EXHIBIT 2
PLAN AND
AGREEMENT OF MERGER
BETWEEN
FIRST COMMERCIAL CORPORATION
AND
SOUTHWEST BANCSHARES, INC.
Date: DECEMBER 20, 1996
TABLE OF CONTENTS
Page
ARTICLE I
THE PLAN OF MERGER
Section 1.01. The Merger . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Effect of the Merger . . . . . . . . . . . . . . . 2
Section 1.03. Consummation of the Merger . . . . . . . . . . . . 2
Section 1.04. Articles of Incorporation; Bylaws;
Directors and Officers . . . . . . . . . . . . . . 3
Section 1.05. Merger Consideration; Conversion
of Securities . . . . . . . . . . . . . . . . . . 3
Section 1.06. Exchange of Certificates . . . . . . . . . . . . . 4
Section 1.07. Rights of Bancshares Shareholders to Dividends . . 4
ARTICLE II
APPROVAL OF MERGER
Section 2.01. Shareholder Approval . . . . . . . . . . . . . . . 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of Bancshares . . . 5
(a) Authority for Transaction . . . . . . . . . . 5
(b) Organization and Capitalization . . . . . . 5
(c) Financial Statements . . . . . . . . . . . 6
(d) Dividends . . . . . . . . . . . . . . . . . 7
(e) Loans . . . . . . . . . . . . . . . . . . . 7
(f) Taxes . . . . . . . . . . . . . . . . . . . 8
(g) Litigation and Regulatory Matters . . . . . 8
(h) Compliance . . . . . . . . . . . . . . . . 9
(i) Properties and Other Assets . . . . . . . . 9
(j) Agreement Does Not Violate Other
Instruments . . . . . . . . . . . . . . . . 10
(k) Insurance . . . . . . . . . . . . . . . . 11
(l) Employee Benefit Plans . . . . . . . . . . 11
(m) Employee Relations . . . . . . . . . . . . 13
(n) No Material Events . . . . . . . . . . . . 13
(o) Liabilities . . . . . . . . . . . . . . . . 14
(p) Marketability of Securities . . . . . . . . 14
(q) Interested Party Transactions . . . . . . . 15
(r) Material Contracts . . . . . . . . . . . . 15
(s) Environmental Matters . . . . . . . . . . . 16
(t) Property Sites Owned by Bancshares
and the Bancshares Subsidiaries . . . . . . 17
(u) Representations Not Misleading . . . . . . 17
Section 3.02. Representations and Warranties of First
Commercial . . . . . . . . . . . . . . . . . . . . 17
(a) Organization and Capitalization of First
Commercial . . . . . . . . . . . . . . . . 18
(b) Authority for Transaction . . . . . . . . . 18
(c) Agreement Does Not Violate Other
Instruments . . . . . . . . . . . . . . . . 19
(d) Representations Not Misleading . . . . . . 19
(e) Financial Statements . . . . . . . . . . . 19
(f) Litigation and Regulatory Matters . . . . . 20
(g) Compliance . . . . . . . . . . . . . . . . 21
(h) No Material Events . . . . . . . . . . . . 21
(i) Taxes . . . . . . . . . . . . . . . . . . . 21
(j) Insurance . . . . . . . . . . . . . . . . . 22
(k) ERISA Plans . . . . . . . . . . . . . . . . 22
(l) Employee Relations . . . . . . . . . . . . 22
(m) Properties and Other Assets . . . . . . . . 22
(n) Environmental Matters . . . . . . . . . . . 23
(o) Pending Acquisition by FCC . . . . . . . . 23
(p) Regulatory Approval . . . . . . . . . . . . 23
(q) Availability of First Commercial Stock . . 23
ARTICLE IV
COVENANTS
Section 4.01. Covenants of Bancshares . . . . . . . . . . . . . 23
(a) Approval of Transaction and Consents . . . 23
(b) Access to Corporate Records . . . . . . . . 24
(c) Monthly Financial Statements . . . . . . . 24
(d) Closing Financial Statements . . . . . . . 25
(e) Conduct of Business . . . . . . . . . . . . 25
(f) Cooperation and Furnishing Information . . 26
(g) Related Party Transactions . . . . . . . . 27
(h) Notice of Changes . . . . . . . . . . . . . 27
(i) Limit on Bancshares's Attorneys' Fees . . . 27
Section 4.02. Covenants of First Commercial . . . . . . . . . . 27
(a) Consents and Approvals . . . . . . . . . . 27
(b) Quarterly Reports; Current Reports . . . . 28
(c) Conduct of Business . . . . . . . . . . . . 28
(d) Notice of Changes . . . . . . . . . . . . . 28
(e) Access to Corporate Records . . . . . . . . 28
(f) Election to First Commercial Board . . . . 29
(g) Registration of First Commercial Stock . . 29
(h) Pooling of Interests . . . . . . . . . . . 29
(i) Employee Benefits . . . . . . . . . . . . . 29
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01. Conditions Precedent to Obligation of First
Commercial . . . . . . . . . . . . . . . . . . . . 29
(a) Performance of Covenants . . . . . . . . . 29
(b) Representations True at Closing . . . . . . 30
(c) Material Changes in Financial Condition,
Business or Prospects . . . . . . . . . . . 30
(d) Certified Resolutions . . . . . . . . . . . 30
(e) Government Approvals; Other Consents . . . 30
(f) No Injunction . . . . . . . . . . . . . . . 30
(g) Litigation . . . . . . . . . . . . . . . . 31
(h) No Material Misstatements or Omissions . . 31
(i) Opinion of Bancshares's Counsel . . . . . . 31
(j) Financial Confirmation . . . . . . . . . . 31
(k) Due Diligence Review . . . . . . . . . . . 32
(l) Title Opinion . . . . . . . . . . . . . . . 32
(m) Pooling of Interests Opinion . . . . . . . 32
(n) Delivery of Continuity of Interest Letters 33
(o) Articles of Merger . . . . . . . . . . . . 33
Section 5.02. Conditions Precedent to Obligation
of Bancshares . . . . . . . . . . . . . . . . . . 33
(a) Performance of Covenants . . . . . . . . . 33
(b) Representations True at Closing . . . . . . 33
(c) Material Changes in Financial Condition . . 34
(d) Certified Resolutions . . . . . . . . . . . 34
(e) No Injunction . . . . . . . . . . . . . . . 34
(f) No Material Misstatements or Omissions . . 34
(g) Opinion of First Commercial's Counsel . . . 34
(h) Tax Opinion . . . . . . . . . . . . . . . . 35
(i) Securities Registration Opinion . . . . . 35
(j) Fairness Opinion . . . . . . . . . . . . . 35
(k) Articles of Merger . . . . . . . . . . . . 35
(l) Due Diligence Review . . . . . . . . . . . 35
(m) No Adverse Change . . . . . . . . . . . . . 36
(n) Litigation . . . . . . . . . . . . . . . . 36
(o) Receipt of Government Approval . . . . . . 37
ARTICLE VI
TERMINATION
Section 6.01. Procedure for Termination . . . . . . . . . . . . 37
Section 6.02. Termination by Mutual Agreement . . . . . . . . . 39
Section 6.03. Effect of Termination for Non-Willful Breach . . . 39
Section 6.04. Effect of Termination for Willful Breach . . . . . 39
Section 6.05. Termination Fee . . . . . . . . . . . . . . . . 39
Section 6.06. Enforcement Expenses . . . . . . . . . . . . . . 39
ARTICLE VII
BROKERS AND EXPENSES
Section 7.01. Brokers . . . . . . . . . . . . . . . . . . . . . 40
Section 7.02. Expenses . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Announcements . . . . . . . . . . . . . . . . . . 40
Section 8.02. Notices . . . . . . . . . . . . . . . . . . . . . 40
Section 8.03. Binding Effect . . . . . . . . . . . . . . . . . . 41
Section 8.04. Headings . . . . . . . . . . . . . . . . . . . . . 41
Section 8.05. Counterparts . . . . . . . . . . . . . . . . . . . 41
Section 8.06. Integration of Agreement . . . . . . . . . . . . . 41
Section 8.07. Amendments; Waivers . . . . . . . . . . . . . . . 41
Section 8.08. Governing Law . . . . . . . . . . . . . . . . . . 41
Section 8.09. Incorporation by Reference . . . . . . . . . . . . 41
Section 8.10. Confidentiality of Information . . . . . . . . . . 42
Section 8.11. No Assignment . . . . . . . . . . . . . . . . . . 42
Section 8.12. Severability . . . . . . . . . . . . . . . . . . . 42
Section 8.13. Survival of Representations and Warranties . . . . 42
Section 8.14. Definition of To The Knowledge Of . . . . . . . . 42
Section 8.15. Applicability of Agreement to Entity Prior
to Becoming Bancshares Subsidiary . . . . . . . . 43
List of Exhibits:
A Form of Articles of Merger (Section 1.01)
B Form of Opinion of Mitchell, Williams, Xxxxx, Xxxxx & Xxxxxxxx,
P.L.L.C. (Section 5.01(i))
C Form of Opinion of Friday, Xxxxxxxx & Xxxxx (Section 5.02(g))
List of Schedules:
A Schedule of Ownership of Common Stock (Delivered Pursuant to
Section 3.01(b)(ii))
B Schedule of Dividends (Delivered Pursuant to Section 3.01(d))
C Schedule of Loans (Delivered Pursuant to Section 3.01(e))
D Schedule of Internal Revenue Service and/or State Taxing
Authority Audits (Delivered Pursuant to Section 3.01(f)
E Schedule of Litigation (Delivered Pursuant to Section 3.01(g))
F Schedule of Consents and Approvals to be Obtained by
Bancshares and Bancshares Subsidiaries (Delivered Pursuant to
Section 3.01(j))
G Schedule of Insurance Policies (Delivered Pursuant to Section
3.01(k))
H Schedule of Employee Benefit Plans (Delivered Pursuant to
Section 3.01(l))
I Schedule of Employees (Delivered Pursuant to Section 3.01(m))
J Schedule of Material Changes (Delivered Pursuant to Section
3.01(n))
K Schedule of Pledges of Investment (Delivered Pursuant to
Section 3.01(p))
L Schedule of Interested Party Transactions and Loans (Delivered
Pursuant to Section 3.01(q))
M Schedule of Material Contracts (Delivered Pursuant to Section
3.01(r))
N Schedule of Properties Containing Hazardous Materials
(Delivered Pursuant to Section 3.01(s))
O Schedule of Property Sites Owned by Bancshares and Bancshares
Subsidiaries (Delivered Pursuant to Section 3.01(t))
P Schedule of Consents and Approvals to Be Obtained by First
Commercial (Delivered Pursuant to Section 3.02(c))
Q Schedule of Litigation (Delivered Pursuant to Section 3.02(f)).
DEFINITIONS
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Articles of Merger . . . . . . . . . . . . . . . . . . . . . . 2
Bancshares . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Bancshares Balance Sheet . . . . . . . . . . . . . . . . . . . . 8
Bancshares Due Diligence Review . . . . . . . . . . . . . . . . 36
Bancshares Financial Statements . . . . . . . . . . . . . . . . . 6
Bancshares Stock . . . . . . . . . . . . . . . . . . . . . . . . 1
Bancshares Subsidiaries . . . . . . . . . . . . . . . . . . . . 1
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Closing Financial Statements . . . . . . . . . . . . . . . . . . 25
COBRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . 3
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . 2
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Federal Reserve Board . . . . . . . . . . . . . . . . . . . . . . 20
First Commercial . . . . . . . . . . . . . . . . . . . . . . . . 1
First Commercial Banks . . . . . . . . . . . . . . . . . . . . . 20
First Commercial Due Diligence Review . . . . . . . . . . . . . 32
First Commercial Stock . . . . . . . . . . . . . . . . . . . . . 1
First Commercial Financial Statements . . . . . . . . . . . . . 19
Insurance Policies . . . . . . . . . . . . . . . . . . . . . . 11
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Merger Consideration . . . . . . . . . . . . . . . . . . . . . 3
Monthly Financial Statements . . . . . . . . . . . . . . . . . 24
Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . 12
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Registration Statement . . . . . . . . . . . . . . . . . . . . 29
SFAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Subsidiary Banks . . . . . . . . . . . . . . . . . . . . . . . . 7
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . 2
PLAN AND
AGREEMENT OF MERGER
BETWEEN
FIRST COMMERCIAL CORPORATION
AND
SOUTHWEST BANCSHARES, INC.
This AGREEMENT is made as of this 20th day of December, 1996,
between FIRST COMMERCIAL CORPORATION, an Arkansas corporation having
its principal office in Little Rock, Arkansas ("First Commercial"),
and SOUTHWEST BANCSHARES, INC., an Arkansas corporation having its
principal office in Jonesboro, Arkansas ("Bancshares").
W I T N E S S E T H:
WHEREAS, Bancshares owns all of the issued and outstanding common
stock of each of First Bank of Arkansas, Jonesboro; First Bank of
Arkansas, Russellville; First Bank of Arkansas, Searcy; and First Bank
of Arkansas, Wynne; and First Bank of Arkansas, Jonesboro owns all of
the issued and outstanding common stock of First Processing Services,
Inc., which holds a 52% general partnership interest in Advance Data
(such direct and indirect subsidiaries are collectively referred to
herein as the "Bancshares Subsidiaries"); and
WHEREAS, for good and sound reasons germane to the business of the
parties hereto, the Boards of Directors of First Commercial and
Bancshares have each determined that it would be in the best interests
of such corporations, their respective shareholders, subsidiaries and
customers and the communities they serve for Bancshares to be merged
with and into First Commercial with the shareholders of Bancshares
receiving shares of common stock of First Commercial, par value $3.00
per share ("First Commercial Stock"), in exchange for the outstanding
shares of common stock of Bancshares, par value $1.00 per share
("Bancshares Stock"), owned by them (the "Merger"), thereby permitting
First Commercial to acquire Bancshares and the Bancshares Subsidiaries;
and
WHEREAS, the Boards of Directors of First Commercial and
Bancshares have adopted resolutions approving the Merger upon the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of these premises and the mutual
promises, representations, covenants and actions hereinafter set forth,
the parties hereto, each intending to be legally bound hereby, agree as
follows:
ARTICLE I
THE PLAN OF MERGER
Section 1.01. The Merger. At the Effective Time (as defined in
Section 1.03 hereof) in accordance with this Agreement and Arkansas
law, Bancshares shall be merged with and into First Commercial pursuant
to the Articles of Merger to be entered into by Bancshares and First
Commercial in substantially the form attached hereto as Exhibit A (the
"Articles of Merger"), the separate existence of Bancshares shall
cease, and First Commercial shall continue as the surviving corporation
under the corporate name it possesses immediately prior to the
Effective Time. First Commercial, as at the Effective Time and
thereafter, hereinafter may sometimes be referred to as the "Surviving
Corporation."
