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AGREEMENT AND PLAN OF CONSOLIDATION
BY AND AMONG
BAY BANCSHARES, INC.,
BAYSHORE NATIONAL BANK,
AND
TEXAS NATIONAL BANK OF BAYTOWN
DATED AS OF AUGUST 7, 1997
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TABLE OF CONTENTS
INTRODUCTION................................................................ 1
I. THE CONSOLIDATIONS...................................................... 2
Section 1.1. Initial Consolidation................................ 2
Section 1.2. Articles of Association, Bylaws and Facilities of
First Surviving Bank................................. 2
Section 1.3. Effect of Initial Consolidation...................... 2
Section 1.4. Liabilities of the First Surviving Bank.............. 3
Section 1.5. Final Consolidation.................................. 3
Section 1.6. Articles of Association, Bylaws and Facilities of
Continuing Bank...................................... 3
Section 1.7. Effect of Final Consolidation........................ 3
Section 1.8. Liabilities of Continuing Bank....................... 4
Section 1.9. Consolidation Consideration.......................... 4
Section 1.10. Dissenting Shares.................................... 5
Section 1.11. Ratification by Shareholders......................... 5
Section 1.12. Xxxxxxx Money Deposit................................ 5
II. REPRESENTATIONS AND WARRANTIES OF TEXAS NATIONAL....................... 6
Section 2.1. Organization......................................... 6
Section 2.2. Capitalization....................................... 7
Section 2.3. Approvals; Authority................................. 7
Section 2.4. Financial Statements................................. 8
Section 2.5. Title................................................ 8
Section 2.6. Environmental Laws................................... 8
Section 2.7. Litigation and Other Proceedings..................... 9
Section 2.8. Taxes................................................ 9
Section 2.9. Contracts............................................ 10
Section 2.10. Insurance............................................ 11
Section 2.11. No Conflict With Other Instruments................... 11
Section 2.12. Laws................................................. 11
Section 2.13. Conduct.............................................. 11
Section 2.14. Allowance for Possible Loan Losses................... 12
Section 2.15. Employment Relations................................. 12
Section 2.16. ERISA................................................ 12
Section 2.17. Loans and Investments................................ 12
Section 2.18. Accurate and Complete Records........................ 13
Section 2.19. Performance of Obligations........................... 13
Section 2.20. No Misleading Statements............................. 13
Section 2.21. Absence of Changes................................... 13
Section 2.22. Brokers and Finders.................................. 13
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Section 2.23. Regulatory Approvals................................. 14
III. REPRESENTATIONS AND WARRANTIES OF
BANCSHARES AND BAYSHORE............................................... 14
Section 3.1. Organization......................................... 14
Section 3.2. Approvals; Authority................................. 14
Section 3.3. No Conflict With Other Instruments................... 14
Section 3.4. Regulatory Approvals................................. 15
Section 3.5. Litigation........................................... 15
Section 3.6. Due Diligence........................................ 00
XX. XXXXXXXXX XX XXXXX NATIONAL............................................ 15
Section 4.1. Shareholder Approval and Best Efforts................ 15
Section 4.2. Invitation to Meetings............................... 15
Section 4.3. Conduct of Business Prior to Closing................. 16
Section 4.4. Litigation and Claims................................ 18
Section 4.5. Confidentiality...................................... 18
Section 4.6. Standstill Provision................................. 18
Section 4.7. Access to Properties and Records..................... 18
Section 4.8. Information for Applications......................... 19
Section 4.9. Additional Disclosures and Information............... 19
Section 4.10. Proxies.............................................. 19
Section 4.11. Releases............................................. 20
V. COVENANTS OF BANCSHARES AND BAYSHORE.................................... 20
Section 5.1. Best Efforts......................................... 20
Section 5.2. Information for Applications and Proxy Solicitation.. 20
Section 5.3. Confidentiality...................................... 21
Section 5.4. Notices.............................................. 21
Section 5.5. Releases............................................. 21
VI. CLOSING................................................................ 21
Section 6.1. Closing.............................................. 21
Section 6.2. Initial Consolidation Effective Time................. 22
Section 6.3. Effective Date....................................... 22
VII. TERMINATION........................................................... 23
Section 7.1. Termination.......................................... 23
Section 7.2. Right to Cure........................................ 24
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VIII. CONDITIONS TO OBLIGATIONS OF BANCSHARES AND BAYSHORE................. 24
Section 8.1. Compliance with Representations and Covenants........ 24
Section 8.2. Material Adverse Change.............................. 24
Section 8.3. Legal Opinion........................................ 25
Section 8.4. Registration of Bancshares Common Stock.............. 25
Section 8.5. Successful Initial Public Offering................... 25
Section 8.6. Releases............................................. 25
Section 8.7. Proceedings and Documents............................ 25
Section 8.8. Litigation........................................... 25
Section 8.9. Resignation.......................................... 26
Section 8.10. No Pending Actions................................... 26
Section 8.11. No Default........................................... 26
Section 8.12. OCC Letter........................................... 26
Section 8.13. Cancellation of Data Processing Contracts............ 26
Section 8.14. Removal of Certain Credit............................ 26
Section 8.15. Covenant Not to Compete.............................. 26
IX. CONDITIONS TO OBLIGATIONS OF TEXAS NATIONAL............................ 26
Section 9.1. Compliance with Representations and Covenants........ 27
Section 9.2. Legal Opinion........................................ 27
Section 9.3. Releases............................................. 27
Section 9.4. Proceedings and Documents............................ 27
Section 9.5. Payment of Consideration............................. 27
X. CONDITIONS TO RESPECTIVE OBLIGATIONS OF BANCSHARES,
BAYSHORE AND TEXAS NATIONAL............................................. 27
Section 10.1. Government Approvals................................. 27
Section 10.2. Shareholder Approval................................. 28
XI. MISCELLANEOUS.......................................................... 28
Section 11.1. Notices.............................................. 28
Section 11.2. Effect of Termination................................ 28
Section 11.3. Entire Agreement Modification; Waiver................ 29
Section 11.4. Governing Law........................................ 29
Section 11.5. Legal Construction................................... 29
Section 11.6. Attorney's Fees...................................... 29
Section 11.7. Cooperation.......................................... 29
Section 11.8. Assignability........................................ 29
Section 11.9. Singular, Plural, Headings........................... 29
Section 11.10. Commissions.......................................... 30
Section 11.11. Effective Date....................................... 30
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Section 11.12. Expenses............................................. 30
Section 11.13. Binding Effect....................................... 30
Section 11.14. Representation by Counsel............................ 30
Section 11.15. Non-Survival of Representations...................... 30
Section 11.16. Facsimile Signatures................................. 30
Section 11.17. Modifications or Waiver.............................. 30
Section 11.18. Severability......................................... 31
Section 11.19. Counterparts......................................... 31
Section 11.20. Gender............................................... 31
Section 11.21. Publicity............................................ 31
Section 11.22. Disclosures.......................................... 31
Section 11.23. Agreement Regarding Certain Participations........... 31
Section 11.24. Indemnification...................................... 32
SCHEDULE 2.5 TO THE CONSOLIDATION AGREEMENT:
Title - Texas National............................................ 35
SCHEDULE 2.6 TO THE CONSOLIDATION AGREEMENT:
Environmental Laws - Texas National............................... 36
SCHEDULE 2.7 TO THE CONSOLIDATION AGREEMENT:
Litigation and Other Proceedings - Texas National................. 37
SCHEDULE 2.8 TO THE CONSOLIDATION AGREEMENT:
Taxes - Texas National............................................ 38
SCHEDULE 2.9 TO THE CONSOLIDATION AGREEMENT:
Contracts - Texas National........................................ 39
SCHEDULE 2.10 TO THE CONSOLIDATION AGREEMENT:
Insurance - Texas National........................................ 40
SCHEDULE 2.12 TO THE CONSOLIDATION AGREEMENT:
Laws - Texas National............................................. 41
SCHEDULE 2.13 TO THE CONSOLIDATION AGREEMENT:
Conduct - Texas National.......................................... 42
SCHEDULE 2.15 TO THE CONSOLIDATION AGREEMENT:
Employment Relations - Texas National............................. 43
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SCHEDULE 2.17 TO THE CONSOLIDATION AGREEMENT:
Loans and Investments - Texas National............................ 44
SCHEDULE 2.21 TO THE CONSOLIDATION AGREEMENT:
Absence of Changes - Texas National............................... 45
SCHEDULE 4.10 TO THE CONSOLIDATION AGREEMENT:
Proxies........................................................... 46
SCHEDULE 4.11 TO THE CONSOLIDATION AGREEMENT:
Releases.......................................................... 47
SCHEDULE 5.5 TO THE CONSOLIDATION AGREEMENT:
Releases.......................................................... 48
SCHEDULE 8.3 TO THE CONSOLIDATION AGREEMENT:
Legal Opinion to be Delivered by Texas National................... 49
SCHEDULE 8.14 TO THE CONSOLIDATION AGREEMENT:
Removal of Certain Credit......................................... 51
SCHEDULE 9.2 TO THE CONSOLIDATION AGREEMENT:
Legal Opinion to be Delivered by Bancshares....................... 52
EXHIBIT A
PLAN OF CONSOLIDATION BETWEEN BAYSHORE
INTERIM NATIONAL BANK AND TEXAS NATIONAL
BANK OF BAYTOWN..................................................... A-1
EXHIBIT B
PLAN OF CONSOLIDATION BETWEEN TEXAS NATIONAL
BANK OF BAYTOWN AND BAYSHORE NATIONAL BANK.......................... X-0
XXXXXXX X
XXXXXX XXXXXXXXX.................................................... X-0
XXXXXXX X
VOTING AGREEMENT AND IRREVOCABLE PROXY.............................. D-1
EXHIBIT E
RELEASE OF CLAIMS................................................... E-1
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EXHIBIT F
RELEASE OF CLAIMS................................................... F-1
EXHIBIT G
OUTLINE OF TERMS OF NON-COMPETITION AGREEMENT....................... X-0
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XXXXXXXXX AND PLAN OF CONSOLIDATION
This Agreement and Plan of Consolidation ("Agreement") dated as of August
7, 1997, is by and among Bay Bancshares, Inc., a Texas corporation
("Bancshares"), Bayshore National Bank, a national banking association
("Bayshore"), and Texas National Bank of Baytown, a national banking association
located in Baytown, Texas ("Texas National").
WHEREAS, Texas National desires to affiliate with Bancshares and Bayshore
and Bancshares and Bayshore desire to affiliate with Texas National in the
manner provided in this Agreement; and
WHEREAS, Bancshares, Bayshore, and Texas National believe that the
acquisition of Texas National by Bancshares in the manner provided by, and
subject to the terms and conditions set forth in, this Agreement and all
exhibits, schedules and supplements hereto is desirable and in the best
interests of their respective shareholders;
NOW, THEREFORE, in consideration of such premises and the mutual
representations, warranties, covenants and agreements contained herein, the
parties agree as set forth below.
INTRODUCTION
Following the execution of this Agreement by Bancshares, Bayshore, and
Texas National, Bancshares will charter and organize as a wholly-owned
subsidiary an interim national banking association ("New Bank") solely for the
purpose of consummating the consolidation transaction described herein. This
Agreement provides for (i) the consolidation of New Bank with and into Texas
National with Texas National as the survivor (the "Initial Consolidation"), all
pursuant to this Agreement and related Plan of Consolidation by and between New
Bank and Texas National, a form of which is attached hereto as Exhibit "A" and
all terms of which are incorporated herein by reference for all purposes and,
immediately thereafter, (ii) the consolidation of Texas National with and into
Bayshore, with Bayshore as the survivor (the "Final Consolidation"), all
pursuant to this Agreement and the Plan of Consolidation by and between Texas
National and Bayshore, a form of which is attached hereto as Exhibit "B" and all
of the terms of which are incorporated herein by reference for all purposes.
The Initial Consolidation and the Final Consolidation shall sometimes be
referred to collectively as the "Consolidations." In connection with the
Consolidations, Bancshares will acquire all issued and outstanding shares of
common stock, $10.00 par value, of Texas National ("Texas National Common
Stock") in exchange for the payment in cash to the shareholders of Texas
National a total consideration of $2,400,000, or approximately $61.59848 per
share based on 38,962 shares of Texas National Common Stock outstanding.
I. THE CONSOLIDATIONS
Section 1.1. INITIAL CONSOLIDATION. New Bank shall consolidate with and
into Texas National (the resulting bank being herein referred to as the "First
Surviving Bank") as of the Initial Consolidation Effective Time, as defined in
Section 6.2, under the charter and Articles of Association of Texas National, as
determined by the Office of the Comptroller of the Currency ("OCC"), and each of
the outstanding shares of common stock of New Bank shall and without any action
on the part of Bancshares be canceled and be converted into shares of common
stock of the First Surviving Bank. The shares of common stock of the First
Surviving Bank into which such New Bank common stock is converted shall
represent ownership of 100% of the issued and outstanding capital stock of the
First Surviving Bank, all of which shall be owned by Bancshares.
Section 1.2. ARTICLES OF ASSOCIATION, BYLAWS AND FACILITIES OF FIRST
SURVIVING BANK. At the Initial Consolidation Effective Time and until
thereafter amended in accordance with law, the Articles of Association of the
First Surviving Bank shall be the Articles of Association of Texas National as
in effect at the Initial Consolidation Effective Time. Until altered, amended
or repealed as provided therein and in the Articles of Association of the First
Surviving Bank, the Bylaws of the First Surviving Bank shall be the Bylaws of
Texas National as in effect at the Initial Consolidation Effective Time. The
main office of the First Surviving Bank shall be the main office of Texas
National as of the Initial Consolidation Effective Time, and all corporate acts,
plans, policies, contracts, approvals and authorizations of Texas National and
New Bank and their respective shareholders, boards of directors, committees
elected or appointed thereby, officers and agents, which were valid and
effective immediately prior to the Initial Consolidation Effective Time, shall
be taken for all purposes as the acts, plans, policies, contracts, approvals and
authorization of the First Surviving Bank and shall be as effective and binding
thereon as the same were with respect to Texas National and New Bank
respectively, as of the Initial Consolidation Effective Time.
Section 1.3. EFFECT OF INITIAL CONSOLIDATION. At the Initial
Consolidation Effective Time, the corporate existence of Texas National and New
Bank shall be merged into and continued in the First Surviving Bank, and the
First Surviving Bank shall be deemed to be a continuation in entity and identity
of Texas National and New Bank. All rights, franchises and interests of Texas
National and New Bank, respectively, in and to any type of property and chooses
in action shall be transferred to and vested in the First Surviving Bank by
virtue of the Initial Consolidation without any deed or other transfer. First
Surviving Bank, without any order or other action on the part of any court or
otherwise, shall hold and enjoy all rights of property, franchises and interest,
including appointments, designations and nominations, and all other rights and
interests as trustee, executor, administrator, transfer agent or registrar of
stocks and bonds, guardian of estates, assignee, receiver and committee of
estates and lunatics, 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 Texas National and New Bank, respectively, as of the Initial
Consolidation Effective Time.
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Section 1.4. LIABILITIES OF THE FIRST SURVIVING BANK. At the Initial
Consolidation Effective Time, the First Surviving Bank shall be liable for all
liabilities of Texas National and New Bank. All deposits, debts, liabilities
and obligations of Texas National and of New Bank, respectively, accrued,
absolute, contingent or otherwise, and whether or not reflected or reserved
against on balance sheets, books of account or records of Texas National or New
Bank, as the case may be, shall be those of the First Surviving Bank and shall
not be released or impaired by the Initial Consolidation. All rights of
creditors and other obligees and all liens on property of either Texas National
or New Bank shall be preserved unimpaired.
Section 1.5. FINAL CONSOLIDATION. Immediately after the Initial
Consolidation Effective Time, the First Surviving Bank shall be consolidated
with and into Bayshore (which, as the receiving association, is hereinafter
referred to as "Continuing Bank" whenever reference is made to it at or after
the Effective Date (as defined in Section 6.3 of this Agreement)) under the
charter and Articles of Association of Bayshore, pursuant to the provisions of,
and with the effect provided in the National Bank Act, as amended.
Section 1.6. ARTICLES OF ASSOCIATION, BYLAWS AND FACILITIES OF CONTINUING
BANK. On the Effective Date and until thereafter amended in accordance with
law, the Articles of Association of Continuing Bank shall be the Articles of
Association of Bayshore as in effect on the Effective Date. Until altered,
amended or repealed as therein provided and in the Articles of Association of
Continuing Bank, the Bylaws of Continuing Bank shall be the Bylaws of Bayshore
as in effect on the Effective Date. Unless and until changed by the Board of
Directors of Continuing Bank, the main office of Continuing Bank shall be the
main office of Bayshore as of the Effective Date. The established offices and
facilities of the First Surviving Bank immediately prior to the Final
Consolidation shall become established offices and facilities of the Continuing
Bank. Until thereafter changed in accordance with law or the Articles of
Association or Bylaws of Continuing Bank, all corporate acts, plans, policies,
contracts, approvals and authorizations of the First Surviving Bank and Bayshore
and their respective shareholders, boards of directors, committees elected or
appointed thereby, officers and agents, 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 Continuing
Bank and shall be as effective and binding thereon as the same were with respect
to the First Surviving Bank and Bayshore, respectively, as of the Effective
Date.
