AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT and PLAN OF MERGER, dated
March 27, 1998 and effective as of March 18, 1998 (this "Plan"),
by and among Regent Bancshares Corp. ("RBC"), Regent National
Bank ("Regent"), JeffBanks, Inc. ("JBI"), JeffBanks
Acquisitioncorp. V, Inc. ("JBI Merger Sub") and Jefferson Bank
"Jefferson").
RECITALS:
A. RBC. RBC is a corporation duly organized and validly existing in
good standing under the laws of the State of New Jersey with its principal
executive offices located in Philadelphia, Pennsylvania. As of the date hereof,
RBC's authorized capital stock consisted of 5,000,000 shares of Preferred Stock,
par value $.10 per share ("Preferred Stock") and 10,000,000 shares of common
stock, par value $.10 per share ("RBC Common Stock"), of which no shares of
Preferred Stock and 3,409,203 shares of RBC Common Stock were outstanding.
B. Regent. Regent is a national banking association duly organized and
validly existing in good standing under the laws of the United States, with its
principal executive offices located in Philadelphia, Pennsylvania. As of the
date hereof, Regent's authorized capital stock consisted of 3,000,000 shares of
common stock, par value $1.00 per share ("Regent Common Stock") of which
1,275,000 shares of Regent Common Stock were outstanding, all of which are owned
by RBC.
C. JBI. JBI is a corporation duly organized and validly existing in
good standing under the laws of the Commonwealth of Pennsylvania with its
principal executive offices located in Philadelphia, Pennsylvania. As of the
date hereof, JBI's authorized capital stock consisted of 10,000,000 shares of
common stock, par value $1.00 per share ("JBI Common Stock"), of which 5,038,251
shares of JBI Common Stock were outstanding.
D. JBI Merger Sub. JBI Merger Sub is a corporation formed for the
purpose of accomplishing the transactions contemplated by this Plan duly
organized and validly existing in good standing under the laws of the
Commonwealth of Pennsylvania with its principal executive offices located in
Philadelphia, Pennsylvania. As of the date hereof, JBI Merger Sub's authorized
capital stock consisted of 100 shares of Common Stock, par value $.01 per share
("JBI Merger Sub Common Stock"), of which 100 shares of JBI Merger Sub Common
Stock were outstanding, all of which are owned by JBI.
E. Merger Transaction. Pursuant to this Plan, the parties have agreed
that JBI will acquire RBC and Regent by means of a merger of JBI Merger Sub with
and into RBC (the "Merger") as a
result of which RBC will become a direct wholly owned subsidiary of JBI and
Regent will become a second-tier subsidiary of JBI (the "Acquisition").
Immediately following the Merger Effective Date (as hereinafter defined), JBI
intends to merge RBC into JBI, with JBI being the surviving entity (collectively
with the Merger, the "Merger Transaction"). Thereafter, JBI and RBC intend to
merge Regent into Jefferson, with Jefferson being the surviving entity (the
"Bank Merger").
F. Stock Option Agreement. As a condition and inducement to JBI's
willingness to enter into this Plan, concurrently with the execution and
delivery of this Plan, RBC has executed and delivered a Stock Option Agreement
with JBI (the "Stock Option Agreement") in substantially the form attached
hereto as Exhibit A, pursuant to which RBC is granting to JBI an option to
purchase, under certain circumstances, shares of RBC Common Stock.
G. Intention of the Parties. It is the intention of the parties to this
Plan that (i) the Merger shall be accounted for as a pooling of interests under
generally accepted accounting principles, and (ii) the Merger Transaction and
the Bank Merger shall qualify as a reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
H. Approvals. The Board of Directors of each of RBC, Regent, JBI,
Jefferson and JBI Merger Sub has determined that this Plan and the transactions
contemplated hereby and by the Stock Option Agreement are in their respective
best interests and the best interests of their respective shareholders, and has
approved, at meetings of each of such Boards of Directors, this Plan and, at the
RBC and JBI Board meetings, the Stock Option Agreement.
NOW, THEREFORE, In consideration of the mutual promises and obligations
contained herein, the parties hereto, intending to be legally bound hereby,
adopt and make this Plan and prescribe the terms and conditions hereof and the
manner and basis of carrying it into effect, which shall be as follows:
I. THE MERGER.
1.01 The Merger. In the event that all of the conditions set forth in
Article VI hereof have been satisfied or waived:
(A) The Continuing Corporation. On the Merger Effective Date, JBI
Merger Sub shall merge with and into RBC, the separate existence of JBI Merger
Sub shall cease and RBC (sometimes hereinafter referred to as the "Continuing
Corporation") shall survive. The name of the Continuing Corporation shall be
"JeffBanks Acquisitioncorp. V, Inc."
-2-
(B) Effect of the Merger. At the Merger Effective Date, the Continuing
Corporation shall be considered the same business and corporate entity as each
of RBC and JBI Merger Sub, and thereupon and thereafter, all the property,
rights, powers and franchises of each of RBC and JBI Merger Sub shall vest in
the Continuing Corporation and the Continuing Corporation shall be subject to
and be deemed to have assumed all of the debts, liabilities, obligations and
duties of each of RBC and JBI Merger Sub and shall have succeeded to all of each
of their relationships, fiduciary or otherwise, as fully and to the same extent
as if such property rights, privileges, powers, franchises, debts, obligations,
duties and relationships had been originally acquired, incurred or entered into
the by Continuing Corporation.
(C) Liabilities. Upon consummation of the Merger, the Continuing
Corporation shall thenceforth be responsible and liable for all the liabilities,
obligations and penalties of each of the corporations so merged. All rights of
creditors and obligors and all liens on the property of each of JBI and RBC
shall be preserved unimpaired.
(D) Certificate of Incorporation; Bylaws; Directors; Officers. The
Certificate of Incorporation and Bylaws of the Continuing Corporation shall be
those of JBI Merger Sub, as in effect immediately prior to the Merger Effective
Date in each case as amended as of the Merger Effective Date as provided in
Exhibits B and C attached hereto. The directors and officers of JBI Merger Sub
in office immediately prior to the Merger Effective Date shall be the directors
and officers of the Continuing Corporation, together with such additional
directors and officers as may thereafter be elected, who shall hold office until
such time as their successors are elected and qualified or their earlier
resignation, removal or death. On or before the Merger Effective Date, JBI shall
cause the election or appointment of (i) Xxxxxx X. Xxxxxxxxx, O. Xxxxxxx Xxxxxx
and Xxxxxxx X. Xxxxxxx as additional directors of Jefferson, (ii) Xxxxxx X.
Xxxxxxxxx and Xxxx X. Xxxx as additional Class A directors of JBI and (iii)
Xxxxxx X. Xxxxxxxxx as Vice Chairman of JBI and President and Chief Operating
Officer of Jefferson.
1.02 Merger Effective Date; Closing. The Merger shall become effective
upon the filing and acceptance of articles of merger by the Pennsylvania
Department of State and the Secretary of State of the State of New Jersey (the
"Merger Effective Date") which such articles of merger shall be filed within ten
days after satisfaction of all conditions set forth in Article VI hereof,
including, without limitation, the receipt of the regulatory approvals referred
to in Paragraphs (B) and (C) of Section 6.02 hereof unless otherwise agreed to
in writing by the parties hereto. All documents required by the terms of this
Plan
-3-
to be delivered at or prior to consummation of the Merger shall be exchanged by
the parties at the times prescribed herein (the "Closing"), which shall be held
on the Merger Effective Date at the offices of Jefferson, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 (or at such other location as may be mutually
agreed upon) at 10:00 a.m.
1.03 Other Matters. Notwithstanding any term of this Plan to the
contrary, JBI may, in its discretion at any time prior to the Merger Effective
Date, designate a direct or indirect wholly-owned subsidiary to substitute for
JBI Merger Sub as a constituent corporation in the Merger by written notice to
RBC so long as the exercise of this right does not adversely affect the
interests of the RBC shareholders, or cause a delay in consummation of the
transactions contemplated herein. JBI shall also have the right to cause JBI
Merger Sub or such substitute, to be the surviving corporation of the Merger, so
long as the exercise of such right does not have an adverse effect on the
interests of the holders of the capital stock of RBC, or cause a delay in, or
otherwise adversely affect, consummation of the transactions described herein.
Nothing in this Plan shall be deemed to restrict the ability of JBI or any of
its subsidiaries to merge with or with and into another entity so long as no
such other transaction shall adversely affect the parties' ability to consummate
the Merger Transaction and the Bank Merger or cause a delay in, or otherwise
adversely affect, consummation of the transactions contemplated herein, or
adversely affect the qualification of the Merger Transaction and the Bank Merger
as a "reorganization" under Section 368(a) of the Code.