Section 1.02. Effect of the Merger. At the Effective Time the
effect of the Merger shall be that (i) the Surviving Corporation shall
possess all the rights, privileges and franchises possessed by each of
First Commercial and Bancshares, (ii) all of the property and assets of
whatsoever kind or description of each of First Commercial and
Bancshares, and all debts due on whatever account to any of them,
including subscriptions for shares or other choses in action belonging
to any of them, shall be taken and be deemed to be transferred to, and
vested in, the Surviving Corporation without further act or deed, and
(iii) the Surviving Corporation shall be responsible for all of the
liabilities and obligations of each of First Commercial and Bancshares,
as provided by applicable law, in the same manner as if the Surviving
Corporation had itself incurred such liabilities or obligations; but
the liabilities of First Commercial and Bancshares, or of their
shareholders, directors or officers, shall not be affected, nor shall
the rights of the creditors thereof, or of any persons dealing with
such corporations be impaired by the Merger, and any claim existing, or
action or proceeding pending, by or against either of First Commercial
or Bancshares may be prosecuted to judgment as if the Merger had not
taken place, or the Surviving Corporation may be proceeded against, or
substituted, in place of First Commercial or Bancshares, as the case
may be.
Section 1.03. Consummation of the Merger. The Merger will be
closed in accordance herewith (the "Closing") on the first business day
of the month immediately following the month in which all approvals and
consents, and the expiration of all waiting periods, necessary to
consummate the transactions contemplated herein have been received, or
such other date as the parties may mutually agree in writing (the
"Closing Date") subject to the fulfillment of each condition set forth
in Article V hereafter. The parties hereto will use their best efforts
to accomplish the Closing before June 30, 1997. The parties hereto
will cause the Merger to be consummated by filing with the Secretary of
State of the State of Arkansas on the Closing Date appropriate Articles
of Merger. The "Effective Time" shall be 5:00 p.m., Little Rock time,
on the date of such filing. The Closing will take place at 10:00 a.m.,
Little Rock time, on the Closing Date, at the offices of Friday,
Xxxxxxxx & Xxxxx in Little Rock, Arkansas, or at such other mutually
agreeable time or place.
Section 1.04. Articles of Incorporation; Bylaws; Directors and
Officers. The Articles of Incorporation of First Commercial, as in
effect immediately prior to the Effective Time, shall be the Articles
of Incorporation of the Surviving Corporation after the Effective Time
until thereafter amended as provided therein and under Arkansas law.
The Bylaws of First Commercial, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation after
the Effective Time until thereafter amended as provided therein and
under Arkansas law. The directors and officers of First Commercial
immediately prior to the Effective Time shall be the initial directors
and officers of the Surviving Corporation after the Effective Time
until their successors are elected and qualified.
Section 1.05. Merger Consideration; Conversion of Securities. At
the Effective Time, by virtue of the Merger and without any action on
the part of First Commercial, Bancshares or the holder of any of the
securities of such corporations:
(a) Each share of Bancshares Stock issued and outstanding
immediately prior to the Effective Time (other than shares as to which
dissenters' rights have been perfected and not withdrawn or otherwise
forfeited under applicable Arkansas law ("Dissenting Shares")) shall be
canceled and extinguished and be converted into the right to receive
that number of shares of First Commercial Stock equal to the result
obtained by dividing (Y) 3,412,457 (the number of shares of First
Commercial Stock to be issued in the Merger) by (Z) the number of
outstanding shares of Bancshares Stock on the Closing Date (such
consideration, as well as any payment due in lieu of fractional shares
of First Commercial Stock as hereinafter provided being herein referred
to as the "Merger Consideration"); provided, however, that in the event
after the date hereof the shares of First Commercial Stock at any time
outstanding prior to the Closing Date shall be subdivided, by
reclassification, recapitalization, stock dividend, or otherwise, into
a greater number of shares without the actual receipt by First
Commercial of consideration (at least equal to book value) for the
additional number of shares so issued, or the number of shares of First
Commercial Stock at any time outstanding shall be reduced, by
reclassification, recapitalization, reduction of capital stock, or
otherwise, or the outstanding shares of First Commercial Stock shall be
reclassified or changed other than in such manner, then the number of
shares of First Commercial Stock that each holder of Bancshares Stock
shall be deemed to have the right to receive shall be adjusted
accordingly to the nearest 10,000th share of First Commercial Stock.
(b) No fractional shares of First Commercial Stock shall be
issued as part of the Merger, and in lieu of fractional shares, First
Commercial shall pay a sum in cash equal to the value of any such
fractional share of First Commercial Stock to which any holder of
Bancshares Stock shall be entitled determined on the basis of the last
reported sales price on the Closing Date for shares of First Commercial
Stock on the Nasdaq National Market.
(c) At and after the Effective Time, there shall be no transfers
on the stock transfer books of Bancshares with respect to shares of
Bancshares Stock issued and outstanding immediately prior to the
Effective Time. If, after the Effective Time, certificates formerly
representing shares of Bancshares Stock are presented to First
Commercial or its transfer agent, they shall be canceled and exchanged
for the Merger Consideration as provided in Section 1.06 and following,
subject to applicable law in the case of Dissenting Shares.
Section 1.06. Exchange of Certificates. From and after the
Effective Time, all certificates representing shares of Bancshares
Stock, with the exception of certificates representing Dissenting
Shares or shares of Bancshares Stock held by First Commercial, shall
represent the right to receive shares of First Commercial Stock on the
basis set forth above, and the right to receive cash in lieu of
fractional shares in exchange therefor, upon the terms and conditions
of this Agreement, subject to applicable abandoned property, escheat
and similar laws. Upon delivery of certificates representing shares of
Bancshares Stock to the transfer agent of First Commercial, including
shares delivered at the Closing provided the transfer agent of First
Commercial has been given at least ten (10) days notice of the intent
to make such delivery, First Commercial shall cause the transfer agent
to issue certificates representing the requisite number of shares of
First Commercial Stock for each share of Bancshares Stock represented
by the certificates therefor properly delivered, and First Commercial
shall pay by certified or cashier's check the amount entitled to be
received in lieu of fractional shares. Notwithstanding the foregoing,
neither First Commercial's transfer agent nor any party hereto shall be
liable to a holder of shares of Bancshares Stock for any of the Merger
Consideration delivered to a public official pursuant to applicable
abandoned property, escheat and similar laws.
Section 1.07. Rights of Bancshares Shareholders to Dividends.
Holders of Bancshares Stock on the Effective Date shall be entitled to
receive, subject to applicable abandoned property, escheat and similar
laws, payment of dividends declared by First Commercial subsequent to
the Effective Date, but delivery of payment of such dividends will not
be required of First Commercial until such persons have delivered their
certificates representing shares of Bancshares Stock in exchange for
certificates representing shares of First Commercial Stock in
accordance with the provisions of Section 1.06 above. Notwithstanding
the foregoing, First Commercial shall not be liable to a holder of
shares of Bancshares Stock for any such dividends delivered to a public
official pursuant to any abandoned property, escheat and similar laws.
ARTICLE II
APPROVAL OF MERGER
Section 2.01. Shareholder Approval. The Shareholders of
Bancshares shall approve the Merger in accordance with Arkansas law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of Bancshares. No
representation or warranty is made by any director, officer or employee
of Bancshares, or any Bancshares Subsidiary, as an individual.
Bancshares, for itself and on behalf of each Bancshares Subsidiary,
represents and warrants to First Commercial the following, each of
which representations and warranties shall be continuing and shall
(except as otherwise stated herein) be true as of the date of this
Agreement and on the Closing Date:
(a) Authority for Transaction. The Board of Directors of
Bancshares has duly approved this Agreement and the transactions
contemplated hereby, and this Agreement constitutes the valid and
binding obligation of Bancshares enforceable in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws from
time to time in effect which affect creditors' rights generally and by
legal and equitable limitations on the availability of injunctive
relief, specific performance and other equitable remedies which are
available only in the discretion of the court. Bancshares has full
corporate power, authority and legal right to enter into this Agreement
and, upon approval thereof by its shareholders and by appropriate
regulatory authorities, to consummate the transactions contemplated
hereby. The Board of Directors of Bancshares and its shareholders
shall have taken all action required by law or by the Articles of
Incorporation and Bylaws of Bancshares or otherwise to authorize the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
(b) Organization and Capitalization.
(i) Bancshares has delivered to First Commercial complete
and correct copies of the Articles of Incorporation, and all amendments
thereto or restatements thereof, and Bylaws of Bancshares as in effect
on the date hereof. Bancshares is a corporation duly organized and
validly existing in good standing under the laws of the State of
Arkansas, with full corporate power and authority to carry on its
business as and where it is now being conducted and to own and lease
its properties and assets in the places where such properties and
assets are now or will be owned or leased. As of the date of this
Agreement, the authorized capital stock of Bancshares consists of
10,000,000 shares of Bancshares Stock, 245,275 shares of which are
issued and outstanding. All such issued and outstanding shares of
Bancshares Stock have been fully paid, are validly authorized and duly
issued and are non-assessable and such shares of Bancshares Stock have
not been issued in violation of any preemptive rights. Bancshares does
not have outstanding any subscriptions, options or other arrangements
or commitments obligating it to issue or dispose of, and it is not
obligated to issue, any shares of Bancshares Stock or other securities.
(ii) Bancshares has delivered to First Commercial complete
and correct copies of the Articles of Incorporation or Partnership
Agreement, as the case may be, and all amendments thereto, and Bylaws,
when applicable, of each of the Bancshares Subsidiaries as in effect on
the date hereof. Each Bancshares Subsidiary is a banking corporation,
business corporation or partnership duly organized and validly existing
in good standing under the laws of the State of Arkansas with full
power and authority to carry on its business as and where it is now
being conducted and to own and lease its properties and assets in the
places where such properties and assets are now or will be owned or
leased. As of the date of this Agreement, the authorized capital stock
of each of the banking and business corporation Bancshares Subsidiaries
consists of the number of shares of common stock, the par values per
share, the number of shares issued and outstanding and ownership
thereof as are reflected in Schedule A, all of which outstanding shares
have been fully paid, are validly authorized and duly issued and are
not subject to assessment, and such shares have not been issued in
violation of any preemptive rights of stockholders. First Processing
Services, Inc. owns a 52% general partnership interest in Advance Data.
To the knowledge of Bancshares and the Bancshares Subsidiaries, no
regulatory agency has threatened or considered any assessment against
the owner of the stock of any banking Bancshares Subsidiary. There are
no subscriptions, options or other arrangements or commitments
obligating Bancshares or any Bancshares Subsidiary to issue or to
acquire or dispose of, and no Bancshares Subsidiary is otherwise
obligated to issue, any shares of its common stock or other securities.
(iii) Bancshares has no direct or indirect subsidiary other
than the Bancshares Subsidiaries.
(c) Financial Statements. Bancshares has delivered to First
Commercial its consolidated financial statements for the years ended
December 31, 1995, 1994, and 1993 with the unqualified report of its
independent auditors, Xxxx & Company (the "Bancshares Financial
Statements"). Contemporaneously with its execution and delivery
hereof, Bancshares will also deliver to First Commercial copies of all
of the periodic public reports filed by Bancshares or by any Bancshares
Subsidiary with banking regulators and agencies since January 1, 1994.
The Bancshares Financial Statements are complete and correct and were
prepared from the books and records of Bancshares and the Bancshares
Subsidiaries, which accurately and fairly reflect the transactions and
dispositions of assets of Bancshares and the Bancshares Subsidiaries,
taken as a whole, and fairly present on a consolidated basis the
financial condition, results of operations and changes in capital
accounts and undivided profits of Bancshares and each Bancshares
Subsidiary, at their respective dates and for the periods to which they
relate. The Bancshares Financial Statements were prepared in
accordance with generally accepted accounting principles consistently
applied. Advance Data was accounted for under the equity method of
accounting. There are no material obligations or liabilities of
Bancshares or the Bancshares Subsidiaries, taken as a whole, whether
absolute, accrued or contingent (including, without limitation,
unfunded obligations under employee benefit plans or arrangements or
liabilities for federal, state, local or foreign taxes or assessments)
or any "loss contingencies" considered "probable" or "reasonably
estimable" within the meaning of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 5, which, in
accordance with generally accepted accounting principles, were required
to be reflected or disclosed in the Bancshares Financial Statements and
which were not so reflected or disclosed therein, except such as have
been reported in writing to First Commercial. All reserves and
allowances included in the Bancshares Financial Statements, taken as a
whole, are adequate and appropriate pursuant to generally accepted
accounting principles.
(d) Dividends. Since December 31, 1995, no dividend has been
declared or paid on any equity securities of Bancshares, nor has
Bancshares purchased or redeemed any of its equity securities, except
as disclosed in Schedule B attached hereto.
(e) Loans. Bancshares has delivered to First Commercial complete
and correct copies of the most current written policies of the banking
subsidiaries of Bancshares (the "Subsidiary Banks") relating to the
making, collection, classification and charge off of loans and other
evidences of indebtedness. To the knowledge of Bancshares and the
Subsidiary Banks, all loans and other evidences of indebtedness of the
Subsidiary Banks have been appropriately and correctly classified
pursuant to the written policies of the Subsidiary Banks. The
Subsidiary Banks have no loans or other evidences of indebtedness in
their respective portfolios that (i) are considered nonperforming or
have been placed on a nonaccrual status in accordance with their
written policies; (ii) are classified as other loans especially
mentioned, substandard, doubtful, or loss loans in accordance with its
written policies; (iii) are sixty (60) days or more past due; (iv) have
been renegotiated as to payment terms or collateral because of credit
risks associated with such loans; or (v) to the knowledge of Bancshares
and the Subsidiary Banks, are subject to any defenses, offsets or
counterclaims that may be asserted against the present holder thereof,
except in each case such loans or evidences of indebtedness as have
been disclosed in Schedule C attached hereto.
