EXHIBIT 2.1
PURCHASE AGREEMENT
AMONG
SOUTHWEST BANCORPORATION OF TEXAS, INC.,
SOUTHWEST BANK OF TEXAS NATIONAL ASSOCIATION,
CITIZENS BANKERS LIMITED PARTNERSHIP
AND
BAYTOWN LAND I, LTD.
Dated as of November 9, 2000
TABLE OF CONTENTS
ARTICLE I SALE AND TRANSFER OF ASSETS; LIQUIDATION OF THE PARTNERSHIP
SECTION 1.1 SALE AND TRANSFER OF ASSETS......................................1
SECTION 1.2 INSTRUMENTS OF CONVEYANCE AND TRANSFER...........................2
SECTION 1.3 RETAINED FUNDS...................................................2
SECTION 1.4 FURTHER ASSURANCES...............................................2
SECTION 1.5 CONSIDERATION FOR SALE AND TRANSFER..............................2
SECTION 1.6 LIQUIDATION AND DISSOLUTION OF THE PARTNERSHIP...................4
SECTION 1.7 CONVERSION OF PARTNERSHIP INTERESTS..............................4
SECTION 1.8 SURRENDER OF PARTNERSHIP INTERESTS...............................5
ARTICLE II THE CLOSING
SECTION 2.1 CLOSING DATE.....................................................6
SECTION 2.2 EFFECTIVE TIME; PROCEDURE........................................6
SECTION 2.3 CERTIFICATE OF TERMINATION.......................................6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP AND
THE GENERAL PARTNER
SECTION 3.1 ORGANIZATION.....................................................7
SECTION 3.2 BINDING EFFECT...................................................8
SECTION 3.3 CAPITALIZATION...................................................8
SECTION 3.4 FINANCIAL STATEMENTS AND REPORTS.................................9
SECTION 3.5 COMPLIANCE WITH APPLICABLE LAWS; OPERATING AUTHORITIES..........10
SECTION 3.6 ACTIVITIES OF THE PARTNERSHIP AND THE GENERAL PARTNER...........10
SECTION 3.7 CONTRACTS AND COMMITMENTS.......................................11
SECTION 3.8 BROKER'S AND FINDER'S FEES......................................11
SECTION 3.9 PARTNERSHIP RECORDS; OTHER INFORMATION..........................11
SECTION 3.10 REAL PROPERTY OWNED OR LEASED...................................12
SECTION 3.11 PERSONAL PROPERTY...............................................12
SECTION 3.12 ACCOUNTING RECORDS; DATA PROCESSING.............................13
SECTION 3.13 ABSENCE OF CERTAIN CHANGES......................................13
SECTION 3.14 LITIGATION......................................................14
SECTION 3.15 TAX MATTERS.....................................................14
SECTION 3.16 EMPLOYMENT AND SIMILAR AGREEMENTS; OBLIGATIONS UPON
CHANGE IN CONTROL.............................................15
SECTION 3.17 BENEFIT PLANS...................................................16
SECTION 3.18 LABOR AND EMPLOYMENT MATTERS....................................16
SECTION 3.19 CERTAIN INTERESTS...............................................17
SECTION 3.20 [INTENTIONALLY OMITTED].........................................18
SECTION 3.21 INSURANCE.......................................................18
SECTION 3.22 ENVIRONMENTAL MATTERS...........................................18
SECTION 3.23 INTELLECTUAL PROPERTY RIGHTS....................................19
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SECTION 3.24 [INTENTIONALLY OMITTED].........................................19
SECTION 3.25 [INTENTIONALLY OMITTED].........................................20
SECTION 3.26 [INTENTIONALLY OMITTED].........................................20
SECTION 3.27 [INTENTIONALLY OMITTED].........................................20
SECTION 3.28 [INTENTIONALLY OMITTED].........................................20
SECTION 3.29 REGULATION D OFFERING...........................................20
SECTION 3.30 DISCLOSURE......................................................20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SW BANK
ARTICLE V COVENANTS OF THE PARTIES
SECTION 5.1 PREPARATION OF OFFERING MEMORANDUM/PROXY STATEMENT..............20
SECTION 5.2 PURSUIT OF REGULATORY APPROVALS.................................21
SECTION 5.3 OTHER CONSENTS..................................................21
SECTION 5.4 PARTNERSHIP AND GENERAL PARTNER ACTIVITIES PENDING CLOSING......22
SECTION 5.5 ONGOING FINANCIAL DISCLOSURE....................................22
SECTION 5.6 ACCESS TO INFORMATION OF THE PARTNERSHIP AND THE GENERAL
PARTNER.......................................................22
SECTION 5.7 CONFIDENTIALITY.................................................24
SECTION 5.8 [INTENTIONALLY OMITTED].........................................24
SECTION 5.9 STOCK LISTING...................................................24
SECTION 5.10 AFFILIATES' LETTERS.............................................24
SECTION 5.11 [INTENTIONALLY OMITTED].........................................24
SECTION 5.12 TERMINATION OF SEVERANCE AND CONSULTING ARRANGEMENTS............25
SECTION 5.13 CERTAIN NOTIFICATIONS...........................................25
SECTION 5.14 [INTENTIONALLY OMITTED].........................................25
SECTION 5.15 NO INCONSISTENT ACTIONS; POOLING; TAX TREATMENT.................25
SECTION 5.16 TAXES; CONSENT..................................................25
SECTION 5.17 [INTENTIONALLY OMITTED].........................................26
SECTION 5.18 [INTENTIONALLY OMITTED].........................................26
SECTION 5.19 COMPLIANCE WITH APPLICABLE LAW..................................26
SECTION 5.20 CERTAIN ACCOUNTING ADJUSTMENTS..................................26
SECTION 5.21 ENVIRONMENTAL INVESTIGATION; RIGHT TO TERMINATE AGREEMENT.......26
SECTION 5.22 INDEMNIFICATION; INSURANCE......................................27
SECTION 5.23 ACCESS TO INFORMATION OF THE COMPANY AND SW BANK................28
SECTION 5.24 [INTENTIONALLY OMITTED].........................................29
SECTION 5.25 FURTHER ASSURANCES..............................................29
SECTION 5.26 PREPARATION OF SHELF REGISTRATION STATEMENT.....................29
SECTION 5.27 PARTNERS' AGREEMENTS AS TO REGISTRATION STATEMENT...............30
SECTION 5.28 INDEMNIFICATION BY THE COMPANY..................................31
SECTION 5.29 COMBINED REPORT.................................................33
SECTION 5.30 LEGENDS ON CERTIFICATES.........................................33
SECTION 5.31 BEST EFFORTS FOR DECEMBER CLOSING...............................34
SECTION 5.32 REAL ESTATE MATTERS.............................................34
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ARTICLE VI CONDITIONS TO CLOSING
SECTION 6.1 CONDITIONS TO CITIZENS' OBLIGATION TO CLOSE.....................34
SECTION 6.2 CONDITIONS TO THE COMPANY'S AND SW BANK'S OBLIGATIONS TO CLOSE..36
ARTICLE VII TERMINATION
SECTION 7.1 TERMINATION.....................................................38
SECTION 7.2 EFFECT OF TERMINATION...........................................40
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES..................40
SECTION 8.2 NOTICES.........................................................41
SECTION 8.3 GOVERNING LAW...................................................42
SECTION 8.4 ENTIRE AGREEMENT................................................42
SECTION 8.5 AMENDMENTS AND WAIVERS..........................................42
SECTION 8.6 SEVERABILITY....................................................42
SECTION 8.7 COUNTERPARTS....................................................42
SECTION 8.8 INTERPRETATION OF AGREEMENT.....................................42
SECTION 8.9 EXPENSES........................................................42
SECTION 8.10 ATTORNEYS' FEES.................................................43
SECTION 8.11 PUBLICITY.......................................................43
SECTION 8.12 BINDING EFFECT..................................................43
SECTION 8.13 THIRD PARTIES...................................................43
SECTION 8.14 GENDER; NUMBER..................................................43
SECTION 8.15 CERTAIN DEFINITIONS.............................................43
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EXHIBITS
Exhibit A - Plan of Liquidation for the Partnership
Exhibit B - Plan of Liquidation for the General Partner
Exhibit C - Form of Affiliates' Letter
Exhibit D - Form of Opinion of Counsel for the Company and SW Bank
Exhibit E - Form of Opinion of Counsel for the Partnership and the General
Partner
SCHEDULES
Schedule 1.5(a) Mortgage Loan
Schedule 3.3(b) Limited Partners Percentage Ownership
Schedule 3.5(a) Non-Compliance with Applicable Laws
Schedule 3.5(c) Registrations, Licenses, Permits, etc.
Schedule 3.7(a) Mortgages, Leases and Other Contracts
Schedule 3.7(b) Breaches of Contract
Schedule 3.8 Broker's Fee
Schedule 3.10(a) Real Property
Schedule 3.10(d) Title Defects to Real Property
Schedule 3.13 Certain Changes
Schedule 3.14(a) All Litigation
Schedule 3.14(b) Material Litigation
Schedule 3.15(c) Tax Sharing Agreements
Schedule 3.15(d) Tax Deficiencies
Schedule 3.16 Employment Agreements
Schedule 3.17(a) Benefit Plans
Schedule 3.18(a) Labor Matters
Schedule 3.19 Contracts with Related Interests
Schedule 3.21 Insurance Policies
Schedule 3.23 Trademarks, Service Marks, Trade Names
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PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is entered into as of November 9,
2000 among Southwest Bancorporation of Texas, Inc., a Texas corporation (the
"Company"), Southwest Bank of Texas National Association, a national banking
association and wholly-owned subsidiary of the Company ("SW Bank"), Citizens
Bankers Limited Partnership., a Texas Limited Partnership ("the Partnership"),
and Baytown Land I, Ltd., a Texas Limited Partnership, as general partner of the
Partnership (the "General Partner").
RECITALS
A. This Agreement provides for the transfer to SW Bank of the entire
business, and all of the property and assets of the Partnership, in exchange for
shares of Common Stock, $1.00 par value, of the Company ("Company Common Stock")
and the assumption by SW Bank of all of the liabilities and obligations of the
Partnership, subject to the further provisions of this Agreement, to be followed
by (i) the liquidation of the Partnership, the distribution of the Company
Common Stock to the General Partner and the limited partners (the "Limited
Partners") of the Partnership in accordance with their respective interests, and
the dissolution of the Partnership, and (ii) the liquidation of the General
Partner, the distribution of the Company Common Stock received by the General
Partner to the general partner and limited partners of the General Partner in
accordance with their respective interests, and the dissolution of the General
Partner, all upon the terms and subject to the conditions herein set forth. The
General Partner and the Limited Partners are referred to herein collectively as
the "Partners" or individually as a "Partner."
B. On October 16, 2000, the Company entered into an Agreement and Plan of
Merger with Citizens Bankers, Inc., a Texas corporation ("Citizens"), dated the
date hereof (the "Merger Agreement"), providing for, among other things, the
merger (the "Merger") of Citizens with and into the Company, the consummation of
which is to occur simultaneously with the consummation of the transactions
contemplated by this Agreement.
C. Certain capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in Section 8.15 hereof.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
SALE AND TRANSFER OF ASSETS; LIQUIDATION OF THE PARTNERSHIP
SECTION 1.1 SALE AND TRANSFER OF ASSETS. Subject to the terms and
conditions of this Agreement, the Partnership agrees to sell, convey and deliver
to SW Bank, and SW Bank agrees to purchase and accept at the Closing (as
hereinafter defined), all of the assets, properties and business as a going
concern of the Partnership, including without limitation the office building
located at 0000 Xxxxxxxxxxxx, Xxxxxxx, Xxxxx, the assets, properties and
goodwill of the Partnership on the Closing Date (as hereinafter defined), but
excluding such portion of the funds in the account referred
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to in Section 1.3 herein as is expended in accordance with the provisions of
such Section (such assets, properties and business as a going concern of the
Partnership being sometimes hereinafter called the "Partnership Assets").
SECTION 1.2 INSTRUMENTS OF CONVEYANCE AND TRANSFER. The Partnership will
deliver to SW Bank at the Closing:
(a) such special warranty deed or deeds, lease termination
agreement, conveyances, bills of sale, endorsements, assignments and other
good and sufficient instrument of conveyance and transfer, in form
reasonably satisfactory to SW Bank's counsel and the Partnership's
counsel, as shall be effective to vest in SW Bank all of the Partnership's
title to and interest in the Partnership Assets, all as provided in this
Agreement; and
(b) all of the Partnership's contracts and commitments, books,
records (except any minute and stock books and any other records which the
Partnership, by law, is required to retain in its possession) and other
data in the Partnership's possession relating to its assets, business and
operations, and simultaneously with such delivery, will take such
reasonable steps as may be requisite to put SW Bank in actual possession
and operating control of such assets and business.
SECTION 1.3 RETAINED FUNDS. In order to provide for the payment of the
liquidation, dissolution and winding up expenses of the Partnership incurred
after the Closing Date, the Partnership will, on or prior to the Closing Date,
establish and fund a special account of the Partnership with Citizens Bank and
Trust Company of Baytown, Texas. Funds deposited by the Partnership in such
account shall not exceed $10,000 for purposes of discharging all such expenses.
The persons authorized to draw upon this account shall be agents designated by
the General Partner; withdrawals shall be made, however, only after the Closing
Date and for purposes and in amounts previously approved in writing by
representatives of the Company and SW Bank. As promptly as practicable after the
Closing Date, and from time to time thereafter, the Partnership shall ascertain,
in its reasonable discretion, whether any amount in the account will not be
required for the purpose of paying the expenses described above. When and as the
Partnership shall have made such determination, it shall promptly transfer and
assign to SW Bank any such amount not so required.
SECTION 1.4 FURTHER ASSURANCES. The General Partner hereby agrees that,
from time to time, at the request of SW Bank and without further consideration,
the General Partner will execute and deliver such additional instruments of
conveyance and transfer and take such other action on behalf of the Partnership
as SW Bank reasonably may require more effectively to sell, convey and deliver
to SW Bank the Partnership Assets, all of which shall be deemed effective as of
the Effective Time.
SECTION 1.5 CONSIDERATION FOR SALE AND TRANSFER. At the Closing, subject
to the terms and conditions of this Agreement and in full consideration for the
aforesaid sale, conveyance and delivery of the Partnership Assets,
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(a) the Company will issue, transfer and deliver to the Partnership
a certificate or certificates bearing a legend to reflect delivery
pursuant to this Agreement representing a number of shares of Company
Common Stock equal to the Adjusted Company Shares. The "Adjusted Company
Shares" shall be a number equal to (A) $3,450,000 divided by (B) the
Company Measurement Price. The "Company Measurement Price" is defined as
the average of the closing prices of a share of Company Common Stock as
reported by Nasdaq during the period of 15 trading days ending on the day
that is five business days preceding the Closing Date (the "Determination
Period"), provided, however, that (i) if the Company Measurement Price is
equal to or greater than $32.50, it shall be deemed to be equal to $32.50
(the "Maximum Company Measurement Price"), and (ii) if the Company
Measurement Price is equal to or less than $30.2326, it shall be deemed to
be equal to $30.2326 (the "Minimum Company Measurement Price").
(b) SW Bank will (i) either repay the mortgage loan described in
Schedule 1.5(b) hereto (the "Mortgage Loan") or fully assume all
liabilities and obligations of the General Partner under the Mortgage
Loan, to the satisfaction of the General Partner and the mortgagee
thereunder, and (ii) obtain from the mortgagee thereunder and deliver to
the General Partner a release and cancellation of that certain Limited
Guaranty (the "Limited Guaranty") dated January 19, 1996, executed by Xxxx
X. Xxxxxx, Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx in favor of American
General Life and Accident Insurance Company in connection with the
Mortgage Loan, which release and cancellation shall be in form and
substance reasonably acceptable to the Partnership's counsel.
(c) SW Bank will deliver to the Partnership an assumption agreement,
a purchaser's certificate and any other documents reasonably requested by
the General Partner, in form reasonably satisfactory to the Partnership's
counsel, whereby SW Bank assumes and agrees to pay, perform and discharge
in due course all debts, liabilities, obligations, taxes and contracts of
the Partnership of any kind, character or description, whether accrued,
absolute, contingent or otherwise, all as the same may exist at the
Closing Date. Notwithstanding the foregoing, such undertaking shall
expressly exclude all liabilities and obligations incurred by the
Partnership subsequent to the Closing Date. The Company agrees to
indemnify and hold the Partnership, the Partners and Xxxx X. Xxxxxx,
Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx as guarantors of a portion of
the Mortgage Loan (the "Guarantor Indemnified Parties") harmless against
any and all liabilities, claims, damages and expenses, including legal and
other expenses of defending any actions relating thereto, which arise out
of the failure or the alleged failure of SW Bank to perform its
obligations under this Section 1.5. The provisions of this Section 1.5(c)
shall survive the Effective Time and the Closing and are intended to be
for the benefit of, and shall be enforceable by, the Guarantor Indemnified
Parties, their heirs and personal representatives, and the Partnership,
the Partners and each of their heirs, personal representatives, successors
and assigns, and shall be binding on the Company and its representative
successors and assigns. If the Company or any of its successors or assigns
(A) shall consolidate with or merge into any other corporation or entity
and shall not be the continuing or surviving corporation or entity of such
consolidation or merger; or (B) shall transfer all or substantially all of
its properties and assets to any individual, corporation or other entity,
then and in each such case the Company shall make proper provision so that
the successors and assigns of the Company shall assume the obligations set
forth in this Section 1.5(c). The Partnership agrees to indemnify and hold
the
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Company, SW Bank and their directors, officers and shareholders harmless
against any and all liabilities, claims, damages and expenses, including
legal and other expenses of defending any action relating thereto which
arise out of the failure or alleged failure of the Partnership to satisfy
and discharge all the liabilities of the Partnership which are not assumed
by SW Bank pursuant to the terms of this Agreement.
SECTION 1.6 LIQUIDATION AND DISSOLUTION OF THE PARTNERSHIP. The General
Partner covenants and agrees that the General Partner will, upon consummation of
the sale of the Partnership Assets pursuant to this Agreement, immediately take
all such action as may be required to dissolve and liquidate the Partnership
completely pursuant to a Plan of Liquidation substantially in the form attached
hereto as Exhibit A, to distribute to the General Partner and Limited Partners,
in accordance with their respective interests, all their right, title and
interest in and to the Adjusted Company Shares received by the Partnership
pursuant to this Agreement and to dissolve and terminate its partnership
existence. In addition, immediately following dissolution and liquidation of the
Partnership, the General Partner will take all such action as may be required to
dissolve and liquidate the General Partner completely pursuant to a Plan of
Liquidation substantially in the form attached hereto as Exhibit B, to
distribute to its partners, in accordance with their respective interests, all
their right, title and interest in and to the Adjusted Company Shares received
by the General Partner pursuant to this Agreement and to dissolve and terminate
its partnership existence.
