AGREEMENT AND PLAN OF MERGER BY AND AMONG EAST WEST BANCORP, INC., EAST WEST BANK, UNITED NATIONAL BANK AND JUNE 29, 2005
AGREEMENT
AND PLAN OF MERGER
BY
AND AMONG
EAST
WEST BANCORP, INC.,
EAST
WEST BANK,
UNITED
NATIONAL BANK
AND
X.
X. XXXX
JUNE
29, 2005
TABLE
OF CONTENTS
ARTICLE
I CERTAIN DEFINITIONS |
2 | |
SECTION
1.01 |
Certain
Definitions |
2 |
ARTICLE
II THE MERGER |
8 | |
SECTION
2.01 |
The
Merger
(a) The
Combination
(b) Filings
(c) Articles
of Incorporation and By-Laws
(d) Directors
and Officers of the Surviving Bank
(e) Effect
of the Merger |
8
8
8
8
8
8 |
SECTION
2.02 |
Effective
Date and Effective Time |
8 |
ARTICLE
III CONSIDERATION; EXCHANGE PROCEDURES |
9 | |
SECTION
3.01 |
Effect
on Capital Stock
(a) EWBC
Common Stock
(b) EWB
Common Stock
(c) UNB
Common Stock
(d) Dissenters’
Shares
(e) Cancellation
of Certain Shares |
9
9
9
9
9
9 |
SECTION
3.02 |
Conversion
of UNB Common Stock
(a Stock
Transfer Books and Exchange
(b Calculations |
9
12
12 |
SECTION
3.03 |
No
Fractional Shares |
12 |
SECTION
3.04 |
Exchange
Procedures
(a) Exchange
Agent
(b) Exchange
of Certificates and Cash
(c) Affiliates
(d) No
Liability
(e) Voting
and Dividends
(f) Withholding
Rights |
12
12
12
13
13
13
13 |
SECTION
3.05 |
Anti-Dilution
Provisions |
14 |
SECTION
3.06 |
Dissenters’
Rights |
14 |
ARTICLE
IV ACTIONS PENDING ACQUISITION |
14 | |
SECTION
4.01 |
Forbearances
of UNB
(a) Ordinary
Course
(b) Capital
Stock
(c) Dividends;
Etc.
(d) Compensation;
Employment Agreements; Etc.
(e) Hiring
and Terminations
(f) Benefit
Plans
(g) Dispositions
(h) Acquisitions
(i) Capital
Expenditures
(j) Governing
Documents
(k) Accounting
Methods
(l) Contracts
(m) Claims
(n) Adverse
Actions
(o) Risk
Management
(p) Indebtedness
(q) Loans
(r) Investments
(s) Taxes
(t) Commitments |
14
15
15
15
15
15
15
16
16
16
16
16
16
16
16
16
17
17
17
17
17 |
SECTION
4.02 |
Forbearances
of EWBC
(a) Ordinary
Course
(b) Adverse
Actions
(c) Commitments |
17
17
17
18 |
ARTICLE
V REPRESENTATIONS AND WARRANTIES |
18 | |
SECTION
5.01 |
Disclosure
Schedules |
18 |
SECTION
5.02 |
Standard |
18 |
SECTION
5.03 |
Representations
and Warranties of UNB
(a) Organization,
Standing and Authority
(b) UNB
Capital Stock
(c) Subsidiaries;
Equity Investments
(d) Corporate
Power
(e) Corporate
Authority
(f) Regulatory
Approvals; No Violations
(g) Financial
Reports; Undisclosed Liabilities
(h) Litigation
(i) Regulatory
Matters
(j) Compliance
With Laws
(k) Contracts;
Defaults
(l) No
Brokers
(m) Employee
Benefit Plans
(n) Labor
Matters
(o) Environmental
Matters
(p) Tax
Matters
(q) Risk
Management Instruments
(r) Books
and Records
(s) Insurance
(t) Allowance
For Loan Losses
(u) Trust
Business
(v) Real
Property
(w) Title
(x) Intellectual
Property
(y)
Past Actions. |
18
18
18
19
19
19
19
20
20
21
21
21
22
22
24
24
25
27
28
28
28
28
28
28
29
29 |
SECTION
5.04 |
Principal
Shareholder Representations |
29 |
SECTION
5.05 |
Representations
and Warranties of EWBC and EWB
(a) Organization,
Standing and Authority of EWBC
(b) Organization,
Standing and Authority of EWB
(c) EWBC
Stock
(d) Subsidiaries
(e) Corporate
Power
(f) Corporate
Authority
(g) Regulatory
Approvals; No Violations
(h) Regulatory
Matters
(i) Financial
Reports and SEC Documents; Material Adverse Effect
(j) Litigation
(k) No
Brokers
(l) Environmental
Matters
(m) Insurance
(n) Past
Actions
(o) Compliance
With Laws
(p) Contracts;
Defaults
(q) Employee
Benefit Plans
(r) Labor
Matters
(s) Tax
Matters
(t) Risk
Management Instruments
(u) Books
and Records
(v) Allowance
For Loan Losses
(w) Trust
Business
(x) Real
Property
(y) Title
(z) Intellectual
Property |
29
29
30
30
30
30
30
31
31
32
32
32
32
33
33
33
34
34
36
36
38
38
38
38
38
39
39 |
ARTICLE
VI COVENANTS |
39 | |
SECTION
6.01
SECTION
6.02
SECTION
6.03
SECTION
6.04
SECTION
6.05
SECTION
6.06
SECTION
6.07
SECTION
6.08
SECTION
6.09
SECTION
6.10
SECTION
6.11
SECTION
6.12
SECTION
6.13
SECTION
6.14
SECTION
6.15
SECTION
6.16
SECTION
6.17
SECTION
6.18
SECTION
6.19 SECTION 6.20 |
Reasonable
Best Efforts
Private
Placement and SEC Form S-3 Registration
Press
Releases
Access;
Information
Affiliate
Letter and Investor Letter
Acquisition
Proposals
Certain
Policies
Regulatory
Applications
Indemnification
by EWBC
Indemnification
by Principal Shareholder
Benefit
Plans
Future
Employment
Notification
of Certain Matters
Human
Resources Issues
Assistance
with Third-Party Agreements
Additional
Agreements
Pre-Closing
Adjustments
Tax
Treatment of the Merger
Limit
on Stock Offerings
Non-Solicitation
& Confidentiality Agreements |
39
40
40
41
42
42
42
43
43
45
46
47
47
47
47
48
48
48
49
49 |
ARTICLE
VII CONDITIONS TO CONSUMMATION OF THE MERGER |
49 | |
SECTION
7.01 |
Conditions
to the Parties’ Obligations to Effect the Merger
(a) Shareholder
Approvals
(b) Regulatory
Approvals
(c) No
Injunction; No Litigation
(d) Tax
Opinion |
49
49
49
49
49 |
SECTION
7.02 |
Conditions
to Obligation of UNB and the Principal Shareholder to Effect the
Merger
(a) Representations
and Warranties; Agreements and Covenants |
50 |
SECTION
7.03 |
Conditions
to Obligation of EWBC
(a) Representations
and Warranties; Agreements and Covenants
(b) UNB
Disclosure Schedule
(c) Performance
of Obligations of UNB
(d) Closing
Financial Statements
(e) Minimum
ALL
(f) FIRPTA
Certificate
(g) Consents |
50
50
51
51
51
51
51
51 |
ARTICLE
VIII TERMINATION |
52 | |
SECTION
8.01
SECTION
8.02
SECTION
8.03
SECTION
8.04 |
Termination
by Mutual Consent
Termination
by Either EWBC, EWB or UNB
Effect
of Termination and Abandonment
Escrow |
52
52
53
53 |
ARTICLE
IX MISCELLANEOUS |
54 | |
SECTION
9.01
SECTION
9.02
SECTION
9.03
SECTION
9.04
SECTION
9.05
SECTION
9.06
SECTION
9.07
SECTION
9.08
SECTION
9.09
SECTION
9.10
SECTION
9.1 |
Survival
Waiver;
Amendment
Counterparts
Governing
Law, Jurisdiction and Venue
Expenses
Notices
Entire
Understanding; No Third Party Beneficiaries
Effect
Severability
Enforcement
of the Agreement
Interpretation |
54
54
54
54
54
54
56
56
56
56
56 |
EXHIBITS
EXHIBIT
A WRITTEN CONSENT
EXHIBIT
B NON-SOLICITATION & CONFIDENTIALITY AGREEMENT
EXHIBIT
B-1 PERSONS EXECUTING NON-SOLICITATION & CONFIDENTIALITY
AGREEMENT
EXHIBIT
C ESCROW AGREEMENT
EXHIBIT
D AGREEMENT OF MERGER
EXHIBIT
E INVESTOR LETTER
EXHIBIT
F AFFILIATE LETTER |
||
AGREEMENT
AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER, dated as of June 29, 2005 (“Agreement”),
by and among East West Bancorp, Inc. (“EWBC”), East West Bank (“EWB”), United
National Bank (“UNB”), and X.X. Xxxx (“Principal Shareholder”).
RECITALS:
A. EWBC.
EWBC is a bank holding company organized under the laws of the State of Delaware
and registered as a bank holding company pursuant to the Bank Holding Company
Act of 1956, as amended (“BHC Act”), having its principal place of business in
San Marino, California.
B. EWB.
EWB is a California state-chartered commercial bank and a member bank of the
Federal Reserve System, having its principal place of business in San Marino,
California, and all of the outstanding capital stock of which is owned by
EWBC.
C. UNB.
UNB is a national banking association having its principal place of business in
San Marino, California.
D. PRINCIPAL
SHAREHOLDER. Principal Shareholder, a citizen of the Republic of China
(Taiwan), is the owner of 4,399,500 shares or approximately 99.99% of all of the
outstanding stock of UNB (“UNB Common Stock”), except for certain director
qualifying shares owned as required by the National Bank Act (“DQ Shares”) by
the directors of UNB (the Principal Shareholder and the UNB directors together,
the “Shareholders”), and has the right to acquire all DQ Shares in conjunction
with the merger of UNB and EWB as contemplated in this Agreement (the
“Merger”).
E. INTENTIONS
OF THE PARTIES. It is the intention of the parties to this Agreement
that the business combination contemplated hereby be accounted for under the
purchase accounting method and be treated as a “reorganization” under Section
368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).
F. BOARD
ACTIONS. The respective Boards of Directors of each of EWBC, EWB and
UNB have determined by unanimous vote that it is in the best interests of their
respective companies and their shareholders to consummate the strategic business
combination transaction provided for herein.
G. WRITTEN
CONSENT. As a condition to, and simultaneously with the execution of
this Agreement, the Shareholders have executed and delivered to UNB a written
consent to the Merger, in the form of Exhibit A hereto (“Written
Consent”), approving the Merger as provided for herein.
H. NON-SOLICITATION
& CONFIDENTIALITY AGREEMENT. A non-solicitation and confidentiality
agreement, in the form attached hereto as Exhibit B (the
“Non-Solicitation & Confidentiality Agreement”), shall be executed by the
Persons listed on Exhibit B-1 hereto.
I. ESCROW
AGREEMENT. As a condition to, and simultaneously with the execution of
this Agreement, EWB and UNB are executing an Escrow Agreement, in the form of
Exhibit C (the “Escrow Agreement”), and have each deposited the amount of
$3,000,000 into escrow as provided for herein.
NOW,
THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
ARTICLE
I
CERTAIN
DEFINITIONS
SECTION
1.01 Certain Definitions. The following terms are used in
this Agreement with the meanings set forth below:
“Acquisition
Proposal” has the meaning set forth in Section 6.06.
“Adjusted
Shareholders’ Equity” has the meaning set forth in
Section 3.02(a).
“Affiliate
Letter” has the meaning set forth in Section 6.05.
“Agreement”
means this Agreement, as amended or modified from time to time in accordance
with Section 9.02.
“Agreement
of Merger” has the meaning set forth in Section 2.01(b).
“ALL” has
the meaning set forth in Section 5.03(t).
“Average
Share Price” has the meaning set forth in Section 3.02(a).
“Bank
Insurance Fund” means the Bank Insurance Fund maintained by the FDIC.
“Bank
Merger Act” means the Bank Merger Act, as amended.
“Bank
Secrecy Act” means the Currency and Foreign Transaction Reporting Act (31 U.S.C.
Section 5311 et seq.) as amended.
“Benefit
Plans” has the meaning set forth in Section 5.03(m).
“BHC Act”
has the meaning set forth in the recitals of this Agreement.
“Business
Combination” has the meaning set forth in Section 3.05.
“Business
Day” means Monday through Friday of each week, except a legal holiday recognized
as such by the U.S. Government or any day on which banking institutions in the
State of California are authorized or obligated to close.
“California
Secretary” means the California Secretary of State.
“Cash
Portion” has the meaning set forth in Section 3.02(a).
“CFC”
means the California Financial Code.
“CGCL”
means the California General Corporation Law.
“Closing
Financial Statements” has the meaning set forth in Section 7.03(e).
“Code” has
the meaning set forth in the recitals to this Agreement.
“Commissioner”
means the California Commissioner of Financial Institutions.
“Community
Reinvestment Act” means the Community Reinvestment Act of 1977, as amended.
“Costs”
has the meaning set forth in Section 6.09(a).
“Derivatives
Contract” has the meaning set forth in Section 5.03(q).
“Disclosure
Schedule” has the meaning set forth in Section 5.01.
“Dissenters
Set Aside” has the meaning set forth in Section 3.02(a).
“Dissenters’
Shares” means shares of UNB Common Stock held by a UNB shareholder with respect
to which such shareholder, in accordance with the National Bank Act, perfects
such shareholder’s right to dissent to the Merger.
“Dissenting
Shareholder” means any holder of Dissenters’ Shares.
“DQ
Shares” has the meaning set forth in the recitals of this
Agreement.
“Effective
Date” has the meaning set forth in Section 2.02.
“Effective
Time” has the meaning set forth in Section 2.02.
“Environmental
Laws” has the meaning set forth in Section 5.03(o).
“Equal
Credit Opportunity Act” means the Equal Credit Act (15 U.S.C. Section 1691 et
seq.) as amended.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA
Affiliate” has the meaning set forth in Section 5.03(m).
“Escrow”
has the meaning set forth in Section 8.04.
“Escrow
Agent” means North American Title Group, 0 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx
Xxx, Xxxxxxxxxx 00000.
“Escrow
Agreement” has the meaning set forth in the recitals to this
Agreement.
“EWB” has
the meaning set forth in the preamble to this Agreement.
“EWB
Articles” means the Articles of Incorporation of EWB, as amended.
“EWB
By-Laws” means the by-laws of EWB, as amended.
“EWB
Common Stock” means the common stock of EWB, 100% of which is owned by EWBC.
“EWB Plan”
has the meaning set forth in Section 6.11(c).
“EWB
Account” means the account specified by EWB for the deposit of the UNB
Termination Fee.
“EWBC” has
the meaning set forth in the preamble to this Agreement.
“EWBC
Articles” means the Articles of Incorporation of EWBC, as amended.
“EWB
Termination Fee” has the meaning set forth in Section 8.03(c).
“EWBC
Board” means the Board of Directors of EWBC.
“EWBC
By-Laws” means the by-laws of EWBC.
“EWBC
Common Stock” means the common stock, par value $.001 per share, of
EWBC.
“EWBC
Disclosure Schedule” has the meaning set forth in Section 5.01.
“EWBC Loan
Property” has the meaning set forth in Section 5.05(j).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
“Exchange
Agent” means U.S. Stock Transfer Corporation, as provided in
Section 3.02(a).
“Exchange
Fund” has the meaning set forth in Section 3.04(a).
“Fair
Housing Act” means the Fair Housing Act (420 U.S.C. Section 3601, et seq.), as
amended.
“FDIC”
means the Federal Deposit Insurance Corporation.
“Federal
Reserve Act” means the Federal Reserve Act, as amended.
“Federal
Reserve Board” means the Board of Governors of the Federal Reserve System or the
Federal Reserve Bank of San Francisco acting under delegated authority.
“Former
UNB Employees” has the meaning set forth in Section 6.11.
“GAAP”
means generally accepted accounting principles.
“Governmental
Authority” means any court, administrative agency or commission or other
federal, state or local governmental authority or instrumentality.
“Hazardous
Substance” has the meaning set forth in Section 5.03(o).
“Home
Mortgage Disclosure Act” means the Home Mortgage Disclosure Act (12 U.S.C.
Section 2801 et seq.), as amended.
“Indemnified
Party” has the meaning set forth in Section 6.09(a).
“Insurance
Cap” has the meaning set forth in Section 6.09(a).
“Insurance
Policies” has the meaning set forth in Section 5.03(s).
“Investor
Letter” has the meaning set forth in Section 5.04(b).
“Lien”
means any charge, mortgage, pledge, security interest, restriction, claim, lien
or encumbrance.
“Material
Adverse Effect” means, with respect to EWBC or UNB, any effect that (i) is
material and adverse to the financial position, results of operations or
business of EWBC and its Subsidiaries taken as a whole or UNB, as the case may
be, or (ii) would materially impair the ability of either EWBC, EWB or UNB to
perform its obligations under this Agreement or otherwise materially threaten or
materially impede the consummation of the Merger and the other transactions
contemplated by this Agreement; provided, however, that Material Adverse Effect
shall not be deemed to include the impact of (a) changes in banking and similar
laws of general applicability or interpretations thereof by Governmental
Authorities, (b) changes in GAAP or regulatory accounting requirements
applicable to banks and their holding companies generally, (c) changes in
general economic conditions affecting banks and their holding companies
generally, except to the extent such changes disproportionately affect UNB (d)
any modifications or changes to valuation policies and practices in connection
with the Merger or restructuring charges taken in connection with the Merger, in
each case in accordance with GAAP and (e) with respect to UNB, the effects of
any action or omission taken with the prior consent of EWBC or EWB.
“Measuring
Date” has the meaning set forth in Section 7.03(d).
“Merger”
has the meaning set forth in the recitals to this Agreement.
“Merger
Consideration” has the meaning set forth in Section 3.02(a).
“Nasdaq”
means The Nasdaq Stock Market, Inc.’s National Market System.
“National
Bank Act” means the National Bank Act, as amended.
“National
Labor Relations Act” means the National Labor Relations Act, as amended.
“New Plan”
has the meaning set forth in Section 6.12(b).
“Non-Solicitation
and Confidentiality Agreements” has the meaning set forth in the recitals to
this Agreement.
“OCC”
means the Office of the Comptroller of the Currency.
“Pension
Plan” has the meaning set forth in Section 5.03(m).
“Per Share
Cash Consideration” has the meaning set forth in
Section 3.02(a).
“Per Share
Merger Consideration” has the meaning set forth in
Section 3.02(a).
“Per Share
Stock Consideration” has the meaning set forth in Section 3.02(a).
“Person”
means any individual, bank, corporation, partnership, association, joint-stock
company, business trust, limited liability company or unincorporated
organization.
“Principal
Shareholder” has the meaning set forth in the preamble to this
Agreement.
“Registration
Statement” has the meaning set forth in Section 6.02(a).
“Regulatory
Authorities” has the meaning set forth in Section 5.03(i).
“Regulatory
Filings” has the meaning set forth in Section 5.03(g).
“Rights”
means, with respect to any Person, securities or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire, or any options, calls or commitments relating to, or any stock
appreciation right or other instrument the value of which is determined in whole
or in part by reference to the market price or value of, shares of capital stock
of such Person.
“Savings
Association Insurance Fund” means the Savings Association Insurance Fund
maintained by the FDIC.
“SEC”
means the United States Securities and Exchange Commission.
“SEC
Documents” has the meaning set forth in Section 5.05(g).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations
thereunder.
“Shareholders”
has the meaning set forth in the recitals to this Agreement.