(f) Taxes. Bancshares and each Bancshares Subsidiary has timely
filed returns for all federal, state and local taxes of Bancshares and
each Bancshares Subsidiary to the extent such filings and payments were
required prior to the date of this Agreement, and such returns are true
and correct in all material respects. Neither Bancshares nor any
Bancshares Subsidiary has had any tax deficiencies proposed or assessed
against it and neither Bancshares nor any Bancshares Subsidiary has
executed any waiver of or extended the statute of limitations on the
audit of any tax return or the assessment or collection of any tax.
All taxes and governmental charges levied or assessed against the
property or the business of Bancshares or any Bancshares Subsidiary
have been paid in full, other than taxes or charges the payment of
which are not yet due or which, if due, are not yet delinquent or are
being contested in good faith or have not been finally determined.
Except as has been indicated to First Commercial in writing, the amount
set up as accruals for taxes on the balance sheet of Bancshares as at
December 31, 1995, contained in the Bancshares Financial Statements
("Bancshares Balance Sheet") is sufficient in all material respects for
the payment of all unpaid taxes applicable to the property or business
of Bancshares and the Bancshares Subsidiaries for the period ended on
December 31, 1995, and all periods prior thereto. Except as disclosed
in Schedule D attached hereto, no tax returns or reports of Bancshares
or any Bancshares Subsidiary have been audited by the Internal Revenue
Service or any state taxing authority within the past five years.
(g) Litigation and Regulatory Matters. Bancshares has disclosed
in Schedule E attached hereto all material actions, suits, proceedings
and investigations pending or, to the knowledge of Bancshares or the
Bancshares Subsidiaries, threatened against or affecting Bancshares or
any Bancshares Subsidiary or any property or rights or stock of
Bancshares or any Bancshares Subsidiary, or their respective officers
or directors (in their capacity as such) at law or in equity, or before
or by any court or other governmental instrumentality, excluding
actions affecting the banking industry generally. Except to the extent
so disclosed in Schedule E, none of such actions, suits, proceedings or
investigations, either (i) involves a claim for an amount exceeding the
amount recoverable by Bancshares or any Bancshares Subsidiary under any
applicable insurance policies, subject to the deductible amounts under
such policies, (ii) results or would result, if adversely determined,
in any material adverse change in the business, operations, prospects
or assets or the condition, financial or otherwise, of Bancshares and
the Bancshares Subsidiaries, taken as a whole, or (iii) would prevent
the Bancshares shareholders from approving and consummating the
transactions contemplated herein. Except as so disclosed in Schedule
E, neither Bancshares nor any Bancshares Subsidiary is subject to any
continuing court or administrative order, writ, injunction, decree,
agreement, memorandum or letter applicable specifically to it or to its
business, property or employees, and neither Bancshares nor any
Bancshares Subsidiary is in default with respect to any order, writ,
injunction or decree, agreement, memorandum or letter of any court or
other governmental instrumentality.
(h) Compliance. Bancshares and the Bancshares Subsidiaries,
taken as a whole, have complied in all material respects with, and
Bancshares and the Bancshares Subsidiaries, taken as a whole, are not
in default in any material respect under, any law, ordinance,
requirement, rule, regulation or order applicable to their respective
businesses or to the assets owned, used or occupied by them (including,
without limitation, the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), licensing requirements with respect to
their personnel and all federal and state consumer credit laws, rules
and regulations), and Bancshares and each Bancshares Subsidiary has
filed with the proper authorities all statements and reports required
by the laws, regulations, licensing requirements and orders to which
they or any of their employees (because of their activities on behalf
of Bancshares or any Bancshares Subsidiary) are subject where the
failure to do so would have a material adverse effect on Bancshares and
the Bancshares Subsidiaries, taken as a whole, and Bancshares and each
Bancshares Subsidiary possess all licenses, franchises, permits and
governmental authorizations necessary to conduct its business in the
manner in which and in the jurisdictions and places where such
businesses are now conducted where the failure to do so would have a
material adverse effect on Bancshares and the Bancshares Subsidiaries,
taken as a whole.
(i) Properties and Other Assets. Bancshares and each Bancshares
Subsidiary has good and marketable fee simple title to, or, as the case
may be, valid and enforceable leasehold interests in, all its
respective properties, interests in properties and other assets, real
and personal, as owned or leased by Bancshares or any Bancshares
Subsidiary, as applicable (i) reflected on the Bancshares Balance
Sheet, or (ii) acquired since the date thereof,except to the extent
such properties and assets are or were thereafter disposed of for fair
value in the ordinary course of business. All such properties and
assets are free and clear of all liens, charges and encumbrances,
except (i) those set forth or reflected in the Bancshares Balance
Sheet, (ii) liens for taxes not yet due and payable or being contested
in good faith and (iii) defects in title and liens, charges and
encumbrances, if any, as do not materially detract from the value, or
materially interfere with the present or proposed use, of the property
or asset subject thereto or affected thereby or as do not otherwise
materially impair business operations of either Bancshares or any
Bancshares Subsidiary. The operation of the properties and businesses
of Bancshares and the Bancshares Subsidiaries in the manner in which
they are now operated does not violate any zoning ordinances or
municipal regulations in such a way as could, if such ordinances or
regulations were enforced, foreseeably result in any material
impairment of the uses of their respective properties for the purposes
for which they are now operated. No asset included in the Bancshares
Balance Sheet was valued in excess of its cost less depreciation or, in
the case of investment securities, in excess of cost, adjusted for
amortization of premiums or accretion of discounts, with the exception
of securities classified as available for sale in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 115, which are
carried at fair market value. All real and tangible personal property
owned or used by Bancshares or any Bancshares Subsidiary in their
respective businesses is in good condition, normal wear and tear
excepted, and is in good operating order. There are no (i) patents,
trademarks, trade names or copyrights, or applications therefor, owned
by or registered in the name of either Bancshares or any Bancshares
Subsidiary, or in which either Bancshares or any Bancshares Subsidiary
has rights, which have not been disclosed in writing to First
Commercial (other than rights held by a Subsidiary Bank as a secured
party in the ordinary course of its lending business), (ii) license
agreements, other than those usually required in normal operations in
the banking industry, to which either Bancshares or any Bancshares
Subsidiary is a party, either as a licensor or licensee, with respect
to any patents, trademarks, tradenames or copyrights which have not
been disclosed in writing to First Commercial or (iii) to the knowledge
of Bancshares, claims that in the conduct of its business, as now
conducted, either Bancshares or any Bancshares Subsidiary is infringing
on any patents, trademarks, trade names or copyrights of others which
have not been disclosed in writing to First Commercial. Bancshares and
each Bancshares Subsidiary has obtained all necessary permits and
certificates for the use and occupancy of the real estate owned, leased
or used by it and the improvements thereon and systems therein, and
such use and occupancy is in full compliance with all federal, state
and local laws, rules and regulations. To the knowledge of Bancshares,
no material fact or condition exists which would result in the
termination or material impairment in the furnishing of any water,
sewer, gas, electricity, telephone, drainage or other services and
equipment to the real estate owned, leased or occupied by Bancshares or
any Bancshares Subsidiary.
(j) Agreement Does Not Violate Other Instruments. Subject to
obtaining any required consents and approvals (which necessary consents
and approvals are disclosed in Schedule F attached hereto and will be
obtained by Bancshares prior to Closing), the execution and delivery of
this Agreement by Bancshares does not, and the consummation of the
transactions contemplated hereby will not, (i) violate any provision of
the Articles of Incorporation or Bylaws of Bancshares, (ii) violate any
provision of the Articles of Association or the Bylaws of any
Subsidiary Bank or the partnership agreement of Advance Data, (iii)
violate any provision of, or result in any breach or termination of, or
constitute a default under, or constitute an event which with notice or
lapse of time, or both, would become a default under, or result in the
creation of any material lien, security interest, charge or encumbrance
upon any property of Bancshares or any Bancshares Subsidiary under, any
material lease, indenture, or other agreement (written or oral) or
instrument to which Bancshares or any Bancshares Subsidiary is a party
or by which Bancshares or any Bancshares Subsidiary may be bound or
affected or under which Bancshares or any Bancshares Subsidiary
receives benefits, (iv) violate any material law, rule, regulation,
order, writ, injunction or decree or administrative memorandum,
agreement or letter to which Bancshares or any Bancshares Subsidiary is
a party or by which Bancshares or any Bancshares Subsidiary may be
bound or affected or under which Bancshares or any Bancshares
Subsidiary receives benefits, or (v) result in the material loss or
material adverse modification of any license, franchise, permit or
other authorization granted to or otherwise held by Bancshares or any
Bancshares Subsidiary.
(k) Insurance. During each of the past three calendar years
Bancshares and the Bancshares Subsidiaries and their properties have
been insured for customary risks, all with limits, deductibles, and
exclusions as are customary in the banking industry. Such insurance
protection continues in effect, and neither Bancshares nor any
Bancshares Subsidiary is aware of any facts or events relating to its
operations or financial condition which reasonably can be expected to
increase materially the premiums or reduce the coverage under any of
such policies, except as has been indicated in writing to First
Commercial. Schedule G attached hereto sets forth a complete and
accurate schedule, including the type of policy, policy number, the
limits of coverage, the insurance carrier, the insurance agent or
broker and the expiration date, of all insurance policies, letters of
credit, performance bonds and fidelity bonds at any time held by, for
the benefit of, or issued to Bancshares or any Bancshares Subsidiary
and now in force (collectively, the "Insurance Policies"). Except as
disclosed in Schedule G, neither Bancshares nor any Bancshares
Subsidiary has forfeited or waived any claim under any Insurance Policy
and each has fully complied with the terms and conditions thereof.
(l) Employee Benefit Plans. Bancshares and the Bancshares
Subsidiaries have disclosed in Schedule H attached hereto each employee
benefit plan (as defined in Section 3(3) of ERISA) or other plan
maintained for their respective employees or under which any one of
them has any present or future liability (each a "Plan"), and true and
complete copies of all Plans will be delivered to First Commercial,
together with the most recent Internal Revenue Service determination
letters, annual reports (Form 5500 Series) and accompanying schedules,
summary plan descriptions, certified financial statements (if
available) and actuarial reports related thereto, within five (5)
business days following the execution and delivery hereof by
Bancshares. With respect to each Plan for which an annual report has
been filed, no material adverse change has occurred with respect to the
matters covered by the annual report since the date thereof, except as
has been disclosed in writing to First Commercial. There are no
unfunded vested benefits under any Plan which are subject to the
vesting and funding standards of ERISA, and none of the Plans is a
multiemployer plan within the meaning of Section 3(37) of ERISA. Each
of the Plans covered by ERISA (i) has been operated in all material
respects in accordance with ERISA, (ii) has not engaged in any
"prohibited transaction" (as such term is defined in Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code") or in
Section 406 of ERISA) which would result in a material penalty, and
(iii) has met the minimum funding standards of Section 412 of the Code,
if applicable. Each of the Plans which is an employee pension benefit
plan (as defined in Section 3(2) of ERISA) ("Pension Plan") that is
intended to "qualify" under Section 401(a) of the Code, is qualified
within the meaning of Section 401(a) of the Code, except as heretofore
disclosed in writing to First Commercial, and a favorable determination
letter has been issued by the Internal Revenue Service with respect to
each such qualified Pension Plan. No Pension Plan has been amended
since issuance of the most recent determination letter by the Internal
Revenue Service with respect thereto, except as disclosed in Schedule
H. Each Pension Plan has been administered in accordance with Section
401(a) of the Code, where applicable. No Reportable Event (within the
meaning of Section 4043 of ERISA) has occurred with respect to any Plan
which would result in material liability to Bancshares and the
Bancshares Subsidiaries, taken as a whole. Since the enactment of
ERISA, neither Bancshares nor any Bancshares Subsidiary has completely
or partially terminated any employee pension benefit plan or withdrawn
from any multiemployer pension plan, other than as disclosed in
Schedule H. No proceeding by the Pension Benefit Guaranty Corporation
has been instituted or threatened to terminate, pursuant to Subtitle C
of Title IV of ERISA, any Plan. There is no suit, action or proceeding
pending, threatened against or affecting, or likely to have an adverse
impact on any Plan. One or more of the Plans may be covered by the
Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA"). If
so, each such Plan has been operated in, and is in, material compliance
with COBRA. All notices required to be given under COBRA have been
timely and properly given in accordance with COBRA, and the rules and
regulations promulgated thereunder, and no employee, former employee or
"qualified beneficiary" (as defined in COBRA) has any claim or
contingent claim against Bancshares or any Bancshares Subsidiary for
failure to comply with COBRA or the rules and regulations promulgated
thereunder. Schedule H lists all persons currently eligible for
benefits under COBRA.
(m) Employee Relations.
(i) No employee of Bancshares or any Bancshares Subsidiary
is a party to a collective bargaining agreement. There are no pending
or threatened labor disputes with any of the employees of Bancshares or
any Bancshares Subsidiary. Except as Bancshares has previously
disclosed in Schedule I, neither Bancshares nor any Bancshares
Subsidiary is obligated to pay any person employed by Bancshares or any
Bancshares Subsidiary total annual compensation for fiscal year 1996
(including bonuses and the like) in excess of Fifty Thousand Dollars
($50,000). To the knowledge of Bancshares and the Bancshares
Subsidiaries, there are no facts that would indicate that any employee
of Bancshares or any Bancshares Subsidiary will not continue in his
respective employment on an acceptable basis, subject to normal
turnover, except as has been disclosed in Schedule I.
(ii) Neither Bancshares nor any Bancshares Subsidiary has
entered into or agreed to enter into any employment agreement or
covenant not to compete agreement, has, since December 31, 1995,
granted or agreed to grant any increase in excess of 10% in the wages,
salaries or other compensation of any of its employees or directors,
has, since December 31, 1995, paid or agreed to pay any bonus to any of
its employees, has directly or indirectly paid or made a commitment to
pay any severance or termination payment to any of its employees, or
has, since December 31, 1995, entered into or agreed to enter into any
written consulting agreement or other agreement for the purchase of
services, except as disclosed in Schedule I.