SECTION 1.7 CONVERSION OF PARTNERSHIP INTERESTS. Upon liquidation and
dissolution of the Partnership, the units of equity interest in the Partnership
held by each Partner (a "Partnership Interest") issued and outstanding
immediately prior thereto, shall, by virtue of such liquidation and dissolution
and without any action on the part of the holder thereof, be converted into and
exchangeable for a portion of the Adjusted Company Shares calculated in
accordance with the respective percentage equity interest in the Partnership of
each Partner. Each Partnership Interest shall automatically be canceled and
shall cease to exist, and shall thereafter represent the right to receive (i)
the number of whole shares of Company Common Stock and (ii) cash in lieu of
fractional shares into which the Partnership Interest has been converted
pursuant to this Section 1.7 and Section 1.8(e) hereof. Partnership Interests
shall be exchanged for certificates representing whole shares of Company Common
Stock and cash in lieu of fractional shares issued in consideration therefor
pursuant to the procedures described in Section 1.8 hereof, without any interest
thereon. If, between the date hereof and the Closing Date, shares of Company
Common Stock shall be changed into a different number of shares or a different
class of shares by reason of any reclassification, recapitalization, split-up,
combination, exchange of shares or readjustment, or if a stock dividend thereon
shall be declared with a record date within such period (a "Common Stock
Adjustment"), then (i) the Adjusted Company Shares, the Maximum Company
Measurement Price and the Minimum Company Measurement Price will be
appropriately and proportionately adjusted so that the number of such shares of
Company Common Stock into which Partnership Interests shall be converted will
equal the number of shares of Company Common Stock which holders of Partnership
Interests would have received pursuant to such Common Stock Adjustment had the
record date therefor been immediately following Closing Date, and (ii) the
Termination Price will likewise be appropriately and proportionately adjusted.
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SECTION 1.8 SURRENDER OF PARTNERSHIP INTERESTS.
(a) As soon as practicable after the Effective Time, Computershare
Investor Services, as Exchange Agent (the "Exchange Agent"), shall mail to each
holder of record of a Partnership Interest, a form letter of transmittal and
instructions for use in effecting the surrender of the Partnership Interest in
exchange for certificates representing the shares of Company Common Stock and
the cash in lieu of fractional shares into which the Partnership Interest shall
have been converted pursuant to this Agreement. Upon surrender of a Partnership
Interest for exchange and cancellation to the Exchange Agent, pursuant to such
letter of transmittal, duly executed, the holder of such Partnership Interest
shall be entitled to receive in exchange therefor (x) a certificate representing
that number of whole shares of Company Common Stock to which such holder of
Partnership Interest shall have become entitled pursuant to the provisions of
Section 1.7 hereof and (y) a check representing the amount of cash in lieu of
fractional shares, if any, which such holder has the right to receive in respect
of the Partnership Interest surrendered pursuant to the provisions of this
Section 1.8. No interest will be paid or accrued on the cash in lieu of
fractional shares and unpaid dividends and distributions, if any, payable to
holders of Partnership Interests.
(b) No dividends or other distributions declared after the Effective Time
with respect to Company Common Stock and payable to the holders of record
thereof shall be paid to the holder of any unsurrendered Partnership Interest
until the holder thereof shall surrender such Partnership Interest in accordance
with this Section 1.8. After the surrender of a Partnership Interest in
accordance with this Section 1.8, the record holder thereof shall be entitled to
receive any such dividends or other distributions, without any interest thereon,
which theretofore had become payable with respect to shares of Company Common
Stock represented by such Partnership Interest.
(c) If any certificate representing shares of Company Common Stock is to
be issued in a name other than that in which the Partnership Interest
surrendered in exchange therefor is reflected on the ownership records of the
Partnership, it shall be a condition of the issuance thereof that the
Partnership Interest so surrendered shall be accompanied by an appropriate
instrument of transfer and otherwise in proper form (reasonably satisfactory to
the Company) for transfer, and that the person requesting such exchange shall
pay to the Exchange Agent in advance any transfer or other taxes required by
reason of the issuance of a certificate representing shares of Company Common
Stock in any name other than that reflected on the ownership records of the
Partnership, or required for any other reason, or shall establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(d) On the Closing Date, the transfer books of the Partnership shall be
closed, and no transfer of any Partnership Interest shall thereafter be
recognized. If, after the Effective Time, Partnership Interests are presented
for transfer to the Exchange Agent, they shall be canceled and exchanged for the
certificates representing shares of Company Common Stock and cash in lieu of
fractional shares as provided in Section 1.7 hereof.
(e) Notwithstanding anything to the contrary contained herein, no
certificates or scrip representing fractional shares of Company Common Stock
shall be issued upon the surrender for exchange of Partnership Interests, no
dividend or distribution with respect to Company Common Stock shall be payable
on or with respect to any fractional share, and such fractional share interests
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shall not entitle the owner thereof to vote or to any other rights of a
shareholder of the Company. In lieu of the issuance of any such fractional
share, the Company shall pay to each former holder of a Partnership Interest who
otherwise would be entitled to receive a fractional share of Company Common
Stock an amount in cash determined by multiplying (i) the Average Closing Price
by (ii) the fraction of a share of Company Common Stock which such holder would
otherwise be entitled to receive pursuant to Section 1.7 hereof. The term
"Average Closing Price" means the average closing sales price per share of
Company Common Stock on The Nasdaq Stock Market ("Nasdaq"), (as reported by THE
WALL STREET JOURNAL or, if not reported thereby, another authoritive source
selected by the Company), for the five consecutive Nasdaq trading days
immediately prior to the date of the meeting of shareholders of Citizens called
to approve the Merger Agreement.
(f) None of the Company, the Partnership, the General Partner, the
Exchange Agent or any other person shall be liable to any former holder of
Partnership Interests for any Company Common Stock (or dividends or
distributions with respect thereto) or cash properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
ARTICLE II
THE CLOSING
SECTION 2.1 CLOSING DATE. The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place on a date to which the Company
and the Partnership may agree (the "Closing Date"); provided, however, that in
the absence of an agreement by the parties to the contrary, such Closing Date
shall be the last business day of the month in which the last of the conditions
to Closing set forth in Sections 6.1 and 6.2 have been satisfied, but in no
event later than the date specified in Section 7.1(h) hereof.
SECTION 2.2 EFFECTIVE TIME; PROCEDURE. The Company and Citizens shall, in
accordance with Section 5.04 of the TBCA, file Articles of Merger with the
Secretary of State of Texas regarding the Merger. The Merger shall become
effective as of the close of business on the date on which such filing has been
completed and the Secretary of State of Texas has issued a Certificate of Merger
with respect to the Merger (the "Effective Time"). Sale and transfer of the
Partnership Assets to the Company hereunder shall also become effective as of
the Effective Time. The parties hereto shall take all such other and further
actions as may be required by Applicable Law to make such sale and transfer
effective at the Effective Time.
SECTION 2.3 CERTIFICATE OF TERMINATION. In accordance with Section 1.6, as
soon as possible following the Effective Time, the General Partner shall prepare
and file with the Secretary of State of Texas a Certificate of Cancellation for
the Partnership and a Certificate of Cancellation for the General Partner
pursuant to Section 2.03 of the Texas Revised Limited Partnership Act (the
"TRLPA").
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
AND THE GENERAL PARTNER
The General Partner has delivered to the Company and SW Bank prior to the
execution hereof a disclosure schedule with respect to the representations and
warranties set forth below (the "Disclosure Schedule"). Sections of the
Disclosure Schedule are hereinafter sometimes referred to as a "Schedule." The
representations and warranties of the Partnership and the General Partner made
with respect to or subject to the Disclosure Schedule, any exception taken
therein or any information or documentation provided or required to be provided
thereby shall be deemed to have been made as of the date of this Agreement. The
Disclosure Schedule shall in each case specifically reference the Section or
subsection of this Agreement to which any exception, information or
documentation set forth therein applies (disclosure in any Section or subsection
of the Disclosure Schedule shall apply only to the referenced Section or
subsection of this Agreement).
The Partnership and the General Partner hereby represent and warrant to
the Company and SW Bank as follows:
SECTION 3.1 ORGANIZATION.
(a) The Partnership is a limited partnership, duly organized, validly
existing and in good standing under the laws of the State of Texas. The
Partnership does not own any equity interest in any corporation or other entity.
(b) Baytown Land I, Ltd., the General Partner, is a limited partnership,
duly organized, validly existing and in good standing under the laws of the
State of Texas, and is the only general partner of the Partnership. Baytown Land
Corporation, a Texas corporation and wholly-owned subsidiary of Citizens
("BLC"), is the sole general partner of, and owns a 1.0% equity interest in, the
General Partner. The limited partners of the General Partner are Cotulla
Partners, Ltd., Xxxxxxx X. Xxxxxxx, Xxxx Xxxxxxx Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxx, who own equity interests of 37.125%, 12.375%, 16.50%, 16.50% and
16.50%, respectively, in the General Partner.
(c) The Partnership and the General Partner have all requisite power and
authority to own or lease their properties and to carry on their businesses as
currently conducted. The nature of the businesses of the Partnership and the
General Partner and their activities, as currently conducted, do not require
either of them to be qualified or registered to do business in any jurisdiction
other than the State of Texas.
(d) The Partnership and the General Partner have the power and authority
to execute and deliver this Agreement, to perform their obligations hereunder
and to consummate the transactions contemplated herein.
(e) The General Partner has delivered to the Company and SW Bank a true
and complete copy of the Partnership's Amended and Restated Agreement and
Certificate of Limited Partnership,
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dated as of February 14, 1984 (the "Partnership Agreement"). There has been no
amendment to the Partnership Agreement since the date thereof, and such
agreement is in full force and effect.
(f) The General Partner has delivered to the Company and SW Bank a true
and complete copy of the Articles of General Partnership dated August 28, 1983,
as amended by the Agreement to Convert Citizens Bankers General Partnership into
Baytown Land I, Ltd. dated December 12, 1995, as amended by First Amendment to
Agreement of Limited Partnership of Baytown Land I, Ltd. (collectively, the "BLI
Partnership Agreement"). There has been no amendment to the BLI Partnership
Agreement since the date of the First Amendment to Agreement of Limited
Partnership of Baytown Land I, Ltd., and the BLI Partnership Agreement is in
full force and effect.
SECTION 3.2 BINDING EFFECT. This Agreement has been duly and validly
authorized, executed and delivered by the Partnership and the General Partner
and constitutes the legal, valid and binding obligation of the Partnership and
the General Partner, enforceable against the Partnership and the General Partner
in accordance with its terms (except as may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights of
creditors generally and the availability of equitable remedies). The General
Partner has determined that the transactions contemplated hereby are in the best
interest of the Limited Partners. No approval of the Limited Partners is
required under the Partnership Agreement or Applicable Law in order for the
transactions contemplated hereby to be consummated. Provided the appropriate
notification is given under the Mortgage Loan and the Mortgage Loan is either
paid in full (including, without limitation, any applicable prepayment penalty)
or assumed by the Company in connection with the Merger (provided the applicable
mortgagee under the Mortgage Loan shall have timely consented to any such
assumption), neither the execution and delivery of this Agreement by the
Partnership and the General Partner, nor the consummation by the Partnership and
the General Partner of the transactions contemplated hereby, nor compliance with
any of the provisions hereof will (i) conflict with or result in the breach of
any provision of the Partnership Agreement or the BLI Partnership Agreement,
(ii) conflict with or result in the breach of any term, condition or provision
of, or constitute a default under (upon the giving of notice, the lapse of time
or otherwise), or give rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation of any lien, charge or
encumbrance upon any property or assets of the Partnership or the General
Partner or otherwise require the consent of any Person under any agreement or
obligation to which the Partnership or the General Partner is a party or by
which any of their properties or assets may be bound, which conflict, breach,
default, right, lien or right of consent could reasonably be expected to cause a
Material Adverse Effect on the Partnership or the General Partner, or (iii)
violate or conflict with (or require any filing, notification, report, approval
or other similar action under) any Applicable Laws.
SECTION 3.3 CAPITALIZATION.
(a) All outstanding Partnership Interests have been and are, duly
authorized and validly issued and have not been issued in violation of the
preemptive rights of any person. No certificate representing any Partnership
Interest has ever been issued by the Partnership or the General Partner;
provided, however, that Private Placement Memorandums were provided to each of
the Limited Partners and a Subscription Agreement and various other disclosure
documents were delivered to each of the Limited Partners for their execution.
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(b) There are no outstanding or authorized subscriptions, options,
warrants, convertible securities, calls, rights, commitments or any other
agreements of any character relating to the issued or unissued securities of the
Partnership obligating the Partnership to issue, deliver or sell, or cause to be
issued, delivered or sold, additional securities of the Partnership or other
similar agreement or commitment. There are no outstanding contractual
obligations of the Partnership to repurchase, redeem or otherwise acquire any
outstanding Partnership Interests. There are no voting trusts or other
agreements with respect to the voting of any Partnership Interests (i) to which
the Partnership is a party or (ii) to the Partnership's knowledge, to which any
other Person is a party. All outstanding Partnership Interests were issued in
compliance with or pursuant to an exemption from, Applicable Law. Schedule
3.3(b) sets forth a true and complete list of the names and addresses of the
General Partner and each Limited Partner of record of the Partnership,
indicating the percentage equity interest in the Partnership held by each such
Partner.
(c) There is no arrangement pursuant to which the stock of any corporation
is held in trust (whether express, resulting or otherwise) for the benefit of
the Partners.
SECTION 3.4 FINANCIAL STATEMENTS AND REPORTS.
(a) The Partnership has delivered to the Company and SW Bank true and
complete copies of its (i) statements of assets and liabilities as of December
31, 1999, 1998 and 1997 and related statements of revenues and expenses and
changes in partner's capital for the years then ended, and (ii) statements of
assets and liabilities as of September 30, 2000 and 1999 and related statements
of revenues and expenses and changes in partners' capital for the nine-month
periods then ended. Such financial statements have been prepared from the books
and records of the Partnership, present fairly the financial condition as of the
relevant dates, and the results of operations and cash flows for the relevant
periods, all prepared on an accounting basis used by the Partnership for income
tax purposes, which is a comprehensive basis of accounting other than generally
accepted accounting principles. Except for any ground rent due and owing under
the existing ground lease on the Land, the Partnership does not have any
Liabilities of a type which should be included in or reflected in such financial
statements or the notes thereto, whether related to tax or non-tax matters,
accrued or contingent, due or not yet due, liquidated or unliquidated, or
otherwise, except (i) as to the extent disclosed or reflected in such financial
statements, (ii) Liabilities incurred in the ordinary course of business since
September 30, 2000, which individually or in the aggregate would not result in a
Material Adverse Effect upon the Partnership, or (iii) Liabilities under this
Agreement and fees and expenses related thereto. The Partnership has delivered
to the Company and SW Bank true and complete copies of all management letters
delivered to the Partnership by Tiller and Company (or any predecessor thereto)
relating to the internal controls of the Partnership during any period from and
after December 31, 1996.
(b) The Partnership has filed all material documents and reports required
to be filed by them with all Governmental Authorities under all Applicable Laws
(the "Governmental Filings"). All such Governmental Filings, as finally amended
or corrected, complied in all material respects at the time of filing and at the
time of any amended or supplemented filing with all requirements of their
respective forms and with all Applicable Laws.
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(c) The Partnership has not changed its independent accounting firm since
December 31, 1996, and there has been no disagreement (as such term is used in
Item 304 of Regulation S-K under the Securities Act) between the Partnership and
its independent accounting firm(s) since December 31, 1996 concerning any aspect
of the manner in which the Partnership maintains its books and records or the
manner in which it has reported upon its financial condition and results of
operations during such period.
SECTION 3.5 COMPLIANCE WITH APPLICABLE LAWS; OPERATING AUTHORITIES.
(a) Except as described in Schedule 3.5(a), the business of the
Partnership and any advertising related to such business or otherwise conducted
by or on its behalf is being conducted in compliance in all material respects
with all Applicable Laws, and the forms, procedures, disclosures and practices
now or previously used by it are or were in compliance in all material respects
with all Applicable Laws as in effect at the relevant times. Neither the
Partnership nor the General Partner has received written notice of any formal
investigation or review by any Governmental Authority concerning any possible
conflicts or violations by the Partnership of Applicable Laws, nor to the
General Partner's knowledge, is any such investigation threatened. Neither the
Partnership nor the General Partner has received written notice of any such
investigation having occurred during the last three years. Since December 31,
1996, no Governmental Authority has delivered any written notice to the
Partnership, or to the General Partner's knowledge, otherwise asserted an
intention to conduct any such investigation or review, nor, to the General
Partner's knowledge, is there any basis for any investigation or review of the
type described above.
(b) The Partnership is not (i) a party to any written agreement,
stipulation, conditional approval, memorandum of understanding or notice of
determination with any Governmental Authority or (ii) subject to any judgment,
order, decree or directive of such a Governmental Authority which specifically
identifies the Partnership, that, in either case, restricts or monitors the
conduct of its business.
(c) The Partnership and the General Partner hold all material
registrations, licenses, permits and franchises as are required to conduct their
business as now conducted, and all such licenses, permits and franchises which
they hold are valid and in full force and effect. Neither the Partnership nor
the General Partner has received written notice of any suspension of any of the
foregoing operating rights, nor , to the General Partner's knowledge, has any
cancellation thereof has been initiated or threatened, and all filings,
applications and registrations with respect thereto are current. Schedule 3.5(c)
contains a list of and true, correct and complete copies of all material
registrations, licenses, permits and franchises currently held by the
Partnership and the General Partner.
SECTION 3.6 ACTIVITIES OF THE PARTNERSHIP AND THE GENERAL PARTNER. The
only activities engaged in by the Partnership consist of leasing from Citizens
the land located at 0000 Xxxxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxx (the "Land"), owning
and operating the building known as the Citizens Bank Tower located on the Land
(the "Building") and leasing office space in the Building to various tenants
(the "Tenants") including Citizens Bank and Trust Company of Baytown (the
"Bank"). The only activities of the General Partner consist of managing the
affairs of the Partnership.
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SECTION 3.7 CONTRACTS AND COMMITMENTS.
(a) Schedule 3.7(a) contains a list of each mortgage, lease and other
contract to which the Partnership or the General Partner is a party, including
but not limited to those pertaining to the Mortgage Loan. All items included or
required to be included in Schedule 3.7(a) are being referred to herein as
"Scheduled Contracts." The General Partner has delivered to the Company and SW
Bank true and complete copies of each of the Scheduled Contracts.
(b) Except as disclosed in Schedule 3.7(b), to the knowledge of the
General Partner, each Scheduled Contract is a legal, valid and binding
obligation enforceable in accordance with its terms (except as may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
rights of creditors generally and the availability of equitable remedies), and
is in full force and effect; the Partnership or the General Partner has duly
performed all of its obligations thereunder to the extent that such obligations
to perform have accrued; there are no material breaches, violations, defaults
(or events that have occurred that with notice, lapse of time or the happening
or occurrence of any other event would constitute a default) or allegations or
assertions of any of the foregoing by the Partnership or the General Partner or,
to the General Partner's knowledge, any other party under any such agreement,
except for such non-performances, breaches, violations or defaults which could
not in the aggregate reasonably be expected to cause a Material Adverse Effect
on the Partnership; each such agreement was entered into in the ordinary course
of business consistent with prudent business practice; and, except as disclosed
in Schedule 3.7(b) or as a result of the consummation of the transactions
contemplated by this Agreement, no breaches disclosed therein, individually,
could reasonably be expected to result in a loss to the Partnership in excess of
$75,000 and all of such breaches, in the aggregate, could not reasonably be
expected to result in a loss to the Partnership in excess of $150,000.