“Stock
Portion” has the meaning set forth in Section 3.02(a).
“Subsidiary”
has the meaning ascribed to those terms in Rule 1-02 of Regulation S-X of the
SEC.
“Surviving
Bank” has the meaning set forth in Section 2.01(a).
“Tax” and
“Taxes” mean all federal, state, local or foreign taxes, charges, fees, levies
or other assessments, however denominated, including, without limitation, all
net income, gross income, gains, gross receipts, sales, use, ad valorem, goods
and services, capital, production, transfer, franchise, windfall profits,
license, withholding, payroll, employment, disability, employer health, excise,
estimated, severance, stamp, occupation, property, environmental, unemployment
or other taxes, custom duties, fees, assessments or charges of any kind
whatsoever, imposed on the income, properties or operations of UNB or its
Subsidiary by any taxing authority whether arising before, on or after the
Effective Date, together with any interest, additions or penalties thereto and
any interest in respect of such interest and penalties.
“Tax
Returns” means any return, amended return or other report (including elections,
declarations, disclosures, schedules, estimates and information returns)
required to be filed on or before the Effective Date with respect to any Taxes
of UNB.
“Transaction
Expenses” has the meaning set forth in Section 3.02(a).
“Treasury
Shares” shall mean any shares of UNB Common Stock held by UNB or by EWBC or any
of its Subsidiaries, in each case other than in a fiduciary (including custodial
or agency) capacity or as a result of debts previously contracted in good faith.
“UNB” has
the meaning set forth in the preamble to this Agreement.
“UNB
Account” means the account specified by UNB for the deposit of the EWB
Termination Fee.
“UNB
Articles” means the Articles of Association of UNB, as amended.
“UNB
Board” means the Board of Directors of UNB.
“UNB
By-Laws” means the By-Laws of UNB.
“UNB
Common Stock” has the meaning set forth in Section 3.02(a)
“UNB
Disclosure Schedule” has the meaning set forth in Section 5.01.
“UNB Loan
Property” has the meaning set forth in Section 5.03(o).
“UNB
Termination Fee” has the meaning set forth in Section 8.03(b).
“Unrealized
Loss Amount” has the meaning set forth in Section 3.02(a).
“USA
Patriot Act” means the USA PATRIOT Act (Pub. L. No. 107-56).
“Waiting
Period” has the meaning set forth in Section 4(c) of the Escrow
Agreement.
“Written
Consent” has the meaning set forth in the recitals to this Agreement.
ARTICLE
II
THE
MERGER
SECTION
2.01 The Merger.
(a) The
Combination. At the Effective Time, UNB shall merge with and into EWB,
pursuant to CFC Section 4881, the separate existence of UNB as a national
banking association shall cease, and EWB shall survive and continue to exist as
a California state-chartered bank (EWB, as the surviving bank in the Merger,
sometimes being referred to herein as the “Surviving Bank”). EWBC may, at any
time prior to the Effective Time (including, to the extent permitted by
applicable law, after UNB’s shareholders have approved this Agreement), change
the method of effecting the combination of EWB with UNB (including, without
limitation, the provisions of this Article 2) if and to the extent it deems such
change to be necessary, appropriate or desirable; provided, however, that no
such change shall (i) alter or change the amount or kind of consideration to be
issued to the holders of UNB Common Stock as provided for in this Agreement (the
“Merger Consideration”), (ii) adversely affect the tax treatment of UNB’s
shareholders as a result of receiving the Merger Consideration, (iii) impede or
delay consummation of the transactions contemplated by this Agreement, or (iv)
otherwise be materially prejudicial to the interests of the shareholders of UNB.
(b) Filings.
Subject to the satisfaction or waiver of the conditions set forth in Article 7,
the Merger shall become effective upon the Effective Time on the Effective Date,
in accordance with CFC Section 4885 upon the filing of an Agreement of Merger
between UNB and EWB as the Surviving Bank, in the form of Exhibit D
hereto (“Agreement of Merger”), certified by the California Secretary with the
Commissioner.
(c) Articles
of Incorporation and By-Laws. The articles of incorporation and by-laws of
the Surviving Bank immediately after the Merger shall be those of EWB as in
effect immediately prior to the Effective Time.
(d) Directors
and Officers of the Surviving Bank. The directors and officers of EWB
immediately after the Merger shall be the directors and officers of EWB
immediately prior to the Effective Time, until such time as their successors
shall be duly elected and qualified.
(e) Effect
of the Merger. At the Effective Time, the effect of the Merger shall be as
provided in CGCL Section 1107, CFC Sections 4888 and 4889 and 12 U.S.C. Section
214a, including any regulations or rules promulgated thereunder. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of UNB shall
vest in the Surviving Bank, all debts, liabilities, obligations, restrictions,
disabilities and duties of UNB shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Bank and the charter of
UNB as a national banking association shall automatically terminate.
SECTION
2.02 Effective Date and Effective Time. Subject to the
satisfaction or waiver of the conditions set forth in Article 7 (other than
those conditions that by their nature are to be satisfied at the consummation of
the Merger, but subject to the fulfillment or waiver of those conditions), the
parties shall cause the filings contemplated by Section 2.01 to be made (i) no
later than the third Business Day after such satisfaction or waiver or (ii) such
other date to which the parties may agree in writing. The Merger provided for
herein shall become effective upon such filing or filings and on such date as
may be specified therein and in accordance CFC Section 4487; provided, however,
that the Effective Date shall not occur prior to the tenth day of any calendar
month unless otherwise agreed upon by the parties hereto. The date of such
effectiveness is herein called the “Effective Date”. The “Effective Time” of the
Merger shall be the time as set forth in such filing.
ARTICLE
III
CONSIDERATION;
EXCHANGE PROCEDURES
SECTION
3.01 Effect on Capital Stock. Subject to the other provisions
of this Article 3, at the Effective Time, by virtue of the Merger and
without any additional action on the part of the holders of shares of EWBC
Common Stock and EWB Common Stock:
(a) EWBC
Common Stock. Each share of EWBC Common Stock issued and outstanding
immediately prior to the Effective Time shall remain an issued and outstanding
share of common stock of EWBC, and shall not be affected by the Merger;
(b) EWB
Common Stock. Each share of EWB Common Stock, issued and outstanding
immediately prior to the Effective Time shall remain an issued and outstanding
share of common stock of the Surviving Bank, and shall not be affected by the
Merger;
(c) UNB
Common Stock. Each share of UNB Common Stock issued and outstanding
immediately prior to the Effective Time (other than any Dissenters’ Shares and
Treasury Shares, as defined below) shall be converted into the right to receive
Per Share Merger Consideration, as provided in Section 3.02;
(d) Dissenters’
Shares. Any shares of UNB Common Stock that are “dissenting shares” within
the meaning of 12 U.S.C. Section 214a (“Dissenters’ Shares”) shall not be
converted into or represent a right to receive EWBC Common Stock or cash
hereunder unless and until such shares have lost their status as dissenting
shares under 12 U.S.C. Section 214a, at which time such shares shall be
converted into cash or EWBC Common Stock pursuant to Section 3.02; and
(e) Cancellation
of Certain Shares. Any shares of UNB Common Stock held by EWBC (or any of
its Subsidiaries) or by UNB, other than those held in a fiduciary capacity or as
a result of debts previously contracted (“Treasury Shares”), shall be cancelled
and retired at the Effective Time and no Per Share Cash Consideration or Per
Share Stock Consideration shall be paid or issued in exchange therefore.
SECTION
3.02 Conversion of UNB Common Stock.
(a) At
the Effective Time, the conversion of each outstanding share of UNB Common Stock
shall proceed as follows:
(i) The
terms used herein shall have the following meanings:
“Adjusted
Shareholders’ Equity” means the equity of UNB as set forth on the Closing
Financial Statements, plus the sum of (x) all amounts paid
or accrued in connection with any actions taken pursuant to Section 6.17 to
the extent that such actions were not necessary to bring UNB into conformity
with GAAP or any applicable rule or regulation of any Governmental
Authority; (y) all fees and expenses of all attorneys, accountants, investment
bankers and other advisors and agents for UNB for services rendered solely in
connection with the transactions contemplated by this Agreement and (z)
insurance premiums pursuant to Section 6.09(a) (collectively, “Transaction
Expenses”) paid by UNB prior to the Effective Time and which do not exceed in
the aggregate $200,000. Adjusted Shareholders’ Equity shall be calculated
without giving any effect to changes in the net after-tax value of the
securities portfolio due to market fluctuations after the date
hereof.
“Average
Share Price” shall mean the volume weighted average of the closing price of EWBC
Common Stock as reported in The Wall Street Journal (Western Edition) for the 60
trading days of the Nasdaq (“NASDAQ”) ending with the fifth trading day prior to
the Effective Date.
“Cash
Portion” shall mean either 30% or 40% of the Merger Consideration, with the
determination of the Cash Portion percentage to be provided by the Principal
Shareholder in a writing to be delivered to EWBC on or before the fifth trading
day prior to the Effective Date.
“Dissenters
Set Aside” shall mean the combination of the Per Share Cash Consideration and
the Per Share Stock Consideration multiplied by the number of Dissenting Shares.
“Merger
Consideration” shall mean 2.30 times the Adjusted Shareholders’ Equity less
$1,000,000 and plus the Unrealized Loss Amount.
“Per Share
Cash Consideration” shall mean the amount derived by dividing the Cash Portion
by the total number of shares of UNB Common Stock outstanding at the Effective
Time.
“Per Share
Merger Consideration” shall mean the sum of the Per Share Cash Consideration and
the Per Share Stock Consideration.
“Per Share
Stock Consideration” shall mean the number of shares of EWBC Common Stock
derived by dividing the Stock Portion, rounded to the nearest whole share, by
the total number of shares of UNB Common Stock outstanding at the Effective
Time.
“Stock
Portion” shall mean the number of shares of EWBC Common Stock issuable in the
Merger derived as follows:
· |
If
the Average Share Price is less than $29.00, then the Stock Portion shall
be the number of shares of EWBC Common Stock derived by dividing either
60% or 70% of the Merger Consideration by $29.00, with the determination
of the Stock Portion percentage to be provided by the Principal
Shareholder concurrently in the writing to be delivered to EWBC on or
before the fifth trading day prior to the Effective Date;
|
· |
If
the Average Share Price is at least $29.00 and not greater than $34.00,
the Stock Portion shall be the number of shares of EWBC Common Stock
derived by dividing 60% or 70% of the Merger Consideration by the Average
Share Price, with the determination of the Stock Portion percentage to be
provided by the Principal Shareholder concurrently in the writing to be
delivered to EWBC on or before the fifth trading day prior to the
Effective Date; |
· |
If
the Average Share Price is greater than $34.00, the Stock Portion shall be
the number of shares of EWBC Common Stock derived by dividing 60% or 70%
of the Merger Consideration by $34.00, with the determination of the Stock
Portion percentage to be made by the Principal Shareholder concurrently in
the writing to be delivered to EWBC on or before the fifth trading day
prior to the Effective Date; |
“UNB
Common Stock” shall mean all of the 4,400,000 shares of UNB Common Stock issued
and outstanding immediately prior to the Effective Time, excluding any Treasury
Shares.
“Unrealized
Loss Amount” shall mean 1.3 times UNB's net after-tax loss on its securities
portfolio on the date hereof.
(ii) EWBC
shall set aside cash from the Cash Portion and the Stock Portion an amount of
cash and EWBC Common Stock equal to the Dissenters Set Aside. EWBC shall deliver
to U. S. Stock Transfer Corporation (the “Exchange Agent”) the remaining Stock
Portion and Cash Portion. Each share of UNB Common Stock (except for Dissenters’
Shares) shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive the Per Share Cash
Consideration and Per Share Stock Consideration.
(iii) At
the Effective Time, each share of UNB Common Stock shall be converted into, and
become exchangeable for, the Per Share Merger Consideration and the holders of
certificates formerly representing shares of UNB Common Stock shall cease to
have any rights as UNB shareholders. Except as provided above, until such
certificates are surrendered for exchange, the certificates of each holder
shall, after the Effective Time, represent for all purposes only the right to
receive the Per Share Merger Consideration.
(iv) If,
subsequent to the date of this Agreement but prior to the Effective Time, the
outstanding shares of EWBC Common Stock shall, through a reclassification,
recapitalization, stock dividend, stock split or reverse stock split, have been
increased, decreased, changed into or exchanged for a different number or kind
of shares or securities, appropriate adjustment will be made to the Stock
Portion.
(b) Stock
Transfer Books and Exchange. At the Effective Time, the stock transfer books
of UNB shall be closed as to holders of UNB Common Stock immediately prior to
the Effective Time and no transfer of UNB Common Stock by any such holder shall
thereafter be made or recognized on the stock transfer books of UNB or the
Surviving Bank. If, after the Effective Time, certificates are properly
presented in accordance with Article 3 of this Agreement to the Exchange Agent,
such certificates shall be canceled and exchanged for certificates representing
the number of whole shares of EWBC Common Stock and a check representing the
amount of cash into which UNB Common Stock represented thereby was converted in
the Merger, plus any payment for a fractional share of EWBC Common Stock.
(c) Calculations.
Any calculation of a portion of a share of EWBC Common Stock shall be rounded to
the nearest ten-thousandth of a share, and any cash payment shall be rounded to
the nearest cent. For purposes of this Section 3.02, the shares of EWBC Common
Stock issued for UNB Common Stock as consideration in the Merger shall be deemed
to be “approximately equal” to the Stock Portion if such number is within 1,000
shares of EWBC Common Stock of such amount.
SECTION
3.03 No Fractional Shares. Notwithstanding any other
provision hereof, no fractional shares of EWBC Common Stock and no certificates
or scrip therefore, or other evidence of ownership thereof, will be issued in
the Merger; instead, EWBC shall pay to each holder of UNB Common Stock who would
otherwise be entitled to a fractional share of EWBC Common Stock (after taking
into account all certificates of UNB Common Stock delivered by such holder) an
amount in cash (without interest) determined by multiplying such fraction by the
Average Share Price. No holder will be entitled to dividends, voting rights or
any other rights as a shareholder in respect of any fractional share of EWBC
Common Stock.
SECTION
3.04 Exchange Procedures.
(a) Exchange
Agent. No later than the Effective Time, EWBC shall deposit with the
Exchange Agent, the Stock Portion and the Cash Portion of the Merger
Consideration (the “Exchange Fund”). The Exchange Agent shall not be entitled to
vote or exercise any rights of ownership with respect to EWBC Common Stock held
by it from time to time hereunder, except that it shall receive and hold all
dividends or other distributions paid or distributed with respect to such shares
for the account of the persons entitled thereto.
(b) Exchange
of Certificates and Cash. Each holder of a certificate formerly representing
UNB Common Stock (other than Dissenters’ Shares or Treasury Shares) who
surrenders or has surrendered such certificate (or customary affidavits and
indemnification regarding the loss or destruction of such certificate), together
with duly executed transmittal materials, to the Exchange Agent shall, upon
acceptance thereof, be entitled to a certificate representing EWBC Common Stock
and cash into which the shares of UNB Common Stock shall have been converted
pursuant hereto, as well as cash in lieu of any fractional shares of EWBC Common
Stock to which such holder would otherwise be entitled. The Exchange Agent shall
accept such UNB certificate upon compliance with such reasonable and customary
terms and conditions as the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with normal practices. Until surrendered as
contemplated by this Section 3.04, each certificate representing UNB Common
Stock shall be deemed from and after the Effective Time to evidence only the
right to receive cash and EWBC Common Stock upon such surrender. EWBC shall not
be obligated to deliver the consideration to which any former holder of UNB
Common Stock is entitled as a result of the Merger until such holder surrenders
his certificate or certificates representing such shares of UNB Common Stock for
exchange as provided herein. If any certificate for shares of UNB Common Stock,
or any check representing cash and/or declared but unpaid dividends, is to be
issued in a name other than that in which a certificate surrendered for exchange
is issued, the certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and the person requesting such exchange
shall affix any requisite stock transfer tax stamps to the certificate
surrendered or provide funds for their purchase or establish to the satisfaction
of the Exchange Agent that such taxes are not payable.
(c) Affiliates.
Certificates surrendered for exchange by any person constituting an “affiliate”
of EWBC for purposes of Rule 145 under the Securities Act, shall not be
exchanged for certificates representing whole shares of EWBC Common Stock until
EWBC has received a written agreement from such person.
(d) No
Liability. Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to any former holder of UNB Common Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(e) Voting
and Dividends. Former shareholders of record of UNB shall not be entitled to
vote after the Effective Time at any meeting of EWBC shareholders until such
holders have exchanged their certificates representing UNB Common Stock for
certificates representing EWBC Common Stock in accordance with the provisions of
this Agreement. Until surrendered for exchange in accordance with the provisions
of this Section 3.04, each certificate previously representing shares of UNB
Common Stock (other than Dissenters’ Shares and Treasury Shares) shall from and
after the Effective Time represent for all purposes only the right to receive
shares of EWBC Common Stock, cash and cash in lieu of fractional shares, as set
forth in this Agreement. No dividends or other distributions declared or made
after the Effective Time with respect to EWBC Common Stock with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
certificate of UNB Common Stock with respect to the shares of EWBC Common Stock
represented thereby, until the holder of such certificate of UNB Common Stock
shall surrender such certificate. Subject to the effect of applicable laws,
following surrender of any such certificates of UNB Common Stock for which
shares of EWBC Common Stock are to be issued, there shall be paid to the holder
of the certificates without interest, (i) the amount of any cash payable with
respect to a fractional share of EWBC Common Stock to which such holder is
entitled pursuant to Section 3.03 and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of EWBC Common Stock, and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of EWBC Common Stock.
(f) Withholding
Rights. EWBC or the Exchange Agent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of shares of UNB Common Stock such amounts as EWBC or the Exchange Agent
is required to deduct and withhold with respect to the making of such payment
under the Code, or any provision of state, local or foreign tax law. To the
extent that amounts are so withheld by EWBC or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of UNB Common Stock in respect of which such
deduction and withholding was made by EWBC or the Exchange Agent.
SECTION
3.05 Anti-Dilution Provisions. In the event EWBC or UNB
changes (or establishes a record date for changing) the number of shares of EWBC
Common Stock or UNB Common Stock issued and outstanding prior to the Effective
Date as a result of a stock split, stock dividend, recapitalization or similar
transaction with respect to the outstanding EWBC Common Stock or UNB Common
Stock, as the case may be, and the record date therefore shall be prior to the
Effective Date, the Stock Portion and Per Share Stock Consideration shall be
proportionately adjusted. If, between the date hereof and the Effective Time,
EWBC shall merge, be acquired or consolidate with, by or into any other
corporation (a “Business Combination”) and the terms thereof shall provide that
EWBC Common Stock shall be converted into or exchanged for the shares of any
other corporation or entity, then provision shall be made as part of the terms
of such Business Combination so that shareholders of UNB who would be entitled
to receive shares of EWBC Common Stock pursuant to this Agreement shall be
entitled to receive, in lieu of each share of EWBC Common Stock issuable to such
shareholders as provided herein, the same kind and amount of securities or
assets as shall be distributable upon such Business Combination with respect to
one share of EWBC Common Stock (provided that nothing herein shall be construed
so as to release the acquiring entity in any such Business Combination from its
obligations under this Agreement as the successor to EWBC).
SECTION
3.06 Dissenters’ Rights.
(a) Any
Dissenting Shareholder who shall be entitled to be paid the value of such
shareholder’s shares of UNB Common Stock, as provided in 12 U.S.C. Section 214a,
shall not be entitled to the Merger Consideration in respect thereof provided
for under Section 3.02 unless and until such Dissenting Shareholder shall have
failed to perfect or shall have effectively withdrawn or lost such Dissenting
Shareholder’s right to dissent from the Merger under the National Bank Act, and
shall be entitled to receive only the payment provided for by 12
Section
U.S.C. 214a with respect to such Dissenters’ Shares.
