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EXHIBIT 10.2
PLAN OF MERGER
BY AND BETWEEN
VALLEY OF THE ROGUE BANK ("VRB")
AND
COLONIAL BANKING COMPANY ("COLONIAL BANK")
Date Effective the 30th day of September, 1997.
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PLAN OF MERGER
THIS PLAN OF MERGER is entered into as of the 30th day of September,
1997 (the "Plan" or "Plan of Merger"), by and between VALLEY OF THE ROGUE BANK
("VRB"), and COLONIAL BANKING COMPANY, ("Colonial Bank")
RECITALS:
A. VRB is an Oregon state chartered bank with its head office at 000
Xxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxx.
B. Colonial Bank is an Oregon state chartered bank with its head office
at 000 X.X. "X" Xxxxxx, Xxxxxx Xxxx, Xxxxxx.
C. The parties hereto desire to enter into a Plan of Merger under which
Colonial Bank will merge with and into VRB and Colonial Bank shareholders will
receive cash for their shares pursuant to the terms of this Plan.
D. Investors Banking Corporation ("IBC") owns 307,203 shares of capital
stock of Colonial Bank.
E. VRB and the shareholders of IBC entered into a Stock Option
Agreement that grants VRB the option to acquire all the shares of IBC capital
stock.
F. The Board of Directors of each of Colonial Bank and VRB have
approved this Plan of Merger and authorized the execution, delivery and
performance of this Plan of Merger on behalf of the respective banks.
G. At or prior to the date the Merger becomes effective, the parties
shall have taken all such actions as may be necessary or appropriate in order to
effectuate the Merger.
AGREEMENT
In consideration of the mutual covenants herein contained, the parties
hereby enter into the Plan of Merger and agree as follows:
For purposes of this Plan, the following terms shall have the
definitions given:
"Colonial Bank Stock" means shares of common and preferred stock of
Colonial Bank.
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"Dissenting Shares" means shares held by Colonial Bank shareholders who
have perfected their rights to have their shares purchased pursuant to ORS
711.042, 711.045 and 711.047 of the Oregon Bank Act.
"Effective Date" is the date on which the Plan of Merger is effected by
issuance of a Certificate of Merger by the Oregon Department of Consumer and
Business Services ("Oregon Director").
"Employee Benefit Plan" means an employee benefit plan as defined by
section 3 of ERISA.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"FHA" means the Federal Housing Administration.
"FHLMC" means the Federal Home Loan Mortgage Corporation.
"FNMA" means the Federal National Mortgage Association.
"GNMA" means the Government National Mortgage Association.
"IBC" means Investors Banking Corporation.
"IRS" means the Internal Revenue Service.
"Oregon Director" means the Director of the Oregon Department of
Consumer and Business Services.
"Merger" means the merger of Colonial Bank with and into VRB on the
Effective Date in accordance with this Plan of Merger.
"Oregon Bank Act" means Chapter 706 through 716 of the Oregon Revised
Statutes.
"Plan of Merger" means this Plan of Merger by and between VRB and
Colonial Bank.
"PBGC" means the Pension Benefit Guaranty Corporation.
"SEC" means the Securities and Exchange Commission.
"SBA" means the Small Business Administration of the Department of
Commerce.
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"Resultant Bank" means the banking institution formed by the merger of
VRB and Colonial Bank as provided by the Plan of Merger which shall be VRB.
"VA" means the Veterans Administration.
MERGER .
1.1 The effective date of this Plan of Merger (the "Effective Date")
shall be set forth in a Certificate of Merger issued with respect to this Plan
of Merger by the Oregon Director.
1.2 At the Effective Date, the corporate existence of Colonial Bank
shall, as provided by Oregon law, be merged into and continued in Resultant
Bank, and the separate existence of Colonial Bank shall terminate. All rights,
franchises and interests of Colonial Bank in and to every type of property
(real, personal, and mixed) and choses in action shall be transferred to and
vested in Resultant Bank by virtue of such merger without any deed or other
transfer, and Resultant Bank, without any order or action on the part of any
court or otherwise, shall hold and enjoy all such rights and property,
franchises, and interests, including appointments, designations and nominations,
and in every other fiduciary capacity, in the same manner and to the same extent
as such rights, franchises, and interests were held or enjoyed by Colonial Bank
on the Effective Date.
1.3 Until altered, amended or repealed, the Articles of Incorporation
and Bylaws of VRB on the Effective Date shall be the Articles of Incorporation
and Bylaws of Resultant Bank. Until their successors are elected or appointed
and qualified, and subject to prior death, resignation or removal, the officers
and directors of VRB on the Effective Date shall be the officers and directors
of the Resultant Bank.
1.4 Until changed by the Board of Directors of Resultant Bank, the
locations and names of the existing offices of VRB shall remain the locations
and names of the offices of the Resultant Bank after the Effective Date and,
until thereafter changed, all corporate acts, plans, policies, contracts,
approvals and authorizations of VRB or Colonial Bank and their respective
shareholders, officers, agents, Boards of Directors, and committees elected or
appointed thereby, which were valid and effective immediately prior to the
Effective Date shall be taken for all purposes as the acts, plans, policies,
contracts, approvals and authorizations of Resultant Bank and shall be as
effective and binding thereon as the same were with respect to VRB prior to the
Effective Date. The following Colonial Bank branches will be given the names as
indicated:
CURRENT BRANCH NAME NAME FOLLOWING MERGER
------- ------ ---- ---- --------- ------
Head Office Downtown Grants Pass Branch
South Grants Pass Xxxxxxxx Highway Branch
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East Medford East Xxxxxxx Street
Merlin Xxxxxx Xxxxxx
Rogue River Branch [to be consolidated into the Main Branch of VRB]
1.5 On the Effective Date, Resultant Bank shall be liable for all
liabilities of Colonial Bank; and all deposits, debts, liabilities, and
contracts of Colonial Bank matured or unmatured, whether accrued, absolute,
contingent or otherwise, and whether or not reflected or reserved against on
balance sheets, books of accounts, or records of Colonial Bank shall be those of
Resultant Bank and shall not be released or impaired by the Merger; and all
rights of creditors and other obligees and all liens on property shall be
preserved unimpaired.
1.6 Upon the Effective Date each share of Colonial Bank Stock (except
for Dissenting Shares and shares held by VRB) shall be converted into the right
to receive cash of $43.36 per share from the Resultant Bank. Colonial Bank Stock
held by VRB shall be cancelled without consideration.
1.7 At or prior to the Effective Date, VRB will deposit sufficient cash
in a designated CBC Stock Exchange Account to make the payments required
hereunder.
1.8 The shareholders of record of Colonial Bank shall, upon the
surrender by them to Resultant Bank of all certificates representing shares of
stock held by them of record, (or upon delivery of an appropriate affidavit of
loss and at the discretion of VRB either a bond or an undertaking of indemnity
in the case of any such certificates that have been lost, stolen, or destroyed),
be entitled to receive in exchange therefor cash to which they are entitled.
Until so surrendered, each outstanding certificate which, prior to the Effective
Date, represented shares of common stock of Colonial Bank shall be deemed for
all corporate purposes to be redeemed with the previous holder only entitled to
receive the cash consideration provided. Upon surrender and exchange of such
outstanding certificates which, prior to the Effective Date, represented shares
of stock of Colonial Bank, there shall be paid to the record holders of the
certificates surrendered, the amount, without interest thereon, they are
entitled to receive pursuant to Section 1.6 hereof.
1.9 Shareholders of Colonial Bank have the right to elect to dissent
from this Plan of Merger and receive the fair value for their shares (the
"Dissenting Shares") as provided by certain provisions of the Oregon Bank Act
attached hereto as Exhibit A. Notwithstanding any other provision of this Plan
of Merger, any Dissenting Shares shall, after the Effective Date, be entitled
only to such rights as are afforded in respect of Dissenting Shares pursuant to
the Oregon Bank Act.
REPRESENTATIONS AND
WARRANTIES OF COLONIAL BANK.
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Colonial Bank represents and warrants to VRB as follows (except as
described in a Schedule of Exceptions heretofore delivered to VRB):
Organization, Existence, and Authority of Colonial Bank.
Colonial Bank is a bank duly organized, validly existing, and in good
standing under the laws of the State of Oregon and has all requisite
corporate power and authority to own, lease, and operate its properties
and assets and carry on its business in the manner now being conducted.
Its activities do not require it to be qualified to do business in any
other state.
Authorized and Outstanding Stock, Options, and Other Rights.
The authorized capital stock of Colonial Bank consists of 2,000,000
shares of common stock ($5.00 par value) of which 235,993 shares are
outstanding and are validly issued, fully paid and nonassessable
(except as provided by the Oregon Bank Act) and 160,857 shares of
preferred stock ($10.50 par value) of which 143,008 shares are
outstanding and are validly issued, fully paid and nonassessable
(except as provided by the Oregon Bank Act). No subscriptions, options,
warrants, convertible securities or other rights or commitments which
would enable the holder to acquire any shares of capital stock or other
investment securities of Colonial Bank, or which enable or require
Colonial Bank to acquire shares of its capital stock or other
investment securities from any holder, are authorized, issued or
outstanding except for options authorizing the holders thereof to
acquire 47,599 Colonial Bank shares at a weighted average exercise
price of $10.61.
Articles of Incorporation, Bylaws, Minutes. The
copies of the Articles of Incorporation, as amended, and the
Bylaws, as amended, of Colonial Bank delivered to VRB as
Schedule 2.3, are true, correct and complete copies of
existing Articles of Incorporation and Bylaws of Colonial Bank
as amended to date. Colonial Bank is not in material violation
of any provision of its Articles of Incorporation or Bylaws.
The minute books of Colonial Bank which have been or will be
made available to VRB for its review contain accurate and
complete minutes of all meetings and all consents evidencing
actions taken without a meeting by the Board of Directors (and
any committees thereof) and by its shareholders.
No Holding Company, Joint Venture, or Other Subsidiaries. No
corporation or other entity is registered or, to the knowledge of
Colonial Bank, is required to be registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended, because of
ownership or control of Colonial Bank except for IBC. Colonial Bank
does not directly or indirectly own or control, either by power to
control the investment or power to vote, any shares of capital stock of
any other corporation or entity, other than shares held in a fiduciary
or custodial capacity in the ordinary course of business and shares
representing less than five percent of the outstanding shares of such
corporation acquired in partial or full satisfaction of debts
previously contracted. Colonial
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Bank is not a part of any joint venture, or general or limited
partnership, or a member of any unincorporated association.
Shareholder Reports. Colonial Bank has delivered to VRB as
Schedule 2.5 copies of all of Colonial Bank's reports and other
communications to stockholders since January 1, 1995, including all
proxy statements and notices of shareholder meetings. Until the
Effective Date, Colonial Bank will furnish to VRB copies of all future
shareholder communications within two days after such materials are
first sent to its shareholders.
Colonial Bank Call Reports. Colonial Bank has delivered to VRB
as Schedule 2.6 copies of Colonial Bank's "Call Reports of Conditions
and Income" filed with the FDIC for December 31, 1994, 1995 and 1996
and for the six months ended June 30, 1997 (which, together with all
future reports so filed, the "Colonial Bank Call Reports"), together
with copies of all other reports, applications, statements and other
filings required to be filed by Colonial Bank with the FDIC or Oregon
Director since December 31, 1994. Until the Effective Date, Colonial
Bank will file with the FDIC or Oregon Director (and will furnish to
VRB within two days thereafter) all additional reports and other
documents which Colonial Bank is required by law or regulation, or
otherwise files, with the FDIC or Oregon Director. The Colonial Bank
Call Reports have been and will be prepared in accordance with
regulatory accounting principles, consistently applied throughout the
periods presented and present fairly the financial conditions and
results of operation of Colonial Bank in accordance with such
regulatory principles on the dates and for the periods covered thereby.
