
and all other rights and interests as trustee, executor, administrator, transfer
agent or registrar of stocks and bonds, guardian of estates, assignee, receiver
and committee of estates and lunatics, and in every other fiduciary capacity, in
the same manner and to the same extent as such rights, franchises, and interests
were held or enjoyed by First Bank and Bayshore, respectively, as of the
Effective Date.
5. LIABILITIES OF CONTINUING BANK. On the Effective Date of the Final
Consolidation, Resulting Bank shall be liable for all liabilities of First Bank
and Bayshore. All deposits, debts, liabilities, obligations and contracts of
First Bank and of Bayshore, respectively, matured or unmatured, whether accrued,
absolute, contingent or otherwise, and whether or not reflected or reserved
against on balance sheets, books of account, or records of the First Bank or
Bayshore shall be those of Resulting Bank and shall not be released or impaired
by the Final Consolidation. All rights of creditors and other obligees and all
liens on property of either First Bank or Bayshore shall be preserved unimpaired
subsequent to the Final Consolidation.
-2-
6. EFFECTIVE DATE. The Final Consolidation shall become effective upon
the issuance of a certificate approving the Final Consolidation to be issued by
the Office of the Comptroller of the Currency. The term "Effective Date" shall
mean the date and time designated in the certificate approving the Final
Consolidation. A closing shall take place on or prior to the Effective Date
following the receipt of all necessary regulatory and governmental approvals and
consents and the expiration of all statutory waiting periods in respect thereof
and the satisfaction or waiver of the conditions to the consummation of the
Final Consolidation specified in Articles VIII, IX and X of the Consolidation
Agreement.
7. CANCELLATION OF STOCK. On the Effective Date, all of the outstanding
shares of capital stock of First Bank, all of which shares shall be owned by
Bancshares, shall be canceled and shall not be deemed to be authorized, issued
or outstanding for any purpose, and no cash, property, rights or securities
shall be delivered with respect to said shares.
8. CONDITIONS PRECEDENT. The respective obligations of each party under
this Plan shall be subject to the satisfaction, or waiver by the party permitted
to do so, of the conditions set forth in Articles VIII, IX and X of the
Consolidation Agreement.
9. TERMINATION. This Plan shall be terminated upon the termination of
the Consolidation Agreement in accordance with Article VII thereof; provided,
that any such termination of this Plan shall not relieve any party hereto from
liability on account of a breach of such party of any of the terms hereof or
thereof.
10. AMENDMENTS. To the extent permitted by law, this Agreement may be
amended by a subsequent writing signed by all of the parties hereto upon the
approval of the Board of Directors of each of the parties.
11. SUCCESSORS. This Agreement shall be binding on the successors of
First Bank and Bayshore.
IN WITNESS WHEREOF, First Bank and Bayshore have caused this Agreement to
be executed by their duly authorized officers as of the date first above
written.
FIRST BANK OF DEER PARK
ATTEST:
By:
------------------------------ ----------------------------------
-3-
BAYSHORE NATIONAL BANK
ATTEST:
By:
------------------------------ ----------------------------------
-4-
EXHIBIT C
ESCROW AGREEMENT
THIS ESCROW AGREEMENT dated as of August __, 1997 ("Agreement") is
entered into by and among Bay Bancshares, Inc. ("Bancshares") and First Bank of
Deer Park (the "Bank") who are parties to the Agreement and Plan of
Consolidation dated August __, 1997 ("Consolidation Agreement"), a copy of which
is attached as Exhibit "A" and _____________________ Bank (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, Bancshares, Bayshore National Bank and the Bank have executed
and delivered the Consolidation Agreement; and
WHEREAS, the Agreement contemplates the acquisition of the Bank by
Bancshares; and
WHEREAS, pursuant to the Agreement, the parties desire to set aside in
escrow certain xxxxxxx money delivered by Bancshares in accordance with the
Agreement; and
WHEREAS, Bancshares and the Bank desire that the Escrow Agent act as
escrow agent hereunder, and the Escrow Agent is willing to act as escrow agent
hereunder;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS. Except as herein defined, capitalized terms used in this
Escrow Agreement have the meanings set forth in the Consolidation Agreement.