(n) No Material Events. Except as disclosed in Schedule J
attached hereto or in the cases of clauses (i), (ii), (iii) and (iv)
below, except for transactions in the ordinary course of business
consistent with past practices, since December 31, 1995 (or as
otherwise indicated), neither Bancshares nor any Bancshares Subsidiary
has (i) incurred or become subject to, or agreed to incur or become
subject to, any material obligation or liability, absolute or
contingent; (ii) discharged or satisfied or agreed to discharge or
satisfy any lien or encumbrance or paid any obligation or liability,
absolute or contingent; (iii) canceled or agreed to cancel any material
debts or claims or waived any rights of substantial value; (iv) made or
permitted or agreed to make or permit any material amendment or
termination of any material contract, lease, arrangement, license or
other instrument to which it is a party; (v) made any material change
in its method of accounting; (vi) made any material capital
expenditures or entered into commitments therefor; (vii) made or agreed
to make any loan or loans to any one person that would cause such
person to have outstanding loans as of the date hereof from any
Subsidiary Bank exceeding in the aggregate Two Hundred Fifty Thousand
Dollars ($250,000) (The term "person," for purposes of this clause,
shall include, in addition to an individual, the persons specified in
Rule 144(a)(2) of the Securities and Exchange Commission.); (viii)
purchased or sold or agreed to purchase or sell any material amounts of
tax-exempt bonds; (ix) made, renewed or extended or agreed to make,
renew or extend any nonadjustable rate loans with maturities exceeding
sixty (60) months; (x) repossessed or purchased in a foreclosure action
any material personal or real property; (xi) charged any loan to the
reserve for loan and lease losses or established any special allocation
thereto; (xii) sold or transferred or agreed to sell or transfer any
loans (excluding partial participations) or other real estate owned;
(xiii) mortgaged or pledged any of its material assets, tangible or
intangible, or permitted any of its material assets, tangible or
intangible, to become subject to any lien, charge or other encumbrance
(other than liens for real estate taxes not yet due and payable and
mechanics', materialmen's and similar liens imposed by statute that are
being contested in good faith) and which remain outstanding as of the
date hereof; (xiv) sold, assigned or transferred any material asset or
property of any nature whatsoever, whether real, personal or mixed,
tangible or intangible; or (xv) made any material change in its
business or operations or entered into any other material transaction.
(o) Liabilities. The liabilities on the Bancshares Balance Sheet
consist solely of obligations and liabilities incurred by Bancshares
and the Bancshares Subsidiaries in the ordinary and regular course of
their businesses, and with regard to such liabilities, all non-deposit
liabilities are to persons who are not affiliated with Bancshares or
any Bancshares Subsidiary. As of December 31, 1995, neither Bancshares
nor the Bancshares Subsidiaries, taken as a whole, had any material and
adverse liabilities or obligations of any nature whatsoever, including,
without limitation, fixed or contingent, accrued, absolute, matured or
unmatured, or any "loss contingencies" considered "probable" or
"reasonably estimable" within the meaning of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 5,
which were not recorded on the Bancshares Balance Sheet. Bancshares
and the Bancshares Subsidiaries, taken as a whole, are not obligated to
make any material investment, directly or indirectly, in any person,
corporation, association, partnership, joint venture, trust or other
entity, except for investments in investment securities and other
evidences of indebtedness made in the ordinary course of business
consistent with past practices.
(p) Marketability of Securities. Except for pledges to secure
public and trust deposits and repurchase agreements disclosed in
Schedule K attached hereto, none of the investments reflected in the
Bancshares Balance Sheet under the heading "Investment Securities" and
none of the investments made since such date are subject to any
"investment" or other restriction, whether contractual or statutory,
which impairs the ability of Bancshares or any Bancshares Subsidiary to
freely dispose of such investment in the open market at any time.
(q) Interested Party Transactions. Neither Bancshares nor any
Bancshares Subsidiary is a party to, and none of their property is
bound or affected by, nor does Bancshares or any Bancshares Subsidiary
receive benefits under, any written or oral or express or implied
contract or other arrangement which is not in the ordinary course of
business in which a material interest is held by any person or entity
which is an "affiliate" of Bancshares or any Bancshares Subsidiary
within the meaning of Rule 144 under the Securities Act of 1933, as
amended, any executive officer or director of Bancshares or any
Bancshares Subsidiary or any "affiliate" or "associate" of any such
executive officer or director, as such terms are defined in Rule 14a-1
under the Securities Exchange Act of 1934, as amended, which is not on
substantially the same terms (including, without limitation, in the
case of lending transactions, interest rates, maturity schedule and
collateral) as those prevailing at the time for comparable transactions
with unrelated parties or which involves more than normal risk of
collectibility or which involves other unfavorable features. Schedule
L attached hereto contains (i) a list of all amounts in excess of
$10,000 paid or to be paid by Bancshares or any Bancshares Subsidiary
to, or received or to be received by Bancshares or any Bancshares
Subsidiary from, any executive officer or director of Bancshares or any
Bancshares Subsidiary or any "affiliate" or "associate" of any such
executive officer or director during their 1996 and 1995 fiscal years
for products or services, not including services as an employee,
executive officer or director, and (ii) a description of all loans from
any Subsidiary Bank to any of such persons outstanding at any quarter
end during 1996 or currently outstanding.
(r) Material Contracts. Schedule M attached hereto contains a
list of all written, and a brief description of all oral, material
contracts, agreements, leases, commitments, licenses, instruments and
obligations not listed in another Schedule hereto to which Bancshares
or any Bancshares Subsidiary is a party or by which any of their assets
is bound. For purposes of this Section 3.01(r), "material" shall mean
an amount exceeding $100,000 over the life of the contract, agreement,
lease, commitment, license, insurance policy or other obligation (as
the case may be), and this Section shall not be deemed to apply to
deposits at the Subsidiary Banks. Neither Bancshares nor any
Bancshares Subsidiary is a party to, and none of their respective
property is bound or affected by, and neither Bancshares nor any
Bancshares Subsidiary receives benefits under, any written or oral or
express or implied material contract or other arrangement which is not
in the ordinary course of business consistent with its past practices,
except as disclosed in Schedule M. Bancshares and each Bancshares
Subsidiary has, in all material respects, performed all of its
obligations required to be performed by it to date and is not in
default in any material respect under any material contract, lease,
insurance policy, commitment or arrangement to which it is a party or
by which it or its property may be bound or affected or under which it
or its property receives benefits, and there has not occurred any event
which with the lapse of time or giving of notice or both would
constitute such a default. All such material contracts, leases,
insurance policies and other instruments are in full force and effect,
are binding obligations of the respective parties thereto in accordance
with their terms, and there are no defenses, offsets or counterclaims
thereto which may be made by any party thereto other than Bancshares or
any Bancshares Subsidiary, and neither Bancshares nor any Bancshares
Subsidiary has waived any substantial rights thereunder. Neither
Bancshares nor any Bancshares Subsidiary is a party to or otherwise
bound by any material contract, agreement, plan, lease, license,
commitment or undertaking which, in the reasonable opinion of
Bancshares or any Bancshares Subsidiary, is materially adverse,
materially onerous, or materially harmful to any aspect of the business
or prospects of Bancshares and the Bancshares Subsidiaries, taken as a
whole.
(s) Environmental Matters. To the knowledge of Bancshares,
except as disclosed in Schedule N attached hereto, none of the
properties of Bancshares or of any Bancshares Subsidiary contains
hazardous materials, waste or substances that cannot be easily
remediated, removed or cleaned up, and, in the case of asbestos,
completely abated. For purposes of this provision, a hazardous
material, waste or substance is deemed easily remediated, removed or
cleaned up, and, in the case of asbestos, completely abated, if the
reasonably estimated cost of such removal, clean-up, remediation,
restoration of natural resources, or abatement does not exceed Fifty
Thousand Dollars ($50,000) in the aggregate and if such removal, clean-
up, remediation, restoration of natural resources, or abatement does
not materially interfere with the day-to-day operations of Bancshares
or any Bancshares Subsidiary. To the knowledge of Bancshares, except
as disclosed in Schedule N, none of the outstanding loans of any
Subsidiary Bank are secured by properties that contain hazardous
materials, wastes, or substances that cannot be remediated, removed or
cleaned up, and, in the case of asbestos, completely abated, at an
expense not exceeding ten percent (10%) of the fair market value of
such properties. As used herein, "hazardous substance" or "hazardous
material" means substances subject to reporting under Title III of the
Superfund Amendments and Reauthorization Act of 1986, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act,
as amended, or the Resource Conservation and Recovery Act, as amended;
petroleum; petroleum products; substances regulated by the Toxic
Substance Control Act, as amended; substances regulated by the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended; or any
hazardous, toxic, or dangerous waste, substance, or material defined as
such in the above-referenced Acts, or any federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability standards of conduct
concerning any hazardous, toxic or dangerous waste, substance, or
material as now in effect. To the knowledge of Bancshares, no
Subsidiary Bank has loaned money against the securities or assets of
any company or other association that has not obtained all permits,
licenses, approvals, and other authorizations that are required under
federal, state and local laws and regulations relating to emissions,
discharges, wetlands, releases or threatened releases of pollutants,
contaminants or hazardous or toxic materials or waste into ambient air,
surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, release,
discharge, emission, storage, disposal, transport or handling of
pollutants, contaminants or hazardous or toxic materials or waste. To
the knowledge of Bancshares, no Subsidiary Bank has loaned money
against the securities or assets of any company or other association,
and has not at any time owned property, that is presently or for which
in the future there is a reasonable basis that it will be subject to
any claim, action, suit, proceeding, hearing, investigation,
injunction, notice of violation, consent administrative order, or
penalty arising out of or relating to the manufacture, presence,
processing, distribution, use, treatment, release, discharge, emission,
storage, disposal, transport or handling of any pollutant, contaminant,
or hazardous or toxic material or waste. To the extent any property is
listed or referred to in Schedule N hereto, such listing or reference
shall not be deemed an admission by Bancshares that it is in violation
of any of the statutes, rules or regulations enumerated in this Section
3.01(s).
(t) Property Sites Owned by Bancshares and the Bancshares
Subsidiaries. Set forth on Schedule O attached hereto is a complete
and accurate list of locations (identified by address, owner/operator,
type of facilities located on the property, and period of time owned,
leased or occupied by Bancshares or any Bancshares Subsidiary) of all
real estate that Bancshares or any Bancshares Subsidiary owned, leased
or used at any time during the previous five (5) years.
(u) Representations Not Misleading. No representation or
warranty by Bancshares in this Agreement or in any Schedule attached
hereto, nor any statement or disclosure furnished to First Commercial
by or on behalf of Bancshares or any Bancshares Subsidiary under and
pursuant to this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading.
Section 3.02. Representations and Warranties of First Commercial.
No representations or warranties are made by any director, officer,
employee or shareholder of First Commercial as an individual. First
Commercial represents and warrants to Bancshares the following, each of
which representations and warranties shall (except as otherwise stated
herein) be continuing and shall be true as of the date of this
Agreement hereof and on the Closing Date:
(a) Organization and Capitalization of First Commercial. First
Commercial has delivered to Bancshares complete and correct copies of
the Second Amended and Restated Articles of Incorporation, as amended,
and Bylaws of First Commercial as in effect on the date hereof. First
Commercial is an Arkansas corporation duly organized and validly
existing in good standing under the laws of Arkansas, with full
corporate power and authority to carry on its business as and where
conducted and to own and lease its properties and assets in the places
where such properties and assets are now or will be owned or leased.
As of the date of this Agreement, the authorized capital stock of First
Commercial consists of 50,000,000 shares of First Commercial Common
Stock, of which 28,807,172 shares are outstanding, and 400,000 shares
of preferred stock, each $1.00 par value, of which no shares are
outstanding. All issued and outstanding shares of First Commercial
Common Stock are, and all shares of First Commercial Common Stock to be
issued pursuant to this Agreement will be, validly authorized, duly
issued, fully paid and nonassessable shares of First Commercial Common
Stock, and such shares have not been, or will not be, issued in
violation of any preemptive rights of stockholders. Except as
described in the financial information provided to Bancshares by First
Commercial, First Commercial does not have outstanding any
subscriptions, options or other arrangements or commitments obligating
First Commercial to issue or dispose of, and it is not obligated to
issue, any shares of First Commercial Common Stock or other securities.
Since December 31, 1995, no dividends have been declared or paid on any
equity securities of First Commercial, nor has First Commercial
purchased or redeemed any of its equity securities, except, in both
instances, as disclosed in the First Commercial Financial Statements
(as hereinafter defined) or in writing to Bancshares.
(b) Authority for Transaction. The Board of Directors of First
Commercial has duly approved this Agreement and the transactions
contemplated hereby, and this Agreement constitutes the valid and
binding obligation of First Commercial enforceable in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws from time to time in effect which affect creditors' rights
generally and by legal and equitable limitations on the availability of
injunctive relief, specific performance and other equitable remedies
which are available only in the discretion of the court. First
Commercial has full corporate power, authority and legal right to
execute and deliver this Agreement and, upon approval thereof by the
necessary regulatory authorities, to consummate the transactions
contemplated hereby.
(c) Agreement Does Not Violate Other Instruments. Subject to
obtaining any required consents and approvals (which necessary consents
and approvals are disclosed in Schedule P attached hereto and will be
obtained by First Commercial prior to Closing), the execution and
delivery of this Agreement by First Commercial does not, and the
consummation of the transactions contemplated hereby will not, (i)
violate any provision of the Articles of Incorporation or Bylaws of
First Commercial, (ii) violate any provision of the Articles of
Incorporation or Association or the Bylaws of any subsidiary of First
Commercial, (iii) violate any provision of, or result in any breach or
termination of, or constitute a default under, or constitute an event
which with notice or lapse of time, or both, would become a default
under, or result in the creation of any material lien, security
interest, charge or encumbrance upon any property of First Commercial
or any subsidiary of First Commercial under, any material lease,
indenture, or other agreement (written or oral) or instrument to which
First Commercial or any subsidiary of First Commercial is a party or by
which First Commercial or any subsidiary of First Commercial may be
bound or affected or under which First Commercial or any subsidiary of
First Commercial receives benefits, (iv) violate any material law,
rule, regulation, order, writ, injunction or decree or administrative
memorandum, agreement or letter to which First Commercial or any
subsidiary of First Commercial is a party or by which First Commercial
or any subsidiary of First Commercial may be bound or affected or under
which First Commercial or any subsidiary of First Commercial receives
benefits, or (v) result in the material loss or material adverse
modification of any license, franchise, permit or other authorization
granted to or otherwise held by First Commercial or any subsidiary of
First Commercial.