SECTION 3.8 BROKER'S AND FINDER'S FEES. Except as disclosed in Schedule
3.8, neither the Partnership, nor anyone acting on its behalf has paid or become
obligated to pay any fee or commission to any broker, finder, intermediary,
financial advisor or financial consultant or other Person (other than legal and
accounting advisors acting as such) in connection with the transactions
contemplated hereby (including, without limitation, any restructuring of
obligations, refinancings or other transactions that have been entered into as
part of the transactions contemplated hereby) and, except as stated above, no
Person is entitled to receive from the Partnership any such fee or commission.
SECTION 3.9 PARTNERSHIP RECORDS; OTHER INFORMATION. All documents and
other written information as to existing facts relating to the Partnership or
the General Partner and their respective assets and liabilities provided to the
Company and SW Bank by the General Partner or its agents in connection with this
Agreement are true and complete in all material respects except to the extent
that any documents or other written information was later specifically
supplemented or corrected prior to the date of this Agreement with additional
documents or written information that was provided to the Company.
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SECTION 3.10 REAL PROPERTY OWNED OR LEASED.
(a) Schedule 3.10(a) contains a true, correct and complete list of all
real property owned or leased by the Partnership (the "Partnership Real
Property"). The Partnership has delivered to the Company and SW Bank true and
complete copies of all of its deeds, leases and title insurance policies for the
properties referred to in Schedule 3.10(a).
(b) Except for rights of first refusal, renewal options, expansion options
or other similar provisions, no lease with respect to any Partnership Real
Property and no deed with respect to any Partnership Real Property contains any
restrictive covenant that materially restricts the use, transferability or value
of such Partnership Real Property. To the General Partner's knowledge, each of
such leases is a legal, valid and binding obligation enforceable in accordance
with its terms (except as may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors generally and
the availability of equitable remedies), and is in full force and effect; there
are no existing defaults by the Partnership or, to its knowledge, the other
party thereunder; to the General Partner's knowledge, there are no allegations
or assertions of such by any party under such agreement or any events that with
notice, lapse of time or the happening or occurrence of any other event would
constitute a default thereunder.
(c) To the knowledge of the General Partner, none of the buildings and
structures located on any Partnership Real Property, nor any appurtenances
thereto or equipment therein, nor the operation or maintenance thereof, violates
in any material manner any restrictive covenants or encroaches on any property
owned by others, nor does any building or structure of third parties encroach
upon any Partnership Real Property, except for those violations and
encroachments which in the aggregate could not reasonably be expected to cause a
Material Adverse Effect on the Partnership. To the knowledge of the General
Partner, no condemnation proceeding is pending or threatened which would
preclude or materially impair the use of any Partnership Real Property in the
manner in which it is currently being used.
(d) Except as disclosed in Schedule 3.10(d), the Partnership has good and
indefeasible title to, or a valid and enforceable leasehold interest in, or a
contract vendee's interest in, all Partnership Real Property, and such interest
is free and clear of all liens, charges or other encumbrances, except (i)
statutory liens for amounts not yet delinquent or which are being contested in
good faith through proper proceedings, (ii) those liens related to real property
taxes, local improvement district assessments, easements, covenants,
restrictions and other matters of record which do not individually or in the
aggregate materially adversely affect the use and enjoyment of the relevant real
property and (iii) the lien of the Mortgage Loan.
SECTION 3.11 PERSONAL PROPERTY. The Partnership has good title to, or a
valid leasehold interest in, all personal property, whether tangible or
intangible, used in the conduct of its business (the "Partnership Personalty"),
free and clear of all liens, charges or other encumbrances, except (a) statutory
liens for amounts not yet delinquent or which are being contested in good faith
through proper proceedings, (b) the lien of the Mortgage Loan and (c) such other
liens, charges, encumbrances and imperfections of title as do not individually
or in the aggregate materially adversely affect the use and enjoyment of the
relevant Partnership Personalty.
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SECTION 3.12 ACCOUNTING RECORDS; DATA PROCESSING.
The Partnership and the General Partner maintains records that accurately,
validly and fairly reflect their transactions and dispositions of assets.
SECTION 3.13 ABSENCE OF CERTAIN CHANGES. Except as disclosed in Schedule
3.13, there has not been since September 30, 2000:
(a) any change in or effect on the business of the Partnership or any
occurrence, development or event of any nature, that has had or may reasonably
be expected to have, together with all such other changes and effects, a
Material Adverse Effect on the Partnership;
(b) any direct or indirect redemption, purchase or other acquisition of
any Partnership Interest by the Partnership; any declaration, setting aside or
payment of any dividend or distribution by the Partnership; or any alteration of
any right attaching to any Partnership Interest; (c)...any increase in the
compensation, management fees or benefits payable or to become payable by the
Partnership to the General Partner or by the Partnership or the General Partner
to its employees, including, without limitation, compensation or benefits under
any Plan (as defined in Section 3.17 hereof);
(d) any amendment or termination of any agreement to which the Partnership
or the General Partner is a party, other than lease amendments or renewals in
the ordinary course of business and other amendments or terminations which do
not and will not, individually or in the aggregate, have a Material Adverse
Effect on the Partnership or the General Partner;
(e) any adoption, assumption or entrance into any Plan or, except as
required by Applicable Law or the current provisions of any Plan, the amendment
or any other action including, but not limited to, acceleration of vesting and
waiver of performance criteria with respect to any Plan;
(f) any amendment to the Partnership Agreement or the BLI Partnership
Agreement;
(g) any change by the Partnership or the General Partner in accounting
principles or methods;
(h) any loss, damage or destruction (whether or not covered by insurance)
affecting any of the tangible assets or business of the Partnership or the
General Partner that may involve a loss of more than $50,000, individually, or
$150,000, in the aggregate (including deductibles), in excess of applicable
insurance coverage; or
(i) any sale, transfer or other disposition of any material properties or
assets of the Partnership or the General Partner except in the ordinary course
of business.
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SECTION 3.14 LITIGATION.
(a) Schedule 3.14(a) contains a true, correct and complete list, as of the
date of this Agreement, of all suits, claims, actions, investigations or
proceedings of any nature by any Person that are pending or, to the General
Partner's knowledge, threatened (as used in this Agreement, the term
"threatened" shall include matters that are under consideration or investigation
whether or not any formal demand has been made) (i) against or otherwise
involving, directly or indirectly, the Partnership or the General Partner, or
any of their properties (including, without limitation, any such matter with
respect to Taxes), or (ii) against or otherwise involving, directly or
indirectly, Baytown Management Company (in connection with Baytown Management
Company's activities on behalf of them or that otherwise relate, directly or
indirectly, to the Partnership or the General Partner or any of their properties
or activities). Neither the Partnership nor the General Partner has any
employees, and the only agent for conducting business of the Partnership and the
General Partner is Baytown Management Company, which is an entity that is not
owned by the Partnership or the General Partner.
(b) Schedule 3.14(b) contains a true, correct and complete list as of the
date of this Agreement of all pending suits, claims, actions, investigations and
proceedings of any nature involving claims in the amount of $50,000 or more or
involving claims for specific performance or injunctive relief by or on behalf
of the Partnership or the General Partner, or Baytown Management Company that
relate, directly or indirectly, to the Partnership or the General Partner or any
of their properties or activities, including, without limitation, the types of
actions referred to in Section 3.14(a).
SECTION 3.15 TAX MATTERS.
(a) DEFINITIONS. For purposes of this Agreement, the following definitions
shall apply:
(i) The term "Taxes" shall mean all taxes, however denominated,
including, without limitation, any interest, penalties or other additions
that may become payable in respect thereof, imposed by any Governmental
Authority, which taxes shall include, without limiting the generality of
the foregoing, all income or profits taxes (including, without limitation,
federal income taxes and state income taxes), payroll and employee
withholding taxes, back-up withholding and other withholding taxes,
unemployment insurance, social security taxes, sales and use taxes, ad
valorem taxes, excise taxes, franchise taxes, gross receipts taxes,
business license taxes, occupation taxes, real and personal property
taxes, stamp taxes, environmental taxes, transfer taxes, workers'
compensation and Pension Benefit Guaranty Corporation premiums, and other
obligations of the same or of a similar nature to any of the foregoing,
which the Partnership or the General Partner is required to pay, withhold
or collect.
(ii) The term "Returns" shall mean all reports, estimates,
declarations of estimated tax, information statements and returns required
to be prepared or filed in connection with, any Taxes.
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(b) RETURNS FILED AND TAXES PAID. The Partnership and the General Partner
have filed with the appropriate agencies all material Returns required to be
filed, and such Returns are true, correct and complete in all material respects.
No Taxes are owing or payable by the Partnership or the General Partner with
respect to items or periods covered by such Returns or with respect to any
period prior to the date of this representation and warranty. No security
interests, liens, encumbrances, attachments or similar interests exist on or
with respect to any of the assets of the Partnership or the General Partner that
arose in connection with any failure or alleged failure to pay any Taxes. The
Partnership and the General Partner have withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee or agent (including, without limitation, any independent contractor,
foreign Person or other third Person) in compliance with all tax withholding
provisions of applicable federal, state, local and foreign law (including,
without limitation, income, social security, employment tax withholding, and
withholding under Code Sections 1441 through 1445). The Partnership and the
General Partner have timely complied in all material respects with all
requirements under Applicable Laws relating to information, reporting and
withholding and other similar matters for customer and other accounts (including
back-up withholding and furnishing of Forms 1099 and all similar reports).
(c) RETURNS FURNISHED. The Partnership and the General Partner have
delivered or made available to the Company and SW Bank true and complete copies
of their federal income tax information returns for all periods for which the
statute of limitations has not expired. The Partnership and the General Partner
have made available to the Company true and complete copies of all other Returns
and other reports and statements relating to Taxes arising during such periods,
including, without limitation, income tax audit reports, statements or income or
gross receipts tax, franchise tax, sales tax and transfer tax, deficiencies, and
closing or other agreements relating to income or gross receipts tax, franchise
tax, sales tax and transfer tax received by the Partnership and the General
Partner in the possession of the Partnership or the General Partner. The
Partnership or the General Partner will promptly furnish to the Company and SW
Bank true and correct copies of any other Returns filed by the Partnership or
the General Partner prior to the Closing Date. Except as set forth on Schedule
3.15(c), neither the Partnership nor the General Partner is (nor ever has been)
a party to any tax sharing agreement.
(d) TAX DEFICIENCIES; AUDITS; STATUTES OF LIMITATIONS. Except as set forth
in Schedule 3.15(d), (i) no deficiencies have been formally asserted with
respect to Taxes that remain unpaid; (ii) neither the Partnership nor the
General Partner is a party to any formal action or proceeding for assessment or
collection of Taxes, and no such action or proceeding has been asserted or, to
the General Partner's knowledge, threatened against the Partnership or the
General Partner or any of their assets; and (iii) no waiver or extension of any
statute of limitations is in effect with respect to Taxes or Returns. Except as
set forth in Schedule 3.15(d), the Returns for all tax years for which the
statute of limitations has not expired have never been audited by a Governmental
Authority (which term includes any taxing authority), nor is any such audit in
process, pending or, to the General Partner's knowledge, threatened.
SECTION 3.16 EMPLOYMENT AND SIMILAR AGREEMENTS; OBLIGATIONS UPON CHANGE IN
CONTROL. Except as set forth in Schedule 3.16 or Schedule 3.17(a), there are no
written or oral employment, consulting, non-competition, retirement, parachutes,
severance or indemnification agreements or other agreements of any nature
whatsoever (collectively, "Employee Agreements")
-15-
between the Partnership or the General Partner, on the one hand, and any
partner, employee or agent thereof, or any of their respective family members,
on the other hand, including, without limitation, any such agreement concerning
the continued employment or use of such partner, employee, agent or family
member after the consummation of the transactions contemplated by this
Agreement, or any other benefits to be granted to any such partner, employee,
agent or family member, upon, after or in connection with the consummation of
the transactions contemplated by this Agreement. Except as set forth in Schedule
3.16, there are no such Employee Agreements or any other agreements under which
the transactions contemplated by this Agreement (including, without limitation,
the change in control of the Partnership Assets) (i) will require any payment by
the Partnership or the General Partner to, or any consent or waiver from, any
partner, employee or agent thereof, or any other Person, or (ii) will result in
a change of any nature in the rights of any party under an agreement with any
partner, employee or agent of the Partnership or the General Partner, or any
other Person, including, without limitation, any acceleration or change in the
award, grant, vesting or determination of options, warrants, rights, severance
payments, or other contingent obligations of any nature whatsoever of the
Partnership or the General Partner. Except as set forth in Schedule 3.16,
neither the Partnership nor the General Partner has any agreements with any
employee that are inconsistent with the status of all employees thereof being
"at-will" employees. Each reference in this Agreement to "employee" or "agent"
of the Partnership or the General Partner, unless otherwise specified, shall
include, without limitation, consultants of the Partnership or the General
Partner. The General Partner has made available to the Company and SW Bank true,
correct and complete copies of all Employee Agreements.
SECTION 3.17 BENEFIT PLANS. There are no Plans of the Partnership or the
General Partner. The term "Plan" shall include each of the following that are
sponsored, maintained, or contributed to by the Partnership or the General
Partner for the benefit of any of the present or former partners, employees,
agents, consultants, or other similar representatives providing services to or
for the Partnership or the General Partner in connection with such service or
any of the following that have been so sponsored maintained, or contributed to
within six years prior to the date of this Agreement: (i) any "employee benefit
plan" within the meaning of Section 3(3) of ERISA, (ii) any plans that would be
employee benefit plans within the meaning of Section 3(3) of ERISA if they were
subject to ERISA, such as foreign plans and plans for directors or independent
contractors, (iii) any profit-sharing, pension, deferred compensation, incentive
compensation, or bonus plan, arrangement, contract, or agreement, (iv) any stock
option, stock purchase, stock bonus, stock ownership, stock appreciation rights,
phantom stock, or other stock plan (whether qualified or nonqualified),
arrangement, contract, or agreement, (v) any severance, retainer, consulting,
"cafeteria" benefits under Section 125 of the Code, health, welfare or incentive
plan or agreement, including any post-employment benefits, and (vi) any plan,
agreement, contract, program, arrangement, or policy providing for "fringe
benefits", including, but not limited to, vacation, paid holidays, personal
leave, employee discount, educational benefit or similar programs.
SECTION 3.18 LABOR AND EMPLOYMENT MATTERS. Except to the extent set forth
in Schedule 3.18, (a) the Partnership and the General Partner are and have been
in compliance with all Applicable Laws respecting employment and employment
practices, terms and conditions of employment, wages and hours, including,
without limitation, the Immigration Reform and Control Act ("IRCA"), the Worker
Adjustment and Retraining Notification Act ("WARN"), any Applicable Law
respecting employment discrimination, disability rights and benefits, equal
opportunity, plant
-16-
closure issues, affirmative action, worker's compensation, employee benefits,
severance payments, labor relations, employee leave issues, wage and hour
standards, occupational safety and health requirements and unemployment
insurance and related matters, and are not engaged in and have not engaged in
any unfair labor practice, except for such noncompliances which in the aggregate
could not reasonably be expected to cause a Material Adverse Effect on the
Partnership; (b) to the knowledge of the General Partner, no investigation or
review by or before any Governmental Authority concerning any possible conflicts
with or violations of any such Applicable Law is pending, nor is any such
investigation threatened. Neither the Partnership nor the General Partner has
received written notice of any such investigation having occurred during the
last three years and no Governmental Authority has provided any notice to the
General Partner or otherwise asserted an intention to conduct any such
investigation or review, nor, to the knowledge of the General Partner, is there
any basis for any such investigation or review; (c) there is no labor strike,
dispute, slowdown or stoppage actually pending or, to the General Partner's
knowledge, threatened against or directly affecting the Partnership or the
General Partner; (d) no union representation question or, to the General
Partner's knowledge, union organizational activity exists respecting the
employees of the Partnership or the General Partner; (e) no collective
bargaining agreement exists which is binding on the Partnership or the General
Partner, nor has the Partnership or the General Partner been a party to any
collective bargaining agreement within the last ten years; (f) neither the
Partnership nor the General Partner have experienced any work stoppage or other
labor difficulties; (g) neither the Partnership nor the General Partner is
delinquent in payments to any of its employees or agents for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed by them or amounts required to be reimbursed to such employees or
agents; (h) neither the Partnership nor the General Partner has done anything or
entered into any agreement that would cause the Partnership, the General Partner
or the Company to be liable to any of said officers, directors, employees or
agents, in the event of termination for any reason of the employment of any said
employees or agents, for so-called "severance pay" or any other similar payments
or benefits, including, without limitation, post-employment healthcare (other
than pursuant to COBRA) or insurance benefits; and (i) within the three-year
period prior to the date hereof there has not been any termination of employment
of any employee or agent of the Partnership or the General Partner who receives
salary or compensation in excess of $40,000 per annum or any termination of any
employee or agent of the Partnership or the General Partner that could result in
a Liability to the Company in excess of $40,000. In furtherance and not in
limitation of the representations and warranties set forth in Section 3.14,
there are no pending or, to the General Partner's knowledge, threatened suits,
claims, actions, charges, investigations or proceedings of any nature (A) under
or alleging violation of IRCA, WARN or any Applicable Law respecting employment
and employment practices, including, without limitation, discrimination,
disability rights or benefits, equal opportunity, plant closures, affirmative
action, worker's compensation, employee benefits, severance payments, labor
relations, employee leave issues, wage and hour standards, occupational safety
and health requirements or unemployment insurance and related matters, (B)
relating to alleged unfair labor practices (or the equivalent thereof under any
Applicable Law).
SECTION 3.19 CERTAIN INTERESTS. Except as set forth in Schedule 3.19, to
the General Partner's knowledge: (i) no partner, employee or agent of the
Partnership or the General Partner, any of their respective family members, any
corporation or organization (other than Citizens or any of its Subsidiaries) of
which any of the foregoing Persons is an officer, director or beneficial owner
of 10% or more of any class of its equity securities, or any trust or other
estate in which any of the
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foregoing Persons has a substantial beneficial interest or as to which such
Person serves as a trustee or in a similar capacity, nor any Affiliate of the
Partnership or the General Partner, nor any current or former beneficial owner
of 5% or more of any of the outstanding stock of Citizens has any material
interest in any property, real or personal, tangible or intangible, used in or
pertaining to the business of the Partnership or the General Partner or in any
transaction or series of similar transactions to which the Partnership or the
General Partner is a party; (ii) no such Person is indebted to the Partnership
or the General Partner; (iii) neither the Partnership nor the General Partner is
indebted to any such Person except for amounts due under normal salary or
reimbursement or ordinary business expenses; and (iv) no such Person is a party
to an agreement with the Partnership or the General Partner. Except as set forth
in Schedule 3.19, to the General Partner's knowledge, none of the Persons or
entities described in clause (i) hereto has any other relationship or has
engaged or proposes to engage in any other transaction or series of transactions
that would be required to be disclosed pursuant to Item 404 of Regulation S-K
under the Securities Act.