2. APPOINTMENT OF ESCROW AGENT. The Escrow Agent is hereby appointed as
escrow agent under this Escrow Agreement to perform the services described
herein, and the Escrow Agent hereby accepts such appointment.
3. ESCROW FUNDS.
x. XXXXXXX MONEY. Upon execution of this Agreement, Bancshares
shall deposit with the Escrow Agent the sum of $150,000 ("Xxxxxxx Money"). The
Escrow Agent shall hold the Xxxxxxx Money and will disburse the Xxxxxxx Money
and any accrued interest thereon in the following manner:
(1) The disbursement provisions set forth immediately below
shall not become effective unless and until the Bank has
delivered to the
Escrow Agent and Bancshares evidence satisfactory to both
the Escrow Agent and Bancshares that each of the directors,
officers and the holders of 5% or more of the issued and
outstanding common stock of the Bank have executed the Voting
Agreement and Irrevocable Proxy set forth as Exhibit "D" to
the Consolidation Agreement.
(2) CREDIT TO PURCHASE PRICE. If the Consolidations as defined
in the Consolidation Agreement close, the Xxxxxxx Money will
be credited to the Consolidation Price as set forth in
Section 1.12(a) of the Consolidation Agreement.
(3) RETURN OF XXXXXXX MONEY. Bancshares will be entitled to a
return of the Xxxxxxx Money if:
(a) the Consolidations do not close because of a failure to
satisfy one or more of the conditions to Closing set
forth in Articles VIII or X of the Agreement, or
(b) Bancshares terminates the Agreement for any of the
reasons set forth in Sections 7.1(a), (c), (d) or (e)
of the Consolidation Agreement.
(4) LOSS OF XXXXXXX MONEY. Bancshares will forfeit the xxxxxxx
money and it will be distributed to Bank if:
(a) the Closing does not occur by December 31, 1997, or
such other date mutually agreed to in writing by the
parties to the Consolidation Agreement, despite the
fact that the Bank has satisfied all conditions to
Closing and Bancshares has not terminated the
Consolidation Agreement.
(b) the Agreement is terminated by the Bank because
Bancshares or Bayshore has breached or failed to
perform in any material respect any of Bancshares'
covenants or agreements contained in the Consolidation
Agreement and has not cured the alleged breach after
receiving proper notice as set forth in the
Consolidation Agreement.
-2-
4. INVESTMENT OF XXXXXXX MONEY. The Xxxxxxx Money shall be invested and
reinvested in any certificate of deposit or acceptance, maturing not more than
30 days after the date of investment, issued by a commercial banking institution
that is a member of the Federal Reserve System and which has a combined capital
and surplus and undivided profits of not less than $2,000,000.
Notwithstanding the foregoing, no investment shall have a maturity greater than
30 days if such maturity extends past the termination date of this Escrow
Agreement. Without specific instructions, the Escrow Agent is not required to
invest the Xxxxxxx Money.
5. RESPONSIBILITY OF ESCROW AGENT. The Escrow Agent shall not be
responsible for the genuineness of any signature or document presented to it
pursuant to this Agreement and may rely conclusively upon and shall be protected
in acting upon any advice, judicial order or decree, certificate, notice,
request, consent, statement, instruction or other instrument believed by it in
good faith to be genuine or to be signed or presented by the proper person
hereunder, or duly authorized by such person or properly made. The Escrow Agent
shall not be responsible for any of the agreements contained herein except the
performance of its duties as expressly set forth herein. The Escrow Agent is
not responsible for investigating or assuring compliance with the Consolidation
Agreement or any amendments thereto or any other agreement or documents outside
of this Escrow Agreement. The Escrow Agent shall be entitled to retain counsel
and to act in reliance upon the advice of such counsel in all matters pertaining
to this Agreement, and shall not be liable for any action taken or omitted by it
in good faith in accordance with such advice. The duties and obligations of the
Escrow Agent hereunder shall be governed solely by the provisions of this
Agreement, and the Escrow Agent shall have no duties other than the duties
expressly imposed hereby and shall not be required to take any action other than
in accordance with the terms hereof. The Escrow Agent shall not be bound by any
notice of, or demand with respect to, any waiver, modification, amendment,
termination, cancellation, rescission or supersession of this Agreement, unless
in writing and signed by Bancshares and Bank, and, if the duties of the Escrow
Agent are affected thereby, unless it shall have given its prior written consent
thereto. In the event of any controversy or dispute hereunder or with respect
to any question as to the construction of this Agreement, or any action to be
taken by the Escrow Agent hereunder, the Escrow Agent shall incur no liability
for any action taken or suffered in good faith, its liability hereunder to be
limited solely to gross negligence or willful misconduct on its part. The
Escrow Agent's reliance on counsel shall be considered to be in good faith for
purposes of this Escrow Agreement.