(b) If
any Dissenting Shareholder shall fail to perfect or shall have effectively
withdrawn or lost such right to dissent, each share of UNB Common Stock of such
Dissenting Shareholder shall be converted at EWBC’s discretion into the right to
receive the Per Share Cash Consideration or the Per Share Stock Consideration to
be necessary or appropriate to preserve the status of the Merger as a
reorganization within the meaning of Section 368(a) of the Code.
ARTICLE
IV
ACTIONS
PENDING ACQUISITION
SECTION
4.01 Forbearances of UNB. From the date hereof until the
Effective Time, except as expressly contemplated by this Agreement, without the
prior written consent of EWBC, UNB will not and the Principal Shareholder will
cause UNB to not:
(a) Ordinary
Course. Except as set forth in UNB Disclosure Schedule 4.01(a), and pursuant
to the terms of Section 6.16 hereof, conduct the business of UNB other than in
the ordinary and usual course or fail to use its best efforts to preserve intact
its business organizations and assets and maintain its rights, franchises and
existing relations with customers, suppliers, employees and business associates,
take any action that would adversely affect or delay the ability of UNB, EWBC or
any Subsidiaries of EWBC to perform any of their obligations on a timely basis
under this Agreement, or take any action that would be reasonably likely to have
a Material Adverse Effect on UNB.
(b) Capital
Stock. (i) receive any new capital contribution; (ii) issue, sell or
otherwise permit to become outstanding, or authorize the creation of, any
additional shares of stock or any Rights, (iii) enter into any agreement with
respect to the foregoing or (iv) permit any additional shares of stock to become
subject to grants of employee or director stock options, other Rights or similar
stock-based employee rights.
(c) Dividends;
Etc. (i) Make, declare, pay or set aside for payment any dividend on or in
respect of, or declare or make any distribution on any shares of stock or (ii)
directly or indirectly adjust, split, combine, redeem, reclassify, purchase or
otherwise acquire, any shares of its capital stock.
(d) Compensation;
Employment Agreements; Etc. Enter into or amend or renew any employment,
consulting, severance or similar agreements or arrangements with any director,
officer or employee of UNB or grant any salary or wage increase or increase any
employee benefit (including incentive or bonus payments), except (i) for normal
individual increases in compensation to employees in the ordinary course of
business consistent with past practice, provided that no such increase shall
result in an annual adjustment of more than 5%, (ii) for other changes that are
required by applicable law, (iii) to satisfy contractual or other obligations
existing as of the date hereof and set forth in UNB Disclosure Schedule 4.01(d),
or (iv) for grants of awards to newly hired employees consistent with past
practice.
(e) Hiring
and Terminations. Hire any person as an employee of UNB or promote any
employee, except (i) to satisfy contractual or regulatory obligations existing
as of the date hereof and set forth in UNB Disclosure Schedule 4.01(e) and (ii)
persons hired to fill any vacancies arising after the date hereof and whose
employment is terminable at the will of UNB, other than any person to be hired
who would have a base salary, including any guaranteed bonus or any similar
bonus, considered on an annual basis of more than $50,000.
(f) Benefit
Plans. Enter into, establish, adopt or amend (except (i) as may be required
by applicable law or (ii) to satisfy contractual obligations existing as of the
date hereof and set forth in UNB Disclosure Schedule 4.01(f)) any pension,
retirement, stock option, stock purchase, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement (or
similar arrangement) related thereto, in respect of any employee, officer,
director, consultant or other service provider of UNB or take any action to
accelerate the vesting or exercisability of any stock options, restricted stock
or other compensation or benefits payable thereunder.
(g) Dispositions.
Except as set forth in UNB Disclosure Schedule 4.01(g), as permitted by Section
4.01(a) and in accordance with Section 6.17, sell, transfer, mortgage, encumber
or otherwise dispose of or discontinue any of its assets, deposits, business or
properties except in the ordinary course of business and in a transaction that,
together with all other such transactions, is not material to UNB.
(h) Acquisitions.
Acquire (other than by way of foreclosures or acquisitions of control in a bona
fide fiduciary capacity or in satisfaction of debts previously contracted in
good faith, in each case in the ordinary and usual course of business consistent
with past practice) all or any portion of the assets, business, deposits or
properties of any other entity except in the ordinary course of business
consistent with past practice and in a transaction that, together with all other
such transactions, is not material to UNB.
(i) Capital
Expenditures. Except as set forth in UNB Disclosure Schedule 4.01(i), make
any capital expenditures other than capital expenditures in the ordinary course
of business consistent with past practice in amounts not exceeding $25,000
individually or $50,000 in the aggregate.
(j) Governing
Documents. Amend UNB Articles or UNB By-Laws.
(k) Accounting
Methods. Implement or adopt any change in its accounting principles,
practices or methods, other than as may be required by GAAP.
(l) Contracts.
Except as set forth in UNB Disclosure Schedule 4.01(l), as permitted under
Section 4.01(a) or in accordance with Section 6.16, enter into, renew or
terminate, or make any payment not then required under, any contract or
agreement that calls for aggregate annual payments of $25,000 or more and which
is not terminable at will or with 60 days or less notice without payment of a
premium or penalty, other than loans and other transactions made in the ordinary
course of the banking business.
(m) Claims.
Enter into any settlement or similar agreement with respect to, or take any
other significant action with respect to the conduct of, any action, suit,
proceeding, order or investigation to which UNB is or becomes a party after the
date of this Agreement, which settlement, agreement or action involves payment
by UNB of an amount, individually or for all such settlements, that is material
to UNB and/or would impose any material restriction on the business of the
Surviving Bank or create precedent for claims that are reasonably likely to be
material to UNB.
(n) Adverse
Actions. Take any action which could result in (i) any of its
representations and warranties set forth in this Agreement being or becoming
untrue at any time at or prior to the Effective Time, (ii) any of the conditions
to the Merger set forth in Article 7 not being satisfied or (iii) a material
violation of any provision of this Agreement except as may be required by
applicable law or regulation.
(o) Risk
Management. Except as required by applicable law or regulation of the OCC,
(i) implement or adopt any material change in its interest rate and other risk
management policies, procedures or practices, (ii) fail to follow its existing
policies or practices with respect to managing its exposure to interest rate and
other risk or (iii) fail to use commercially reasonable means to avoid any
material increase in its aggregate exposure to interest rate risk.
(p) Indebtedness.
Incur any indebtedness for borrowed money (other than deposits, Federal Funds
borrowings and borrowings from the Federal Home Loan Bank of San Francisco) or
assume, guarantee, endorse or otherwise as an accommodation become responsible
for the obligations of any other Person.
(q) Loans.
Make any loan, loan commitment or renewal or extension thereof to any Person
which would, when aggregated with all outstanding loans, commitments for loans
or renewals or extensions thereof made to such Person and any affiliate or
immediate family member of such Person, exceed $1,000,000 (or $1,500,000 in the
case of renewals of existing, passed rated credit) without submitting complete
loan package information to the chief credit officer of EWB for review with a
right of comment at least two full Business Days prior to taking such action.
(r) Investments.
(i) Other than in the ordinary course of business consistent with past practice
in individual amounts not to exceed $1,000,000 or in securities transactions as
provided in (ii) below, make any investment either by contributions to capital,
property transfers or purchase of any property or assets of any Person or (ii)
other than purchases of direct obligations of the United States of America or
obligations of U.S. government agencies which are entitled to the full faith and
credit of the United States of America, in any case with a remaining maturity at
the time of purchase of two years or less, purchase or acquire securities of any
type; provided, however, that in the case of investment securities, UNB may
purchase investment securities if, within five Business Days after UNB requests
in writing (which shall describe in detail the investment securities to be
purchased and the price thereof) that EWB consent to making of any such
purchase, EWB has approved such request in writing or has not responded in
writing to such request.
(s) Taxes.
Take any action which would materially adversely affect the tax position of UNB
or its successor after the Merger.
(t) Commitments.
Agree or commit to do any of the foregoing.
SECTION
4.02 Forbearances of EWBC. From the date hereof until the
Effective Time, except as expressly contemplated by this Agreement, without the
prior written consent of UNB, EWBC will not, and will cause each of its
Subsidiaries not to:
(a) Ordinary
Course. Take any action reasonably likely to have an adverse effect on
EWBC’s ability to perform any of its material obligations under this Agreement.
(b) Adverse
Actions. Knowingly take any action that is intended or is reasonably likely
to result in (i) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time at or
prior to the Effective Time, (ii) any of the conditions to the Merger set forth
in Article 7 not being satisfied or (iii) a material violation of any provision
of this Agreement except as may be required by applicable law or regulation.
(c) Commitments.
Agree or commit to do any of the foregoing.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
SECTION
5.01 Disclosure Schedules. Except for the list of contracts
for UNB Disclosure Schedule 5.03(k) and the list of insurance policies, binders
and bonds for UNB Disclosure Schedule 5.03(s), each of which shall be delivered
within 10 days following the date of this Agreement, UNB shall deliver a
schedule to EWBC (the “UNB Disclosure Schedule”) and EWBC shall deliver a
schedule to UNB (the “EWBC Disclosure Schedule”), (collectively, the “Disclosure
Schedules”) on or prior to the date of this Agreement, setting forth, among
other things, items the disclosure of which is necessary or appropriate either
in response to an express disclosure requirement contained in a provision hereof
or as an exception to one or more representations or warranties contained in
Section 5.03, Section 5.04, or 5.05, respectively, or to one or more of their
respective covenants contained in Article VI. If delivered after the date
hereof, any material adverse disclosure not previously provided to EWBC shall
entitle EWBC to terminate the Agreement in its sole discretion as provided in
Article VIII; provided that any such material adverse disclosure shall not be
considered a breach of this Agreement. Items listed on the Disclosure Schedules
shall only be considered exceptions to the specific Sections for which such item
is scheduled.
SECTION
5.02 Standard. No representation or warranty of EWBC, EWB,
UNB or the Principal Shareholder contained in Sections 5.03, 5.04 or 5.05,
respectively, shall be deemed untrue or incorrect, and no party hereto shall be
deemed to have breached a representation or warranty, as a consequence of the
existence of any fact, event or circumstance unless such fact, circumstance or
event, individually or taken together with all other facts, events or
circumstances inconsistent with any representation or warranty contained in
Section 5.03, 5.04, or 5.05, has had or is reasonably likely to have a Material
Adverse Effect on the party making such representation or warranty.
SECTION
5.03 Representations and Warranties of UNB. Subject to
Sections 5.01 and 5.02 and except as set forth in the UNB Disclosure Schedule
with respect to a particular Section, UNB hereby represents and warrants to EWBC
and EWB:
(a) Organization,
Standing and Authority. UNB is a nationally chartered banking association
duly licensed by and in good standing with the OCC, and its deposits are insured
by the FDIC through the Bank Insurance Fund in the manner and to the fullest
extent provided by law.
(b) UNB
Capital Stock. As of the date hereof, the only authorized capital stock of
UNB consists of 5,000,000 shares of UNB Common Stock, of which 4,400,000 shares
are issued and outstanding. There are no shares of preferred stock authorized or
outstanding. As of the date hereof, no shares of UNB Common Stock were held in
treasury by UNB or otherwise owned by UNB. UNB has no stock option plan nor any
stock option issued or granted outstanding or exercisable. The outstanding
shares of UNB Common Stock have been duly authorized and are validly issued and
outstanding, and subject to no preemptive rights (and were not issued in
violation of any preemptive rights). There are no authorized shares of UNB
Common Stock that are reserved for issuance. UNB does not have any other Rights
issued or outstanding with respect to UNB Common Stock. UNB does not have any
commitment to authorize, issue or sell any UNB Common Stock.
(c) Subsidiaries;
Equity Investments.
(i) UNB
has no Subsidiaries.
(ii) UNB
does not own beneficially, directly or indirectly, any equity securities or
similar interests of any Person or any interests of any Person or any interest
in a partnership or joint venture of any kind, except as shown on UNB Disclosure
Schedule 5.03(c).
(d) Corporate
Power. UNB has the corporate power and authority to carry on its business as
it is now being conducted and to own all its properties and assets; and UNB has
the corporate power and authority and has taken all corporate action necessary
to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby.
(e) Corporate
Authority. As of the date hereof, with respect to each of clauses (i), (ii)
and (iii) below, UNB’s board of directors, by resolutions duly adopted by
unanimous vote at a meeting duly called and held, has duly (i) determined that
this Agreement and the Merger are advisable and fair to and in the best
interests of UNB and its shareholders, (ii) approved this Agreement and the
Merger and (iii) recommended that its shareholders approve this Agreement and
the Merger. Concurrently with the delivery and execution of this Agreement, the
Shareholders have approved the Agreement and the Merger by execution of the
Written Consent and no further shareholder approval or consent is required. UNB
has duly executed and delivered this Agreement and this Agreement is a valid and
legally binding obligation of UNB, enforceable in accordance with its terms
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors’ rights or by general equity
principles).
(f) Regulatory
Approvals; No Violations.
(i) No
consents or approvals of, or waivers by, or filings or registrations with, any
Governmental Authority or with any third party are required to be made or
obtained by UNB or any Subsidiary of UNB in connection with the execution,
delivery or performance by UNB of this Agreement or to consummate the Merger
except for (A) filings of applications or notices with, and approvals or waivers
by, the Federal Reserve Board, the FDIC, the OCC and any other Regulatory
Authority, as may be required, (B) filings with state securities authorities and
(C) the approval of this Agreement by the holders of two-thirds of the
outstanding shares of UNB Common Stock, voting as a single class on an
as-converted basis, which approval has been received. As of the date hereof, UNB
is not aware of any reason why the approvals set forth in Section 7.01(b) will
not be received without the imposition of a condition, restriction or
requirement of the type described in Section 7.01(b), except as described on UNB
Disclosure Schedule 5.03(f).
(ii) Subject
to receipt of the approvals referred to in the preceding paragraph, and the
expiration of related waiting periods, and required filings under federal and
state securities laws, the execution, delivery and performance of this Agreement
by UNB and the consummation of the transactions contemplated hereby and thereby
do not and will not (A) constitute a breach or violation of, or a default under,
or give rise to any Lien, any acceleration of remedies or any right of
termination under, any law, rule or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture or instrument of UNB or
to which UNB or any of its respective properties is subject or bound, (B)
constitute a breach or violation of, or a default under, the UNB Articles or the
UNB By-Laws (or similar governing documents), or (C) require any consent or
approval under any such law, rule, regulation, judgment, decree, order,
governmental permit or license, agreement, indenture or instrument.
(g) Financial
Reports; Undisclosed Liabilities.
(i) The
consolidated balance sheet of UNB as of December 31, 2004, and the related
consolidated statements of income, cash flow and changes in financial position
of UNB for the three years then ended, audited by Deloitte & Touche LLP,
fairly present the financial position of UNB as of such dates and the results of
the operations of UNB for the periods then ended, all in accordance with GAAP
consistently applied (or in accordance with regulatory accounting principles to
the extent different from GAAP and required by a Regulatory Authority to which
UNB is subject). The books and records of UNB have been, and are being,
maintained in accordance with GAAP and any other applicable legal and accounting
requirements.
(ii) UNB
has timely filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, required to be filed since
December 31, 2002 with any Regulatory Authority (collectively, the “Regulatory
Filings”) and all other material reports and statements required to be filed by
it since December 31, 2002, including, without limitation, any report or
statement required to be filed pursuant to the laws of the United States and the
rules and regulations of the FDIC and any other Regulatory Authority, and has
paid all fees and assessments due and payable in connection therewith. As of
their respective dates, such reports, registrations and statements complied in
all material respects with all the laws, rules and regulations of the applicable
Regulatory Agency with which they were filed.
(iii) Since
December 31, 2004, UNB has not incurred any liability other than in the ordinary
course of business consistent with past practice or as otherwise contemplated by
this Agreement.
(iv) Since
December 31, 2004, (A) UNB has conducted its business in the ordinary and usual
course consistent with past practice (excluding the incurrence of expenses
related to this Agreement and the transactions contemplated hereby) and (B) no
event has occurred or circumstance arisen that, individually or taken together
with all other facts, circumstances and events (described in any paragraph of
this Section 5.03 or otherwise), has had or could be reasonably likely to have a
Material Adverse Effect with respect to UNB.
(h) Litigation.
Except as set forth on UNB Disclosure Schedule 5.03(h), no litigation, claim or
other proceeding before any court or governmental agency is pending against UNB
and, to UNB’s knowledge, no such litigation, claim or other proceeding has been
threatened and there are no facts which could reasonably give rise to such
litigation, claim or other proceeding.
(i) Regulatory
Matters. Except as set forth on UNB Disclosure Schedule 5.03(i):
(i) UNB
is not, directly or indirectly, party to or subject to any order, decree,
agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary supervisory letter
from, any federal or state governmental agency or authority charged with the
supervision or regulation of financial institutions or issuers of securities or
engaged in the insurance of deposits (including, without limitation, the FDIC)
or the supervision or regulation of it (collectively, the “Regulatory
Authorities”). UNB has paid all assessments made or imposed by any Regulatory
Authority.
(ii) UNB
has not been advised by, nor does it have any knowledge of facts which could
give rise to an advisory notice by, any Regulatory Authority that such
Regulatory Authority is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, commitment letter, supervisory letter or similar
submission.
(j) Compliance
With Laws. Except as set forth on UNB Disclosure Schedule 5.03(j), UNB:
(i) is
in compliance with all applicable federal, state, local and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders or decrees applicable
thereto or to the employees conducting such businesses, including, without
limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act, the Home Mortgage Disclosure Act, the Bank Secrecy
Act, Title III of the USA Patriot Act and all other applicable fair lending laws
and other laws relating to discriminatory business practices;
(ii) has
all permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, all Governmental Authorities that
are required in order to permit it to own or lease its properties and to conduct
its businesses as presently conducted; all such permits, licenses, certificates
of authority, orders and approvals are in full force and effect and, to UNB’s
knowledge, no suspension or cancellation of any of them is threatened; and
(iii) has
received, since December 31, 2004, no notification or communication from any
Governmental Authority (A) asserting that UNB is not in compliance with any of
the statutes, regulations or ordinances which such Governmental Authority
enforces or (B) threatening to revoke any license, franchise, permit or
governmental authorization (nor, to UNB’s knowledge, do any grounds for any of
the foregoing exist).
(k) Contracts;
Defaults.
(i) Except
as set forth on UNB Disclosure Schedule 5.03(k), UNB is not a party to, bound by
or subject to any agreement, contract, arrangement, commitment or understanding
(whether written or oral) (i) that is a “material contract” within the meaning
of Item 601(b)(10) of the SEC’s Regulation S-K or (ii) that materially restricts
the conduct of business by UNB. Except as set forth on UNB Disclosure Schedule
5.03(k), UNB is not in default under any contract, agreement, commitment,
arrangement, lease, insurance policy or other instrument to which it is a party,
by which its assets, business, or operations may be bound or affected, or under
which it or its assets, business, or operations receives benefits, and there has
not occurred any event that, with the lapse of time or the giving of notice or
both, would constitute such a default. No power of attorney or similar
authorization given directly or indirectly by UNB is currently outstanding. UNB
Disclosure Schedule 5.03(k) also sets forth a true and complete list of all
third party consents or waivers required to be obtained so as not to be in
default under any contract, agreement, commitment, arrangement, lease, insurance
policy or other instrument to which UNB is a party as a result of the
transaction contemplated hereby.