SECTION 3.20 [INTENTIONALLY OMITTED].
SECTION 3.21 INSURANCE.
(a) Schedule 3.21 contains an accurate and complete description of all
policies of general liability, theft, life, fire, worker's compensation, health
and other forms of insurance owned or held by the Partnership or the General
Partner specifying the insurer, amount of coverage, deductions, exclusions, type
of insurance, policy number and any pending claims thereunder involving more
than $10,000 of which the General Partner has knowledge.
(b) All policies of general liability, theft, life, fire, worker's
compensation, health, directors and officers, and other forms of insurance owned
or held by the Partnership or the General Partner (i) are in full force and
effect and all premiums that are due and payable with respect thereto are
currently paid; (ii) are sufficient for compliance with all requirements of
Applicable Law and of all agreements to which the Partnership or the General
Partner is a party; (iii) are, to the General Partner's knowledge, valid,
outstanding and enforceable policies (except as may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights of
creditors generally and the availability of equitable remedies); and (iv) to the
General Partner's knowledge will remain in full force and effect through the
Closing Date. No insurer under any such policy or bond has canceled or indicated
an intention to cancel or not to renew any such policy or bond effective at any
time prior to the Closing Date or generally disclaimed liability thereunder.
Neither the Partnership nor the General Partner is in default under any such
policy or bond, and all material claims thereunder have been filed in a timely
fashion. Neither the Partnership nor the General Partner has been denied or had
revoked or rescinded any policy of insurance during the last three fiscal years.
SECTION 3.22 ENVIRONMENTAL MATTERS. To the knowledge of the General
Partner, neither the Partnership nor the General Partner, nor any properties or
businesses owned or operated by either of them, whether or not held in a
fiduciary or representative capacity, has been or is in violation of or liable
under any Environmental Law (as hereinafter defined). To the knowledge of the
General Partner, there are no actions, suits or proceedings, or demands, claims,
notices or investigations (including, without limitation, notices, demand
letters or requests for information from any
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environmental agency) instituted, pending or threatened relating to the
liability of any properties or businesses owned or operated by the Partnership
or the General Partner, whether or not held in a fiduciary or representative
capacity, under any Environmental Law. To the knowledge of the General Partner,
neither the Partnership nor the General Partner is responsible under any
Environmental Law for any release by any Person at or in the vicinity of real
property of any contaminant, pollutant, hazardous substance, hazardous waste,
hazardous pollutant, toxic pollutant, toxic waste or toxic substance
("Contaminant"), including, without limitation, by spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing of any such Contaminant into the environment (collectively,
"Release") nor, to the knowledge of the General Partner is the Partnership or
the General Partner responsible for any material costs of any response action
required by virtue of any Release of any Contaminant into the environment
including, without limitation, costs arising from investigation, removal or
remediation of Contaminants, security fencing, alternative water supplies,
temporary evacuation and housing and other emergency assistance undertaken by
any environmental regulatory body or any other person. The representations
contained in the foregoing three sentences are qualified to the extent that
there may be certain exceptions to such representations; however, all exceptions
to such representations in the aggregate could not reasonably be expected to
cause a Material Adverse Effect on the Partnership or the General Partner.
Notwithstanding the foregoing, "Contaminant" shall not include materials
employed in normal consumer or office uses, such as gasoline, lubricants,
printing materials, cleaners, disinfectants, pesticides, building materials,
fluorescent lights and ballasts, batteries and refrigerants, as long as such
materials are used and stored only in quantities typical of consumer and office
uses. "Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with any
Governmental Authority relating to (i) the protection, preservation or
restoration of the environment (including, without limitation, air, water vapor,
surface water, groundwater, drinking water supply, surface soil, subsurface
soil, plant and animal life or any other natural resource), and/or (ii) the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labeling, production, release (or threatened release) or disposal of any
substance presently listed, defined, designated or classified as hazardous,
toxic, radioactive or dangerous by any Governmental Authority or otherwise
regulated, whether by type or by quantity, including any material containing any
such substance as a component. Since January 1, 1995, no environmental
inspection, survey or report has been performed or completed on behalf of the
General Partner with respect to any Partnership Real Property.
SECTION 3.23 INTELLECTUAL PROPERTY RIGHTS. There are no registered
trademarks, registered service marks, trademark and service xxxx applications,
trade names or registered copyrights presently owned or held by the Partnership
or the General Partner or used under license by them in the conduct of their
business. Except as set forth on Schedule 3.23, neither the Partnership nor the
General Partner is infringing or violating any patent, copyright, trademark,
service xxxx, label filing or trade name owned or otherwise held by any other
party, nor has the Partnership or the General Partner used any confidential
information or any trade secrets owned or otherwise held by any other party,
without holding a valid license for such use. Neither the Partnership nor the
General Partner is engaging, nor has it been charged with engaging, in any kind
of unfair or unlawful competition.
SECTION 3.24 [INTENTIONALLY OMITTED].
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SECTION 3.25 [INTENTIONALLY OMITTED].
SECTION 3.26 [INTENTIONALLY OMITTED].
SECTION 3.27 [INTENTIONALLY OMITTED].
SECTION 3.28 [INTENTIONALLY OMITTED].
SECTION 3.29 REGULATION D OFFERING. The Partnership and the General
Partner acknowledge that the issuance of Company Common Stock hereunder will be
structured as an offering of Company Common Stock to the Partnership that is
exempt from registration under Regulation D. In that connection, the Partnership
and the General Partner represent that the Partnership is an "accredited
investor," as defined in Rule 501(a) of Regulation D.
SECTION 3.30 DISCLOSURE. Without limiting any of the representations and
warranties contained herein, no representation or warranty by the Partnership
and the General Partner in this Agreement, no statement contained in any
document (including, without limitation, the financial statements, the
Disclosure Schedule and the information to be provided pursuant to Section 5.5
hereof), certificate or other writing and no other information furnished or to
be furnished by the Partnership or the General Partner to the Company and SW
Bank or any of their representatives pursuant to the provisions hereof or in
connection with the transactions contemplated hereby, contains or will contain
any untrue statement of material fact or omits or will omit to state any
material fact necessary in order to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SW BANK
The Company and SW Bank hereby make all of the representations and
warranties to the Partnership and the General Partner that are made by the
Company to Citizens in Article IV of the Merger Agreement, all of which are
incorporated herein by reference.
ARTICLE V
COVENANTS OF THE PARTIES
SECTION 5.1 PREPARATION OF OFFERING MEMORANDUM/PROXY STATEMENT. Citizens
and the Company contemplate that the shares of Company Common Stock to be issued
in connection with the transactions contemplated by the Merger Agreement and the
transactions contemplated hereby will be issued in a private transaction that is
exempt from registration under the Securities Act pursuant to Regulation D
thereunder and that the parties will prepare a related Offering Memorandum/Proxy
Statement (the "Offering Memorandum/Proxy Statement") to be mailed to the
shareholders of Citizens in connection with the special meeting of shareholders
of Citizens called to approve the Merger Agreement (the "Shareholders'
Meeting"). The parties hereby agree to cooperate with each other in preparing
such Offering Memorandum/Proxy Statement and in ensuring
-20-
that the Offering Memorandum contains all information required by Rule 502(b) of
Regulation D, including information about this Agreement and the transactions
contemplated hereunder. Without limiting the generality of the foregoing,
nothing shall be contained in the Offering Memorandum/Proxy Statement or any
proxy soliciting materials with respect to any party unless approved by such
party, which approval shall not be unreasonably withheld.
SECTION 5.2 PURSUIT OF REGULATORY APPROVALS.
(a) The parties shall cooperate and use their best efforts (i) to obtain
all necessary approvals, consents, authorizations and the like from Governmental
Authorities required to consummate the Merger, the Delaware Merger and the Bank
Merger (as those terms are defined in the Merger Agreement), including, without
limitation, the approval of the Federal Reserve, the OCC, the TDB and such other
Persons as may be required under Applicable Law. In addition, the consummation
of the transactions contemplated by the Merger Agreement is subject to the
expiration of any applicable waiting period with respect to any of the foregoing
matters (including, without limitation, any extension thereof by reason of a
request for additional information or as a result of any pending or threatened
action, suit or proceeding by the U.S. Department of Justice or the Federal
Trade Commission under federal antitrust laws), and the publication of any
notice required by Applicable Law.
All such approvals, together with any other approvals of Governmental
Authorities that are necessary to consummate the transactions contemplated
hereby and by the Merger Agreement, are referred to herein as the "Regulatory
Approvals."
(b) The Company shall have primary responsibility for the preparation of
all Federal Reserve and OCC applications and filings required in connection with
Section 5.2(a) above, and the parties shall be jointly responsible for the
preparation of all applications and filings, if any, with the TDB required in
connection with Section 5.2(a) above. The Company shall use its best efforts to
prepare and file such applications as soon as practicable and shall promptly
provide the General Partner with copies of all non-confidential portions of such
applications, filings and correspondence with Governmental Authorities related
to obtaining such Regulatory Approvals. Each party shall cooperate with the
other party hereto in preparation of all applications for such Regulatory
Approvals and will furnish promptly upon request all documents, information,
financial statements or other materials as may be required in order to complete
such applications. Should the appearance of any of the officers, directors,
employees or agents of either of the parties hereto be requested by either of
the parties or by any Governmental Authority at any hearing or otherwise in
connection with any such application, such party shall promptly use its best
efforts to arrange for those appearances.
SECTION 5.3 OTHER CONSENTS. The Partnership, the General Partner, the
Company and SW Bank agree to apply for and reasonably and diligently seek to
obtain all waivers, consents and approvals of other Persons required in
connection with the transactions contemplated by this Agreement, including,
without limitation, the consent of any Person which may be required under any
Scheduled Contract.
-21-
SECTION 5.4 PARTNERSHIP AND GENERAL PARTNER ACTIVITIES PENDING CLOSING.
Except as otherwise specifically provided in this Agreement and subject to
Applicable Law, from the date hereof to and including the Effective Time, the
Partnership and the General Partner shall, as long as this Agreement remains in
effect or unless the Company and SW Bank otherwise consent in writing (which
consent shall not be unreasonably withheld):
(a) conduct their affairs (including, without limitation, the making of or
agreeing to make any loans or other extensions of credit) only in the ordinary
course of business consistent with prudent business practice and in accordance
with Applicable Laws, and use its best efforts to preserve intact their present
business organizations, keep available the services of their present key
employees and agents and preserve their relationships and goodwill with all
Persons having business dealings with them;
(b) refrain from issuing or selling or obligating itself to issue or sell
any Partnership Interests or any equity interest in the General Partner;
(c) not enter into, amend or terminate any agreement of the type that
would be required to be disclosed on Schedule 3.7(a) (other than leases in the
ordinary course of business), or any other material agreement, or acquire or
dispose of any material amount of assets or liabilities, except in the ordinary
course of business consistent with prudent business practices;
(d) not grant any severance or termination pay to, or enter into any
employment, consulting, non-competition, retirement, parachute, severance or
indemnification agreement with, any partner, employee or agent of the
Partnership or the General Partner, either individually or as part of a class of
similarly situated persons;
(e) not cause or allow any of the things listed in Section 3.13 to occur
(except with respect to Section 3.13(a) and (h), the Partnership and the General
Partner shall use their best efforts to not cause or allow any of the things
listed therein to occur; and
(f) not establish any Subsidiary of the Partnership or the General
Partner.
SECTION 5.5 ONGOING FINANCIAL DISCLOSURE. The General Partner shall
provide to the Company and SW Bank as soon as practicable but in no event later
than thirty (30) days following the end of each calendar month, from the date
hereof through the Closing Date, copies of all financial statements and other
written financial information provided to the General Partner (other than where
such information relates to litigation and counsel for the General Partner has
advised the General Partner that such disclosure may jeopardize the
attorney-client privilege), and, to the extent permitted by Applicable Law, any
reports filed by the Partnership or the General Partner with federal or state
regulatory agencies. The Company shall send to the General Partner, promptly
after they become publicly available, copies of all Company filings from and
after the date hereof made under Sections 13(a) and 14 of the Exchange Act and
copies of all news releases made by the Company from and after the date hereof
SECTION 5.6 ACCESS TO INFORMATION OF THE PARTNERSHIP AND THE GENERAL
PARTNER.
-22-
(a) During the period from the date hereof until the Effective Time, the
General Partner shall provide the information and access described in paragraphs
(b) and (c) below during normal business hours, upon reasonable written or oral
notice and in such manner as will not unreasonably interfere with the conduct of
the business of the Partnership and the General Partner.
(b) To the extent permitted by law and consistent with Section 5.6(a), the
Partnership and the General Partner shall authorize and permit the Company, SW
Bank and their representatives, accountants and counsel to have full and
complete access to all of the properties, books, records, tenant accounts and
records, any reports of Governmental Authorities and responses thereto,
operating instructions and procedures (and all correspondence with Governmental
Authorities), tax returns, tax settlement letters, financial statements and
other financial information (including the work papers of Tiller and Company
used to compile the Partnership's financial statements), contracts and documents
of the Partnership and the General Partner and all other information with
respect to the business affairs, financial condition, assets and Liabilities of
the Partnership and the General Partner as the Company and SW Bank may from time
to time reasonably request, to make copies of such books, records and other
documents, and to discuss the business affairs, condition (financial and
otherwise), assets and Liabilities of the Partnership and the General Partner
with such third persons, including, without limitation, the directors, officers,
employees, agents, accountants (including Tiller and Company) and attorneys of
the Partnership and the General Partner (other than where such information
relates to litigation and counsel for the General Partner has advised the
General Partner that such disclosure may jeopardize the attorney-client
privilege), as the Company and SW Bank consider reasonably necessary or
appropriate for the purposes of familiarizing themselves with the business and
operations of the Partnership and the General Partner, determining any breach of
the representations, warranties and covenants of the Partnership and the General
Partner set forth herein, obtaining any necessary orders, consents or approvals
of the transactions contemplated by this Agreement by Governmental Authorities,
conducting further evaluations of the assets and Liabilities of the Partnership
and the General Partner, and accomplishing the integration of the business
operations of the Partnership and the General Partner with those of the Company
and its Subsidiaries at the earliest possible date.
(c) For purposes of the Company's and SW Bank's investigation pursuant to
this Section 5.6, the General Partner shall use its best efforts to cause any
service bureau, accountant, third party servicer or other third party under
contract to it to furnish to the Company, SW Bank and their authorized
representatives, at SW Bank's cost, full access to such party's premises and all
of its books, records and properties, including, without limitation, all loan,
investment, regulatory, financial, accounting, tax and property records and
files relating to the operations of the Partnership and the General Partner
including, without limitation, all files, computer records and customer
information, relating to assets serviced by third parties or necessary for the
conversion on the Closing Date of all accounts, products and branch operating
systems of the Partnership and the General Partner to such systems as the
Company and SW Bank may designate. The General Partner shall use its best
efforts to cause any service bureau, accountant, third party servicer or other
third party to provide adequate space and facilities and the cooperation of its
personnel at SW Bank's cost, including, without limitation, copying facilities,
to the end that such examination shall be completed expeditiously, completely
and accurately. Without limiting any of the foregoing, the Company, SW Bank and
their authorized representatives shall be specifically entitled to conduct at SW
Bank's own
-23-
expense (and the General Partner shall use its best efforts to enable them to
conduct) such tests of accounts receivable and other matters as they deem
appropriate. Any examination or investigation made by the Company, SW Bank or
other Persons as contemplated by this Section shall not affect any of the
representations and warranties hereunder.
SECTION 5.7 CONFIDENTIALITY. Except as contemplated by this Agreement or
as necessary to carry out the transactions contemplated herein, all information
or documents furnished hereunder by any party hereto or any other party shall be
kept confidential by the party to whom it is furnished (and such party shall use
its best efforts to cause its agents and representatives to maintain the
confidentiality of such documents) and in the event such transactions are not
consummated, each shall return to the other or destroy all information furnished
hereunder and shall not thereafter use the same for any purpose until such time
as such information becomes publicly available, except to the extent (i) it was
known by such other party prior to being received other than through the
violation or breach of such party or any other Person of any duty of
confidentiality, (ii) it is or thereafter becomes lawfully obtainable from other
sources, (iii) it is necessary or appropriate to disclose the same to any
Governmental Authority having jurisdiction over the parties or their
Subsidiaries or as otherwise may be required by Applicable Laws (to the extent
permitted by law, the party intending to make disclosure in such circumstances
shall give the other party hereto prompt notice prior to making such disclosures
so that such other parties may seek a protective order or other appropriate
remedy prior to such disclosure), or (iv) such duty of confidentiality is waived
in writing by the other party, and that none of this information shall be used
for competitive purposes. Notwithstanding the foregoing, information and
documents furnished by or on behalf of the Partnership or the General Partner
hereunder may be disclosed by the Company or SW Bank to the FRB, the OCC, the
FDIC, the TDB and any other Governmental Authority whose approval, consent,
authorization or other action is necessary for the consummation of the Merger
and the transactions contemplated hereby.
SECTION 5.8 [INTENTIONALLY OMITTED].
SECTION 5.9 STOCK LISTING. The Company shall, prior to the Effective Time,
notify Nasdaq with respect to the listing of the shares of Company Common Stock
to be issued pursuant to this Agreement and shall obtain any approval required
by Nasdaq necessary in connection with the issuance of the Company Common Stock.
SECTION 5.10 AFFILIATES' LETTERS. No later than the 30th day following the
date hereof, the General Partner shall deliver to the Company, after
consultation with legal counsel, a list of names and addresses of those persons
who are "Affiliates" of the Partnership within the meaning of Rule 144 under the
Securities Act. There shall be added to such list the names and addresses of any
other person (within the meaning of such Rule) which the Company identifies (by
written notice to the General Partner within three business days after receipt
of such list) as possibly being a person who may be deemed to be an "Affiliate"
of the Partnership within the meaning of Rule 144. The General Partner shall use
its best efforts to deliver, or cause to be delivered, to the Company, not later
than the Closing Date from each of the "Affiliates" of the Partnership
identified as aforesaid, a letter dated as of the date of delivery thereof in
the form of Exhibit C attached hereto.
SECTION 5.11 [INTENTIONALLY OMITTED].
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SECTION 5.12 TERMINATION OF SEVERANCE AND CONSULTING ARRANGEMENTS. On or
prior to the Closing Date, subject to Applicable Law, the Partnership and the
General Partner shall use their best efforts to terminate as of the Closing Date
those arrangements (other than the engagement of Xxxxx Xxxxxxx & Xxxx LLP,
Xxxxxxxxx & Xxxxxxxxx, L.L.P. or Tiller and Company) as SW Bank shall notify the
General Partner in writing at least ten days prior to the Closing Date pursuant
to which SW Bank is or may be obligated to make payments after the Closing Date
(with respect to matters occurring after the Closing Date) to any Person
pursuant to any employment, consulting, severance, employment termination or
other similar agreement with any current or former employee or agent of the
Partnership or the General Partner.