As of the date filed, each such filing has complied or will comply with
all requirements applicable to such filing in all material respects.
Colonial Bank Financial Reports. Except as noted on Schedule
2.7, any financial statements furnished or to be furnished pursuant to
Section 2.5 for any subsequent periods have been and will be prepared
in accordance with generally accepted accounting principles,
consistently applied and present fairly the financial position and
results of operation of Colonial Bank on the dates and for the periods
covered thereby, except that interim period statements are in summary
form without required footnotes and are subject to year-end
adjustments.
Books and Records. The books and records of Colonial Bank
accurately reflect in all material respects the transactions to which
it is a party or by which it or its properties are bound or subject.
Such books and records have been and are accurate and complete and
comply in all material respects with applicable legal, regulatory and
accounting requirements.
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Legal Proceedings. Except for regulatory examinations
conducted in the normal course of regulation of Colonial Bank
and applications for regulatory approval of the Merger, and
except as disclosed in Schedule 2.9 delivered to VRB, there
are no actions, suits, proceedings, claims or governmental
investigations pending or, to the knowledge of Colonial Bank,
threatened against or affecting Colonial Bank before any
court, administrative officer or agency, other governmental
body or arbitration which might, individually or in the
aggregate, result in any material adverse change in the
business, assets, earnings, operation or condition (financial
or otherwise) of Colonial Bank or which might materially
hinder or delay the consummation of the transactions
contemplated by this Plan of Merger.
Compliance with Lending Laws and Regulations. Except as
disclosed in Schedule 2.10 delivered to VRB:
(a) The conduct by Colonial Bank of its business and the
operation by Colonial Bank of the properties or other assets owned or leased by
it does not violate or infringe any applicable domestic or foreign laws,
statutes, ordinances, rules or regulations, the enforcement of which,
individually or in the aggregate, would materially and adversely affect Colonial
Bank. Specifically, but without limitations, Colonial Bank is in compliance in
all material respects with every local, state or federal law or ordinance, and
any regulation or order issued thereunder, now in effect and applicable to
Colonial Bank governing or pertaining to fair housing, anti-redlining, equal
credit opportunity, truth-in-lending, real estate settlement procedures, fair
credit reporting and every other applicable legal prohibition against unlawful
discrimination in residential lending, or governing consumer credit, including,
but not limited to, the Community Reinvestment Act, the Consumer Credit
Protection Act, Truth-in-Lending Law, and Regulation Z promulgated by the FRB,
and the Real Estate Settlement Procedures Act of 1974. Except as would not have
a material adverse effect in relation to Colonial Bank's loan portfolio taken as
a whole (i) all loans, leases, contracts and accounts receivable (billed and
unbilled), security agreements, guarantees and recourse agreements, of Colonial
Bank, as held in its portfolios, or as sold into the secondary market represent
and are valid and binding obligations of their respective parties and debtors,
enforceable in accordance with their respective terms, (ii) each of them is
based on a valid, binding and enforceable contract or commitment, each of which
has been executed and delivered in full compliance, in form and substance, with
any and all federal, state or local laws applicable to Colonial Bank, or to the
other party or parties to the contract(s) or commitment(s), including without
limitation the Truth-in-Lending Act, Regulations Z and U of the FRB, laws and
regulations providing for nondiscriminatory practices in the granting of loans
or credit, applicable usury laws, and laws imposing lending limits, (iii) all
such contracts or commitments have been administered in full compliance with all
applicable federal, state or local laws or regulations, and (iv) all Uniform
Commercial Code filings, or filings of trust deeds, or of liens or other
security interest documentation that are required by any applicable federal,
state or local government laws and regulations to perfect the security interests
referred to in any and all of such documents or
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other security agreements have been made, and all security interests under such
deeds, documents or security agreements have been perfected, and all contracts
have been entered into or assumed in full compliance with all applicable
material legal or regulatory requirements.
(b) The loan files of Colonial Bank are complete and accurate
in all material respects and have been maintained in accordance with good
banking practice.
(c) All notices of default, foreclosure proceedings or
repossession proceedings against any real or personal property collateral have
been issued, initiated and conducted by Colonial Bank in full formal and
substantive compliance with all applicable federal, state or local laws and
regulations, and no loss or impairment of any security interest, or exposure to
meritorious lawsuits or other proceedings against Colonial Bank has been or will
be suffered or incurred by Colonial Bank.
(d) Colonial Bank is not in violation of any applicable
servicer or any other requirements of the FHA, VA, FNMA, GNMA, FHLMC, SBA or any
private mortgage insurer which insured or guaranteed any loans owned by Colonial
Bank or as to which Colonial Bank has sold to other investors, the effect of
which violation would materially and adversely affect the business, assets,
earnings, operation or condition (financial or otherwise) of Colonial Bank.
(e) Colonial Bank has not knowingly engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any margin stock.
Commitments. Colonial Bank has delivered to VRB as
Schedule 2.11 a listing of all outstanding commitments,
including outstanding letters of credit, repurchase agreements
and unfunded agreements to lend of Colonial Bank.
Hazardous Wastes. To the knowledge of the directors
and officers of Colonial Bank, neither Colonial Bank, nor any
other person having an interest in any property which Colonial
Bank owns or leases, or has owned or leased, or in which it
holds any security interest, mortgage, or other liens or
interest including but not limited to as beneficiary of a
trust deed ("Property") has engaged in the generation, use,
manufacture, treatment, transportation, storage (in tanks or
otherwise), or disposal of Hazardous Material on or from such
Property in violation of applicable laws which would have a
material adverse effect on Colonial Bank. To the knowledge of
the directors and officers of Colonial Bank, individually or
in the aggregate, there has been no: (i) presence, use,
generation, handling, treatment, storage, release, threatened
release, migration or disposal of Hazardous Material; (ii)
condition that could result in any use, ownership or transfer
restriction; or (iii) condition of nuisance on or from such
Property, any of which individually or collectively would have
a material adverse effect on the business, assets, earnings,
operation or condition (financial or otherwise) of
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Colonial Bank. Colonial Bank has received no notice of, or has
no reason to know of, a condition that could give rise to any
private or governmental suit, claim, action, proceeding or
investigation against Colonial Bank, any such other person or
such Property as a result of any of the foregoing events.
"Hazardous Material" means any chemical, substance, material,
object, condition, or waste harmful to human health or safety
or to the environment due to its radioactivity, ignitability,
corrosivity, reactivity, explosivity, toxicity,
carcinogenicity, infectiousness or other harmful or
potentially harmful properties or effects, including, without
limitation, petroleum or petroleum products, and all of those
chemicals, substances, materials, objects, conditions, wastes
or combinations of them which are now or become listed,
defined or regulated in any manner by any federal, state or
local law based, directly or indirectly, upon such properties
or effects.
Contingent and Other Liabilities. Colonial Bank has
delivered to VRB as Schedule 2.13 a list of contingent and
other liabilities not set forth in other schedules, together
with copies of documents evidencing those liabilities. Except
as set forth in the Colonial Bank Financial Reports or in
schedules delivered by Colonial Bank to VRB, and except for
FDIC insured deposits, federal funds purchased and securities
sold under agreements to repurchase, and other obligations and
liabilities incurred in the ordinary course of business
arising out of transactions subsequent to the date of such
Financial Reports, Colonial Bank has no obligations or
liabilities of any nature (whether accrued, absolute,
contingent or otherwise) which are material or which, when
combined with all other such obligations or liabilities would
be material to the business, assets, earnings, operation or
condition (financial or otherwise) of Colonial Bank.
No Adverse Changes. Since June 30, 1997, (a) there
has been no material adverse change in the business, assets,
earnings, operation or condition (financial or otherwise) of
Colonial Bank; (b) no cash, stock or other dividends, or other
distributions with respect to capital stock, have been
declared or paid by Colonial Bank except cash dividends as
required by the terms of Colonial Bank's preferred stock
outstanding, nor has Colonial Bank purchased or redeemed any
of its shares (other than purchases of stock options as
anticipated by Section 4.11 of the Plan of Merger); and (c)
there has not been any damage, destruction or loss (whether or
not covered by insurance) materially and adversely affecting
any asset material to Colonial Bank. As of the Effective Date,
Colonial Bank will have no obligations or liabilities of any
nature, whether absolute, accrued, contingent or otherwise, in
excess of $50,000 individually, or $100,000 in the aggregate,
other than:
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Obligations and liabilities disclosed in call reports as of June 30,
1997 or otherwise disclosed to VRB pursuant to this Plan of Merger;
Obligations and liabilities incurred in, or as a result of, the normal
and ordinary course of business, consistent with past practices, which
do not, in the aggregate, have a material adverse effect on the
business, assets, earnings, operation or condition (financial or
otherwise) of Colonial Bank; and
Obligations and liabilities incurred otherwise than in or as a result
of the normal and ordinary course of business consistent with past
practices, provided VRB shall have consented thereto pursuant to
Section 4.1 hereof.
There is no basis for any claim against Colonial Bank or any other
obligation or liability of any nature, in excess of $50,000 individually or
$100,000 in the aggregate, except as set forth in clauses (a), (b), and (c)
above.
Regulatory Approvals Required. The nature of the
business and operations of Colonial Bank does not require any
approval, authorization, consent, license, clearance or order
of, any declaration or notification to, or any filing or
registration with, any governmental or regulatory authority in
order to permit Colonial Bank to perform its obligations under
this Plan, or to prevent the termination of any material
right, privilege, license or agreement of Colonial Bank, or
any material loss or disadvantage to its business, upon
consummation of the Plan of Merger, except for:
(a) Approval of the Plan of Merger by the Oregon Director;
(b) Approval of the Plan of Merger by the FDIC; and
(c) Filing of the Plan of Merger with the Oregon Director.
Corporate and Shareholder Approval of Plan, Binding
Obligations. Colonial Bank has all requisite corporate power
to execute, deliver and perform its obligations under this
Plan. The execution, delivery and performance of this Plan,
and the transactions contemplated thereby, have been duly
authorized by the Board of Directors of Colonial Bank. No
other corporate action on the part of Colonial Bank other than
shareholder approval is required to authorize the Plan of
Merger or the consummation of the transactions contemplated
thereby. This Plan has been duly executed and delivered by
Colonial Bank and constitutes the legal, valid and binding
obligation of Colonial Bank enforceable in accordance with its
terms.
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No Defaults from Transaction. Subject to compliance
with the governmental approvals described in Section 2.15,
neither the execution, delivery and performance of the Plan of
Merger by Colonial Bank, nor the consummation of the
transactions contemplated thereby will conflict with, result
in any breach or violation of, or result in any default or any
acceleration of performance under, any of the terms,
conditions or provisions of its Articles of Incorporation or
Bylaws, or of any statute, regulation or existing order, writ,
injunction or decree of any court or governmental agency, or
of any contract, agreement or instrument to which it is a
party or by which it is bound, or will result in the
declaration or imposition of any lien, charge or encumbrance
upon any of the assets of Colonial Bank which are material to
their business.
