1
[DATE] Exhibit 8
----
Board of Directors Board of Directors
First Banks America, Inc. First Commercial Bancorp, Inc.
000 Xxxxx Xxxxxxx Xxxxxx 000 Xxxx Xxx., Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxxxx 00000
Re: Agreement and Plan of Merger by and between First Banks
America, Inc. and First Commercial Bancorp, Inc., dated
[DATE], as amended
Gentlemen:
You have requested our opinion with regard to certain federal income tax
consequences of the proposed merger (the Merger) of First Commercial
Bancorp, Inc. (First Commercial) with and into First Banks America, Inc.
(First Banks America), and the resulting acquisition by First Banks America
of all the issued and outstanding capital stock of First Commercial.
In connection with the preparation of our opinion, we have examined and
have relied upon the following:
(i) The Agreement and Plan of Merger by and between First Banks
America and First Commercial dated [DATE] (the Plan);
----
(ii) The draft Proxy Statement-Prospectus contained in the
Registration Statement on Form S-4 of First Banks America to be
filed with the Securities and Exchange Commission on [DATE];
----
(iii) The representations on behalf of First Banks America set forth
in Exhibit A hereto (the First Banks America Certificate);
(iv) The representations on behalf of First Commercial and its Board
of Directors set forth in Exhibit B hereto (the First
Commercial Certificate).
Our opinion is based solely upon the factual information contained in
the above-referenced documents. In rendering our opinion, we have assumed
the accuracy of all information contained in each document (including
information in the First Banks America Certificate and First Commercial
Certificate represented to be accurate only to the best knowledge of the
person issuing the Certificate), and we have also assumed the authenticity of
all original documents, the conformity of all copies to the original
documents, and the genuineness of all signatures. We have not attempted to
verify independently the accuracy of any information in any such document.
If the actual facts relating to any aspect of the Merger differ in any
material respect from those facts set forth in any such document or those
facts and assumptions described below in the section captioned Statement of
Facts, any or all the
2
opinions expressed herein may be inapplicable. All terms appearing, but not
otherwise defined in this opinion letter, shall have the meaning ascribed to
them in the Plan.
OPINIONS
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Based upon the foregoing and on the facts and representations described
in the Statement of Facts, and subject to the more detailed analyses of the
issues set forth in the Legal Analysis section of this letter and the
conditions and limitations expressed elsewhere herein, we are of the opinion
that for federal income tax purposes:
1. The Merger will constitute a reorganization within the meaning of
Section 368(a)(1)(A) and Section 368(a)(1)(D) of the Internal
Revenue Code of 1986, as amended to the date hereof (the Code),
and First Banks America and First Commercial each will constitute
a party to a reorganization within the meaning of Section 368(b)
of the Code.
2. Neither First Banks America nor First Commercial will recognize
gain or loss as a result of the Merger.
3. Each stockholder of First Commercial who exchanges his, her, or
its shares of First Commercial Common Stock (as defined in the
Statement of Facts following) solely for shares of First Banks
America Common Stock (as defined in the Statement of Facts
following):
(a) will recognize no gain or loss;
(b) will have an aggregate tax basis in the shares of First
Banks America Common Stock the stockholder receives equal to
the stockholder's aggregate tax basis in the shares of First
Commercial Common Stock the stockholder surrenders in the
Merger; and
(c) will have a holding period for the shares of First Banks
America Common Stock the stockholder receives which includes
the stockholder's holding period for the First Commercial
Common Stock the stockholder surrenders in the Merger.
4. A stockholder of First Commercial Common Stock who receives cash
in the Merger in lieu of a fractional share interest in First
Banks America Common Stock will be treated as having received the
cash in redemption of such fractional share interest.
Accordingly, the recipient will recognize gain or loss equal to
the difference between the amount of cash received and such
stockholder's adjusted tax basis in the fractional share interest.
The stockholder's adjusted tax basis in the fractional share
interest will be determined as if First Banks America issued a
fractional share of First Banks America Common Stock in the Merger
and then redeemed such fractional share. Thus, the stockholder's
adjusted tax basis in First Commercial Common Stock will be
allocated to the First Banks America Common Stock the stockholder
receives, including the fractional share so redeemed. If the
stockholder's First Commercial Common Stock is a capital asset in
the stockholder's hands, the gain or loss will be capital, long-
or short-term depending upon the stockholder's holding period.