II. MERGER CONSIDERATION.
2.01 Merger Consideration. Subject to the provisions of this Plan, at
the Merger Effective Date, automatically as a result of the Merger, and without
any action on the part of any party or shareholder:
(A) Outstanding JBI Common Stock. The shares of JBI Common Stock issued
and outstanding immediately prior to the Merger Effective Date shall, on and
after the Merger Effective Date, remain issued and outstanding shares of JBI
Common Stock.
(B) Outstanding RBC Common Stock. On the Merger Effective Date, each
share of RBC Common Stock (excluding shares owned by RBC) issued and outstanding
immediately prior to the Merger Effective Date shall, by virtue of the Merger,
automatically and without any action on the part of the holder thereof, become
and be converted into the right to receive .303 shares (the "Exchange Ratio")
(subject to possible adjustment as set forth in Section 2.06 hereof) of JBI
Common Stock (the "Merger Consideration"). Any shares of RBC Common Stock owned
by RBC shall be canceled and
-4-
retired upon the Merger Effective Date and no consideration shall be issued in
exchange therefor.
(C) Outstanding Shares of JBI Merger Sub. Each of the shares of JBI
Merger Sub Common Stock issued and outstanding immediately prior to the Merger
shall, by virtue of and after the Merger, be converted into one share of RBC
Common Stock and thereafter shall collectively constitute all of the issued and
outstanding shares of the capital stock of the Continuing Corporation.
(D) Outstanding Shares of Regent. The shares of Regent Common Stock
issued and outstanding immediately prior to the Merger shall, on and after the
Merger, remain issued and outstanding shares of Regent Common Stock.
2.02 Shareholder Rights; Stock Transfers. On the Merger Effective Date,
holders of RBC Common Stock shall cease to be, and shall have no rights as,
shareholders of RBC, other than to receive the Merger Consideration provided
under Section 2.01 hereof and Section 2.03 hereof. After the Merger Effective
Date, there shall be no transfers on the stock transfer books of JBI Merger Sub
or the Continuing Corporation of the shares of RBC Common Stock which were
issued and outstanding immediately prior to the Merger Effective Date.
2.03 Fractional Shares. Notwithstanding any other provision hereof, no
fractional shares of JBI Common Stock, and no certificates or scrip therefor, or
other evidence of ownership thereof, will be issued in the Merger. Instead, JBI
shall pay to each holder of RBC Common Stock who would otherwise be entitled to
a fractional share of JBI Common Stock an amount in cash determined by
multiplying such fractional share of JBI Common Stock by the Index Price (as
hereinafter defined). As used herein, the term "Index Price" shall mean the
average of the daily closing prices for JBI Common Stock on the Nasdaq National
Market System ("Nasdaq NMS") for the 20 consecutive full trading days ending at
the close of trading on the business day immediately prior to the Merger
Effective Date.
2.04 Exchange Procedures. As promptly as practicable after the Merger
Effective Date, JBI shall send or cause to be sent to each shareholder of record
of RBC immediately prior to the Merger Effective Date transmittal materials for
use in exchanging such shareholder's certificates formerly representing RBC
Common Stock ("Old Certificates") for the consideration set forth in Section
2.01(B) hereof and Section 2.03 hereof. The certificates representing the shares
of JBI Common Stock ("New Certificates") issuable in exchange for the Old
Certificates and any fractional share checks which an RBC shareholder shall be
entitled to receive, and any dividends or other distributions paid on any
-5-
shares of JBI Common Stock that such shareholder shall be entitled to receive
prior to the delivery to Xxxxx Xxxxxx Securities Transfer Company (the "Exchange
Agent") of Old Certificates representing all of such shareholder's shares of RBC
Common Stock will be delivered to such shareholder only upon delivery to the
Exchange Agent of Old Certificates representing all of such shares (or indemnity
satisfactory to JBI and the Exchange Agent, in their judgement, if any of the
certificates are lost, stolen or destroyed) owned by such shareholder. No
interest will be paid on any such fractional share checks or dividends to which
the holder of such shares shall be entitled to receive upon such delivery. After
the Merger Effective Date, to the extent required by law, former shareholders of
record of RBC shall be entitled to vote at any meeting of holders of JBI Common
Stock the number of whole shares of JBI Common Stock into which their respective
shares of RBC Common Stock are converted, regardless of whether such holders
have exchanged their Old Certificates for New Certificates in accordance with
the provisions of this Plan. Notwithstanding the foregoing, neither the Exchange
Agent nor any party hereto shall be liable to any former holder of RBC Common
Stock for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
2.05 Options. Any valid option to purchase shares of RBC Common Stock
(an "RBC Option"), outstanding and unexercised immediately prior to the Merger
shall, by virtue of the Merger, automatically and without any action on the part
of the holder thereof, become and be converted into an option (a "JBI Option")
to purchase that number of shares of JBI Common Stock as shall equal the
Exchange Ratio multiplied by that number of shares of RBC Common Stock which
such option entitled the holder thereof to purchase (rounded to the nearest
whole share), at an exercise price equal to the exercise price per share of the
RBC Option divided by the Exchange Ratio (rounded to the nearest cent). JBI
shall perform each such JBI Option in accordance with the terms of the plan or
agreement by which it is evidenced, subject to the foregoing. The maximum number
of shares of RBC Common Stock which are issuable upon exercise of the options
referred to above, as of the date hereof, has been Previously Disclosed (as such
term is defined in Section 8.08(C) hereof.
2.06 Anti-Dilution Provisions. In the event that (i) JBI changes the
number of shares of JBI Common Stock issued and outstanding prior to the Merger
Effective Date as a result of a stock split, stock dividend, recapitalization,
reclassification or other distribution with respect to the outstanding JBI
Common Stock and the record date therefor shall be prior to the Merger Effective
Date, or (ii) between the date hereof and the Merger Effective Date, JBI issues
JBI Common Stock or securities convertible into or exchangeable for shares of
XXX Xxxxxx Xxxxx,
-0
at a price per share of JBI Common Stock (or, with respect to securities
convertible into or exchangeable for shares of JBI Common Stock at a conversion
or exchange price per share) less than the market value per share of JBI Common
Stock at the time of issuance or a binding agreement to issue such JBI Common
Stock or such convertible or exchangeable securities is entered into, then the
Exchange Ratio shall be proportionately adjusted effective upon the record date
for any such event.
III. ACTIONS PENDING MERGER.
3.01 Actions Pending Merger. From the date hereof until the Merger
Effective Date, except as expressly contemplated by this Plan, without the prior
written consent or approval of the Chairman or President of JBI, RBC will not,
and will cause Regent not to:
(A) Dividends. Make, declare or pay any dividend or declare or make any
distribution on, any shares of its capital stock or directly or indirectly
combine, redeem, reclassify, purchase or otherwise acquire any shares of its
capital stock.
(B) Compensation; Employment Agreements. Enter into or amend any
employment, severance or similar agreements or arrangements with, increase the
rate of compensation or increase any employee benefit of (except normal
individual increases in the ordinary course of business in accordance with
existing policy consistent with current practice), or pay or agree to pay any
bonus to, any of its directors, officers or employees, except in accordance with
plans or agreements existing, as Previously Disclosed and as in effect on the
date hereof.
(C) Benefit Plans. Enter into or modify (except as may be required by
applicable law or except in accordance with plans or agreements as Previously
Disclosed and as in effect on the date hereof) 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 related thereto,
in respect of any of its directors, officers or other employees, including
without limitation taking any action that accelerates (i) the vesting or
exercise of any benefits payable thereunder; or (ii) the right to exercise any
employee stock options outstanding thereunder.
(D) Acquisitions and Dispositions. Dispose of or discontinue any
material portion of its assets, business or properties (except for the sale of
foreclosed properties, or properties received in lieu of foreclosure, in the
ordinary course of business, consistent with past practice and purchases
-7-
and sales of investment securities consistent with current practice), or merge
or consolidate with, or acquire all or any substantial portion of, the business
or property of any other entity (except for properties received through, or in
lieu of, foreclosure in the ordinary course of business, consistent with past
practice).
(E) Amendments. Amend its Certificate or Articles of Incorporation or
Bylaws.
(F) Actions in Ordinary Course. Take any other action or engage in any
loan, deposit, investment or other transaction not in the usual, regular and
ordinary course of business consistent with current practice, including, but not
limited to, (i) significantly changing asset liability sensitivity, (ii) making
loans, (iii) purchasing securities, (iv) entering into any material contract,
except for this Plan and the Stock Option Agreement, to be performed after the
date hereof, and (v) incurring any indebtedness for borrowed money, in each case
in a manner not consistent with current practice.
(G) Agreements. Agree or commit to do or take any of the foregoing
actions.