Tax Returns. Except as would not have a material
adverse effect on Colonial Bank, (i) Colonial Bank, as a
member of the IBC consolidated group, has filed all federal,
state and other income, franchise or other tax returns,
required to be filed by it, (ii) each such return is complete
and accurate in all material respects, (iii) all taxes and
related interest and liabilities to be paid in connection
therewith have been paid or adequate reserve has been
established for the timely payment thereof, and (iv) Colonial
Bank has timely and accurately filed all currency transaction
reports required by the Bank Secrecy Act, as amended, and has
timely and accurately filed all required information returns
and reports, including without limitation forms 1099, and has
exercised due diligence in obtaining certified taxpayer
identification numbers as required by the Code and Treasury
Regulations. Colonial Bank has not received notice of any
federal, state or other income, franchise or other tax
assessment or notice of a deficiency to date which has not
been paid or for which adequate reserve has not been provided,
and Colonial Bank does not know of any pending or threatened
audit or investigation of Colonial Bank with respect to any
tax liabilities. There are currently no agreements in effect
to either extend the period of limitations for assessment or
collection of any tax. Colonial Bank has delivered to VRB as
Schedule 2.18 copies of the federal and state tax returns for
years 1994 through 1996 for IBC.
Real Property, Leased Personal Property. Colonial
Bank has delivered to VRB as Schedule 2.19 a list setting
forth all real property owned by Colonial Bank as present,
former or future bank premises and all real property currently
held as other real estate owned. Except as set forth in that
schedule or except for disposition of other real estate owned
in the ordinary course of business, Colonial Bank will own all
of such real property presently owned, on the Effective Date.
Except as may be noted on that schedule, all real property
reflected in the Colonial Bank Call Report as of June 30, 1997
is included in that schedule. The leases pursuant to which
Colonial Bank leases real and personal property, copies of
which have also been delivered to VRB as part of Schedule
2.19, are valid and effective in accordance with their
respective terms and there is not under any such lease any
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default by Colonial Bank nor has there occurred any event
which, with the giving of notice, lapse of time, or otherwise,
would constitute an event of default. The real and personal
property leased by Colonial Bank is free of any adverse claims
known to Colonial Bank. Except as noted on Schedule 2.19, all
buildings and structures on the real property, the equipment
located thereon, and the real and personal property leased by
Colonial Bank, are in all material respects in good operating
condition and repair and conform in all material respects to
all applicable laws, ordinances and regulations. Colonial Bank
has good and marketable title to all of its real and personal
property, subject to no mortgages, pledges, encumbrances,
liens or charges of any kind, except liens for taxes not
delinquent and except as shown in Schedule 2.19 delivered to
VRB. Colonial Bank owns or leases all property on which its
continued business operations are materially dependent.
Insurance. Colonial Bank has provided to VRB as
Schedule 2.20 copies of all insurance policies currently in
force with respect to Colonial Bank's business and real and
personal property, and it will maintain all existing insurance
through the Effective Date. Colonial Bank is in compliance in
all material respects with all existing insurance policies and
has not failed to give timely notice or present any material
claim thereunder. Except as set forth in Schedule 2.20,
Colonial Bank has maintained such policies or comparable
coverage for each of the past six years.
Trademarks. Colonial Bank owns or licenses all
patents, trademarks, copyrights or trade names which it
considers to be material to its business taken as a whole, and
has not been charged with infringement or violation of any
patent, trademark, copyright or trade name which would be
likely to have a material adverse effect on its business.
Contracts and Agreements. Colonial Bank has delivered
to VRB as Schedule 2.22, copies of all material outstanding
contracts, agreements, leases or understandings to which
Colonial Bank is a party or to which any of its properties are
subject, except those referred to in schedules furnished
pursuant to other sections of this Plan, and except for any
contracts or agreements entered into with Colonial Bank
customers in the ordinary course of business. Such documents
include, without limitation, all agreements, contracts, leases
or understandings with officers and directors of Colonial Bank
or VRB, all of which are related to, and have been entered
into in the ordinary course of, Colonial Bank's banking
business. Colonial Bank is not in material default or breach,
nor has there occurred any event which with notice or lapse of
time would constitute a material breach or default by Colonial
Bank, under any contract, agreement, instrument, lease or
understanding, and, excluding defaults by customers of
Colonial Bank
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reflected in Colonial Bank's regular delinquent loan reports
which have been and will be made available to VRB, Colonial
Bank does not know of any default by any other party thereto
and, no contract, agreement, lease or undertaking referred to
in Schedule 2.22, will be modified or changed prior to the
Effective Date without the prior written consent of VRB which
will not be unreasonably withheld. No consent or approval by
the parties thereto is required by reason of this Plan to
maintain such contracts, agreements, leases and undertakings
in effect. No waiver or indulgence has been granted by any of
the landlords under any such leases.
Employee Benefits.
(a) Each Employee Benefit Plan sponsored or maintained by
Colonial Bank ("Benefit Plan") is set forth in Schedule 2.23. Except as set
forth in such schedule, Colonial Bank neither has nor has sponsored any other
pension, profit sharing, thrift, savings, bonus, retirement, vacation, life
insurance, health insurance, severance, sickness, disability, medical or death
benefit plans.
(b) Except as set forth on Schedule 2.23, there are no
employment contracts entered into by Colonial Bank and no other deferred
compensation contracts, agreements, arrangements or commitments maintained or
agreed to by it. There are no other compensation, employment or collective
bargaining agreements, stock options, stock purchase agreements, life, health,
accident or other insurance, bonus, deferred or incentive compensation,
change-in-control, severance or separation, profit sharing, retirement, or other
employee fringe benefit policies or arrangements of any kind, covering employees
or former employees or other persons of Colonial Bank.
(c) Colonial Bank does not maintain nor contribute to an
"employee welfare benefit plans" (as defined in section 3(1) of ERISA).
(d) Other than as set forth in Schedule 2.23, Colonial Bank
has not maintained a pension benefit plan that is subject to title 1, subtitle
B, part 3 of ERISA ("Pension Benefit Plan"). With respect to any such Pension
Benefit Plan, the amount of liability for any contribution paid or owing with
respect to such Pension Benefit Plan for the last or current plan year and the
plan year in which the Effective Date occurs are set forth on Schedule 2.23.
There are no other material liabilities of Colonial Bank that would be incurred
in connection with a termination of the Plan, and the Plan is fully funded.
(e) Colonial Bank and, to the knowledge of the executive
officers and directors of Colonial Bank, all persons having fiduciary or other
responsibilities or duties with respect to any Benefit Plan, are, and have since
inception been, in compliance in all material respects with, and each such
Benefit Plan is and has been operated in all material respects in accordance
with, its provisions and in compliance with the applicable laws, rules and
regulations governing such
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Plan, including, without limitation, the rules and regulations promulgated by
the Department of Labor, the Pension Benefit Guaranty Corporation and the IRS
under ERISA or the Code. Each Pension Benefit Plan and any related trust
agreements or annuity contracts (or any other funding instruments) comply
currently, and have complied in the past, both as to form and operation, with
the provisions of ERISA and the Code (including section 410(b) of the Code
relating to coverage), where required in order to be tax-qualified under section
401(b) or 403(a) or other applicable provisions of the Code, and all other
applicable laws, rules and regulations; all necessary governmental approvals for
the Benefit Plans have been obtained; and a favorable determination as to the
qualification under the Code of each Pension Benefit Plan set forth in Schedule
2.23 and each amendment thereto has been made by the IRS.
(f) Each Welfare Benefit Plan and each Pension Benefit Plan
has been administered to date in material compliance with the requirements of
the claims procedure of the Code and ERISA. All reports required by any
government agency and disclosures to participants with respect to each Welfare
Benefit Plan and each Pension Benefit Plan have been timely made or filed. Each
Benefit Plan has been operated since inception in material compliance with the
governing instruments and applicable federal or state law. In particular, but
without limitation, each Welfare Benefit Plan has been administered in material
compliance with federal law, including without limitation the health care
continuation requirements of federal law ("COBRA"). Other than as required by
COBRA, and amounts due Participants under each Pension Benefit Plan, Colonial
Bank has no obligation to furnish health, severance or other benefits under any
Benefit Plan after retirement or other severance of an employee.
(g) Neither Colonial Bank nor, to Colonial Bank's knowledge,
any plan fiduciary of any Welfare Benefit Plan or Pension Benefit Plan, has
engaged in any transaction in violation of section 406(a) or (b) of ERISA (for
which no exemption exists under section 408 of ERISA) or any "prohibited
transaction" (as defined in section 4975(c)(1) of the Code) for which no
exemption exists under section 4975(c)(2) or (d) of the Code or in any
prohibited transactions under predecessor provisions of the Code.
(h) Colonial Bank has had no liability to the Pension Benefit
Guaranty Corporation ("PBGC"). No material liability to the PBGC has been or
will be incurred by Colonial Bank or other trade or business under "common
control" with Colonial Bank (as determined under section 414(c) of the Code)
("Common Control Entity") on account of any termination of an employee pension
benefit plan subject to title IV of ERISA. Except as set forth in Schedule 2.23,
since September 1, 1974, no filing has been made by Colonial Bank (or any Common
Control Entity) with the PBGC (and no proceeding has been commenced by the PBGC)
to terminate any employee pension benefit plan subject to title IV of ERISA
maintained, or wholly or partially funded by Colonial Bank (or any Common
Control Entity). Neither Colonial Bank nor any Common Control Entity has (i)
ceased operations at a facility so as to become subject to the provisions of
section 4062(e) of ERISA, (ii) withdrawn as a substantial employer so as to
become subject to the provisions of section 4063 of ERISA, (iii) ceased making
contributions on or before the Effective Date to any employee pension benefit
plan subject to section 4064(a) of ERISA to which Colonial Bank (or any Common
Control Entity) made contributions during the
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five years prior to the Effective Date, or (iv) made a complete or partial
withdrawal from a multi-employer plan (as defined in section 3(37) of ERISA) so
as to incur withdrawal liability as defined in section 4201 of ERISA (without
regard to subsequent reduction or waiver of such liability under section 4207 or
4208 or ERISA).
(i) Complete and correct copies of the following documents
have been furnished to VRB as Schedule 2.23:
(i) Each Benefit Plan and any related trust
agreements;
(ii) The most recent summary plan descriptions of each
Benefit Plan subject to ERISA;
(iii) The most recent determination letters of the IRS
with respect to the qualified status of a Pension Benefit Plan;
(iv) Annual Reports (on form 5500 series) required to
be filed with any governmental agency for the last two years;
(v) Financial information which identifies (x) all
asserted or unasserted claims arising under any Benefit Plan, (y) all claims
presently outstanding against any Benefit Plan, and (z) a description of any
future compliance action required with respect to any Benefit Plan under ERISA,
or federal or state law.
(j) Each Welfare Benefit Plan and each Pension Benefit Plan is
legally valid and binding and in full force and effect.
Employment Disputes. There is no labor strike,
dispute, slowdown or stoppage pending or, to the best
knowledge of Colonial Bank, threatened against Colonial Bank,
and Colonial Bank does not have any knowledge of any attempt
to organize any employees of Colonial Bank into a collective
bargaining unit. Consummation of the Plan of Merger will not
(either alone or in combination with any other act or event)
result in any payment of severance pay or any other payment
becoming due from Colonial Bank to any of its employees except
as set forth in Schedule 2.23. Colonial Bank is not a party to
any agreement involving payments to any person or entity based
upon the profits, revenues or other financial performance of
Colonial Bank except as set forth on Schedule 2.23.
Reserve for Loan Losses. Colonial Bank's reserve for
loan losses, as established from time to time, is adequate as
determined by the standards applied to Colonial Bank by the
applicable bank regulatory agencies and pursuant to generally
accepted accounting principles. At the time of closing, the
percentage
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of the reserve to total loans will not be less than such
percentage was at June 30, 1997.