5. The receipt of cash rather than First Banks America Common Stock
by any stockholder who effectively exercises appraisal rights and
does not withdraw his, her, or its demand therefor is a taxable
transaction. In most cases, such stockholder will recognize gain
or loss from the sale of First Commercial Common
3
Stock equal to the difference between the cash received and the
stockholder's adjusted tax basis in his, her, or its First
Commercial Common Stock. Such gain or loss will be capital if the
First Commercial Common Stock is a capital asset in the
stockholder's hands, and long- or short-term depending on the
stockholder's holding period. However, continued ownership of First
Banks America Common Stock, directly or constructively, could result
in the stockholder realizing ordinary income, possibly to the extent
of the cash the stockholder receives. Definitive resolution of this
issue with respect to a stockholder who effectively exercises
appraisal rights and does not withdraw his, her, or its demand
therefor requires analysis of specific facts applicable to such
stockholder.
* * * * * * * * * *
We express no opinion with regard to federal, state, or local taxes, or
any other federal or state laws not specifically referred to and discussed
herein. Further, our opinions are based upon the Code, regulations
promulgated by the United States Department of the Treasury under the Code
(Treasury Reg.), and interpretations and judicial precedents as of the date
hereof, all of which are subject to change at any time, possibly with
retroactive effect, and we assume no obligation to advise you of any
subsequent change thereto. If there is any change in the applicable law or
regulations, or if there is any new administrative or judicial interpretation
of the applicable law or regulations, any or all of the opinions expressed
herein may become inapplicable.
The foregoing opinions reflect our legal judgment solely on the issues
represented and discussed herein. While these opinions reflect our best
professional judgment with respect to the matters they address, they have no
official status and, therefore, are not binding on the Internal Revenue
Service (the Service) or the courts.
STATEMENT OF FACTS
------------------
Parties to the Proposed Merger
First Commercial Bancorp, Inc. First Commercial is a Delaware
corporation that was reincorporated in Delaware in 1990 to act as a
registered bank holding company under the federal Bank Holding Company Act of
1956, as amended (the Act). First Commercial owns all of the issued and
outstanding stock of one subsidiary bank, First Commercial Bank, a California
state-chartered bank that began operations in 1979. Through the subsidiary
bank, First Commercial offers a complete line of commercial banking services
in Sacramento, Roseville, San Francisco, Concord, and Campbell, California.
Such banking services include commercial, real estate construction and
development, commercial and residential real estate, and consumer and
installment loans.
First Commercial has two classes of authorized capital stock, consisting
of (i) 10,000,000 shares of voting Common Stock, $1.25 par value (First
Commercial Common Stock), of which 846,127 shares were issued and
outstanding as of [DATE] and (ii) 5,000,000 shares of Preferred Stock, par
----
value $0.01, the rights and preferences of which may be designated in one or
more series by resolution of the Board of Directors of First Commercial, and
of which 500,000 have been designated as Series A Participated Preferred
Stock, but none of which have been issued. First Commercial has
approximately stockholders.
---
First Banks America, Inc. First Banks America is a Delaware corporation
that was organized in 1978 to act as a registered bank holding company under
the Act. First Banks America, directly and through its subsidiaries, offers
a broad range of banking services in Roseville, Rancho Xxxxxxx, and Citrus
Heights, California and Houston, Dallas, Irving, and McKinney, Texas. The
commercial and personal banking services offering by First Banks America
include certificate of deposit, individual retirement and other time deposit
accounts,
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checking and other demand deposit accounts, interest checking accounts, savings
accounts, and money market accounts. Loans include commercial and industrial,
commercial and residential real estate, real estate construction and
development, and consumer loans. Other financial services include automatic
teller machines, telephone banking, lockbox deposits, cash management services,
savings accounts, credit-related insurance, and safe deposit boxes.