Section 1.7. EFFECT OF FINAL CONSOLIDATION. On the Effective Date, the
corporate existence of the First Surviving Bank and Bayshore shall, as provided
in the provisions of law heretofore mentioned, be consolidated with and
continued in Continuing Bank, and Continuing Bank shall be deemed to be a
continuation in entity and identity of the First Surviving Bank and Bayshore.
All rights, franchises and interests of the First Surviving Bank and Bayshore,
respectively, in and to any type of property and chooses in action shall be
transferred to and vested in Continuing Bank by virtue of such Final
Consolidation without any deed or other transfer. Continuing Bank, without any
order or other action on the part of any court or otherwise, shall hold and
enjoy all rights of property,
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franchises and interest, including appointments, designations and
nominations, and all other rights and interests as trustee, executor,
administrator, transfer agent or registrar of stocks and bonds, guardian of
estates, assignee, receiver and committee of estates and lunatics, 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 Texas National
and Bayshore, respectively, as of the Effective Date.
Section 1.8. LIABILITIES OF CONTINUING BANK. On the Effective Date of
the Final Consolidation, Continuing Bank shall be liable for all liabilities of
the First Surviving Bank and Bayshore. All deposits, debts, liabilities,
obligations and contracts of the First Surviving Bank and of Bayshore,
respectively, matured or unmatured, whether accrued, absolute, contingent or
otherwise, and whether or not reflected or reserved against on balance sheets,
books of account, or records of the First Surviving Bank or Bayshore shall be
those of Continuing Bank and shall not be released or impaired by the
Consolidations. All rights of creditors and other obligees and all liens on
property of either the First Surviving Bank or Bayshore shall be preserved
unimpaired subsequent to the Consolidations.
Section 1.9. CONSOLIDATION CONSIDERATION. The total consolidation
consideration payable for all of the capital stock of Texas National referenced
below shall be $2,400,000.00, or $61.59848 per share of Texas National Common
Stock (based on 38,962 shares issued and outstanding) to be payable in the
following manner:
At the Initial Consolidation Effective Time and upon and by reason of the
Initial Consolidation becoming effective, each of the 38,962 shares of Texas
National Common Stock issued and outstanding immediately prior to the Initial
Consolidation Effective Time, excluding any Dissenting Shares (as defined in
Section 1.10 of this Agreement), and any and all rights arising out of the
ownership of such shares shall, without any action on the part of the holder
thereof, be canceled and converted into the right to receive $61.59848 in cash
payable upon tender of the stock certificates evidencing such shares as set
forth in the following paragraph. The aggregate consideration to be paid for
all of the shares of Texas National Common Stock shall hereafter sometimes be
referred to as the "Consolidation Price."
On or immediately prior to the Initial Consolidation Effective Time,
Bancshares or Bayshore shall have available cash in sufficient amount to pay the
aggregate Consolidation Price. At least ten (10) days in advance of the Closing
Date (as defined in Section 6.1 of this Agreement), Bancshares will send to each
shareholder of Texas National a letter of transmittal for use in exchanging such
holder's certificates for his pro rata amount of the Consolidation Price.
Commencing immediately after the Effective Date (as defined in Section 6.3 of
this Agreement), each shareholder of Texas National shall be entitled to receive
payment for his shares upon surrender of the certificates representing his
shares of Texas National Common Stock or after providing an appropriate
Affidavit of Lost Certificate and Indemnity Agreement and/or a bond as may be
required in each case by Bancshares. Until so surrendered, each Texas National
Common Stock certificate will be deemed
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for all corporate purposes to represent and evidence solely the right to
receive the amount of the Consolidation Price to be paid therefor pursuant to
this Agreement without interest thereon.
Upon the consummation of the Consolidations, the par value and number of
issued and outstanding shares of capital stock of the Continuing Bank shall be
the same as the par value and number of issued and outstanding shares of capital
stock of Bayshore as of the Effective Date.
Section 1.10. DISSENTING SHARES. Each share of Texas National Common
Stock issued and outstanding immediately prior to the Effective Date, the holder
of which has not voted in favor of the Initial Consolidation and who has
properly perfected his dissenters' rights of appraisal by following the
procedures set forth in the National Bank Act, is referred to herein as a
"Dissenting Share." Dissenting Shares owned by each holder thereof who has not
exchanged his certificates representing shares of Texas National Common Stock
for the Consolidation Price and otherwise has not effectively withdrawn or lost
his dissenter's rights, shall not be converted into or represent the right to
receive the Consolidation Price pursuant to Section 1.9 hereof and shall be
entitled only to such rights as are available to such holder pursuant to the
applicable provisions of the National Bank Act. Each holder of Dissenting
Shares shall be entitled to receive the value of such Dissenting Shares held by
him in accordance with the applicable provisions of the National Bank Act,
provided such holder complies with the procedures contemplated by and set forth
in the applicable provisions of the National Bank Act. If any holder of
Dissenting Shares shall effectively withdraw or lose his dissenter's rights
under the applicable provisions of the National Bank Act, such Dissenting Shares
shall be converted into the right to receive the Consolidation Price in
accordance with the provisions of Section 1.9 hereof.
Section 1.11. RATIFICATION BY SHAREHOLDERS. This Agreement shall be
submitted to the shareholders of Texas National and, if required, to Bancshares
as the sole shareholder of New Bank and Bayshore in accordance with applicable
provisions of law and the respective Articles of Association and Bylaws of Texas
National, New Bank and Bayshore. Texas National and Bancshares and Bayshore
shall proceed expeditiously and cooperate fully in the procurement of any other
consents and approvals and the taking of any other actions in satisfaction of
all other requirements prescribed by law or otherwise necessary for consummation
of the Consolidations on the terms herein provided, including, without
limitation, the preparation and submission of all necessary filings, requests
for waivers and certificates with the Board of Governors of the Federal Reserve
System ("Federal Reserve Board"), the Federal Deposit Insurance Corporation
("FDIC"), the Texas Department of Banking ("Banking Department") and the OCC.
Section 1.12. XXXXXXX MONEY DEPOSIT.
(a) Upon the execution of this Agreement by Texas National,
Bancshares shall deliver Fifty Thousand Dollars ($50,000) to Texas National as
an xxxxxxx money deposit and expression of Bancshares' good faith interest in
Texas National and as compensation for the standstill
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set forth in Section 4.6 of this Agreement (the "Xxxxxxx Money"). Texas
National will deliver the Xxxxxxx Money to an independent escrow agent
("Escrow Agent") who will hold it pursuant to the terms of the Escrow
Agreement ("Escrow Agreement") set forth as Exhibit "C" to this Agreement.
As set forth in the Escrow Agreement, the Xxxxxxx Money will not become
subject to the disbursement provisions of the Escrow Agreement or this
Agreement until Texas National has delivered to the Escrow Agent and
Bancshares evidence satisfactory to the Escrow Agent and Bancshares that each
of the directors, officers and owners of five percent or more of the issued
and outstanding Texas National Common Stock have executed the Voting
Agreement and Irrevocable Proxy set forth as Exhibit "D" to this Agreement.
If the Consolidations are completed, the Xxxxxxx Money will be credited
against the Consolidation Price at the Closing.
(b) In the event that despite the fact that all of Bancshares'
conditions to Closing set forth in Articles VIII and X of this Agreement have
been satisfied and Bancshares has not elected to terminate this Agreement
pursuant to Article VII of this Agreement, the Closing does not occur by
November 30, 1997, or such other later date mutually agreed to in writing by the
parties hereto, Texas National shall be entitled to retain the Xxxxxxx Money.
(c) Bancshares shall be entitled to a return of the Xxxxxxx Money and
both Texas National and Bancshares shall be relieved of any further obligations
pursuant to this Agreement if the Consolidations do not close as a result of any
of Bancshares' conditions to Closing set forth in Articles VIII and X not being
satisfied or if the Agreement is terminated under the provisions of Sections
7.1(a), (c), (d) or (e). Any other failure to close the transactions
contemplated by this Agreement for any reason whatsoever will entitle Texas
National to retain the Xxxxxxx Money. It is specifically provided, however,
that Texas National shall not be entitled to retain the Xxxxxxx Money if Texas
National was the cause of or contributed to the failure of a condition precedent
or event of termination that serves as the basis for Bancshares' claim of the
Xxxxxxx Money.
II. REPRESENTATIONS AND WARRANTIES OF TEXAS NATIONAL
Texas National makes each of the following representations and warranties
to Bancshares and Bayshore. Texas National agrees that, at the Closing, it
shall provide Bancshares with supplemental Schedules reflecting any changes in
the information contained in the Schedules attached to this Agreement on the
date of its execution which have occurred in the period from the date of
execution of this Agreement to the date of Closing.
Section 2.1. ORGANIZATION. (a) Texas National is a national banking
association duly organized, validly existing and in good standing under the laws
of the United States of America. Texas National has full corporate power and
authority to own and lease its properties, to engage in the business and
activities now conducted by it and is duly licensed or qualified to do business
in each jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary.
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(b) True and complete copies of the Articles of Association and
Bylaws of Texas National, as amended to date, have been delivered or made
available to Bancshares.
(c) Texas National (i) does not have any subsidiaries or affiliates,
(ii) is not a general partner or material owner in any joint venture, general
partnership, limited partnership, trust or other non-corporate entity (other
than in the capacity as a participating lender in multi-bank loans in the
ordinary course of business) and (iii) does not know of any arrangement pursuant
to which the stock of any corporation is or has been held in trust (whether
express, constructive, resulting or otherwise) for the benefit of all
stockholders of Texas National.
(d) The deposit accounts of Texas National are insured by the FDIC
through the Bank Insurance Fund to the fullest extent permitted by law, and all
premiums and assessments required in connection therewith have been paid by
Texas National.
Section 2.2. CAPITALIZATION. The authorized capital stock of Texas
National consists of 38,962 shares of Texas National Common Stock, all of which
shares are issued and outstanding. As of the date of this Agreement, no shares
of other classes of stock or other securities of Texas National are authorized,
issued or outstanding. There are no shares of Texas National Common Stock or
other classes of stock or other securities of Texas National held in treasury.
All of the issued and outstanding shares of Texas National Common Stock are
validly issued, fully paid and non-assessable and, to the best knowledge of
Texas National, were not issued in violation of the securities laws of the
United States or any other applicable jurisdiction or in violation of the
preemptive rights of any person. There are no authorized or outstanding
subscriptions, options, warrants, calls, convertible securities or commitments
of any kind obligating Texas National to issue any shares of Texas National
Common Stock or other classes of stock or other securities of Texas National nor
does Texas National have any outstanding commitment or obligation to repurchase,
reacquire or redeem any shares of its outstanding capital stock. There are no
voting trusts, voting agreements, buy-sell agreements or other similar
arrangements affecting either the Texas National Common Stock or, to the best
knowledge of Texas National, any of the other shares of the common stock of
Texas National.
Section 2.3. APPROVALS; AUTHORITY. The Board of Directors has approved
this Agreement and the transactions contemplated herein subject to the approval
thereof by the shareholders of Texas National as required by law, and, other
than shareholder approval, no further corporate proceedings of Texas National
are needed to deliver this Agreement and consummate the Consolidations. Neither
the execution and delivery of this Agreement nor the consummation of the
Consolidations contemplated hereby nor compliance by Texas National with any of
the provisions hereof will conflict with or result in a breach of any provisions
of its Articles of Association or By-laws. This Agreement has been duly
executed and delivered by Texas National and, when all requisite regulatory and
shareholder approvals have been obtained, it will be a binding agreement of
Texas National enforceable against Texas National in accordance with its terms,
subject to the effect of
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bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally and general equitable principles.
Section 2.4. FINANCIAL STATEMENTS. Texas National has furnished or made
available to Bancshares true and complete copies of Texas National's (i)
unaudited balance sheet (the "Balance Sheet) as of June 30, 1997 (the "Balance
Sheet Date") and the related statements of income and changes in stockholders'
equity for the six months then ended, together with the notes thereto, (ii)
audited balance sheets as of December 31, 1996, December 31,1995 and December
31,1994 and the related statements of income and changes in stockholders' equity
for the years then ended, together with the notes thereto and (iii) Texas
National's Call Report as filed with the OCC as of and for the period ended June
30, 1997. The financial information referred to in this Section 2.4 is
collectively referred to herein as the "Financial Statements". The Financial
Statements fairly present the financial position and results of operations of
Texas National at the dates and for the periods indicated. Texas National had,
as of the dates of the Financial Statements, no liabilities, fixed or
contingent, which were material and were not fully disclosed or adequately
provided for in the Financial Statements. No event has occurred since the
Balance Sheet Date which would have a material adverse effect on Texas National.
Section 2.5. TITLE. True and complete copies of the deed and title
insurance policy for the real property owned by Texas National have been
provided to Bancshares and such real property is not subject to any mortgages,
deeds of trust and security agreements. Except as set forth on Schedule 2.5 of
this Agreement, Texas National has unencumbered, good, legal and indefeasible
title to all of its properties and assets, real and personal, including without
limitation all of the properties and assets reflected in the Financial
Statements, except (i) as noted in the Financial Statements or as set forth in
the documents delivered or made available to Bancshares referred to above, (ii)
statutory liens not yet delinquent, (iii) minor defects and irregularities in
title and encumbrances which do not materially impair the use thereof for the
purposes for which they are held, and (iv) those assets and properties disposed
of for fair value in the ordinary course of business since the dates of the
Financial Statements. Texas National owns no securities of or interest in any
commercial bank, financial institution or other entity except as set forth in
Schedule 2.5 of this Agreement.
Section 2.6. ENVIRONMENTAL LAWS. Texas National is in compliance with
all terms and conditions of all applicable federal, state and local
environmental statutes, regulations or ordinances required thereunder
("Environmental Laws"), except to the extent that failure to comply would not
have a material adverse effect on Texas National. There is no legal,
administrative or other proceeding, claim or legal action of any nature pending,
or to the best knowledge of Texas National, threatened which seeks to impose on
Texas National any liability arising from (i) any violation of any Environmental
Laws or (ii) the release of Hazardous Materials (as hereinafter defined) under
any Environmental Laws. To the best knowledge of Texas National, Texas National
is not subject to any claim or lien under any Environmental Laws. To the best
knowledge of Texas National, no real
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estate currently owned, operated or leased by Texas National, or owned,
operated or leased by Texas National within ten years preceding the date of
this Agreement, has been designated by any federal, state or local agency as
requiring any environmental remediation or other response action to comply
with Environmental Laws, or to the best knowledge of Texas National, has been
the site of the release or discharge of any Hazardous Materials except as set
forth in Schedule 2.6 hereto. For purposes of this Section 2.6, Texas
National shall not be considered "owning" or "operating" real estate if it
merely maintains a security interest in that real estate. As used in this
Agreement, the term "Hazardous Materials" means petroleum and all petroleum
products as well as any pollutant, contaminant or hazardous substance under
the Comprehensive Environmental Response, Compensation and Liability Act, or
any similar state law.
Section 2.7. LITIGATION AND OTHER PROCEEDINGS. Except as otherwise noted
in Schedule 2.7 hereto, there are no legal, quasi judicial or administrative
proceedings of any kind or nature now pending or, to the best knowledge of Texas
National, threatened before any court or administrative body in any manner
against Texas National, or any of its properties or capital stock, which could
reasonably be expected to have a material adverse effect on Texas National, its
financial condition, assets, operations or earnings or the transactions proposed
by this Agreement. Except as previously disclosed to Bancshares in writing,
Texas National has no knowledge of any basis on which any litigation or
proceeding could be brought which could have a material adverse effect on Texas
National or which could question the validity of any action taken or to be taken
in connection with this Agreement and the transactions contemplated hereby.
Except for any uncompleted requirements of the Cease and Desist Order of the OCC
dated September 28, 1994 (the "Cease and Desist Order"), Texas National is not
in default with respect to any judgment, order, writ, injunction, decree, award,
rule or regulation of any court, arbitrator or governmental agency or
instrumentality. There are no suits, actions, claims, proceedings or
investigations pending, or to the best knowledge of Texas National, threatened,
seeking to prevent or challenge the transactions contemplated by this Agreement.
Section 2.8. TAXES. Except as set forth on Schedule 2.8, Texas National
has filed with the appropriate federal, state and local governmental agencies
all tax returns and reports required to be filed, and has paid all taxes and
assessments shown or claimed therein to be due. Except as described in Schedule
2.8 hereto, Texas National has not executed or filed with the Internal Revenue
Service any agreement extending the period for assessment and collection of any
federal tax, nor is Texas National a party to any action or proceeding by any
governmental authority for assessment or collection of taxes, nor has any claim
for assessment or collection of taxes been asserted against Texas National.