(ii) UNB
is not party to any oral or written (A) consulting agreement not terminable on
30 days’ or less notice, (B) agreement with any executive officer or other key
employee of UNB the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving UNB of the
nature contemplated by this Agreement, (C) agreement with respect to any
employee of UNB providing any term of employment or compensation guarantee, (D)
agreement or plan, including any stock option plan, stock appreciation rights
plan, restricted stock plan or stock purchase plan, any of the benefits of which
will be increased, or the vesting of the benefits of which will be accelerated,
by the occurrence of any of the transactions contemplated by this Agreement or
the value of any of the benefits of which will be calculated on the basis of any
of the transactions contemplated by this Agreement, (E) agreement which requires
the payment of referral fees or commissions or other fees in connection with
deposits, loans or any other business, (F) agreement containing covenants that
limit the ability of UNB to compete in any line of business or with any person,
or that involves any restriction on the geographic area in which, or method by
which, UNB may carry on its business (other than as may be required by law or
any Regulatory Authorities) or exclusive dealing contract that limits the
ability of UNB to contract with certain persons or to directly engage in certain
activities, or (G) agreement which requires further payments over the remaining
term of the contract in excess of $100,000.
(l) No
Brokers. No action has been taken by UNB that would give rise to any valid
claim against any party hereto for a brokerage commission, finder’s fee or other
like payment with respect to the transactions contemplated by this Agreement.
(m) Employee
Benefit Plans.
(i) All
benefit and compensation plans, contracts, policies or arrangements covering
current or former employees, including officers, of UNB and current or former
directors, consultants and other service providers of UNB including, but not
limited to, “employee benefit plans” within the meaning of Section 3(3) of
ERISA, and deferred compensation, stock option, stock purchase, stock
appreciation rights, stock based, incentive and bonus plans (the “Benefit
Plans”), are set forth in UNB Disclosure Schedule 5.03(m). True and complete
copies of all Benefit Plans and all amendments thereto and all documents related
thereto have been provided or made available to EWBC, including but not limited
to (i) the Form 5500 for each Benefit Plan (if applicable) for each of the three
most recent plan years for which such forms are required to have been filed,
(ii) the most recent determination letter from the IRS (if applicable) for such
Benefit Plan, (iii) a copy of the most recent summary plan description required
for such Benefit Plan under ERISA (if applicable), (iv) a copy of the trust
instruments(s), insurance contract(s) and other funding agreement(s) forming a
part of any Benefit Plan, and (v) the latest financial statements of the Benefit
Plan (if applicable).
(ii) All
Benefits Plans have been operated and administered in accordance with their
terms and applicable law, including, but not limited to, ERISA and the Code.
Except as set forth on UNB Disclosure Schedule 5.03(m)(ii), each Benefit Plan
which is an “employee pension benefit plan” within the meaning of Section 3(2)
of ERISA (“Pension Plan”) and which is intended to be qualified under Section
401(a) of the Code does so qualify, and UNB has received a favorable
determination letter from the Internal Revenue Service with respect to such
qualification covering all tax law changes with respect to which Internal
Revenue Service determination letters can be issued, and no circumstances have
occurred that are likely to result in revocation of any such favorable
determination letter or the loss of the qualification of such Pension Plan under
Section 401(a) of the Code. There is no pending or threatened litigation
relating to any of the Benefits Plans. Neither UNB nor any ERISA Affiliate (as
defined below) has engaged in a transaction, taken any action or failed to take
any action or to meet any requirement with respect to any Benefit Plan or
Pension Plan that, assuming the taxable period of such transaction expired as of
the date hereof, could subject UNB to a tax or penalty imposed by any of
Sections 4971, 4972, 4975, 4976, 4977, 4978, 4979, 4980, 4980B, 4980D, 4980E,
4980F, or 4980G, of the Code or Sections 409 or 502(i) of ERISA.
(iii) No
liability under of Title IV of ERISA has been or is expected to be incurred by
UNB with respect to any ongoing, frozen or terminated “single-employer plan”,
within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by it, or the single-employer plan of any entity which is considered
one employer with UNB under Section 4001 of ERISA or Section 414 of the Code (an
“ERISA Affiliate”), and UNB is not aware of any condition that presents a
significant risk to UNB or any ERISA Affiliate of incurring any liability
thereunder. Neither UNB nor any ERISA Affiliate has ever participated in any
“multiemployer plan” within the meaning of Section 3(37) of ERISA. UNB has
not incurred, and does it not expect to incur, any withdrawal liability with
respect to a multiemployer plan under Subtitle E of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate). No notice
of a “reportable event,” within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived, has been required to be
filed for any Pension Plan or by any ERISA Affiliate within the 12-month period
ending on the date hereof or will be required to be filed in connection with the
transactions contemplated by this Agreement.
(iv) All
contributions required to be made under the terms of any Benefit Plan have been
timely made. All contributions to each Benefit Plan in respect of all current
and prior plan years have been accrued in accordance with GAAP and are reflected
in UNB’s financial statements. Neither any Pension Plan nor any single-employer
plan of an ERISA Affiliate has an “accumulated funding deficiency” (whether or
not waived) within the meaning of Section 412 of the Code or Section 302 of
ERISA, and neither UNB nor any ERISA Affiliate has an outstanding funding
waiver. UNB has not provided, nor is it required to provide, security to any
Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Code.
(v) Under
each Pension Plan which is a single-employer plan, as of the last day of the
most recent plan year ended prior to the date hereof, the actuarially determined
present value of all “benefit liabilities,” within the meaning of Section
4001(a)(16) of ERISA (as determined on the basis of the actuarial assumptions
contained in the Pension Plan’s most recent actuarial valuation and on a
termination basis), did not exceed the lesser of the actuarial value or the then
current value of the assets of such Pension Plan, and there has been no material
change in the financial condition of such Pension Plan since the last day of the
most recent plan year.
(vi) UNB
has no obligations to provide any current or former employee, officer, director,
consultant or other service provider health, disability or life benefits beyond
his or her retirement or other termination of service under any Benefit Plan,
other than healthcare continuation coverage mandated by applicable law. UNB may
amend or terminate any Benefit Plan at any time without incurring any liability
thereunder.
(vii) Except
as set forth on UNB Disclosure Schedule 5.03(m)(vii), none of the execution of
this Agreement, shareholder approval of this Agreement or consummation of the
transactions contemplated by this Agreement will, either alone or in combination
with any other event, (A) entitle any current or former employee, officer,
director, consultant or other service provider of UNB to severance pay or any
other payment or benefit, or any increase in severance pay or any other payment
or benefit upon any termination of employment or other relationship after the
date hereof, (B) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of compensation or
benefits under, increase the amount payable or trigger any other material
obligation pursuant to, any of the Benefit Plans, (C) result in any breach or
violation of, or a default under, any of the Benefit Plans or (D) result in any
payment that would be a “parachute payment” to a “disqualified individual” as
those terms are defined in Section 280G of the Code, without regard to whether
such payment is reasonable compensation for personal services performed or to be
performed in the future. UNB Disclosure Schedule 5.03(m)(vii) categorizes any
such exceptions according to the categories above and sets forth the amounts of
any such payments to the persons listed thereon.
(viii) No
Benefit Plan that is subject to section 409A of the Code fails to meet any
requirement of section 409A of the Code that would result in any Benefit Plan
participant having liability for additional interest or the 20% addition to tax
under such section of the Code.
(n) Labor
Matters. UNB is not a party to nor bound by any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor organization, nor is it the subject of a proceeding asserting that it has
committed an unfair labor practice (within the meaning of the National Labor
Relations Act) or seeking to compel UNB to bargain with any labor organization
as to wages or conditions of employment, nor is there any strike or other labor
dispute involving it or, to UNB’s knowledge, threatened, nor is UNB aware of any
activity involving its employees seeking to certify a collective bargaining unit
or engaging in other organizational activity.
(o) Environmental
Matters. (i) UNB has complied at all times with applicable Environmental
Laws; (ii) no real property (including buildings or other structures) currently
or formerly owned or operated by UNB, or any property in which UNB has held a
security interest, Lien or a fiduciary or management role (“UNB Loan Property”),
has been contaminated with, or has had any release of, any Hazardous Substance
that could reasonably be expected to result in liability to UNB arising out of
any Environmental Law; (iii) neither UNB nor any Subsidiary of UNB could be
deemed the owner or operator of any UNB Loan Property under any Environmental
Law which such UNB Loan Property has been contaminated with, or has had any
release of, any Hazardous Substance; (iv) UNB is not subject to liability for
any Hazardous Substance disposal or contamination on any third party property;
(v) UNB has not received any notice, demand letter, claim or request for
information alleging any violation of, or liability under, any Environmental
Law; (vi) UNB is not subject to any order, decree, injunction or other agreement
with any Governmental Authority or any third party relating to any Environmental
Law; (vii) there are no circumstances or conditions (including the presence of
asbestos, underground storage tanks, lead products, polychlorinated biphenyls,
prior manufacturing operations, dry-cleaning, or automotive services) involving
UNB, any currently or formerly owned or operated property, or any UNB Loan
Property, that could reasonably be expected to result in any claims, liability
or investigations against UNB, result in any restrictions on the ownership, use,
or transfer of any property pursuant to any Environmental Law, or adversely
affect the value of any UNB Loan Property and (viii) UNB has made available to
EWBC copies of all environmental reports, studies, sampling data,
correspondence, filings and other environmental information in its possession or
reasonably available to it relating to UNB, and any currently or formerly owned
or operated property or any UNB Loan Property.
As used
herein, the term “Environmental Laws” means any federal, state or local law,
regulation, order, decree, permit, authorization, opinion, common law or agency
requirement relating to: (A) the protection or restoration of the environment,
health, safety, or natural resources, (B) the handling, use, presence, disposal,
release or threatened release of any Hazardous Substance or (C) noise, odor,
wetlands, indoor air, pollution, contamination or any injury or threat of injury
to persons or property in connection with any Hazardous Substance and the term
“Hazardous Substance” means any substance in any concentration that is: (A)
listed, classified or regulated pursuant to any Environmental Law, (B) any
petroleum product or by-product, asbestos-containing material, lead-containing
paint or plumbing, polychlorinated biphenyls, radioactive materials or radon or
(C) any other substance which is or may be the subject of regulatory action by
any Governmental Authority in connection with any Environmental Law.
(p) Tax
Matters.
(i) Except
as set forth UNB Disclosure Schedule 5.03(p)(i), UNB has:
(A) duly
and timely filed (including applicable extensions granted without penalty) all
Tax Returns required to be filed by it, and such Tax Returns are true, correct
and complete;
(B) timely
paid in full all Taxes required to be paid by it; and
(C) made
adequate provision in the financial statements of UNB (in accordance with GAAP)
for all Taxes not yet due.
(ii) Except
as set forth in UNB Disclosure Schedule 5.03(p)(ii), no deficiencies for any
Taxes have been proposed, asserted, assessed or, threatened in writing against
or with respect to UNB.
(iii) Except
as set forth in UNB Disclosure Schedule 5.03(p)(iii) of the:
(A) there
are no Liens for Taxes upon the assets of UNB except for statutory Liens for
current Taxes not yet due;
(B) UNB
has not requested any extension of time within which to file any Tax Returns in
respect of any fiscal year which have not since been filed and no request for
waivers of the time to assess any Taxes are pending or outstanding;
(C) no
federal, state, local or foreign audits or other administrative proceedings or
court proceedings are presently pending with regard to any Taxes (other than
federal or state income Taxes) of UNB, and UNB has not received a written notice
of any claims, audits or proceedings with respect to such Taxes;
(D) with
respect to each taxable period of UNB, the federal and state income Tax Returns
of UNB have not been audited by the Internal Revenue Service or appropriate
state tax authorities or the time for assessing and collecting income Tax with
respect to such taxable period has closed and such taxable period is not subject
to review;
(E) UNB
has not filed or been included in a combined, consolidated or unitary income Tax
Return other than one in which UNB was the parent of the group filing such Tax
Return;
(F) UNB
is not a party to any agreement providing for the allocation, sharing, or
indemnification of Taxes;
(G) UNB
is not required to include in income any adjustment pursuant to Section 481(a)
of the Code (or any similar or corresponding provision or requirement of state,
local or foreign income Tax law), by reason of the voluntary change in
accounting method (nor has any taxing authority proposed any such adjustment or
change of accounting method);
(H) no
closing agreements, private letter rulings, technical advice memoranda or
similar agreement or ruling have been entered into or issued by any taxing
authority with respect to UNB within five years of the date of this Agreement,
and no such agreement or ruling has been applied for and is currently pending;
(I) UNB
has not made any Tax election or change in Tax election, amended any Tax Returns
or entered into any settlement or compromise of any income tax liability of UNB;
(J) UNB
has not granted in writing any power of attorney which is currently in force
with respect to any Taxes or Tax Returns;
(K) UNB
has not constituted either a “distributing corporation” or a “controlled
corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a
distribution of stock to which Section 355 of the Code (or so much of Section
356 of the Code as relates to Section 355 of the Code) applies and which
occurred within two years of the date of this Agreement;
(L) no
claim has been made in writing in any jurisdiction where UNB does not file Tax
Returns that any such entity is, or may be, subject to Tax by that
jurisdiction;
(M) UNB
has not filed a consent pursuant to Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as such term is defined in Section 341(f)(4) of the Code) owned by UNB;
(N) UNB
has not executed or entered into a closing agreement pursuant to Section 7121 of
the Code or any predecessor provision thereof or any similar provision of state,
local or foreign law;
(O) UNB
has not been a “United States real property holding corporation” within the
meaning of Section 897(c)(2) during the applicable period specified in
897(c)(1)(A)(ii) of the Code;
(P) UNB
has not engaged in a “reportable transaction” within the meaning of Treasury
Regulations Section 1.6011-4; and
(Q) as
of the date hereof, UNB has no reason to believe that any conditions exist or
will exist that might prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
(q) Risk
Management Instruments. UNB is not a party to nor has it agreed to enter
into an exchange traded or over-the-counter equity, interest rate, foreign
exchange or other swap, forward, future, option, cap, floor or collar or any
other contract that is not included on the balance sheet and is a derivatives
contract (including various combinations thereof) (each, a “Derivatives
Contract”) or owns securities that (i) are referred to generically as
“structured notes,” “high risk mortgage derivatives,” “capped floating rate
notes” or “capped floating rate mortgage derivatives” or (ii) are likely to have
changes in value as a result of interest or exchange rate changes that
significantly exceed normal changes in value attributable to interest or
exchange rate changes, except for those Derivatives Contracts and other
instruments legally purchased or entered into in the ordinary course of
business, consistent with safe and sound banking practices and regulatory
guidance. All of such Derivatives Contracts or other instruments, are legal,
valid and binding obligations of UNB, as the case may be, enforceable in
accordance with their terms (except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting creditors’ rights and
remedies generally), and are in full force and effect. UNB has duly performed in
all material respects all of their material obligations thereunder to the extent
that such obligations to perform have accrued; and, to UNB’s knowledge, there
are no breaches, violations or defaults or allegations or assertions of such by
any party thereunder which have had or could reasonably be expected to have a
Material Adverse Effect on UNB.
(r) Books
and Records. The books and records of UNB have been fully, properly and
accurately maintained in all material respects, and there are no material
inaccuracies or discrepancies of any kind contained or reflected therein, and
they fairly present the financial position of UNB.
(s) Insurance.
UNB Disclosure Schedule 5.03(s) sets forth a true and complete list of all of
the insurance policies, binders, or bonds maintained by UNB (“Insurance
Policies”). UNB is insured with reputable insurers against such risks and in
such amounts as the management of UNB reasonably has determined to be prudent in
accordance with industry practices against such risks as companies engaged in a
similar business would customarily be insured. Insurance applications for
policies that are currently in force are complete and accurate. All the
Insurance Policies are in full force and effect; UNB is not in material default
thereunder; and all claims thereunder have been filed in due and timely fashion.
(t) Allowance
For Loan Losses. UNB’s Allowance for Loan Losses (“ALL”) is, and shall be as
of the Effective Date, in compliance with UNB’s existing methodology for
determining the adequacy of its ALL as well as the standards established by
applicable Governmental Authorities and the Financial Accounting Standards Board
and is and shall be adequate under all such standards.
(u) Trust
Business. UNB does not have trust powers.
(v) Real
Property.
(i) UNB
Disclosure Schedule 5.03(v) contains a complete and correct list of (A) all real
property or premises owned on the date hereof, in whole or in part by UNB and
all indebtedness secured by any encumbrance thereon, and (B) all real property
or premises leased in whole or in part by UNB and together with a list of all
applicable leases and the name of the lessor. None of such premises or
properties have been condemned or otherwise taken by any public authority and no
condemnation or taking is threatened or contemplated and none thereof is subject
to any claim, contract or law which might affect its use or value for the
purposes now made of it. None of the premises or properties of UNB is subject to
any current or potential interests of third parties or other restrictions or
limitations that would impair or be inconsistent in any material respect with
the current use of such property by UNB, as the case may be.
(ii) Each
of the leases referred to in the UNB Disclosure Schedule is valid and existing
and in full force and effect, and no party thereto is in default and no notice
of a claim of default by any party has been delivered to UNB or is now pending,
and there does not exist any event that with notice or the passing of time, or
both, would constitute a default or excuse performance by any party thereto,
provided that with respect to matters relating to any party other than UNB, the
foregoing representation is based on the knowledge of UNB and the knowledge of
UNB.
(w) Title.
UNB has good title to its properties and assets (other than (i) property as
to which it is lessee and (ii) real estate owned as a result of foreclosure,
transfer in lieu of foreclosure or other transfer in satisfaction of a debtor’s
obligation previously contracted) except (1) statutory Liens not yet delinquent
which are being contested in good faith by appropriate proceedings, and Liens
for taxes not yet due, (2) pledges of assets in the ordinary course of business
to secure public deposits, (3) for those assets and properties disposed of for
fair value in the ordinary course of business since the date of UNB’s call
report dated as of and for the quarter ended March 31, 2005 and (4) defects and
irregularities of title and encumbrances that do not materially impair the use
thereof for the purposes for which they are held.
(x) Intellectual
Property. UNB owns or possesses valid and binding licenses and other rights
to use (without payment) all material trade secrets, trade names, trademarks,
service marks, inventions and processes used in its businesses; and UNB has
received no notice of conflict with respect thereto that asserts a right of
others. UNB has in all material respects performed all the obligations required
to be performed by it and is not in default in any material respect under any
contract, agreement, arrangement or commitment relating to any of the
foregoing.
(y) Past
Actions. UNB has not extended or renewed any extension of credit in material
violation of its applicable policies, applicable laws, regulations or
administrative orders or interpretations. Since December 31, 2003, there have
not been any acts of dishonesty, self-dealing or any breach of any statutory,
contractual or fiduciary duties, or duty of loyalty on the part of any of the
directors, or officers of UNB in connection with their duties and
responsibilities at UNB.
SECTION
5.04 Principal Shareholder Representations. Subject to
Section 5.02, the Principal Shareholder hereby represents and warrants to EWBC
and EWB:
(a) The
Principal Shareholder is the record holder or beneficial owner of 4,399,500
shares of UNB Common Stock and has sole voting power and sole power to issue
voting instructions, sole power to demand appraisal rights and sole power to
enter into this Agreement and perform the obligations of the Principal
Shareholder with respect to said shares provided in this Agreement, with no
restrictions on voting rights, rights of disposition or otherwise, subject to
applicable laws and the terms of this Agreement.
(b) The
EWBC Common Stock to be acquired by the Principal Shareholder pursuant to this
Agreement and the Merger shall be acquired for investment and for the Principal
Shareholder’s own account, and not with a view to distribution, resale, pledge
or other disposition. The Principal Shareholder hereby makes the further
representations and warranties set forth in the Investor Letter, attached hereto
as Exhibit E (the “Investor Letter”).