First Banks America will have, at the time of the Merger, 10,666,666
shares of authorized capital stock divided into two classes consisting of (i)
<1,412,900> issued and outstanding shares of Class A Common Stock $0.15 par
---------
value (FIRST BANKS AMERICA COMMON STOCK), and (ii) <2,500,000> issued
---------
and outstanding shares of Class B Common Stock, $0.15 par value. First
Banks America Common Stock will be the only class of stock tendered by First
Banks America in the Merger. First Banks America Common Stock is traded on
the New York Stock Exchange under the symbol FBA. On [DATE], the last sale
----
price for First Banks America Common Stock as reported by the NYSE was
$.
-----
The Proposed Merger
Background; Business Purposes. First Commercial's Board of Directors
has determined that the Merger will result in a combined entity that is (i)
capable of competing more effectively with larger financial institutions that
have exerted increasing competitive pressures on First Commercial, (ii) well-
capitalized and capable of enjoying significant market penetration throughout
the Sacramento, California and surrounding metropolitan area banking market,
(iii) capable of offering, directly or in cooperation with First Banks
America and its current subsidiaries, certain customer services in a more
cost-effective manner, and (iv) committed to serving the banking and other
financial needs of First Commercial's depositors, employees, customers, and
communities.
First Banks America's Board of Directors has determined that the Merger
will enable First Banks America to (i) take advantage of a unique opportunity
to First Banks America to increase its presence in the Sacramento, California
and surrounding area banking market, through the acquisition of an
established banking franchise in an area where First Banks America does not
currently have a strong presence, and (ii) enhance First Banks America's
ability to compete in the increasingly competitive banking and financial
services industry.
The Plan of Reorganization. As a result of the foregoing
determinations and arm's-length negotiations, First Banks America and First
Commercial entered into the Plan on [DATE]. First Commercial's Board of
----
Directors has unanimously approved the Plan and will recommend to its
stockholders approval and adoption of the Plan pursuant to which First
Commercial will merge with and into First Banks America.
Upon approval by holders of at least a majority of the issued and
outstanding shares of First Commercial Common Stock and of at least a
majority of the issued and outstanding shares of First Banks America Common
Stock and the First Banks America Class B Common Stock, and upon satisfaction
of certain conditions in the Plan, including approval by the requisite state
and federal regulatory agencies, First Commercial will be merged with and
into First Banks America. The Merger will be a statutory merger pursuant to
the Delaware General Corporation Law.
On the date the Merger is consummated (the EFFECTIVE DATE), each
stockholder of First Commercial, except stockholders who effectively exercise
appraisal rights and do not withdraw their demand therefor, will convert his,
her, or its First Commercial Common Stock into shares of First Banks America
Common Stock.
The conversion ratio is based upon arm's-length negotiations. No
fractional share of First Banks America Common Stock will be issued in the
Merger. Cash will be paid by First Banks America in lieu of fractional
shares, if any.
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First Commercial stockholders may exercise appraisal rights in
compliance with the requirements of Section 262 of the Delaware General
Business Corporation Law and will be entitled to receive, in cash, an amount
equal to the appraised value of his, her, or its shares of First Commercial
Common Stock upon consummation of the Merger. Payments to stockholders who
effectively exercise appraisal rights and do not withdraw their demand
therefor will be made solely by First Banks America.
LEGAL ANALYSIS
--------------
Sections 368(a)(1)(A) and 368(a)(1)(D) Requirements
Overview. Section 368(a)(1)(A) of the Code provides that the term
reorganization includes a statutory merger or consolidation. Section
368(a)(1)(D) of the Code provides that a reorganization includes a transfer
of some or all assets from one corporation to another when the transferor, or
one or more of its shareholders, or the transferor and one or more of its
shareholders are in control of the transferee corporation following the
transfer of assets. To constitute a reorganization, in addition to being a
statutory merger the Merger also must satisfy the nonstatutory requirements
of business purpose, continuity of business enterprise, and continuity
of proprietary interest as set forth in Treasury Reg. Sec.1.368-1(b).
Statutory Merger. The Merger will qualify as a statutory merger under
Delaware law and will result in the transfer of substantially all of First
Commercial's assets to First Banks America.