6. INDEMNIFICATION OF ESCROW AGENT. BANCSHARES AND BANK HEREBY AGREE TO
INDEMNIFY THE ESCROW AGENT FOR, AND TO HOLD IT HARMLESS AGAINST, ANY LOSS,
LIABILITY OR EXPENSE INCURRED WITHOUT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON
THE PART OF THE ESCROW AGENT, ARISING OUT OF OR IN CONNECTION WITH ITS ENTERING
INTO THIS
-3-
ESCROW AGREEMENT, AND CARRYING OUT ITS DUTIES HEREUNDER, INCLUDING THE COSTS
AND EXPENSES OF DEFENDING ITSELF AGAINST ANY CLAIM OF LIABILITY.
7. RIGHT OF INTERPLEADER. Should any controversy arise between
Bancshares and Bayshore, and Bank, or any other person, firm or entity, with
respect to this Escrow Agreement, the Xxxxxxx Money, or any part thereof, or the
right of any party or other person to receive the Xxxxxxx Money, or Bancshares
and Bank fail to designate another Escrow Agent as provided in Section 9 hereof,
or if the Escrow Agent should be in doubt as to what action to take, the Escrow
Agent shall have the right (but not the obligation) to (i) withhold delivery of
the Xxxxxxx Money until the controversy is resolved, the conflicting demands are
withdrawn or its doubt is resolved or (ii) institute a xxxx of interpleader in
any court of competent jurisdiction to determine the rights of the parties
hereto (the right of the Escrow Agent to institute such xxxx of interpleader
shall not, however, be deemed to modify the manner in which the Escrow Agent is
entitled to make disbursements of the Xxxxxxx Money as hereinabove set forth
other than to tender the Xxxxxxx Money into the registry of such court). If a
xxxx of interpleader is instituted, or if the Escrow Agent is threatened with
litigation or becomes involved in litigation in any manner whatsoever on account
of this Escrow Agreement or the Xxxxxxx Money, then as between themselves and
the Escrow Agent, Bancshares and Bank, jointly and severally, hereby bind and
obligate themselves, their successors, heirs, executors and assigns to pay the
Escrow Agent its reasonable attorney's fees and any and all other disbursements,
expenses, losses, costs and damages of the Escrow Agent in connection with or
resulting from such threatened or actual litigation.
8. COLLECTED FUNDS; COLLECTION OF CHECKS OR INSTRUMENTS. Any check
included in the Xxxxxxx Money shall be collected by the Escrow Agent and the
proceeds held as part of the Xxxxxxx Money. No monies shall be disbursed by the
Escrow Agent until and unless it has collected the deposited funds. If any
check or instrument delivered to the Escrow Agent under this Escrow Agreement is
uncollectible and if the Escrow Agent has distributed funds represented by such
item pursuant to the terms hereof, the Escrow Agent shall notify the depositor
thereof and shall deliver the returned check or instrument to such depositor,
and such depositor shall immediately reimburse the Escrow Agent for the amount
of funds uncollectible. The Escrow Agent may pay out monies held in escrow by
its check. The Escrow Agent shall not be obligated to take any legal action to
enforce payment of any item deposited with it in escrow.
9. TERMINATION. This Escrow Agreement shall terminate as to the Xxxxxxx
Money on the date on which the Escrow Agent receives written notice from
Bancshares and Bank that the parties have fulfilled all of their obligations
under this Escrow Agreement. Upon receipt of such notice, the Escrow Agent
shall deliver to Bancshares any remaining portion of the Xxxxxxx Money, if any,
including all income earned on the Xxxxxxx Money.
-4-
10. REIMBURSEMENT OF EXPENSES OF ESCROW AGENT. All such fees and related
expenses (including legal expenses, if necessary) shall be the responsibility
of Bancshares and Bank and shall be paid directly by the responsible party upon
delivery of an invoice by the Escrow Agent to Bancshares and Bank.