(d) Representations Not Misleading. No representation or
warranty by First Commercial in or required by this Agreement, nor any
statement, exhibit or disclosure furnished to Bancshares by or on
behalf of First Commercial under and pursuant to this Agreement,
contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
(e) Financial Statements. First Commercial has delivered to
Bancshares the following financial statements: the consolidated
balance sheets of First Commercial as of December 31, 1995, 1994 and
1993, together with the consolidated statements of income,
stockholders' equity and cash flow of First Commercial for the periods
then ended, accompanied by the notes thereto, and an unqualified audit
report of Ernst & Young LLP for such years (the "First Commercial
Financial Statements"). First Commercial has also delivered to
Bancshares copies of all periodic and other reports and proxy
statements filed by First Commercial with the Securities and Exchange
Commission and the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board") since January 1, 1994, and has made
available copies of all of periodic and other public reports filed by
the banking subsidiaries of First Commercial (the "First Commercial
Banks") with the Arkansas State Bank Department, the Office of the
Comptroller of the Currency or the Federal Deposit Insurance
Corporation since January 1, 1995. The First Commercial Financial
Statements are complete and correct and have been prepared from the
books and records of First Commercial and the First Commercial Banks,
which accurately and fairly reflect the transactions and dispositions
of assets of First Commercial and the First Commercial Banks and fairly
present the financial condition, results of operations and changes in
capital accounts and undivided profits of First Commercial and the
First Commercial Banks, taken as a whole, at their respective dates and
for the periods to which they relate. The First Commercial Financial
Statements were prepared in accordance with generally accepted
accounting principles and general practices within the banking industry
consistently applied. There are no material obligations or liabilities
of First Commercial or the First Commercial Banks, taken as a whole,
whether absolute, accrued or contingent (including, without limitation,
unfunded obligations under employee benefit plans or arrangements or
liabilities for federal, state, local or foreign taxes or assessments)
or any "loss contingencies" considered "probable" or "reasonably
estimable" within the meaning of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 5, which, in
accordance with generally accepted accounting principles, were required
to be reflected or disclosed in the First Commercial Financial
Statements and which are not so reflected or disclosed therein, except
as disclosed in writing to Bancshares. All allowances and reserves for
loan losses, as reflected in the First Commercial Financial Statements,
are adequate and appropriate as determined by generally accepted
accounting principles.
(f) Litigation and Regulatory Matters. First Commercial and the
First Commercial Banks have disclosed in Schedule Q attached hereto all
material actions, suits, proceedings and investigations pending or, to
the knowledge of First Commercial or the First Commercial Banks,
threatened against or affecting First Commercial or any First
Commercial Bank or any property or rights or stock of First Commercial
or any First Commercial Bank, or their respective officers or directors
(in their capacity as such) at law or in equity, or before or by any
court or other governmental instrumentality, excluding actions
affecting the banking industry generally. Except to the extent so
disclosed in Schedule Q, none of such actions, suits, proceedings or
investigations, either (i) involves a claim for an amount exceeding the
amount recoverable by First Commercial or any First Commercial Bank
under any applicable insurance policies, subject to the deductible
amounts under such policies, or (ii) results or would result, if
adversely determined, in any material adverse change in the business,
operations, prospects or assets or the condition, financial or
otherwise, of First Commercial and the First Commercial Banks, taken as
a whole. Except as so disclosed in Schedule Q, neither First
Commercial nor any First Commercial Bank is subject to any continuing
court or administrative order, writ, injunction, decree, agreement,
memorandum or letter applicable specifically to it or to its business,
property or employees, and neither First Commercial nor any First
Commercial Bank is in default with respect to any order, writ,
injunction or decree, agreement, memorandum or letter of any court or
other governmental instrumentality.
(g) Compliance. First Commercial and the First Commercial Banks,
taken as a whole, have complied in all material respects with, and
First Commercial and the First Commercial Banks, taken as a whole, are
not in default in any material respect under, any law, ordinance,
requirement, rule, regulation or order applicable to their respective
businesses or to the assets owned, used or occupied by them (including,
without limitation, ERISA, licensing requirements with respect to their
personnel and all federal and state consumer credit laws, rules and
regulations), and First Commercial and each First Commercial Bank has
filed with the proper authorities all statements and reports required
by the laws, regulations, licensing requirements and orders to which
they or any of their employees (because of their activities on behalf
of First Commercial or any First Commercial Bank) are subject, and
First Commercial and each First Commercial Bank possess all licenses,
franchises, permits and governmental authorizations necessary to
conduct its business in the manner in which and in the jurisdictions
and places where such businesses are now conducted.
(h) No Material Events. Except as reflected in the First
Commercial Financial Statements or as may be disclosed in writing to
Bancshares and except for transactions in the ordinary course of
business consistent with past practices of First Commercial, since
December 31, 1995, First Commercial has not experienced any material
adverse changes in the condition (financial or otherwise) of its
properties, assets, liabilities, business, operations or prospects.
(i) Taxes. First Commercial and the First Commercial Banks
have timely filed returns for all federal, state and local taxes of
First Commercial and the First Commercial Banks to the extent such
filings and payments were required prior to the date of this Agreement,
and such returns are true and correct in all material respects.
Neither First Commercial nor the First Commercial Banks has had any tax
deficiencies proposed or assessed against them and neither First
Commercial nor the First Commercial Banks has executed any waiver of or
extended the statute of limitations on the audit of any tax return or
the assessment or collection of any tax. All taxes and governmental
charges levied or assessed against the property or the business of
First Commercial or the First Commercial Banks have been paid in full,
other than taxes or charges the payment of which is not yet due or
which, if due, is not yet delinquent or is being contested in good
faith or has not been finally determined. Except as indicated in
writing to Bancshares, the amount set up as accruals for taxes on the
December 31, 1995, balance sheet for First Commercial is sufficient in
all material respects for the payment of all unpaid taxes and
governmental charges of all kinds, applicable to the property or
business of First Commercial and the First Commercial Banks for the
period ended on December 31, 1995, and all periods prior thereto.
(j) Insurance. During each of the past three calendar years
First Commercial and its properties have been insured for customary
risks, all with limits, deductibles, and exclusions as are customary in
the banking industry. Such insurance protection continues in effect,
and First Commercial is not aware of any facts or events relating to
its operations or financial condition which reasonably can be expected
to increase materially the premiums or reduce the coverage under any of
such policies, except as has been indicated in writing to Bancshares.
(k) ERISA Plans. No ERISA Plans of First Commercial, nor any
trustee, administrator or fiduciary thereof, has engaged in a
"prohibited transaction," as such term is defined in Section 4974 of
the Code or Title I of ERISA, which could subject the ERISA Plans, or
any of them, or any trustee, administrator, or fiduciary thereof, or
any party dealing with the ERISA Plans, or any such trust, to any
material tax or penalty on prohibited transactions imposed by Section
4975 of the Code or liability under Title I of ERISA. The execution
and delivery of this Agreement and consummation of the transactions
contemplated herein will not involve any transaction prohibited by
ERISA or by Section 4975 of the Code. None of the ERISA Plans of First
Commercial has been terminated nor have any proceedings to terminate
such plans been instituted, nor have there been any "reportable
events," as that term is defined in Section 4043 of ERISA, since the
effective date of ERISA that have not already been reported by the
filing of appropriate Form 5500 in accordance with ERISA requirements.
(l) Employee Relations. Neither First Commercial nor the First
Commercial Banks has agreements with any labor or other organization
representing employees for collective bargaining or other labor
relations purposes.
(m) Properties and Other Assets. First Commercial and the First
Commercial Banks have good and marketable fee simple title to, or, as
the case may be, valid and enforceable leasehold interest in, all their
respective properties, interests in properties and other assets, real
and personal, (i) reflected on the First Commercial Financial
Statements or (ii) acquired since the date thereof, except to the
extent such properties and assets are or were thereafter disposed of
for fair value in the ordinary course of business. All such properties
and assets are free and clear of all liens, charges and encumbrances,
except (i) those set forth or reflected in the First Commercial
Financial Statements, (ii) liens for taxes not yet due and payable or
being contested in good faith and (iii) defects in title and liens,
charges and encumbrances, if any, as do not materially detract from the
value, or materially interfere with the present or proposed use, of the
property or assets subject thereto or affected thereby or as do not
otherwise materially impair business operations of either First
Commercial or the First Commercial Banks.
(n) Environmental Matters. To its knowledge and except as
identified in writing to Bancshares, First Commercial has no present or
past environmental condition under which First Commercial has or may
become materially liable to any person or by reason of which any First
Commercial assets may be subjected to any material lien, or by reason
of which First Commercial may materially violate any environmental law
or order.
(o) Pending Acquisitions by FCC. FCC has not entered into any
agreement, letter of intent or other undertaking with respect to the
acquisition of the capital stock of or other interest in any
corporation, business or other entity, except with respect to its
acquisition of City National Bank, Whitehouse, Texas and W.B.T. Holding
Company, parent of United American Bank, Memphis, Tennessee.
(p) Regulatory Approval. To the knowledge of First Commercial,
there is no reason that approval from regulatory authorities, including
but not limited to the Securities and Exchange Commission, necessary to
consummate the transactions contemplated hereby cannot or will not be
obtained in the ordinary course, except as has been disclosed in
writing to Bancshares.
(q) Availability of First Commercial Stock. First Commercial has
available a sufficient number of authorized and unissued shares of
First Commercial Stock to pay the Merger Consideration, and First
Commercial will not take any action during the term of this Agreement
that will cause it not to have a sufficient number of authorized and
unissued shares of First Commercial Stock to pay the Merger
Consideration.
ARTICLE IV
COVENANTS
Section 4.01. Covenants of Bancshares. Bancshares hereby
covenants and agrees that between the date hereof and the Effective
Date:
(a) Approval of Transaction and Consents. Bancshares will submit
to and recommend the approval and adoption of this Agreement, and the
transactions contemplated hereby, by its shareholders, with such
approval to be evidenced by the vote of the requisite number of its
shareholders at a meeting thereof to be duly called, properly noticed
and held as soon as practicable following completion of the First
Commercial Due Diligence Review and declaration by the Securities and
Exchange Commission of the effectiveness of the Registration Statement
(as defined elsewhere herein). Bancshares shall, and shall cause each
Bancshares Subsidiary to, use its best efforts to obtain all licenses,
approvals and consents of any federal, state or other regulatory agency
having jurisdiction and of any other party to the extent that such
licenses, approvals or consents are required of Bancshares to effect
the Merger and the transactions contemplated hereby, or are required
pursuant to Section 3.01(j) hereof.
(b) Access to Corporate Records. Until the Effective Date,
Bancshares and the Bancshares Subsidiaries will afford to First
Commercial and its employees, agents and representatives, including its
accountants, Ernst & Young LLP, full access during normal business
hours to all of the offices, property, documents, contracts, books and
records of Bancshares and the Bancshares Subsidiaries and such
additional information with respect to the business affairs and
properties of Bancshares and the Bancshares Subsidiaries as First
Commercial from time to time may reasonably request. Bancshares and
the Bancshares Subsidiaries will cause their transfer agent and
registrar to make stock transfer records relating to Bancshares and the
Bancshares Subsidiaries available to the extent necessary to effectuate
the intent of this Agreement. Upon the request of First Commercial,
Bancshares and the Bancshares Subsidiaries will furnish abstracts of
title or title insurance policies to real property owned or leased by
Bancshares and the Bancshares Subsidiaries, and copies of any
unrecorded leases to which any of them is a party.
(c) Monthly Financial Statements. Bancshares shall promptly
provide First Commercial with copies of all of the monthly financial
statements for Bancshares and the Bancshares Subsidiaries ("Monthly
Financial Statements") for each of the monthly periods ending between
December 31, 1995, and the Closing Date. The Monthly Financial
Statements shall be accompanied by a certificate of the Chief Financial
Officer of Bancshares to the effect that they are complete and correct
and accurately and fairly reflect the transactions and dispositions of
assets of Bancshares and the Bancshares Subsidiaries, taken as a whole,
and the financial condition and results of operations of Bancshares and
the Bancshares Subsidiaries, taken as a whole, at their respective
dates and for the periods to which they relate, subject to normal year-
end audit adjustments. In addition, the Monthly Financial Statements
shall be prepared in accordance with generally accepted accounting
principles and general practices within the banking industry
consistently applied, except for any footnotes that may be required or
except as otherwise set forth in the accompanying Chief Financial
Officer's certificate. Bancshares shall also promptly provide to First
Commercial copies of all reports and correspondence filed by Bancshares
or any Bancshares Subsidiary during such period with banking regulators
and agencies or received by Bancshares or any Bancshares Subsidiary
from same.
(d) Closing Financial Statements. At the Closing, Bancshares
shall deliver to First Commercial consolidated balance sheets and
statements of income of Bancshares and the Bancshares Subsidiaries
dated as of the last day of the month immediately preceding the Closing
Date (the "Closing Financial Statements"), which shall be certified by
the Chief Financial Officer of Bancshares as being true and correct in
all material respects and as fairly reflecting the consolidated
financial condition and results of operations of Bancshares and the
Bancshares Subsidiaries at the date and for the period to which they
relate, except for any footnotes that may be required and except as
specifically disclosed in the accompanying Chief Financial Officer's
certificate.