IV. REPRESENTATIONS AND WARRANTIES.
Each of RBC and Regent hereby represents and warrants to JBI, Jefferson and JBI
Merger Sub, and each of JBI, JBI Merger Sub and Jefferson hereby represents and
warrants to RBC and Regent as follows:
(A) Recitals. The facts set forth in the Recitals of this Plan with
respect to it are true and correct.
(B) Capital Shares. The outstanding shares of it are validly issued and
outstanding, fully paid and nonassessable, and subject to no preemptive rights.
(C) Qualification. It 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 the conduct of its business requires it to
be so qualified. It has the corporate power and authority to carry on its
business as it is now being conducted and to own all its material properties and
assets. It has in effect all federal, state and local authorizations, licenses
and approvals necessary for it to own or lease its properties and assets and to
carry on its business as it is now conducted.
(D) Subsidiaries. Except as Previously Disclosed, in the case of RBC
and Regent, it does not have any subsidiaries.
-8-
(E) Authority. Subject to receipt of any necessary approval by its
shareholders and the regulatory approvals referred to in Section 6.02 hereof, it
has the corporate power and authority to execute, deliver and perform its
obligations under this Plan and, in the case of RBC, the Stock Option Agreement,
this Plan and, in the case of RBC, the Stock Option Agreement has been
authorized by all necessary corporate action by it and this Plan and, in the
case of RBC, the Stock Option Agreement is a valid and binding agreement of it
enforceable against it in accordance with its respective terms, subject to
bankruptcy, insolvency, receivership, conservatorship and other laws of general
applicability relating to or affecting creditors rights and to general equity
principles.
(F) No Conflict. The execution, delivery and performance of this Plan
and, in the case of RBC, the Stock Option Agreement and the consummation of the
transactions contemplated by this Plan and, in the case of RBC, the Stock Option
Agreement will not constitute (i) a breach or violation of, or a default under,
any law, rule or regulation or any judgment, decree, order, governmental permit
or license, or agreement, indenture or instrument of it or of any of its
subsidiaries or to which it or any of its subsidiaries or properties is subject
or by which any of them are bound, which breach, violation or default is
reasonably likely to have, either by itself or in the aggregate with one or more
other events, occurrences or circumstances, a Material Adverse Effect (as such
term is defined in Section 8.08(B) hereof), on it, or (ii) a breach or violation
of, or a default under, its Certificate or Articles of Incorporation or Bylaws;
and the consummation of the transactions contemplated by this Plan and, in the
case of RBC, the Stock Option Agreement will not require any consent or approval
under any such law, rule, regulation, judgment, decree, order, governmental
permit or license or, except as Previously Disclosed, the consent or approval of
any other party to any such agreement, indenture or instrument, other than the
required approvals of applicable regulatory authorities referred to in Section
6.02 hereof.
(G) Financial Reports and SEC Documents. Its Annual Reports on Form
10-K for the fiscal years ended December 31, 1996 and 1997, and all other
reports, registration statements, definitive proxy statements or information
statements filed or to be filed by it or any of its subsidiaries subsequent to
December 31, 1996 under the Securities Act of 1933, as amended (together with
the rules and regulations thereunder, the "Securities Act") or under Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(together with the rules and regulations thereunder, the "Exchange Act"), in the
form filed, or to be filed, with the SEC (collectively, its "SEC Documents") (i)
complied or will comply as to form in all material respects with the applicable
requirements under the
-9-
Securities Act or the Exchange Act, as the case may be, and (ii) did not and
will not, at the time of such filing, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading; and each of the balance sheets in or
incorporated by reference into any such SEC Document (including the related
notes and schedule thereto) fairly presents and will fairly present the
financial position of the entity or entities to which it relates as of its date,
and each of the statements of income and changes in shareholders' equity and
cash flows or equivalent statements in such report and documents (including any
related notes and schedules thereto) fairly presents and will fairly present the
results of operations, changes in shareholders' equity and changes in cash
flows, as the case may be, of the entity or entities to which it relates for the
periods set forth therein, in each case in accordance with generally accepted
accounting principles ("GAAP") consistently applied during the periods involved,
except in each case as may be noted therein, subject to normal year-end audit
adjustments in the case of unaudited statements.
(H) Conduct of Business in Ordinary Course. Except as Previously
Disclosed, since September 30, 1997, (i) it and each of its subsidiaries have
conducted their respective businesses in the ordinary and usual course
(excluding the incurrence of expenses related to this Plan and the transactions
contemplated hereby) and (ii) no event has occurred which, either by itself or
in the aggregate with one or more other events, occurrences or circumstances, is
reasonably likely to have a Material Adverse Effect on it.
(I) Litigation; Regulatory Action. Except as Previously Disclosed, no
litigation, proceeding, or controversy before any court or governmental agency
is pending which, either by itself or in the aggregate with one or more other
events, occurrences or circumstances, is reasonably likely to have a Material
Adverse Effect on it and, to the best of its knowledge, no such litigation,
proceedings or controversy has been threatened; and except as Previously
Disclosed, neither it nor any of its subsidiaries is a 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 has adopted any board
resolution at the request of, any federal, state or other government,
governmental agency or authority charged with the supervision or regulation of
financial institutions or their holding companies or the issuance of securities
or engaged in the insurance of deposits (including, without limitation, the
Office of the Comptroller of the Currency (the "OCC"), the Pennsylvania
Department of Banking, the Board of Governors of the Federal Reserve System (the
"FRB") and the
-10-
Federal Deposit Insurance Corporation (the "FDIC")) or the supervision or
regulation of it or any of its subsidiaries or properties (collectively, the
"Regulatory Authorities"); and except as Previously Disclosed, neither it nor
any of its subsidiaries has been advised by any Regulatory Authority that such
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 or similar submission or any such
resolutions. Since Regent received notification of its most recent CAMEL rating
from the OCC, a copy of which has been furnished to JBI, there has been no
change in such rating.
(J) Compliance with Laws. Except as Previously Disclosed, it and each
of its subsidiaries is in material compliance, in the conduct of its business,
with all applicable federal, state and local 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 and all other applicable fair lending laws
relating to discriminatory business practices; and, except as Previously
Disclosed, it and each of its subsidiaries has all permits, licenses,
authorizations, orders and approvals of, and has made all filings, applications
and registrations with, all Regulatory Authorities that are required in order to
permit them to conduct their businesses substantially as presently conducted;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect and, to the best of its knowledge, no suspension or
cancellation of any of them is threatened; and, except as Previously Disclosed,
neither it nor any of its subsidiaries has received notification or
communication from any Regulatory Authority (i) asserting that it or any of its
subsidiaries is not in material compliance with any of the statutes,
regulations, or ordinances which such Regulatory Authority enforces or (ii)
threatening to revoke any license, franchise, permit, or governmental
authorization or (iii) threatening or contemplating revocation or limitation of,
or which would have the effect of revoking or limiting, federal deposit
insurance (nor, to its knowledge, do any grounds for any of the foregoing
exist).
(K) Material Contracts. Except as Previously Disclosed and except for
this Plan and the Stock Option Agreement, in the case of RBC and Regent only, it
is not bound by any material contract to be performed after the date hereof.
(L) Defaults. Except as Previously Disclosed, in the case of RBC and
Regent only, neither it nor any of its subsidiaries is in default under any
material contract, agreement, commitment, arrangement, lease, insurance policy,
or other instrument to
-11-
which it is a party, by which its respective assets, business, or operations may
be bound or affected, or under which it or its respective 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. Neither it nor any of its subsidiaries is subject to, or bound by, any
contract containing covenants which (i) limit the ability of it or any
subsidiary to compete in any material line of business or with any person, or
(ii) involve any material restriction of geographical area in which, or method
by which, it or any subsidiary may carry on its business (other than as may be
required by law or any applicable Regulatory Authority).
(M) Title to Properties. Except as Previously Disclosed, in the case of
RBC and Regent only, it and each of its subsidiaries has good and marketable
title, free and clear of any charge, mortgage, pledge, security interest,
restriction, claim, lien or encumbrance ("Liens") (other than Liens for current
taxes not yet delinquent, pledges to secure deposits or in the ordinary course
of business consistent with past practice) to all of the properties and assets,
tangible and intangible, owned by it or its subsidiaries. To the best of its
knowledge, all buildings and all fixtures, equipment and other property and
assets are held under valid leases or subleases by it or its subsidiaries
enforceable in accordance with their respective terms (except as may be limited
by bankruptcy, insolvency, receivership, conservatorship and other laws of
general applicability relating to or affecting creditors rights or by general
equity principles).