11. RESIGNATION, REMOVAL AND REPLACEMENT OF ESCROW AGENT. The Escrow
Agent or any successor Escrow Agent may resign at any time by giving not less
than 60 days' prior written notice of resignation to Bancshares and Bank, such
resignation to be effective on the date specified in such notice. Bancshares
and Bank may at any time remove the Escrow Agent with or without cause by any
instrument or instruments in writing signed by Bancshares and Bank and delivered
to the Escrow Agent. In case the office of the Escrow Agent shall become vacant
for any reason, including, without limitation, resignation or removal, the
parties hereto shall appoint as successor Escrow Agent such other person or
entity as Bancshares and Bank agree, by an instrument or instruments in writing
delivered to such successor Escrow Agent and the retiring Escrow Agent. Upon
the appointment of any successor pursuant to this Section 14, the Escrow Agent
shall deliver the Xxxxxxx Money to the successor Escrow Agent on the date of
resignation, and such successor Escrow Agent shall immediately and without
further act succeed the retiring Escrow Agent as if originally named herein. If
no successor escrow agent is appointed, the Escrow Agent may, in its sole
discretion, deliver the Xxxxxxx Money to Bancshares, as successor escrow agent,
who shall become bound by the terms and provisions of this Escrow Agreement, or
institute a xxxx of interpleader.
12. NOTICES AND COMMUNICATIONS; FINAL ACCOUNTING. The Escrow Agent shall
keep Bancshares and Bank advised in writing of all transactions pursuant to this
Escrow Agreement by monthly statement of account, which shall be sent by regular
mail to each of the parties listed below. In addition, the Escrow Agent shall
issue a final financial accounting of all transactions concerning the Xxxxxx
Money, including investments, income from investments and distributions, to
Bancshares and Bank upon termination of this Escrow Agreement.
Any notice or other communication under this Escrow Agreement shall be
deemed to have been duly delivered on the earlier of (i) the date of receipt, if
delivered by hand or telecopy, or (ii) three days after the date when the same
shall have been posted by certified mail, return receipt requested, in any post
office in the United States of America, postage prepaid and addressed to the
party to whom such notice or other communication is to be given or made at such
party's address set forth below, or to such other address as such party shall
designate by written notice to the other parties (including the Escrow Agent),
as follows:
If to Bank: Xx. X. X. Xxxxxxx
Xxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
-5-
With a copy to: Xx. X. Xxxxxx Xxxxx
Xxxxxxxxxxx, Hrdlicka, White, Xxxxxxxx & Xxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Bancshares: Xx. X. X. Xxxxxx
Bay Bancshares, Inc.
0000 Xxxxxxx 000
Xx Xxxxx, Xxxxx 00000
With a copy to: Xx. Xxxxxxx X. Xxxxxx XX
Xxxxxxxxx & Xxxxxxxxx, L.L.P.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
If to Escrow Agent:
----------------------
----------------------
----------------------
With a copy to :
----------------------
----------------------
----------------------
13. GOVERNING LAW. The validity, enforceability and construction of this
Escrow Agreement shall be governed by the laws of the State of Texas applicable
to contracts to be made and wholly performed in such state.
14. AMENDMENTS; SUCCESSORS. This Agreement may be amended only by a
writing signed by Bancshares and Bank, and shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns. The consent of the Escrow Agent shall be required for any such
amendment in which the duties of the Escrow Agent are involved.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, which may be separately executed by the parties hereto, each of
which shall be an original and all of which taken together shall constitute one
and the same instrument.
16. ENTIRE AGREEMENT. This Escrow Agreement and the Consolidation
Agreement contain the entire agreements and understanding of the parties with
respect to the transaction contemplated hereby. No prior agreement, either
written or oral, shall be construed to change, amend, alter, repeal or
invalidate this Escrow Agreement.
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
on the day and year first above written.
BAY BANCSHARES, INC.