(e) Conduct of Business. Bancshares shall, and shall cause the
Bancshares Subsidiaries to, conduct their respective businesses in the
ordinary course so as to maintain their respective properties and
businesses and to preserve their respective business organizations and
the goodwill of their employees, depositors, customers and others
having dealings with them and to maintain their books and records in
the usual, ordinary and normal course. Without the prior written
consent of First Commercial, Bancshares shall not, and shall not permit
any Bancshares Subsidiary to, (i) except for payment of income or
dividends of the Bancshares Subsidiaries, declare or distribute any
cash or stock dividend, authorize a stock split, or authorize, issue or
make any distribution of its capital stock or any security convertible
into or exercisable for Bancshares Stock or the common stock of any
Bancshares Subsidiary or pledge or otherwise encumber any of its
capital stock or any security convertible into or exercisable for
Bancshares Stock or the common stock of any Bancshares Subsidiary,
except that Bancshares may pay (a) a cash dividend of Five Dollars
($5.00) per share of Bancshares Stock in January of 1997 and (b)
thereafter cash dividends (at such time or times as Bancshares
determines appropriate) on each share of Bancshares Stock equal to the
cash dividends declared by First Commercial from January 1, 1997
through the Effective Date on each share of First Commercial Stock
multiplied by the result obtained by dividing 3,412,457 by the number
of shares of Bancshares Stock outstanding on the date the cash dividend
is paid by Bancshares; (ii) open or acquire any new branch office;
(iii) make any direct or indirect redemption, purchase or other
acquisition of any of its capital stock, other than the redemption of
qualifying shares of their respective directors; (iv) intentionally
incur any liability or obligation, make any commitment or disbursement,
acquire or dispose of any property or asset, make any contract or
agreement, subject any of its properties or assets to any lien, claim,
charge, option or encumbrance or engage in any transaction, except in
the ordinary course of its business, except that Bancshares may repay
or borrow on its revolving loan from National Bank of Commerce,
Memphis, Tennessee; (v) increase or decrease by more than 10% the rate
of compensation of any director or employee or enter into any agreement
to increase or decrease the rate of compensation of any director or
employee except with respect to the payment of "inside director" fees
at First Bank Xxxxxx; (vi) create or modify any pension or profit
sharing plan, bonus, deferred compensation, death benefit, or
retirement plan, or the level of benefits under any such plan or
increase or decrease any severance or termination pay benefit or any
other fringe benefit; (vii) amend its articles of incorporation or
bylaws except as may be necessary to carry out this Agreement or as
required by law; or (viii) directly or indirectly encourage, solicit,
participate in or initiate discussions or negotiations with, or provide
any information to, any corporation, partnership, person or other
entity or group (other than First Commercial or an affiliate of First
Commercial) concerning any merger, sale of assets, sale of shares of
capital stock or similar transaction involving Bancshares or any
Bancshares Subsidiary (an "Acquisition"). Bancshares represents that
as of the date hereof Bancshares and the Bancshares Subsidiaries have
ceased all prior activities, and Bancshares and the Bancshares
Subsidiaries have no present intention to engage in activities, of the
type contemplated by clause (viii) with respect to an Acquisition
(other than with First Commercial or an affiliate of First Commercial).
Bancshares shall, and shall cause the Bancshares Subsidiaries to,
advise First Commercial in writing of (i) the institution of any
litigation or proceedings of any kind whatsoever against either
Bancshares or the Bancshares Subsidiaries, (ii) the happening of any
event which would have a material adverse effect on the financial
condition, business, prospects or affairs of either of them, and (iii)
the terms of any proposal or inquiry which it may receive in respect of
an Acquisition by any person (other than First Commercial or any
affiliate of First Commercial). Bancshares and the Bancshares
Subsidiaries will use their reasonable best efforts to comply with all
material contracts, agreements, commitments or obligations to which
Bancshares or any Bancshares Subsidiary is a party or by which
Bancshares or any Bancshares Subsidiary may be bound.
(f) Cooperation and Furnishing Information. Bancshares agrees
to use its reasonable best efforts to cooperate with First Commercial
in furnishing such information concerning the business and affairs of
Bancshares and the Bancshares Subsidiaries as is reasonably necessary
or requested by First Commercial in order to prepare and file any
application for regulatory or government approvals required for
consummation of the transactions contemplated by this Agreement. All
such information shall be true and correct in all material respects and
shall not omit any material fact necessary to make such information not
misleading.
(g) Related Party Transactions. Without the prior written
consent of First Commercial, to the knowledge of Bancshares and the
Bancshares Subsidiaries, neither Bancshares nor any Bancshares
Subsidiary shall enter into any transaction, other than those in the
ordinary course of business, with any of its officers, directors or any
of such person's "affiliates" or "associates," or with any business of
which an officer or director of Bancshares or any Bancshares
Subsidiary, or any of such persons' "affiliates" or "associates," is an
officer, director, employee or ten percent (10%) or more equity owner,
as such terms "affiliates" or "associates" are defined in Rule 14a-1
under the Securities Exchange Act of 1934, as amended.
(h) Notice of Changes. Until the Effective Date, Bancshares
shall, and shall cause the Bancshares Subsidiaries to, give First
Commercial prompt written notice 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 any Bancshares Subsidiary
or a failure by Bancshares or any Bancshares Subsidiary to comply with
any covenant, condition or agreement contained herein, or any other
changes or any inaccuracies in any information or data previously given
or made available to First Commercial pursuant to this Agreement.
(i) Limit on Bancshares's Attorney's Fees. Bancshares agrees
that any fees or expenses it will pay to attorneys in connection with
this Agreement and the consummation of the transactions contemplated
herein shall not exceed $60,000.
Section 4.02. Covenants of First Commercial. First Commercial
hereby covenants and agrees that between the date hereof and the
Effective Date:
(a) Consents and Approvals. First Commercial agrees to cooperate
with Bancshares in furnishing such information concerning the business
and affairs of First Commercial and its directors and officers as is
reasonably necessary or requested in order to prepare and file
applications for regulatory and governmental approvals, including, but
not limited to, an application to the Federal Reserve Board for prior
approval of the transaction contemplated hereunder. First Commercial
will use its best efforts to file such application with the Federal
Reserve Board in a reasonably timely fashion. First Commercial also
will use its best efforts to obtain all licenses, approvals and
consents of any federal, state or other regulatory agency having
jurisdiction and of any other party to the extent that such licenses,
approvals or consents are required to effect the transactions
contemplated hereby, or are required pursuant to Section 3.02(c)
hereof. All such information shall be true and correct in all material
respects and shall not omit any material fact necessary to make such
information not misleading.
(b) Quarterly Reports; Current Reports. First Commercial shall,
between the date of this Agreement and the Closing Date, promptly
provide Bancshares with copies of its Annual Report on Form 10-K, its
Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K
filed with the Securities and Exchange Commission and its regulatory
reports filed with the Federal Reserve Board.
(c) Conduct of Business. First Commercial will, and will cause
the First Commercial Banks to, conduct their respective businesses in
the ordinary course so as to maintain their respective properties and
business and to preserve their respective business organizations and
the goodwill of their employees, depositors, customers and others
having dealings with them. First Commercial will maintain its books
and records in the usual, ordinary and normal course. First Commercial
will promptly advise Bancshares in writing of (i) the institution of
any material litigation against First Commercial or its subsidiaries,
(ii) the happening of any event that would have a material adverse
effect on the financial condition, business or affairs of First
Commercial and (iii) any material contacts with regulatory agencies
regarding their approval of the Merger. First Commercial shall advise
Bancshares in writing of (x) the institution of any material litigation
or proceedings of any kind whatsoever against either First Commercial
or the First Commercial Banks and (y) the happening of any event which
would have a material adverse affect on the financial condition,
business, prospects or affairs of First Commercial and the First
Commercial Banks, taken as a whole. First Commercial and the First
Commercial Banks will use their reasonable best efforts to comply with
all material contracts, agreements, commitments or obligations to which
First Commercial or any First Commercial Bank is a party or by which
First Commercial or any First Commercial Bank may be bound.
(d) Notice of Changes. Until the Closing Date, First Commercial
will give Bancshares prompt written notice 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 First Commercial or a failure by
First Commercial to comply with any covenant, condition or agreement
contained herein, or any other changes or any inaccuracies in any data
previously given or made available to Bancshares pursuant to this
Agreement.
(e) Access to Corporate Records. Until the Effective Date, First
Commercial will afford to Bancshares and its employees, agents and
representatives, including its accountants, Xxxx & Company, full access
during normal business hours to all of the offices, property,
documents, contracts, books and records of First Commercial and the
First Commercial Banks and such additional information with respect to
the business affairs and properties of First Commercial and the First
Commercial Banks as Bancshares from time to time may reasonably
request. First Commercial will cause its transfer agent and registrar
to make stock transfer records relating to First Commercial available
to the extent necessary to effectuate the intent of this Agreement.
(f) Election to First Commercial Board. Upon the closing of the
Merger, the Board of Directors of First Commercial will elect Xxxxxxx
X. Xxxxxx as a member of such Board of Directors and of its Executive
Committee.
(g) Registration of First Commercial Stock. First Commercial
will prepare and file with the Securities and Exchange Commission, as
soon as practicable following the date hereof, a registration statement
on Form S-4 (the "Registration Statement"), or such other form as it
deems appropriate, for the registration under the Securities Act of the
shares of First Commercial Stock constituting the Merger Consideration.
First Commercial shall use its best efforts to cause the Registration
Statement to become effective as soon as practicable, and to cause such
shares of First Commercial Stock to be listed or included for trading
on the Nasdaq National Market or any other market on which shares of
First Commercial Stock trade at the time of effectiveness of the
Registration Statement.
(h) Pooling of Interests. Neither First Commercial nor any First
Commercial Bank has taken, and First Commercial shall not, and shall
not allow any First Commercial Bank to take, unless otherwise required
by law, any action which should prevent the Merger from qualifying for
pooling of interests accounting treatment under Accounting Principles
Board Opinion No. 16 if closed and consummated in accordance with this
Agreement.
(i) Employee Benefits. First Commercial undertakes to provide
Bancshares and the Bancshares Subsidiaries employees who become
employed by First Commercial or who remain employed by any Bancshares
Subsidiary following the Merger with substantially the same benefits as
those provided to other employees of First Commercial.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01. Conditions Precedent to Obligation of First
Commercial. The obligation of First Commercial to consummate the
transactions contemplated by this Agreement shall be subject to the
satisfaction, on or before the Closing Date, of each and every one of
the following conditions, all or any of which may be waived, in whole
or in part, by First Commercial, in its sole and absolute discretion:
(a) Performance of Covenants. Each of the acts and undertakings
of Bancshares to be performed on or before the Closing Date shall have
been duly performed and the Chief Executive Officer of Bancshares shall
have executed and delivered to First Commercial a certificate, dated as
of the Closing Date, to the effect that the foregoing condition has
been fulfilled.
(b) Representations True at Closing. The representations and
warranties made by Bancshares and the Bancshares Subsidiaries herein
shall be true and correct in all material respects on the Closing Date
hereunder with the same force and effect as though such representations
and warranties had been made on and as of such time (except that such
representations and warranties may be untrue or incorrect as a result
of actions or transactions contemplated or permitted by this Agreement
or actions or transactions of Bancshares or any Bancshares Subsidiary
made with the written consent of First Commercial), and the Chief
Executive Officer of Bancshares shall have executed and delivered to
First Commercial a certificate, dated as of the Closing Date, to the
effect that the foregoing condition has been fulfilled.
(c) Material Changes in Financial Condition, Business or
Prospects. Since December 31, 1995, there shall not have occurred any
material adverse change in the assets, financial condition, operations,
business or prospects of Bancshares and the Bancshares Subsidiaries,
taken as a whole, regardless of the cause.
(d) Certified Resolutions. Bancshares shall furnish to First
Commercial certified copies of resolutions duly adopted by the Board of
Directors and the shareholders of Bancshares approving this Agreement
and the Merger.
(e) Government Approvals; Other Consents. First Commercial shall
have received in form and substance reasonably satisfactory to First
Commercial and its counsel all necessary federal and state governmental
and regulatory approvals for the transactions contemplated by this
Agreement (including, but not limited to, the approval of the Federal
Reserve Board, the Office of the Comptroller of the Currency and the
Arkansas State Bank Department, if required), and Bancshares and the
Bancshares Subsidiaries shall have received any and all consents
required pursuant to Section 3.01(j) hereof; provided, however, that
any divestiture of assets mandated by a regulatory authority shall not
constitute a failure to receive satisfactory regulatory approval.
(f) No Injunction. No proceeding shall have been instituted or
threatened before any court, governmental agency or legislative body to
enjoin, restrain or prohibit, or to obtain substantial damages in
respect of, or which is related to or arises out of, this Agreement or
the consummation of the transactions contemplated hereby, which, in the
reasonable judgment of First Commercial, would make it inadvisable to
consummate such transactions (it being understood and agreed that a
written request by governmental authorities for information with
respect to the transactions contemplated herein may not be deemed by
First Commercial to be a threat of material litigation or proceeding,
regardless of whether such request is received before or after
execution of this Agreement).
(g) Litigation. On the Effective Date, there shall not be
pending or threatened against Bancshares or any Bancshares Subsidiary
or the officers or directors of Bancshares or any Bancshares Subsidiary
in their capacity as such, any suit, action or proceeding which, if
successful, would, in the reasonable judgment of First Commercial, have
a material adverse effect on the financial condition, operations,
business or prospects of Bancshares and the Bancshares Subsidiaries,
taken as a whole.
(h) No Material Misstatements or Omissions. First Commercial
shall not have discovered in any of the representations or warranties
of Bancshares or any Bancshares Subsidiary or in any certificate or
information furnished or to be furnished to First Commercial hereunder
or in any application or report to any governmental agency or authority
(including the Federal Reserve Board, the Office of the Comptroller of
the Currency and the Arkansas State Bank Department) relating to the
transactions contemplated by this Agreement any untrue statement of a
material fact or any omission to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or any material failure to
perform or satisfy any covenants of Bancshares or any Bancshares
Subsidiary contained herein.
(i) Opinion of Bancshares's Counsel. An opinion of Mitchell,
Williams, Xxxxx, Xxxxx & Xxxxxxxx, P.L.L.C., counsel for Bancshares,
dated the Closing Date, in substantially the form attached hereto as
Exhibit B, shall have been delivered to First Commercial. In rendering
the opinions contained therein, such counsel may rely as to factual
matters upon certificates of one or more officers of Bancshares and any
Bancshares Subsidiary and of public officials and, as to litigation in
which such counsel is not counsel, on opinions of counsel handling such
litigation, copies of which opinions shall be delivered to First
Commercial.