(N) No Brokers. Except as Previously Disclosed in the case of RBC with
respect to arrangements between Xxxxx, Xxxxxxxx & Xxxxx, Inc. and RBC, all
negotiations relative to this Plan and the transactions contemplated hereby have
been carried on by it and its agents directly with the other parties hereto and
their agents and no action has been taken by it that would give rise to any
valid claim against any party hereto for a brokerage commission, finder's fee or
other like payment.
(O) Employee Benefit Plans. Except as Previously Disclosed:
(i) RBC has delivered to JBI a true and complete copy of its
401(k) Plan, which is the only "employee benefit plan" within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), covering employees or former employees of it and Regent (the
"Employees").
(ii) All employee benefit plans of Regent covering Employees,
to the extent subject to ERISA (the "ERISA Plans"), have been operated and
administered, and are in material
-12-
compliance with, applicable law, including ERISA and the Code, or any rules or
regulations thereunder, and all filings, disclosures and notices required by any
such laws have been timely made, except for failures to so comply which are not
reasonably likely, either by themselves or in the aggregate with one or more
other events, occurrences or circumstances, to have a Material Adverse Effect on
it. There is no pending or, to the best of its knowledge, threatened litigation
relating to the ERISA Plans which is reasonably likely, either by itself or in
the aggregate with one or more other events, occurrences or circumstances, to
have a Material Adverse Effect on it; and neither it nor any of its subsidiaries
has engaged in a transaction with respect to any ERISA Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would subject
it or any of its subsidiaries to a tax or penalty imposed by either Section 4975
of the Code or Section 502 of ERISA in an amount which is reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect on it.
(iii) All contributions required to be made under the terms of
any ERISA Plan of RBC or its subsidiaries have been timely made.
(iv) There are no material current or projected liabilities
for retiree health or life insurance benefits.
(P) No Regulatory Impediment. It knows of no reason why the regulatory
approvals referred to in Section 6.02 hereof should not be obtained.
(Q) Labor Matters. Neither it nor any of its subsidiaries is a party
to, or bound by any collective bargaining agreement, contract or other agreement
or understanding with a labor union or labor organization, nor is it the subject
of a proceeding asserting that it or any subsidiary has committed an unfair
labor practice (within the meaning of the National Labor Relations Act) or
seeking to compel it or any subsidiary to bargain with any labor organization as
to wages and conditions of employment, nor is there any strike or other labor
dispute involving it, pending or, to the best of its knowledge, threatened, nor
is it aware of any activity involving its employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
(R) Insurance. It and each of its subsidiaries has taken all requisite
action (including without limitation the making of claims and the giving of
notices) pursuant to its directors' and officers' liability insurance policy or
policies in order to preserve all rights thereunder with respect to all matters
(other than matters arising in connection with this Plan and the transactions
contemplated hereby) that are known to it.
-13-
(S) Asset Classification. In the case of RBC and Regent only, it has
Previously Disclosed a list, accurate and complete in all material respects, of
all loans, extensions of credit or other assets of Regent that are classified by
it as of December 31, 1997 (the "Asset Classification"); and no amounts of
loans, extensions of credit or other assets that are classified as of December
31, 1997 by any regulatory examiner as "Other Assets Especially Mentioned",
"Substandard", "Doubtful," "Loss," or words of similar import are excluded from
the amounts disclosed in the Asset Classification, other than amounts of loans,
extensions of credit or other assets that were charged off by Regent prior to
December 31, 1997; and in the case of RBC and Regent only, the allowance for
loan and lease losses disclosed in its SEC Documents were, and the allowance for
loan and lease losses disclosed in its SEC Documents for periods ending after
the date of this Plan will be, adequate as of the date thereof, under generally
accepted accounting principles consistently applied to banks and bank holding
companies and all other applicable regulatory requirements for all losses
reasonably anticipated in the ordinary course of business as of the date thereof
based on information available as of such date; and in the case of RBC and
Regent only, the assets comprising other real estate owned and in-substance
foreclosures included in any of its non-performing assets are carried net of
reserves at the lower of cost or market value based on current independent
appraisals or current management appraisals.
(T) Affiliates. Except as Previously Disclosed, in the case of RBC and
Regent only, to the best of its knowledge, there is no person who, as of the
date of this Plan, may be deemed to be an "affiliate" of RBC or Regent as that
term is used in Rule 145 under the Securities Act.
(U) Takeover Laws; Dissenters' Rights. In the case of RBC and Regent
only, it has taken all necessary action to exempt the transactions contemplated
by this Plan (including those contemplated by the Stock Option Agreement) from,
or the transactions contemplated by this Plan (including those contemplated by
the Stock Option Agreement) are otherwise exempt from, the requirements of any
"moratorium," "control share," "fair price," "affiliate transaction," "control
transaction," "business combination" or other anti-takeover laws and regulations
(collectively, the "Takeover Laws") of the Commonwealth of Pennsylvania or the
State of New Jersey, including, without limitation, Chapter 25 of the
Pennsylvania Business Corporation Law, the New Jersey Shareholders Protection
Act and the New Jersey Corporation Takeover Bid Disclosure Law. Holders of RBC
Common Stock and JBI Common Stock do not have dissenters' or appraisal rights in
connection with the execution of this Plan or the consummation of any of the
transactions contemplated hereby.
-14-
(V) Environmental Matters. Except as Previously Disclosed, in the case
of RBC and Regent only, to the best of their knowledge:
(i) No Hazardous Substances (as hereinafter defined) have been
stored, treated, dumped, spilled, disposed, discharged, released or deposited
at, under or on (1) any property now owned, occupied, leased or held or managed
in a representative or fiduciary capacity ("Present Property") by RBC or any of
its subsidiaries, (2) any property previously owned, occupied, leased or held or
managed in a representative or fiduciary capacity ("Former Property") by RBC or
any of its subsidiaries during the term of such previous ownership, occupancy,
lease, holding or management or (3) any Participation Facility (as hereinafter
defined) during the time that RBC or any of its subsidiaries participated in the
management of, or may be deemed to be or to have been an owner or operator of,
such Participation Facility, where such storage, treatment, dumping, spilling,
disposing, discharging, releasing or depositing would have a Material Adverse
Effect on RBC and its subsidiaries, taken as a whole.
(ii) Neither RBC nor any of its subsidiaries disposed of, or
arranged for the disposal of, Hazardous Substances from any Present Property,
Former Property or Participation Facility, and no owner or operator of a
Participation Facility during the time that RBC or any of its subsidiaries
participated in the management of, or may be deemed to be or to have been an
owner or operator of, such Participation Facility, where such disposal or
arranging for disposal would have a Material Adverse Effect on RBC and its
subsidiaries, taken as whole.
(iii) No Hazardous Substances have been stored, treated,
dumped, spilled, disposed, discharged, released or deposited at, under or on any
Loan Property (as hereinafter defined), where such storage, treatment, dumping,
spilling, disposing, discharging, releasing, depositing or violation would have
a Material Adverse Effect on RBC and its subsidiaries, taken as a whole, nor is
there, with respect to any such Loan Property, any violation of environmental
law which could materially adversely affect the value of such Loan Property to
an extent which could prevent or delay RBC or any of its subsidiaries from
recovering the full value of its loan in the event of a foreclosure on such Loan
Property.
(iv) Neither RBC nor any of its subsidiaries (i) is aware of
any investigations contemplated, pending or completed by any environmental
regulatory authority with respect to any Present Property, Former Property, Loan
Property or Participation Facility, (ii) has received any information requests
from any environmental regulatory authority or (iii) been named as a potentially
responsible or liable party in any Superfund,
-15-
Resource Conservation and Recovery Act, Toxic Substances Control Act or Clean
Water Act proceeding or other equivalent state or federal proceeding.
(v) As used in this Plan, (i) "Participation Facility" shall
mean any property or facility of which the relevant person or entity (A) has at
any time participated in the management or (B) may be deemed to be or to have
been an owner or operator, (ii) "Loan Property" shall mean any real property in
which the relevant person or entity holds a security interest in an amount
greater than $50,000 and (iii) "Hazardous Substances" shall mean (x) any
flammable substances, explosives, radioactive materials, hazardous materials,
hazardous substances, hazardous wastes, toxic substances, pollutants,
contaminants and any related materials or substances specified in any applicable
federal or state law or regulation relating to pollution or protection of human
health or the environment (including, without limitation, ambient or indoor air,
surface water, groundwater, land surface or subsurface strata) and (y) friable
asbestos, polychlorinated biphenyls, urea formaldehyde and petroleum and
petroleum-containing products and wastes.