SECTION 5.13 CERTAIN NOTIFICATIONS.
(a) Each party to this Agreement shall notify the other party promptly
both orally and in writing (i) after becoming aware of any misrepresentation or
breach of warranty on its part under this Agreement, (ii) after becoming aware
of the occurrence of, or the impending or threatened occurrence of, any event
that would constitute a breach on its part of any obligation under this
Agreement or the occurrence of any event that would cause any representation or
warranty made by it herein to be false or misleading in any material respect if
such representation and warranty were restated at such time, or (ii) upon the
occurrence of, or the discovery of, any event that could reasonably be expected
to cause it to be unable to satisfy a condition to any other party's obligation
to proceed with the Closing.
(b) Each party to this Agreement shall notify the other party promptly
both orally and in writing if it becomes aware that there exists a basis for any
material suit, claim, action, investigation or proceeding of any nature to be
brought against or by or on behalf of the notifying party, or any of its
properties.
SECTION 5.14 [INTENTIONALLY OMITTED].
SECTION 5.15 NO INCONSISTENT ACTIONS; POOLING; TAX TREATMENT. None of the
parties hereto will voluntarily take or omit to take any action, the effect of
the taking or omission of which would reasonably be expected to cause any of its
representations and warranties herein to be inaccurate in any material respect
at the Closing or at any time prior to the Closing as if such representation and
warranty were restated at such time. Each party hereto shall use its best
efforts to cause the Merger and the transactions contemplated hereunder to be
treated for financial accounting purposes as a "pooling of interests," and shall
not take, and shall use its best efforts to prevent any Affiliate of such party
from taking, any actions which could prevent the Merger and the transactions
contemplated hereunder from being treated as such for financial accounting
purposes.
SECTION 5.16 TAXES; CONSENT. The General Partner shall prepare and timely
file all Returns and amendments thereto required to be filed by the Partnership
and the General Partner on or before the Closing Date. The Company and SW Bank
shall have a reasonable opportunity to review all Returns and amendments thereto
prior to filing. The Partnership and the General Partner shall pay and discharge
all Taxes, assessments and governmental charges upon or against them or any of
their properties or assets, and all liabilities at any time existing, before the
same shall become delinquent and before penalties accrue thereon, except to the
extent and as long as: (a) the same are being contested in good faith and by
appropriate proceedings pursued diligently and in such a manner as not to cause
any Material Adverse Effect on the Partnership or the General Partner; and (b)
the Partnership or the General Partner shall have set aside on its books
reserves (segregated to the extent required by sound accounting practice) in the
amount of the demanded principal imposition (together with interest and
penalties relating thereto, if any).
-25-
SECTION 5.17 [INTENTIONALLY OMITTED].
SECTION 5.18 [INTENTIONALLY OMITTED].
SECTION 5.19 COMPLIANCE WITH APPLICABLE LAW. During the period from the
date of this Agreement until the Effective Time, the General Partner shall take
any and all actions reasonably requested by the Company in order to conform the
conduct of the business of the Partnership and the General Partner, including,
without limitation, the business of originating, acquiring, holding or disposing
of assets and liabilities, with the requirements of any Applicable Law.
SECTION 5.20 [INTENTIONALLY OMITTED].
SECTION 5.21 ENVIRONMENTAL INVESTIGATION; RIGHT TO TERMINATE AGREEMENT.
(a) The Company, SW Bank and their designated consultants, agents and
representatives shall have the right to the same extent that the Partnership or
the General Partner has such right, but not the obligation or responsibility, at
SW Bank's expense, to inspect any Partnership Real Property, including, without
limitation, conducting asbestos surveys and sampling, environmental assessments
and investigation, and other environmental surveys and analyses including soil
and ground sampling ("Environmental Inspections") at any time on or prior to
December 9, 2000. The Company or SW Bank shall notify the General Partner prior
to any physical inspections of any such properties, and the General Partner may
place reasonable restrictions on the time of such inspections. (If, as a result
of any such Environmental Inspection, further investigation ("secondary
investigation") including, without limitation, test borings, soil, water and
other sampling is deemed desirable by the Company or SW Bank, the Company or SW
Bank shall (i) notify the General Partner of any property for which it intends
to conduct such a secondary investigation and the reasons for such secondary
investigation, and (ii) commence such secondary investigation, on or prior to
January 8, 2001. All secondary investigations must be approved in advance by the
General Partner. The Company or SW Bank shall give reasonable notice to the
General Partner of such secondary investigations, and the General Partner may
place reasonable time and place restrictions on such secondary investigations.
(b) The Partnership and the General Partner agree to indemnify and hold
harmless the Company for any claims for damage to property, or injury or death
to persons, made as a result of any Environmental Inspection or secondary
investigation conducted by the Company or its agents, which damage or injury is
attributable solely to the negligent actions or negligent omissions of the
General Partner or its agents. The Company agrees to indemnify and hold harmless
the Partnership and the General Partner for any claims for damage to property,
or injury or death to persons, attributable solely to the negligent actions or
omissions of the Company, SW Bank or their agents (including, but not limited
to, any person or entity entering onto Partnership property in connection
-26-
with any such inspections or investigations) in performing any Environmental
Inspection or secondary investigation. In addition, the Company shall, after any
physical testing, restore such tested property to its original condition at the
Company's sole cost and expense. The Company and SW Bank shall not have any
liability or responsibility of any nature whatsoever for the results,
conclusions or other findings related to any Environmental Inspection, secondary
investigation or other environmental survey. If this Agreement is terminated,
then except as otherwise required by law, reports to any governmental authority
of the results of any Environmental Inspection, secondary investigation or other
environmental survey shall be made by the General Partner and not by the Company
or SW Bank. Neither the Company nor SW Bank shall make any such report prior to
the Closing unless required to do so by law, and in such case will give the
General Partner at least ten days written notice of their intentions.
(c) The Company and SW Bank shall have the right to terminate this
Agreement after ten days prior written notice of either of the following if (i)
the General Partner has refused to allow the Company and SW Bank to conduct an
Environmental Inspection or secondary investigation in a manner that the Company
and SW Bank reasonably consider necessary; or (ii) the Environmental Inspection,
secondary investigation or other environmental survey identifies any past or
present events, conditions or circumstances (including but not limited to the
presence of any asbestos-containing material or underground storage tank) that
would require remedial or cleanup action at the expense of the Partnership and
the General Partner in an aggregate estimated cost which is in excess of
$500,000 on an after-tax basis. On or prior to January 23, 2001, the Company and
SW Bank shall advise the General Partner in writing if the Company and SW Bank
intend to terminate this Agreement because the Company and SW Bank disapprove of
the results of the Environmental Inspection, secondary investigation or other
environmental survey. Notwithstanding the foregoing, if the Company and SW Bank
elect to terminate this Agreement pursuant to clause (ii) of the first sentence
of this Section 5.21(c), the General Partner may elect, within three business
days of its receipt of such notice of termination, to reduce the total number of
shares of Company Common Stock to be received by the Partnership or the Partners
hereunder by the quotient of the excess of the Company's estimated remedial or
clean up cost over $500,000 on an after-tax basis divided by the Company
Measurement Price, and proceed with the Closing. In such event, the Company, SW
Bank, the Partnership and the General Partner shall execute an amendment to this
Agreement to reflect the appropriate reduction in the Exchange Ratio.
SECTION 5.22 INDEMNIFICATION; INSURANCE.
(a) From and after the Effective Time, the Company shall indemnify, defend
and hold harmless the Partnership, BLC, Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxx,
Xxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Cotulla
Partners, Ltd., the Partners, employees and agents of the Partnership or the
General Partner (collectively, the "Indemnified Parties") against all losses,
expenses, claims, damages, liabilities or amounts (including all amounts paid in
settlement with the approval of the Company, which approval shall not
unreasonably be withheld) in connection with, any claim, action, suit,
proceeding or investigation (a "Claim"), based in whole or in part on the fact
that such person is or was a Partner, employee or agent of the Partnership or
otherwise affiliated with the Partnership or the General Partner and arising out
of actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions
-27-
contemplated by this Agreement), in each case to the fullest extent permitted
under Applicable Law and whether or not asserted before the Effective Time.
(b) Without limiting the foregoing, in the event any Claim is brought
against any Indemnified Party (whether arising before or after the Effective
Time) after the Effective Time (i) the Indemnified Parties may retain the
Partnership's regularly engaged independent legal counsel, or other independent
legal counsel satisfactory to them provided that such other counsel shall be
reasonably acceptable to the Company, (ii) the Company shall pay all reasonable
fees and expenses of such counsel for the Indemnified Parties promptly as
statements therefor are received and (iii) the Company will use its best efforts
to assist in the vigorous defense of any such matter, provided that the Company
shall not be liable for any settlement of any Claim effected without its written
consent, which consent shall not be unreasonably withheld. Any Indemnified Party
wishing to claim indemnification under this Section 5.22, upon learning of any
such Claim, shall notify the Company (although the failure so to notify the
Company shall not relieve the Company from any liability which the Company may
have under this Section 5.22 except to the extent such failure prejudices the
Company), and shall deliver to the Company an undertaking to repay all expenses
paid by the Company if such indemnification is not permitted under Applicable
Law. The Indemnified Parties as a group may retain one law firm to represent
them with respect to each such matter unless there is, under applicable
standards of professional conduct (as determined by counsel to the Indemnified
Parties), a conflict on any significant issue between the positions of any two
or more Indemnified Parties, in which event, such additional counsel as may be
required may be retained by the Indemnified Parties.
(c) The provisions of this Section 5.22 shall survive the Closing and are
intended to be for the benefit of, and shall be enforceable by, the Indemnified
Parties, their heirs and personal representatives and shall be binding on the
Company and its representative successors and assigns.
(d) If the Company or any of its successors or assigns (A) shall
consolidate with or merge into any other corporation or entity and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger; or (B) shall transfer all or substantially all of its properties and
assets to any individual, corporation, or other entity, then and in each such
case the Company shall make proper provision so that the successors and assigns
of the Company shall assume the obligations set forth in this Section 5.22.
SECTION 5.23 ACCESS TO INFORMATION OF THE COMPANY AND SW BANK.
(a) During the period from the date hereof until the Effective Time, the
Company and SW Bank shall provide the information and access described in
paragraphs (b) and (c) below during normal business hours, upon reasonable
written or oral notice and in such manner as will not unreasonably interfere
with the conduct of the Company's or SW Bank's business.
(b) To the extent permitted by law and consistent with Section 5.23(a),
the Company and SW Bank shall authorize and permit the General Partner and its
representatives, accountants and counsel to have full and complete access to all
of the properties, books, records, branch operating reports, branch audit
reports, customer accounts and records, any reports of Governmental Authorities
and responses thereto, operating instructions and procedures (and all
correspondence
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with Governmental Authorities), tax returns, tax settlement letters, financial
statements and other financial information (including the work papers of
PricewaterhouseCoopers used to audit the Company's balance sheets as of December
31, 1999 and 1998 and its statements of income, changes in shareholders' equity
and cash flows for the years ended December 31, 1999, 1998 and 1997), contracts
and documents of the Company and SW Bank and all other information with respect
to the business affairs, financial condition, assets and Liabilities of the
Company and SW Bank as the General Partner may from time to time reasonably
request, to make copies of such books, records and other documents and to
discuss the business affairs, condition (financial and otherwise), assets and
Liabilities of the Company and SW Bank with such third persons, including,
without limitation, the directors, officers, employees, agents, accountants
(including PricewaterhouseCoopers) and attorneys of the Company and SW Bank, as
the General Partner considers reasonably necessary or appropriate for the
purposes of familiarizing itself with the business and operations of the Company
and SW Bank, determining any breach of the representations, warranties and
covenants of the Company and SW Bank set forth herein, obtaining any necessary
orders, consents or approvals of the transactions contemplated by this Agreement
by Governmental Authorities and conducting further evaluations of the assets and
Liabilities of the Company and SW Bank.
(c) For purposes of the General Partner's investigation pursuant to this
Section 5.23, the Company and SW Bank shall use their best efforts to cause any
service bureau, accountant, third party servicer or other third party under
contract to it to furnish to the General Partner and its authorized
representatives, at the Partnership's cost, full access to such party's premises
and all of its books, records and properties, including, without limitation, all
loan, investment, regulatory, financial, accounting, tax and property records
and files relating to the operations of the Company and SW Bank including,
without limitation, all files, computer records and customer information,
relating to assets serviced by third parties. The Company and SW Bank shall use
their best efforts to cause any service bureau, accountant, third party servicer
or other third party to provide adequate space and facilities and the
cooperation of its personnel at the Partnership's cost, including, without
limitation, copying facilities, to the end that such examination shall be
completed expeditiously, completely and accurately. Without limiting any of the
foregoing, the General Partner and its authorized representatives shall be
specifically entitled to conduct at the General Partner's own expense (and the
Company and SW Bank shall use their best efforts to enable them to conduct) such
tests of accounts receivable and other matters as they deem appropriate. Any
examination or investigation made by the General Partner or other Persons as
contemplated by this Section shall not affect any of the representations and
warranties hereunder.
SECTION 5.24 [INTENTIONALLY OMITTED].
SECTION 5.25 FURTHER ASSURANCES. Each party hereto shall execute and
deliver such instruments and take such other actions as the other party may
reasonably require in order to carry out the intent of this Agreement.
SECTION 5.26 PREPARATION OF SHELF REGISTRATION STATEMENT. As soon as
practicable following the Closing Date (but no later than ten days following the
later of the Closing Date or the date on which the Company has received all
requisite information from substantially all of the Partners), the Company will
prepare and file with the SEC, at its expense (including, without limitation,
all NASD registration and filing fees, fees and expenses of compliance with
securities
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or blue sky laws, listing fees, printing expenses, messenger and delivery
expenses, all fees and disbursements of counsel, independent certified public
accountants, consultants, advisors and experts for the Company, and all other
expenses of the type ordinarily incurred to register securities, but not
including any underwriting discounts or commissions, or expenses of Partners or
underwriters), a continuous or "shelf" registration statement on Form S-3 (the
"Registration Statement") pursuant to Rule 415 under the Securities Act for
registration of the resale by the Partners of the shares of Company Common Stock
to be issued in connection with the transactions contemplated hereby. The
parties hereby agree (i) to cooperate with each other in preparing and filing
such Registration Statement, and (ii) to use its best efforts to cause such
Registration Statement to be declared effective by the SEC by the date on which
the Company first publishes an earnings report that reflects at least 30 days of
combined operations of the Company, Citizens and the Partnership (the
"Expiration Date"), such earnings report being referred to herein as the
"Combined Report." The Company agrees to maintain the effectiveness of the
Registration Statement for a period of two years following the Closing Date.
Without limiting the generality of the foregoing, nothing shall be contained in
the Registration Statement or with respect to any party unless approved by such
party, which approval shall not be unreasonably withheld. The Company shall
furnish without charge to each Partner such number of copies of the prospectus
(including each preliminary prospectus) included in the Registration Statement,
and such other documents as the Partner may reasonable request in order to
facilitate the disposition of shares of Company Common Stock by each Partner,
including, without limitation, all documents incorporated by reference in the
Registration Statement. The Company shall also promptly notify each Partner,
after becoming aware thereof, of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the happening of
any event which makes the Registration Statement or any post-effective amendment
thereto, related prospectus or any amendment or supplement thereto, or any
document incorporated therein by reference, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein in the light of the circumstances
under which they were made not misleading. The Company shall use its best
efforts to register or qualify such shares under the securities or blue sky laws
of such states and the District of Columbia as the Partners may reasonably
request to enable them to dispose in such states and the District of Columbia of
the shares owned by them; and otherwise use its best efforts to comply with all
Applicable Laws to enable the Partners to consummate the disposition of the
shares owned by them.
The Company shall prepare and file with the SEC all such amendments and
supplements to the Registration Statement and each prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective for
the two-year period specified above in this Section 5.26 and as may be necessary
to comply with the provisions of the Securities Act with respect to the
disposition of all shares of Company Common Stock covered by the Registration
Statement in accordance with the intended method of disposition (which shall
include underwritten offerings) set forth in the Registration Statement.
SECTION 5.27 PARTNERS' AGREEMENTS AS TO REGISTRATION STATEMENT. The
General Partner understands that each Partner must furnish the Company with such
information regarding the Partner and pertinent to the disclosure requirements
relating to the registration and distribution of his shares of Company Common
Stock as the Company may from time to time reasonably request in writing and
hereby agrees to assist the Company in that regard. The General Partner
understands and agrees that in order to sell any shares of Company Common Stock
pursuant to the Registration Statement,
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the selling Partner or the broker effectuating any such sale must deliver a copy
of the current prospectus included in the Registration Statement to the
purchaser of such shares prior to or simultaneously with the delivery of the
confirmation for such sale to such purchaser. The General Partner understands
that any sale which fails to comply with the requirements of the preceding
sentence will not be in compliance with the Securities Act and must be
rescinded. The General Partner understands that, upon receipt of any notice from
the Company of the happening of any event described in the sixth sentence of
Section 5.26 hereof, each Partner must immediately discontinue disposition of
his shares of Company Common Stock pursuant to the Registration Statement until
the lifting of such stop order or the Partner's receipt of the copies of the
supplemented or amended prospectus, as applicable. The Company understands that
the General Partner cannot control or bind the Partners to any of the foregoing
provisions or restrictions.
SECTION 5.28 INDEMNIFICATION BY THE COMPANY. The Company shall indemnify,
defend and hold harmless Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxx,
Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Cotulla Partners, Ltd. and
each Partner and each underwriter, if any, and each Affiliate of each
Shareholder or any such underwriter (collectively, the "Partner Indemnified
Parties") against any and all losses, claims, damages or liabilities, and
expenses to which any such Partner Indemnified Party may become subject under
the Securities Act, common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof, whether
commenced or threatened) arise out of or are based upon (i) any untrue statement
of any material fact contained in the Registration Statement, any preliminary,
final or summary prospectus contained therein (except where errors or omissions
in such preliminary prospectus are corrected in the final prospectus and the
Partner fails to timely deliver such final prospectus) or in any amendment or
supplement thereto or any document incorporated by reference therein or (ii) any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse the Partner Indemnified Party for any legal or any other expenses
reasonably incurred by him in connection with investigating or defending any
such loss, claim, liability, action or proceeding; PROVIDED, that the Company
shall not be liable to any Partner Indemnified Party in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon any untrue statement
or omission made in the Registration Statement or amendment or supplement
thereto or in any such preliminary, final or summary prospectus in reliance upon
and in conformity with written information with respect to the subject Partner
or such Partner's underwriter furnished to the Company by such Partner or such
Partner's underwriter specifically for use in the preparation thereof. The
indemnity agreements contained in this Section 5.28 shall not apply to amounts
paid in settlement of claims if such settlement is effectuated without the
consent of the Company (which consent shall not be unreasonably withheld). Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Partner or any Partner Indemnified Party.