Texas National has not waived any statute of limitations with respect to any tax
or other assessment or levy, and except as set forth on Schedule 2.8, all such
taxes and other assessments and levies which Texas National is required by law
to withhold or to collect have been duly withheld and collected and have been
paid over to the proper governmental agency, domestic and foreign, or segregated
and set aside for such payment and, if so segregated and set aside will be so
paid by Texas National, as required by law.
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True and complete copies of the federal income tax returns of Texas
National as filed with the Internal Revenue Service for the years ended
December 31, 1996 (when available), December 31, 1995, December 31, 1994 and
December 31, 1993 have been delivered or made available to Bancshares.
Section 2.9. CONTRACTS. Except as otherwise noted in Schedule 2.9
hereto, Texas National is not a party to or bound by any (i) employment contract
(including without limitation any collective bargaining contract or union
agreement), consulting or similar agreement which is not terminable by Texas
National on less than sixty (60) days notice without payment of any amount on
account of such termination; (ii) bonus, stock option, deferred compensation or
profit-sharing, pension or retirement plan or other employee benefit
arrangement; (iii) material lease or license with respect to any property, real
or personal, whether as landlord, tenant, licensor or licensee; (iv) contract or
commitment for capital expenditures in excess of $10,000 for any one project;
(v) contract or commitment for the purchase of materials or supplies or for the
performance of services over a period of more than sixty (60) days from the date
of this Agreement involving an annual expenditure in excess of $50,000; (vi)
contract or option to purchase or sell any real or personal property other than
in the ordinary course of business; (vii) contract, order, memorandum, agreement
or letter with respect to the management of Texas National imposed by any bank
regulatory authority having supervisory jurisdiction over Texas National, (viii)
agreement, contract or indenture related to the borrowing by Texas National of
money other than those entered into in the ordinary course of business; (ix)
guaranty of any obligation for the borrowing of money, excluding endorsements
made for collection, repurchase or resell agreements, letters of credit and
guaranties made in the ordinary course of business; (x) agreement with or
extension of credit to any executive officer or director of Texas National or
holder of more than ten percent (10%) of the Texas National Common Stock, or any
affiliate of such person, which is not on substantially the same terms
(including, without limitation, in the case of lending transactions, interest
rates and collateral) as, and following credit underwriting practices that are
not less stringent than, those prevailing at the time for comparable
transactions with unrelated parties or which involve more than the normal risk
of collectability or other unfavorable features; (xi) agreement between Texas
National and any present or former officer, director, employee or agent of Texas
National or any business in which any of such persons has an interest; or (xii)
material contracts, other than the foregoing, involving more than $25,000 not
made in the ordinary course of business and not otherwise disclosed in this
Agreement or in any schedule attached hereto. Complete and correct copies of
all contracts, commitments, leases, agreements and other documents described in
Schedule 2.9 have been delivered or made available to Bancshares. Texas
National has in all material respects performed all material obligations
required to be performed by it to date and is not in default under, and to the
best knowledge of Texas National, no event has occurred which, with the lapse of
time or action by a third party could result in default under, any indenture,
mortgage, contract, lease or other agreement to which Texas National is a party
or by which its properties or assets are bound or under any provision of its
Articles of Association or Bylaws.
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Section 2.10. INSURANCE. Schedule 2.10 hereto is a true and complete list
of all insurance policies owned or held by or on behalf of Texas National (other
than credit-life policies), including policy numbers, retention levels,
insurance carriers and effective and termination dates. Such policies are in
full force and effect and contain standard cancellation or termination clauses.
Texas National has received no notice of cancellation or termination of any such
policies. Complete and correct copies of such policies have been delivered or
made available to Bancshares.
Section 2.11. NO CONFLICT WITH OTHER INSTRUMENTS. Neither the execution
and delivery of this Agreement nor the consummation of the purchase contemplated
thereby will conflict with or result in a breach of any provision of Texas
National's Articles of Association, Bylaws, or other constituent documents, if
applicable. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, subject to obtaining all regulatory
approvals, will not violate any provision of, or constitute a default under, any
law, or any order, writ, injunction or decree of any court or other governmental
agency, or any contract, agreement or instrument to which Texas National is a
party or by which it is bound or constitute an event which, with the lapse of
time or action by a third party, could result in any default under any of the
foregoing or result in the creation of any lien, charge or encumbrance upon the
assets or properties of Texas National or upon the Texas National Common Stock.
Section 2.12. LAWS. Except as otherwise noted in Schedule 2.12 hereto,
Texas National is in compliance with all applicable federal, state and local
laws, rules, regulations and orders, except to the extent that failure to comply
would not have a material adverse effect on Texas National. Texas National has
filed all reports, registrations and statements, together with any amendments
required to be made thereto, that are required to be filed with the OCC, the
FDIC or any other regulatory authority having jurisdiction over Texas National,
and such reports, registrations and statements are, to the best knowledge of
Texas National, true and correct in all material respects.
Section 2.13. CONDUCT. Since the Balance Sheet Date and except as
otherwise disclosed on Schedule 2.13 hereto, Texas National has not (i) issued
or sold any of its capital stock or corporate debt obligations (excluding
insured deposits) or granted any options for the purchase of its capital stock;
(ii) declared or set aside or paid any dividend or made any other distribution
in respect of or, directly or indirectly, purchased, redeemed or otherwise
acquired any shares of its issued and outstanding capital stock; (iii) incurred
any obligations or liabilities (fixed or contingent), except obligations or
liabilities incurred in the ordinary course of business, or mortgaged, pledged
or subjected any of its assets to a lien or encumbrance (other than in the
ordinary course of business and other than statutory liens not yet delinquent);
(iv) discharged or satisfied any lien or encumbrance or paid any obligation or
liability (fixed or contingent), other than accruals, accounts and notes payable
included in the Balance Sheet, accruals, accounts and notes payable incurred
since the Balance Sheet Date in the ordinary course of business and accruals,
accounts and notes payable incurred in connection with the transactions
contemplated by this Agreement; (v) sold, exchanged or otherwise disposed of any
of its capital assets other than in the ordinary course of business; (vi)
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made any general or individual wage or salary increase (except in the
ordinary course of business and in accordance with prior practices of Texas
National), paid any bonus, entered into any employment contract or made any
accrual or arrangement for or payment of bonuses or special compensation of
any kind or any severance or termination pay to any present or former officer
or salaried employee or instituted or amended any employee welfare,
retirement or similar plan or arrangement; (vii) materially increased the
rate of compensation payable or to become payable by Texas National to any of
its directors, officers, employees or agents; (viii) made any significant
change in any method of management, operation or accounting of Texas
National; (ix) suffered any damage, destruction or casualty loss, whether or
not covered by insurance, which had or could have a material adverse effect
on Texas National; (x) except in the ordinary course of business, entered
into any agreement or arrangement granting any preferential rights to
purchase any of its assets, properties or rights or requiring the consent of
any party to the transfer and assignment of any such assets, properties or
rights; or (xi) agreed to do any of the foregoing.
Section 2.14. ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for
possible loan losses of Texas National has been calculated in accordance with
regulatory accounting principles as applied to banking institutions and in
accordance with all applicable rules and regulations. At the Closing Date, no
material facts relevant to the adequacy of the allowance for possible loan
losses as of that date will have been withheld from Bancshares.
Section 2.15. EMPLOYMENT RELATIONS. The relations of Texas National with
its employees are satisfactory, and Texas National has not received any notice
of any controversies with, or organizational efforts or other pending actions
by, representatives of its employees. Except as disclosed on Schedule 2.15,
Texas National has complied in all material respects with all laws relating to
employment or labor concerning its employees, including any provisions thereof
relating to wages, hours, collective bargaining and the payment of workers'
compensation insurance and social security and similar taxes, and no person has
asserted that Texas National is liable for any arrearage of wages, workers'
compensation insurance premiums or any taxes or penalties for failure to comply
with any of the foregoing.
Section 2.16. ERISA. Texas National has no employee pension benefits
plans and welfare benefit plans that are subject to the provisions of ERISA.
Section 2.17. LOANS AND INVESTMENTS. Texas National is not aware of any
defense to or excuse for Texas National's enforcement of the documents and
instruments which evidence loans and investments of Texas National in accordance
with their terms (subject to bankruptcy, insolvency, moratorium or other laws
affecting creditors generally or by the exercise of judicial discretion, and
authorized under applicable federal and state laws and regulations) and Texas
National has no notice whatsoever of any claim or objection to the enforcement
of such documents and instruments by the obligors thereunder. For the purposes
of this Section 2.17, Texas National makes no representation or warranty of any
kind or nature concerning whether any borrower or other obligor of Texas
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National has the financial ability to pay a loan or that the collateral is
sufficient in value to result in payment of the loan secured thereby.
Section 2.18. ACCURATE AND COMPLETE RECORDS. The books, ledgers,
financial records and other records of Texas National for the period of time
which is not less than three years prior to the date hereof or any such longer
period as may be required by applicable laws or regulations:
(a) are, or will be prior to the Closing Date, in the possession of
Texas National;
(b) have been, in all material respects, maintained in accordance
with all applicable laws, rules and regulations and generally accepted standards
of practice; and
(c) are accurate and complete and do not contain or reflect any
material discrepancies.
Section 2.19. PERFORMANCE OF OBLIGATIONS. Except as otherwise noted in
Schedule 2.19 hereto, Texas National has performed in all material respects all
of the obligations required to be performed by it to date under, and Texas
National is not in default under or in breach of, any term or provision of any
covenant, contract, lease, indenture or any other covenant to which it is a
party, is subject or is otherwise bound, and no event has occurred that, with
the giving of notice or the passage of time or both, would constitute such
default or breach, where such default or breach or failure to perform would have
a material adverse effect on Texas National. To Texas National's knowledge, no
party with whom Texas National has an agreement that is of material importance
to the business of Texas National is in default thereunder.
Section 2.20. NO MISLEADING STATEMENTS. The representations and
warranties of Texas National contained in this Agreement, the schedules hereto
and all other documents and information furnished to Bancshares and its
representatives pursuant hereto are complete and accurate and do not and will
not include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements made and to be made not
misleading.
Section 2.21. ABSENCE OF CHANGES. Since the Balance Sheet Date, except as
disclosed in Schedule 2.21 to this Agreement, there has not been any material
adverse change in the condition (financial or otherwise), assets, liabilities,
earnings or business of Texas National. Since such date, the business of Texas
National has been conducted only in the ordinary course consistent with prior
practices.
Section 2.22. BROKERS AND FINDERS. Neither Texas National nor any of its
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the Consolidations contemplated herein.
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Section 2.23. REGULATORY APPROVALS. Texas National has no reason to
believe that it will not be able to obtain all requisite regulatory approvals
(if any) necessary to consummate the Consolidations as set forth in this
Agreement.
III. REPRESENTATIONS AND WARRANTIES OF
BANCSHARES AND BAYSHORE
Bancshares and Bayshore represent and warrant to Texas National as follows:
Section 3.1. ORGANIZATION. Bancshares is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas and a
bank holding company duly registered under the Bank Holding Company Act of 1956,
as amended (the "BHC Act"), subject to all laws, rules and regulations
applicable to bank holding companies. Bancshares owns 100% of the issued and
outstanding common stock of Bayshore. Bayshore is a national banking
association duly organized, validly existing and in good standing under the laws
of the United States. Bayshore is an insured bank as defined in the Federal
Deposit Insurance Act. Upon the organization of New Bank, Bancshares will own
100% of the issued and outstanding capital stock of New Bank. When organized,
New Bank will be duly organized, validly existing and in good standing under the
laws of the United States of America. Bancshares and Bayshore have full power
and authority (including all licenses, franchises, permits and other
governmental authorizations which are legally required) to own their properties,
to engage in the business and activities now conducted by them and to enter into
and perform this Agreement.
Section 3.2. APPROVALS; AUTHORITY. The Boards of Directors of Bancshares
and Bayshore have each approved this Agreement and the transactions contemplated
herein subject to the approval thereof by the shareholders of Bancshares and
Bayshore as required by law, and, other than shareholder approval required by
law, no further corporate proceedings of Bancshares or Bayshore are needed to
deliver this Agreement and consummate the Consolidations. This Agreement has
been duly executed and delivered by Bancshares and Bayshore and, when all
requisite regulatory and shareholder approvals have been obtained, it will be a
binding agreement of Bancshares and Bayshore enforceable against each entity in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally and general equitable principles.
Section 3.3. NO CONFLICT WITH OTHER INSTRUMENTS. Neither the execution
and delivery of this Agreement nor the consummation of the Consolidations
contemplated thereby, subject to obtaining all required shareholder consents,
will conflict with or result in a breach of any provision of any Articles of
Incorporation or Association of Bancshares, Bayshore, or New Bank, as
applicable, or their respective Bylaws. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, subject
to obtaining all required shareholder and regulatory approvals, will not violate
any provision of, or constitute a default under, any law,
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or any order, writ, injunction or decree of any court or other governmental
agency, or any contract, agreement or instrument to which Bancshares,
Bayshore, or New Bank is a party or by which it is bound or constitute an
event which, with the lapse of time or action by a third party, could result
in any default under any of the foregoing or result in the creation of any
lien, charge or encumbrance upon the assets or properties of Bancshares or
Bayshore or upon the stock of Bancshares or Bayshore.
Section 3.4. REGULATORY APPROVALS. Bancshares and Bayshore have no
reason to believe that they will not be able to obtain all requisite regulatory
approvals necessary to consummate the Consolidations as set forth in this
Agreement.
Section 3.5. LITIGATION. There is no pending or threatened litigation,
arbitration, or other action or proceeding to which Bancshares is a party that
seeks to prevent or delay the execution and delivery of this Agreement or the
completion of the transactions contemplated by this Agreement.
Section 3.6. DUE DILIGENCE. Bancshares has had, or by the Closing Date
will have had adequate opportunity to examine the books and records of Texas
National, including, without limitation, the loan records of Texas National, and
as a result of that examination, Bancshares has arrived at its own evaluation
of the quality of Texas National's loan portfolio and the adequacy of Texas
National's loan loss reserve. Consequently, in so far as the quality of Texas
National's loan portfolio and the adequacy of Texas National's loan loss reserve
is concerned, Bancshares is relying on its own evaluation and not upon any
statements, representations, or warranties of Texas National.
IV. COVENANTS OF TEXAS NATIONAL
Texas National covenants and agrees with Bancshares and Bayshore as
follows:
Section 4.1. SHAREHOLDER APPROVAL AND BEST EFFORTS. Texas National will,
as soon as practicable, present for the approval of its shareholders this
Agreement and the transactions contemplated hereby. Texas National will take
all reasonable action to arrange for a meeting of its shareholders for the
purpose of considering the Agreement and, if the transaction is approved by such
shareholders, to aid and assist in the consummation of the Consolidations, and
will use its best efforts to take or cause to be taken all other actions
necessary, proper or advisable to consummate the transactions contemplated by
this Agreement, including such actions as Bancshares reasonably considers
necessary, proper or advisable in connection with filing applications or
obtaining approvals from, all regulatory authorities having jurisdiction over
the transactions contemplated by this Agreement.
Section 4.2. INVITATION TO MEETINGS. A designee of Bancshares (the
"Bancshares Designee") shall be entitled to attend as an invited guest all
regular and special meetings of the Boards of Directors of Texas National. The
Bancshares Designee shall also be entitled to prior
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notice of and attendance as an invited guest at all meetings of the
executive, loan and discount, and any other committees of Texas National. In
addition, the Bancshares Designee shall be allowed to be present in Texas
National from time to time in manner so as not to interfere with the normal
operation of Texas National to review all financial reports, watch loan
lists, new loan lists and other documents generated by Texas National in its
day-to-day operations.