(W) Tax Matters. Except as Previously Disclosed, (i) all reports and
returns with respect to Taxes (as defined below) that are required to be filed
by or with respect to it (collectively, the "Tax Returns"), have been duly
filed, or requests for extensions have been timely filed and have not expired,
for all periods immediately preceding the Merger Effective Date except to the
extent such filing is not yet due or all such failures to file, taken together,
are not reasonably likely to have either by themselves or in the aggregate with
one or more other events, occurrences or circumstances, a Material Adverse
Effect on it, and such Tax Returns were true, complete, accurate and correct in
all material respects, (ii) all taxes (which shall mean federal, state, local or
foreign income, gross receipts, windfall profits, severance, property,
production, sales, use, occupancy, license, excise, franchise, employment,
withholding or similar taxes imposed on the income, properties, operations or
activities of it, together with any interest, additions, or penalties with
respect thereto and any interest in respect of such additions or penalties,
collectively the "Taxes") shown to be due on the Tax Returns have been paid in
full on or before the due date or are being contested in good faith and
adequately reserved for, in accordance with GAAP, on its consolidated balance
sheet, (iii) the Tax Returns have never been examined by the Internal Revenue
Service, (iv) no written notice of deficiency, pending audit or assessment with
respect to the Tax Returns has been received from the appropriate state, local
or foreign taxing authority, or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has expired, (v) all
Taxes due with respect to completed and settled examinations have been paid
-16-
in full or otherwise adequately reserved in accordance with GAAP on its
consolidated balance sheet, (vi) no issues have been raised by the relevant
taxing authority in connection with the examination of any of the Tax Returns
which are reasonably likely to result in a determination that would have, either
by themselves or in the aggregate with one or more other events, occurrences or
circumstances, a Material Adverse Effect on it, except as reserved against, in
accordance with GAAP, in its Financial Reports, and (vi) no waivers of statutes
of limitations have been given by or requested with respect to any Taxes of it.
(X) Pooling; Reorganization. It is aware of no reason why the Merger
will fail to qualify (i) for pooling-of-interests accounting treatment or (ii)
as a reorganization under Section 368(a) of the Code.
(Y) Outstanding Securities. Except as set forth in the recitals to this
Plan, or Previously Disclosed pursuant to this Plan, in the case of RBC and
Regent only, neither it nor any of its subsidiaries has any securities (whether
capital stock or other equity securities, debt securities, or warrants, options
or rights to obtain the issuance of any such securities) authorized and reserved
for issuance and neither RBC nor Regent has any commitment to authorize, issue,
or sell any such shares or any securities or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for or acquire
from such party, any such securities and no securities or obligations
representing any such rights are outstanding;
(Z) Articles and Bylaws. In the case of RBC and Regent only, it has
previously delivered to the other parties its Articles or Certificate of
Incorporation and Bylaws which are true, correct and complete copies of such
documents as in effect on the date of this Plan.
V. COVENANTS.
RBC and Regent hereby covenant to JBI, Jefferson and JBI Merger Sub, and JBI,
Jefferson and JBI Merger Sub hereby covenant to RBC and Regent, that:
5.01 Reasonable Best Efforts. Subject to the terms and conditions of
this Plan, it shall use commercially reasonable 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, as promptly
as practicable so as to permit consummation of the Merger at the earliest
possible date and to otherwise enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other parties hereto, and
each party shall use, and shall cause each of their respective subsidiaries to
use,
-17-
commercially reasonable efforts to cause to be satisfied the conditions referred
to in Article VI hereof, to lift or rescind any injunction or restraining order
or other order adversely affecting the ability of the parties to consummate the
transactions contemplated by this Plan, to obtain all consents (governmental or
other) necessary or desirable for the consummation of the transactions
contemplated by this Plan and to defend any litigation seeking to enjoin,
prevent or delay the consummation of the transactions contemplated by this Plan.
5.02 Irrevocable Proxies. In the case of RBC and Regent only, it shall
use its best efforts to cause each director and executive officer of RBC and
Regent to deliver to JBI on the date of this Plan or as promptly as practicable
thereafter, irrevocable proxies naming Xxxxx X. Xxxxx, Xxxxxx X. Xxxxxx, or
either of them, as the attorneys-in-fact for such persons to vote the shares of
RBC held in his or her name (or to instruct the record holder of any such shares
held in nominee name for his or her benefit) for approval of this Plan, the
Merger and the transactions contemplated hereby.
5.03 Registration Statement.
(A) Each shall use its best efforts in good faith and in cooperation
with the other parties to promptly prepare and file with the SEC in accordance
with the requirements of the Securities Act, a registration statement (the
"Registration Statement") in connection with the issuance of the JBI Common
Stock contemplated by this Plan. Each shall use its best efforts to promptly
prepare and, if required, file with the SEC, a proxy or information statement to
be mailed to the holders of RBC Common Stock. RBC shall call a meeting of the
holders of RBC Common Stock to be held as soon as practicable after the
effective date of the Registration Statement for purposes of voting upon a
proposal seeking approval of this Plan and the Merger contemplated hereby, and,
subject to the right of the Board of Directors of RBC to withdraw or modify its
recommendations if such Board of Directors determines that it is required to do
so in the exercise of its fiduciary duties after consultation with counsel, it
shall recommend approval of this Plan and the transactions contemplated hereby,
and use its best efforts to obtain such approvals from the holders of RBC Common
Stock. RBC shall, at JBI's request, recess or adjourn its shareholders' meeting
if such recess or adjournment is deemed by JBI to be necessary or desirable.
(B) In the case of JBI only: (i) it shall use its best efforts to cause
the Registration Statement to be declared effective as soon as practicable after
the filing thereof; (ii) it shall use its best efforts to obtain, prior to the
effective date of the Registration Statement, all necessary state
-18-
securities laws or "blue sky" permits and approvals, provided that JBI shall not
be required by virtue thereof to submit to general jurisdiction in any state;
(iii) when the Registration Statement or any post-effective amendment or
supplement thereto shall become effective, and at all times subsequent to such
effectiveness, up to and including the date of the meetings, such Registration
Statement and all amendments or supplements thereto, with respect to all
information set forth therein furnished by RBC or Regent relating to RBC, Regent
or their subsidiaries and by JBI relating to JBI and its subsidiaries (a) will
comply as to form in all material respects with the provisions of the Securities
Act and any other applicable statutory or regulatory requirements, and (b) 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 contained
therein not misleading; provided however, in no event shall any party hereto be
liable for any untrue statement of a material fact or omission to state a
material fact in the Registration Statement made in reliance upon and in
conformity with, written information concerning another party furnished by such
other party specifically for use in the Registration Statement.
5.04 Press Releases. Unless approved by the other parties hereto in
advance, no party will issue any press release or written statement for general
circulation relating to the transactions contemplated hereby, except as
otherwise required by law or applicable stock exchange, National Association of
Securities Dealers, Inc. ("NASD") or Nasdaq NMS rule.
5.05 Access; Information.
(A) Upon reasonable notice, each party hereto shall afford the other
parties hereto, and their officers, employees, counsel, accountants and other
authorized representatives, access, during normal business hours throughout the
period prior to the Merger Effective Date to all of its properties, books,
contracts, commitments and records and, during such period, it shall furnish
promptly to the other parties hereto, (i) a copy of each material report,
schedule and other document filed by it pursuant to the requirements of federal
or state securities or banking laws, and (ii) all other information concerning
its business, properties and personnel as the other parties hereto may
reasonably request. No party shall be required to provide access to or to
disclose information where such access or disclosure would violate or prejudice
the rights of its customers, jeopardize the attorney-client or similar privilege
with respect to such information or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or agreement entered into prior to the date
hereof. The parties will use their reasonable best efforts to make appropriate
substitute disclosure arrangements, to the
-19-
extent practicable, in circumstances in which the restrictions of the preceding
sentence apply.
(B) No investigation pursuant to this Section 5.05 by any party shall
affect or be deemed to modify or waive any representation or warranty made by
any other party hereto or the conditions to the obligation of the first party to
consummate the transactions contemplated by this Plan; and (2) each party hereto
will not use any information obtained pursuant to this Section 5.05 for any
purpose unrelated to this Plan, the consummation of the transactions
contemplated hereby and, if the Merger is not consummated, will hold all
information and documents obtained pursuant to this paragraph in confidence (as
provided in Section 8.06 hereof) unless and until such time as such information
or documents become publicly available other than by reason of any action or
failure to act by such party or as it is advised by counsel that any such
information or document is required by law or applicable stock exchange, NASD or
Nasdaq NMS rule to be disclosed, and in the event of the termination of this
Plan, each party will, upon request by the other party, deliver to the other all
documents so obtained by it or destroy such documents.