Control Requirement. Following the Merger, First Banks and others,
who or which were shareholders of First Commercial before the Merger, will
own more than fifty percent of all classes of stock of First Banks America.
Under Section 368(a)(2)(H) of the Code, such level of control satisfies the
control requirement of Section 368(a)(1)(D) of the Code, so long as the
transferee corporation acquires substantially all the assets of the
transferor, as it will in the Merger, and the stock of the transferee passes
to the shareholders of the transferor pursuant to the plan of reorganization,
as it will in the Merger.
Business Purpose Requirement. This requirement is satisfied if the
reorganization is undertaken for reasons germane to the continuance of the
business of a corporation in modified corporate form. Treasury Reg.
Sec.Sec.1.368-1(b), -2(g). Based on the business reasons for the Merger
identified in the section hereof entitled The Proposed Merger, the accuracy
of which we assume, this requirement is satisfied.
Continuity of Business Enterprise Requirement. This requirement is
satisfied if the acquiring corporation (First Banks America) continues the
historic business of the target corporation (First Commercial) or uses a
significant portion of the target corporation's historic business assets in a
business. Treasury Reg. Sec.1.368-1(d)(2). Based on the representations
contained in the First Banks America Certificate, following the Merger First
Banks America will continue to conduct the historic businesses currently
conducted by First Commercial. As a result, the continuity of business
enterprise test will be satisfied. Rev. Rul. 85-198,1985-2 C.B. 120.
Continuity of Proprietary Interest Requirement. The Merger must
satisfy the continuity of proprietary interest requirement, which, in the
context of a statutory merger, means that the stockholders of the target
corporation (First Commercial) must receive stock of the acquiring
corporation (First Banks America) which represent(s) a material part of the
value of the transferred assets. Helvering v. Minnesota Tea Co., 000 X.X.
000, 386 (1935); XxXxxxx x. Xxxxxxxx, 000 X.X. 000 (1940); Cortland
Speciality Co. v. Commissioner, 60 F.2d 937 (2d Cir. 1932); Treasury Reg.
Sec.Sec.1.368-1(b), -2(a).
First Banks America Common Stock qualifies as the type of consideration
that will satisfy the foregoing test. With regard to whether the fair market
value of the aggregate amount of First Banks America Common Stock to be
exchanged pursuant to the Plan will be sufficient,
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the Service generally has required, as a condition to issuing a favorable
advance ruling under Section 368(a)(1)(A), that the former stockholders of the
target corporation receive stock in the acquiring corporation having a value on
the effective date of the merger equal to at least 50 percent of the value of
the formerly outstanding stock of the target corporation as of the same date,
including, for purposes of determining shares outstanding, shares redeemed as
part of the (or to facilitate the plan of) reorganization (the 50 percent
continuity test). Rev. Proc. 77-37, 1977-2 C.B. 568; Rev. Proc. 86-42, 1986-2
C.B. 722.
The 50 percent continuity test will be satisfied if the First Banks
America Common Stock received by First Commercial stockholders in the Merger
and retained by them following the Merger has a value at least equal to 50
percent of the aggregate fair market value of the issued and outstanding
First Commercial Common Stock on the Effective Date. For the purpose of our
opinions, we have assumed that the fair market value of the First Banks
America Common Stock issued as consideration in the Merger will be in excess
of 50 percent of the aggregate fair market value of the issued and
outstanding First Commercial Common Stock on the Effective Date, and the
structure of the pricing mechanism in the Plan supports this assumption. If
this assumption is incorrect, or if First Commercial stockholders dispose of
First Banks America Common Stock following the Merger so as to cause the
retained First Banks America Common Stock to have a value less than 50
percent of the value of the issued and outstanding First Commercial Common
Stock, the 50 percent continuity test will not be satisfied, and the merger
may fail to qualify as a reorganization described in Section 368(a)(1)(A) of
the Code.