Section 4.3. CONDUCT OF BUSINESS PRIOR TO CLOSING. Without Bancshares'
prior written consent to the contrary, which consent shall not be unreasonably
withheld, prior to the date of the Closing, Texas National will operate so as:
(a) To carry on its business in substantially the same manner as it
has been conducted since June 30, 1997;
(b) To maintain and keep its properties in as good repair and
condition as at present, except for deterioration due to ordinary
wear and tear and damage due to casualty;
(c) To maintain in full force and effect insurance comparable in
amount and scope of coverage to that currently maintained for
Texas National;
(d) To make no alteration in the manner of maintaining its books,
accounts or records, or in the accounting practices relating to
its business, properties or assets;
(e) To perform all of its material obligations under contracts,
leases and documents relating to or affecting its assets,
properties and business, except such obligations as Texas
National may in good faith reasonably dispute;
(f) To maintain and preserve its business organization intact, use
its best efforts to retain its present employees and maintain
relationships with depositors and customers of Texas National;
(g) To comply with and perform all obligations and duties imposed
upon Texas National by all federal, state and local laws, and all
rules, regulations and orders imposed by federal, state or local
governmental authorities; provided, however, that Bancshares
agrees that the current steps being taken by Texas National to
achieve compliance with the Cease and Desist Order shall
constitute compliance with this subsection;
(h) To notify Bancshares immediately upon commencement of any
compliance, safety and soundness or the other type of examination
conducted by the
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FDIC, the OCC or any other agency having supervisory authority
over Texas National;
(i) Not to mortgage, pledge or encumber any asset, nor sell nor
transfer any of its assets, except in the ordinary course of
business;
(j) Not to declare or pay during 1997 any dividends in an amount in
excess of Texas National's earnings for the year, measured
through the end of the month prior to Closing if the Closing
takes place at any time before the sixteenth day of a given
month, and measured as of the fifteenth day of the month in which
the Closing takes place if the Closing occurs on or after the
sixteenth day of the month; provided that on the Closing Date
Texas National's total equity capital accounts shall be at least
$1,571,000. It is specifically provided that any increases or
decreases in value of the securities held available for sale will
not affect the calculation of total equity capital for purposes
of this Section 4.3(j);
(k) Not to make or authorize any change in Texas National's
authorized stock or in its articles of association or bylaws;
(l) Not to make any capital expenditures in an amount greater than
$10,000.00;
(m) Not to make any investment portfolio transactions;
(n) Not to enter into or amend or allow Texas National to enter into
or amend any contract agreement or other instrument of any of the
types listed in Section 2.9 of this Agreement other than in the
ordinary course of business with prior notice to Bancshares;
(o) Not take or allow Texas National to take any action described or
do any of the things listed in Section 2.13 of this Agreement
(except with respect to Section 2.13(ix)) other than in the
ordinary course of business with prior notice to Bancshares;
(p) Not to increase the compensation paid or to be paid to any
officer or employee of Texas National;
(q) To take such action as may be reasonably necessary to maintain,
preserve, renew and keep in full force and effect their corporate
existence and rights; and
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(r) Not to purchase from or sell a participation in any loan or other
extension of credit to First National Bank of Bellaire, First
Bank of Deer Park, Texas Coastal Bank or Mayde Creek Bank, N.A.
Section 4.4. LITIGATION AND CLAIMS. Texas National will promptly notify
Bancshares of (i) any litigation or any claim, controversy or contingent
liability that may become the subject of litigation against Texas National or
affecting Texas National's property, if such litigation or potential litigation
may, in the event of an unfavorable outcome, have a material adverse effect on
Texas National, (ii) any violation or alleged violation of any state or federal
environmental laws or regulations, or (iii) any correspondence from a state or
federal bank regulatory authority severely criticizing Texas National management
or proposing a formal or informal regulatory enforcement action.
Section 4.5. CONFIDENTIALITY. Without the prior written consent of
Bancshares, Texas National shall not release, disseminate or transfer, either
verbally or by any other means, any part of the information regarding Bancshares
acquired as a result of the execution and performance of this Agreement, to any
party not a party hereto, other than as necessary to consummate the
Consolidations.
Section 4.6. STANDSTILL PROVISION. So long as this Agreement is in
effect, Texas National will not provide any information to or negotiate with any
other party with respect to the merger, acquisition, or sale of all or
substantially all of the assets or capital stock of Texas National. Texas
National agrees to notify Bancshares immediately of any such unsolicited
acquisition proposals and provide reasonable detail as to the identity of the
proposed acquiror and the nature of the proposed transaction.
Section 4.7. ACCESS TO PROPERTIES AND RECORDS. To the extent permitted
by law, Texas National shall afford Bancshares and authorized representatives
(including legal counsel, accountants and consultants) of Bancshares full access
in a reasonable manner and at reasonable times to its properties, books and
records in order that Bancshares may have full opportunity to make such
reasonable investigation as it shall desire to make of Texas National's affairs
and officers of Texas National will furnish Bancshares with such additional
financial and operating data and other information as to its business and
properties as Bancshares shall, from time to time, request. Bancshares shall not
disclose any confidential information furnished by Texas National to Bancshares
except and to the extent required by law in the reasonable judgment of
Bancshares; the parties acknowledge that appropriate disclosure must be made to
governmental entities. In the event of termination of this Agreement,
Bancshares shall return to Texas National all documents and other information
obtained pursuant hereto and shall keep confidential and not use any information
obtained pursuant to this Agreement. This Section is not applicable to any
information that was or becomes generally available to the public other than
through a breach of this Agreement.
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Section 4.8. INFORMATION FOR APPLICATIONS. Texas National shall, to the
extent permitted by law, furnish Bancshares with all information required for
inclusion in (i) any application, statement or document to be made or filed by
Bancshares or Bayshore with any governmental entity in connection with the
transactions contemplated by this Agreement during the pendency of this
Agreement ("Regulatory Applications"), and (ii) any registration statement and
amendments thereto ("Registration Statement") to be filed by Bancshares with the
Securities and Exchange Commission ("SEC") or any state securities authorities
in order to register the shares of common stock of Bancshares ("Bancshares
Common Stock") to be sold in order to obtain the proceeds to pay the
Consolidation Price ("Securities Filings"). Texas National represents and
warrants to Bancshares that all information to be furnished by Texas National
for inclusion in any Regulatory Applications or Securities Filings shall be true
and correct in all material respects and shall not contain any statement which,
at the time and in light of the circumstances under which it is made, is false
or misleading with respect to any material fact, or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances in which they are made, not misleading. Texas National agrees at
any time, upon the request of Bancshares, to furnish to Bancshares a written
letter or statement confirming the accuracy of the information with respect to
Texas National contained in any application or filing referred to in Sections
4.1 or 4.8 of this Agreement, and confirming that the information with respect
to Texas National contained in such document or draft was furnished by Texas
National expressly for use therein or, if such is not the case, indicating the
inaccuracies contained in such document or indicating the information not
furnished by Texas National expressly for use therein.
Section 4.9. ADDITIONAL DISCLOSURES AND INFORMATION. Texas National
shall give Bancshares prompt written notice if at any time on or prior to the
Closing there is a change in any state of facts, or there is the occurrence,
nonoccurrence or existence of any event subsequent to the date of this Agreement
(or any event prior to the date of this Agreement which Texas National become
aware of subsequent to the date of such Agreement), which change or event is
known to Texas National and which would (i) make any representation or warranty
(including the information set forth in the Schedules) made by Texas National to
Bancshares not true or correct in any material respect or (ii) have a material
adverse effect on Texas National, it being the intention of the parties to this
Agreement that Texas National shall engage in a continuous disclosure process
from the date of this Agreement through the Closing.
Section 4.10. PROXIES. Texas National acknowledges that to the best of
its knowledge the persons listed on Schedule 4.10 have agreed that they will
vote the shares of Texas National Common Stock owned by them in favor of this
Agreement and the transactions contemplated hereby, subject to required
regulatory approvals, and that they will retain the right to vote such shares of
Texas National Common Stock during the term of this Agreement and have given
X.X. Xxxxxxx a proxy to vote such shares of Texas National Common Stock in favor
of the Agreement if they should fail to do so, pursuant to a Voting Agreement
and Irrevocable Proxy substantially in the form attached hereto as EXHIBIT D.
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Section 4.11. RELEASES. Texas National acknowledges that the persons
listed on Schedule 4.11 have agreed that they will release and discharge Texas
National from any action or claim that they may have against Texas National
(except as to deposits, accounts and loans with Texas National, any rights to
indemnification pursuant to the Articles and Bylaws of Texas National and any
rights of such person with respect to the Agreement) pursuant to the Release of
Claims substantially in the form attached hereto as EXHIBIT E.
V. COVENANTS OF BANCSHARES AND BAYSHORE
Bancshares and Bayshore covenant and agree with Texas National as follows:
Section 5.1. BEST EFFORTS. If required, Bayshore and New Bank will, as
soon as practicable, present for the approval of their respective shareholders,
this Agreement and the transactions contemplated thereby. Bancshares and
Bayshore will take all reasonable action to aid and assist in the consummation
of the Consolidations and the transactions contemplated hereby, and will use its
best efforts to take or cause to be taken all other actions necessary, proper or
advisable to consummate the transactions contemplated by this Agreement,
including such actions which are necessary, proper or advisable in connection
with filing applications with, or obtaining approvals from, all regulatory
authorities having jurisdiction over the transactions contemplated by this
Agreement including, but not limited to, filing the Registration Statement with
the SEC and having the Bancshares Common Stock registered with the SEC.
Section 5.2. INFORMATION FOR APPLICATIONS AND PROXY SOLICITATION. To the
extent permitted by law, Bancshares will furnish Texas National with all
information concerning Bancshares and Bayshore required for inclusion in (a) any
application, statement or document to be made or filed by Texas National with
any federal or state regulatory or supervisory authority in connection with the
transactions contemplated by this Agreement during the pendency of this
Agreement and (b) any proxy materials to be furnished to the shareholders of
Texas National in connection with their consideration of the Consolidations.
Each of Bancshares and Bayshore represent and warrant that all information so
furnished for such statements and applications shall, to the best of its
knowledge, be true and correct in all material respects without omission of any
material fact required to be stated to make the information not misleading.
Bancshares will indemnify and hold harmless Texas National from and against any
and all losses, claims, damages, expenses or liabilities to which Texas National
may become subject under applicable laws, rules and regulations and will
reimburse Texas National for any legal or other expenses reasonably incurred by
Texas National in connection with investigating or defending any actions whether
or not resulting in liability, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are based on any untrue
statement or alleged untrue statement of a material fact contained in any such
application or proxy materials or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary in order to make the statements therein not misleading, but only
insofar as such statement or omission was made in reliance upon and in
conformity with
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information expressly furnished by Bancshares expressly for use therein.
Bancshares agrees, upon the request of Texas National, to furnish to Texas
National a written letter or statement confirming to the best of its
knowledge the accuracy of the information with respect to Bancshares and
Bayshore contained in any report or other application or statement referred
to in Sections 5.1 or 5.2 of this Agreement, and confirming that the
information with respect to Bancshares and Bayshore contained in such
document or draft was furnished expressly for use therein or, if such is not
the case, indicating the inaccuracies contained in such document or
indicating the information not furnished by Bancshares expressly for use
therein.
Section 5.3. CONFIDENTIALITY. Bancshares shall not release, disseminate
or transfer either verbally or by any other means any part of the information
regarding Texas National acquired as a result of execution and performance of
this Agreement, to any party not a party hereto, other than as necessary to
consummate the Consolidations or have the Bancshares Common Stock registered
with the SEC. Furthermore, Bancshares agrees (i) not to use any information or
forms of documentation obtained from Texas National in any way, directly or
indirectly, damaging to the interests of Texas National; (ii) not to use,
directly or indirectly, any of the information obtained from Texas National for
its own benefit or for the benefit of another, separate and apart from the
purposes of this Agreement; and (iii) not to disclose any of the information
obtained from Texas National to anyone without the express, prior, written
permission of Texas National. In the event this Agreement is terminated, any
and all copies of the books and records of Texas National in the possession of
Bancshares shall be returned to Texas National.
Section 5.4. NOTICES. Bancshares will promptly give notice to Texas
National of the occurrence of any event or the failure of any event to occur
that results in a breach of any representation or warranty by Bancshares or a
failure by Bancshares to comply with any covenant, condition or agreement
contained in this Agreement.
Section 5.5. RELEASES. Bancshares will release and discharge the persons
listed on Schedule 5.5 from any action or claim that they may have against such
persons (except as to deposits and accounts with Texas National and any rights
of Bancshares pursuant to the Agreement) pursuant to the Release of Claims
substantially in the form attached hereto as EXHIBIT F.
VI. CLOSING
Section 6.1. CLOSING. Subject to the other provisions of this Section
VI, on a mutually acceptable date ("Closing Date") as soon as practicable within
a thirty-day period commencing with the latest of the following dates:
(a) the receipt of shareholder approval and the last approval from
any requisite regulatory or supervisory authority and the expiration of any
statutory or regulatory waiting period which is necessary to effect the
Consolidations; or
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(b) if the transactions contemplated by this Agreement are being
contested in any legal proceeding and Bancshares or Texas National, pursuant to
Section 10.1 herein, have elected to contest the same, then the date that such
proceeding has been brought to a conclusion favorable, in the judgment of each
of Bancshares and Texas National, to the consummation of the transactions
contemplated herein, or such prior date as each of Bancshares and Texas National
shall elect whether or not such proceeding has been brought to a conclusion;
a meeting ("Closing") will take place at which the parties to this Agreement
will exchange certificates, opinions, letters and other documents in order to
determine whether any condition exists which would permit the parties hereto to
terminate this Agreement. If no such condition then exists or if no party
elects to exercise any right it may have to terminate this Agreement, then and
thereupon the appropriate parties shall execute such documents and instruments
as may be necessary or appropriate to effect the transactions contemplated by
this Agreement.
The Closing shall take place at the offices of Bracewell & Xxxxxxxxx,
L.L.P. in Houston, Texas, or at such other place to which the parties hereto may
mutually agree.
Section 6.2. INITIAL CONSOLIDATION EFFECTIVE TIME. Subject to the terms
and upon satisfaction of all requirements of law and the conditions specified in
this Agreement including, among other conditions, the receipt of any requisite
approval of the shareholders of New Bank and Texas National and the regulatory
approvals of the Federal Reserve Board, OCC, the FDIC, Banking Department, and
any other federal or state regulatory agency whose approval must be received in
order to consummate the Initial Consolidation, the Initial Consolidation shall
become effective, and the effective time of the Initial Consolidation shall
occur, at the date and time specified in the certificate approving the Initial
Consolidation to be issued by the OCC ("Initial Consolidation Effective Time").
It is anticipated by Bancshares and Texas National that the Closing, the Initial
Consolidation Effective Time and the Effective Date will occur on the same day.
Section 6.3. EFFECTIVE DATE. Subject to the terms and upon satisfaction
of all requirements of law and the conditions specified in this Agreement
including, among other conditions, the receipt of any requisite approvals of the
shareholders of Bayshore and Texas National and the regulatory approvals of the
Federal Reserve Board, the OCC, the FDIC, Banking Department and any other
federal or state regulatory agency whose approval must be received in order to
consummate the Consolidations, the Final Consolidation shall become effective,
and the effective date of the Final Consolidation shall occur, at the date and
time specified in the certificate approving the Final Consolidation to be issued
by the OCC ("Effective Date"). It is anticipated by Bancshares and Texas
National that the Closing, the Initial Consolidation Effective Time and the
Effective Date will occur on the same day.
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VII. TERMINATION
Section 7.1. TERMINATION.
(a) This Agreement may be terminated by action of the Board of
Directors of either Bancshares, Bayshore or Texas National at any time prior to
the Initial Consolidation Effective Time if:
(i) there shall be any actual or threatened action or proceeding
by or before any court or any other governmental body which shall seek
to restrain, prohibit or invalidate the transactions contemplated by
this Agreement and which, in the judgment of such Board or Boards of
Directors, makes it inadvisable to proceed with the Consolidations;
(ii) any of the transactions contemplated by this Agreement are
disapproved by any regulatory authority or other person whose approval
is required to consummate any of such transactions;
(iii) the Consolidations shall not have become effective on or
before December 31, 1997, or such later date as shall have been
approved in writing by the Boards of Directors of Bancshares, Bayshore
and Texas National; provided, however, that the right to terminate
under this Section 7.1(a)(iii) shall not be available to any party
whose failure to fulfill any material obligation under this Agreement
has been the cause of, or has resulted in, the failure of the
Consolidations to become effective on or before such date; or
(iv) Purchaser has not received all required regulatory approvals
as set forth in Section 10.1 of this Agreement by November 30, 1997;
provided however, that the right to terminate under this Section
7.1(a)(iv) shall not be available to any party whose failure to
fulfill any material obligation under this Agreement has been the
cause of, or has resulted in, the failure to obtain such approvals on
or before such date.
(b) This Agreement may be terminated at any time prior to the Initial
Consolidation Effective Time by the Board of Directors of Texas National if
Bancshares or Bayshore shall fail to comply in any material respect with any of
their covenants or agreements contained in this Agreement, or if any of the
representations or warranties of Bancshares or Bayshore contained herein shall
be defective in any material respect.
(c) This Agreement may be terminated any time prior to the Effective
Date by action of the Board of Directors of Bancshares or Bayshore if (i) Texas
National shall fail to comply
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in any material respect with any of its covenants or agreements contained in
this Agreement, or if any of the representations or warranties of Texas
National contained herein shall be defective in any material respect, (ii)
there shall have been any change after the Balance Sheet Date in the assets,
properties, business or financial condition of Texas National which
individually or in the aggregate have materially and adversely affected the
financial condition, results of operation or business of Texas National, or
(iii) the Board of Directors determines that necessary approval from a
regulatory authority, including but not limited to the registration of the
Bancshares Common Stock with the SEC, cannot reasonably be obtained or that
the terms or conditions of a necessary approval are unacceptable in its
reasonable discretion.
(d) This Agreement may be terminated by Bancshares within fifteen
(15) days of the date of execution of the Agreement in the event that the
executed Voting Agreement and Irrevocable Proxies described in Section 4.10 have
not been obtained.
(e) This Agreement may be terminated at any time prior to the
Effective Date with the mutual written consent of Bancshares, Bayshore, and
Texas National and the approval of such action by their respective Boards of
Directors.