5.06 Acquisition Transactions.
(A) Prior to the Merger Effective Date, RBC shall not, and shall not
authorize or permit any of its subsidiaries or any of its or its subsidiaries'
directors, officers, employees, agents or representatives, directly or
indirectly, to solicit, initiate, facilitate or encourage (including by way of
furnishing or disclosing non-public information) any inquiries or the making of
any proposal with respect to any merger, consolidation or other business
combination involving it or its subsidiaries or the acquisition of all or
substantially all of the assets or capital stock of it and its subsidiaries
taken as a whole, or any similar transaction (an "Acquisition Transaction") or
negotiate, explore or otherwise engage in substantive discussions with any
person (other than JBI or its directors, officers, employees, agents and
representatives) with respect to any Acquisition Transaction or enter into any
agreement, arrangement or understanding requiring it to abandon, terminate or
fail to consummate the Merger or any other transactions contemplated by this
Agreement; provided that RBC may, in response to an unsolicited written proposal
with respect to an Acquisition Transaction from a third party, furnish
information to, and negotiate, explore or otherwise engage in substantive
discussions with such third party, and enter into any such agreement,
arrangement or understanding, in each case only if RBC's Board of Directors,
determines in good faith by a majority vote, after consultation with its
financial advisers and its outside legal counsel, that failing to take such
action would be a breach of the fiduciary duties of its Board of Directors in
-20-
connection with seeking an Acquisition Transaction that is more favorable to its
shareholders than the Merger.
(B) RBC shall promptly advise JBI in writing of the receipt of any
inquiries or proposals relating to an Acquisition Transaction, unless RBC's
Board of Directors determines in good faith by a majority vote, after
consultation with its outside legal counsel, that taking such action would be a
breach of the fiduciary duties of its Board of Directors in connection with
seeking an Acquisition Transaction that is more favorable to its shareholders
than the Merger.
5.07 Affiliate Agreements. In the case of RBC and Regent only, it will
cause each person who may be deemed to be an "affiliate" of RBC or Regent for
purposes of Rule 145 under the Securities Act to execute and deliver to JBI on
or before the mailing of the proxy statements for the meetings referred to in
Section 5.03 hereof an agreement in the form attached hereto as Exhibit D
restricting the disposition of such affiliate's shares of RBC Common Stock and
the shares of JBI Common Stock to be received by such person in exchange for
such person's shares of RBC Common Stock or shares of JBI Common Stock issuable
pursuant to the exercise of the JBI Options, as applicable.
5.08 Certain Modifications; Restructuring Changes. In the case of
Regent, it shall use its best efforts to make reasonable modifications and
changes to its loan, litigation and real estate valuation policies and practices
(including loan classifications and levels of reserves) prior to the Merger
Effective Date so as to be consistent on a mutually satisfactory basis with
those of JBI and generally accepted accounting principles. Regent shall not be
required to modify or change any such policies or practices, however, until (i)
satisfaction of the conditions set forth in Section 6.01 hereof, (ii)
commencement of the United States Department of Justice review period set forth
in 12 U.S.C. ss.1849; (iii) such time as Regent and JBI shall reasonably agree
that the Merger Effective Date will occur prior to public disclosure of such
modifications or changes in regular periodic earnings releases or periodic
reports filed with any Regulatory Authority, and (iv) such time as JBI
acknowledges in writing that all conditions to JBI's obligations to consummate
the Merger (and JBI's rights to terminate this Plan) have been waived or
satisfied; provided, however, that in all circumstances Regent shall make such
modifications and changes not later than immediately prior to the expiration of
the statutory waiting period referred to above in clause (ii). Regent's
representations, warranties and covenants contained in this Plan shall not be
deemed to be untrue or breached in any respect for any purpose as a consequence
of any modifications or changes undertaken solely on account of this Section
5.08 nor will any such modifications or changes affect or be considered in the
definition of "Material Adverse Effect" contained in Section 8.08 hereof.
-21-
5.09 Takeover Laws. In the case of each of RBC and Regent only, it
shall not take any action that would cause the transactions contemplated by this
Plan (including those contemplated by the Stock Option Agreement) to be subject
to any applicable state takeover statute in effect as of the date of this Plan
and RBC and Regent shall take all necessary steps to exempt (or ensure the
continued exemption of) the transactions contemplated by this Plan (including
those contemplated by the Stock Option Agreement) from any applicable state
takeover law, as now or hereafter in effect, including, without limitation, the
New Jersey Shareholders Protection Act and the New Jersey Corporation Takeover
Bid Disclosure Law.
5.10 No Rights Triggered. In the case of RBC and Regent only, it shall
take all necessary steps to ensure that the entering into of this Plan and the
consummation of the transactions contemplated hereby (including without
limitation the Merger and the transactions contemplated by the Stock Option
Agreement) and any other action or combination of actions, or any other
transactions contemplated hereby or thereby do not and will not (i) result in
the grant of any rights or claims under the Certificate of Incorporation or
Bylaws of Regent or RBC or under any agreement to which Regent or RBC is a party
other than as Previously Disclosed with respect to certain employment
agreements, or (ii) restrict or impair in any way the ability of JBI or JBI
Merger Sub to exercise the rights granted hereunder.
5.11 Regulatory Applications. It undertakes and agrees to use its best
efforts to cause the Merger to be effected, including, without limitation,
promptly preparing and filing any and all regulatory applications and disclosure
documents, and to take no action which would cause the Merger to fail to qualify
for pooling-of-interests accounting treatment.
5.12 Employees.
(A) In the case of JBI, prior to the completion of the Merger, it will
advise each of the current employees of RBC and Regent in writing that (i) it
will interview all current employees of Regent; (ii) it will consider in good
faith continuing to employ each such employee upon the completion of the Merger;
and (iii) any employee of Regent that is retained by JBI will be given credit
for his or her prior service with Regent for the purposes of determining the
entitlement to and amount of (a) retirement benefits provided under JBI's
current retirement plans (and any successor thereto) and (b) the required
employer contribution for the group health insurance currently provided by JBI.
-22-
(B) In the case of RBC and Regent, the employment agreements of each of
Xxxxxx X. Xxxxxxxxx, Xxxx X. Xxxxx and Xxxxxx Xxxxxxx, shall be amended or
replaced on terms acceptable to JBI or shall be terminated in accordance with
their terms or on such other terms as shall be acceptable to JBI.
5.13 Quarterly Information. In the case of RBC and Regent only, it
shall promptly after the end of each fiscal quarter after the date of this Plan
and on the Merger Effective Date provide JBI with a list of all of its loans,
extensions of credit or other assets that have been classified internally or by
any regulatory examiner since the date it provided JBI with the Asset
Classification.
5.14 Indemnification. In the case of JBI only:
(A) From and after the Merger Effective Date through the second
anniversary of the Merger Effective Date, it agrees to indemnify and hold
harmless each present and former director and officer of each of RBC and Regent
and each officer or employee of each of RBC and Regent that is serving as a
director or trustee of another entity expressly at the request or direction of
RBC or Regent (each, an "Indemnified Party"), against any costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages or liabilities (collectively, the "Costs") incurred in connection with
any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, and whether or not the Indemnified Party is a
party thereto, arising out of matters existing or occurring at or prior to the
Merger Effective Date (including the transactions contemplated by this Plan),
whether asserted or claimed prior to, at or after the Merger Effective Date, to
the fullest extent permitted under the RBC Certificate of Incorporation, the
charter of Regent, or the bylaws of either in effect on the date hereof;
provided, however, that no Indemnified Party shall be entitled to
indemnification for costs arising out of any matter that such Indemnified Party
had an obligation, pursuant to this Plan, to Previously Disclose to JBI and did
not so disclose.
(B) Any Indemnified Party wishing to claim indemnification under
Section 5.14(A) hereof, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify JBI thereof, but the failure
to so notify shall not relieve JBI of any liability it may have hereunder to
such Indemnified Party if such failure does not materially prejudice JBI. In the
event of any such claim, action, suit, proceeding or investigation, (i) JBI
shall have the right to assume the defense thereof with
-23-
counsel reasonably acceptable to the Indemnified Party and JBI shall not be
liable to such Indemnified Party for any legal expenses of other counsel
subsequently incurred by such Indemnified Party in connection with the defense
thereof, except that if JBI does not elect to assume such defense within a
reasonable time or if there are issues which constitute conflicts of interest
between JBI and the Indemnified Party, the Indemnified Party may retain counsel
satisfactory to such Indemnified Party, and JBI shall remain responsible for the
reasonable fees and expenses of such counsel, with respect to those matters as
to which a conflict of interest exists as set forth above, promptly as
statements therefor are received; provided, however, that JBI shall be obligated
pursuant to this Section 5.14(B) to pay for only one firm of counsel for all
Indemnified Parties in any one jurisdiction with respect to any given claim,
action, suit, proceeding or investigation unless the use of one counsel for such
Indemnified Parties would present such counsel with a conflict of interest; (ii)
the Indemnified Party will reasonably cooperate in the defense of any such
matter and (iii) JBI shall not be liable for any settlement effected by an
Indemnified Party without its prior written consent, which consent may not be
withheld unless such settlement is unreasonable in light of such claims,
actions, suits, proceedings or investigations against and defenses available to,
such Indemnified Party.