Repurchase Agreement. Colonial Bank has valid and
perfected first position security interests in all government
securities subject to repurchase agreements and the market
value of the collateral securing each such repurchase
agreement equals or exceeds the amount of the debt secured by
such collateral under such agreements.
Shareholder List. The list of shareholders of
Colonial Bank dated June 6, 1997, provided to VRB as Schedule
2.27, is a true, correct and complete list of the names,
addresses and holdings of all record holders of Colonial Bank
Stock as of that date. Colonial Bank shall notify VRB of any
change known to Colonial Bank in such stock ownership of over
one percent (1%) through the Effective Date.
Proxy Statement. The proxy statement to be used by
Colonial Bank to solicit proxies from the holders of Colonial
Bank Stock at the meeting of shareholders held to consider and
vote upon this Plan of Merger, and the transactions
contemplated thereby (in its definitive form the "Proxy
Statement"), will fairly describe the transaction and Colonial
Bank, and will contain no untrue statement of any material
fact and will not omit to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading, except those statements in or omission from
the Proxy Statement which may be made with respect to VRB.
Colonial Bank will promptly advise VRB in writing if at any
time prior to the Effective Date Colonial Bank shall obtain
knowledge of any facts that might make it necessary or
appropriate to amend or supplement the Proxy Statement in
order to make the statements therein not misleading or to
comply with applicable law.
Interests of Directors and Others. Except as shown on
Schedule 2.29, no officer or director of Colonial Bank has any
material interest in any assets or property (whether real or
personal, tangible or intangible), of or used in the business
of Colonial Bank other than as an owner of outstanding
securities or deposit accounts of Colonial Bank, or as
borrowers under loans fully performing in accordance with
their terms, which terms are no more favorable than those
available to unaffiliated parties made at or about the same
time by Colonial Bank.
Colonial Bank Schedules. Colonial Bank has delivered
to VRB the following schedules, as described in the preceding
Sections 2.1 through 2.29:
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2.3 Articles of Incorporation and Bylaws.
2.5 Reports to Shareholders since January 1, 1995.
2.6 Colonial Bank Call Reports of Condition and Income for December
31, 1994, 1995 and 1996 and June 30, 1997.
2.7 Colonial Bank Financial Reports
2.9 Schedule of Litigation.
2.10 Schedules of Law/Regulatory Violations.
2.11 Schedule of Commitments.
2.13 Schedule of Contingent and other Liabilities.
2.14 Schedule of Changes.
2.18 Federal and State Tax Returns for 1994 through 1996.
2.19 Schedule of Owned Real Property and Real and Personal Property;
Schedule of Encumbrances on Real and Personal Property.
2.20 Schedule of Insurance Policies.
2.22 Schedule of Contracts and Agreements.
2.23 Employee Benefit Plans
2.27 Shareholders List as of June 6, 1997.
2.29 Schedule of Interests of Management in Property or Business of
Colonial Bank.
The information in the schedules constitutes additional representations
and warranties made by Colonial Bank hereunder and is incorporated herein by
reference. The copies of documents furnished as part of these schedules are
true, correct and complete copies and include all amendments, supplements, and
modifications thereto and all waivers applicable thereunder.
No Misstatements or Omissions. No representation or
warranty of Colonial Bank in this Plan of Merger or in any
statement, certificate or schedule furnished or to be
furnished by Colonial Bank pursuant to this Plan of Merger or
in connection with the transaction contemplated by this Plan
of Merger, contains or will contain any untrue statements of a
material fact or omits or will omit to state any material
fact.
2.32 Brokers, Investment Bankers. Colonial Bank represents that it has
not employed any investment banker, broker, finder or other intermediaries in
connection with the transaction contemplated hereby in such manner as to give
rise to any valid claim against any party for an investment banker's fee,
broker's commission, finder's fee or any like payment.
.REPRESENTATIONS AND
WARRANTIES OF VRB
VRB represents and warrants to Colonial Bank, as of the Effective Date,
as follows:
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Organization, Existence, Authority of VRB. VRB is a
state chartered bank, duly organized, and validly existing
under the laws of the State of Oregon and has all requisite
corporate power and authority to own, lease and operate its
properties and assets and to carry on its business in the
manner then being conducted. Its activities do not require it
to be qualified to do business in any other state.
VRB Public Reports. VRB has delivered to Colonial Bank as
Schedule 3.2 copies of VRB's Form 10-K report filed with the SEC for
the years ended December 31, 1996 and the Form 10-Q for the six months
ended June 30, 1997 (which, together with such reports filed subsequent
to such date, the "VRB Public Reports"). Until the Effective Date, VRB
will file with the SEC (and will furnish to Colonial Bank within two
days thereafter) all additional reports and other documents which VRB
is required by the Securities Exchange Act of 1934 or regulations
promulgated thereunder to file or otherwise files with the SEC. The VRB
Public Reports have been and will be prepared in accordance with
generally accepted accounting principles, consistently applied, and
present fairly the financial position and results of operation of VRB
on the dates and for the periods covered thereby. As of the date filed,
each VRB Public Report has and will be accurate and complete, and
complies or will comply with all requirements applicable to such
filing.
Articles of Incorporation, Bylaws, Minutes. The
copies of the Articles of Incorporation and the Bylaws of VRB
delivered to Colonial Bank as Schedule 3.3, are true, correct
and complete copies of existing Articles of Incorporation and
Bylaws of VRB, as amended to date. VRB is not in violation of
any provision of its Articles of Incorporation or Bylaws. The
minute books of VRB contain accurate and complete minutes of
all meetings and all consents evidencing actions taken without
a meeting by the Board of Directors (and any committees
thereof) and by the shareholders of VRB.
3.4 No Adverse Changes. Since June 30, 1997, there has been no material
adverse change in the business, assets, earnings, operations, (financial or
otherwise) of VRB taken as a whole.
3.5 Regulatory Approvals Required. No approval, authorization, consent,
license, clearance or order of, any declaration or notification to, or filing or
registration with, any governmental or regulatory authority is required in order
to permit VRB to perform its obligations under this Plan of Merger except for:
(a) Approval of the Plan of Merger by the Oregon Director;
(b) Approval of the Plan of Merger by the FDIC; and
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(c) Filing of the Plan of Merger with the Oregon Director.
3.6 Corporate Approval of Plan, Binding Obligations. VRB has all
requisite corporate power to execute, deliver and perform its obligations under
this Plan of Merger. The execution, delivery and performance of this Plan of
Merger, and the transactions contemplated thereby, have been duly authorized by
the Board of Directors of VRB. No other corporate action on the part of VRB is
required to authorize this Plan of Merger or the consummation of the
transactions contemplated thereby. This Plan has been duly executed and
delivered by VRB and constitutes the legal, valid and binding obligation of VRB
enforceable against VRB in accordance with its terms.
3.7 No Violations. The execution, delivery and performance of this Plan
of Merger will not violate or conflict with the Articles of Incorporation,
Bylaws or any material contract of VRB.
3.8 Employee Benefits. Each Employee Benefit Plan sponsored or
maintained by VRB ("VRB Benefit Plan") is set forth in Schedule 3.8 and complete
copies of all VRB Benefit Plans have been delivered to Colonial Bank.
3.9 VRB Schedules. VRB has delivered to Colonial Bank the following
schedules, as described in the preceding Sections 3.1 through 3.8:
3.2 VRB Public Reports.
3.3 Articles of Incorporation and Bylaws.
3.8 Employee Benefit Plans
The information in the schedules constitutes additional representations
and warranties made by VRB hereunder and is incorporated herein by reference.
The copies of documents furnished as part of these schedules are true, correct
and complete copies and include all amendments, supplements, and modifications
thereto and all waivers applicable thereunder.
3.10 Financial Resources. VRB has adequate liquidity to provide the
funds necessary to exercise the option granted by IBC shareholders and to
consummate the transactions contemplated by this Plan of Merger without
dependence of any external sources of funds or financing except under legally
binding commitments that are not subject to satisfaction of any further
conditions.
3.11 No Misstatements or Omissions. No representation or warranty of
VRB to this Plan of Merger or in any statement, certificate or schedule
furnished or to be furnished by VRB pursuant to this Plan, contains or will
contain any untrue statement of a material fact.
3.12 Branches and Employment. VRB has no plan or intention to close any
facility of Colonial Bank other than the consolidation of the Rogue River Branch
or, except for certain senior
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officers (Vice President or above and making over $50,000), to terminate the
employment of any Colonial Bank employee.
3.13 No Brokers. VRB represents that it has not employed any investment
banker, broker, finder or other intermediaries in connection with the
transaction contemplated hereby in such manner as to give rise to any valid
claim against any party for an investment banker's fee, broker's commission,
finder's fee or any like payment.
.COVENANTS OF
COLONIAL BANK
4.1 Certain Actions. During the period between the date hereof and the
earlier of the Effective Date or the termination of this Plan, except as
otherwise contemplated by this Plan of Merger, Colonial Bank shall not, without
first obtaining the written approval of VRB, which will not be unreasonably
withheld:
(a) Amend its Articles of Incorporation or Bylaws;
(b) Declare or pay any dividend (except (i) dividends on its
preferred stock as required by the terms thereof and (ii) in the event the
closing occurs after February 28, 1998, a dividend not in excess of Colonial
Bank's adjusted net income after December 31, 1997 through the date of closing
calculated without regard to the items described in clauses (i), (ii), and (iii)
of Section 6.13); redeem, repurchase or otherwise acquire or agree to acquire
any Colonial Bank Stock or make or commit to make any other distribution to
Colonial Bank's stockholders;
(c) Issue, sell, or deliver; agree to issue, sell or deliver;
or grant or agree to grant any shares of any class of the stock of Colonial
Bank; any securities convertible into any of such shares; or any options,
warrants, or other rights to purchase;
(d) Except in the ordinary course of business, borrow or agree
to borrow any funds or voluntarily incur, assume or become subject to, whether
directly or by way of guarantee or otherwise, any commitment, obligation or
liability (absolute or contingent); or cancel or agree to cancel any debts or
claims;
(e) Except in the ordinary course of business, lease, sell or
transfer; agree to lease, sell or transfer, or grant or agree to grant any
preferential rights to lease or acquire, any of its assets, property or rights,
or make or permit any amendment or termination of any contract, agreement,
instrument or other right to which Colonial Bank is a party and which is
material to Colonial Bank's business, assets, earnings, operation or condition
(financial or otherwise); or mortgage, pledge or subject to a lien or any other
encumbrance any of its assets, tangible or intangible;
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(f) Violate, or commit a breach of or default under any
contract, agreement or instrument to which it is a party or to which any of its
assets may be subject and which is material to its business, assets, earnings,
operation or condition (financial or otherwise); or violate in any material
respect any applicable law, regulation, ordinance, order, injunction or decree
or any other requirements of any governmental body or court, relating to its
assets or business;
(g) Increase or agree to increase the compensation payable to
any officer, director, employee or agent, except for merit increases to
non-management personnel in the ordinary course of business consistent with past
practices (provided that this shall not prohibit the payment of normal year-end
bonuses which have been fully funded and do not exceed $11,000 per month in
total); enter into any contract of employment for a period greater than 30 days
or providing for payments upon termination of employment or the occurrence of
any other event including but not limited to the consummation of this Plan of
Merger; or enter into or make any change in any Employee Benefit Plan except as
required by law;
(h) Except in the ordinary course of business through
foreclosure or transfer in lieu thereof in the collection of loans to customers,
acquire control of or any other ownership interest in any other corporation,
association, joint venture, partnership, business trust or other business
entity; acquire control or ownership of all or a substantial portion of the
assets of any of the foregoing; merge, consolidate or otherwise combine with any
other corporation; or enter into any agreement providing for any of the
foregoing;
(i) Acquire an ownership or leasehold interest in any real
property whether by foreclosure, deed in lieu of foreclosure or otherwise
without making an environmental evaluation consistent with VRB's policy, a copy
of which has been provided to Colonial Bank.