Section 7.2. RIGHT TO CURE. If either Bancshares, Bayshore or Texas
National shall elect to terminate this Agreement pursuant to Section 7.1, then
such party must notify the other party in writing of its intent to terminate
stating the reason therefor and such other party shall have fifteen days from
the receipt of such notice to cure the alleged breach, inaccuracy or change or
satisfy such condition subject to the approval of the party seeking to terminate
the Agreement.
VIII. CONDITIONS TO OBLIGATIONS OF BANCSHARES AND BAYSHORE
The obligations of Bancshares and Bayshore under this Agreement are subject
to the satisfaction, at or prior to the Closing Date of the following
conditions, which may be waived by Bancshares and Bayshore in their sole
discretion:
Section 8.1. COMPLIANCE WITH REPRESENTATIONS AND COVENANTS. The
representations and warranties made by Texas National in this Agreement must
have been true when made and shall be true in all material respects as of the
Closing Date with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Texas National shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed and complied with prior to or at the Closing.
Bancshares shall have been furnished with a certificate, executed by an
appropriate representative of Texas National and dated as of the Closing Date,
to the foregoing effect.
Section 8.2. MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business or operations of Texas
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National, nor shall any event have occurred which, with the lapse of time,
may cause or create any material adverse change in the financial condition,
business or operations of Texas National in the reasonable judgment of the
Board of Directors of Bancshares. Bancshares shall have received a
certificate to the foregoing effect executed by an appropriate representative
of Texas National and dated as of the Closing Date.
Section 8.3. LEGAL OPINION. Bancshares shall have received an opinion of
counsel to Texas National, dated as of the Closing Date, in form and substance
satisfactory to counsel for Bancshares, to the effect set forth in Schedule 8.3
hereof.
Section 8.4. REGISTRATION OF BANCSHARES COMMON STOCK. The Registration
Statement covering the Bancshares Common Stock to be issued to provide funds for
the Consolidation Price shall be effective under the Securities Act of 1933 and
any applicable state securities or "blue sky" acts and no stop order suspending
the effectiveness of such Registration Statement shall be in effect and no
proceedings for such purpose, or any proceedings under the SEC or applicable
state securities authorities rules with respect to the transactions contemplated
hereby, shall be pending before or threatened by the SEC or any applicable state
securities or "blue sky" acts and no stop order suspending the effectiveness of
such Registration Statement shall be in effect and no proceedings for such
purpose, or any proceedings under the SEC or applicable state securities
authorities rules with respect to the transactions contemplated hereby, shall be
pending before or threatened by the SEC or any applicable state securities or
blue sky authorities.
Section 8.5. SUCCESSFUL INITIAL PUBLIC OFFERING. Through no fault of
either Bancshares or Xxxxxx & Xxxxxx, the Underwriter of Bancshares' proposed
public offering of common stock, Xxxxxx & Xxxxxx fails to perform its firm
commitment to successfully underwrite and complete an initial public offering of
Bancshares Common Stock in which Bancshares shall have received from such public
offering net proceeds of at least $8,500,000 by purchasing the entire issue as
principal (whether or not they are able to subsequently resell the securities to
their institutional and retain clients).
Section 8.6. RELEASES. Bancshares shall have received all of the
releases referred to in Section 4.11.
Section 8.7. PROCEEDINGS AND DOCUMENTS. All actions, proceedings,
instruments and documents required to effectuate this Agreement or incidental
hereto shall be satisfactory in substance and form to Bancshares and its
counsel.
Section 8.8. LITIGATION. Texas National shall have furnished Bancshares
with certificates dated as of the Closing Date signed by an appropriate officer
of Texas National to the effect that to Texas National's knowledge, no
litigation, proceeding, investigation or inquiry, other than that which is set
forth in Schedule 2.7 of this Agreement, is pending or threatened that might
result in action
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to enjoin or prevent the consummation of the transaction contemplated by this
Agreement or is likely to result in a material adverse change in Texas
National or any of its assets, properties, business, financial condition, or
operations.
Section 8.9. RESIGNATION. Bancshares shall have received the written
resignations effective as of the Closing Date of any officers and directors of
Texas National as may be requested in writing by Bancshares.
Section 8.10. NO PENDING ACTIONS. No proceeding initiated by any person
or governmental authority seeking to restrain or enjoin the transaction shall be
pending.
Section 8.11. NO DEFAULT. Except for any uncompleted requirements of that
certain Cease and Desist Order, Texas National shall not be in default under any
material order, judgment, award or decree of any court, arbitrator or
governmental authority binding upon or affecting Texas National or by which any
of Texas National's assets may be bound or affected, and no such order,
judgment, award or decree materially adversely affects the ability of Texas
National to carry on its business as now conducted. Bancshares shall have
received a certificate to the foregoing effect executed by Texas National and
dated as of the Closing Date.
Section 8.12. OCC LETTER. Bayshore shall have received an opinion from
the OCC, satisfactory in form and content to Bancshares and its counsel, that
the loans to Xxxxx X. Xxxxx and his affiliated interests which have been deemed
by the OCC to have been issued in excess of Texas National's lending limits,
will not represent a violation of 12 U.S.C. Section 84 to Bayshore and its
directors.
Section 8.13. CANCELLATION OF DATA PROCESSING CONTRACTS. Texas National
shall have received written confirmation that when Texas National's data
processing and ATM agreements terminate, they will do so without any penalty or
additional liability.
Section 8.14. REMOVAL OF CERTAIN CREDIT. Texas National shall have
removed from its books the loan identified in Schedule 8.14.
Section 8.15. COVENANT NOT TO COMPETE. Each officer of Texas National
shall have executed a Covenant Not to Compete in the form substantially as set
forth in Exhibit G.
IX. CONDITIONS TO OBLIGATIONS OF TEXAS NATIONAL
The obligations of Texas National under this Agreement are subject to the
satisfaction, at or prior to the Closing Date, of the following conditions,
which may be waived by Texas National in its sole discretion:
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Section 9.1. COMPLIANCE WITH REPRESENTATIONS AND COVENANTS. The
representations and warranties made by Bancshares and Bayshore in this Agreement
must have been true when made and shall be true in all material respects as of
the Closing Date with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Bancshares and Bayshore
shall have performed and complied with all covenants and conditions required by
this Agreement to be performed or complied with by Bancshares and Bayshore prior
to or at the Closing. Texas National shall be furnished with a certificate,
executed by appropriate representatives of Bancshares and dated as of the
Closing Date, to the foregoing effect.
Section 9.2. LEGAL OPINION. Texas National shall have received an
opinion of counsel to Bancshares, dated as of the Closing Date and in form and
substance satisfactory to counsel for Texas National, to the effect set forth in
Schedule 9.2 hereof.
Section 9.3. RELEASES. Bancshares shall have delivered all of the
releases referred to in Section 5.5.
Section 9.4. PROCEEDINGS AND DOCUMENTS. All actions, proceedings,
instruments and documents required to effectuate this Agreement or incidental
hereto shall be satisfactory in substance and form to Texas National and its
counsel.
Section 9.5. PAYMENT OF CONSIDERATION. Bancshares shall pay the
Consolidation Price by cash, cashiers check, or wire transfer to the
shareholders of Texas National upon the proper surrender of the Texas National
Common Stock.
X. CONDITIONS TO RESPECTIVE OBLIGATIONS OF BANCSHARES,
BAYSHORE AND TEXAS NATIONAL
The respective obligations of Bancshares, Bayshore, and Texas National
under this Agreement are subject to the satisfaction of the following conditions
which may be waived by Bancshares, Bayshore and Texas National, respectively, in
their sole discretion:
Section 10.1. GOVERNMENT APPROVALS. Bancshares and Texas National shall
have received the approval, or waiver of approval, of the transactions
contemplated by this Agreement from all necessary governmental agencies and
authorities, including the Federal Reserve Board and any other regulatory agency
whose approval must be received in order to consummate the Consolidations, which
approvals shall not impose any restrictions on the operations of the Continuing
Bank which are unacceptable to Bancshares, and such approvals and the
transactions contemplated hereby shall not have been contested by any federal or
state governmental authority or any third party (except shareholders asserting
dissenters' rights) by formal proceeding. It is understood that, if any such
contest is brought by formal proceeding, Bancshares or Texas National may, but
shall not be
-27-
obligated to, answer and defend such contest or otherwise pursue the
Consolidations over such objection.
Section 10.2. SHAREHOLDER APPROVAL. The shareholders of Texas National
and Bancshares as the sole shareholder of Bayshore and New Bank shall have voted
for the authorization and approval of, or given their respective written consent
to, this Agreement and the transactions contemplated by this Agreement.
XI. MISCELLANEOUS
Section 11.1. NOTICES. Any notice, request, instruction or other
communication required hereunder shall be given in writing and shall be deemed
to be given and received when delivered personally, or forty-eight hours after
deposit in the United States mail, certified or registered, return receipt
requested, postage prepaid, as follows:
If to Texas National then to: Xx. X. X. Xxxxxxx
Xxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
With a copy to: Xx. X. Xxxxxx Xxxxx
Xxxxxxxxxxx, Hrdlicka, White, Xxxxxxxx &
Xxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Bancshares then to: Xx. X. X. Xxxxxx
Bay Bancshares, Inc.
0000 Xxxxxxx 000
Xx Xxxxx, Xxxxx 00000
With a copy to: Xx. Xxxxxxx X. Xxxxxx XX
Xxxxxxxxx & Xxxxxxxxx, L.L.P.
South Tower Pennzoil Place
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Section 11.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement and the abandonment of the transaction without breach by any party
hereto, this Agreement shall become void and have no effect, without any
liability on the part of any party or its directors, officers, stockholders or
agents, if any; provided, however, that the provisions of Sections 4.5 and 5.3
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respecting confidentiality shall remain in force. Nothing contained in this
Section 11.2 shall relieve any party hereto of any liability for a breach of
this Agreement.
Section 11.3. ENTIRE AGREEMENT MODIFICATION; WAIVER. This Agreement
constitutes the entire agreement between the parties hereto pertaining to the
subject matter hereof and supersedes all prior contemporaneous agreements,
undertakings, negotiations and discussions, whether oral or written, and there
are no warranties, representations or agreements between the parties in
connection with the subject matter hereof, except as set forth or referred to
herein. No supplement, modification, waiver or termination of this Agreement or
any provision thereof shall be binding unless executed in writing by the parties
to be bound thereby. No waiver of any of the provisions of this Agreement shall
constitute a waiver of any other provisions (whether or not similar) nor shall
such waiver constitute a continuing waiver unless otherwise expressly provided.
Section 11.4. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, and to the extent
applicable, the laws of the United States of America.
Section 11.5. LEGAL CONSTRUCTION. In case any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall- not affect any other provisions hereof, and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
Section 11.6. ATTORNEY'S FEES. If any action at law or in equity,
including an action for declaratory relief, is brought to enforce or interpret
the provisions of this Agreement, the prevailing party shall be entitled to
recover reasonable attorney's fees from the other party, which fees may be set
by the Court in the trial of such action or may be enforced in a separate action
brought for that purpose, and which fees shall be in addition to any other
relief that may be awarded.
Section 11.7. COOPERATION. Bancshares and Texas National agree to
cooperate and work together to provide any information required by either party
to consummate this transaction and in negotiating and agreeing upon any other
matters that may arise in connection with the consummation of the transactions
contemplated by this Agreement, and obtaining approval of all necessary
regulatory authorities.
Section 11.8. ASSIGNABILITY. This Agreement and the obligations created
hereunder are assignable by Bancshares to any person or entity, subject to prior
notice to, and the approval of, Texas National, which approval shall not be
unreasonably withheld.
Section 11.9. SINGULAR, PLURAL, HEADINGS. Whenever the singular form of
any word is used in this Agreement, the same shall include the plural form of
such word, whenever appropriate, and
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vice versa. The headings contained in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning of any of
the provisions contained herein.
Section 11.10. COMMISSIONS. Texas National and Bancshares agree and
represent to each other that there are no commissions due to any broker or any
other persons related to the transaction that is the subject of this Agreement,
and each party hereto agrees to indemnify and hold harmless the other party
hereto from any commission due as a result of its actions with respect to this
transaction.
Section 11.11. EFFECTIVE DATE. The effective date of this Agreement shall
be the date a copy of this Agreement, fully executed by Texas National, is
returned to and received by Bancshares.
Section 11.12. EXPENSES. Whether or not the transactions provided for
herein are consummated, Bancshares and Texas National shall pay their own
expenses in connection with this Agreement and the transactions contemplated
hereby, including without limitation, all reasonable counsel fees; provided
that, Bancshares shall pay up to $5,000 of Texas National's legal fees related
to the consummation of the transactions set forth in this Agreement.
Section 11.13. BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns as permitted by law.
Section 11.14. REPRESENTATION BY COUNSEL. Both parties acknowledge that
they have had the benefit of representation by legal counsel of their choosing
in negotiating the terms of this agreement, that they have executed this
agreement of their own free will with the intent to be bound hereby.
Section 11.15. NON-SURVIVAL OF REPRESENTATIONS. Bancshares and Texas
National shall satisfy themselves as to the accuracy of the representations and
warranties contained herein prior to Closing. None of the representations or
warranties contained herein shall survive the Closing.
Section 11.16. FACSIMILE SIGNATURES. The signature of any party hereto
transmitted by facsimile shall be effective in all respects to bind such party
in the same manner as an original signature.
Section 11.17. MODIFICATIONS OR WAIVER. No termination, cancellation,
modification, amendment, deletion, addition or other change in this Agreement,
or any provision hereof, or waiver of any right or remedy herein provided, shall
be effective for any purpose unless specifically set forth in a writing signed
by the party or parties to be bound thereby. The waiver of any right or remedy
in respect to any occurrence or event on one occasion shall not be deemed a
waiver of such right or remedy in respect to such occurrence or event on any
other occasion.
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Section 11.18. SEVERABILITY. Any provision hereof prohibited by or
unlawful or unenforceable under any applicable law or any jurisdiction shall as
to such jurisdiction be ineffective, without affecting any other provision of
this Agreement, or shall be deemed to be severed or modified to conform with
such law, and the remaining provisions of this Agreement shall remain in force,
provided that the purpose of the Agreement can be effected. To the fullest
extent, however, that the provisions of such applicable law may be waived, they
are hereby waived, to the end that this Agreement be deemed to be a valid and
binding agreement enforceable in accordance with its terms.
Section 11.19. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which shall
be deemed to constitute one and the same instrument.
Section 11.20. GENDER. Any pronoun used herein shall refer to any gender,
either masculine, feminine or neuter, as the context requires.
Section 11.21. PUBLICITY. Subject to written advice of counsel with
respect to legal requirements relating to public disclosure of matters related
to the transactions contemplated by this Agreement, the timing and content of
any announcements, press releases or other public statements (whether written or
oral) concerning this Agreement or the Consolidations will occur upon, and be
determined by, the mutual consent of Bancshares and Texas National.
Section 11.22. DISCLOSURES. Any disclosure made in any document delivered
pursuant to this Agreement or referred to or described in writing in any section
of this Agreement or any schedule attached hereto shall be deemed to be
disclosure for purposes of any section herein or schedule hereto.
Section 11.23. AGREEMENT REGARDING CERTAIN PARTICIPATIONS. At all times
prior to the Closing, and as required by the Cease and Desist Order, Texas
National and the other participating banks will attempt to sell their
participation interests in certain loans and extensions of credit originally
made to Xxxxx X. Xxxxx and his affiliated interests and later assumed by what is
now CenterAmerica, Inc. (the "Xxxxx Loans") and which loans are, inter alia, the
subject of the Cease and Desist Order. A list of the Xxxxx Loans and the
participations of each bank participant are attached hereto as Schedule 11.23.
Such sale of the Xxxxx Loans may be made individually or in bulk, and may take
place at a purchase price less than the face amount of the loan or loans. In
connection with any such sale of the Xxxxx Loans, Texas National agrees as
follows:
(a) Texas National will use its best efforts to negotiate, and will
use its best efforts to persuade any of the other participants in the Xxxxx
Loans to negotiate, a sale of the loans at the lowest possible discount,
provided however, that Texas National will not sell any Xxxxx Loan participation
for a discount of greater than 10% without the prior written consent of
Bancshares.
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(b) At all times after the Closing, and for an indefinite period of
time thereafter, Bancshares and Bayshore agree as follows:
(i) Bancshares and Bayshore, and the other participating banks
as required by the Cease and Desist Order, will use their best efforts to
sell the Xxxxx Loans at the lowest possible discount.
(ii) If a written offer to purchase all or any part of the Xxxxx
Loans in which Bancshares and Bayshore have a participating interest is
received by Bancshares or Bayshore or any of the other financial
institutions who have participating interests in the Xxxxx Loans at a
discount not to exceed 10%, and the holders of a majority interest in terms
of aggregate loan dollar amount outstanding with respect to those loans to
which the offer relates desire to accept such offer on the terms and
conditions stated in the written offer (as the same may thereafter be
negotiated in favor of the participating lenders), Bancshares and Bayshore
will sell their participating interest in and to the loans covered by the
written offer at the offered price and upon the same terms and conditions
as may be accepted by the holders of a majority interest in terms of
aggregate loan dollar amount outstanding with respect to the loans to which
the offer pertains.