(j) Financial Confirmation. The Chief Financial Officer of
Bancshares shall have furnished to First Commercial a certificate,
dated the Closing Date, in form and substance satisfactory to First
Commercial, to the effect that nothing has come to Bancshares's
attention that would indicate that (a) during the period from December
31, 1995, to the Closing Date there was any change in the
capitalization of Bancshares and the Bancshares Subsidiaries, taken as
a whole, other than as described in or contemplated by this Agreement,
(b) any material adjustments need to be made to the financial
statements for the period ending at the end of the most recent month
prior to the Closing Date in order for them to be in conformity with
generally accepted accounting principles applied on a consistent basis
with that of prior periods, other than year-end adjustments, or (c)
since December 31, 1995, there has occurred or there is threatened to
occur a matter that would have a material adverse effect on the
business, financial condition, operations, results of operations or
prospects of Bancshares and the Bancshares Subsidiaries, taken as a
whole.
(k) Due Diligence Review. First Commercial shall have the right
to inspect and review, including the right to conduct an audit of, the
books and records relating in any way to the Bancshares Financial
Statements, or to the business, properties and assets of Bancshares and
the Bancshares Subsidiaries, and to conduct such other inspection and
review of the business, assets, condition (financial or other),
operations and prospects of Bancshares and of the Bancshares
Subsidiaries, to the extent First Commercial shall deem necessary (the
"First Commercial Due Diligence Review"). The First Commercial Due
Diligence Review shall not have indicated, in the reasonable judgment
of First Commercial, any matter that may be reasonably expected to have
a material adverse effect on the business, financial condition,
operations, results of operations or prospects of Bancshares and the
Bancshares Subsidiaries, taken as a whole, or that may materially
impair the contemplated benefits, taken as a whole, to First Commercial
of the transactions contemplated by this Agreement. First Commercial
shall complete the First Commercial Due Diligence Review as diligently
as possible but at the latest within ninety (90) days from the date of
this Agreement and shall, upon such completion, advise Bancshares in
writing within ten (10) days thereafter of its intention either to
proceed, pursuant to this Agreement, with the transactions contemplated
by this Agreement or to terminate this Agreement due to non-
satisfaction of the condition precedent set forth in this Section
5.01(k). Provided, however, Bancshares shall have ten (10) days from
the date of a termination notice to attempt to cure the matter(s)
described in such notice as the reason for termination. If such
matter(s) are not, in the reasonable judgment of First Commercial,
cured within the ten (10) day period, this Agreement shall be
terminated.
(l) Title Opinion. First Commercial shall have received in form
and substance satisfactory to its counsel an attorney's opinion and/or
title policy or policies issued by a title insurance company acceptable
to First Commercial relating to all of the real property (except for
other real estate owned) owned or leased by Bancshares or any
Bancshares Subsidiary.
(m) Pooling of Interests Opinion. Ernst & Young LLP, certified
public accountants, shall have delivered to First Commercial, dated the
Closing Date and reasonably satisfactory in form and substance to First
Commercial and its counsel, an opinion to the effect that the
transactions contemplated by this Agreement shall be recorded on the
books and records of First Commercial and shall be reported in the
financial statements of First Commercial by the pooling of interests
method of accounting under generally accepted accounting principles, as
defined in APB Opinion No. 16, together with such additional letter of
assurances regarding the financial condition of Bancshares and the
Bancshares Subsidiaries as First Commercial shall reasonably request.
First Commercial, predicated on its knowledge and the terms of this
Agreement, has no reason to believe as of the date hereof that such
transactions will not be recorded by the pooling of interests method of
accounting.
(n) Delivery of Continuity of Interest Letters.
(i) Each stockholder of Bancshares who is an executive
officer, director or beneficial owner of ten percent (10%) or more of
Bancshares Stock shall have delivered to First Commercial a letter
representing and warranting that he will not sell, transfer or in any
way reduce his risk with respect to the First Commercial Stock received
in connection with the Merger until such time as First Commercial shall
have published financial results covering at least thirty (30) days of
post-transaction combined operations.
(ii) Each stockholder of Bancshares who is the beneficial
owner of five percent (5%) or more of Bancshares Stock shall have
delivered to First Commercial a letter representing or warranting that
(or, if such shareholder is delivering a letter pursuant to Section
5.01(n)(i) above, include a statement in such letter to the effect
that) he has no present intent to sell, transfer or otherwise dispose
of any of the First Commercial Stock to be received by him in
connection with the Merger nor will he sell, transfer or otherwise
dispose of more than fifty percent (50%) of such stock for a period of
at least one (1) year following the Closing.
(o) Articles of Merger. The parties shall have executed and
delivered the Articles of Merger.
Section 5.02. Conditions Precedent to Obligation of Bancshares.
The obligation of Bancshares to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, on
or before the Closing Date, of each and every one of the following
conditions, all or any of which may be waived, in whole or in part, by
Bancshares in its sole and absolute discretion:
(a) Performance of Covenants. Each of the acts and undertakings
of First Commercial to be performed on or before the Closing Date shall
have been duly performed, and an authorized officer of First Commercial
shall have executed and delivered to Bancshares a certificate, dated as
of the Closing Date, to the effect that this condition has been
fulfilled.
(b) Representations True at Closing. The representations and
warranties made by First Commercial pursuant to this Agreement shall be
true and correct in all material respects on the Closing Date hereunder
with the same force and effect as though such representations and
warranties had been made on and as of such time (except that such
representations and warranties may be untrue or incorrect as a result
of actions or transactions contemplated or permitted by this Agreement
or actions or transactions of First Commercial made with the written
consent of Bancshares), and an authorized officer of First Commercial
shall have executed and delivered to Bancshares a certificate, dated as
of the Closing Date, to the effect that this condition has been
fulfilled.
(c) Material Changes in Financial Condition. Since December 31,
1995, there shall not have occurred any material adverse change in the
assets, financial condition, operations, business or prospects of First
Commercial or the First Commercial Banks, taken as a whole, regardless
of the cause.
(d) Certified Resolutions. First Commercial shall have furnished
to Bancshares a certified copy of resolutions duly adopted by the Board
of Directors of First Commercial authorizing the transactions
contemplated by this Agreement.
(e) No Injunction. No action, proceeding, regulation or
legislation shall have been instituted or threatened before any court,
governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain substantial damages in respect of, or which is
related to or arises out of, this Agreement or the consummation of the
transactions contemplated hereby, which, in the reasonable judgment of
Bancshares, would make it inadvisable to consummate such transactions
(it being understood and agreed that a written request by governmental
authorities for information with respect to the transactions
contemplated herein may not be deemed by Bancshares to be a threat of
material litigation or proceeding, regardless of whether such request
is received before or after execution of this Agreement).
(f) No Material Misstatements or Omissions. Bancshares shall not
have discovered in any of the representations or warranties of First
Commercial or in any certificate or information furnished or to be
furnished to Bancshares hereunder or in any application or report to
any governmental agency or authority (including the Federal Reserve
Board) relating to the transactions contemplated by this Agreement any
untrue statement of a material fact or any omission to state a material
fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading,
or any material failure to perform or satisfy any covenants of First
Commercial or any First Commercial Bank contained herein, and such fact
shall be certified to Bancshares by First Commercial.
(g) Opinion of First Commercial's Counsel. An opinion of Friday,
Xxxxxxxx & Xxxxx, counsel for First Commercial, dated as of the Closing
Date, in substantially the form attached hereto as Exhibit C, shall
have been delivered to Bancshares. In rendering the opinions contained
therein, such counsel may rely as to factual matters upon certificates
of officers of First Commercial and its subsidiaries and of public
officials and as to litigation in which they are not counsel on opin-
ions of counsel handling such litigation, copies of which opinions
shall be delivered to Bancshares.
(h) Tax Opinion. Bancshares shall have received an opinion of
Friday, Xxxxxxxx & Xxxxx, counsel to First Commercial, to the effect
that the transactions contemplated herein will be treated for federal
income tax purposes as a tax-free corporate reorganization within the
meaning of Section 368(a)(1)(A) of the Code. The parties agree to
utilize their reasonable best efforts to consummate the transactions
described herein in a manner which will qualify as a tax-free corporate
reorganization within the meaning of the foregoing provisions.
(i) Securities Registration Opinion. Bancshares shall have
received an opinion of Friday, Xxxxxxxx & Xxxxx, counsel to First
Commercial, to the effect that the shares of First Commercial Stock
issued to the shareholders of Bancshares pursuant to this Agreement
have been registered with the Securities and Exchange Commission
pursuant to Section 5 of the Securities Act of 1933, as amended, and
may be sold or transferred by the shareholders of Bancshares without
further registration under Section 5 of the Securities Act of 1933, as
amended, except as may otherwise be provided by Rules 144 and 145 of
the Securities and Exchange Commission and the terms of the letter to
be delivered by certain stockholders of Bancshares pursuant to Section
5.01(n) of this Agreement.
(j) Fairness Opinion. Bancshares shall have received an opinion
from Xxxxxxxx Inc. that the transactions contemplated by this Agreement
and the Merger Consideration to be received by the holders of
Bancshares Stock pursuant to the terms set forth in this Agreement are
fair from a financial point of view to the holders of Bancshares Stock,
which opinion shall be dated as of the date of this Agreement and
delivered concurrently with its execution. Such opinion shall remain
in effect and not have been withdrawn as of the date of the Joint Proxy
Statement/Prospectus forming a part of the Registration Statement.
(k) Articles of Merger. The parties shall have executed and
delivered the Articles of Merger.
(l) Due Diligence Review. Bancshares and its counsel or agent
shall have the right to inspect and review, including the right to
conduct an audit of, the books and records relating in any way to the
First Commercial Financial Statements, or the business, properties and
assets of First Commercial and the First Commercial Banks, and to
conduct such other inspection and review of the business, assets,
condition (financial or other), operations and prospects of First
Commercial and of the First Commercial Banks, to the extent Bancshares
shall deem necessary (the "Bancshares Due Diligence Review"). The
Bancshares Due Diligence Review shall not have indicated, in the
reasonable judgment of Bancshares, any matter that may reasonably be
expected to have a material adverse effect on the business, financial
condition, operations, results of operations or prospects of First
Commercial and the First Commercial Banks, taken as a whole.
Bancshares shall complete the Bancshares Due Diligence Review within
thirty (30) days from the date of this Agreement and shall, upon such
completion, advise First Commercial of its intention either to proceed,
pursuant to this Agreement, with the transactions contemplated by this
Agreement or to terminate this Agreement due to non-satisfaction of the
condition precedent set forth in this Section 5.02(l).
(m) No Adverse Change in Market Price for First Commercial Stock.
In the event the average of the individual averages of the bid and
asked prices for shares of First Commercial Stock reported on the
Nasdaq National Market as of the close of business on each of the
twenty (20) trading days immediately proceeding the Closing Date shall
be less than $29.50 per share, subject to such adjustments as provided
in Section 1.05 hereof, then Bancshares may elect to terminate this
Agreement in accordance with Section 6.01(f) hereof, unless First
Commercial agrees to amend and restate this Agreement to provide in
Section 1.05(a) that each share of Bancshares Stock shall be converted
into the right to receive that number of shares equal to the result
obtained by dividing (Y) the number of whole shares of First Commercial
Stock having an aggregate market value closest to, but not exceeding,
$100,667,482, based on the average of the individual averages of the
bid and asked prices for shares of First Commercial Stock reported on
the Nasdaq National Market as of the close of business on each of the
twenty (20) days immediately proceeding the date on which action is
taken by Bancshares by (Z) the number of shares of Bancshares Stock
outstanding on the Effective Date. If First Commercial notifies
Bancshares in writing that First Commercial will agree to so amend and
restate this Agreement, then the Board of Directors of Bancshares shall
approve a form of amended and restated agreement incorporating changes
consistent herewith and shall authorize its execution and delivery by
officers of Bancshares.
(n) Litigation. On the Effective Date, there shall not be
pending or threatened against First Commercial or any First Commercial
Bank or the officers or the directors of First Commercial or any First
Commercial Bank in their capacity as such, any suit, action or
proceeding which, if successful, would, in the reasonable judgment of
Bancshares, have a material adverse affect on the financial condition,
operations, business or prospects of First Commercial and the First
Commercial Banks, taken as a whole. Bancshares acknowledges that it is
aware of the Aearth Development, Inc. legal proceeding disclosed in
First Commercial's Report on Form 10-Q for the quarterly period ended
June 30, 1996, and that such proceeding, in the event the original
verdict rendered at trial is reinstated on appeal, will not have a
material adverse impact on the financial condition, operations,
business or prospects of First Commercial and the First Commercial
Banks, taken as a whole.
(o) Government Approvals; Other Consents. Bancshares shall have
received in form and substance reasonably satisfactory to Bancshares
and its counsel all necessary federal and state governmental and
regulatory approvals for the transactions contemplated by this
Agreement (including, but not limited to, the approval of the Federal
Reserve Board, the Office of the Comptroller of the Currency and the
Arkansas State Bank Department, if required), and First Commercial and
the First Commercial Banks shall have received any and all consents
required pursuant to Section 3.02(c) hereof; provided, however, that
any divestiture of assets mandated by regulatory authority shall not
constitute a failure to receive satisfactory regulatory approval.
ARTICLE VI
TERMINATION
Section 6.01. Procedure for Termination. This Agreement may be
terminated and abandoned at any time prior to the Closing, whether
before or after approval of the Merger by the Board of Directors of
First Commercial or by the shareholders of Bancshares, upon the
occurrence of any of the following by written notice from First
Commercial to Bancshares (as authorized by the Board of Directors of
First Commercial), or by written notice from Bancshares to First
Commercial, as the case may be:
(a) If any condition to the obligations of First Commercial
set forth in Section 5.01 is not substantially satisfied at the time or
times contemplated thereby and such condition is not waived by First
Commercial or if any condition to the obligations of Bancshares as set
forth in Section 5.02 is not substantially satisfied at the time or
times contemplated thereby and such condition is not waived by
Bancshares, it being understood that each party's right to terminate
under this Section 6.01(a) shall relate only to conditions to that
party's obligations;
(b) In the event of a material breach by the other of any
representation, warranty or agreement contained in this Agreement that
is not cured within 20 days of the time that written notice of such
breach is received by such other party from the party giving notice
(except that any such notice shall not have the effect of extending the
time for termination set forth in Section 6.01(c) hereof);
(c) By either Bancshares or First Commercial if the Closing
Date shall not have occurred, for reasons other than a breach of this
Agreement by the party seeking termination, on or before September 30,
1997, or such later date agreed to in writing by the parties; or
(d) By First Commercial if there shall have been any action
taken, or any statute, rule or regulation proposed or enacted, by any
federal, state or foreign government or governmental or administrative
agency that would (i) render First Commercial substantially unable to
satisfy its obligations hereunder, (ii) in the sole, but reasonable,
judgment of First Commercial, prohibit or delay for four months, or
longer, consummation of the transactions contemplated by this
Agreement, or (iii) materially impair the contemplated benefits to
First Commercial of the transactions contemplated by this Agreement by
limiting the location at which or manner in which First Commercial
presently conducts its business or by requiring First Commercial,
Bancshares or any Bancshares Subsidiary to undertake any material
changes in personnel, organizational structure, internal controls,
accounting systems, operations or policies, or otherwise.