Existing judicial decisions suggest that a lesser percentage of
continuity will satisfy the continuity of interest requirement. See, for
example, Xxxx X. Xxxxxx Co. x. Xxxxxxxxx, 000 X.X. 000 (1935). Thus, failure
to meet the Service's advance ruling guidelines is not necessarily critical
and does not necessarily render the reorganization taxable. We recommend,
however, that the parties comply with the Service's advance ruling guideline
so as to minimize the risk that the Service will challenge the reorganization
for lack of continuity of proprietary interest.
Federal Income Tax Consequences to the Parties
A reorganization qualifying under Section 368(a)(1)(A) and Section
368(a)(1)(D) of the Code will result in the following federal income tax
consequences:
No Corporate Level Gain. Unless the liabilities of First Commercial
which First Banks takes subject to or assumes in the Merger exceed the
aggregate adjusted tax basis of First Commercial's assets (Code Section
357(c)) neither First Commercial nor First Banks America will recognize gain
or loss as a result of the Merger. First Banks America will hold the assets
it receives from First Commercial with their historical adjusted tax bases
and their tax attributes, including their holding period, as if First
Commercial continued to own the assets. Code Section 362(b).
Solely Stock Received. Except for (i) cash received in lieu of
fractional share interests which will result in the recognition of gain or
loss by the recipient stockholders, and (ii) stockholders who effectively
exercise appraisal rights and do not withdraw their demand therefor and
receive only cash, First Commercial stockholders will receive only First
Banks America Common Stock. Pursuant to Code Section 354(a)(1), a First
Commercial stockholder who receives solely First Banks America Common Stock
in exchange for his, her, or its First Commercial Common Stock recognizes no
gain or loss in the Merger.
Basis. First Commercial stockholders who receive First Banks America
Common Stock in the Merger will have a tax basis in such First Banks America
Common Stock equal to the tax basis of the First Commercial Common Stock they
surrender in exchange therefor. Code Section 358(a)(1).
Cash in Lieu of Fractional Shares. Each former stockholder of First
Commercial who receives cash in lieu of fractional share of First Banks
America Common Stock will be treated as
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if the fractional shares were distributed as part of the Merger and were then
redeemed. Such stockholder will recognize gain or loss in an amount equal to
the difference between the adjusted tax basis of such fractional shares and the
cash received in lieu thereof, inasmuch as the First Banks America Certificate
and the First Commercial Certificate indicate that the cash to be paid in lieu
of fractional shares is not a bargained part of the Merger consideration, but a
matter of convenience to avoid the expense of issuing fractional shares. See
Rev. Proc. 77-41, 1977-2 C.B. 574, for the Service's advance ruling position
on this issue. Any such gain or loss a First Commercial stockholder
recognizes should constitute a capital gain or loss if the shares of First
Commercial Common Stock were a capital asset to the stockholder. Code
Section 1221. Any capital gain or loss such stockholder recognizes will
constitute a long-term gain or loss if the stockholder held the shares for
more than one year before the Merger. Code Section 1222(3) and (4).
Appraisal Rights. First Commercial stockholders who effectively
exercise appraisal rights and do not withdraw their demand therefor will be
deemed to have sold their First Commercial Common Stock for the cash they
receive. Normally, they will recognize gain or loss on that sale under Code
Section 1001. It is possible, however, although unlikely in view of the
disparity in size of the corporations involved in the Merger, that continued
actual or constructive ownership of First Banks America Common Stock by such
a First Commercial stockholder could cause that stockholder's receipt of cash
to be treated in whole or in part, as a realization of ordinary income
equivalent to a dividend. Code Sections 356, 302, and 318 together might
generate such a result. Since we do not know which stockholders, if any, may
effectively exercise appraisal rights and not withdraw their demand therefor,
and because the inquiry would be factually intensive with respect to any such
stockholder, we are unable to render an opinion with respect to this matter.
CONSENT
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We hereby consent to the filing of this letter as an exhibit to
Registration Statement in connection with the proposed Merger and to
----
all references made to this letter in such Registration Statement.
Very truly yours,
SUELTHAUS & XXXXX, P.C.
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EXHIBIT A
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Certificate of First Banks America, Inc.