(j) Make any payment in excess of $50,000 in settlement of any
pending or threatened legal proceeding involving a claim against Colonial Bank;
(k) Engage in any activity or transaction which is other than
in the ordinary course of business including the sale of any properties,
securities, servicing rights, loans or other assets except as specifically
contemplated hereby, or which would have a material adverse effect on the
business, assets, earnings, operation or condition (financial or otherwise) of
Colonial Bank provided that nothing herein shall prevent the sale of loans or
investments or the taking of other actions for the purpose of maintaining
liquidity;
(l) Acquire, open or close any office or branch;
(m) Do any act which causes Colonial Bank not to remain in
good standing with all regulatory authorities having jurisdiction over its
business operations;
(n) Make or commit to make any capital expenditures, capital
additions or capital improvements involving an amount in excess of $10,000 other
than completion of the remodel of the South Grants Pass Branch;
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(o) Make, renew, commit to make, or materially modify any loan
over $250,000 or a series of loans or commitments over $500,000 to any person or
related persons without furnishing a copy of the report provided to Colonial
Bank's loan committee to VRB at least three (3) business days prior to such
approval or when such report is first provided to the loan committee if less
than three (3) business days;
(p) Enter into or modify any agreement or arrangement (except
for renewals of previously disclosed indebtedness) which alone or together with
all similar arrangements exceeds $100,000, with any director or officer of
Colonial Bank, any person who owns more than five percent (5%) of the
outstanding capital stock of Colonial Bank, or any business or entity in which
such director, officer or beneficial owner has an ownership interest in excess
of ten percent (10%); or
(q) Sell any investment securities except as necessary to
provide liquidity in accordance with past practices, or materially restructure
the mix or maturities of its investment portfolio.
4.2 Filing Reports and Returns, Payment of Taxes. During the period
between the date hereof and the earlier of the Effective Date or the termination
of this Plan, Colonial Bank (alone or as a member of a consolidated group) shall
duly and timely (by the due date or any duly granted extension thereof) file all
reports and returns required to be filed with federal, state, local, foreign and
other regulatory authorities, including, without limitation, reports required to
be filed with the FDIC or Oregon Director and all required federal, state and
local tax returns. Unless it is contesting the same in good faith and, if
appropriate, has established reasonable reserves therefore, Colonial Bank will
promptly pay all taxes and assessments indicated by tax returns as due or
otherwise lawfully levied or assessed upon it or any of its properties and
withhold or collect and pay to the proper governmental authorities or hold in
separate bank accounts for such payment all taxes and other assessments which
are required by law to be so withheld or collected.
4.3 Preservation of Business. During the period between the date hereof
and the earlier of the Effective Date or the termination of this Plan, Colonial
Bank shall use its best efforts to preserve intact its business organization; to
preserve its relationships and goodwill with its customers, employees and other
having business dealings with it; and to keep available the services of its
present officers, agents and employees. Except as otherwise contemplated hereby
or as requested or agreed to by VRB, Colonial Bank will not institute any novel,
unusual or material change in its methods of management, lending policies,
personnel policies, accounting, marketing, investments or operations.
4.4 Best Efforts. Colonial Bank will use its best efforts to obtain and
to assist VRB in obtaining all necessary approvals, consents and orders,
including but not limited to approval of the FDIC and the Oregon Director, to
the transactions contemplated by this Plan of Merger, and to obtain the approval
of the shareholders of Colonial Bank.
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4.5 Continuing Accuracy of Representatives and Warranties. During the
period between the date hereof and the earlier of the Effective Date or the
termination of this Plan, Colonial Bank will not take any action which would
cause or constitute a breach of any of the representations or warranties of
Colonial Bank contained in this Plan or which would cause any such
representations or warranties, if made on and as the date of such event or the
Effective Date, to be untrue or inaccurate in any material respect (other than
an event so affecting a representation or warranty which is permitted hereby or
is expressly limited to a state of facts existing at a time prior to the
occurrence of such event). In the event of, and promptly upon becoming aware of
the occurrence of or the pending or threatened occurrence of any event which
would cause or constitute such a breach or inaccuracy, Colonial Bank will give
detailed written notice thereof to VRB and will use its best efforts to prevent
or promptly remedy such breach or inaccuracy.
4.6 Updating Schedules. During the period between the date hereof and
the earlier of the Effective Date or the termination of this Plan, Colonial Bank
will, from time to time and as appropriate to ensure that the schedules provided
to VRB remain at all times accurate and complete in all material respects, to
and including the Effective Date, promptly supplement the schedules.
Notwithstanding anything to the contrary contained herein, supplementation of
such schedules following the execution of this Plan shall not be deemed a
modification of Colonial Bank's representations or warranties contained herein.
4.7 Rights of Access. During the period between the date hereof and the
earlier of the Effective Date or the termination of this Plan of Merger,
Colonial Bank agrees to permit VRB, and its employees, agents and
representatives reasonable access during normal business hours to the premises
of Colonial Bank on reasonable notice and to all books, files and records of
Colonial Bank, including but not limited to loan files, litigation files and
federal and state examination reports, and to furnish to VRB such financial and
operating data and other information with respect to the business and assets of
Colonial Bank as VRB shall reasonably request.
4.8 Delivery of Reports. During the period between the date hereof and
the earlier of the Effective Date or the termination of this Plan, Colonial Bank
will deliver to VRB promptly upon preparation copies of:
(a) Minutes of meetings of Colonial Bank's shareholders, Board
of Directors, and management or director committees;
(b) Colonial Bank loan committee reports and reports of loan
delinquencies, foreclosures and other adverse developments regarding loans; and
of developments regarding other real estate owned or other assets acquired
through foreclosure or action in lieu thereof;
(c) All regularly prepared internal financial statements of
Colonial Bank, which shall be issued not less frequently than monthly; and
(d) Quarterly statements of condition and income verified by
Colonial Bank's chief financial officer and complying with either regulatory
accounting principles or generally
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accepted accounting principles consistently applied, which present fairly the
financial condition and results of operations of Colonial Bank on the dates and
for the periods covered.
4.9 Payment of Obligations. During the period between the date hereof
and the earlier of the Effective Date or the termination of this Plan, Colonial
Bank will pay promptly upon receipt of xxxxxxxx all accounts payable, including
professional fees for legal, financial and accounting services, and will
maintain its assets in accordance with good business practices.
4.10 Shareholder Meeting. Colonial Bank shall call a meeting of its
shareholders to consider and vote upon this Plan of Merger and the transactions
contemplated thereby. Colonial Bank shall give notice of the meeting in
accordance with Oregon law and all requirements of laws and regulations
applicable to the merger transaction. The date of the shareholders meeting shall
be set in agreement with VRB to follow receipt of regulatory approvals and to
immediately proceed the Effective Date. Colonial Bank shall deliver to its
shareholders a proxy statement complying with the representations and warranties
of Section 2.28 hereof in connection with the shareholders meeting. Provided
that the representations and warranties of VRB contained herein continue to be
accurate, the shareholders of Colonial Bank signing this Plan agree to vote all
Colonial Bank shares held or controlled by it or them for the approval of all
such matters.
4.11 Cash-Out of Options. Prior to the Effective Date, Colonial Bank
shall use its best efforts to cancel its outstanding stock options at a price
not to exceed the difference between the exercise price of each option and
$43.36 per share.
4.12 Other Actions. Colonial Bank covenants and agrees to execute, file
and record such documents and do such other acts and things as are necessary or
appropriate to obtain required government and regulatory approvals to and to
otherwise accomplish this Plan of Merger.
4.13 No Solicitation. Subject to the fiduciary duties of the directors
and officers of Colonial Bank based upon a written opinion of Miller, Nash,
Wiener, Hager & Xxxxxxx LLP provided to VRB, between the date hereof and the
Effective Date, Colonial Bank, its Board of Directors and the shareholders of
Colonial Bank executing this Plan, shall not directly or indirectly initiate
contact with any person or entity in an effort to solicit any Alternative
Acquisition Transaction (as defined below), nor will Colonial Bank authorize or
knowingly permit any officer or any other person representing or retained by
Colonial Bank to directly furnish or cause to be furnished any non-public
information concerning its business, properties, or assets to any person or
entity in connection with any possible Alternative Acquisition Transaction.
Colonial Bank shall promptly orally notify VRB followed by written notice, of
any Alternative Acquisition Transaction, whether oral or written, by any person
or persons to Colonial Bank, or any indication from any person that it is
considering making any Alternative Acquisition Transaction. The persons
executing this plan agree to vote his or her Colonial Bank Stock and any shares
over which he or she have voting control in favor of this Plan of Merger.
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For purposes of this Plan of Merger an "Alternative Acquisition
Transaction" means any tender offer, agreement, understanding or other proposal
of any nature pursuant to which any corporation, partnership, person or other
entity, other than VRB, would directly or indirectly (i) acquire or participate
in a merger, share exchange, consolidation or any other business combination
involving Colonial Bank or IBC; (ii) acquire in excess of fifteen percent (15%)
of the outstanding Colonial Bank Stock or IBC or the right to vote fifteen
percent (15%) or more of the Colonial Bank Stock or IBC; or (iii) acquire a
significant portion of the assets or earning power of Colonial Bank or IBC.
.COVENANTS OF VRB
Best Efforts. VRB will use its best efforts to obtain
and to assist Colonial Bank in obtaining, all necessary
approvals, consents and orders, including but not limited to
approvals of the FDIC and the Oregon Director, to the
transactions contemplated by this Plan of Merger.
Continuing Accuracy of Representatives and
Warranties. During the period between the date hereof and the
earlier of the Effective Date or the termination of this Plan,
VRB will not take any action which would cause or constitute a
breach of any of the representations or warranties of VRB
contained in this Plan or which would cause any such
representations or warranties, if made on and as the date of
such event or the Effective Date, to be untrue or inaccurate
in any material respect (other than an event so affecting a
representation or warranty which is permitted hereby or is
expressly limited to a state of facts existing at a time prior
to the occurrence of such event). In the event of, and
promptly upon becoming aware of the occurrence of or the
pending or threatened occurrence of any event which would
cause or constitute such a breach or inaccuracy, VRB will give
detailed written notice thereof to Colonial Bank and will use
its best efforts to prevent or promptly remedy such breach or
inaccuracy.
Updating Schedules. During the period between the
date hereof and the earlier of the Effective Date or the
termination of this Plan, VRB will, from time to time and as
appropriate to ensure that the schedules provided to Colonial
Bank remain at all times accurate and complete, to and
including the Effective Date, promptly supplement the
schedules. Notwithstanding anything to the contrary contained
herein, supplementation of such schedules following the
execution of this Plan shall not be deemed a modification of
VRB's representations or warranties contained herein.
Other Actions. VRB covenant and agree to execute,
file and record such documents and do such other acts and
things as are necessary or appropriate to
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obtain required government and regulatory approvals to and to
otherwise accomplish this Plan of Merger.