--------------------------------------
X. X. XXXXXX
FIRST BANK OF DEER PARK
--------------------------------------
--------------------------------------
--------------------------------------
ESCROW AGENT
-7-
EXHIBIT D
VOTING AGREEMENT
AND IRREVOCABLE PROXY
This Voting Agreement and Irrevocable Proxy (the "Voting Agreement") dated
as of August __, 1997 is executed by and among Bay Bancshares, Inc., a Texas
corporation ("Bancshares"), First Bank of Deer Park, a Texas banking association
("First Bank"), and the other persons who are signatories hereto (referred to
herein individually as a "Shareholder" and collectively as the "Shareholders").
WHEREAS, Bancshares, Bayshore National Bank and First Bank have executed
that certain Agreement and Plan of Consolidation dated as August ___, 1997 (the
"Consolidation Agreement") whereby First Bank will merge into a Texas
corporation formed as a subsidiary of Bancshares solely to facilitate the
transactions contemplated by the Consolidation Agreement, and immediately
thereafter, First Bank will consolidate into Bayshore National Bank, a wholly
owned subsidiary of Bancshares (collectively, the "Consolidations"); and
WHEREAS, the Consolidation Agreement provides that the total consideration
payable for all of the issued and outstanding stock of First Bank will be
$7,970,000 or $69.0043 per share based on 115,500 shares issued and outstanding;
WHEREAS, Section 4.10 of the Consolidation Agreement requires that First
Bank deliver to Bancshares the irrevocable proxies of the Shareholders; and
WHEREAS, First Bank and Bancshares are relying on the irrevocable proxies
in incurring expenses in reviewing First Bank's business, in preparing a proxy
statement, in proceeding with the filing of applications for regulatory
approvals, and in undertaking other actions necessary for the consummation of
the Consolidations;
NOW, THEREFORE, the parties hereto agree as follows:
1. Each of the Shareholders hereby represents and warrants to Bancshares
and First Bank that he is the registered holder of and has the exclusive right
to vote the shares of common stock, $5.00 par value, of First Bank ("Stock")
set forth below his name on the signature pages hereto. Each Shareholder hereby
agrees to vote at the shareholders' meeting referred to in Section 1.11 of the
Consolidation Agreement (the "Meeting") the shares of Stock set forth below his
name on the signature pages hereto and all other shares of Stock such
Shareholder owns of record as of the date of the Meeting and to direct the vote
of all shares of Stock which such Shareholder
-8-
holds beneficially and has the power and authority to direct the voting
thereof as of the date of the Meeting (the "Shares") in favor of the
authorization and approval of the Consolidation Agreement, and the other
agreements and transactions contemplated thereby.
2. In order better to effect the provisions of Section 1, each
Shareholder hereby revokes any previously executed proxies and hereby
constitutes and appoints X.X. Xxxxxxx (the "Proxy Holder"), with full power of
substitution, his true and lawful proxy and attorney-in-fact to vote at the
Meeting all of such Shareholder's Shares in favor of the authorization and
approval of the Consolidation Agreement and the other agreements and
transactions contemplated thereby, with such modifications to the Consolidation
Agreement and the other agreements and transactions contemplated thereby as the
parties thereto may make, in the event such Shareholder does not vote in favor
of the authorization and approval of the Consolidation Agreement and the other
agreements and transactions contemplated thereby.
3. Each Shareholder hereby covenants and agrees that until this Voting
Agreement is terminated in accordance with its terms, such Shareholder will not,
and will not agree to, without the consent of Bancshares, directly or
indirectly, sell, transfer, assign, pledge, hypothecate, cause to be redeemed or
otherwise dispose of any of the Shares or grant any proxy or interest in or with
respect to any such Shares or deposit such shares into a voting trust or enter
into another voting agreement or arrangement with respect to such Shares except
as contemplated by this Voting Agreement, unless the Shareholder causes the
transferee of such Shares to deliver to Bancshares an amendment to this Voting
Agreement whereby such transferee or other holder becomes bound by the terms of
this Voting Agreement.
4. This proxy shall be limited strictly and solely to the power to vote
the Shares in the manner set forth in Section 2 and shall not extend to any
other matters.
5. Each Shareholder acknowledges that Bancshares and First Bank are
relying on this Voting Agreement in incurring expenses in reviewing First Bank's
business, in preparing a proxy statement, in proceeding with the filing of
applications for regulatory approvals, and in undertaking other actions
necessary for the consummation of the Consolidations and that the proxy granted
hereby is coupled with an interest and is irrevocable to the full extent
permitted by applicable law, including Article 2.29C of the Texas Business
Corporation Act. Each Shareholder and First Bank acknowledge that the
performance of this Voting Agreement is intended to benefit Bancshares.