----------------------------------------
The undersigned Xxxxx X. Xxxxx, Vice President, Chief Financial Officer,
and Secretary of First Banks America, Inc., a Delaware corporation (First
Banks America), on behalf of First Banks America and its Board of Directors,
HEREBY CERTIFIES that: (a) I am familiar with the terms and conditions of
the Agreement and Plan of Merger by and between First Banks America, a
Delaware corporation and First Commercial Bancorp, Inc., a Delaware
corporation (First Commercial), dated [DATE], as amended (the Plan); and
----
(b) I am aware that (i) this Certificate will be relied on by Suelthaus &
Xxxxx, P.C., counsel for First Commercial, in rendering its opinion that the
merger (the Merger) of First Commercial into First Banks America will
constitute a reorganization within the meaning of Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended (the Code), and (ii) the facts
and representations recited herein will survive the Merger. All terms used
in this Certificate but not defined herein shall have the meanings assigned
to them in the Plan.
The undersigned HEREBY FURTHER CERTIFIES, ON BEHALF OF FIRST BANKS
AMERICA AND ITS BOARD OF DIRECTORS, as follows:
1. The fair market value of the First Banks America Common Stock and
any cash to be received in lieu of fractional shares by each First Commercial
shareholder will be approximately equal to the fair market value of the First
Commercial Common Stock surrendered in the Merger by each such shareholder.
2. First Banks America has no plan or intention to redeem or
otherwise reacquire any of the First Banks America Common Stock issued to the
shareholders of First Commercial in the Merger.
3. First Banks America has no plan or intention to sell or otherwise
dispose of any assets of First Commercial (or its subsidiaries) acquired in
the Merger, except for dispositions made in the ordinary course of business.
4. Following the Merger, First Banks America will continue the
historic businesses of First Commercial.
5. Expenses, if any, incurred in connection with the Merger that are
properly attributable to the shareholders of First Commercial or to First
Commercial will not be paid by First Banks America. First Banks America will
pay its own expenses which are incurred in connection with the Merger.
6. No intercorporate indebtedness exists or will exist prior to the
Merger between First Commercial and First Banks America that was issued or
acquired, or will be settled, at a discount.
7. The payment of cash in lieu of fractional shares of First Banks
America Common Stock will be solely for the purposes of avoiding the expense
and inconvenience to First Banks America of issuing fractional shares and
will not represent separately bargained-for consideration. The total cash
consideration that will be paid in the Merger to the First Commercial
shareholders in lieu of fractional shares of First Banks America Common
Stock will not exceed one percent of the total consideration that will be
issued in the transaction to the First Commercial shareholders in exchange
for their shares of First Commercial Common stock. The fractional share
interests of each First Commercial shareholder will be aggregated, and no
First Commercial shareholder will receive cash in an amount equal to or
greater than the value of one full share of First Banks America Common Stock
except shareholders who effectively exercise appraisal rights and do not
withdraw their demand therefor.
8. None of the compensation to be received by any shareholder-
employees of First Commercial will be separate consideration for, or
allocable to, any of their shares of First
9
Commercial Common Stock; none of the shares of First Banks America Common Stock
to be received by any First Commercial shareholder-employees will be separate
consideration for, or allocable to, any employment agreement; and the
compensation paid to any First Commercial shareholder-employees will be for
services actually rendered and will be commensurate with amounts paid to third
parties bargaining at arm's length for similar services.
9. The terms of the exchange of First Commercial Common Stock for
First Banks America Common Stock in the Merger were arrived at in arm's
length negotiations between First Commercial and First Banks America.
10. First Banks America is not an investment company as defined in
Sec.368(a)(1)(A) of the Code.
11. The majority shareholder of First Banks America, which is also the
majority shareholder of First Commercial, did not acquire its majority
ownership of First Commercial pursuant to a plan to merge First Commercial
into First Banks America.
IN WITNESS WHEREOF, I have executed this Certificate of First Banks
America pursuant to authority granted me by First Banks America's Board of
Directors, on behalf of First Banks America and its Board of Directors, this
----- day of ----------------, 1997.
-------------------------------------------------
Xxxxx X. Xxxxx, Vice President, Chief Financial
Officer, and Secretary
For and on behalf of First Banks America and its
Board of Directors
10
EXHIBIT B
---------
Certificate of First Commercial Bancorp, Inc.