(iii) If a written offer to purchase all or any part of the
Xxxxx Loans at a discount in excess of 10% is received by Bancshares,
Bayshore or any of the other participating banks, all of the participating
banks will have to agree to the sale.
(c) Any purchaser of all or part of the Xxxxx Loans from Texas
National or Bancshares or Bayshore or any of the participating banks will be
expressly required to be bound by the provisions of paragraphs (a) and (b) of
this Section 11.23.
(d) Without the prior written consent of all participating banks, no
sale of any Xxxxx Loan participation at any discount will be made to any person
or entity other than a bona fide third party with no management or ownership
affiliation with any of the banks which own participations in the Xxxxx Loans.
Section 11.24. INDEMNIFICATION. In consideration for Texas National
entering into this Agreement and agreeing to the consolidation rather than a
stock purchase arrangement, Bancshares and Bayshore agree to protect, defend,
indemnify and hold Texas National, its agents, directors, officers, and
employees harmless from and against all losses, claims, demands, liabilities or
causes of action of every kind and character, in favor of any person, entity or
party, for any damages of whatsoever nature sustained by any person, entity or
party, which arises out of or is incidental to, either directly or indirectly,
their activities or work or documentation in furtherance of the transactions set
forth in this Agreement, and regardless of whether the damages, losses, claims,
demands, liabilities or causes of action of every kind or character were caused
by or arose out of the
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sole, concurrent, active or passive negligence or gross negligence of any
party or entity, strict liability, breaches of express or implied warranties,
and/or any other legal fault of any party or entity, including that of Texas
National, its agents, directors, officers and employees. Bancshares and
Bayshore shall fully defend any such claims, demands or suits at its sole
expenses, including all attorneys' fees, costs, and other related expenses,
even if the same are groundless. It is specifically provided, however, that
the indemnification set forth above shall only apply to actions taken as a
result of this transaction being structured as a consolidation rather than a
stock purchase agreement containing the usual representations, warranties,
covenants and conditions as set forth in such a stock purchase agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
BAY BANCSHARES, INC.
By:
--------------------------------
ATTEST:
By:
-----------------------------
BAYSHORE NATIONAL BANK
By:
--------------------------------
ATTEST:
By:
-----------------------------
-00-
XXXXX XXXXXXXX XXXX XX XXXXXXX
By:
------------------------------------
ATTEST:
By:
-----------------------------
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SCHEDULE 2.5 TO THE CONSOLIDATION AGREEMENT:
TITLE - TEXAS NATIONAL
-35-
SCHEDULE 2.6 TO THE CONSOLIDATION AGREEMENT:
ENVIRONMENTAL LAWS - TEXAS NATIONAL
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SCHEDULE 2.7 TO THE CONSOLIDATION AGREEMENT:
LITIGATION AND OTHER PROCEEDINGS - TEXAS NATIONAL
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SCHEDULE 2.8 TO THE CONSOLIDATION AGREEMENT:
TAXES - TEXAS NATIONAL
-38-
SCHEDULE 2.9 TO THE CONSOLIDATION AGREEMENT:
CONTRACTS - TEXAS NATIONAL
-39-
SCHEDULE 2.10 TO THE CONSOLIDATION AGREEMENT:
INSURANCE - TEXAS NATIONAL
-40-
SCHEDULE 2.12 TO THE CONSOLIDATION AGREEMENT:
LAWS - TEXAS NATIONAL
-41-
SCHEDULE 2.13 TO THE CONSOLIDATION AGREEMENT:
CONDUCT - TEXAS NATIONAL
-42-
SCHEDULE 2.15 TO THE CONSOLIDATION AGREEMENT:
EMPLOYMENT RELATIONS - TEXAS NATIONAL
-43-
SCHEDULE 2.17 TO THE CONSOLIDATION AGREEMENT:
LOANS AND INVESTMENTS - TEXAS NATIONAL
-44-
SCHEDULE 2.21 TO THE CONSOLIDATION AGREEMENT:
ABSENCE OF CHANGES - TEXAS NATIONAL
-45-
SCHEDULE 4.10 TO THE CONSOLIDATION AGREEMENT:
PROXIES
The following list comprises individuals who are (i) directors, (ii) officers or
(iii) holders of 5% or more of the Texas National Common Stock, each of whom has
agreed to execute the Voting Agreement.
-46-
SCHEDULE 4.11 TO THE CONSOLIDATION AGREEMENT:
RELEASES
Directors and Officers of Texas National.
-47-
SCHEDULE 5.5 TO THE CONSOLIDATION AGREEMENT:
RELEASES
-48-
SCHEDULE 8.3 TO THE CONSOLIDATION AGREEMENT:
LEGAL OPINION TO BE DELIVERED BY TEXAS NATIONAL
The legal opinion of counsel for Texas National which is called for by Section
8.3 of the Agreement shall be to the following effect:
(a) Texas National is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America and has full power and authority (including all
licenses, franchises, permits and other governmental authorizations
which are legally required) to own its properties, to engage in the
business and activities now conducted by it and to enter into this
Agreement.
(b) The authorized capital stock of Texas National consists of 38,962
shares of Common Stock, $10.00 par value. As of the date hereof,
38,962 shares of Texas National Common Stock were issued and
outstanding. All of the shares which are issued and outstanding are
validly issued, fully paid and have not been issued in violation of
the preemptive rights of any person. There are no existing options,
warrants, calls, convertible securities or commitments of any kind
enabling Texas National to issue any authorized and unissued Texas
National Common Stock nor does Texas National have any commitment or
obligation to repurchase, reacquire or redeem any of its outstanding
capital stock.
(c) The Board of Directors of Texas National has approved the Agreement
and the transactions contemplated thereby. All necessary corporate
proceedings, including all appropriate and legal actions by
shareholders of Texas National to approve and authorize the
transactions set forth in the Consolidation Agreement, have been
taken. This Agreement has been duly executed and delivered by Texas
National and is a binding agreement of Texas National enforceable
against Texas National in accordance with its terms.
(d) Except as otherwise noted in the Agreement, there are no legal,
quasi-judicial or administrative proceedings of any kind or nature now
pending or, to the knowledge of counsel to Texas National, threatened
before any court or administrative body in any manner against Texas
National or any of their properties or capital stock which might have
a material adverse effect on Texas National, its financial condition,
assets, operations or earnings or the transactions proposed by the
Agreement. Texas National is not in default with respect to any
judgment, order, writ, injunction, decree, award, rule or regulation
of any court, arbitrator or governmental agency or instrumentality.
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(e) The execution and delivery of the Agreement and the consummation of
the transactions contemplated thereby will not, to the best knowledge
of counsel to Texas National, violate any provision of, or constitute
a default under, any law, or any order, writ, injunction or decree of
any court or other governmental agency, or any contract, agreement or
instrument to which Texas National is a party or by which it is bound
or constitute an event which with the lapse of time or action by a
third party could result in any default under any of the foregoing or
result in the creation of any lien, charge or encumbrance upon the
assets or properties of Texas National or upon the Texas National
Common Stock.
Such opinion shall also cover such other matters incident to the transactions
contemplated by the Agreement as Bancshares may reasonably request. As to
questions of fact material to their opinion, such counsel may rely upon
certificates of officers of the Texas National. Such opinion may contain such
qualifications, exceptions and explanations as are satisfactory in form and
substance to Bancshares.
-50-
SCHEDULE 8.14 TO THE CONSOLIDATION AGREEMENT:
REMOVAL OF CERTAIN CREDIT
The loan originated in October of 1996 in the principal amount of $246,000 to
Xxxxx X. Xxxxxxx.
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SCHEDULE 9.2 TO THE CONSOLIDATION AGREEMENT:
LEGAL OPINION TO BE DELIVERED BY BANCSHARES
The legal opinion of counsel for Bancshares which is called for by Section 9.2
of the Agreement shall be to the following effect:
(a) Bancshares is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas, and has
full power and authority (including all licenses, franchises,
permits and other governmental authorizations which are legally
required) to own its properties, to engage in the business and
activities now conducted by it and to enter into this Agreement.
(b) Bayshore is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of
America, and has full power and authority (including all licenses,
franchises, permits and other governmental authorizations which are
legally required) to own its properties, to engage in the business and
activities now conducted by it and to enter into this Agreement.
(c) The Board of Directors of Bancshares and Bayshore and the shareholder
of Bayshore have approved the Agreement and the transactions
contemplated thereby. The Agreement has been duly executed and
delivered by Bancshares and Bayshore and is a binding agreement of
Bancshares and Bayshore enforceable against Bancshares and Bayshore in
accordance with its terms.
(d) The execution and delivery of the Agreement and the consummation of
the transactions contemplated thereby, will not, to the best knowledge
of counsel to Bancshares, violate any provision of, or constitute a
default under, any law, or any order, writ, injunction or decree of
any court or other governmental agency, or any contract, agreement or
instrument to which either Bancshares or Bayshore is a party or by
which they are bound or constitute an event which with the lapse of
time or action by a third party could result in any default under any
of the foregoing or result in the creation of any lien, charge or
encumbrance upon of the assets or properties of Bancshares or Bayshore
or upon the stock of Bancshares or Bayshore.
Such opinion shall also cover such other matters incident to the transactions
contemplated by the Agreement as Texas National may reasonably request. As to
questions of fact material to their opinion, such counsel may rely upon
certificates of officers of Bancshares and Bayshore. Such
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opinion may contain such qualifications, exceptions and explanations as are
satisfactory in form and substance to Texas National.
-53-
EXHIBIT A
PLAN OF CONSOLIDATION
BETWEEN BAYSHORE INTERIM NATIONAL BANK
AND TEXAS NATIONAL BANK OF BAYTOWN
This PLAN OF CONSOLIDATION (the "Plan") is dated as of the ____ day of
_________, 1997, by and between Texas National Bank of Baytown, a national
banking association located in Baytown, Texas ("Texas National") and Bayshore
Interim National Bank ("New Bank"), a national interim banking association
formed as a wholly-owned subsidiary of Bayshore Bancshares, Inc. ("Bancshares")
solely to facilitate the transactions contemplated by the Consolidation
Agreement, defined below. Texas National and New Bank are hereinafter sometimes
collectively referred to as the "Merging Institutions."
This Plan of Consolidation is being entered into pursuant to the Agreement
and Plan of Consolidation dated as of August __, 1997 (the "Consolidation
Agreement") by and among Bancshares, Bayshore National Bank, and Texas National.
In consideration of the premises, and the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set forth below
shall have the following meanings:
Section 1.1. "Effective Date" shall mean the date at which the
consolidation contemplated by this Plan of Consolidation becomes effective as
determined by the certificate approving the consolidation to be issued by the
Office of the Comptroller of the Currency ("OCC").
Section 1.2. "New Bank Common Stock" shall mean the common stock, par
value $10.00 per share, of New Bank owned by Bancshares.
Section 1.3. "Texas National Common Stock" shall mean the common stock,
par value $10.00 per share, of Texas National.
Section 1.4. "The Consolidation" shall refer to the consolidation of New
Bank with and into Texas National as provided in Section 2.1 of this Plan.
Section 1.5. "Surviving Bank" shall refer to Texas National as the
institution surviving the Consolidation.
ARTICLE 2.
TERMS OF THE CONSOLIDATION
Section 2.1. THE CONSOLIDATION. Subject to the terms and conditions set
forth in the Consolidation Agreement, on the Effective Date, New Bank shall be
consolidated with and into Texas National, with Texas National as the Surviving
Bank, under the charter and Articles of Association of Texas National, as
determined by the OCC, and each of the outstanding shares of common stock of New
Bank shall and without any action on the part of Bancshares be canceled and be
converted into shares of common stock of the Surviving Bank. The shares of
common stock of the Surviving Bank into which such New Bank Common Stock is
converted shall represent ownership of 100% of the issued and outstanding
capital stock of the Surviving Bank, all of which shall be owned by Bancshares.
Section 2.2. ARTICLES OF ASSOCIATION, BYLAWS AND FACILITIES OF SURVIVING
BANK. On the Effective Date and until thereafter amended in accordance with
law, the Articles of Association of the Surviving Bank shall be the Articles of
Association of Texas National as in effect on the Effective Date. Until
altered, amended or repealed as provided therein and in the Articles of
Association of the Surviving Bank, the Bylaws of the Surviving Bank shall be the
Bylaws of Texas National as in effect on the Effective Date. The main office of
the Surviving Bank shall be the main office of Texas National as of the
Effective Date, and all corporate acts, plans, policies, contracts, approvals
and authorizations of Texas National and New Bank and their respective
shareholders, boards of directors, committees elected or appointed thereby,
officers and agents, 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 authorization of the Surviving Bank and shall be as
effective and binding thereon as the same were with respect to Texas National
and New Bank respectively, as of the Effective Date.
Section 2.3. EFFECT OF CONSOLIDATION. On the Effective Date of the
Consolidation, the corporate existence of Texas National and New Bank shall be
consolidated into and continued in the Surviving Bank, and the Surviving Bank
shall be deemed to be a continuation in entity and identity of Texas National
and New Bank. All rights, franchises and interests of Texas National and New
Bank, respectively, in and to any type of property and chooses in action shall
be transferred to and
-2-
vested in the Surviving Bank by virtue of the Consolidation without any deed
or other transfer. Surviving Bank, without any order or other action on the
part of any court or otherwise, shall hold and enjoy all rights of property,
franchises and interest, including appointments, designations and
nominations, and all other rights and interests as trustee, executor,
administrator, transfer agent or registrar of stocks and bonds, guardian of
estates, assignee, receiver and committee of estates and lunatics, 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 Texas National
and New Bank, respectively, as of the Effective Date.
Section 2.4. LIABILITIES OF THE SURVIVING BANK. On the Effective Date,
the Surviving Bank shall be liable for all liabilities of Texas National and New
Bank. All deposits, debts, liabilities and obligations of Texas National and of
New Bank, respectively, accrued, absolute, contingent or otherwise, and whether
or not reflected or reserved against on balance sheets, books of account or
records of Texas National or New Bank, as the case may be, shall be those of the
Surviving Bank and shall not be released or impaired by the Consolidation. All
rights of creditors and other obligees and all liens on property of either Texas
National or New Bank shall be preserved unimpaired.
ARTICLE 3.
CONVERSION OF SHARES
Section 3.1. CONVERSION OF TEXAS NATIONAL COMMON STOCK. On the Effective
Date, each share of Texas National Common Stock, issued and outstanding
immediately prior to the Effective Date (other than Dissenting Shares as
hereinafter defined) shall, by virtue of the Consolidation and without any
action on the part of the holder thereof, be converted into the right to receive
$61.59848 in cash ("Consolidation Price") based on 38,962 shares outstanding.
Section 3.2. EXCHANGE OF SHARES. On or immediately prior to the
Effective Date, Bancshares shall have available cash in sufficient amount to pay
the aggregate Consolidation Price. At least ten (10) days in advance of the
Closing Date (as defined in Section 6.1 of the Agreement), Bancshares will send
to each shareholder of Texas National a letter of transmittal for use in
exchanging such holder's certificates for his pro rata amount of the
Consolidation Price. Each shareholder of Texas National shall be entitled to
receive payment for his shares only upon surrender of the certificates
representing his shares of Texas National Common Stock or after providing an
appropriate Affidavit of Lost Certificate and Indemnity Agreement and/or a bond
as may be required in each case by Bancshares. Until so surrendered, each Texas
National Common Stock certificate will be deemed for all corporate purposes to
represent and evidence solely the right to receive the
-3-
amount of the Consolidation Price to be paid therefor pursuant to the
Consolidation Agreement without interest thereon.
Section 3.3. DISSENTING SHARES. Each share of Texas National Common
Stock issued and outstanding immediately prior to the Effective Date, the holder
of which has not voted in favor of the Consolidation and who has properly
perfected his dissenters' rights of appraisal by following the procedures set
forth in the National Bank Act is referred to herein as a "Dissenting Share."
Dissenting Shares owned by each holder thereof who has not exchanged his
certificates representing shares of Texas National Common Stock for the
Consolidation Price and otherwise has not effectively withdrawn or lost his
dissenter's rights, shall not be converted into or represent the right to
receive the Consolidation Price pursuant to Section 3.1 hereof and shall be
entitled only to such rights as are available to such holder pursuant to the
applicable provisions of the National Bank Act. Each holder of Dissenting
Shares shall be entitled to receive the value of such Dissenting Shares held by
him in accordance with the applicable provisions of the National Bank Act,
provided such holder complies with the procedures contemplated by and set forth
in the applicable provisions of the National Bank Act. If any holder of
Dissenting Shares shall effectively withdraw or lose his dissenter's rights
under the applicable provisions of the National Bank Act, such Dissenting Shares
shall be converted into the right to receive the Consolidation Price in
accordance with the provisions of Section 3.1.