6. The irrevocable proxy granted pursuant hereto shall continue in effect
until the earlier to occur of (i) the termination of the Consolidation
Agreement, as it may be amended or extended from time to time, or (ii) the
consummation of the Consolidations.
-9-
7. The vote of the Proxy Holder shall control in any conflict between its
vote of the Shares and a vote by the Shareholders of the Shares and First Bank
agrees to recognize the vote of the Proxy Holder instead of the vote of the
Shareholders in the event the Shareholders do not vote in favor of the approval
of the Consolidation Agreement as set forth in Section 1 hereof.
8. This Voting Agreement may not be modified, amended, altered or
supplemented with respect to a particular Shareholder except upon the execution
and delivery of a written agreement executed by First Bank, Bancshares and the
Shareholder.
9. This Voting Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
10. This Voting Agreement, together with the Consolidation Agreement and
the agreements contemplated thereby, embody the entire agreement and
understanding of the parties hereto in respect to the subject matter contained
herein. This Voting Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter contained
herein.
11. All notices, requests, demands and other communications required or
permitted hereby shall be in writing and shall be deemed to have been duly given
if delivered by hand or mail, certified or registered mail (return receipt
requested) with postage prepaid to the addresses of the parties hereto set forth
below their signature on the signature pages hereof or to such other address as
any party may have furnished to the others in writing in accordance herewith.
12. This Voting Agreement and the relations among the parties hereto
arising from this Voting Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
above written.
BAYSHORE BANCSHARES, INC.
By:
----------------------------------
X. X. Xxxxxx
President
-10-
Address:
0000 Xxxxxxx 000
XxXxxxx, Xxxxx 00000
Attention: X. X. Xxxxxx
FIRST BANK OF DEER PARK
By:
-----------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address:
0000 Xxxxxx Xxxxxx
Xxxx Xxxx, Xxxxx 00000
Attention: X. X. Xxxxxxx
SHAREHOLDER:
---------------------------------------
Printed Name:
--------------------------
Address:
------------------------------
---------------------------------------
________ shares of Common Stock
-11-
EXHIBIT E
RELEASE OF CLAIMS
THIS RELEASE OF CLAIMS ("Release") dated the ______ day of ____________,
1997, is executed and delivered by the undersigned individual to First Bank of
Deer Park ("Bank").
WHEREAS, Bay Bancshares, Inc. ("Bancshares") will acquire the Bank pursuant
to that certain Agreement and Plan of Consolidation dated as of August ___, 1997
by and between Bancshares, Bayshore National Bank and the Bank (the
"Agreement"); and
WHEREAS, Bancshares has required as a condition of the acquisition that the
undersigned execute and deliver this Release to confirm the absence of any
claims by the undersigned against the Bank;
NOW THEREFORE, in consideration of the premises contained herein and ten
dollars and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned hereby agrees as follows:
Section 1. RELEASE. The undersigned hereby RELEASES and FOREVER
DISCHARGES the Bank and its successors, assigns, representatives and attorneys
from all manners of action, causes of action, suits, debts, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, premises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever in law or in equity which the
undersigned ever had, no has, or hereafter can, shall or may have against the
Bank, in respect of any and all agreements and obligations incurred on or prior
to the date hereof, or in respect of any event occurring or circumstances
existing on or prior to the date hereof; provided, however, that the Bank shall
not be released from any of its obligations or liabilities to the undersigned
(i) pursuant to the provisions of the certificate or articles of incorporation
or association or bylaws of the Bank regarding the indemnification of directors
and officers; and (ii) in connection with any indebtedness or contractual
obligation or liability to the undersigned existing on the date hereof.
Section 2. SUCCESSORS. This Release shall be binding upon the
undersigned and his or her heirs, devisees, administrators, executors, personal
representatives, successors and assigns and shall inure to the benefit of the
Bank and its successors and assigns.
Section 3. GOVERNING LAW. This Release shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to Texas principles of conflicts of law.
Section 4. MODIFICATION. This Release may be modified only by a
written instrument executed by the undersigned and the Bank.