SECTION
5.05 Representations and Warranties of EWBC and EWB. Subject
to Sections 5.01 and Section 5.02, EWBC and EWB jointly and severally,
hereby represent and warrant to UNB as follows (provided that EWB does not make
any representations and warranties as to EWBC):
(a) Organization,
Standing and Authority of EWBC. EWBC is duly organized, validly existing and
in good standing under the laws of the State of Delaware. EWBC is duly qualified
to do business and is in good standing in the states of the United States and
foreign jurisdictions where its ownership or leasing of property or assets or
the conduct of its business requires it to be so qualified. EWBC has in effect
all federal, state, local, and foreign governmental authorizations necessary for
it to own or lease its properties and assets and to carry on its business as it
is now conducted.
(b) Organization,
Standing and Authority of EWB. EWB is duly licensed by and in good standing
with the Commissioner, and its deposits are insured by the Bank Insurance Fund
or the Savings Association Insurance Fund in the manner and to the fullest
extent provided by law. EWB is duly authorized to conduct a general banking
business and is qualified and in good standing in the states of the United
States and foreign jurisdictions where its ownership or leasing of property or
assets or the conduct of its business requires it to be so qualified. EWB has in
effect all federal, state, local, and foreign governmental authorizations
necessary for it to own or lease its properties and assets and to carry on its
banking business as it is now conducted.
(c) EWBC
Stock.
(i) As
of the date hereof, the authorized capital stock of EWBC consists solely of
200,000,000 shares of EWBC Common Stock, of which no more than 52,688,492 shares
are issued and outstanding, and 5,000,000 shares of EWBC Preferred Stock, of
which no shares are issued and outstanding.
(ii) As
of the date hereof, the authorized capital stock of EWB consists of 50,000,000
shares of EWB Common Stock, of which 23,775,000 are issued and outstanding.
(iii) The
shares of EWBC Common Stock to be issued in exchange for shares of UNB Common
Stock in the Merger, when issued in accordance with the terms of this Agreement,
will be duly authorized, validly issued, fully paid and nonassessable and the
issuance thereof is not subject to any preemptive right.
(d) Subsidiaries.
Each of EWBC’s Subsidiaries has been duly organized and is validly existing in
good standing under the laws of the jurisdiction of its organization, and is
duly qualified to do business and in good standing in the jurisdictions where
its ownership or leasing of property or the conduct of its business requires it
to be so qualified and it owns, directly or indirectly, all the issued and
outstanding equity securities of each of its Significant Subsidiaries.
(e) Corporate
Power. EWBC and each of its Subsidiaries has the corporate power and
authority to carry on its business as it is now being conducted and to own all
its properties and assets; each of EWBC and EWB has the corporate power and
authority to execute, deliver and perform their obligations under this Agreement
and to consummate the transactions contemplated hereby.
(f) Corporate
Authority. This Agreement and the transactions contemplated hereby have been
authorized by all necessary corporate action of the boards of directors of EWBC
and EWB. This Agreement has been duly executed and delivered by each of EWBC and
EWB and this Agreement is a valid and legally binding agreement of EWBC and EWB
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors’ rights or by general equity principles).
(g) Regulatory
Approvals; No Violations.
(i) No
consents or approvals of, or waivers by, or filings or registrations with, any
Governmental Authority or with any third party are required to be made or
obtained by EWBC or any of its Subsidiaries in connection with the execution,
delivery or performance by EWBC or EWB of this Agreement or to consummate the
Merger except for (A) filings of applications or notices with and approvals
or waivers by the Federal Reserve Board, the FDIC, the OCC, the California
Secretary and the Commissioner, as may be required, (B) filings with the
SEC and state securities authorities, as may be required, (C) the approval of
the listing on Nasdaq of the EWBC Common Stock to be issued in the Merger, (D)
such filings as are required to be made or approvals as are required to be
obtained under the securities or “Blue Sky” laws of various states in connection
with the issuance of EWBC Common Stock in the Merger, and (E) the filing of the
executed Agreement of Merger with the Commissioner. As of the date hereof, EWBC
is not aware of any reason why the approvals set forth in Section 7.01(b)
will not be received in a timely manner and without the imposition of a
condition, restriction or requirement of the type described in Section 7.01(b).
(ii) Subject
to receipt, or the making, of the consents, approvals and filings referred to in
the preceding paragraph and expiration of the related waiting periods, the
execution, delivery and performance of this Agreement by EWBC and EWB and the
consummation of the transactions contemplated hereby do not and will not (A)
constitute a breach or violation of, or a default under, or give rise to any
Lien, any acceleration of remedies or any right of termination under, any law,
rule or regulation or any judgment, decree, order, governmental permit or
license, or Agreement, indenture or instrument of EWBC or of any of its
Subsidiaries or to which EWBC or any of its Subsidiaries or properties is
subject or bound, (B) constitute a breach or violation of, or a default
under, the EWBC Articles or EWBC By-Laws (or similar governing documents) or any
of its Subsidiaries or (C) require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental permit or license,
agreement, indenture or instrument.
(h) Regulatory
Matters. Except as set forth on EWBC Disclosure Schedule 5.05(h):
(i) None
of EWBC or any of its Subsidiaries are, directly or indirectly, party to or
subject to any order, decree, agreement, memorandum of understanding or similar
arrangement with, or a commitment letter or similar submission to, or
extraordinary supervisory letter from any Regulatory Authority. EWBC and its
Subsidiaries have paid all assessments made or imposed by any Regulatory
Authority.
(ii) Neither
EWBC or any of its Subsidiaries have been advised by, or have any knowledge of
facts which could give rise to an advisory notice by, any Regulatory Authority
that such Regulatory Authority is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, commitment letter, supervisory
letter or similar submission.
(i) Financial
Reports and SEC Documents; Material Adverse Effect.
(i) EWBC’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and all
other reports, registration statements, definitive proxy statements or
information statements filed or to be filed by it subsequent to December 31,
2004 under the Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act in the form filed or to be filed (collectively, EWBC’s “SEC
Documents”) with the SEC, as of the date filed or to be filed, (A) complied or
will comply in all material respects as to form with the applicable requirements
under the Securities Act or the Exchange Act, as the case may be and
(B) did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; and each of the balance sheets contained in or
incorporated by reference into any such SEC Document (including the related
notes and schedules thereto) fairly presents, or will fairly present, the
financial position of EWBC and its Subsidiaries as of its date, and each of the
statements of income and changes in shareholders’ equity and cash flows or
equivalent statements in such SEC Documents (including any related notes and
schedules thereto) fairly presents, or will fairly present, the results of
operations, changes in shareholders’ equity and changes in cash flows, as the
case may be, of EWBC and its Subsidiaries for the periods to which they relate,
in each case in accordance with GAAP consistently applied during the periods
involved, except in each case as may be noted therein.
(ii) Since
December 31, 2004, EWBC and its Subsidiaries have conducted their respective
businesses in the ordinary and usual course consistent with past practice
(excluding the incurrence of expenses related to this Agreement and the
transactions contemplated hereby) and no event has occurred or circumstance
arisen that, individually or taken together with all other facts, circumstances
and events (described in any paragraph of this Section 5.05 or otherwise), is
reasonably likely to have a Material Adverse Effect with respect to EWBC or its
Subsidiaries.
(iii) Except
as disclosed on EWBC Disclosure Schedule 5.05(p), since December 31, 2004,
neither EWBC nor any of its Subsidiaries have incurred any liability other than
in the ordinary course of business consistent with past practice or as otherwise
contemplated by this Agreement.
(j) Litigation.
Except as set forth on EWBC Disclosure Schedule 5.05(j), no litigation, claim or
other proceeding before any court or governmental agency is pending against EWBC
or its Subsidiaries, and to EWBC and its Subsidiaries’ knowledge, no such
litigation, claim or other proceeding has been threatened and there are no facts
which could reasonably give rise to such litigation, claim or other proceeding.
(k) No
Brokers. No action has been taken by EWBC or its Subsidiaries that would
give rise to any valid claim against any party hereto for a brokerage
commission, finder’s fee or other like payment with respect to the transactions
contemplated by this Agreement.
(l) Environmental
Matters. (i) EWBC and its Subsidiaries have complied at all times with
applicable Environmental Laws; (ii) no real property (including buildings or
other structures) currently or formerly owned or operated by EWBC or any of its
Subsidiaries, or any property in which EWBC or any of its Subsidiaries has held
a security interest, Lien or a fiduciary or management role (collectively, “EWBC
Loan Property”), has been contaminated with, or has had any release of, any
Hazardous Substance; (iii) neither EWBC nor any of its Subsidiaries could be
deemed the owner or operator of any EWBC Loan Property under any Environmental
Law which such EWBC Loan Property has been contaminated with, or has had any
release of, any Hazardous Substance; (iv) neither EWBC nor any of its
Subsidiaries is subject to liability for any Hazardous Substance disposal or
contamination on any third party property; (v) neither EWBC nor any of its
Subsidiaries has received any notice, demand letter, claim or request for
information alleging any violation of, or liability under, any Environmental
Law; (vi) neither EWBC nor any of its Subsidiaries is subject to any order,
decree, injunction or other agreement with any Governmental Authority or any
third party relating to any Environmental Law; and (vii) to EWBC’s
knowledge, there are no circumstances or conditions (including the presence of
asbestos, underground storage tanks, lead products, polychlorinated biphenyls,
prior manufacturing operations, dry-cleaning, or automotive services) involving
EWBC or its Subsidiaries, any currently or formerly owned or operated property,
or any EWBC Loan Property, that could reasonably be expected to result in any
claims, liability or investigations against EWBC or its Subsidiaries, result in
any restrictions on the ownership, use, or transfer of any property pursuant to
any Environmental Law, or adversely affect the value of any EWBC Loan Property.
(m) Insurance.
EWBC and its Subsidiaries are insured with reputable insurers against such risks
and in such amounts as the management of EWBC and its Subsidiaries reasonably
has determined to be prudent in accordance with industry practices against such
risks as companies engaged in a similar business would customarily be insured.
Insurance applications for policies that are currently in force are complete and
accurate. All the insurance policies binders, or bonds maintained by EWBC and
its Subsidiaries are in full force and effect; neither EWBC nor its Subsidiaries
are in material default thereunder; and all claims thereunder have been filed in
due and timely fashion.
(n) Past
Actions. EWB has not extended or renewed any extension of credit in material
violation of its applicable policies, applicable laws, regulations or
administrative orders or interpretations. Since December 31, 2003, there have
not been any acts of dishonesty, self-dealing or any breach of any statutory,
contractual or fiduciary duties, or duty of loyalty on the part of any of the
directors, or officers of EWBC or its Subsidiaries in connection with their
duties and responsibilities at EWBC or its Subsidiaries.
(o) Compliance
With Laws. Except as set forth on EWBC Disclosure Schedule 5.05(o), EWBC and
its Subsidiaries:
(i) are
in compliance with all applicable federal, state, local and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders or decrees applicable
thereto or to the employees conducting such businesses, including, without
limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act, the Home Mortgage Disclosure Act, the Bank Secrecy
Act, Title III of the USA Patriot Act and all other applicable fair lending laws
and other laws relating to discriminatory business practices;
(ii) have
all permits, licenses, authorizations, orders and approvals of, and have made
all filings, applications and registrations with, all Governmental Authorities
that are required in order to permit them to own or lease their properties and
to conduct their businesses as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect
and, to EWBC’s knowledge, no suspension or cancellation of any of them is
threatened; and
(iii) have
received, since December 31, 2004, no notification or communication from any
Governmental Authority (A) asserting that EWBC or any of its Subsidiaries are
not in compliance with any of the statutes, regulations or ordinances which such
Governmental Authority enforces or (B) threatening to revoke any license,
franchise, permit or governmental authorization (nor, to EWBC’s knowledge, do
any grounds for any of the foregoing exist).
(p) Contracts;
Defaults. Except as set forth on EWBC Disclosure Schedule 5.05(p), neither
EWBC nor any of its Subsidiaries are parties to, bound by or subject to any
agreement, contract, arrangement, commitment or understanding (whether written
or oral) that materially restricts the conduct of business by EWBC or its
Subsidiaries. Except as set forth on EWBC Disclosure Schedule 5.05(p), EWBC and
its Subsidiaries are not in default under any contract, agreement, commitment,
arrangement, lease, insurance policy or other instrument to which they are
parties, by which their assets, business, or operations may be bound or
affected, or under which they or their assets, business, or operations receives
benefits, and there has not occurred any event that, with the lapse of time or
the giving of notice or both, would constitute such a default. No power of
attorney or similar authorization given directly or indirectly by EWBC and its
Subsidiaries is currently outstanding. EWBC Disclosure Schedule 5.05(p) also
sets forth a true and complete list of all third party consents or waivers
required to be obtained so as not to be in default under any contract,
agreement, commitment, arrangement, lease, insurance policy or other instrument
to which EWBC and its Subsidiaries are parties as a result of the transaction
contemplated hereby.
(q) Employee
Benefit Plans.
(i) All
benefit and compensation plans, contracts, policies or arrangements covering
current or former employees, including officers, of EWBC and its Subsidiaries
and current or former directors, consultants and other service providers of EWBC
and its Subsidiaries including, but not limited to, “employee benefit plans”
within the meaning of Section 3(3) of ERISA, and deferred compensation, stock
option, stock purchase, stock appreciation rights, stock based, incentive and
bonus plans (the “EWBC Benefits Plans”) have been operated and administered in
accordance with their terms and applicable law, including, but not limited to,
ERISA and the Code. Except as set forth on EWBC Disclosure Schedule 5.05(q),
each EWBC Benefit Plan that is a Pension Plan which is intended to be qualified
under Section 401(a) of the Code does so qualify, and EWBC and its Subsidiaries,
where applicable, have received favorable determination letters from the
Internal Revenue Service with respect to such qualification covering all tax law
changes with respect to which Internal Revenue Service determination letters can
be issued, and no circumstances have occurred that are likely to result in
revocation of any such favorable determination letter or the loss of the
qualification of such Pension Plan under Section 401(a) of the Code. There is no
pending or threatened litigation relating to any of the EWBC Benefits Plans.
Neither EWBC, its Subsidiaries, nor any ERISA Affiliate of EWBC has engaged in a
transaction, taken any action or failed to take any action or to meet any
requirement with respect to any EWBC Benefit Plan that, assuming the taxable
period of such transaction expired as of the date hereof, could subject EWBC or
its Subsidiaries to a tax or penalty imposed by any of Sections 4971, 4972,
4975, 4976, 4977, 4978, 4979, 4980, 4980B, 4980D, 4980E, 4980F, or 4980G, of the
Code or Sections 409 or 502(i) of ERISA.
(ii) No
liability under Title IV of ERISA has been or is expected to be incurred by EWBC
or its Subsidiaries with respect to any ongoing, frozen or terminated
“single-employer plan”, within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by it, or the single-employer plan of any
entity which is considered one employer with EWBC under Section 4001 of ERISA or
Section 414 of the Code (an “ERISA Affiliate of EWBC”), and EWBC is not aware of
any condition that presents a significant risk to EWBC, its Subsidiaries, or any
ERISA Affiliate of EWBC of incurring any liability thereunder. Neither EWBC, its
Subsidiaries, nor any ERISA Affiliate of EWBC has ever participated in any
“multiemployer plan” within the meaning of Section 3(37) of ERISA. EWBC and
its Subsidiaries have not incurred, nor do they expect to incur, any withdrawal
liability with respect to a multiemployer plan under Subtitle E of Title IV of
ERISA (regardless of whether based on contributions of an ERISA Affiliate of
EWBC).
(iii) All
contributions required to be made under the terms of any EWBC Benefit Plan have
been timely made. All contributions to each EWBC Benefit Plan in respect of all
current and prior plan years have been accrued in accordance with GAAP and are
reflected in EWBC and its Subsidiaries’ financial statements. Neither any EWBC
Benefit Plan that is a Pension Plan nor any single-employer plan of an ERISA
Affiliate of EWBC has an “accumulated funding deficiency” (whether or not
waived) within the meaning of Section 412 of the Code or Section 302 of ERISA,
and neither EWBC, its Subsidiaries, nor any ERISA Affiliate of EWBC has an
outstanding funding waiver. Neither EWBC nor any of its Subsidiaries have
provided, nor are they required to provide, security to any EWBC Benefit Plan
that is a Pension Plan or to any single-employer plan of an ERISA Affiliate
pursuant to Section 401(a)(29) of the Code.
(iv) Under
each EWBC Benefit Plan that is a Pension Plan which is a single-employer plan,
as of the last day of the most recent plan year ended prior to the date hereof,
the actuarially determined present value of all “benefit liabilities,” within
the meaning of Section 4001(a)(16) of ERISA (as determined on the basis of the
actuarial assumptions contained in the Pension Plan’s most recent actuarial
valuation and on a termination basis), did not exceed the lesser of the
actuarial value or the then current value of the assets of such Pension Plan,
and there has been no material change in the financial condition of such Pension
Plan since the last day of the most recent plan year.
(v) Neither
EWBC nor any of its Subsidiaries have obligations to provide any of their
current or former employees, officers, directors, consultants or other service
providers health, disability or life benefits beyond his or her retirement or
other termination of service under any EWBC Benefit Plan, other than healthcare
continuation coverage mandated by applicable law.
(r) Labor
Matters. Neither EWBC nor any of its Subsidiaries is a party to nor bound by
any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor are any of them the
subject of a proceeding asserting that they have committed an unfair labor
practice (within the meaning of the National Labor Relations Act) or seeking to
compel EWBC or any of its Subsidiaries to bargain with any labor organization as
to wages or conditions of employment, nor is there any strike or other labor
dispute involving it or, to EWBC’s and EWB’s knowledge, threatened, nor is
either aware of any activity involving its employees seeking to certify a
collective bargaining unit or engaging in other organizational activity.
(s) Tax
Matters.
(i) Except
as set forth in EWBC Disclosure Schedule 5.05(s)(i), EWBC and its Subsidiaries
have:
(A) duly
and timely filed (including applicable extensions granted without penalty) all
Tax Returns required to be filed by them, and such Tax Returns are true, correct
and complete;
(B) timely
paid in full all Taxes required to be paid by them; and
(C) made
adequate provision in the financial statements of EWBC and its Subsidiaries (in
accordance with GAAP) for all Taxes not yet due.
(ii) Except
as set forth in EWBC Disclosure Schedule 5.05(s)(ii), no deficiencies for any
Taxes have been proposed, asserted, assessed or, threatened in writing against
or with respect to EWBC or its Subsidiaries.