5.5 Employee Benefit Plans. (a) Within a reasonable time after the
Effective Date, VRB shall provide to employees who formerly were employees of
Colonial Bank employee benefits, including but not limited to pension plans,
thrift plans, management incentive plans, group life plans, accidental death and
dismemberment plans, vacation benefits, travel accident plans, medical and
hospitalization plans and long-term disability plans, on the same basis as
provided to similarly situated employees of VRB and without any exclusion or
reduction by reason of any pre-existing condition. From and after the Effective
Date, and until VRB has accomplished the actions contemplated by the preceding
sentence, employees who were employees of Colonial Bank immediately prior to the
Effective Time shall be provided with employee benefits under employee benefit
plans of Colonial Bank, or a combination of benefit plans of VRB and Colonial
Bank, as may be reasonably appropriate in order to accomplish an orderly
transition of benefits. From and after the Effective Date, employees who were
employees of Colonial Bank immediately prior to the Effective Date shall receive
full credit for all purposes under such plans for their length of service prior
to the Effective Date with Colonial Bank (and any predecessors thereto) except
for vesting purposes with respect to VRB's matching contributions for such
employees under its 401(k) plan; provided, however, previous Colonial Bank
employees completing two consecutive years of full time employment with VRB will
receive credit for prior service with Colonial Bank for the purpose of vesting
under VRB's 401(k) plan.
(b) VRB agrees to honor in accordance with their terms (i) all
Colonial Bank Employee Benefit Plans and (ii) all contracts, arrangements,
commitments, or understandings described in Schedule 2.23, and (iii) all
benefits vested thereunder as of the Effective Date, including without
limitation, accrued vacation pay. The provisions of this Section 5.5 are
intended to be for the benefit for, and enforceable by, each of the
beneficiaries of or parties to such plans, contracts, arrangements, commitments,
and understandings. Nothing herein, however, shall be deemed to require VRB to
continue such benefit plans.
5.6 Indemnification; Directors' and Officers' Insurance. (a) In the
event of any threatened or actual claim, action, suit, proceeding, or
investigation, whether civil, criminal, or administrative, including without
limitation, any such claim, action, suit, proceeding, or investigation in which
any person who is now, or has been at any time prior to the date of this
Agreement, or who becomes prior to the Effective Date, a director, officer, or
employee of Colonial Bank (the "Indemnified Parties") is, or is threatened to
be, made a party based in whole or in part on, or arising in whole or in part
out of, or pertaining to (i) the fact that he is or was a director, officer, or
employee of Colonial Bank or any of its predecessors or (ii) this Agreement, the
Stock Option Agreement, or any of the transactions contemplated hereby or
thereby, whether in any case asserted or arising before or after the Effective
Date, the parties hereto agree to cooperate and use their best efforts to defend
against and respond thereto. It is understood and agreed that after the
Effective Date, VRB shall indemnify and hold harmless, as and to the fullest
extent permitted by law, each such Indemnified Party against any losses, claims,
damages,
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liabilities, costs, expenses (including reasonable attorney's fees and expenses
in advance of the final disposition of any claim, suit, proceeding, or
investigation to each Indemnified Party to the fullest extent permitted by law
upon receipt of any undertaking required by applicable law), judgments, fines,
and amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, proceeding, or investigation and in the event of any such
threatened or actual claim, action, suit, proceeding, or investigation (whether
asserted or arising before or after the Effective Date), the Indemnified Parties
may retain counsel reasonably satisfactory to them after consultation with VRB;
provided, however, that (1) VRB shall have the right to assume the defense
thereof and upon such assumption VRB shall not be liable to any Indemnified
Party for any legal expenses of other counsel or other expenses subsequently
incurred by any Indemnified Party in connection with the defense thereof, except
that if VRB elects not to assume such defense or counsel for the Indemnified
Parties reasonably advises the Indemnified Parties that there are issues which
raise conflicts of interest between VRB and the Indemnified Parties, the
Indemnified Parties may retain counsel reasonably satisfactory to them after
consultation with VRB, and VRB shall pay the reasonable fees and expenses of
such counsel for the Indemnified Parties, (2) VRB shall be obligated pursuant to
this paragraph to pay for only one firm of counsel for all Indemnified Parties,
unless an Indemnified Party shall have reasonably concluded, based on the advice
of counsel, that in order to be adequately represented, separate counsel is
necessary for such Indemnified Party, in which case, VRB shall be obligated to
pay for such separate counsel, (3) VRB shall not be liable for any settlement
effected without its prior written consent (which consent shall not be
unreasonably withheld), and (4) VRB shall have no obligation hereunder to any
Indemnified Party when and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and nonappealable,
that indemnification for such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law. Any Indemnified Party wishing to claim
Indemnification under this Section 5.6, upon learning of any such claim, action,
suit, proceeding, or investigation, shall notify VRB thereof, provided that the
failure to so notify shall not affect the obligations of VRB under this Section
5.6 except to the extent such failure to so notify materially prejudices VRB.
VRB's obligations under this Section 5.6 continue in full force and effect for a
period of six years from the Effective Time; provided, however, that all rights
to indemnification in respect of any claim (a "Claim") asserted or made within
such period shall continue until the final disposition of such Claim and
provided further that VRB shall have the right of set-off against any payments
required to be made by VRB to an Indemnified Party pursuant to this Section
5.6(a) to the extent that such Indemnified Party shall have received the
indemnification to which such Indemnified Party is entitled from an insurer
under a directors' and officers' liability insurance policy maintained by
Colonial Bank. Excluded from the above indemnification are any claims made by
VRB pursuant to this Plan of Merger, claims (i) based upon a violation of
federal banking regulations including Regulation O, (ii) not permitted by ORS
707.746, or (iii) enumerated in ORS 707.110(5)(c)(A)-(D).
(b) VRB shall purchase or cause to be purchased one year of
extended discover coverage under Colonial Bank's current directors' and
officers' liability insurance policy maintained by Colonial Bank following the
Effective Date of the Plan of Merger.
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(c) In the event VRB or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers or conveys all or substantially all of its properties and
assets to any person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of VRB assume
the obligations set forth in this section.
(d) The provisions of this Section 5.6 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party and his or
her heirs and representatives.
.CONDITIONS TO
OBLIGATIONS OF VRB
The obligation of VRB under this Plan of Merger to consummate the
Merger, shall be subject to the satisfaction, on or before the Effective Date,
of the following conditions (unless waived by VRB in writing and not required by
law):
Shareholders Approvals. Approval of this Plan of
Merger by the stockholders of Colonial Bank and holders of
fewer than five percent of Colonial Bank Stock shall have
voted against and otherwise taken steps to perfect their
dissenter appraisal rights.
No Litigation. Absence of any suit, action, or
proceeding (made or threatened) against VRB, Colonial Bank, or
any of their directors or officers, seeking to challenge,
restrain, enjoin, or otherwise affect this Plan of Merger or
the transactions contemplated thereby; seeking to restrict the
rights of the parties or the operation of the business of
Resultant Bank after consummation of the Merger; or seeking to
subject the parties to this Plan of Merger or any of their
officers or directors to any liability, fine, forfeiture or
penalty on the grounds that the parties hereto or their
directors or officers have violated or will violate their
fiduciary duties to their respective shareholders or will
violate any applicable law or regulation in connection with
the transactions contemplated by this Plan of Merger.
No Banking Moratorium. Absence of a banking
moratorium or other suspension of payment by banks in the
United States or any new limitation on extension of credit by
commercial banks in the United States.
Regulatory Approvals. Procurement of all consents,
orders and approvals required by law, and the satisfaction of
all other necessary or appropriate legal
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requirements, including but not limited to approvals by the
FDIC and the Oregon Director of the transaction contemplated
by this Plan of Merger, without the imposition of any
materially burdensome conditions other than conditions
routinely imposed in similar circumstances, and the expiration
of all regulatory waiting periods.
Other Consents. Receipt of all other consents and approvals
necessary for consummation of the transactions contemplated by this
Plan of Merger.
Opinion of Counsel. Receipt by VRB of a favorable
opinion by Miller, Nash, Wiener, Hager & Xxxxxxx LLP, counsel
to Colonial Bank, in form and substance reasonably
satisfactory to VRB and its counsel, to the effect that,
except as disclosed pursuant to this Plan of Merger:
(a) Colonial Bank is a state chartered bank, duly organized,
validly existing and in good standing under the laws of the State of Oregon and
has all requisite corporate power and authority to own, lease and operate its
properties and assets and carry on its business in the manner being conducted on
the Effective Date;
(b) Colonial Bank has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Plan of
Merger; the execution, delivery and performance of the Plan of Merger, and the
consummation of the transactions contemplated thereby, have been duly authorized
by all requisite corporate action on the part of Colonial Bank; and the Plan of
Merger has been duly executed and delivered by Colonial Bank and constitute the
legal, valid, and binding obligation of Colonial Bank, enforceable in accordance
with its terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or by equitable principles; and
(c) The authorized capital stock of Colonial Bank consists of
2,000,000 shares of common stock ($5.00 par value) and 160,857 shares of
preferred stock ($10.50 par value) of which 235,993 shares of common stock and
143,008 shares of preferred stock have been duly issued and are validly
outstanding, fully paid and nonassessable except as provided by the Oregon Bank
Act. Such shares are the only shares of capital stock of Colonial Bank
authorized, issued or outstanding; and to the best of counsel's knowledge,
Colonial Bank is not a party to, and is not obligated by, any commitment, plan
or arrangement to issue or to sell any shares of capital stock or any equity
interest in Colonial Bank. None of the shares of common stock has been issued in
violation of the preemptive rights of any stockholder.
Acquisition of IBC Shares. The acquisition by VRB of
all outstanding IBC shares (and the conversion or cancellation
of all IBC Options) pursuant to the Stock Option Agreement and
the subsequent liquidation of IBC.
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6.8 Continuing Accuracy of Representations and Warranties. Except as
expressly contemplated hereby, the representations and warranties of Colonial
Bank being true in all material respects at and as of the Effective Date as
though such representations and warranties were made at and as of the Effective
Date, except as to representations and warranties that are made as of a
particular time.
6.9 Compliance with Covenants and Conditions. Compliance by Colonial
Bank in all material respects with all agreements, covenants and conditions on
its part required by this Plan to be performed or complied with prior to or at
the Effective Date.
6.10 No Adverse Changes. Between June 30, 1997 and the Effective Date,
the absence of any material adverse change in the business, assets, liabilities,
income, or conditions, financial or otherwise, of Colonial Bank, except changes
contemplated by this Plan and such changes as may have been previously approved
in writing by VRB.
6.11 Reserve for Loan Losses. Prior to the Effective Date, and if
requested as of December 31, 1997 if all regulatory approvals have been received
and closing is anticipated early January 1998, Colonial Bank shall make a
provision sufficient to increase its loan loss reserves to 1.75% of its
outstanding loans. Any such provision shall not, however, be deemed a material
adverse change to Colonial Bank's income or financial condition for purposes of
Section 6.10, or otherwise form a basis for any breach or failure of condition
and shall not serve as a basis for any assertion that the current reserve is
inadequate.
6.12 Certificate. Receipt by VRB of a Certificate of the President and
the Chief Financial Officer of Colonial Bank, dated as of the Effective Date,
certifying to the best of their knowledge the fulfillment of the conditions
specified in Sections 6.1, 6.2, 6.4, 6.5, 6.8. 6.9, 6.10 and 6.11 hereof, and
such other matters with respect to the fulfillment by Colonial Bank of any of
the conditions of this Plan as VRB may reasonably request.