IN WITNESS WHEREOF, the undersigned has executed this Release effective as
of the date first above written.
---------------------------------------
Signature
---------------------------------------
Printed Name
STATE OF TEXAS )
)
COUNTY OF _______ )
This instrument was acknowledged before me on _____________________, 1997
by ________________________________.
---------------------------------------
Notary Public in and for the
State of Texas
---------------------------------------
Notary's Name Typed or Printed
My Commission Expires:
-----------------
-2-
EXHIBIT F
RELEASE OF CLAIMS
THIS RELEASE OF CLAIMS ("Release") dated the _____ day of ____________
1997, is executed and delivered by the undersigned Bay Bancshares, Inc.
("Bancshares") and Bayshore National Bank ("Bayshore") to _____________________
("Person").
WHEREAS, Bancshares will acquire First Bank of Deer Park (the "Bank")
pursuant to that certain Agreement and Plan of Consolidation by and between
Bancshares, Bayshore National Bank and the Bank; and
WHEREAS, the Bank has required as a condition of the acquisition that
Bancshares and Bayshore execute and deliver this Release to confirm the absence
of any claims by Bancshares and Bayshore against Person;
NOW THEREFORE, in consideration of the premises contained herein and ten
dollars and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned hereby agrees as follows:
Section 1. RELEASE. The undersigned hereby RELEASES and FOREVER
DISCHARGES Person and his successors, assigns, representatives and attorneys
from all manners of action, causes of action, suits, debts, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, premises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever in law or in equity which the
undersigned ever had, or has, or hereafter can, shall or may have against Person
in respect of any and all agreements and obligations incurred on or prior to the
date hereof, or in respect of any event occurring or circumstances existing on
or prior to the date hereof; provided, however, that Person shall not be
released from any of his obligations or liabilities to the undersigned in
connection with any indebtedness or contractual obligation or liability related
to deposits, accounts and loans which the undersigned may have with the Bank
existing on the date hereof.
Section 2. SUCCESSORS. This Release shall be binding upon the
undersigned and his or her heirs, devisees, administrators, executors,
personal representatives, successors and assigns and shall inure to the
benefit of the Bancshares and Person and their successors and assigns.
Section 3. GOVERNING LAW. This Release shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to Texas principles of conflicts of law.
Section 4. MODIFICATION. This Release may be modified only by a
written instrument executed by the Bancshares, Bayshore and Person.
IN WITNESS WHEREOF, the undersigned has executed this Release effective
as of the date first above written.
BAY BANCSHARES, INC.
--------------------------------------
Signature
--------------------------------------
Printed Name
BAYSHORE NATIONAL BANK
---------------------------------------
Signature
---------------------------------------
Printed Name
STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on _____________________, 1997
by ________________________________.
---------------------------------------
Notary Public in and for the
State of Texas
---------------------------------------
Notary's Name Typed or Printed
My Commission Expires:
-----------------
-2-
STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on _____________________, 1997
by ________________________________.
---------------------------------------
Notary Public in and for the
State of Texas
---------------------------------------
Notary's Name Typed or Printed
My Commission Expires:
-----------------
-3-
EXHIBIT G
OUTLINE OF TERMS OF NON-COMPETITION AGREEMENT
Any officer who is offered and accepts employment with Bancshares or
Bayshore will be required to enter into a Non-Competition Agreement providing
that for a one year period following the date of execution of the
Non-Competition Agreement the undersigned Officer shall not, directly or
indirectly, either as an employee, employer, consultant, agent, principal,
partner, greater than 10% stockholder, officer, director or in any other
individual or representative capacity, (i) solicit the banking business (loan,
deposit or otherwise) of any then existing customers of First Bank of Deer Park
and (ii) engage or participate in any business that is in competition in any
manner whatever with the business of Bay Bancshares, Inc. or Bayshore National
Bank within a five-mile radius of First Bank's facility located at 0000 Xxxxxx
Xxxxxx xx Xxxx Xxxx, Xxxxx. Officers who are not offered employment or who are
offered employment but subsequently terminated by Bancshares or Bayshore shall
not be subject to the above restrictions. An officer who is offered employment
but subsequently voluntarily terminates his employment shall be subject to the
above restrictions.