Section 3.4. NEW BANK COMMON STOCK. On the Effective Date, the shares of
New Bank Common Stock issued and outstanding immediately prior to the Effective
Date shall be converted automatically and without any action on the part of the
holder thereof into 38,962 shares of common stock of the Surviving Bank. The
shares of common stock of the Surviving Bank into which such New Bank Common
Stock are converted shall represent ownership of 100% of the issued and
outstanding capital stock of the Surviving Bank, all of which shall be owned by
Bancshares.
ARTICLE 4.
MISCELLANEOUS
Section 4.1. CONDITIONS PRECEDENT. The respective obligations of each
party under this Plan shall be subject to the satisfaction, or waiver by the
party permitted to do so, of the conditions set forth in Articles VIII, IX and X
of the Consolidation Agreement.
Section 4.2. TERMINATION. This Plan shall be terminated upon the
termination of the Consolidation Agreement in accordance with Article VII
thereof; provided, that any such termination of this Plan shall not relieve any
party hereto from liability on account of a breach by such party of any of the
terms hereof or thereof.
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Section 4.3. AMENDMENTS. To the extent permitted by law, this Plan may
be amended by a subsequent writing signed by all of the parties hereto upon the
approval of the Board of Directors of each of the parties hereto.
Section 4.4. SUCCESSORS. This Plan shall be binding on the successors of
New Bank and Texas National.
IN WITNESS WHEREOF, New Bank and Texas National have caused this Plan to be
executed by their duly authorized officers and their corporate seals to be
hereunto affixed as of the date first above written.
BAYSHORE INTERIM NATIONAL BANK
Attest:
By:
------------------------------ ------------------------------
TEXAS NATIONAL BANK OF BAYTOWN
Attest:
By:
------------------------------ ------------------------------
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EXHIBIT B
PLAN OF CONSOLIDATION
BETWEEN
TEXAS NATIONAL BANK OF BAYTOWN
AND
BAYSHORE NATIONAL BANK
THIS PLAN OF CONSOLIDATION (the "Plan) is dated as of the ____ day of
________, 1997, by and between Texas National Bank of Baytown ("Texas
National"), a national banking association and the surviving bank of the Plan of
Consolidation between Bayshore Interim National Bank and Texas National, and
Bayshore National Bank ("Bayshore").
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement and Plan of Consolidation (the
"Consolidation Agreement") dated as of August __, 1997, by and among Bayshore
Bancshares, Inc. ("Bancshares"), Bayshore, and Texas National and the Plan of
Consolidation, dated as of __________, 1997, between Texas National and Bayshore
Interim National Bank ("New Bank"), New Bank will consolidate with and into
Texas National (the "First Consolidation"), with the result that Texas National
will become a wholly-owned subsidiary of Bancshares;
WHEREAS, the Consolidation Agreement provides that simultaneously with or
as soon as practicable after the First Consolidation, Texas National will be
consolidated with and into Bayshore;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Texas National and Bayshore hereby
agree that, subject to the terms and conditions hereinafter set forth, and in
accordance with all applicable laws and regulations, Texas National shall be
consolidated with and into Bayshore on the Effective Date (as hereinafter
defined) (the "Final Consolidation"). The parties hereto do hereby agree and
covenant as follows:
1. CONDITIONS OF APPROVAL. The Final Consolidation shall not become
effective unless and until all terms and conditions to such effectiveness
contained in the Consolidation Agreement, which conditions are incorporated
herein by reference, shall have been satisfied or waived.
2. IDENTITY OF RESULTING BANK. The resulting bank as a result of the
Final Consolidation (the "Resulting Bank") shall be Bayshore.
3. ARTICLES OF ASSOCIATION, BYLAWS AND FACILITIES OF CONTINUING BANK. On
the Effective Date and until thereafter amended in accordance with law, the
Articles of Association of Resulting Bank shall be the Articles of Association
of Bayshore as in effect on the Effective Date. Until altered, amended or
repealed as therein provided and in the Articles of Association of Resulting
Bank, the Bylaws of Resulting Bank shall be the Bylaws of Bayshore as in effect
on the Effective Date. Unless and until changed by the Board of Directors of
Resulting Bank, the main office of Resulting Bank shall be the main office of
Bayshore as of the Effective Date. The established offices and facilities of
Texas National immediately prior to the Final Consolidation shall become
established offices and facilities of the Resulting Bank. Until thereafter
changed in accordance with law or the Articles of Association or Bylaws of
Resulting Bank, all corporate acts, plans, policies, contracts, approvals and
authorizations of Texas National and Bayshore and their respective shareholders,
boards of directors, committees elected or appointed thereby, officers and
agents, 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 Resulting Bank and shall be as effective and
binding thereon as the same were with respect to Texas National and Bayshore,
respectively, as of the Effective Date.
4. EFFECT OF FINAL CONSOLIDATION. On the Effective Date, the corporate
existence of the Texas National and Bayshore shall, as provided by law, be
consolidated into and continued in Resulting Bank, and Resulting Bank shall be
deemed to be a continuation in entity and identity of Texas National and
Bayshore. All rights, franchises and interests of Texas National and Bayshore,
respectively, in and to any type of property and chooses in action shall be
transferred to and vested in Resulting Bank by virtue of such Final
Consolidation without any deed or other transfer. Resulting Bank, without any
order or other action on the part of any court or otherwise, shall hold and
enjoy all rights of property, franchises and interest, including appointments,
designations and nominations, and all other rights and interests as trustee,
executor, administrator, transfer agent or registrar of stocks and bonds,
guardian of estates, assignee, receiver and committee of estates and lunatics,
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 Texas National
and Bayshore, respectively, as of the Effective Date.
5. LIABILITIES OF CONTINUING BANK. On the Effective Date of the Final
Consolidation, Resulting Bank shall be liable for all liabilities of Texas
National and Bayshore. All deposits, debts, liabilities, obligations and
contracts of Texas National and of Bayshore, respectively, matured or unmatured,
whether accrued, absolute, contingent or otherwise, and whether or not reflected
or reserved against on balance sheets, books of account, or records of the Texas
National or Bayshore shall be those of Resulting Bank and shall not be released
or impaired by the Final Consolidation. All rights of creditors and other
obligees and all liens on property of either Texas National or Bayshore shall be
preserved unimpaired subsequent to the Final Consolidation.
-2-
6. EFFECTIVE DATE. The Final Consolidation shall become effective upon
the issuance of a certificate approving the Final Consolidation to be issued by
the Office of the Comptroller of the Currency. The term "Effective Date" shall
mean the date and time designated in the certificate approving the Final
Consolidation. A closing shall take place on or prior to the Effective Date
following the receipt of all necessary regulatory and governmental approvals and
consents and the expiration of all statutory waiting periods in respect thereof
and the satisfaction or waiver of the conditions to the consummation of the
Final Consolidation specified in Articles VIII, IX and X of the Consolidation
Agreement.
7. CANCELLATION OF STOCK. On the Effective Date, all of the outstanding
shares of capital stock of Texas National, all of which shares shall be owned by
Bancshares, shall be canceled and shall not be deemed to be authorized, issued
or outstanding for any purpose, and no cash, property, rights or securities
shall be delivered with respect to said shares.
8. CONDITIONS PRECEDENT. The respective obligations of each party under
this Plan shall be subject to the satisfaction, or waiver by the party permitted
to do so, of the conditions set forth in Articles VIII, IX and X of the
Consolidation Agreement.
9. TERMINATION. This Plan shall be terminated upon the termination of
the Consolidation Agreement in accordance with Article VII thereof; provided,
that any such termination of this Plan shall not relieve any party hereto from
liability on account of a breach of such party of any of the terms hereof or
thereof.
10. AMENDMENTS. To the extent permitted by law, this Agreement may be
amended by a subsequent writing signed by all of the parties hereto upon the
approval of the Board of Directors of each of the parties.
11. SUCCESSORS. This Agreement shall be binding on the successors of
Texas National and Bayshore.
IN WITNESS WHEREOF, Texas National and Bayshore have caused this Agreement
to be executed by their duly authorized officers as of the date first above
written.
TEXAS NATIONAL BANK OF BAYTOWN
ATTEST:
By:
------------------------------ ------------------------------
-3-
BAYSHORE NATIONAL BANK
ATTEST:
By:
------------------------------ ------------------------------
-4-
EXHIBIT C
ESCROW AGREEMENT
THIS ESCROW AGREEMENT dated as of August __, 1997 ("Agreement") is
entered into by and among Bay Bancshares, Inc. ("Bancshares") and Texas
National Bank of Baytown (the "Bank") who are parties to the Agreement and Plan
of Consolidation dated July __, 1997 ("Consolidation Agreement"), a copy of
which is attached as Exhibit "A" and _____________________ Bank (the "Escrow
Agent").
W I T N E S S E T H:
WHEREAS, Bancshares, Bayshore National Bank and the Bank have executed
and delivered the Consolidation Agreement; and
WHEREAS, the Agreement contemplates the acquisition of the Bank by
Bancshares; and
WHEREAS, pursuant to the Agreement, the parties desire to set aside in
escrow certain xxxxxxx money delivered by Bancshares in accordance with the
Agreement; and
WHEREAS, Bancshares and the Bank desire that the Escrow Agent act as
escrow agent hereunder, and the Escrow Agent is willing to act as escrow agent
hereunder;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS. Except as herein defined, capitalized terms used in this
Escrow Agreement have the meanings set forth in the Consolidation Agreement.
2. APPOINTMENT OF ESCROW AGENT. The Escrow Agent is hereby appointed as
escrow agent under this Escrow Agreement to perform the services described
herein, and the Escrow Agent hereby accepts such appointment.
3. ESCROW FUNDS.
x. XXXXXXX MONEY. Upon execution of this Agreement, Bancshares
shall deposit with the Escrow Agent the sum of $50,000 ("Xxxxxxx Money"). The
Escrow Agent shall hold the Xxxxxxx Money and will disburse the Xxxxxxx Money
and any accrued interest thereon in the following manner:
(1) The disbursement provisions set forth immediately below
shall not become affective unless and until the Bank has
delivered to the
Escrow Agent and Bancshares evidence satisfactory to both
the Escrow Agent and Bancshares that each of the directors,
officers and holders of at least five percent of the issued
and outstanding common stock of the Bank have executed the
Voting Agreement and Irrevocable Proxy set forth as Exhibit
"D" to the Consolidation Agreement.
(2) CREDIT TO PURCHASE PRICE. If the Consolidations as defined
in the Consolidation Agreement close, the Xxxxxxx Money will
be credited to the Consolidation Price as set forth in
Section 1.12(a) of the Consolidation Agreement.
(3) RETURN OF XXXXXXX MONEY. Bancshares will be entitled to a
return of the Xxxxxxx Money if:
(a) the Consolidations do not close because of a failure to
satisfy one or more of the conditions to Closing set
forth in Articles VIII or X of the Agreement, or
(b) Bancshares terminates the Agreement for any of the
reasons set forth in Sections 7.1(a), (c), (d) or (e)
of the Consolidation Agreement.
(4) LOSS OF XXXXXXX MONEY. Bancshares will forfeit the xxxxxxx
money and it will be distributed to Bank if:
(a) the Closing does not occur by December 31, 1997, or
such other date mutually agreed to in writing by the
parties to the Consolidation Agreement, despite the
fact that the Bank has satisfied all conditions to
Closing and Bancshares has not terminated the
Consolidation Agreement.
(b) the Agreement is terminated by the Bank because
Bancshares or Bayshore has breached or failed to
perform in any material respect any of Bancshares'
covenants or agreements contained in the Consolidation
Agreement and has not cured the alleged breach after
receiving proper notice as set forth in the
Consolidation Agreement.
-2-
4. INVESTMENT OF XXXXXXX MONEY. The Xxxxxxx Money shall be invested and
reinvested in any certificate of deposit or acceptance, maturing not more than
30 days after the date of investment, issued by a commercial banking institution
that is a member of the Federal Reserve System and which has a combined capital
and surplus and undivided profits of not less than $2,000,000.
Notwithstanding the foregoing, no investment shall have a maturity greater than
30 days if such maturity extends past the termination date of this Escrow
Agreement. Without specific instructions, the Escrow Agent is not required to
invest the Xxxxxxx Money.
5. RESPONSIBILITY OF ESCROW AGENT. The Escrow Agent shall not be
responsible for the genuineness of any signature or document presented to it
pursuant to this Agreement and may rely conclusively upon and shall be protected
in acting upon any advice, judicial order or decree, certificate, notice,
request, consent, statement, instruction or other instrument believed by it in
good faith to be genuine or to be signed or presented by the proper person
hereunder, or duly authorized by such person or properly made. The Escrow Agent
shall not be responsible for any of the agreements contained herein except the
performance of its duties as expressly set forth herein. The Escrow Agent is
not responsible for investigating or assuring compliance with the Consolidation
Agreement or any amendments thereto or any other agreement or documents outside
of this Escrow Agreement. The Escrow Agent shall be entitled to retain counsel
and to act in reliance upon the advice of such counsel in all matters pertaining
to this Agreement, and shall not be liable for any action taken or omitted by it
in good faith in accordance with such advice. The duties and obligations of the
Escrow Agent hereunder shall be governed solely by the provisions of this
Agreement, and the Escrow Agent shall have no duties other than the duties
expressly imposed hereby and shall not be required to take any action other than
in accordance with the terms hereof. The Escrow Agent shall not be bound by any
notice of, or demand with respect to, any waiver, modification, amendment,
termination, cancellation, rescission or supersession of this Agreement, unless
in writing and signed by Bancshares and Bank, and, if the duties of the Escrow
Agent are affected thereby, unless it shall have given its prior written consent
thereto. In the event of any controversy or dispute hereunder or with respect
to any question as to the construction of this Agreement, or any action to be
taken by the Escrow Agent hereunder, the Escrow Agent shall incur no liability
for any action taken or suffered in good faith, its liability hereunder to be
limited solely to gross negligence or willful misconduct on its part. The
Escrow Agent's reliance on counsel shall be considered to be in good faith for
purposes of this Escrow Agreement.
6. INDEMNIFICATION OF ESCROW AGENT. BANCSHARES AND BANK HEREBY AGREE TO
INDEMNIFY THE ESCROW AGENT FOR, AND TO HOLD IT HARMLESS AGAINST, ANY LOSS,
LIABILITY OR EXPENSE INCURRED WITHOUT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON
THE PART OF THE ESCROW AGENT, ARISING OUT OF OR IN CONNECTION WITH ITS ENTERING
INTO THIS
-3-
ESCROW AGREEMENT, AND CARRYING OUT ITS DUTIES HEREUNDER, INCLUDING THE COSTS
AND EXPENSES OF DEFENDING ITSELF AGAINST ANY CLAIM OF LIABILITY.
7. RIGHT OF INTERPLEADER. Should any controversy arise between
Bancshares and Bayshore, and Bank, or any other person, firm or entity, with
respect to this Escrow Agreement, the Xxxxxxx Money, or any part thereof, or the
right of any party or other person to receive the Xxxxxxx Money, or Bancshares
and Bank fail to designate another Escrow Agent as provided in Section 9 hereof,
or if the Escrow Agent should be in doubt as to what action to take, the Escrow
Agent shall have the right (but not the obligation) to (i) withhold delivery of
the Xxxxxxx Money until the controversy is resolved, the conflicting demands are
withdrawn or its doubt is resolved or (ii) institute a xxxx of interpleader in
any court of competent jurisdiction to determine the rights of the parties
hereto (the right of the Escrow Agent to institute such xxxx of interpleader
shall not, however, be deemed to modify the manner in which the Escrow Agent is
entitled to make disbursements of the Xxxxxxx Money as hereinabove set forth
other than to tender the Xxxxxxx Money into the registry of such court). If a
xxxx of interpleader is instituted, or if the Escrow Agent is threatened with
litigation or becomes involved in litigation in any manner whatsoever on account
of this Escrow Agreement or the Xxxxxxx Money, then as between themselves and
the Escrow Agent, Bancshares and Bank, jointly and severally, hereby bind and
obligate themselves, their successors, heirs, executors and assigns to pay the
Escrow Agent its reasonable attorney's fees and any and all other disbursements,
expenses, losses, costs and damages of the Escrow Agent in connection with or
resulting from such threatened or actual litigation.
8. COLLECTED FUNDS; COLLECTION OF CHECKS OR INSTRUMENTS. Any check
included in the Xxxxxxx Money shall be collected by the Escrow Agent and the
proceeds held as part of the Xxxxxxx Money. No monies shall be disbursed by the
Escrow Agent until and unless it has collected the deposited funds. If any
check or instrument delivered to the Escrow Agent under this Escrow Agreement is
uncollectible and if the Escrow Agent has distributed funds represented by such
item pursuant to the terms hereof, the Escrow Agent shall notify the depositor
thereof and shall deliver the returned check or instrument to such depositor,
and such depositor shall immediately reimburse the Escrow Agent for the amount
of funds uncollectible. The Escrow Agent may pay out monies held in escrow by
its check. The Escrow Agent shall not be obligated to take any legal action to
enforce payment of any item deposited with it in escrow.