(iii) Except
as set forth in EWBC Disclosure Schedule 5.05(s)(iii):
(A) there
are no Liens for Taxes upon the assets of EWBC or its Subsidiaries except for
statutory Liens for current Taxes not yet due;
(B) Neither
EWBC nor any of its Subsidiaries have requested any extension of time within
which to file any Tax Returns in respect of any fiscal year which have not since
been filed and no request for waivers of the time to assess any Taxes are
pending or outstanding;
(C) no
federal, state, local or foreign audits or other administrative proceedings or
court proceedings are presently pending with regard to any Taxes (other than
federal or state income Taxes) of EWBC and its Subsidiaries, and neither EWBC or
any of its Subsidiaries have received a written notice of any claims, audits or
proceedings with respect to such Taxes;
(D) with
respect to each taxable period of EWBC and its Subsidiaries, the federal and
state income Tax Returns of EWBC and its Subsidiaries have not been audited by
the Internal Revenue Service or appropriate state tax authorities or the time
for assessing and collecting income Tax with respect to such taxable period has
closed and such taxable period is not subject to review;
(E) Neither
EWBC nor any of its Subsidiaries have filed or been included in a combined,
consolidated or unitary income Tax Return other than one in which EWBC was the
parent of the group filing such Tax Return;
(F) Neither
EWBC nor any of its Subsidiaries are parties to any agreement providing for the
allocation, sharing, or indemnification of Taxes;
(G) Neither
EWBC nor any of its Subsidiaries are required to include in income any
adjustment pursuant to Section 481(a) of the Code (or any similar or
corresponding provision or requirement of state, local or foreign income Tax
law), by reason of the voluntary change in accounting method (nor has any taxing
authority proposed any such adjustment or change of accounting method);
(H) no
closing agreements, private letter rulings, technical advice memoranda or
similar agreement or ruling have been entered into or issued by any taxing
authority with respect to EWBC or its Subsidiaries within five years of the date
of this Agreement, and no such agreement or ruling has been applied for and is
currently pending;
(I) Neither
EWBC nor any of its Subsidiaries have made any Tax election or change in Tax
election, amended any Tax Returns or entered into any settlement or compromise
of any income tax liability of EWBC or any Subsidiary, respectively;
(J) Neither
EWBC nor any of its Subsidiaries have granted in writing any power of attorney
which is currently in force with respect to any Taxes or Tax Returns;
(K) Neither
EWBC nor any of its Subsidiaries have constituted either a “distributing
corporation” or a “controlled corporation” (within the meaning of Section
355(a)(1)(A) of the Code) in a distribution of stock to which Section 355 of the
Code (or so much of Section 356 of the Code as relates to Section 355 of the
Code) applies and which occurred within two years of the date of this Agreement;
(L) no
claim has been made in writing in any jurisdiction where EWBC or its
Subsidiaries do not file Tax Returns that any such entities are, or may be,
subject to Tax by that jurisdiction;
(M) Neither
EWBC nor any of its Subsidiaries have filed a consent pursuant to Section 341(f)
of the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by EWBC or its Subsidiaries;
(N) Neither
EWBC nor any of its Subsidiaries have executed or entered into a closing
agreement pursuant to Section 7121 of the Code or any predecessor provision
thereof or any similar provision of state, local or foreign law;
(O) Neither
EWBC nor any of its Subsidiaries have been “United States real property holding
corporations” within the meaning of Section 897(c)(2) during the applicable
period specified in 897(c)(1)(A)(ii) of the Code;
(P) Neither
EWBC nor any of its Subsidiaries have engaged in a “reportable transaction”
within the meaning of Treasury Regulations Section 1.6011-4; and
(Q) as
of the date hereof, neither EWBC nor any of its Subsidiaries have reason to
believe that any conditions exist or will exist that might prevent or impede the
Merger from qualifying as a reorganization within the meaning of Section 368(a)
of the Code.
(t) Risk
Management Instruments. Neither EWBC nor any of its Subsidiaries are parties
to or have they agreed to enter Derivatives Contracts or own securities that (i)
are referred to generically as “structured notes,” “high risk mortgage
derivatives,” “capped floating rate notes” or “capped floating rate mortgage
derivatives” nor (ii) are likely to have changes in value as a result of
interest or exchange rate changes that significantly exceed normal changes in
value attributable to interest or exchange rate changes, except for those
Derivatives Contracts and other instruments legally purchased or entered into in
the ordinary course of business, consistent with safe and sound banking
practices and regulatory guidance. All of such Derivatives Contracts or other
instruments, are legal, valid and binding obligations of EWBC or its
Subsidiaries, as the case may be, enforceable in accordance with their terms
(except as enforcement may be limited by general principles of equity whether
applied in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors’ rights and remedies generally), and are in
full force and effect. EWBC and its Subsidiaries have duly performed in all
material respects all of their material obligations thereunder to the extent
that such obligations to perform have accrued; and, to EWBC’s and its
Subsidiaries’ knowledge, there are no breaches, violations or defaults or
allegations or assertions of such by any party thereunder which have had or
could reasonably be expected to have a Material Adverse Effect on EWBC or any of
its Subsidiaries.
(u) Books
and Records. The books and records of EWBC and its Subsidiaries have been
fully, properly and accurately maintained in all material respects, and there
are no material inaccuracies or discrepancies of any kind contained or reflected
therein, and they fairly present the financial position of EWBC and its
Subsidiaries.
(v) Allowance
For Loan Losses. EWB’s ALL is, and shall be as of the Effective Date, in
compliance with EWB’s existing methodology for determining the adequacy of its
ALL as well as the standards established by applicable Governmental Authorities
and the Financial Accounting Standards Board and is and shall be adequate under
all such standards.
(w) Trust
Business. EWB does not have trust powers.
(x) Real
Property.
(i) None
of the real property or premises owned on the date hereof, in whole or in part
by EWBC or its Subsidiaries and the real property or premises leased in whole or
in part by EWBC or its Subsidiaries have been condemned or otherwise taken by
any public authority and no condemnation or taking is threatened or contemplated
and none thereof is subject to any claim, contract or law which might affect its
use or value for the purposes now made of it. None of the premises or properties
of EWBC or its Subsidiaries are subject to any current or potential interests of
third parties or other restrictions or limitations that would impair or be
inconsistent in any material respect with the current use of such property by
EWBC or its Subsidiaries, as the case may be.
(ii) Each
of the leases referred to in Section 5.05(x)(i) is valid and existing and in
full force and effect, and no party thereto is in default and no notice of a
claim of default by any party has been delivered to EWBC or its Subsidiaries or
is now pending, and there does not exist any event that with notice or the
passing of time, or both, would constitute a default or excuse performance by
any party thereto, provided that with respect to matters relating to any party
other than EWBC and its Subsidiaries, the foregoing representation is based on
the knowledge of EWBC and the knowledge of EWB.
(y) Title.
EWBC and its Subsidiaries have good title to their properties and assets (other
than (i) property as to which EWBC or its Subsidiaries is lessee and (ii)
real estate owned as a result of foreclosure, transfer in lieu of foreclosure or
other transfer in satisfaction of a debtor’s obligation previously contracted)
except (1) statutory Liens not yet delinquent which are being contested in good
faith by appropriate proceedings, and Liens for taxes not yet due, (2) pledges
of assets in the ordinary course of business to secure public deposits, (3) for
those assets and properties disposed of for fair value in the ordinary course of
business since the date of EWB’s call report dated as of and for the quarter
ended March 31, 2005 and (4) defects and irregularities of title and
encumbrances that do not materially impair the use thereof for the purposes for
which they are held.
(z) Intellectual
Property. EWBC and its Subsidiaries own or possess valid and binding
licenses and other rights to use (without payment) all material trade secrets,
trade names, trademarks, service marks, inventions and processes used in their
respective businesses; and neither EWBC nor any of its Subsidiaries have
received notice of conflict with respect thereto that asserts a right of others.
EWBC and its Subsidiaries have in all material respects performed all the
obligations required to be performed by them and are not in default in any
material respect under any contract, agreement, arrangement or commitment
relating to any of the foregoing.
ARTICLE
VI
COVENANTS
SECTION
6.01 Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each of EWBC, EWB, UNB and the Principal
Shareholder agrees to use their reasonable best efforts in good faith to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or desirable, or advisable under applicable laws, so as to
permit consummation of the Merger as promptly as practicable and otherwise to
enable consummation of the transactions contemplated hereby, including the
satisfaction of the conditions set forth in Article VII hereof, and shall
cooperate fully with the other parties hereto to that end.
SECTION
6.02 Private Placement and SEC Form S-3 Registration. The
EWBC Common Stock to be exchanged for the UNB Common Stock shall be issued
pursuant to Regulation D and Rule 506 of the Securities Act. As expeditiously as
practicable after the Effective Time, and in any event within thirty (30) days
after the Effective Time, EWBC shall:
(a) Prepare
and file with the SEC a registration statement under the Securities Act covering
the resale of the EWBC Common Stock issued pursuant to the Agreement and the
Merger hereunder (the “Registration Statement”) and use its best efforts to
cause such Registration Statement to become and remain effective for two years
from the Effective Time and shall use its best efforts to comply with the rules
and regulations of the SEC in preparing and filing such Registration
Statement;
(b) Prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep the Registration Statement
effective for a period of not less than one year from the date of issuance of
the EWB Common covered by such Registration Statement;
(c) Make
every reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement at the earliest practicable
time;
(d) On
or prior to the date on which the Registration Statement is declared effective,
use its best efforts to register or qualify the EWBC Common Stock covered by
such Registration Statement under all applicable state laws;
(e) Use
its reasonable best efforts to list, on the Nasdaq the shares of EWBC Common
Stock to be issued to the Shareholders in the Merger.
All of the
costs and expenses of each registration hereunder will be borne by EWBC,
including all registration and filing fees, the fees and expenses of EWBC’s
counsel and accountants.
SECTION
6.03 Press Releases. EWBC, UNB and the Principal Shareholder
shall consult with each other before issuing any press release with respect to
the Merger or this Agreement and shall not issue any such press release or make
any such public statements without the prior consent of the other party, which
shall not be unreasonably withheld; provided, however, that a party may, without
the prior consent of the other party (but after such consultation, to the extent
practicable in the circumstances), issue such press release or make such public
statements as may upon the advice of outside counsel be required by law or the
rules or regulations of Nasdaq. EWBC and UNB shall cooperate to develop all
public announcement materials and make appropriate management available at
presentations related to the transactions contemplated by this Agreement as
reasonably requested by the other party.
SECTION
6.04 Access; Information.
(a) UNB
agrees that upon reasonable notice and subject to applicable laws relating to
the exchange of information, it shall afford EWBC and EWBC’s officers,
employees, counsel, accountants and other authorized representatives such access
during normal business hours throughout the period prior to the Effective Time
to the books, records (including, without limitation, Tax Returns and work
papers of independent auditors), properties and personnel and to such other
information as EWBC may reasonably request and, during such period, it shall
furnish promptly to EWBC all information concerning its business, properties and
personnel as EWBC may reasonably request.
(b) Without
limiting the generality of Section 6.04(a), prior to the Effective Time, EWBC
and its respective representatives shall have the right to conduct a review to
determine (i) that the assets, books, records and operations of UNB are in
satisfactory condition and will not in a material way adversely impact EWBC
after consummation of the transactions contemplated hereby and (ii) the accuracy
of the representations and warranties and the satisfaction of the conditions to
closing as provided hereunder.
(c) UNB
agrees that, subject to applicable laws, it shall cooperate in good faith with
EWBC on mutually agreed operating issues which the parties agree have priority.
(d) EWBC
agrees that, upon reasonable notice and subject to applicable laws relating to
the exchange of information, it shall afford UNB and its authorized
representatives such access to EWBC’s books and records as UNB may reasonably
request.
(e) Each
party agrees that it will not, and will cause its representatives not to, use
any information obtained pursuant to this Section 6.04 (as well as any other
information obtained prior to the date hereof in connection with the entering
into of this Agreement) for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. Subject to the requirements of law,
each party shall keep confidential, and shall cause its representatives to keep
confidential, all information and documents obtained pursuant to this Section
6.04 (as well as any other information obtained prior to the date hereof in
connection with the entering into of this Agreement) unless such information (i)
was already known to such party, (ii) becomes available to such party from other
sources not known by such party to be bound by a confidentiality obligation,
(iii) is disclosed with the prior written approval of the party to which such
information pertains or (iv) is or becomes readily ascertainable from publicly
available sources. In the event that this Agreement is terminated or the
transactions contemplated by this Agreement shall otherwise fail to be
consummated, (A) each party shall promptly cause all copies of documents or
extracts thereof containing information and data as to another party hereto to
be returned to the party which furnished the same; (B) neither UNB or the
Principal Shareholder, on the one hand, nor EWBC or EWB, on the other hand,
shall, and each of the parties shall cause its respective representatives not
to, use any confidential information to solicit customers of the other party;
and (C) for one year after such termination, neither UNB or the Principal
Shareholder, on the one hand, nor EWBC or EWB, on the other hand, shall, and
each of the parties shall cause its respective representatives not to, solicit
the services of any employee of such other party for purposes of engaging them
as an employee, agent, consultant or independent contractor of such soliciting
party, provided, however, that neither party will be barred from retaining the
services, in any capacity, of any current employee of the other party in the
event such employee approaches such party with the intent of securing employment
with such party. Notwithstanding the foregoing, nothing herein shall prevent the
parties hereto from any general advertising or recruitment activities not
directed specifically at the employees of the other party hereto. No
investigation by any party of the business and affairs of any other party shall
affect or be deemed to modify or waive any representation, warranty, covenant or
agreement in this Agreement, or the conditions to any party’s obligation to
consummate the transactions contemplated by this Agreement.
SECTION
6.05 Affiliate Letter and Investor Letter. Principal
Shareholder shall deliver to EWBC, no later than 20 days prior to the Effective
Date, (i) the Investor Letter, and (ii) as an “affiliate” of UNB within the
meaning of Rule 145 promulgated by the SEC under the Securities Act or SEC
Accounting Releases 130 and 135, an affiliate letter, substantially in the form
of Exhibit F hereto (the “Affiliate Letter”).
SECTION
6.06 Acquisition Proposals. Principal Shareholder agrees not
to and UNB agrees that their officers or directors shall not, and Principal
Shareholder and UNB agree they shall direct and use their reasonable best
efforts to cause their employees, agents and representatives not to, directly or
indirectly, initiate, solicit or otherwise encourage any inquiries or the making
of any proposal or offer with respect to a merger, reorganization, share
exchange, consolidation or similar transaction involving, or any purchase of all
or substantially all of the assets of UNB or more than 10% of the outstanding
equity securities, of UNB (any such proposal or offer being hereinafter referred
to as an “Acquisition Proposal”). Principal Shareholder and UNB further agree
that neither Principal Shareholder nor UNB nor any of their officers and
directors shall, and that they shall direct and use their reasonable best
efforts to cause their employees, agents and representatives not to, directly or
indirectly, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any Person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal. UNB agrees that it will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any Acquisition
Proposals. UNB agrees that it will take the necessary steps to promptly
inform the individuals referred to in the foregoing sentence of the obligations
undertaken in this Section 6.06. UNB agrees that it will notify EWBC
promptly, but in no event later than the second succeeding Business Day, if any
such inquiries, proposals or offers are received by, any such information is
requested from, or any such discussions or negotiations are sought to be
initiated or continued with, any of its representatives, indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any proposal or offer.
SECTION
6.07 Certain Policies. Prior to the Effective Date, UNB
shall, consistent with GAAP and applicable banking laws and regulations, modify
or change its loan, OREO, accrual, reserve, tax, litigation and real estate
valuation policies and practices (including loan classifications and levels of
reserves) so as to be applied on a basis that is consistent with that of EWBC.
SECTION
6.08 Regulatory Applications.
(a) Each
of EWBC and the UNB shall cooperate and use their respective reasonable best
efforts to prepare and file, or cause to be filed, all documentation, to effect
all necessary notices, reports and other filings and to obtain all permits,
consents, approvals and authorizations necessary or advisable to be obtained
from any third parties and/or Governmental Authorities in order to consummate
the Merger or any of the other transactions contemplated by this Agreement; and
any initial filings with Governmental Authorities (other than the Registration
Statement) shall be made by EWBC as soon as reasonably practicable after the
execution hereof but, provided that UNB has cooperated as described above, in no
event later than 45 days after the date hereof. Each of EWBC and UNB shall
have the right to review in advance, and to the extent practicable each shall
consult with the other, in each case subject to applicable laws relating to the
exchange of information, with respect to all material written information
submitted to any third party and/or any Governmental Authority in connection
with the Merger and the other transactions contemplated by this Agreement.
In exercising the foregoing right, each of such parties agrees to act reasonably
and as promptly as practicable. Each party hereto agrees that it shall
consult with the other parties hereto with respect to the obtaining of all
material permits, consents, approvals and authorizations of all third parties
and/or Governmental Authorities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party shall keep the other
parties apprised of the status of material matters relating to completion of the
transactions contemplated hereby (including promptly furnishing the other with
copies of notices or other communications received by EWBC or UNB, as the case
may be, from any third party and/or Governmental Authority with respect to the
Merger and the other transactions contemplated by this Agreement).
(b) Each
party agrees, upon request, to furnish the other parties with all information
known to it (which knowledge shall be deemed to include knowledge which could be
acquired after reasonable due inquiry) concerning itself, its Subsidiaries,
directors, advisory directors, officers and shareholders and such other matters
as may be reasonably necessary or advisable in connection with any filing,
notice or application made by or on behalf of such other parties to any third
party or Governmental Authority.
SECTION
6.09 Indemnification by EWBC.
(a) Following
the Effective Time, EWBC or EWB shall indemnify, defend and hold harmless each
present and former director and officer of UNB (each, an “Indemnified Party”)
against all costs or expenses (including reasonable attorneys’ fees), judgments,
fines, losses, claims, damages or liabilities (collectively, “Costs”) incurred
in connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of actions or
omissions occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Agreement, or any related
agreement, but excluding any Costs arising out of any violation or alleged
violation of the Exchange Act or the rules and regulations thereunder) to the
same extent as directors or officers under the EWB Articles and the EWB By-Laws,
as in effect on the date hereof; provided that any determination required to be
made with respect to whether an officer’s or director’s conduct complies with
the standards set forth in the EWB Articles or the EWB By-Laws shall be made by
independent counsel selected by EWBC and reasonably acceptable to the
Indemnified Party; and provided, further, that in the absence of judicial
precedent to the contrary, such counsel, in making such determination, shall
presume such officer’s or director’s conduct complied with such standard and
EWBC shall have the burden to demonstrate that such officer’s or director’s
conduct failed to comply with such standard.
For a
period of one year from the Effective Time, EWBC shall use its commercially
reasonable efforts to provide that portion of director’s and officer’s liability
insurance that serves to reimburse the present and former officers and directors
(determined as of the Effective Time) of UNB (as opposed to the portion that
serves to reimburse UNB) with respect to claims against such directors and
officers arising from facts or events which occurred before the Effective Time,
which insurance shall contain at least the same coverage and amounts, and
contain terms and conditions no less advantageous, as that coverage currently
provided by UNB; provided, however, that if EWBC is unable to maintain
or obtain the insurance called for by this Section 6.09(a) without
exceeding the aggregate $200,000 limit on Transaction Expenses, EWBC shall use
its commercially reasonable efforts to obtain as much comparable insurance as is
available; provided, further, that officers and directors of UNB may be required
to make application and provide customary representations and warranties to
EWBC’s insurance carrier for the purpose of obtaining such
insurance.
(b) Any
Indemnified Party wishing to claim indemnification under Section 6.09(a), upon
learning of any claim, action, suit, proceeding or investigation described
above, shall promptly notify EWBC thereof; provided that the failure so to
notify shall not affect the obligations of EWBC under Section 6.09(a) unless and
to the extent that EWBC is actually prejudiced as a result of such failure. In
the event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) EWBC shall have the right
to assume the defense thereof and EWBC shall not be liable to such Indemnified
Party for any legal expenses or other counsel or any other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof,
provided, however, that any Indemnified Party shall have the right
to employ counsel to represent such Indemnified Party if (A) the
Indemnified Party and EWBC shall have so mutually agreed; (B) EWBC has
failed within a reasonable time to retain counsel; (C) the Indemnified
Party shall have reasonably concluded that there may be legal defenses available
to it that are different from or in addition to those available to EWBC; or
(D) the named parties in any such proceeding (including any impleaded
parties) include both the Indemnified Party, on the one hand, and EWBC or any of
its Subsidiaries, on the other hand, and representation of both sets of parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them, and in any such events the fees and expenses of such
separate counsel shall be paid by EWBC; (ii) the Indemnified Party will
cooperate in the defense of any such matter and (iii) EWBC shall not be
liable for any settlement effected without its prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed; provided,
further, that EWBC shall not have any obligation hereunder to any Indemnified
Party if and when a court of competent jurisdiction shall ultimately determine,
and such determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law.