(C) In the event JBI or any of its successors or assigns (1)
consolidates with or merges into any other corporation or entity and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person or entity, then, and in each case, to the extent
necessary, proper provision shall be made so that the successors and assigns of
JBI assume the obligations set forth in this Section 5.14.
(D) JBI shall maintain in effect for not less than two years from the
Merger Effective Date the policies of directors' and officers' liability
insurance most recently maintained by RBC, provided that JBI may substitute
therefor policies with reputable and financially sound carriers of at least the
same coverage containing terms and conditions which are no less advantageous for
so long as such substitution does not result in gaps or lapses in coverage, with
respect to claims arising from or relating to matters occurring prior to the
Merger Effective Date; provided that in no event shall JBI be required to spend
more than an amount per year equal to 250% of the current annual premiums paid
by RBC, (the "Premium Amount") to maintain or procure insurance coverage
pursuant hereto and further provided that if JBI is unable to obtain the
insurance called for by this Section 5.14, JBI shall obtain as much comparable
insurance as is available for the Premium Amount per year and, provided further,
-24-
that in lieu of the foregoing, JBI may renew any existing insurance or purchase
any "discovery period" insurance provided for thereunder. JBI shall pay all
expenses (including attorneys' fees) that may be incurred by any Indemnified
Party in enforcing the indemnity and other obligations provided for in this
Section 5.14.
(E) The provisions of this Section 5.14 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and their
respective heirs and representatives.
5.15 Accountants' Letters. Each of RBC and JBI shall use its reasonable
best efforts to cause to be delivered to JBI, and JBI's directors and officers
who sign the Registration Statement, letters of Xxxxx Xxxxxxxx LLP and Xxxxxx
Xxxxxxxx LLP dated (i) the date on which the Registration Statement shall become
effective and (ii) a date shortly prior to the Merger Effective Date, and
addressed to JBI, and such directors and officers, in form and substance
customary for "comfort" letters delivered by independent accountants in
accordance with Statement on Auditing Standards No. 72.
5.16 Notification of Certain Matters. Except as may be otherwise
provided in Section 5.06(B) of this Agreement, each of RBC and JBI 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.
5.17 Form S-8 Registration Statement. As soon as reasonably practicable
following the Merger Effective Date, JBI shall prepare and file with the SEC, in
accordance with the requirements of the Securities Act, a registration statement
on Form S-8 registering the shares of JBI Common Stock issuable upon exercise of
the JBI Options.
VI. CONDITIONS TO CONSUMMATION OF THE MERGER.
Consummation of the Merger is conditioned upon:
6.01 Shareholder Vote. Approval of (i) the Merger and the other
transactions contemplated hereby by the required vote of the shareholders of RBC
and as and to the extent required by law, by RBC as the sole shareholder of
Regent, and (ii) the Merger by the shareholders of JBI and JBI Merger Sub.
6.02 Regulatory Approvals. Procurement by JBI and RBC of all requisite
approvals and consents of Regulatory Authorities,
-25-
and the expiration of applicable statutory waiting periods relating thereto,
provided, however, that no such approval or consent shall have imposed any
condition or requirement (other than conditions or requirements Previously
Disclosed) which would so materially and adversely impact the economic or
business benefits to JBI or RBC of the transactions contemplated by this Plan
that, had such condition or required been known, such party would not, in its
reasonable judgment, have entered into this Plan.
6.03 Third Party Consents. All consents or approvals of all persons
(other than Regulatory Authorities) required for the consummation of the Merger
shall have been obtained and shall be in full force and effect, unless the
failure to obtain any such consent or approval is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on RBC or JBI.
6.04 No Injunction. There not being in effect any order, decree or
injunction of any court or agency of competent jurisdiction that enjoins or
prohibits consummation of the Merger Transaction or the Bank Merger.
6.05 Pooling Letter. Receipt (i) by JBI from Xxxxx Xxxxxxxx LLP of a
letter to the effect that it is not aware of any facts and circumstances which
might cause the Merger not to qualify for pooling-of-interests accounting
treatment and (ii) by RBC from Xxxxxx Xxxxxxxx LLP of a letter to the effect
that it is not aware of any facts and circumstances which might cause the Merger
not to qualify for pooling-of-interests accounting treatment.
6.06 Legal Opinions.
(A) The receipt by RBC, Regent and their directors and officers of an
opinion, dated the Merger Effective Date, of Ledgewood Law Firm, P.C., counsel
for JBI and Jefferson, in form and substance reasonably satisfactory to RBC and
Regent; and
(B) The receipt by JBI and its directors and officers who sign the
Registration Statement of an opinion, dated the Merger Effective Date, of Duane,
Morris & Heckscher, LLP, in form and substance reasonably satisfactory to JBI.
6.07 Representations, Warranties and Covenants.
(A) (i) Each of the representations and warranties contained herein of
any party being true and correct as of the date of this Plan and upon the Merger
Effective Date with the same effect as though all such representations and
warranties had been made on the Merger Effective Date, except (x) for any such
representations and warranties made as of a specified date, which
-26-
shall be true and correct as of such date, (y) as expressly contemplated by this
Plan, or (z) for representations and warranties (other than the representations
and warranties set forth in Paragraph (A) of Article IV, which shall be true and
correct in all material respects) the inaccuracies of which relate to matters
that, individually or in the aggregate, do not materially adversely affect the
Merger and the other transactions contemplated by this Plan; (ii) each and all
of the agreements and covenants contained herein of any party to be performed
and complied with pursuant to this Plan and the other agreements contemplated
hereby prior to the Merger Effective Date shall have been duly performed and
complied with in all material respects, and (ii) JBI and RBC shall have received
a certificate signed by the Chief Executive Officer and the Chief Financial
Officer of the other party dated the Merger Effective Date, to such effect;
6.08 Effective Registration Statement. The Registration Statement shall
have become effective, no stop order suspending the effectiveness of the
Registration Statement having been issued and no proceedings for that purpose
having been initiated or threatened by the SEC or any other Regulatory
Authority.
6.09 Blue Sky Permits. JBI having received all state securities laws
and "blue sky" permits and other authorizations necessary in connection with the
issuance of the JBI Common Stock as set forth in the Registration Statement and
to otherwise consummate the Merger.
6.10 Tax Opinions. JBI and RBC shall have received opinions from
Ledgewood Law Firm, P.C. (as to JBI) and Duane, Morris & Heckscher, LLP (as to
RBC) to the effect that each of the Merger Transaction and the Bank Merger
constitute a reorganization under Section 368 of the Code, which such opinions
may rely upon factual representations contained in certificates of officers of
JBI, JBI Merger Sub, RBC, Regent and others.
6.11 Nasdaq NMS Listing. The shares of JBI Common Stock issuable
pursuant to the Merger having been approved for listing on Nasdaq NMS, subject
to official notice of issuance.
6.12 Election of Directors and Officers. The election or appointment
immediately prior to the Merger Effective Date of those additional directors and
officers of Jefferson and JBI as specified in Section 1.01(D) hereof.
6.13 Opinion of Financial Advisor. RBC shall have received the written
opinion of Xxxxx, Xxxxxxxx & Xxxxx, Inc., in form and substance satisfactory to
RBC, as to the fairness of the Merger Transaction to the shareholders of RBC
from a financial point of view, dated as of a date not less than five business
days prior to the date of mailing of the proxy statement with respect to the
-27-
Merger Transaction and the Bank Merger and such opinion shall not have been
withdrawn by Xxxxx, Xxxxxxxx & Xxxxx, Inc. at any time prior to the Merger
Effective Date.
Provided, however, a failure to satisfy any of the conditions set forth
in Sections 6.05 and 6.06(B) hereof, shall only constitute conditions if
asserted by JBI; and a failure to satisfy any of the conditions set forth in
Sections 6.06(A), 6.11, 6.12 and 6.13 of this Article VI shall only constitute
conditions if asserted by RBC.
VII. TERMINATION.
7.01 Termination. This Plan may be terminated prior to the Merger
Effective Date either before or after receipt of required shareholder approvals:
(A) Mutual Consent. At any time prior to the Merger Effective Date, by
the mutual consent of JBI and RBC, if the Board of Directors of each so
determines by vote of a majority of the members of its entire Board.