6.13 Minimum Net Worth. The total adjusted stockholders equity of
Colonial Bank as of the Effective Date will not be less than $7,497,700. The
adjusted stockholders equity of Colonial Bank for purposes of this condition
will be the book value of Colonial Bank (consisting of preferred stock, common
stock, surplus, and accumulated undivided profits including any current period
profit loss) as shown on its accounting records at the Effective Date after
adjustments necessary to reflect the application of generally accepted
accounting principles applied on a basis consistent with their application in
prior periods, but not reflecting (i) any loan loss provision that may be
requested by VRB under Section 6.11 to increase Colonial Bank's loan loss
reserve from the level required by Section 2.25, (ii) the amount and effect of
any cash payments to cancel outstanding stock options pursuant to Section 4.11,
or (iv) other payments or accruals contemplated by or in connection with this
Plan of Merger.
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6.14 Severance Agreements. The Severance Agreements between VRB and
each of Xxxxxx Xxxxxx and Xxxx Xxxxxx shall be executed and delivered with no
material default existing thereunder.
. CONDITIONS TO OBLIGATIONS OF COLONIAL BANK
The obligations of Colonial Bank under this Plan of Merger to
consummate the merger, shall be subject to the satisfaction, on or before the
Effective Date, of the following conditions (unless waived by Colonial Bank in
writing and not required by law):
Shareholder Approval. Approval of this Plan of Merger
by the stockholders of Colonial Bank.
No Litigation. Absence of any suit, action, or
proceeding (made or threatened) against Colonial Bank or its
directors or officers, seeking to challenge, restrain, enjoin,
or otherwise affect this Plan of Merger or the transactions
contemplated thereby; or seeking to subject any of them or
their officers or directors to any liability, fine, forfeiture
or penalty on the grounds that such parties have violated or
will violate their fiduciary duties to their shareholders or
will violate any applicable law or regulation in connection
with the transactions contemplated by this Plan of Merger.
No Banking Moratorium. Absence of a banking
moratorium or other suspension of payment by banks in the
United States or any new limitation on extension of credit by
commercial banks in the United States.
Regulatory Approvals. Procurement of all consents,
orders and approvals required by law, and the satisfaction of
all other necessary or appropriate legal requirements,
including but not limited to approvals by the FDIC and the
Oregon Director of the transaction contemplated by this Plan
of Merger and the expiration of all regulatory waiting
periods.
Other Consents. Receipt of all other consents and
approvals necessary for consummation of the transactions
contemplated by this Plan of Merger.
Opinions of Counsel. Receipt by Colonial Bank of a
favorable opinion of Xxxxxx Pepper & Shefelman PLLC, counsel
to VRB, dated as of the Effective Date, in form and substance
satisfactory to Colonial Bank and its counsel to the effect
that:
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(a) VRB is a state chartered bank, duly organized and validly
existing under the laws of the state of Oregon, and has all requisite corporate
power and authority to own, lease, and operate its properties and assets and
carry on its business in the manner being conducted on the Effective Date;
(b) VRB has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Plan of Merger; the
execution, delivery and performance of the Plan of Merger and the consummation
of the transactions contemplated thereby, has been duly authorized by all
requisite corporate action; and the Plan of Merger has been duly executed and
delivered by VRB and constitute the legal, valid and binding obligation,
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or by
equitable principles; and
(c) All required notifications and filings with and consents
and approvals of governmental authorities have been given or obtained and all
required waiting periods have expired.
Corporate Documents. Receipt by Colonial Bank of:
(a) Copy certified by the appropriate governmental officer of
the Articles of Incorporation of VRB;
(b) A current good standing certificate for VRB issued by the
appropriate governmental officer as of a date immediately prior to the Effective
Date; and
(c) Copy certified by the Secretary of the Bylaws of VRB as
amended to date and of the resolutions adopted by the Board of Directors
approving this Plan of Merger.
Continuing Accuracy with Representations and
Warranties. Except as contemplated hereby, the representations
and warranties of VRB being true at and as of the Effective
Date as though such representations and warranties were made
at and as of the Effective Date.
Compliance with Covenants and Conditions. VRB having
complied with all agreements, covenants and conditions on its
part required by this Plan to be performed or complied with
prior to or at the Effective Date.
Certificates. Receipt by Colonial Bank of a
Certificate of the President and Chief Financial Officer of
VRB dated as of the Effective Date, certifying to the best of
their knowledge the fulfillment of the conditions specified in
Sections 7.4,
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7.5, 7.8 and 7.9 hereof and such other matters with respect to
the fulfillment by VRB of any of the conditions of this Plan
as Colonial Bank may reasonably request.
7.11 Deposit of Funds. Cash in the amount necessary to fund the
payments to be made to Colonial Bank shareholders shall have been placed in a
designated deposit account within VRB for the benefit of the shareholders of
Colonial Bank.
.CLOSING
The transactions contemplated by this Plan of Merger will close in the
office of Xxxxxx Pepper & Shefelman PLLC at such time and on such date (but not
prior to January 1, 1998) within seven (7) days following the satisfaction of
all conditions prior to closing set forth in Sections 6 and 7 (not waived or to
be satisfied by delivery of documents or opinions or a state of facts to exist
at closing), as set by notice from VRB to Colonial Bank or such other time and
place as the parties may agree.
.TERMINATION
Procedure for Termination. This Plan may be
terminated before the Effective Date:
(a) By the mutual consent of the Boards of Directors of VRB
and Colonial Bank acknowledged in writing;
(b) By VRB or Colonial Bank acting through their Boards of
Directors upon written notice to the other parties, if (i) at the time of such
notice the party giving the notice is not in default under this Plan and the
Merger shall not have become effective by March 31, 1998 (or such later date as
shall have been agreed to in writing by VRB and Colonial Bank acting through
their respective Boards of Directors) or (ii) shareholders of Colonial Bank
holding at least two-thirds of the Colonial Bank Shares shall have failed to
approve this Plan of Merger at a meeting held for such purpose; or
(c) By VRB, acting through its Board of Directors upon written
notice to Colonial Bank, if there has been a material misrepresentation or
material breach on the part of Colonial Bank in its representations and
warranties set forth herein or if there has been any material failure on the
part of Colonial Bank to comply with its obligations and covenants hereunder
which misrepresentation, breach or failure is not cured within thirty (30) days
after notice to Colonial Bank of such misrepresentation, breach or failure; or
by Colonial Bank, acting through its Board of Directors upon written notice to
VRB, if there has been a material misrepresentation or material breach by VRB in
its representations and warranties set forth herein
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or if there has been a material failure on the part of VRB to comply with its
obligations and covenants hereunder which misrepresentation, breach or failure
is not cured within thirty (30) days after notice to VRB of such
misrepresentation, breach or failure.
Effect of Termination. In the event this Plan is
terminated pursuant to Section 9.1(a) or 9.1(b), it shall
become wholly void and of no further force and effect and
there shall be no liability on the part of any party as a
result of such termination or abandonment, except in the event
prior notice of misrepresentation, breach, or failure has been
given under Section 9.1(c).
If the Plan is terminated by Colonial Bank pursuant to Section 9.1(c),
VRB shall pay to Colonial Bank its reasonable out-of-pocket costs plus the sum
of $250,000 to compensate it for the expenses and effort taken to enter into and
attempt to consummate the transactions.
If the Plan is terminated by VRB pursuant to Section 9.1(c), Colonial
Bank agrees to pay to VRB its reasonable out-of-pocket costs plus the sum of
$250,000 to compensate it for the expenses and effort taken to enter into and
attempt to consummate the transactions.
Documents from Colonial Bank. In the event of
termination of this Plan, VRB will promptly deliver to
Colonial Bank all originals and copies of documents and work
papers obtained by VRB from Colonial Bank, whether so obtained
before or after the execution hereof, and will not use any
information so obtained, and will not disclose or divulge such
information so obtained; provided, however, that any
disclosure of such information may be made to the extent
required by applicable law or regulation or judicial or
regulatory process; and provided further that VRB shall not be
obligated to treat as confidential any such information which
is publicly available or readily ascertainable from public
sources, or which was known to VRB at the time that such
information was disclosed to it by Colonial Bank or which is
rightfully received by VRB from a third party. The obligations
arising under this Section 9.3 shall survive any termination
or abandonment of this Plan.
Documents from VRB. In the event of termination of
this Plan, Colonial Bank will promptly deliver to VRB all
originals and copies of documents and work papers obtained by
Colonial Bank from VRB, whether so obtained before or after
the execution hereof, and will not use, disclose or divulge
any information so obtained; provided, however, that any
disclosure of such information may be made to the extent
required by applicable law, regulation or judicial or
regulatory process; and provided further, Colonial Bank shall
not be obligated to treat as confidential any information
which is publicly available or readily ascertainable from
public sources, or which was known to Colonial Bank at the
time that such information was disclosed to it by VRB or which
is rightfully received by Colonial
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Bank from a third party. The obligations arising under this
Section 9.4 shall survive any termination or abandonment of
this Plan.
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.MISCELLANEOUS
PROVISIONS
Amendment or Modification. Prior to the Effective
Date, this Plan of Merger may be amended or modified, either
before or after approval by the shareholders of Colonial Bank,
only by an agreement in writing executed by the parties hereto
upon approval of their respective boards of directors;
provided, however, that no such amendment or modification
shall decrease the amount or modify the form of consideration
to be received by the Colonial Bank shareholders pursuant to
this Plan of Merger without the approval of the Colonial Bank
shareholders.
Public Statements. No party to this Plan shall issue
any press release or other public statement concerning the
transactions contemplated by this Plan without first providing
the other party hereto with a written copy of the text of such
release or statement and obtaining the consent of the other
parties to such release or statement, which consent will not
be unreasonably withheld. The consent provided for in this
Section shall not be required if the delay would preclude the
timely issuance of a press release or public statement
required by law or any applicable regulations. The provisions
of this section shall not be construed as limiting the parties
from communications consistent with the purposes of this Plan,
including but not limited to seeking regulatory and
shareholder approvals necessary to complete the transactions
contemplated by this Plan of Merger.
Confidentiality. Each party shall use the non-public
information that it obtains from the other parties to this
Plan solely for the effectuation of the transactions
contemplated by this Plan of Merger or for other purposes
consistent with the intent of the Plan of Merger and shall not
use any such information for other purposes, including but not
limited to the competitive detriment of the other parties.
Each party shall maintain strictly confidential all non-public
information it receives from the other party and shall, upon
termination of this Plan prior to the Effective Date, return
such information in accordance with Sections 9.3 and 9.4
hereof. The provisions of this section shall not prohibit the
use of information consistent with the provisions of those
sections or to prohibit disclosure of information to the
party's respective counsel, accountants, tax advisors, and
consultants, provided that those parties also agree to
maintain such information confidential in accordance with this
section and Sections 9.3 and 9.4 hereof, or to banking
regulators from whom consent is required.
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Waivers and Extensions. Each of the parties hereto
may, by an instrument in writing, extend the time for or waive
the performance of any of the obligations of the other parties
hereto or waive compliance by the other parties hereto of any
of the covenants or conditions contained herein other than
those required by law. No such waiver or extension of time
shall constitute a waiver of any subsequent or other
performance or compliance. No such waiver shall require the
approval of the shareholders of any party.
Expenses. Each of the parties hereto shall pay their
respective expenses in connection with this Plan of Merger and
the transactions contemplated thereby, except as otherwise may
be specifically provided.
Binding Effect, No Assignment. This Plan and all the
provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors
and permitted assigns, but neither this Plan nor any of the
rights, interests or obligations hereunder, shall be assigned
by any of the parties hereto without the prior written consent
of the other parties.
Representations and Warranties. The respective
representations and warranties of each party hereto contained
herein shall not be deemed to be waived or otherwise affected
by any investigation made by the other parties, and except for
claims based upon fraud of the parties or their
representatives, shall not survive the closing hereof.
Remedies. Except for claims based upon fraud of the
parties or their representatives, or as provided in Section
9.2, the only remedy available to any party hereunder is for
specific performance.