(b) INDEMNIFICATION BY THE PARTNERS. Each Partner shall, severally and not
jointly, indemnify, defend and hold harmless, the Company and each Affiliate of
the Company and their respective directors and officers (and the directors,
officers, affiliates and controlling persons thereof, as defined in Section 15
of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), (collectively, the "Company Indemnified
Parties"), against any and all losses, claims, damages or liabilities, and
expenses to which any such Company
-31-
Indemnified Party may become subject under the Securities Act, common law or
otherwise, insofar as such losses, claims, damages or liabilities,(or actions or
proceedings in respect thereof, whether commenced or threatened) arise out of or
are based upon any statement in or omission from the Registration Statement, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement, if such statement or omission was made in reliance upon and in
conformity with written information with respect to the Partner furnished to the
Company by such Partner specifically for use in the preparation of the
Registration Statement, preliminary, final or summary prospectus or amendment or
supplement, or a document incorporated by reference into any of the foregoing;
PROVIDED, HOWEVER, that the indemnity agreement contained in this Section 5.28
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action arising if such settlement is effected without the consent
of the Partner (which consent shall not be unreasonably withheld). Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any other Company Indemnified Party. In
no event shall the liability of any Partner hereunder be greater in amount than
the dollar amount of the proceeds received by such Partner upon the sale of the
Company Common Stock giving rise to such indemnity obligation.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by a Partner or a
Company Indemnified Party (collectively, an "Indemnified Party") hereunder or
written notice of the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to this Section 5.28,
such Indemnified Party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action; PROVIDED, that the failure of such Indemnified Party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding sections of this Section 5.28, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice, and in
no event shall such omission relieve the indemnifying party from any other
liability it may have to such Indemnified Party. In case any such action is
brought against any Indemnified Party, unless in such Indemnified Party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such Indemnified Party, and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof. No indemnifying party will
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof, the giving by the claimant or
plaintiff to such Indemnified Party or a release from all liability in respect
to such claim or litigation.
(d) CONTRIBUTION. If the indemnification provided for in this Section 5.28
from the indemnifying party is unavailable to an Indemnified Party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying party, in lieu of indemnifying such Indemnified
Party shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and such Indemnified Party in connection with the actions that resulted in
such losses, claims, damages,
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liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and an Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or by
such Indemnified Party. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 5.28(d) were determined: (i)
by pro rata allocation or (ii) by any other method of allocation that does not
take account of the equitable considerations referred to in this Section
5.28(d). The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above shall be deemed to include (subject to the
limitations set forth in Section 5.28(c) hereof) any legal or other fees or
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action, proceeding or claim. Notwithstanding
the provisions of this Section 5.28(d), no Partner shall be required to
contribute any amount in excess of the net proceeds received by such Partner
from the sale of Company Common Stock under the Registration Statement. No party
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any party who was not
guilty of such fraudulent misrepresentation.
(e) NON-EXCLUSIVITY. The obligations of the parties under this Section
5.28 shall be in addition to any liability which any party may otherwise have to
any other party.
(f) SUCCESSORS AND ASSIGNS. The provisions of this Section 5.28 shall
survive the Effective Time and the Closing and are intended to be for the
benefit of, and shall be enforceable by, the Indemnified Parties, their heirs,
personal representatives, successors and assigns and shall be binding on the
Company, the Partners and their heirs, personal representatives, successors and
assigns.
(g) MERGER. If the Company or any of its successors or assigns (A) shall
consolidate with or merge into any other corporation or entity and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger; or (B) shall transfer all or substantially all of its properties and
assets to any individual, corporation, or other entity, then and in each such
case the Company shall make proper provision so that the successors and assigns
of the Company shall assume the obligations set forth in this Section 5.28.
SECTION 5.29 COMBINED REPORT. The Company agrees to publish the Combined
Report without undue delay, but in no event later than 30 days after the last
day of the first full month of combined operations of the Company, Citizens and
the Partnership Assets, and thereupon to notify the Partners of the occurrence
of the Expiration Date.
SECTION 5.30 LEGENDS ON CERTIFICATES. In order to comply with the
requirements of the Securities Act and the Texas Business Corporation Act, the
Company may give stop transfer instructions to its transfer agent with respect
to the shares of Company Common Stock issuable hereunder and shall place on each
certificate representing any such shares (and any substitution therefor) a
legend stating in substance:
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"The securities represented by this certificate were issued without
registration under the Securities Act of 1933 (the "Act") or any
applicable state securities laws and may be sold, transferred or otherwise
disposed of only upon receipt by the Company of an opinion of counsel
acceptable to it that an exemption from registration under the Act and any
such state securities laws is available, or pursuant to a registration
statement under the Act."
The legend set forth above shall be removed by delivery of substitute
certificates without such legend, and any related stop transfer instructions
shall be lifted forthwith, provided that the Shares have been sold under the
Registration Statement and the prospectus delivery requirements set forth in
Section 5.27 have been satisfied. In addition, such legend shall be so removed,
and any related stop transfer instructions shall be lifted forthwith, upon the
Company's receipt of a request therefor from any Partner at least two years
following the Effective Time, unless the Company deems the Partner at the time
to be an affiliate of the Company or to have been such an affiliate within the
preceding three months.
SECTION 5.31 BEST EFFORTS FOR DECEMBER CLOSING. The Company, SW Bank and
the General Partner shall use their best efforts to cause the Effective Time to
occur on or prior to December 31, 2000.
SECTION 5.32 REAL ESTATE MATTERS. The Company and SW Bank may, at their
option and expense, obtain prior to December 15, 2000, any or all of the
following for the purpose of verifying certain of the representations and
warranties of the Partnership hereunder: (i) a survey of the Land; (ii) a title
insurance commitment for a standard Texas title insurance policy covering the
Land and the Building, (iii) structural and mechanical inspections of the
Building, including but not limited to inspection of the foundation, roof,
plumbing, electrical, HVAC and other mechanical systems, and (iv) other
inspections of the Building to assure compliance with federal and state laws and
regulations.
ARTICLE VI
CONDITIONS TO CLOSING
SECTION 6.1 CONDITIONS TO THE PARTNERSHIP'S OBLIGATION TO CLOSE. The
obligation of the Partnership and the General Partner to consummate the
transactions contemplated by this Agreement is subject to the satisfaction or
waiver on or before the Closing Date (or as otherwise provided below) of all of
the following conditions.
(a) REPRESENTATIONS AND WARRANTIES.
(i) Except for such breaches of the representations and warranties
contained in Article IV hereof as have not had, and cannot reasonably be
expected to have, in the aggregate, a Material Adverse Effect on the
Company, all representations and warranties of the Company and SW Bank
contained in Article IV of this Agreement shall be true and correct on and
as of the Closing Date with the same force and effect as though such
representations and warranties were being made on and as of the Closing
Date (except to the
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extent such representations and warranties speak as of a specific date, in
which case they shall be deemed to have been made as of the Closing Date
but speaking only as of such specific date). Solely for purposes of this
Section and in determining compliance with the condition set forth herein,
any representation and warranty made by the Company and SW Bank in this
Agreement shall be read and interpreted as if the qualification set
therein with respect to materiality or Material Adverse Effect were not
contained therein;
(ii) The Company and SW Bank shall have performed and satisfied in
all material respects all covenants and conditions required by this
Agreement to be performed and satisfied by them at or prior to the Closing
Date;
(iii) There shall not have been instituted or threatened any suit,
claim, action, investigation or proceeding of any nature by any Person
that, individually or when aggregated with other suits, claims, actions,
investigations or proceedings, if any, and breaches, if any, of the
representations and warranties contained in Article IV hereof, has had, or
can reasonably be expected to have, a Material Adverse Effect on the
Company; and
(iv) There shall have been delivered to the General Partner on the
Closing Date, a certificate executed by the Chief Executive Officer, the
President or any Executive Vice President, of the Company certifying
compliance with all the provisions of this Section 6.1(a).
(b) REGULATORY APPROVALS. All of the Regulatory Approvals for the Merger
and the transactions contemplated by this Agreement shall have been obtained;
such Regulatory Approvals shall be in effect and no proceedings shall have been
initiated or threatened with respect thereto; all applicable waiting periods
with respect to such Regulatory Approvals shall have expired; and all conditions
and requirements prescribed by Applicable Law or by such Regulatory Approvals
shall have been satisfied.
(c) [Intentionally Omitted]
(d) BOARD APPROVAL. The Company and SW Bank shall have furnished the
General Partner with a certified copy of the resolutions duly adopted by the
Board of Directors of the Company approving this Agreement and the transactions
contemplated hereby.
(e) NO VIOLATIONS OF LAW, LITIGATION. The transactions contemplated by
this Agreement shall not violate any Applicable Law. There shall be no pending
or threatened suits, claims, actions, investigations or proceedings by any
Person or Governmental Authority (or determinations by any Governmental
Authority) challenging or in any manner seeking to restrict or prohibit the
transactions contemplated hereby or seeking to obtain any material damages
against any Person as a result of the transactions contemplated hereby.
(f) OPINIONS OF COUNSEL. The Partnership and the General Partner shall
have received an opinion addressed to them of Xxxxxx & Xxxxxx L.L.P., counsel to
the Company, dated the Closing Date, substantially in the form of Exhibit D
hereto.
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(g) MERGER AGREEMENT. The transactions contemplated by the Merger
Agreement shall be consummated simultaneously with the Closing.
(h) NASDAQ LISTING. The shares of Company Common Stock to be delivered to
the Partners pursuant to this Agreement shall have been authorized for listing
on Nasdaq.
(i) BANKING CRISIS. There shall not have occurred and be continuing any
general banking moratorium or general suspension of payments in respect of banks
in the United States.
(j) RELEASE OF GUARANTORS; MORTGAGE LOAN. SW Bank shall have delivered to
the General Partner evidence reasonably satisfactory to the General Partner that
either the Mortgage Loan has been repaid in full or the Mortgage Loan has been
assumed by SW Bank, and a release and cancellation of the Limited Guaranty in
form and substance reasonably acceptable to the General Partner.
SECTION 6.2 CONDITIONS TO THE COMPANY'S AND SW BANK'S OBLIGATIONS TO
CLOSE. The obligations of the Company to consummate the transactions
contemplated by this Agreement are subject to the satisfaction or waiver on or
before the Closing Date (or as otherwise provided below) of all of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES; COVENANTS.
(i) Except for such breaches of the representations and warranties
contained in Article III hereof as have not had, and cannot reasonably be
expected to have, in the aggregate, a Material Adverse Effect on the
Partnership, all representations and warranties of the Partnership and the
General Partner contained in Article III of this Agreement shall be true
and correct on and as of the Closing Date, with the same force and effect
as though such representations and warranties were being made on and as of
the Closing Date (except to the extent such representations and warranties
speak as of a specific date, in which case they shall be deemed to have
been made as of the Closing Date but speaking only as of such specific
date). Solely for purposes of this Section and in determining compliance
with the condition set forth herein, any representation and warranty made
by the Partnership and the General Partner in this Agreement shall be read
and interpreted as if the qualification stated therein with respect to
materiality or Material Adverse Effect were not contained therein;
(ii) The Partnership and the General Partner shall have performed
and satisfied in all material respects all covenants and conditions
required by this Agreement to be performed and satisfied by them at or
prior to the Closing Date;
(iii) There shall not have been instituted or threatened any suit,
claim, action, investigation or proceeding of any nature by any Person
that would have been required to be listed on Schedule 3.14(a) hereto had
such suit, claim, action or proceeding been instituted or threatened as of
the date of this Agreement, and that, individually or in the aggregate, or
when aggregated with the breaches, if any, of representations and
warranties contained in Article III hereof, has had, or can reasonably be
expected to have, a Material Adverse Effect on the Partnership; and
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(iv) There shall have been delivered to the Company and SW Bank on
the Closing Date a certificate executed by the General Partner certifying
compliance with all the provisions of this Section 6.2(a).
(b) REGULATORY APPROVALS. All the Regulatory Approvals for the
transactions contemplated by this Agreement and the Merger Agreement shall have
been obtained without the imposition of any non-standard conditions that are or
would become applicable to the Company, SW Bank or any other Subsidiary of the
Company after the Effective Time that the Company and SW Bank in good faith
determine would be unduly burdensome (in the context of the transactions
contemplated by this Agreement) upon the conduct of the business of the Company
or SW Bank, as such businesses have been conducted prior to the Effective Time
or as such businesses are anticipated to be conducted after the Effective Time,
other than activity restrictions resulting from the activities of the
Partnership constituting non-permissible activities of a bank or a bank holding
company. All such Regulatory Approvals shall be in effect and no proceedings
shall have been instituted or threatened with respect thereto; all applicable
waiting periods with respect to such Regulatory Approvals shall have expired;
and all conditions and requirements prescribed by Applicable Law or by such
Regulatory Approvals shall have been satisfied. All other consents, approvals,
waivers and other actions required from any other Person pursuant to the
Scheduled Contracts in connection with the transactions contemplated by this
Agreement shall have been obtained in form satisfactory to the Company and SW
Bank, except where the failure to obtain such consents, approvals and waivers,
and to take such other action, will not result in a Material Adverse Effect.
(c) BOARD APPROVAL. The General Partner shall have furnished the Company
and SW Bank with a certified copy of the resolutions duly adopted by the Board
of Directors of BLC as the general partner of the General Partner approving this
Agreement and the transactions contemplated hereby and thereby.
(d) NO VIOLATIONS OF LAW; NO LITIGATION. The transactions contemplated by
this Agreement shall not violate any Applicable Law. There shall be no pending
or threatened suits, claims, actions, investigations, or proceedings by any
Person or Governmental Authority (or determinations by any Governmental
Authority) challenging or in any manner seeking to restrict or prohibit the
transactions contemplated hereby or seeking to obtain any damages against any
Person as a result of the transactions contemplated hereby.
(e) OPINION OF COUNSEL. The Company and SW Bank shall have received an
opinion addressed to them of Xxxxx Liddell & Xxxx LLP, special counsel to the
Partnership and the General Partner, dated the Closing Date, substantially in
the form of Exhibit E hereto.
(f) TAX OPINION. The Company and SW Bank shall have received from Xxxxxx &
Xxxxxx L.L.P. an opinion of counsel, to the effect that for federal income tax
purposes no gain or loss will be recognized by the Company or SW Bank by reason
of the purchase of the Partnership Assets hereunder. In rendering any such
opinion, such counsel may require and, to the extent they deem necessary or
appropriate, may rely upon representations made in certificates of officers of
BLC as
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general partner of the General Partner, the Company, SW Bank, affiliates of the
foregoing, and others.
(g) BANKING CRISIS. There shall not have occurred and be continuing any
general banking moratorium or general suspension of payments in respect of banks
in the United States.
(h) MERGER AGREEMENT. The transactions contemplated by the Merger
Agreement shall be consummated simultaneously with the Closing.
(i) AFFILIATES' LETTERS. Each Affiliate of the Partnership shall have
delivered to the Company an executed copy of the letter contemplated by Section
5.10 hereof.
(j) POOLING OF INTERESTS. The Merger and the transactions contemplated
hereunder shall qualify as a "pooling of interests" for financial accounting
purposes, and the Company shall have received an opinion from
PricewaterhouseCoopers LLP dated the Closing Date to that effect, and Tiller and
Company shall have delivered its opinion to the Company dated as of the Closing
Date that it knows of no facts with regard to Citizens or the Partnership that
would not allow the Merger and the transactions contemplated hereunder to
qualify as a "pooling-of-interests."
(k) REAL ESTATE MATTERS. The Company shall have received, if obtained
prior to December 15, 2000 pursuant to Section 5.32, (i) a survey of the Land
reasonably satisfactory to the Company and SW Bank and showing no encroachment
of the Building (exclusive of the parking lot) on any real property outside the
boundaries of the Land, (ii) a standard Texas title insurance policy covering
the Land and the Building in form and substance reasonably satisfactory to the
Company and SW Bank, and (iii) structural, mechanical and legal compliance
inspections of the Building and facilities used therein reasonably satisfactory
to the Company and SW Bank indicating that the Building and other facilities
used in the Partnership's business are adequately maintained and are free from
defects that could materially interfere with the use of such facilities and that
the Partnership Personalty is in good operating condition and repair, subject to
ordinary wear and tear and is adequate for the uses to which it is being put.
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION. This Agreement and the obligations of the parties
hereunder will terminate automatically upon any termination of the Merger
Agreement pursuant to Article VII thereof. In addition, this Agreement and the
obligations of the parties hereunder may be terminated:
(a) by mutual written consent of the Company, SW Bank and the General
Partner at any time whether or not previously approved by the Board of Directors
of BLC;
(b) by the Company and SW Bank or the General Partner upon the expiration
of 15 days after any Governmental Authority having jurisdiction over any of the
transactions set forth herein indicates that it intends to deny or to refuse to
grant any Regulatory Approval; provided, however, that in the case of a denial
or refusal to grant approval by any Governmental Authority other than
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the OCC or the Federal Reserve Board, the parties shall use their best efforts
during such 15 day period to obtain the withdrawal of such denial or refusal;
(c) by the Company and SW Bank immediately upon the expiration of 30 days
from the date that the Company and SW Bank have given notice to the General
Partner of the material failure by the Partnership or the General Partner to
satisfy any covenant or agreement herein, or of the breach by the Partnership or
the General Partner of any warranties or representations contained herein that
in the aggregate represent a change in the Partnership from that represented to
the Company and SW Bank that is equivalent to a Material Adverse Effect on the
Partnership; provided, however, that no termination under this Section 7.1(c)
shall take effect if the General Partner shall have fully and completely
corrected the grounds for termination as specified in the aforementioned notice
within the earlier to occur of (i) 30 days after the date of receipt of such
notice and (ii) the date specified in paragraph (h) below, and provided further,
however, that solely for purposes of this Section 7.1(c), any representation and
warranty made by the Partnership or the General Partner in this Agreement shall
be read and interpreted as if the qualification stated therein with respect to
materiality or Material Adverse Effect were not contained therein;
(d) by the General Partner immediately upon the expiration of 30 days from
the date that the General Partner has given written notice to the Company and SW
Bank of their material failure to satisfy any covenant or agreement contained
herein, or of their breach of any warranties or representations contained herein
that in the aggregate represent a change in the Company and SW Bank from that
represented to the Partnership and the General Partner that is equivalent to a
Material Adverse Effect on the Company; provided, however, that no termination
under this Section 7.1(d) shall take effect if the Company and SW Bank shall
have fully and completely corrected the grounds for termination as specified in
the aforementioned notice within the earlier to occur of (i) 30 days after the
date of receipt of such notice and (ii) the date specified in paragraph (h)
below, and provided further, however, that solely for purposes of this Section
7.1(d), any representation and warranty made by the Company and SW Bank in this
Agreement shall be read and interpreted as if the qualification stated therein
with respect to materiality or Material Adverse Effect were not contained
therein;
(e) by the Company and SW Bank, if there shall have occurred since
September 30, 2000, any change in or effect on the business of the Partnership
or any occurrence, development or event of any nature that has had or may
reasonably be expected to have, together with all such other changes and
effects, a Material Adverse Effect on the Partnership;
(f) by the General Partner, if there shall have occurred since September
30, 2000, any change in or effect on the business of the Company and SW Bank or
any occurrence, development or event of any nature that has had or may
reasonably be expected to have, together with all such other changes and
effects, a Material Adverse Effect on the Company;
(g) by the General Partner, within three business days after the end of
the Company Measurement Period if the Company Measurement Price is less than
$25.00 (the "Termination Price") without regard for the Minimum Company
Measurement Price (the "Arithmetic Company Measurement Price");
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(h) immediately by a party hereto that is not in default hereunder, if the
Closing has not occurred on or before March 31, 2001.