---------------------------------------------
The undersigned Xxxxxx X. Xxxxxxxx, President and Chief Executive
Officer of First Commercial Bancorp, Inc., a Delaware corporation (First
Commercial), on behalf of First Commercial and its Board of Directors,
HEREBY CERTIFIES that: (a) I am familiar with the terms and conditions of
the Agreement and Plan of Merger by and among First Banks America, Inc., a
Delaware corporation (First Banks America) and First Commercial Bancorp,
Inc., dated [DATE], as amended (the Plan); and (b) I am aware that (i)
----
Suelthaus & Xxxxx, P.C., counsel for First Commercial, will rely on this
Certificate in rendering its opinion that the merger (the Merger) of First
Commercial into First Banks America will constitute a reorganization within
the meaning of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as
amended (the Code), and (ii) the facts and representations recited herein
will survive the Merger. All terms used in this Certificate but not defined
herein shall have the meanings assigned to them in the Plan.
The undersigned HEREBY FURTHER CERTIFIES, ON BEHALF OF FIRST COMMERCIAL
AND ITS BOARD OF DIRECTORS, as follows:
1. The fair market value of the First Banks America Common Stock and
any cash to be received in lieu of fractional shares by each First Commercial
shareholder will be approximately equal to the fair market value of the First
Commercial Common Stock surrendered in the Merger by each such shareholder.
2. First Commercial has not disposed of any of its assets, except in
the ordinary course of business, in contemplation of or anticipation of the
consummation of the Merger.
3. To the best knowledge of First Commercial and its Board of
Directors, taking into account payments to shareholders who effectively
exercise their appraisal rights and do not withdraw their demand therefor,
there is no plan or intention on the part of any of the holders of First
Commercial Common Stock to sell, exchange, or otherwise dispose of any First
Banks America Common Stock to be received in the Merger, with the exception
of shares to be exchanged for cash in lieu of fractional shares of First
Banks America Common Stock.
4. The total adjusted basis of First Commercial's assets will equal
or exceed the sum of the liabilities assumed by First Banks America, plus the
amount of liabilities, if any, to which the assets First Commercial will
transfer to First Banks America are subject.
5. All liabilities of First Commercial were incurred in the ordinary
course of its business.
6. First Commercial is not under the jurisdiction of a court in a
Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the
Code.
7. First Commercial is not an investment company as defined in
Section 368(a)(2)(F) of the Code.
8. First Commercial and its shareholders each will pay its or their
own expenses which are incurred in connection with the Merger.
9. No intercorporate indebtedness exists or will exist prior to the
Merger between First Commercial and First Banks America that was issued or
acquired, or will be settled, at a discount.
10. The payment of cash in lieu of fractional shares of First Banks
America Common Stock will be solely for the purposes of avoiding the expense
and inconvenience to First Banks
11
America of issuing fractional shares and will not represent separately
bargained-for consideration.
11. None of the compensation to be received by any shareholder-
employees of First Commercial will be separate consideration for, or
allocable to, any of their shares of First Commercial Common Stock; none of
the shares of First Banks America Common Stock to be received by any First
Commercial shareholder-employees will be separate consideration for, or
allocable to, any employment agreement; and the compensation paid to any
First Commercial shareholder-employees will be for services actually rendered
and will be commensurate with amounts paid to third parties bargaining at arm's
length for similar services.
12. The terms of the exchange of First Commercial Common Stock for
First Banks America Common Stock in the Merger were arrived at in arm's
length negotiations between First Commercial and First Banks America.
13. The majority shareholder of First Commercial, which is also the
majority shareholder of First Banks America, did not acquire its majority
ownership of First Commercial pursuant to a Plan to merge First Commercial
into First Banks America.
IN WITNESS WHEREOF, I have executed this Certificate of First Commercial
pursuant to authority granted me by First Commercial's Board of Directors, on
behalf of First Commercial and its Board of Directors, this _____ day of
________________, 1997.
-------------------------------------------------
Xxxxxx X. Xxxxxxxx, President and Chief Executive
Officer
For and on behalf of First Commercial and its
Board of Directors