No Benefit to Third Parties. Nothing herein expressed
or implied is intended or shall be construed to confer upon or
give any person or entity, other than the parties hereto, any
right or remedy under or by reason hereof, except the
provisions of Article I for the benefit of the shareholders of
Colonial Bank and the provisions of Sections 5.5 and 5.6..
Notices. Any notice, demand or other communication
permitted or desired to be given hereunder shall be in writing
and shall be deemed to have been sufficiently given or served
for all purposes if personally delivered or mailed by
registered or certified mail, return receipt requested, or
sent via confirmed
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facsimile to the respective parties at their addresses or
telephone numbers set forth below:
If to VRB:
Valley of the Rogue Bank
X.X. Xxx 0000
Xxxxx Xxxxx, Xxxxxx 00000
Attn: Xxx Xxxxxxxx, Executive Vice President
Fax: 000-000-0000
Copies of Notices to VRB to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx Pepper & Shefelman PLLC
Xxx Xxxx Xxxxx, 00xx Xxxxx
000 X.X. Xxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Fax: 0-000-000-0000
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If to Colonial Bank:
Colonial Bank
117 N.E. "F" Street
X.X. Xxx 000
Xxxxxx Xxxx, Xxxxxx 00000
Attn: Xxxxxx Xxxxxx, President/CEO
Fax: 000-000-0000
Copies of Notices to Colonial Bank to:
Miller, Nash, Wiener, Hager & Xxxxxxx LLP
3500 U.S. Bancorp Tower
000 X.X. Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000-0000
Attn: Xxxx X. XxXxxx
Fax: (000) 000-0000
Any party from time to time may change such address or facsimile
telephone number by so notifying the other parties hereto of such change, which
address or number shall thereupon become effective for purposes of this section.
Governing Law. This Plan shall be governed by and
construed in accordance with the laws of the State of Oregon.
Entire Agreement. This Plan, including all of the
schedules and other documents or agreements referred to
herein, constitutes the entire agreement between the parties
with respect to the merger and other transactions contemplated
hereby and supersedes all prior agreements and understandings
between the parties with respect to such matters.
Headings. The article and section headings in this
Plan are for the convenience of the parties and shall not
affect the interpretation of this Plan.
Counterparts. At the convenience of the parties, this
Plan may be executed in counterparts, and each such executed
counterpart shall be deemed to be an original instrument, but
all such executed counterparts together shall constitute but
one Plan of Merger.
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Non-Competition Agreement. Each member of the Board
of Directors of Colonial Bank signing at the end of this Plan
(except Messrs. Xxxxxx and Xxxxxx who have separate Severance
Agreements) severally agrees that such member will not, for a
period of one year following the Effective Date, engage in the
business of banking in Xxxxxxx or Xxxxxxxxx County, Oregon, in
any manner associated with any financial institution other
than the Resultant Bank with offices or branches in Xxxxxxx or
Xxxxxxxxx Counties, Oregon, whether directly or indirectly,
alone or as a member of a partnership, or as an officer,
director, stockholder or employee. Ownership of less than
three percent of the stock of a publicly traded corporation
shall not be deemed to be prohibited by this provision.
10.16 Arbitration. Any claim or controversy arising out of this Plan or
the breach thereof shall be settled by arbitration pursuant to the commercial
arbitration rules of the American Arbitration Association. The Arbitration shall
be held in Multnomah County, Oregon. The arbitration award may be entered as a
judgment in any court or courts with proper jurisdiction. The prevailing party
in such arbitration proceedings shall be entitled to attorney's fees, or as
determined by the arbitrator.
IN WITNESS WHEREOF, the parties hereto, pursuant to the approval and
authority duly given by resolutions adopted by a majority of their respective
Boards of Directors, have each caused this Plan of Merger to be executed by its
duly authorized officers.
VALLEY OF THE ROGUE BANK COLONIAL BANKING COMPANY
By: By:
Xxxxxxx Xxxxx, President Xxxxxx Xxxxxx, President
By: By:
Xxx Xxxxxxxx, Exec. Vice President Xxxx Xxxxxx, Exec. Vice President
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The undersigned, Members of the Board of Directors and Shareholders of Colonial
Bank Company execute this Plan of Merger for the limited purpose of Sections
2.32, 4.10, and 10.15 hereof.
Xxxxx Xxxxxxx Xxxxxxxxx Xxxxx
Xxxxxx Xxxxxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
Xxx Xxxxx Xxxxxx Xxxxxx
INVESTORS BANKING CORPORATION
By:
Xxxxx Xxxxxxx, President
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EXHIBIT A
DISSENTERS RIGHTS
ORS 711.045
(1) Any stockholder of an Oregon stock bank who dissented to a
transaction listed under section 280(1) of this 1997 Act and who desires to
receive the value in cash of those shares, shall make written demand upon the
Oregon stock bank or its successor and accompany the demand with the surrender
of the share certificates, properly indorsed within 30 days after the
stockholders' meeting at which a vote to approve such transaction involving an
Oregon stock bank was taken. Any stockholder failing to make written demand
within the 30-day period shall be bound by the terms of the proposed plan of
merger, plan of share exchange or acquisition transaction agreement.
(2) Within 30 days after a transaction listed under section 280(1) of
this 1997 Act is effected, the Oregon stock bank or its successor shall give
written notice thereof to each dissenting stockholder who has made demand under
this section at the address of the stockholder on the stock record books of the
Oregon stock bank, and shall make a written offer to each such stockholder to
pay for the shares at a specified price in cash determined by the Oregon stock
bank or its successor to be the fair value of the shares as of the effective
date of the transaction. The notice and offer shall be accompanied by a
statement of condition of the Oregon stock bank, the shares of which the
dissenting stockholder held, as of the latest available date and not more than
four months prior to the consummation of the transaction, and a statement of
income of the Oregon stock bank for the period ending on the date of the
statement of condition.
(3) Any stockholder who accepts the offer of the Oregon stock bank or
its successor within 30 days following the date on which notice of the offer was
mailed or delivered to dissenting stockholders shall be paid the price per share
offered, in cash, within 30 days following the date on which the stockholder
communicates acceptance in writing to the Oregon stock bank or its successor.
Upon payment, the dissenting stockholder shall cease to have any interest in the
shares previously held by the stockholder.
(4) If, within 30 days after notice of the offer, one or more
dissenting stockholders do not accept the offer of the Oregon stock bank or its
successor or if no offer is made, then the value of the shares of the dissenting
stockholders who have not accepted the offer shall be ascertained, as of the
effective date of the transaction, by an independent, qualified appraiser chosen
by the Director of the Department of Consumer and Business Services. The
valuation determined by the appraiser shall govern and the appraiser's valuation
of such shares shall not be appealable except for one or more of the reasons set
forth in ORS 36.355(1). Any such appeal must be made within 30 days after the
date of the appraiser's valuation and is subject to ORS 183.415 to 183.500. The
Oregon stock bank or its successor shall pay the dissenting shareholders the
appraised value of the shares within 30 days after the date the appraiser sends
the Oregon stock bank or its successor written notice of the appraiser's
valuation.
(5) The director shall assess the reasonable costs and expenses of the
appraisal proceeding equally to the Oregon stock bank or its successor and to
the dissenting shareholders, as a group, if the amount offered by the Oregon
stock bank or its successor is between 85 percent and 115 percent of the
appraised value of the shares. The director shall assess the reasonable costs
and expenses of the appraisal proceeding and the reasonable costs and expenses,
including attorney fees and costs, of the Oregon stock bank or its successor to
the dissenting stockholders, as a group, if the amount offered by the Oregon
stock bank or its successor is 115 percent or more of the appraised value of the
shares. The director shall assess the reasonable costs and expenses of the
appraisal proceeding and the reasonable costs and expenses, including
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attorney fees and costs, of the dissenting shareholders, as a group, to the
Oregon stock bank or its successor if the amount offered by the Oregon stock
bank or its successor is 85 percent or less of the appraised value of the
shares. The director's decision regarding assessment of fees and costs may be
appealed as provided in ORS 183.415 to 183.500.
(6) Amounts required to be paid by the Oregon stock bank or its
successors, or the dissenting shareholders under this section shall be paid
within 30 days after the director's assessment of any fees or costs becomes
final or, if the director's decision is appealed, within 30 days after a final
determination of such fees and costs is made.
(7) The director may require, as a condition of approving a transaction
listed in section 280(1) of this 1997 Act, the replacement of all or a portion
of the stockholders' equity of an Oregon stock bank expended in payment to
dissenting stockholders under this section.
(8) A stockholder may not receive the fair value of the stockholder's
shares under this section:
(a) If the plan of merger provides that all stockholders of
the resulting insured stock institution receive common stock of a holding
company pursuant to a merger with an interim Oregon stock bank chartered under
ORS 707.025, and the stockholder's Oregon stock bank and the interim Oregon
stock bank are the only parties to the merger; or
(b) If the shares held by the dissenting stockholder
immediately before the effective date of a transaction listed in section 280(1)
of this 1997 Act are listed on any national securities exchange or are included
on the list of over-the-counter margin stocks issued by the Board of Governors
of the Federal Reserve System.
1997 Or. Laws Ch. ; Sections 280 - 282.
Section 280
(1) A stockholder of an Oregon stock bank may dissent from the
following:
(a) A plan of merger pursuant to which the Oregon stock bank
is not the resulting insured institution;
(b) A plan of merger pursuant to which the Oregon stock bank
is the resulting insured stock institution and the number of its voting shares
outstanding immediately after the merger, plus the number of shares issuable as
a result of the merger, either by the conversion of securities issued pursuant
to the merger or the exercise of rights and warrants issued pursuant to the
merger, will exceed by more than 20 percent the total number of voting shares of
the resulting insured stock institution outstanding immediately before the
merger;
(c) A plan of share exchange pursuant to which the Oregon
stock bank in which the stockholder owns shares is acquired; and
(d) An acquisition transaction requiring such stockholder's
approval pursuant to section 297(5) of this 1997 Act.
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(2) To perfect a stockholder's right to dissent to a transaction
described in subsection (1) of this section, the stockholder must send or
deliver a notice of dissent to the Oregon stock bank prior to or at the meeting
of the stockholders at which the transaction is submitted to a vote, or the
stockholder must vote against such transaction.
(3) A stockholder shall not dissent as to less than all the shares
registered in the name of the stockholder, except a stockholder holding, as a
fiduciary or nominee, shares registered in the stockholder's name for the
benefit of more than one beneficiary, may dissent as to less than all of the
shares registered in the fiduciary or nominee's name if any dissent as to the
shares held for a beneficiary is made as to all the shares held by the fiduciary
for that beneficiary or nominee. The fiduciary's rights shall be determined as
if the shares to which the fiduciary has dissented and the other shares are
registered in the names of different stockholders.
Section 281.
(1) A dissenting stockholder making a demand under ORS 711.045 may
withdraw the demand if:
(a) The Oregon stock bank or its successor consents to the
withdrawal; or
(b) The dissenting stockholder pays such stockholder's pro
rata share of the appraisal costs and the Oregon stock bank's reasonable costs
and expenses, including attorney fees and costs.
(2) When a dissenting stockholder withdraws the demand under subsection
(1) of this section, the stockholder's status as a stockholder shall be
restored, without prejudice to any corporate proceedings taking place in the
interim.
Section 282.
If a merger, conversion or acquisition of an Oregon bank involves a
trust company, the Director of the Department of Consumer and Business Services
shall not approve the merger, conversion, or acquisition until satisfied that
adequate provision has been made for successor fiduciaries.
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