Notwithstanding the foregoing, if the General Partner elects to terminate
the Agreement pursuant to clause (g) above, the Company shall have the right,
but not the obligation, to nullify such termination by increasing the number of
Adjusted Company Shares to be received by the Partnership pursuant to Section
1.5(a) hereof by multiplying the number of Adjusted Company Shares determined
pursuant to Section 1.5(a) by the quotient of the Termination Price divided by
the Arithmetic Company Measurement Price. If the Company exercises the right
described in the preceding sentence, it must notify the General Partner of such
exercise within two business days following its receipt of the General Partner's
election to terminate the Agreement pursuant to clause (g) above, whereupon no
such termination shall have occurred and this Agreement shall remain in effect
in accordance with its terms (except that the Adjusted Company Shares shall have
been so modified), and any references in this Agreement to "Adjusted Company
Shares" shall thereafter be deemed to refer to such term as adjusted pursuant to
this paragraph.
SECTION 7.2 EFFECT OF TERMINATION. In the event of a termination under
Section 7.1, this Agreement shall become void, and there shall be no liability
on the part of any party or any of such party's directors, officers, employees,
agents or shareholders to the other party or such other party's directors,
officers, employees, agents or shareholders; provided, however, that the
obligations of any party under Sections 5.7, 5.21(b), 8.9, 8.10 and 8.11 shall
survive the termination of this Agreement; and provided further that a
termination under Section 7.1(c) or (d) shall not relieve any party of any
liability for breach of this Agreement or for any misrepresentation hereunder as
of the date of this Agreement or be deemed to constitute a waiver of any remedy
available for such breach or misrepresentation. Liability, if any, for an
inadvertent or non-intentional breach or misrepresentation under the foregoing
provisions shall be limited to the recovery of out-of-pocket costs and expenses
and shall not include punitive, special or consequential damages. The parties
acknowledge and agree that breaches of representations and warranties that in
the aggregate do not give rise to a right of termination hereunder shall not
give any right to any party as to offset or any other remedy or right hereunder.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations, warranties, conditions, covenants and agreements of the parties
contained in this Agreement or in any instrument of transfer or other document
delivered in connection with the transactions contemplated hereby shall survive
the Closing, except for those covenants and agreements that are contemplated by
their terms to be performed after the Closing. No party, including any of its
directors, officers, employees, agents, partners, counsel and shareholders,
shall be under any liability whatsoever with respect to such representations,
warranties, conditions and covenants following the Closing, except that the
Company and SW Bank shall be responsible for all of their covenants and
agreements that are contemplated by their terms to be performed after the
Closing.
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SECTION 8.2 NOTICES. Any notice or communication required or permitted
hereunder shall be sufficiently given if in writing and (i) delivered in person
or by overnight delivery or courier service (ii) sent by facsimile or (iii)
deposited in the United States mail, by certified mail postage prepaid and
return receipt requested (provided that any notice given pursuant to clause (ii)
is also confirmed by the means described in clause (i) or (iii)), as follows:
To the Company and SW Bank:
Southwest Bancorporation of Texas, Inc.
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
Fax: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
To the Partnership and the General Partner:
Baytown Land Corporation
c/o Citizens Bankers, Inc.
0000 Xxxxxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxx & Xxxx LLP
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, P.C.
Fax: (000) 000-0000
Such notice or other communication shall be deemed given when so delivered
personally, or sent by facsimile transmission, or, if sent by overnight delivery
or courier service, the business day after being sent from within the United
States, or if mailed, four days after the date of deposit in the United States
mails.
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SECTION 8.3 GOVERNING LAW. Except as otherwise provided in any exhibit
hereto, this Agreement and the legal relations between the parties shall be
governed by and construed in accordance with the internal laws of the State of
Texas without taking into account provisions regarding choice of law.
SECTION 8.4 ENTIRE AGREEMENT. All exhibits and schedules (including,
without limitation, the Disclosure Schedule) referred to in this Agreement are
integral parts hereof, and this Agreement, together with such exhibits and
schedules (including, without limitation, the Disclosure Schedule), constitutes
the entire agreement among the parties hereto with respect to the matters herein
and therein and supersedes all prior agreements and understandings between the
parties with respect thereto.
SECTION 8.5 AMENDMENTS AND WAIVERS. This Agreement may not be amended
except upon a written consent authorized and approved by the board of directors
of each party hereto. By an instrument in writing, the Company and SW Bank may
waive compliance by the Partnership and the General Partner and the General
Partner may waive compliance by the Company and SW Bank with any term or
provision of this Agreement that such other party was or is obligated to comply
with or perform; provided, however, that such waiver shall not operate as a
waiver of, or estoppel with respect to, any other or subsequent failure. No
failure to exercise and no delay in exercising any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy or power hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy or power provided
herein or by law or in equity. The waiver by any party of the time for
performance of any act or condition hereunder does not constitute a waiver of
the act or condition itself.
SECTION 8.6 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the date
this Agreement was executed or last amended.
SECTION 8.7 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall constitute one and the same instrument.
SECTION 8.8 INTERPRETATION OF AGREEMENT. The article, section and other
headings used in this Agreement are for reference purposes only and shall not
constitute a part hereof or affect the meaning or interpretation of this
Agreement. References herein to the transactions contemplated by this Agreement
or other similar words shall include, without limitation, the Merger, the
Delaware Merger, the Bank Merger and all of the other transactions contemplated
hereunder.
SECTION 8.9 EXPENSES. Except as otherwise provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, all costs
and expenses incurred in connection with this Agreement, and the transactions
contemplated hereby, will be paid by the party incurring such costs and
expenses.
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SECTION 8.10 ATTORNEYS' FEES. If any legal action is brought for the
enforcement of this Agreement or because of an alleged dispute, breach or
default in connection with this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in such
action or proceeding, in addition to any other relief to which it may be
entitled.
SECTION 8.11 PUBLICITY. The parties hereto will consult with each other
with regard to the terms and substance of any and all press releases,
announcements or other public statements with respect to the transactions
contemplated hereby. The parties agree further that neither of them will release
any such press release, announcement or other public statement without the prior
approval of the other party, unless such release is required by law and the
parties cannot reach agreement upon a mutually acceptable form of release, in
which event the party releasing the information, announcement or public
statement shall not be deemed to be in breach of this Agreement. The parties
agree further that such approval will not be unreasonably withheld, and they
pledge to make a good faith effort to reach agreement expeditiously on the terms
of any such press release, announcement or other public statement.
SECTION 8.12 BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
SECTION 8.13 THIRD PARTIES. Except as otherwise provided herein, each
party intends that this Agreement shall not benefit or create any right or cause
of action or remedy of any nature whatsoever in any Person other than the
parties to this Agreement, including, without limitation, conferring upon any
Person the right to remain an employee or agent of the Partnership, the General
Partner, the Company or any of their Subsidiaries, or restraining the
Partnership, the General Partner, the Company or any of their Subsidiaries from
changing the terms and conditions of employment of any Person or terminating
such Person's employment, following the Effective Time.
SECTION 8.14 GENDER; NUMBER. Whenever the context of this Agreement
requires, the masculine gender shall include the feminine or neuter, and the
singular number shall include the plural.
SECTION 8.15 CERTAIN DEFINITIONS.
"ACCREDITED INVESTOR" shall have the meaning as defined in Section 3.29
hereof.
"AFFILIATE" or "ASSOCIATE" shall have the meaning assigned thereto in Rule
405, as presently promulgated under the Securities Act of 1933, as amended.
"AGENT" of the Partnership or the General Partner shall have the meaning
as defined in Section 3.16 hereof.
"AGREEMENT" shall mean this Purchase Agreement.
"AGREEMENT" shall mean with respect to any Person any note, bond,
indenture, license, agreement, lease, contract, indenture, mortgage, deed of
trust, lien, instrument, commitment,
-43-
arrangement or other understanding, whether written or oral, to which such
Person is a party or by which its properties or assets may be bound or affected
or under which it or its respective business, properties or assets receive
benefits.
"APPLICABLE LAW" shall mean any domestic or foreign, federal, state or
local statute, law, ordinance, rule, administrative interpretation, regulation,
order, writ, injunction, directive, judgment, decree or other requirement of any
Governmental Authority applicable, in the case of the Partnership or the General
Partner, to the Partnership or the General Partner, respectively, or the
respective properties, assets, employees or agents (in connection with such
officers', directors', employees' or agents' activities on behalf of them) of
any of them, and, in the case of the Company, SW Bank or any other Subsidiary of
the Company, to the Company, SW Bank, or such other Subsidiary of the Company,
respectively, or the respective properties, assets, officers, directors,
employees or agents (in connection with such officers', directors', employees'
or agents' activities on behalf of them) of any of them.
"BLC" shall mean Baytown Land Corporation, a Texas corporation and the
general partner of the General Partner.
"BLI PARTNERSHIP AGREEMENT" shall have the meaning as defined in Section
3.1(f) hereof.
"BUILDING" shall have the meaning as defined in Section 3.6 hereof.
"CERTIFICATE" shall have the meaning as defined in Section 1.2(a) hereof.
"CLOSING" shall have the meaning as defined in Section 2.1 hereof.
"CLOSING DATE" shall have the meaning as defined in Section 2.1 hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1986.
"COMBINED REPORT" shall have the meaning as defined in Section 5.26
hereof.
"COMPANY" shall mean Southwest Bancorporation of Texas, Inc., a Texas
corporation.
"COMPANY COMMON STOCK" shall mean the Company's Common Stock, $1.00 par
value.
"CONTAMINANT" shall have the meaning as defined in Section 3.22 hereof.
"DAMAGES" shall mean all demands, claims, actions or causes of action,
assessments, losses, damages, Liabilities, judgments, awards, fines, sanctions,
penalties, charges, and amounts paid in settlement of any such matter,
including, without limitation, interest, penalties, costs, fees and expenses of
attorneys, experts, witnesses, investigators and any other agents.
"DISCLOSURE SCHEDULE" shall have the meaning as defined in Article III
hereof.
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"EFFECTIVE TIME" shall have the meaning as defined in Section 2.2(a)
hereof.
"EMPLOYEE" of the Partnership or the General Partner shall have the
meaning as defined in Section 3.16 hereof.
"EMPLOYEE AGREEMENTS" shall have the meaning as defined in Section 3.16
hereof.
"ENVIRONMENTAL LAW" shall have the meaning as defined in Section 3.22
hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"EXCHANGE AGENT" shall have the meaning as defined in Section 1.3(a)
hereof.
"EXPIRATION DATE" shall have the meaning as defined in Section 5.27
hereof.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"FRB" shall mean the Board of Governors of the Federal Reserve Bank.
"GENERAL PARTNER" shall mean Baytown Land I, Ltd., a Texas limited
partnership and the sole general partner of the Partnership.
"GOVERNMENTAL AUTHORITY" shall mean any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, court, government or self-regulatory organization, commission,
tribunal, organization or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the foregoing.
"GOVERNMENTAL FILINGS" shall have the meaning as defined in Section 3.4(b)
hereof.
"IRCA" shall have the meaning as defined in Section 3.18 hereof.
"JOINT VENTURE" shall mean with respect to an entity any general or
limited partnership or joint venture interest which is owned directly or
indirectly by such entity.
"KNOWLEDGE" when used with respect to (a) the Company means actual
knowledge of any current executive officer or director of such party or any of
its Subsidiaries or any other officer with supervising responsibility for the
matter to which knowledge refers and (b) with respect to the Partnership and the
General Partner means actual knowledge of Xxxxxxx X. Xxxxxxx or Xxxx X. Xxxxxx
in their capacity as officers of Baytown Land Corporation, without investigation
or inquiry other than to the officers of Baytown Management Company; provided,
however, that in the absence of fraud nothing in this Agreement shall be deemed
to create or impose any personal liability of any kind on such individuals.
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"LIABILITIES" shall mean obligations of any nature (absolute, accrued,
contingent or otherwise, and whether due or to become due) that are required to
be reflected in financial statements under generally accepted accounting
principles consistently applied.
"LIMITED PARTNERS" mean the limited partners of the Partnership.
"MATERIAL ADVERSE EFFECT" shall mean any change or effect that would be
material and adverse to the consolidated business, operations, condition
(financial or other), properties or results of operations of a specified Person
and its Subsidiaries taken as a whole; provided, however, that Material Adverse
Effect shall not be deemed to include the impact of (a) changes in banking,
partnership, corporation 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,
and (c) any modifications or changes or restructuring charges taken in
connection with the Merger or the transactions contemplated hereunder, in each
case in accordance with generally accepted accounting principles.
"MAXIMUM COMPANY MEASUREMENT PRICE" shall have the meaning as defined in
Section 1.5(a) hereof.
"MERGER" shall have the meaning as defined in Recital B hereof.
"MINIMUM COMPANY MEASUREMENT PRICE" shall have the meaning as defined in
Section 1.5(a) hereof.
"MULTIEMPLOYER PLAN" shall mean a plan described in Section 3(37) of
ERISA.
"NASDAQ" shall have the meaning as defined in Section 1.3(e) hereof.
"OCC" shall mean the Office of the Comptroller of the Currency.
"OFFERING MEMORANDUM/PROXY STATEMENT shall have the meaning as defined in
Section 5.1 hereof.
"PARTNER" shall mean the General Partner or a Limited Partner.
"PARTNERSHIP" shall mean Citizens Banks Limited Partnership, a Texas
limited partnership.
"PARTNERSHIP ASSETS" shall have the meaning as defined in Section 1.1
hereof.
"PARTNERSHIP INTEREST" shall have the meaning as defined in Section 1.7(a)
hereof.
"PARTNERSHIP PERSONALTY" shall have the meaning as defined in Section 3.11
hereof.
"PARTNERSHIP REAL PROPERTY" shall have the meaning as defined in Section
3.10 (a).
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"PERSON" shall include any individual, partnership, joint venture,
corporation, trust or unincorporated organization, any other business entity and
any Governmental Authority, in each case whether acting in an individual,
fiduciary or other capacity.
"PLANS" shall have the meaning as defined in Section 3.17(a) hereof.
"REGISTRATION STATEMENT" shall have the meaning as defined in Section 5.1
hereof.
"REGULATION D" shall mean Regulation D promulgated under the Securities
Act.
"REGULATORY APPROVALS" shall have the meaning as defined in Section 5.2(a)
hereof.
"REGULATORY STANDARDS" shall have the meaning as defined in Section 3.26
hereof.
"RELEASE" shall have the meaning as defined in Section 3.22 hereof.
"RETURNS" shall have the meaning as defined in Section 3.15(a)(ii) hereof.
"SCHEDULED CONTRACTS" shall have the meaning as defined in Section 3.7(a)
hereof.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHAREHOLDERS' MEETING" shall have the meaning as defined in Section 5.1
hereof.
"SUBSIDIARY" shall mean, as to any particular parent corporation, any
corporation as to which more than 50% of the outstanding stock having ordinary
voting rights or power (and excluding stock having voting rights only upon the
occurrence of a contingency unless and until such contingency occurs and such
rights are to be exercised) at the time is owned or controlled, directly or
indirectly, by such parent corporation and/or by one or more Subsidiaries, and
any general partnership, limited partnership, association, joint venture
arrangement or trust of any kind with respect to which such parent corporation
or any Subsidiary thereof has an equity or management interest or as to which
any such entity serves as trustee.
"SW BANK" shall mean Southwest Bank of Texas National Association, a
national banking association.
"TAXES" shall have the meaning as defined in Section 3.15(a)(i) hereof.
"TBCA" shall have the meaning as defined in Section 1.1(a) hereof.
"TDB" shall mean the Texas Department of Banking.
"TERMINATION PRICE" shall have the meaning as defined in Section 7.1(h)
hereof.
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"THREATENED" shall have the meaning as defined in Section 3.14(a) hereof.
"WARN" shall have the meaning as defined in Section 3.18 hereof.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SOUTHWEST BANCORPORATION OF TEXAS, INC.
By: /s/ XXXX X. XXXXXX, XX.
Xxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
. SOUTHWEST BANK OF TEXAS
NATIONAL ASSOCIATION
By: /s/ XXXX X. XXXXXX, XX.
Xxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
CITIZENS BANKERS LIMITED PARTNERSHIP
By: BAYTOWN LAND I, LTD.
Its General Partner
By: BAYTOWN LAND CORPORATION
Its General Partner
By: /s/ XXXX X. XXXXXX
Xxxx X. Xxxxxx
Chairman
BAYTOWN LAND I, LTD.
By: BAYTOWN LAND CORPORATION
Its General Partner
By: /s/ XXXX X. XXXXXX
Xxxx X. Xxxxxx
Chairman
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EXHIBIT A
PLAN OF COMPLETE LIQUIDATION
OF
CITIZENS BANKERS LIMITED PARTNERSHIP
This plan of Complete Liquidation (the "Plan of Liquidation") is intended
to accomplish the complete liquidation and dissolution of Citizens Bankers
Limited Partnership, a Texas limited partnership located in Baytown, Xxxxxx
County, Texas (the "Partnership"), pursuant to the following steps:
1. The Partnership has entered into a Purchase Agreement as of November 9,
2000 (the "Agreement"), among Southwest Bancorporation of Texas, Inc., a Texas
corporation ("Southwest"), the Partnership and Baytown Land I, Ltd., a Texas
limited partnership and the general partner of the Partnership (the "General
Partner"), wherein and whereby the Partnership will transfer the entire business
and substantially all of the property and assets of the Partnership to Southwest
in exchange for ____________ shares of voting common stock of Southwest, par
value $1.00 ("Southwest Common Stock"), and the assumption by Southwest of all
liabilities and obligations of the Partnership (except as specifically excluded
by the terms of the Agreement). The Partnership will then be liquidated and
dissolved, and the Southwest Common Stock will be distributed to the
Partnership's general partner and limited partners (the "Partners") according to
their respective interests, all upon and subject to the terms and conditions of
such Agreement.
2. After the receipt by the Partnership of the Southwest Common Stock to
be received in exchange for the business, properties and assets of the
Partnership, and after payment of all unpaid expenses and obligations of the
Partnership not assumed by Southwest, as provided in the Agreement, the
Partnership shall distribute ratably to the Partners entitled thereto the shares
of Southwest Common Stock which the Partnership has received. Such distribution
by the Partnership of the Southwest Common Stock to the Partners of the
Partnership entitled thereto shall be in complete liquidation, and in exchange
for and in redemption and cancellation of all the issued and outstanding equity
interests of the Partnership, and the Partners of the Partnership shall
thereupon surrender to the Partnership their Partnership units representing
their equity interests in the Partnership. No fractional shares of Southwest
Common Stock will be issued. Any holder of an equity interest of the Partnership
who would otherwise be entitled to a fractional share of Southwest Common Stock
upon the distribution in complete liquidation of the Partnership shall receive
in cash the value of such fractional shares, as provided in the Agreement.