(B) Breach. At any time prior to the Merger Effective Date, by JBI or
RBC, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event of (i) a breach by the other party of
any representation or warranty contained herein, which breach has not been cured
within 30 days after the giving of written notice to the breaching party of such
breach and which breaches, individually or in the aggregate, materially
adversely affect the Merger and the other transactions contemplated by this
Plan, (ii) a material breach by the other party of any of the covenants or
agreements contained herein, which breach has not been cured within 30 days
after the giving of written notice to the breaching party of such breach. For
purposes of this Section 7.01(B), no representation or warranty of JBI or RBC
contained herein 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, circumstance or event if such fact, circumstance or
event, individually or taken together with all other facts, circumstances or
events inconsistent with any other representations and warranties contained
herein is not reasonably likely to have a Material Adverse Effect on the party
making such representation or warranty.
(C) Delay. By JBI or RBC, if its Board of Directors so determines by
vote of a majority of the members of its entire Board, in the event that the
Merger is not consummated by September 30,
-28-
1998; provided, however, that (i) if any required regulatory approval shall not
have been received by September 30, 1998, such date shall be extended without
any action by or on behalf of the parties hereto until five business days after
receipt of such required regulatory approval, but in no event later than
November 30, 1998, and (ii) such date may be extended by an agreement in writing
among the parties hereto approved by their respective Boards of Directors and
executed in the same manner as this Plan.
(D) No Approval. By JBI or RBC, if its Board of Directors so determines
by a vote of a majority of the members of its entire Board, in the event that
any shareholder approval contemplated by Section 6.01 hereof is not obtained at
a meeting or meetings called for the purpose of obtaining such approval.
(E) Withdrawal of RBC Recommendation. By JBI, if the Board of Directors
of RBC shall (i) withdraw, modify or change its recommendation or approval in
respect of this Plan or the Merger in a manner adverse to JBI, or (ii) approve
or recommend any proposal other than by JBI in respect of any Acquisition
Transaction.
(F) Withdrawal of JBI Board Approval. By RBC, if the Board of Directors
of JBI shall withdraw, modify or change its recommendation or approval in
respect of this Plan or the Merger in a manner adverse to RBC.
(G) Other Acquisition Transaction. Assuming RBC shall not have
contravened Section 5.06 hereof, by RBC to allow RBC to enter into an agreement
in respect of an Acquisition Transaction.
7.02 Effect of Termination and Abandonment. In the event of termination
of this Plan and the abandonment of the Mergers pursuant to this Article VII, no
party to this Plan shall have any liability or further obligation to any other
party hereunder except (i) as set forth in Section 8.01, (ii) that termination
will not relieve a breaching party from liability for any willful breach of this
Plan giving rise to such termination, (iii) that, upon the termination of this
Agreement by JBI pursuant to Section 7.01(B)(ii), Section 7.01(E) or upon
termination pursuant to Section 7.01(G), RBC shall pay JBI a fee, in immediately
available funds, equal to $1,500,000, and (iv) that, upon termination of this
Agreement by RBC pursuant to Section 7.01(B)(ii) or Section 7.01(F), JBI shall
pay RBC a fee, in immediately available funds, equal to $1,500,000.
VIII. OTHER MATTERS.
8.01 Survival. If the Merger Effective Date occurs, the agreements of
the parties in Sections 5.03(B), 8.01, 8.03, 8.04, 8.06, 8.07 and 8.09 hereof
shall survive the Merger Effective
-29-
Date; all other representations, warranties, agreements and covenants contained
in this Plan shall be deemed to be conditions of the Merger Transaction and
shall not survive the Merger Effective Date. If this Plan is terminated prior to
the Merger Effective Date, the agreements and representations of the parties in
Sections 4.03(N), 5.05, 8.01, 8.04, 8.05, 8.06 and 8.09 hereof shall survive
such termination.
8.02 Waiver or Amendment. Prior to the Merger Effective Date, any
provision of this Plan may be (i) waived by the party benefitted by the
provision, or (ii) amended or modified at any time (including the structure of
the transaction), by an agreement in writing among the parties hereto approved
by their respective Boards of Directors and executed in the same manner as this
Plan, except that, after the vote by the shareholders of RBC, the consideration
to be received by the shareholders of RBC for each share of RBC Common Stock
shall not thereby be decreased.
8.03 Counterparts. This Plan may be executed in one or more
counterparts, each of which shall be deemed to constitute an original. This Plan
shall become effective when one counterpart has been signed by each party
hereto.
8.04 Governing Law. This Plan shall be governed by, and interpreted in
accordance with, the substantive laws of the Commonwealth of Pennsylvania
without regard to its principles of conflicts of laws, except as federal law may
be applicable.
8.05 Expenses. Except as otherwise provided in Section 7.02 hereof or
in this Section 8.05, each party hereto will bear all expenses incurred by it in
connection with this Plan and the transactions contemplated hereby, except
printing expenses of the Registration Statement which shall be shared equally
between RBC and JBI.
8.06 Confidentiality. Except as otherwise provided in Section 5.05
hereof, each of the parties hereto and their respective agents, attorneys and
accountants will maintain the confidentiality of all information provided in
connection herewith which has not been publicly disclosed.
8.07 Notices. All notices, requests and other communications hereunder
to a party shall be in writing and shall be deemed to have been duly given when
delivered by hand, telegram or telex (confirmed in writing) to such party at its
address set forth below or such other address as such party may specify by
notice to the parties hereto:
-30-
If to JBI, JBI Xxxxx X. Xxxxx, Chairman
Merger Sub, or and Chief Executive Officer
Jefferson, to: JeffBanks, Inc.
0000 Xxxxxx Xxxxxx, 00xx xxxxx
Xxxxxxxxxxxx, XX 00000
With, in each X. Xxxx Xxxxxxxxxx, Esq.
instance, a copy to: Ledgewood Law Firm, P.C.
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
If to RBC or Xxxxxx X. Xxxxxxxxx, President
Regent, to: and Chief Executive Officer
Regent Bancshares Corp.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
With, in each Xxxxxxxxx X. Xxxxxx, Esquire
instance, a copy to: Duane, Morris & Heckscher, LLP
Suite 0000
Xxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
8.08 Definitions. Any term defined anywhere in this Plan shall have the
meaning ascribed to it for all purposes of this Plan (unless expressly noted to
the contrary). In addition:
(A) the term "knowledge" when used with respect to a party shall mean
the knowledge, after due inquiry, of any "Executive Officer" of such party, as
such term is defined in Regulation O of the FRB;
(B) the term "Material Adverse Effect" shall mean in the case of RBC or
Regent only, one or more events, occurrences or circumstances, which in the
aggregate, result, or are reasonably likely to result, in a decrease in the
shareholders' equity account of it, as determined in accordance with GAAP and as
measured from its financial statements as set forth in its Annual Report on Form
10-K for the year ended December 31, 1997, in an amount equal to or greater than
$600,000; provided, however, that the term Material Adverse Effect shall not
include the impact of (a) changes in banking and similar laws of general
applicability or interpretations thereof by courts or governmental authorities;
(b) changes in generally accepted accounting principles or regulatory accounting
requirements applicable to banks and bank holding companies generally, (c) with
respect to any loan of Regent, pursuant to Section 5.08 hereof, where the
financial condition of the borrower of such loan and the value of any and all
collateral securing such loan has not materially
-31-
deteriorated, any material increase in Regent's loan loss reserve with respect
to such loan or any loan charge-off with respect to such loan or any loan
charge-off in an amount which, in the view of JBI, should be reserved against
possible losses on such loan or charged-off with respect to such loan, (d)
decreases in the valuation of zero-coupon investment securities, to the extent
that such decrease is not in excess of $250,000, (e) Merger related expenses, to
the extent that such expenses are not in excess of $600,000 and (f) increases in
the provision for possible loan loss expense, to the extent that such increase
is not in excess of $500,000; and
(C) the term "Previously Disclosed" by a party shall mean information
set forth in a written disclosure letter that is delivered by that party to the
other party contemporaneously with the execution of this Plan and specifically
designated as information "Previously Disclosed" pursuant to this Plan.
8.09 Preserving Qualification of Merger Transaction as a Reorganization
under Section 368 of the Code. Neither JBI nor any of its subsidiaries shall
intentionally take, or cause to be taken, any actions that would cause the
Merger Transaction not to qualify as a "reorganization" within the meaning of
Section 368 of the Code.
8.10 Entire Understanding; No Third Party Beneficiaries. This Plan
represents the entire understanding of the parties hereto with reference to the
transactions contemplated hereby and thereby and supersedes any and all other
oral or written agreements heretofore made. Nothing in this Plan 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 Plan.
-32-
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
JEFFBANKS, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------
Chairman and
Chief Executive Officer
JEFFBANKS ACQUISITIONCORP. V,
INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------
Chairman and
Chief Executive Officer
JEFFERSON BANK
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
President
REGENT BANCSHARES CORP.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
President and
Chief Executive Officer
REGENT NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Chairman and
Chief Executive Officer
-33-