9. TERMINATION. This Escrow Agreement shall terminate as to the Xxxxxxx
Money on the date on which the Escrow Agent receives written notice from
Bancshares and Bank that the parties have fulfilled all of their obligations
under this Escrow Agreement. Upon receipt of such notice, the Escrow Agent
shall deliver to Bancshares any remaining portion of the Xxxxxxx Money, if any,
including all income earned on the Xxxxxxx Money.
-4-
10. REIMBURSEMENT OF EXPENSES OF ESCROW AGENT. All such fees and related
expenses (including legal expenses, if necessary) shall be the responsibility
of Bancshares and Bank and shall be paid directly by the responsible party upon
delivery of an invoice by the Escrow Agent to Bancshares and Bank.
11. RESIGNATION, REMOVAL AND REPLACEMENT OF ESCROW AGENT. The Escrow
Agent or any successor Escrow Agent may resign at any time by giving not less
than 60 days' prior written notice of resignation to Bancshares and Bank, such
resignation to be effective on the date specified in such notice. Bancshares
and Bank may at any time remove the Escrow Agent with or without cause by any
instrument or instruments in writing signed by Bancshares and Bank and delivered
to the Escrow Agent. In case the office of the Escrow Agent shall become vacant
for any reason, including, without limitation, resignation or removal, the
parties hereto shall appoint as successor Escrow Agent such other person or
entity as Bancshares and Bank agree, by an instrument or instruments in writing
delivered to such successor Escrow Agent and the retiring Escrow Agent. Upon
the appointment of any successor pursuant to this Section 14, the Escrow Agent
shall deliver the Xxxxxxx Money to the successor Escrow Agent on the date of
resignation, and such successor Escrow Agent shall immediately and without
further act succeed the retiring Escrow Agent as if originally named herein. If
no successor escrow agent is appointed, the Escrow Agent may, in its sole
discretion, deliver the Xxxxxxx Money to Bancshares, as successor escrow agent,
who shall become bound by the terms and provisions of this Escrow Agreement, or
institute a xxxx of interpleader.
12. NOTICES AND COMMUNICATIONS; FINAL ACCOUNTING. The Escrow Agent shall
keep Bancshares and Bank advised in writing of all transactions pursuant to this
Escrow Agreement by monthly statement of account, which shall be sent by regular
mail to each of the parties listed below. In addition, the Escrow Agent shall
issue a final financial accounting of all transactions concerning the Xxxxxx
Money, including investments, income from investments and distributions, to
Bancshares and Bank upon termination of this Escrow Agreement.
Any notice or other communication under this Escrow Agreement shall be
deemed to have been duly delivered on the earlier of (i) the date of receipt, if
delivered by hand or telecopy, or (ii) three days after the date when the same
shall have been posted by certified mail, return receipt requested, in any post
office in the United States of America, postage prepaid and addressed to the
party to whom such notice or other communication is to be given or made at such
party's address set forth below, or to such other address as such party shall
designate by written notice to the other parties (including the Escrow Agent),
as follows:
If to Bank: Xx. X. X. Xxxxxxx
Xxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
-5-
With a copy to: Xx. X. Xxxxxx Xxxxx
Xxxxxxxxxxx, Hrdlicka, White, Xxxxxxxx & Xxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Bancshares: Xx. X. X. Xxxxxx
Bay Bancshares, Inc.
0000 Xxxxxxx 000
Xx Xxxxx, Xxxxx 00000
With a copy to: Xx. Xxxxxxx X. Xxxxxx XX
Bracewell & Xxxxxxxxx, L.L.P.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
If to Escrow Agent:
---------------------
---------------------
---------------------
With a copy to :
---------------------
---------------------
---------------------
13. GOVERNING LAW. The validity, enforceability and construction of this
Escrow Agreement shall be governed by the laws of the State of Texas applicable
to contracts to be made and wholly performed in such state.
14. AMENDMENTS; SUCCESSORS. This Agreement may be amended only by a
writing signed by Bancshares and Bank, and shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns. The consent of the Escrow Agent shall be required for any such
amendment in which the duties of the Escrow Agent are involved.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, which may be separately executed by the parties hereto, each of
which shall be an original and all of which taken together shall constitute one
and the same instrument.
16. ENTIRE AGREEMENT. This Escrow Agreement and the Consolidation
Agreement contain the entire agreements and understanding of the parties with
respect to the transaction contemplated
-6-
hereby. No prior agreement, either written or oral, shall be construed to
change, amend, alter, repeal or invalidate this Escrow Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
on the day and year first above written.
BAY BANCSHARES, INC.
---------------------------------------
X. X. XXXXXX
TEXAS NATIONAL BANK OF BAYTOWN
---------------------------------------
---------------------------------------
---------------------------------------
ESCROW AGENT
-7-
EXHIBIT D
VOTING AGREEMENT
AND IRREVOCABLE PROXY
This Voting Agreement and Irrevocable Proxy (the "Voting Agreement") dated
as of August __, 1997 is executed by and among Bay Bancshares, Inc., a Texas
corporation ("Bancshares"), Texas National Bank of Baytown, a national banking
association ("Texas National"), and the other persons who are signatories hereto
(referred to herein individually as a "Shareholder" and collectively as the
"Shareholders").
WHEREAS, Bancshares, Bayshore National Bank and Texas National have
executed that certain Agreement and Plan of Consolidation dated as August 4,
1997 (the "Consolidation Agreement") whereby Texas National will consolidate
into an interim bank formed as a subsidiary of Bancshares solely to facilitate
the transactions contemplated by the Consolidation Agreement, and immediately
thereafter, Texas National will consolidate into Bayshore National Bank, a
wholly owned subsidiary of Bancshares (collectively, the "Consolidations"); and
WHEREAS, the Consolidation Agreement provides that the total consideration
payable for all of issued and outstanding stock of Texas National will be
$2,400,000 or $61.59848 based on 38,962 shares issued and outstanding;
WHEREAS, Section 4.10 of the Consolidation Agreement requires that Texas
National deliver to Bancshares the irrevocable proxies of the Shareholders; and
WHEREAS, Texas National and Bancshares are relying on the irrevocable
proxies in incurring expenses in reviewing Texas National's business, in
preparing a proxy statement, in proceeding with the filing of applications for
regulatory approvals, and in undertaking other actions necessary for the
consummation of the Consolidations;
NOW, THEREFORE, the parties hereto agree as follows:
1. Each of the Shareholders hereby represents and warrants to Bancshares
and Texas National that he is the registered holder of and has the exclusive
right to vote the shares of common stock, $10.00 par value, of Texas National
("Stock") set forth below his name on the signature pages hereto. Each
Shareholder hereby agrees to vote at the shareholders' meeting referred to in
Section 1.11 of the Consolidation Agreement (the "Meeting") the shares of Stock
set forth below his name on the signature pages hereto and all other shares of
Stock such Shareholder owns of record as of the date of the Meeting and to
direct the vote of all shares of Stock which such Shareholder
-8-
holds beneficially and has the power and authority to direct the voting
thereof as of the date of the Meeting (the "Shares") in favor of the
authorization and approval of the Consolidation Agreement, and the other
agreements and transactions contemplated thereby.
2. In order better to effect the provisions of Section 1, each
Shareholder hereby revokes any previously executed proxies and hereby
constitutes and appoints X.X. Xxxxxxx (the "Proxy Holder"), with full power of
substitution, his true and lawful proxy and attorney-in-fact to vote at the
Meeting all of such Shareholder's Shares in favor of the authorization and
approval of the Consolidation Agreement and the other agreements and
transactions contemplated thereby, with such modifications to the Consolidation
Agreement and the other agreements and transactions contemplated thereby as the
parties thereto may make, in the event such Shareholder does not vote in favor
of the authorization and approval of the Consolidation Agreement and the other
agreements and transactions contemplated thereby.
3. Each Shareholder hereby covenants and agrees that until this Voting
Agreement is terminated in accordance with its terms, such Shareholder will not,
and will not agree to, without the consent of Bancshares, directly or
indirectly, sell, transfer, assign, pledge, hypothecate, cause to be redeemed or
otherwise dispose of any of the Shares or grant any proxy or interest in or with
respect to any such Shares or deposit such shares into a voting trust or enter
into another voting agreement or arrangement with respect to such Shares except
as contemplated by this Voting Agreement, unless the Shareholder causes the
transferee of such Shares to deliver to Bancshares an amendment to this Voting
Agreement whereby such transferee or other holder becomes bound by the terms of
this Voting Agreement.
4. This proxy shall be limited strictly and solely to the power to vote
the Shares in the manner set forth in Section 2 and shall not extend to any
other matters.
5. Each Shareholder acknowledges that Bancshares and Texas National are
relying on this Voting Agreement in incurring expenses in reviewing Texas
National's business, in preparing a proxy statement, in proceeding with the
filing of applications for regulatory approvals, and in undertaking other
actions necessary for the consummation of the Consolidations and that the proxy
granted hereby is coupled with an interest and is irrevocable to the full extent
permitted by applicable law, including 12 U.S.C. 61 of the National Bank Act and
Article 2.29C of the Texas Business Corporation Act. Each Shareholder and Texas
National acknowledge that the performance of this Voting Agreement is intended
to benefit Bancshares.
6. The irrevocable proxy granted pursuant hereto shall continue in effect
until the earlier to occur of (i) the termination of the Consolidation
Agreement, as it may be amended or extended from time to time, or (ii) the
consummation of the Consolidations.
-9-
7. The vote of the Proxy Holder shall control in any conflict between its
vote of the Shares and a vote by the Shareholders of the Shares and Texas
National agrees to recognize the vote of the Proxy Holder instead of the vote of
the Shareholders in the event the Shareholders do not vote in favor of the
approval of the Consolidation Agreement as set forth in Section 1 hereof.
8. This Voting Agreement may not be modified, amended, altered or
supplemented with respect to a particular Shareholder except upon the execution
and delivery of a written agreement executed by Texas National, Bancshares and
the Shareholder.
9. This Voting Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
10. This Voting Agreement, together with the Consolidation Agreement and
the agreements contemplated thereby, embody the entire agreement and
understanding of the parties hereto in respect to the subject matter contained
herein. This Voting Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter contained
herein.
11. All notices, requests, demands and other communications required or
permitted hereby shall be in writing and shall be deemed to have been duly given
if delivered by hand or mail, certified or registered mail (return receipt
requested) with postage prepaid to the addresses of the parties hereto set forth
below their signature on the signature pages hereof or to such other address as
any party may have furnished to the others in writing in accordance herewith.
12. This Voting Agreement and the relations among the parties hereto
arising from this Voting Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
above written.
BAYSHORE BANCSHARES, INC.
By:
----------------------------------
X. X. Xxxxxx
President
-10-
Address:
0000 Xxxxxxx 000
XxXxxxx, Xxxxx 00000
Attention: X. X. Xxxxxx
TEXAS NATIONAL BANK OF BAYTOWN
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Address:
0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: X. X. Xxxxxxx
SHAREHOLDER:
---------------------------------------
Printed Name:
--------------------------
Address:
-------------------------------
---------------------------------------
________ shares of Common Stock
-11-
EXHIBIT E
RELEASE OF CLAIMS
THIS RELEASE OF CLAIMS ("Release") dated the ______ day of ____________,
1997, is executed and delivered by the undersigned individual to Texas National
Bank of Baytown ("Bank").
WHEREAS, Bay Bancshares, Inc. ("Bancshares") will acquire the Bank pursuant
to that certain Agreement and Plan of Consolidation dated as of August ___, 1997
by and between Bancshares, Bayshore National Bank and the Bank (the
"Agreement"); and
WHEREAS, Bancshares has required as a condition of the acquisition that the
undersigned execute and deliver this Release to confirm the absence of any
claims by the undersigned against the Bank;
NOW THEREFORE, in consideration of the premises contained herein and ten
dollars and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned hereby agrees as follows:
Section 1. RELEASE. The undersigned hereby RELEASES and FOREVER
DISCHARGES the Bank and its successors, assigns, representatives and attorneys
from all manners of action, causes of action, suits, debts, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, premises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever in law or in equity which the
undersigned ever had, no has, or hereafter can, shall or may have against the
Bank, in respect of any and all agreements and obligations incurred on or prior
to the date hereof, or in respect of any event occurring or circumstances
existing on or prior to the date hereof; provided, however, that the Bank shall
not be released from any of its obligations or liabilities to the undersigned
(i) pursuant to the provisions of the certificate or articles of incorporation
or association or bylaws of the Bank regarding the indemnification of directors
and officers; and (ii) in connection with any indebtedness or contractual
obligation or liability to the undersigned existing on the date hereof.
Section 2. SUCCESSORS. This Release shall be binding upon the
undersigned and his or her heirs, devisees, administrators, executors, personal
representatives, successors and assigns and shall inure to the benefit of the
Bank and its successors and assigns.
Section 3. GOVERNING LAW. This Release shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to Texas principles of conflicts of law.
Section 4. MODIFICATION. This Release may be modified only by a
written instrument executed by the undersigned and the Bank.
IN WITNESS WHEREOF, the undersigned has executed this Release effective as
of the date first above written.
---------------------------------------
Signature
---------------------------------------
Printed Name
STATE OF TEXAS )
)
COUNTY OF _______ )
This instrument was acknowledged before me on _____________________, 1997
by ________________________________.
---------------------------------------
Notary Public in and for the
State of Texas
---------------------------------------
Notary's Name Typed or Printed
My Commission Expires:
-----------------
-2-
EXHIBIT F
RELEASE OF CLAIMS
THIS RELEASE OF CLAIMS ("Release") dated the _____ day of ____________
1997, is executed and delivered by the undersigned Bay Bancshares, Inc.
("Bancshares") and Bayshore National Bank ("Bayshore") to ______________________
("Person").
WHEREAS, Bancshares will acquire Texas National Bank of Baytown (the
"Bank") pursuant to that certain Agreement and Plan of Consolidation by and
between Bancshares, Bayshore and the Bank; and
WHEREAS, the Bank has required as a condition of the acquisition that
Bancshares and Bayshore execute and deliver this Release to confirm the absence
of any claims by Bancshares and Bayshore against Person;
NOW THEREFORE, in consideration of the premises contained herein and ten
dollars and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned hereby agrees as follows:
Section 1. RELEASE. The undersigned hereby RELEASES and FOREVER
DISCHARGES Person and his successors, assigns, representatives and attorneys
from all manners of action, causes of action, suits, debts, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, premises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever in law or in equity which the
undersigned ever had, or has, or hereafter can, shall or may have against Person
in respect of any and all agreements and obligations incurred on or prior to the
date hereof, or in respect of any event occurring or circumstances existing on
or prior to the date hereof; provided, however, that Person shall not be
released from any of his obligations or liabilities to the undersigned in
connection with any indebtedness or contractual obligation or liability related
to deposits, accounts and loans which the undersigned may have with the Bank
existing on the date hereof.
Section 2. SUCCESSORS. This Release shall be binding upon the
undersigned and his or her heirs, devisees, administrators, executors, personal
representatives, successors and assigns and shall inure to the benefit of the
Bancshares and Person and their successors and assigns.
Section 3. GOVERNING LAW. This Release shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to Texas principles of conflicts of law.
Section 4. MODIFICATION. This Release may be modified only by a
written instrument executed by the Bancshares, Bayshore and Person.
IN WITNESS WHEREOF, the undersigned has executed this Release effective
as of the date first above written.
BAY BANCSHARES, INC.
---------------------------------------
Signature
---------------------------------------
Printed Name
BAYSHORE NATIONAL BANK
---------------------------------------
Signature
---------------------------------------
Printed Name
STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on _____________________, 1997
by __________________________, the ________________ of Bay Bancshares, Inc.
---------------------------------------
Notary Public in and for the
State of Texas
---------------------------------------
Notary's Name Typed or Printed
My Commission Expires:
-----------------
-2-
STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on _____________________, 1997
by __________________________, the ________________ of Bayshore National Bank.
---------------------------------------
Notary Public in and for the
State of Texas
---------------------------------------
Notary's Name Typed or Printed
My Commission Expires:
-----------------
-3-
EXHIBIT G
OUTLINE OF TERMS OF NON-COMPETITION AGREEMENT
Any officer who is offered and accepts employment with Bancshares or
Bayshore will be required to enter into a Non-Competition Agreement providing
that for a one year period following the date of execution of the
Non-Competition Agreement the Officer shall not, directly or indirectly, either
as an employee, employer, consultant, agent, principal, partner, greater than
10% stockholder, officer, director or in any other individual or representative
capacity, (i) solicit the banking business (loan, deposit or otherwise) of any
then existing customers of Texas National Bank and (ii) engage or participate in
any business that is in competition in any manner whatever with the business of
Bay Bancshares, Inc. or Bayshore National Bank within a five-mile radius of
Texas National's facility located at 0000 Xxxxxx Xxxxx in Baytown, Texas.
Officers who are not offered employment or who are offered employment but
subsequently terminated by Bancshares or Bayshore shall not be subject to the
above restrictions. An officer who is offered employment but subsequently
voluntarily terminates his employment shall be subject to the above
restrictions.