3. Upon the completion of the distribution of the Southwest Common Stock,
the Partnership shall forthwith be dissolved and its existence terminated in
accordance with Article 9 of the Partnership's Amended and Restated Agreement
and Certificate of Limited Partnership, dated February 14, 1984.
4. This Plan of Liquidation is conditioned upon the consummation of the
obligations of all parties under the Agreement.
A-1
EXHIBIT B
PLAN OF COMPLETE LIQUIDATION
OF
BAYTOWN LAND I, LTD.
This plan of Complete Liquidation (the "Plan of Liquidation") is intended
to accomplish the complete liquidation and dissolution of Baytown Land I, Ltd.,
a Texas limited partnership located in Baytown, Xxxxxx County, Texas (the
"Partnership"), pursuant to the following steps:
1. The Partnership has entered into a Purchase Agreement as of November 9,
2000 (the "Agreement"), among Southwest Bancorporation of Texas, Inc., a Texas
corporation ("Southwest"), the Partnership and Citizens Bankers Limited
Partnership, a Texas limited partnership ("CBLP"), wherein and whereby CBLP will
transfer the entire business and substantially all of the property and assets of
CBLP to Southwest in exchange for ____________ shares of voting common stock of
Southwest, par value $1.00 ("Southwest Common Stock"), and the assumption by
Southwest of all liabilities and obligations of CBLP (except as specifically
excluded by the terms of the Agreement). CBLP will then be liquidated and
dissolved, and the Southwest Common Stock will be distributed to the
Partnership, as the general partner of CBLP, and the limited partners of CBLP
according to their respective interests, all upon and subject to the terms and
conditions of such Agreement.
2. After the receipt by the Partnership of the Southwest Common Stock to
be received in connection with the liquidation and dissolution of CBLP, and
after payment of all unpaid expenses and obligations of the Partnership, the
Partnership shall distribute ratably to its general partner and limited partners
entitled thereto the shares of Southwest Common Stock which the Partnership has
received. Such distribution by the Partnership of the Southwest Common Stock to
the general partner and limited partners of the Partnership entitled thereto
shall be in complete liquidation, and in exchange for and in redemption and
cancellation of all the issued and outstanding equity interests of the
Partnership, and the general partner and limited partners of the Partnership
shall thereupon surrender to the Partnership their Partnership units
representing their equity interests in the Partnership. No fractional shares of
Southwest Common Stock will be issued. Any holder of an equity interest of the
Partnership who would otherwise be entitled to a fractional share of Southwest
Common Stock upon the distribution in complete liquidation of the Partnership
shall receive in cash the value of such fractional shares, as provided in the
Agreement.
3. Upon the completion of the distribution of the Southwest Common Stock,
the Partnership shall forthwith be dissolved and its existence terminated in
accordance with Article VIII of the Articles of General Partnership of Citizens
Bankers Limited Partnership, dated August 28, 1983, as amended by the Agreement
to Convert Citizens Bankers Limited Partnership into Baytown Land I, Ltd. dated
effective as of December 12, 1995.
4. This Plan of Liquidation is conditioned upon the consummation of the
obligations of all parties under the Agreement.
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EXHIBIT C
[Form of Affiliates' Letter]
Southwest Bancorporation of Texas, Inc.
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Gentlemen:
I have been advised that as of the date hereof I am an "affiliate" of
Citizens Bankers Limited Partnership, a Texas limited partnership (the
"Partnership"), as that term is defined in Rule 144 ("Rule 144") of the Rules
and Regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933 (the "Act").
Pursuant to the terms of the Purchase Agreement dated November 9, 2000 (the
"Agreement"), between Southwest Bancorporation of Texas, Inc., a Texas
corporation (the "Company"), the Partnership, and Baytown Land I, Ltd., a Texas
limited partnership (the "General Partner"), providing for the purchase by the
Company of all the assets and the assumption by the Company of all the
liabilities of, the Partnership (the "Purchase"), as a result of which I will
receive shares of Company Common Stock (the "Company Shares") in exchange for
the equity interest in the Partnership and/or the General Partner owned by me at
the Effective Time of the Purchase as defined in the Agreement.
I represent and warrant that:
A. I shall not make any sale, transfer or other disposition of the Company
Shares in violation of the Act or the Rules and Regulations.
B. I have been advised that the issuance of the Company Shares to me
pursuant to the Purchase has not been registered by the Company under the Act
but that the Company has agreed to file a "shelf" registration statement on Form
S-3 (the "Registration Statement") after the Effective Time of the Purchase that
would register the resale of my Company Shares. I hereby agree to furnish the
Company with such information regarding myself and pertinent to the disclosure
requirements relating to the registration and distribution of my Company Shares
as the Company may reasonably request in writing. I hereby acknowledge and agree
that in order to sell any of my Company Shares pursuant to the Registration
Statement, I or the broker effectuating any such sale must deliver a copy of the
current prospectus included in the Registration Statement to the purchaser of
such shares prior to or simultaneously with the delivery of the confirmation for
such sale to such purchaser. I further understand that any sale which fails to
comply with the requirement of the preceding sentence will not be in compliance
with the Act and must be rescinded. I also hereby agree that, upon my receipt of
any notice from the Company of the issuance by the Securities and Exchange
Commission (the "SEC") of any stop order suspending the effectiveness of the
Registration Statement or the happening of any event which makes the
Registration Statement or any post-effective amendment thereto, related
prospectus or any amendment or supplement thereto, or any document incorporated
therein by reference, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements
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therein in the light of the circumstances under which they were made not
misleading, I will immediately discontinue disposition of my Company Shares
pursuant to the Registration Statement until the lifting of such stop order or
my receipt of the copies of the supplemented or amended prospectus, as
applicable.
C. I have been informed by the Company that I may not transfer, or in any
way reduce my risk with respect to, the Company Shares between the period
starting thirty (30) days prior to the Effective Time and ending at such time as
the Company shall have publicly released its first earnings report after the
Effective Time which includes the results of the combined operations of the
Company and the assets and liabilities of the Partnership for a period of at
least thirty (30) days subsequent to the Effective Time.
D. [The following sentence to be included only if the affiliate is a
record or beneficial owner of 5% or more of the outstanding equity interests in
the Partnership] I have no present plan or intention to sell, exchange,
transfer, distribute (including, without limitation, a distribution by a
partnership to its partners or by a corporation to its stockholders), pledge or
otherwise dispose of, reduce the risk of loss by short sale or otherwise, enter
into any contract or arrangement with respect thereto, or consent to the sale,
exchange, transfer, distribution or other disposition of any interest in (i) the
Partnership or the General Partner in a transaction the consideration for which
is to be provided by the Partnership, the Company, or any party related to the
Partnership or the Company or (ii) shares of Company Common Stock to be received
in the Purchase in a transaction the consideration for which is to be provided
by the Company or any party related to the Company.
E. I have carefully read this letter and the Agreement and have discussed
their requirements and other applicable limitations upon my sale, transfer or
other disposition of the Company Shares, to the extent I felt necessary, with my
counsel or counsel for the Partnership.
F. I understand that the Company is under no obligation to register the
sale, transfer or other disposition of the Company Shares by me or on my behalf,
or to take any other action necessary in order to make compliance with an
exemption from registration available, other than as set forth in the Agreement.
G. I also understand that stop transfer instructions will be given to the
Company's transfer agent with respect to the Company Shares and that there will
be placed on the certificates for the Company Shares, or any substitutions
therefor, a legend stating in substance:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or any applicable
state securities laws and may be sold, transferred or otherwise disposed
of only upon receipt by the Company of an opinion of counsel acceptable to
it that an exemption from registration under the Act and any such state
securities laws is available, or pursuant to a registration statement
under the Act."
It is understood and agreed that the legend set forth in paragraph G above
shall be removed by delivery of substitute certificates without such legend (i)
if the Company Shares have been sold under the Registration Statement and the
prospectus delivery requirements set forth in paragraph B
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above have been satisfied, or (ii) upon the Company's receipt of a request by
the undersigned for such removal at least two years following the Effective Time
of the Purchase, provided that the undersigned has not been an "affiliate" of
the Company (as defined in Rule 144) within the three-month period preceding the
date of such request.
Very truly yours,
------------------------------------------
ACCEPTED this _____ day
of ____________, 2000, by
SOUTHWEST BANCORPORATION OF TEXAS, INC.
By __________________________
Xxxxx X. Xxxxxxx
Executive Vice President
and
Chief Financial Officer
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EXHIBIT D
OPINION OF COUNSEL FOR THE COMPANY AND SW BANK
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Texas. The Company has the
corporate power to own or lease its properties and to carry on its business as
currently conducted and is not required to be licensed or qualified to do
business as a foreign corporation in any jurisdiction in which the failure to be
so licensed, qualified or in good standing would have a Material Adverse Effect
on the Company.
2. The authorized capital stock of the Company consists of 1,000,000
shares of Preferred Stock, $.01 par value, none of which shares are issued, and
50,000,000 shares of Company Common Stock, of which ___________ shares were
issued and outstanding as of ________, 2000. All outstanding shares of Company
Common Stock have been duly authorized and validly issued, are fully paid and
nonassessable and have not been issued in violation of the preemptive rights of
any person. The shares of Company Common Stock to be issued to the Partners
pursuant to the provisions of the Agreement have been duly authorized, will be
validly issued, fully paid and nonassessable and will not be issued in violation
of the preemptive rights of any person.
3. The Company has full corporate power and authority to execute and
deliver the Agreement and to consummate the transactions contemplated thereby.
The Agreement has been duly authorized by all necessary corporate action on the
part of the Company, has been duly and validly executed and delivered by and
constitutes the valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except to the extent that such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors' rights
generally and by general principles of equity (whether applied at law or in
equity).
6. The Company and SW Bank have received approval from all necessary
governmental agencies and authorities (including the FRB, the OCC and the Texas
Department of Banking) for the consummation of the transactions contemplated by
the Agreement and the Merger Agreement. Neither the execution nor delivery of
the Agreement nor the consummation by the Company of the transactions
contemplated thereby, nor the compliance with and fulfillment of the terms and
provisions thereof by the Company will conflict with, or result in a breach of,
any term, condition or provisions of, or constitute a default under, (a) the
Articles of Incorporation or Bylaws of the Company, (b) to our knowledge, any
material agreement or instrument to which the Company is a party or by which it
is bound, or (e) to our knowledge, any material order, judgment, or decree to
which the Company is subject, or result in the creation of any material lien,
charge or encumbrance on any properties of the Company.
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EXHIBIT E
OPINION OF COUNSEL FOR THE PARTNERSHIP AND THE GENERAL PARTNER
___________________, 2000
Ladies and Gentlemen:
We have acted as special counsel to Citizens Bankers Limited Partnership,
a Texas limited partnership ("Partnership"), and Baytown Land I, Ltd., a Texas
limited partnership (the "General Partner"), in connection with the Purchase
Agreement among Southwest Bancorporation of Texas, Inc. (the "Company"), the
Partnership and the General Partner. This opinion is rendered to you pursuant to
Section 6.2(e) of the Agreement.
We advise you that we represent the Partnership and the General Partner on
certain matters. However, we are not generally familiar with the affairs,
business, assets, properties or agreements of the Partnership or the General
Partner and the scope and force of our opinions herein are necessarily limited
by that fact. There may be many matters of a legal nature concerning the
Partnership and the General Partner about which we have not been consulted and
concerning which we have no knowledge.
In our capacity as special counsel to the Partnership and the General
Partner, we have examined originals, or copies identified to our satisfaction as
being true copies, of such records, documents or other instruments as in our
judgment are necessary or appropriate to enable us to render the opinions
expressed below. We have also obtained and relied upon such certificates and
assurances from public officials as we have deemed necessary. In all such
examinations, we have assumed the genuineness of all signatures on original and
certified documents, the conformity to original or certified documents of all
documents submitted to us as conformed or photostatic copies and the legal
capacity of natural persons. As to any matters of fact material to our opinions,
we have relied, with your consent, upon statements of representatives of the
Partnership and the General Partner, certificates of public agencies and the
truth and accuracy of the warranties and representations of the Partnership and
the General Partner in the Agreement. We have assumed the accuracy of such
representations, warranties, statements and certificates and the factual matters
contained therein without independent investigation or verification on our part.
As to the existence of the Partnership and the General Partner, we have relied
solely upon the certificates of public officials.
We have investigated such questions of law for the purpose of rendering
this opinion as we have deemed necessary. We are opining herein as to only
United States federal law and the laws of the State of Texas.
On the basis of the foregoing, and in reliance thereon, and subject to the
limitations, qualifications and exceptions set forth below, we are of the
opinion that:
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1. The Partnership is a limited partnership, duly formed and validly existing
under the laws of the State of Texas. The General Partner is a limited
partnership, duly formed and validly existing under the laws of the State
of Texas. Each of the Partnership and the General Partner has the
partnership power and authority to own or lease its properties and to
carry on its business as currently conducted, and is not required to be
licensed or qualified to do business as a foreign partnership in any
jurisdiction. Baytown Land Corporation is the sole general partner of the
General Partner. The General Partner is the sole general partner of the
Partnership.
2. The Partnership and the General Partner have full partnership power and
authority to execute and deliver the Agreement and to consummate the
transactions contemplated thereby. The Agreement has been duly authorized
by all necessary partnership action on the part of the Partnership and the
General Partner, has been duly and validly executed and delivered by and
constitutes the valid and binding agreement of the Partnership and the
General Partner, enforceable against the Partnership and the General
Partner in accordance with its terms. No approval of the Agreement by the
Limited Partners (as defined in the Agreement) is required under the
Partnership Agreement or Applicable Law (as each is defined in the
Agreement).
3. The Partnership and the General Partner have received approval from all
necessary governmental agencies and authorities required to be received by
the Partnership and the General Partner for the consummation of the
transactions contemplated by the Agreement. Neither the execution and
delivery of the Agreement, the consummation by the Partnership and the
General Partner of the transactions contemplated thereby, nor the
compliance with and fulfillment of the terms and provisions thereof by the
Partnership and the General Partner will conflict with, or result in a
breach of, any term, condition, or provision of, or constitute a default
under, (a) the Partnership Agreement, (b) the BLI Partnership Agreement
(as defined in the Agreement), (c) to the Actual Knowledge of the Primary
Lawyer Group, any material agreement or instrument to which the
Partnership or the General Partner is a party or by which either of them
is bound, or (d) to the Actual Knowledge of the Primary Lawyer Group, any
material order, judgment, or decree to which the Partnership or the
General Partner is subject, or to the Actual Knowledge of the Primary
Lawyer Group, result in the creation of any material lien, charge or
encumbrance on any properties of the Partnership or the General Partner.
4. To the Actual Knowledge of the Primary Lawyer Group, except as disclosed
on the Disclosure Schedule (as defined in the Agreement), there is no
action, suit, proceeding or claim pending, or any investigation by any
government or governmental agency or instrumentality, domestic or foreign,
pending or threatened, against the Partnership or the General Partner or
any employee benefit plan maintained by it or the assets, business or
goodwill of the Partnership or the General Partner before any court,
government or governmental agency or instrumentality, domestic or foreign,
nor is there any outstanding order, writ, judgment, stipulation,
injunction, decree, determination, award or other order of any court,
government or governmental agency or instrumentality, domestic or foreign,
against the Partnership or the General Partner.
5. To the Actual Knowledge of the Primary Lawyer Group, there are no
outstanding options, warrants, subscriptions, calls, contracts or other
rights, arrangements or commitments of any
E-2
kind, however, relating to the purchase or other acquisition of any
Partnership Interest from the Partnership.
6. To the Actual Knowledge of the Primary Lawyer Group, there are no
outstanding options, warrants, subscriptions, calls, contracts or other
rights, arrangements or commitments of any kind, however, relating to the
purchase or other acquisition of any interest in the General Partner from
the General Partner.
This opinion is limited by, subject to and qualified in all respects by
the following:
(a) The validity and enforceability of the Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation,
probate, conservatorship and other similar laws (including court
decisions) now or hereafter in effect and affecting the rights of
creditors generally and by general principles of equity (regardless
of whether such validity and enforceability is considered in a
proceeding in equity or at law).
(b) We express no opinion as to whether a court would grant specific
performance or any other equitable remedy with respect to the
Agreement.
(c) We express no opinion as to the enforceability of provisions
relating to severability, indemnification or contribution.
Our opinion in paragraph 3 above as to any required approvals of
governmental authorities is based upon a review of those statutes, rules and
regulations which, in our experience, are normally directly applicable to
transactions of the type contemplated by the Agreement.
To the extent that the obligations of the Partnership and the General
Partner may be dependent upon such matters, we have assumed for purposes of this
opinion, other than with respect to the Partnership and the General Partner,
that each additional party to the agreements and contracts referred to herein is
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation; that each such other party has the requisite
corporate or other organizational power and authority to perform its obligations
under such agreements and contracts, as applicable; that such agreements and
contracts have been duly authorized, executed and delivered by, and each of them
constitutes the legally valid and binding obligation of, such other parties, as
applicable, enforceable against such other parties in accordance with their
respective terms; and that there is no requirement of registration, consent,
approval, license or authorization by any person or governmental authority
required to be obtained by such other party and arising out of the execution,
delivery or performance of the Agreement by such other party, except those
contemplated by the Agreement and obtained prior to the date hereof. We are not
expressing any opinion as to the effect of compliance by the Company with any
state or federal laws or regulations applicable to the transactions because of
the nature of any of its businesses.
The term "Primary Lawyer Group" as used herein means the lawyers in this
firm who have given substantive legal attention to the representation of the
Partnerships in connection with the Agreement. The term "Actual Knowledge" means
the conscious awareness of facts, agreements,
E-3
instruments, orders, writs, judgments, decrees or other information by the
Primary Lawyer Group, without undertaking any special investigation and without
searching public records, our files or the files of the Partnership or the
General Partner.
This opinion is limited in all respects to federal laws of the United
States of America, and the laws of the State of Texas, in each case as now in
effect, which have been published and are generally available in a format that
makes legal research reasonably feasible and we disclaim any responsibility to
inform you of any changes. No opinion is expressed as to any matter that may be
governed by the laws of any other jurisdiction.
This opinion is rendered only to the Company and is solely for its benefit
in connection with the above transactions. This opinion may not be relied upon
by the Company for any other purpose, or quoted to or relied upon by any other
person, firm or corporation for any purpose, without our prior written consent
This opinion is given as of the date hereof, and we assume no obligation
to update this opinion to reflect any facts or circumstances that may hereafter
come to our attention or any changes in laws or regulations that may hereafter
occur.
This letter expresses our legal opinion as to the foregoing matters based
on our professional judgment at this time; it is not, however, to be construed
as a guaranty, nor is it a warranty that a court considering such matters would
not rule in a manner contrary to the opinions set forth above.
XXXXX XXXXXXX & XXXX LLP
By:________________________
_________________
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