(c) For
a period of one (1) year following the Effective Time, EWBC and EWB shall
indemnify, defend and hold harmless the Principal Shareholder from and against
all Costs incurred by the Principal Shareholder resulting from or arising out of
any inaccuracy in or any breach of any representation, warranty, or covenant of
EWBC or its Subsidiaries contained in Section 5.05 of this Agreement.
(d) Promptly
after receipt by the Principal Shareholder of notice of any demand, claim or
circumstances which, with the lapse of time, would give rise to a claim or the
commencement (or threatened commencement) of any action, proceeding or
investigation that may result in the incurrence of such Costs, the Principal
Shareholder shall promptly provide EWBC notice of such demand or claim; provided
that the failure so to notify shall not affect the obligations of EWBC under
Section 6.09(c) unless and to the extent that EWBC is actually prejudiced as a
result of such failure. In the event of any such claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time),
(i) EWBC shall have the right to assume the defense thereof and EWBC shall
not be liable to the Principal Shareholder for any legal expenses or other
counsel or any other expenses subsequently incurred by the Principal Shareholder
in connection with the defense thereof, provided, however,
that the Principal Shareholder shall have the right to employ counsel to
represent the Principal Shareholder if (A) the Principal Shareholder and
EWBC shall have so mutually agreed; (B) EWBC has failed within a reasonable
time to retain counsel; (C) the Principal Shareholder shall have reasonably
concluded that there may be legal defenses available to it that are different
from or in addition to those available to EWBC; or (D) the named parties in
any such proceeding (including any impleaded parties) include both the Principal
Shareholder, on the one hand, and EWBC, on the other hand, and representation of
both sets of parties by the same counsel would be inappropriate due to actual or
potential differing interests between them, and in any such events the fees and
expenses of such separate counsel shall be paid by EWBC; (ii) the Principal
Shareholder will cooperate in the defense of any such matter and (iii) EWBC
shall not be liable for any settlement effected without its prior written
consent which shall not be unreasonably withheld, conditioned, or delayed;
provided, further, that EWBC shall not have any obligation hereunder to the
Principal Shareholder if and when a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final, that the
indemnification of the Principal Shareholder in the manner contemplated hereby
is prohibited by applicable law.
(e) If
EWBC or any of its successors or assigns shall (i) consolidate with or merge
into any other entity and shall not be the continuing or surviving entity of
such consolidation or merger or (ii) transfer all or substantially all of its
assets to any other entity, then and in each case, proper provision shall be
made so that the successors and assigns of EWBC shall assume the obligations set
forth in this Section 6.09.
SECTION
6.10 Indemnification by Principal Shareholder.
(a) Principal
Shareholder shall indemnify, defend and hold harmless EWBC and EWB (and their
respective directors, officers, employees, representatives and assigns) from and
against all Costs incurred by EWBC or EWB resulting from or arising out of any
inaccuracy in or any breach of any representation or warranty of the Principal
Shareholder contained in Section 5.04 of this Agreement.
(b) Promptly
after receipt by EWBC of notice of any demand, claim or circumstances which,
with the lapse of time, would give rise to a claim or the commencement (or
threatened commencement) of any action, proceeding or investigation that may
result in the incurrence of such Costs, EWBC shall promptly provide the
Principal Shareholder notice of such demand or claim; provided that the failure
so to notify shall not affect the obligations of the Principal Shareholder under
Section 6.10(a) unless and to the extent that the Principal Shareholder is
actually prejudiced as a result of such failure. In the event of any such claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) the Principal Shareholder shall have the right to
assume the defense thereof and the Principal Shareholder shall not be liable to
EWBC for any legal expenses or other counsel or any other expenses subsequently
incurred by the Principal Shareholder in connection with the defense
thereof, provided, however, that EWBC shall have the right to
employ counsel to represent EWBC if (A) EWBC and the Principal Shareholder
shall have so mutually agreed; (B) EWBC has failed within a reasonable time
to retain counsel; (C) EWBC shall have reasonably concluded that there may
be legal defenses available to it that are different from or in addition to
those available to the Principal Shareholder; or (D) the named parties in
any such proceeding (including any impleaded parties) include both EWBC, on the
one hand, and the Principal Shareholder, on the other hand, and representation
of both sets of parties by the same counsel would be inappropriate due to actual
or potential differing interests between them, and in any such events the fees
and expenses of such separate counsel shall be paid by the Principal
Shareholder; (ii) EWBC will cooperate in the defense of any such matter and
(iii) the Principal Shareholder shall not be liable for any settlement
effected without its prior written consent which shall not be unreasonably
withheld, conditioned, or delayed; provided, further, that the Principal
Shareholder shall not have any obligation hereunder to EWBC if and when a court
of competent jurisdiction shall ultimately determine, and such determination
shall have become final, that the indemnification of EWBC in the manner
contemplated hereby is prohibited by applicable law.
SECTION
6.11 Benefit Plans.
(a) Prior
to the Effective Time, UNB shall take all action necessary to terminate any and
all 401(k) Plans UNB maintains and any other Benefit Plan that EWB may
specify.
(b) EWB
agrees that as of and following the Effective Time, the employees of UNB as of
the Effective Time who are offered and who accept employment with EWBC or EWB
(the “Former UNB Employees”) shall be eligible to participate in EWBC’s or EWB’s
employee benefit plans in which the similarly situated employees of EWBC or EWB
participate, to the same extent as such similarly situated employees of EWBC or
EWB participate.
(c) With
respect to each employee benefit plan, program, policy or arrangement maintained
by EWBC or EWB for the benefit of current employees of EWBC or EWB (each such
plan, program, policy or arrangement, an “EWB Plan”), EWBC and EWB agrees that
for purposes of determining eligibility to participate and vesting (but not for
benefit accrual purposes), service with UNB shall be treated as service with
EWBC or with EWB; provided, however, that such service shall not be recognized
to the extent that such recognition would result in a duplication of benefits.
To the extent permitted by any insurer of an EWB Plan, EWB shall cause such EWB
Plan to waive (i) any pre-existing condition restriction that did not apply
under the terms of any analogous Benefit Plan immediately prior to the Effective
Time and (ii) any waiting period limitation or evidence of insurability
requirement which would otherwise be applicable to a Former UNB Employee on or
after the Effective Time to the extent such Former UNB Employee had satisfied
any similar limitation or requirement under an analogous Benefit Plan prior to
the Effective Time and shall cause such EWB Plan to give each Former UNB
Employee credit for amounts paid under any analogous Benefit Plan for purposes
of applying deductibles, co-payments and out-of-pocket maximums as though such
amounts had been paid in accordance with the terms and conditions of the EWB
Plan.
SECTION
6.12 Future Employment.
(a) EWB
shall have the right but not the obligation to offer employment immediately
following the Effective Time to any and all persons who are expected to be
officers and employees of UNB immediately before the Effective Time. UNB will
provide EWBC and EWB with information regarding such persons’ current employment
arrangements with UNB and will otherwise assist EWBC and EWB in making such
offers.
(b) UNB
shall establish an employee severance plan (the "New Plan") that is
acceptable to EWB for UNB employees whose positions are eliminated and
who do not accept other mutually agreeable employment with EWB. The
New Plan shall replace and be in lieu of any existing employee
severance policies of UNB. All severance payments under the
New Plan shall provide for the execution of a severance agreement
satisfactory to EWB as a condition to receipt of payments, which shall provide
for (i) release of claims, (ii) confidentiality of information, and (iii) no
solicitation of EWB customers or employees for a period of one year after the
Effective Time.
SECTION
6.13 Notification of Certain Matters. Each of UNB and EWBC
shall give prompt notice to the other of any fact, event or circumstance known
to it that (i) is reasonably likely, individually or taken together with all
other facts, events and circumstances known to it, to result in any Material
Adverse Effect with respect to it or (ii) would cause or constitute a material
breach of any of its representations, warranties, covenants or agreements
contained herein.
SECTION
6.14 Human Resources Issues. UNB agrees to cooperate with EWB
with respect to any formal meetings or interviews with one or more employees
called or arranged by UNB and held for the purpose of discussing the
transactions contemplated by this Agreement or their effect on such employees,
with EWB given the opportunity to participate in such meetings or interviews.
This section is not intended to apply to casual conversations about the
transaction or informal meetings initiated by employees, or to prohibit
discussion in general, but rather to allow EWB a role in the formal presentation
of the transaction to employees, and an opportunity to participate in the
significant, formal meetings at which the transaction is explained and
discussed.
SECTION
6.15 Assistance with Third-Party Agreements.
(a) UNB
shall cooperate with and use all commercially reasonable efforts to assist EWB
in (i) gaining access to and obtaining any required consents from all of its
third-party vendors, landlords of all of their leased properties and other
parties to material agreements, promptly after the date of this Agreement, and
(ii) obtaining the cooperation of such third parties in a smooth transition in
accordance with EWB’s timetable at or after the Effective Time. UNB shall
cooperate with EWB in minimizing the extent to which any contracts will continue
in effect following the Effective Time, in addition to complying with the
prohibition of Section 4.01(l) hereof.
(b) Without
limiting Section 6.15(a), UNB shall use all reasonable efforts to provide data
processing and other processing support to assist EWB in performing all tasks
reasonably required to result in a successful conversion of UNB data and other
files and records to EWB’s production environment at such time as EWB requests
or after the Effective Time. Among other things, UNB shall:
(i) cooperate
with EWB to establish a mutually agreeable project plan to effectuate the
conversion;
(ii) use
its commercially reasonable efforts to have UNB’s outside contractors continue
to support both the conversion effort and its needs until the conversion can be
established;
(iii) provide,
or use its commercially reasonable efforts to obtain from any outside
contractors, all data or other files and layouts requested by EWB for use in
planning the conversion, as soon as reasonably practicable;
(iv) provide
reasonable access to personnel at corporate headquarters, data and other
processing centers, all branches and, with the consent of outside contractors,
at outside contractors, to enable the conversion effort to be completed on
schedule; and
(v) to
the extent reasonably practicable, give notice of termination, conditioned upon
the completion of the transactions contemplated hereby, of the contracts of
outside data and other processing contractors or other third-party vendors when
directed to do so by EWB.
(vi) EWB
agrees that all actions taken pursuant to this Section 6.15 shall be taken
in a manner intended to minimize disruption to the customary business activities
of UNB.
SECTION
6.16 Additional Agreements. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement or to vest EWBC or EWB with full title to all
properties, assets, rights, approvals, immunities and franchises of UNB, the
proper officers and directors of each party to this Agreement shall take all
necessary or appropriate action.
SECTION
6.17 Pre-Closing Adjustments. At or before the Effective
Time, as determined by UNB and EWBC, UNB shall make such accounting entries or
adjustments, including additions to its ALL and charge-offs of loans as EWBC
shall direct as a result of its on-going review of UNB (including its review of
the information provided to it pursuant to Sections 6.04 and 6.14) or in order
to implement its plans following the Effective Time or to reflect expenses and
costs related to the Merger; provided, however, that unless the adjustment would
otherwise be required by applicable law, rule or regulation, or by regulatory
accounting principles and GAAP applied on a basis consistent with the financial
statements of UNB, (a) UNB shall not be required to take such actions more than
one day prior to the Effective Time or prior to the time EWBC agrees in writing
that all of the conditions to its obligation to close as set forth in Section
7.03 have been satisfied or waived and each of the approvals in Section 7.01(b)
have been received, and (b) no such adjustment shall (i) require any filing with
any Governmental Authority, (ii) violate any law, rule or regulation applicable
to EWBC, (iii) otherwise materially disadvantage UNB if the Merger was not
consummated or (iv) constitute or be deemed to be a breach, violation of or
failure to satisfy any representation, warranty, covenant, condition or other
provision of this Agreement or otherwise be considered in determining whether
any such breach, violation or failure to satisfy shall have occurred.
SECTION
6.18 Tax Treatment of the Merger. The parties intend the
Agreement to qualify as a tax-free reorganization for all U.S. federal income
tax purposes. Each party will (and EWBC will cause each of its Subsidiaries to)
both before and after the Effective Time (i) use reasonable efforts to
cause the Agreement to so qualify; and (ii) refrain from taking any action that
would reasonably be expected to cause the Agreement to fail to so qualify.
SECTION
6.19 Limit on Stock Offerings. EWBC shall not issue shares of
EWBC Common Stock for a period of ninety (90) days following the Effective Time,
except (i) as may be required by regulatory authorities or as may be anticipated
to be needed to meet regulatory capital adequacy guidelines to be considered
“well capitalized” or EWBC's internal minimum capital guidelines, (ii) upon
exercise of stock options or warrants, outstanding prior to the Effective Time,
to purchase EWBC Common Stock, or (iii) in the case of employees and directors,
the issuance of stock or the issuance of stock upon exercise of stock options,
consistent with past practices.
SECTION
6.20 Non-Solicitation & Confidentiality Agreements.
UNB shall deliver to EWBC Non-Solicitation & Confidentiality Agreements,
substantially in the form of Exhibit B hereto, executed by each of the
Persons listed on Exhibit B-1, on or before the Effective
Date.
ARTICLE
VII
CONDITIONS
TO CONSUMMATION OF THE MERGER
SECTION
7.01 Conditions to the Parties’ Obligations to Effect the
Merger. The respective obligations of the parties hereto to consummate the
Merger is subject to the fulfillment or written waiver by the parties hereto
prior to the Effective Time of each of the following conditions:
(a) Shareholder
Approvals. This Agreement and the Merger have been duly approved by the
affirmative written consents or the affirmative votes of the shareholders or
boards of directors of UNB, EWB and EWBC in accordance with applicable law. Said
approvals, including the Written Consent, shall continue in effect and shall not
have been revoked.
(b) Regulatory
Approvals. All regulatory approvals required to consummate the transactions
contemplated hereby, including the Merger, shall have been obtained and shall
remain in full force and effect and all statutory waiting periods in respect
thereof shall have expired and no such approvals shall contain any conditions,
restrictions or requirements which the board of directors of EWBC reasonably
determines in good faith would (i) following the Effective Time, have a Material
Adverse Effect on EWBC and its Subsidiaries taken as a whole or (ii) reduce the
benefits of the transactions contemplated hereby to such a degree that EWBC
would not have entered into this Agreement had such conditions, restrictions or
requirements been known at the date hereof.
(c) No
Injunction; No Litigation. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by this Agreement.
(d) Tax
Opinion. UNB and EWBC shall have received the opinion of Manatt, Xxxxxx
& Xxxxxxxx, LLP, dated the Effective Date, in form and substance reasonably
satisfactory to UNB and EWBC, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, which are assumed in
the opinion to be consistent with the state of facts existing at the Effective
Time, the Merger more likely than not will be treated for federal income tax
purposes as a reorganization under Section 368(a) of the Code. In rendering its
opinion, Manatt, Xxxxxx & Xxxxxxxx, LLP, may require and rely upon
representations contained in letters from EWBC, EWB, UNB or the Principal
Shareholder and/or their officers or principal shareholders as are customary for
such opinions.
SECTION
7.02 Conditions to Obligation of UNB and the Principal
Shareholder to Effect the Merger. The obligation of UNB and the Principal
Shareholder to consummate the Merger is also subject to the fulfillment or
written waiver prior to the Effective Time of each of the following additional
conditions:
(a) Representations
and Warranties; Agreements and Covenants. The representations and warranties
of EWBC set forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Effective Date as though made on and as of the
Effective Date (except that representations and warranties that by their terms
speak as of the date of this Agreement or some other date shall be true and
correct as of such date). For purposes of this paragraph, such representations
and warranties shall be deemed to be true and correct in all material respects
unless the failure or failures of such representations and warranties to be true
and correct in all material respects, either individually or in the aggregate,
and without giving effect to any materiality, material adverse effect or similar
qualifications set forth in such representations and warranties, will have or
would reasonably be expected to have a Material Adverse Effect on EWBC. EWBC
shall have performed, in all material respects, each of its covenants and
agreements contained in this Agreement. UNB shall have received a certificate,
dated the Effective Date, signed on behalf of EWBC and EWB by authorized
executive officers of EWBC and EWB to such effect.
SECTION
7.03 Conditions to Obligation of EWBC. The obligation of EWBC
and EWB to consummate the Merger is also subject to the fulfillment or written
waiver prior to the Effective Time of each of the following conditions:
(a) Representations
and Warranties; Agreements and Covenants. The representations and warranties
of the Principal Shareholder and UNB set forth in this Agreement shall be true
and correct as of the date of this Agreement and as of the Effective Date as
though made on and as of the Effective Date (except that representations and
warranties that by their terms speak as of the date of this Agreement or some
other date shall be true and correct as of such date). For purposes of this
paragraph, such representations and warranties shall be deemed to be true and
correct in all material respects unless the failure or failures of such
representations and warranties to be true and correct in all material respects,
either individually or in the aggregate, and without giving effect to any
materiality, material adverse effect or similar qualifications set forth in such
representations and warranties, will have or would reasonably be expected to
have a Material Adverse Effect on UNB. UNB and the Principal Shareholder shall
have performed, in all material respects, each of its covenants and agreements
contained in this Agreement and EWBC and EWB shall have received a certificate
from UNB, dated the Effective Date, signed by the Chief Executive Officer and
the Chief Financial Officer of UNB to such effect.
(b) UNB
Disclosure Schedule. The UNB Disclosure Schedule shall be updated and made
current as of the day prior to the Effective Date and a draft of the updated UNB
Disclosure Schedule shall have been delivered to EWBC no later than 72 hours
prior to the Effective Time; such update of the UNB Disclosure Schedule shall
not in any way affect the representations and warranties set forth in Section
5.05 and 7.03(a). UNB shall have performed in all material respects, each of its
covenants and agreements contained in this Agreement and EWBC shall have
received a certificate, dated the Effective Date, signed by the Chief Executive
Officer and the Chief Financial Officer of UNB, to the foregoing effect.
(c) Performance
of Obligations of UNB. UNB shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Effective Time, and EWBC and EWB shall have received a certificate, dated
the Effective Date, signed on behalf of UNB by the Chief Executive Officer and
the Chief Financial Officer of UNB to such effect.
(d) Closing
Financial Statements. At least five (5) Business Days prior to the Effective
Date, UNB shall provide EWBC with UNB’s financial statements (the “Closing
Financial Statements”) presenting the financial condition of UNB as of the close
of business at the end of the month immediately preceding the month of the
Effective Date (the “Measuring Date”) and UNB’s results of operations for the
following periods: January 1, 2005 through the close of business on the
Measuring Date; provided, however, that the Effective Date shall not occur prior
to the tenth day of any calendar month, unless otherwise agreed by the parties
hereto. Such financial statements shall have been prepared in all material
respects in accordance with GAAP and regulatory accounting principles
consistently applied and other applicable legal and accounting requirements, and
reflect all period-end accruals and other adjustments. Such financial statements
shall be accompanied by a certificate of UNB’s Chief Financial Officer, dated as
of a date no earlier than two Business Days prior to the Effective Date, to the
effect that such financial statements continue to reflect accurately, as of the
date of the certificate, the financial condition of EWBC in all material
respects.
(e) Minimum
ALL. As of the Measuring Date, UNB’s ALL, plus the amount of $432,785, shall
not be less than the amount which is 0.92% of the value of total loans held by
UNB valued as of Measuring Date, as determined in accordance with GAAP.
(f) FIRPTA
Certificate. UNB shall have furnished to EWB a certification that UNB is not
a United States real property holding corporation, dated not more than 30 days
prior to the Effective Date, in compliance with Treasury Regulations Sections
1.1445-2(c)(3) and 1.897-2(h), in a form reasonably satisfactory to EWB.
(g) Consents.
UNB shall have obtained each of the material consents listed in UNB Disclosure
Schedule 5.03(k).
ARTICLE
VIII
TERMINATION
SECTION
8.01 Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by the mutual written consent of EWBC, EWB, and UNB by action of their
respective boards of directors.
SECTION
8.02 Termination by Either EWBC, EWB or
UNB.
(a) This
Agreement may be terminated and the Merger may be abandoned at any time prior to
the Effective Time by action of the board of directors of either EWBC or EWB, on
the one hand, or UNB, on the other hand, in the event:
(i) The
UNB Disclosure Schedule delivered after the date hereof contains a material
adverse disclosure as determined in the sole discretion of the receiving party.
(ii) The
Merger is not consummated by December 31, 2005 except to the extent that the
failure of the Merger then to be consummated arises out of or results from the
knowing action or inaction of (A) the party seeking to terminate pursuant to
this Section 8.02(a), or (B) any of the Shareholders (if UNB is the party
seeking to terminate), which action or inaction is in violation of their
obligations under this Agreement.
(iii) The
approval of any Governmental Authority required for consummation of the Merger
and the other transactions contemplated by this Agreement shall have been denied
by final and nonappealable action of such Governmental Authority or an
application therefor shall have been permanently withdrawn at the invitation,
request or suggestion of a Governmental Authority.
(b) This
Agreement may be terminated and the Merger may be abandoned at any time prior to
the Effective Time:
(i) by
action of the EWBC Board: in the event of (A) a breach by UNB or the
Principal Shareholder of any representation or warranty contained herein, which
breach cannot be or has not been cured within 30 days after the giving of
written notice to UNB or to the Principal Shareholder of such breach, (B) a
material breach by UNB or the Principal Shareholder of any of the covenants or
agreements contained herein, which breach cannot be or has not been cured within
30 days after the giving of written notice to UNB or the Principal Shareholder
of such breach, (C) UNB or any of the other Persons described in
Section 6.06 as affiliates, representatives or agents of UNB shall take any
of the actions that would be proscribed by Section 6.06, or (D) UNB shall
have breached Section 6.06 or the UNB Board shall have adopted any
resolution inconsistent with its approval of this Agreement or the Merger, or
failed to reconfirm its recommendation of this Agreement within five (5)
Business Days after a written request by EWBC to do so or the Principal
Shareholder has taken any action inconsistent with the execution of the Written
Consent.
(ii) by
action of the UNB Board: in the event of (A) a breach by EWBC or EWB of any
representation or warranty contained herein, which breach cannot be or has not
been cured within 30 days after the giving of written notice to EWB of such
breach, or (B) a material breach by EWBC or EWB of any of the covenants or
agreements contained herein, which breach cannot be or has not been cured within
30 days after the giving of written notice to EWBC and EWB of such breach, or
(C) the EWBC Board shall have adopted any resolution inconsistent with its
approval of this Agreement or the Merger, or failed to reconfirm its
recommendation of this Agreement within five (5) Business Days after a
written request by UNB to do so.
(c) For
purposes of Section 8.02(b), the representations and warranties contained
herein shall be deemed to have been breached by either the Principal
Shareholder, UNB, EWBC or EWB only if the failure of such representations and
warranties to be true and correct, either individually or in the aggregate, and
without giving effect to any materiality, material adverse effect or similar
qualifications set forth in such representations and warranties, will have or
would reasonably be expected to have a Material Adverse Effect on the breaching
party.
SECTION
8.03 Effect of Termination and
Abandonment.
(a) In
the event of termination of this Agreement and the abandonment of the Merger
pursuant to this Article VIII, this Agreement (other than as set forth in
Section 9.01) shall become void and of no effect with no liability or
further obligation on the part of any party hereto (or of any of its directors,
officers, employees, agents, legal and financial advisors or other
representatives); provided, however, except as otherwise provided herein, no
party shall otherwise be relieved of any liability or damages resulting from any
breach of this Agreement.
(b) In
the event that this Agreement is terminated by EWBC pursuant to
Section 8.02(b)(i), then, no later than two (2) Business Days
following the expiration of the Waiting Period, the Escrow Agent shall pay a
termination fee to EWB, representing liquidated damages, of $3,000,000 (the “UNB
Termination Fee”) by wire transfer of immediately available funds to the EWB
Account.
(c) In
the event that this Agreement is terminated by UNB pursuant to
Section 8.02(b)(ii), then, no later than two (2) Business Days
following the expiration of the Waiting Period, the Escrow Agent shall pay a
termination fee to UNB, representing liquidated damages, of $3,000,000 (the “EWB
Termination Fee”) by wire transfer in immediately available funds to the UNB
Account.
(d) UNB
and EWBC agree that the agreements contained in paragraphs (b) and
(c) above are an integral part of the transactions contemplated by this
Agreement, that without such agreements EWBC and UNB would not have entered into
this Agreement, and that such amounts specified therein do not constitute a
penalty. If the applicable party fails to promptly pay to the other party
the amounts due under paragraph (b) or (c) above within the time
period specified therein, the party required to make payment thereunder shall
pay all costs and expenses (including attorneys’ fees) incurred by the other
party in connection with any action, including the filing of any lawsuit, taken
to collect payment of such amounts, together with interest on the amount of any
such unpaid amounts at the publicly announced prime rate of EWB from the date
such amounts were required to be paid.
SECTION
8.04 Escrow. UNB and EWB shall establish an account with the
Escrow Agent (the “Escrow”) in which the UNB Termination Fee and the EWB
Termination Fee shall be deposited concurrently with the execution of this
Agreement. UNB and EWB have each earmarked and segregated $3,000,000 for deposit
into the Escrow.
ARTICLE
IX
MISCELLANEOUS
SECTION
9.01 Survival. All representations, warranties, agreements
and covenants contained in this Agreement shall survive for one year following
the Effective Time (other than Sections 6.09, 6.10, 6.11, 6.12, and 6.19 and
this Article IX, which shall survive the Effective Time indefinitely unless
otherwise specifically provided therein) or the termination of this Agreement if
this Agreement is terminated prior to the Effective Time (other than Sections
6.04(e), 8.03 and this Article IX, which shall survive any such termination).
SECTION
9.02 Waiver; Amendment. Prior to the Effective Time, any
provision of this Agreement may be (i) waived in whole or in part by the party
benefited by the provision or by both parties or (ii) amended or modified at any
time, by an agreement in writing between the parties hereto executed in the same
manner as this Agreement.
SECTION
9.03 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to constitute an original but
all of which together shall constitute one and the same instrument.
SECTION
9.04 Governing Law, Jurisdiction and Venue. This Agreement
shall be governed by, and interpreted in accordance with, the laws of the State
of California (however, not to the exclusion of any applicable Federal law),
without regard to California statutes or judicial decisions regarding choice of
law questions. The parties hereby irrevocably submit to the jurisdiction of the
courts of the State of California and the federal courts of the United States of
America located in the Southern District of the State of California solely in
respect of the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in respect of
the transactions contemplated herein and therein, and hereby waive, and agree to
assert, as a defense in any action, suit or proceeding for the interpretation or
enforcement hereof or of any such documents, that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that the venue thereof may not be appropriate or that this
Agreement or any such document may not be enforced in or by such courts, and the
parties hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such California state or federal
court. The parties hereby consent to and grant any such court jurisdiction over
the person of such parties and over the subject matter of such dispute and agree
that mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 9.06 or in such other manner as may
be permitted by law, shall be valid and sufficient service thereof.
SECTION
9.05 Expenses. Each party hereto will bear all expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby.
SECTION
9.06 Notices. All notices, requests and other communications
hereunder to a party shall be in writing and shall be deemed given if personally
delivered, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to such party at its address set forth below or
such other address as such party may specify by notice to the parties hereto.
If to UNB:
United
National Bank
0000
Xxxxxxxxxx Xxxxx
Xxx
Xxxxxx, XX 00000
Attention:
Xxxxxx Xx, Chairman of the Board and Chief
Executive Officer
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
With a
copy to:
Xxxxxxxxx
X. Xxxxx, Esq.
XxXxxxxxx,
Xxxxx & Xxxxxx
0000 Xxxx
Xxxxxx, 00xx Xxxxx
Xxxxxx, XX
00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If to
Principal Shareholder:
X.X.
Xxxx
c/o
Xxxxxxxxx X. Xxxxx, Esq.
XxXxxxxxx,
Xxxxx & Xxxxxx
0000 Xxxx
Xxxxxx, 00xx Xxxxx
Xxxxxx, XX
00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
With a
copy to:
Xxxxxxxxx
X. Xxxxx, Esq.
XxXxxxxxx,
Xxxxx & Xxxxxx
0000 Xxxx
Xxxxxx, 00xx Xxxxx
Xxxxxx, XX
00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If to EWBC
or EWB to:
Xxxxxxx X.
Xxxxxx, Esq.
Executive
Vice President, General Counsel and Corporate Secretary
East West
Bancorp, Inc.
000
Xxxxxxxxxx Xxxxx
Xxx
Xxxxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
With a
copies to:
Xxxxxx X.
Xxxx, Esq., and
X.X.
Xxxxxxxx, Esq.
Manatt,
Xxxxxx & Xxxxxxxx, LLP
0000 X. Xxxxxxx
Xxxxxxxxx
Xxx
Xxxxxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
SECTION
9.07 Entire Understanding; No Third Party Beneficiaries. This
Agreement, the Disclosure Schedules attached hereto and incorporated herein, and
the exhibits to the Agreement represent the entire understanding of the parties
hereto and thereto with reference to the transactions contemplated hereby and
thereby and this Agreement, the Disclosure Schedules attached hereto and
incorporated herein, and the exhibits to the Agreement, supersede any and all
other oral or written agreements heretofore made. Except for Sections 6.09
and 6.11, nothing in this Agreement, expressed or implied, is intended to confer
upon any Person, other than the parties hereto or their respective successors,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION
9.08 Effect. No provision of this Agreement shall be
construed to require UNB, EWBC, EWB or any Subsidiaries, affiliates or directors
of any of them to take any action or omit to take any action which action or
omission would violate applicable law (whether statutory or common law), rule or
regulation.
SECTION
9.09 Severability. Except to the extent that application of
this Section 9.09 would have a Material Adverse Effect on UNB, EWBC or EWB, any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
SECTION
9.10 Enforcement of the Agreement. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
SECTION
9.11 Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Disclosure Schedules, such reference shall be
to a Section of, or Exhibit or Disclosure Schedule to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation”.
IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed in
counterparts by their duly authorized officers, all as of the day and year first
above written.
EAST
WEST BANCORP, INC. |
EAST
WEST BANK |
By: |
By: |
Name: |
Name: |
Title: |
Title: |
PRINCIPAL
SHAREHOLDER |
UNITED
NATIONAL BANK |
By: | |
X.X.
Xxxx |
Name:
Xxxxxx Xx |
Title:
Chairman and Chief Executive
Officer |
EXHIBIT
D
THIS
AGREEMENT OF MERGER (the “Agreement of Merger”) is made and entered into as of
this day of , 2005, by and between East West
Bank (“EWB”) and United National Bank (“UNB”), in connection with the
transactions described in that certain Agreement and Plan of Merger, dated as of
June 29, 2005 (the “Agreement and Plan of Merger”), by and among, EWB, UNB, East
West Bancorp, Inc. (“EWBC”), and X.X. Xxxx, principal shareholder of UNB. Terms
not otherwise defined herein shall have the meaning given them in the Agreement
and Plan of Merger.
RECITALS
1. UNB
is a national banking association duly organized, validly existing and in good
standing under the laws of the United States and is authorized by the
Comptroller of the Currency to conduct a general banking business, with
authorized capital of 5,000,000 shares of $5 par value common stock (“UNB Common
Stock”), of which, on the date hereof, there are 4,400,000 shares issued and
outstanding.
2. EWB
is a corporation duly organized, validly existing and in good standing under the
laws of the State of California, with authorized capital of 50,000,000 shares of
common stock, no par value (“EWB Common Stock”) of which, on the date hereof,
there are 23,775,000 shares issued and outstanding, all of which are owned by
EWBC, the parent corporation of EWB.
3. The
respective Boards of Directors of EWB and UNB deem it desirable and in the best
interests of their respective corporations and stockholders that UNB be merged
with and into EWB as provided in this Agreement of Merger pursuant to the laws
of the State of California (the “Merger”) and that EWB be the surviving
corporation (“Surviving Bank”).
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein set forth and for the purpose of prescribing the terms and
conditions of such Merger, the parties hereto agree as follows:
ARTICLE
I
THE
MERGER
Upon
consummation of the Merger at the Effective Time (as defined in Article VIII
hereof), UNB shall be merged with and into EWB, which shall thereupon be the
Surviving Bank, and the separate corporate existence of UNB shall
cease.
ARTICLE
II
NAME
The name
of the Surviving Bank shall be “East West Bank”.
ARTICLE
III
ARTICLES
OF INCORPORATION
The
Articles of Incorporation of EWB as in effect immediately prior to the Effective
Time shall, at and after the Effective Time, continue to be the Articles of
Incorporation of the Surviving Bank.
ARTICLE
IV
BYLAWS
The Bylaws
of EWB as in effect immediately prior to the Effective Time shall, at and after
the Effective Time, continue to be the Bylaws of the Surviving
Bank.
ARTICLE
V
RIGHTS
AND DUTIES OF SURVIVING BANK
At and
after the Effective Time, all rights, privileges, powers and franchises and all
property and assets of every kind and description of EWB and UNB shall be vested
in and be held and enjoyed by the Surviving Bank, without further act or deed,
and all the estates and interests of every kind of EWB and UNB, including all
debts due to either of them, shall be as effectively the property of the
Surviving Bank as they were of EWB and UNB, and the title to any real estate
vested by deed or otherwise in either EWB or UNB shall not revert or be in any
way impaired by reason of the Merger; and all rights of creditors and liens upon
any property of EWB and UNB shall be preserved unimpaired and all debts,
liabilities and duties of EWB and UNB shall be debts, liabilities and duties of
the Surviving Bank and may be enforced against it to the same extent as if said
debts, liabilities and duties had been incurred or contracted by
it.
ARTICLE
VI
CONVERSION
OF SHARES
In and by
virtue of the Merger and at the Effective Time, pursuant to this Agreement of
Merger, the shares of EWB Common Stock and UNB Common Stock outstanding at the
Effective Time shall be converted as follows:
(a) Effect
on UNB Common Stock. Each share of UNB Common Stock issued and outstanding
immediately prior to the Effective Time, excluding any Dissenters’ Shares (as
defined below) or shares of UNB Common Stock held by EWBC (or any of its
Subsidiaries), other than those held in a fiduciary capacity or as a result of
debts previously contracted, shall, without any action on the part of the holder
thereof, cease to be outstanding and be converted into the right to receive
$___________ in cash and _________ shares of EWBC Common Stock.
“Dissenters’ Shares” means shares of UNB Common
Stock held by a UNB shareholder with respect to which such shareholder, in
accordance with the National Bank Act, perfects such shareholder’s right to
dissent to the Merger.
(b) Fractional
Shares. No fractional shares of EWBC Common Stock and no certificates or
scrip therefore, or other evidence of ownership thereof, will be issued in the
Merger; instead, EWBC shall pay to each holder of UNB Common Stock who would
otherwise be entitled to a fractional share of EWBC Common Stock (after taking
into account all certificates of UNB Common Stock delivered by such holder) an
amount in cash (without interest) determined by multiplying such fraction by
$________. No holder will be entitled to dividends, voting rights or any other
rights as a shareholder in respect of any fractional share of EWBC Common Stock.
(c) Dissenters’
Shares. Any shares of UNB Common Stock that are Dissenters’ Shares shall not
be converted into or represent a right to receive EWBC Common Stock or cash
hereunder unless and until such shares have lost their status as dissenting
shares under 12 U.S.C. 214a, at which time such shares shall be converted into
cash or EWBC Common Stock.
(d) Cancellation
of Certain Shares. Any shares of UNB Common Stock held by EWBC (or any of
its Subsidiaries) or by UNB, other than those held in a fiduciary capacity or as
a result of debts previously contracted, shall be canceled and retired at the
Effective Time and no per share cash consideration or per share stock
consideration shall be paid or issued in exchange therefore.
(e) Effect
on EWB Common Stock. Each share of EWB Common Stock, issued and outstanding
immediately prior to the Effective Time shall remain an issued and outstanding
share of common stock of the Surviving Bank, and shall not be affected by the
Merger.
ARTICLE
VII
FURTHER
ACTION
The
parties hereto shall execute and deliver, or cause to be executed and delivered,
all such deeds and other instruments, and will take or cause to be taken all
further or other action as they may deem necessary or desirable, in order to
vest in and confirm to the Surviving Bank title to and possession of all of
EWB’s and UNB’s property, rights, privileges, powers and franchises hereunder,
and otherwise to carry out the intent and purposes of this Agreement of
Merger.
ARTICLE
VIII
EFFECTIVE
TIME
The Merger
will become effective upon the filing, in accordance with Section 4887 of the
California Financial Code, of a copy of this Agreement of Merger (bearing the
certification of the Secretary of State of the State of California) and all
other requisite accompanying certificates in the office of the California
Commissioner of Financial Institutions (the “Commissioner”). The date and time
of such filing with the Commissioner is referred to herein as the “Effective
Time”.
ARTICLE
IX
SUCCESSORS
AND ASSIGNS
This
Agreement of Merger shall be binding upon and enforceable by the parties hereto
and their respective successors, assigns and transferees, but this Agreement of
Merger may not be assigned by either party without the written consent of the
other.
ARTICLE
X
GOVERNING
LAW
This
Agreement of Merger has been executed in the State of California, and the laws
of the State of California shall govern the validity and interpretation hereof
and the performance by the parties hereto.
ARTICLE
XI
TERMINATION
This
Agreement of Merger may, by the mutual consent and action of the Boards of
Directors of EWB and UNB, be abandoned at any time before or after approval
thereof by the shareholders of EWB and UNB, but not later than the filing of
this Agreement of Merger with the Secretary of State.
[Remainder
of this page was intentionally left blank]
IN WITNESS
WHEREOF, EWB and UNB, pursuant to the approval and authority duly given by
resolution of their respective Board of Directors, have caused this Agreement of
Merger to be signed by their respective authorized officers on the day and year
first above written.
EAST WEST
BANK
By:
_______________________________
__________________________________
UNITED
NATIONAL BANK
By:
__________________________________
__________________________________
CERTIFICATE
OF APPROVAL
OF
AGREEMENT
OF MERGER
and certify that:
1. |
They
are the and the , respectively, of EAST WEST BANK, a
California banking corporation (“EWB”). |
2. |
The
Agreement of Merger in the form attached was duly approved by the board of
directors of the corporation. |
3. |
Shareholder
approval of East West Bancorp, Inc., the parent of EWB, was not required,
pursuant to Section 1201 of the California General Corporation
Law. |
We further
declare under penalty of perjury under the laws of the State of California that
the matters set forth in this certificate are true and correct of our own
knowledge.
Dated this
th day xx , 0000, xx Xxx Xxxxxx,
Xxxxxxxxxx.
By:
_______________________________
________________________________
CERTIFICATE
OF APPROVAL
OF
AGREEMENT
OF MERGER
and certify that:
1. |
They
are the and the, respectively, of UNB, a national banking association (the
“Bank”). |
2. |
The
Agreement of Merger in the form attached was duly approved by the board of
directors and the shareholders of the Bank. |
3. |
There
is only one class of shares. The total number of outstanding shares
entitled to vote on the merger was 4,400,000.
|
4. |
The
principal terms of the Agreement of Merger were approved by a vote which
equaled or exceeded the vote required. The percentage vote required was
more than 66 2/3%. |
We further
declare under penalty of perjury under the laws of the State of California that
the matters set forth in this certificate are true and correct of our own
knowledge.
Dated this
th day xx , 0000, xx Xxx Xxxxxx,
Xxxxxxxxxx.
By:
______________________________________
______________________________________