(e) By First Commercial if there shall have occurred:
(i) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States,
(ii) a commencement of a war, armed hostilities, or
other international or national calamity, directly or indirectly
involving the United States, or
(iii) a material change in the United States or any other
currency exchange rates or a suspension of, or limitation on, the
markets thereof;
or, in the case of any of the foregoing existing at the time of this
Agreement, a material acceleration or worsening thereof.
(f) At the election of Bancshares upon the occurrence of the
event described in 5.02(m), subject to the right set forth therein of
First Commercial to preclude such election.
(g) By Bancshares if its Board of Directors so determines,
in the event that prior to the Effective Date (i) First Commercial
enters into a letter of intent or comparable document or a definitive
(a) purchase and sale agreement to be acquired, or (b) merger agreement
in which First Commercial is not the surviving corporation, or (ii)
another person publicly announces the intent to acquire twenty-five
percent (25%) or more of the outstanding equity securities of First
Commercial whether by tender offer or otherwise.
Section 6.02. Termination by Mutual Agreement. This Agreement
may be terminated and abandoned (whether before or after approval of
the Merger by First Commercial or by the shareholders of Bancshares) by
mutual written consent of Bancshares and First Commercial, as
authorized by their respective Board of Directors.
Section 6.03. Effect of Termination for Non-Willful Breach. In
the event of termination of this Agreement caused otherwise than by a
willful breach of this Agreement by any of the parties hereto, this
Agreement shall cease and terminate, the acquisition of Bancshares as
provided herein shall not be consummated, and neither Bancshares or
First Commercial shall have any liability to the other party under this
Agreement of any nature whatever; provided, however, that the duties of
the parties with respect to confidential information as set forth in
Section 8.10 shall survive any such termination.
Section 6.04. Effect of Termination for Willful Breach. If
termination of this Agreement shall have been caused by willful breach
of this Agreement, then, in addition to other remedies as may be
available at law or equity for breach of this Agreement, the party so
found to have willfully breached this Agreement shall indemnify the
other party for its costs, fees and expenses of its counsel,
accountants and other experts and advisors, as well as fees and
expenses incident to negotiation, preparation and execution of this
Agreement, and all parties shall be bound by the confidentiality
obligations provided in Section 8.10 of this Agreement.
Section 6.05. Termination Fee. If termination of this Agreement
shall have been caused by the willful breach or the willful failure to
perform this Agreement by Bancshares, or by First Commercial, then if
Bancshares is the breaching party it shall pay to First Commercial, in
addition to any other costs, fees or expenses due under this Agreement,
within five (5) business days after the date of such termination,
$5,000,000 in immediately available funds, and if First Commercial is
the breaching party it shall pay to Bancshares, in addition to any
other costs, fees or expenses due under this Agreement, within five (5)
business days after the date of such termination, $500,000 in
immediately available funds. The parties hereto agree that such
termination fee is necessary because of the difficulty in ascertaining
the precise amount of damages to either party from the willful breach
of or failure to perform this Agreement and that such termination fee
represents a reasonable estimate of those damages. No termination fee
shall be paid in the event of a non-willful breach of or non-willful
failure to perform this Agreement.
Section 6.06. Enforcement Expenses. The prevailing party in any
suit or action to enforce this Agreement or to obtain any remedy which
may be available as a result of a breach of any representation,
warranty or covenant contained herein prior to Closing shall be
entitled to recover its court costs and reasonable attorneys' fees,
including costs and attorneys' fees on appeal from any such suit or
action.
ARTICLE VII
BROKERS AND EXPENSES
Section 7.01. Brokers. Bancshares represents and warrants to
First Commercial that no broker or finder has acted for it in
connection with the execution and delivery of this Agreement or the
transactions contemplated hereby other than Xxxxxxxx, Inc.
Section 7.02. Expenses. Each party hereto will pay all
attorneys' and accountants' fees and all other costs and expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby, except as provided in Article VI hereof, and
except as limited by Section 4.01(i) hereof.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Announcements. Neither First Commercial nor
Bancshares will make any press release or other announcement to the
public concerning the transactions contemplated by this Agreement
without the prior written consent of the other party, except as
required by law.
Section 8.02. Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to
have been duly given upon receipt when delivered personally or by
confirmed telefacsimile, or one(1) business day following the date it
is given to a nationally-recognized overnight mail or delivery service
(with postage or delivery charge prepaid) providing proof of delivery,
as follows:
(a) If to Bancshares to:
Southwest Bancshares, Inc.
0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx, Chairman
with copy to:
Xxxx X. Xxxxx
Xxxxxxxx, Williams, Selig, Gates & Xxxxxxxx, P.L.L.C.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
(b) If to First Commercial, to:
First Commercial Corporation
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Mr. J. Xxxx Xxxxxx
with copy to:
Xxxx Xxxxxxx Xxxxxxxx
Friday, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
or to such other address as any person may designate in writing to
First Commercial and Bancshares at the addresses listed above, in
accordance with this Section 8.02.
Section 8.03. Binding Effect. All of the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
Section 8.04. Headings. The Article, Section, paragraph and
other headings in this Agreement are inserted solely as a matter of
convenience and for reference and are not a part of this Agreement.
Section 8.05. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
Section 8.06. Integration of Agreement. This Agreement
constitutes the entire understanding of the parties with respect to the
subject matter hereof and supersedes all prior agreements, arrangements
or communications, oral or written, between the parties hereto with
respect to the subject matter hereof.
Section 8.07. Amendments; Waivers. Any of the terms or
conditions of this Agreement may be waived, but only in writing of the
party against which the enforcement of such waiver is sought, and any
such terms or conditions may be amended or modified in whole or in part
at any time by agreement in writing, executed in the same manner as
this Agreement.
Section 8.08. Governing Law. This Agreement shall be governed by
and construed and enforced under and pursuant to the laws of the State
of Arkansas.
Section 8.09. Incorporation by Reference. Any and all schedules,
exhibits, annexes, statements, reports, certificates or other documents
or instruments referred to herein or attached hereto are incorporated
herein by reference thereto as though fully set forth at the point
referred to in this Agreement.
Section 8.10. Confidentiality of Information. Until the Closing
Date, or in the event of termination of this Agreement without
consummation of the transactions contemplated hereby, First Commercial
and Bancshares each hereby covenants and agrees that it and its agents
shall keep and shall cause its subsidiaries to keep confidential any
information (unless readily ascertainable from public or published
information or sources) obtained from the other party or its agents,
except for disclosures of information expressly allowed by such other
party. In the event this Agreement is terminated, then promptly after
such termination First Commercial or Bancshares (as the case may be)
and its agents shall return to the other party hereto all documents,
work papers and other written material obtained from such other party
or its agents in connection with this Agreement and not theretofore
made public (including all copies thereof).
Section 8.11. No Assignment. Neither this Agreement nor any
rights or obligations of any party hereunder or thereunder, may be
assigned by the parties, by operation of law or otherwise, except with
the written consent of the other party.
Section 8.12. Severability. If any portion or provision of this
Agreement is determined by a court of competent jurisdiction to be
invalid, illegal or unenforceable in any jurisdiction, such portion or
provision shall be ineffective as to that jurisdiction to the extent of
such invalidity, illegality or unenforceability, without affecting in
any way the validity or enforceability of the remaining portions or
provisions in such jurisdiction or rendering that or any other portions
or provisions of this Agreement invalid, illegal or unenforceable in
any other jurisdiction.
Section 8.13. Survival of Representations and Warranties. None
of the representations, warranties or covenants contained in this
Agreement, or in any instrument or other document delivered pursuant to
this Agreement, shall survive the Closing.
Section 8.14. Definition of To The Knowledge Of.
(i) When used in this Agreement, the phrases "to the knowledge of
Bancshares," "to the knowledge of Bancshares and the Bancshares
Subsidiaries," and "nothing has come to Bancshares's attention" shall
mean the actual knowledge of Xxxxxxx X. Xxxxxx, Xxxxx XxXxxxxxx, Xx.
and Xxxx Xxxxx in the case of Bancshares, and these individuals and the
individuals serving in the office of President in the case of the
Bancshares Subsidiaries, including the knowledge that such individuals
should have acquired in the ordinary course of performing their duties
as officers of Bancshares and/or a Bancshares Subsidiary.
(ii) When used in this Agreement, the phrases "to the knowledge of
First Commercial," "to the knowledge of First Commercial and the First
Commercial Banks," and "nothing has come to First Commercial's
attention" shall mean the actual knowledge of Xxxxxxx Xxxxx, Xxxxx X.
Xxxxx and J. Xxxx Xxxxxx, including the knowledge that such individuals
should have acquired in the ordinary course of performing their duties
as executive officers of First Commercial.
Section 8.15. Applicability of Agreement to Entity Prior to
Becoming Bancshares Subsidiary. Notwithstanding anything in this
Agreement to the contrary, no Bancshares Subsidiary shall be required
to make any representation or warranty, nor shall Bancshares be deemed
to have made any representation or warranty as to or concerning a
Bancshares Subsidiary, or provide any information, with respect to a
period of time during which such entity was not a subsidiary of
Bancshares.
IN WITNESS WHEREOF, First Commercial and Bancshares have caused
this Agreement to be executed and delivered in multiple counterparts as
of the date first above written.
FIRST COMMERCIAL CORPORATION
By: __________________________
Title: ________________________
ATTEST:
____________________
Secretary
SOUTHWEST BANCSHARES, INC.
By: __________________________
Title: ________________________
ATTEST:
____________________
Secretary
EXHIBIT A
ARTICLES OF MERGER
OF
SOUTHWEST BANCSHARES, INC.
WITH AND INTO
FIRST COMMERCIAL CORPORATION
We, ___________, the duly elected __________ of Southwest
Bancshares, Inc., an Arkansas corporation ("Bancshares") and ________
_______, the duly elected _________ of First Commercial Corporation, an
Arkansas corporation, ("First Commercial") do hereby state on oath that
the following information relating to the merger of Bancshares with and
into First Commercial is true, correct, and complete to the best of our
knowledge and belief:
ARTICLE I
THE PLAN OF MERGER
Section 1.01. The Merger. At the Effective Time (as defined in
Section 1.03 hereof) in accordance with this Plan of Merger and
Arkansas law, Bancshares shall be merged with and into First Commercial
pursuant to this Plan of Merger, the separate existence of Bancshares
shall cease, and First Commercial shall continue as the surviving
corporation under the corporate name "First Commercial Corporation."
First Commercial hereinafter may sometimes be referred to as the
"Surviving Corporation."
Section 1.02. Effect of the Merger. At the Effective Time the
effect of the Merger shall be that (i) the Surviving Corporation shall
possess all the rights, privileges, and franchises possessed by each of
First Commercial and Bancshares, (ii) all of the property and assets of
whatsoever kind or description of each of First Commercial and
Bancshares, and all debts due on whatever account to any of them,
including subscriptions for shares or other choses in action belonging
to any of them, shall be taken and be deemed to be transferred to, and
vested in, the Surviving Corporation without further act or deed, and
(iii) the Surviving Corporation shall be responsible for all of the
liabilities and obligations of each of First Commercial and Bancshares,
as provided by applicable law, in the same manner as if the Surviving
Corporation had itself incurred such liabilities or obligations; but
the liabilities of First Commercial and Bancshares, or of their
shareholders, directors, or officers, shall not be affected, nor shall
the rights of the creditors thereof, or of any persons dealing with
such corporations be impaired by the Merger, and any claim existing, or
action or proceeding pending, by or against either of First Commercial
or Bancshares may be prosecuted to judgment as if the Merger had not
taken place, or the Surviving Corporation may be proceeded against, or
substituted, in place of First Commercial or Bancshares, as the case
may be.
Section 1.03. Consummation of the Merger, Effective Time. The
parties hereto will cause the Merger to be consummated by filing with
the Secretary of State of the State of Arkansas these Articles of
Merger. The "Effective Time" shall be 5:00 p.m., Little Rock time, on
the date of such filing.
Section 1.04. Articles of Incorporation; Bylaws; Directors and
Officers. The Articles of Incorporation of First Commercial, as in
effect immediately prior to the Effective Time, shall be the Articles
of Incorporation of the Surviving Corporation after the Effective Time
until thereafter amended as provided therein and under Arkansas law.
The Bylaws of First Commercial, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation after
the Effective Time until thereafter amended as provided therein and
under Arkansas law. The directors and officers of First Commercial
immediately prior to the Effective Time shall be the initial directors
and officers of the Surviving Corporation after the Effective Time
until their successors are elected and qualified.
Section 1.05. Merger Consideration; Conversion of Securities. At
the Effective Time, by virtue of the Merger and without any action on
the part of First Commercial, Bancshares, or the holder of any of the
securities of such corporations:
(a) Each share of the common stock of Bancshares, par value $____
per share ("Bancshares Stock"), issued and outstanding immediately
prior to the Effective Time (other than shares as to which dissenters'
rights have been perfected and not withdrawn or otherwise forfeited
under applicable Arkansas law ("Dissenting Shares")) shall be canceled
and extinguished and be converted into the right to receive that number
of shares of common stock of First Commercial, $3.00 par value ("First
Commercial Stock"), equal to the result obtained by dividing (Y)
3,412,457 by (Z) 245,275 (such consideration, as well as any payment
due in lieu of fractional shares of First Commercial Stock as
hereinafter provided being herein referred to as the "Merger
Consideration").
(b) No fractional shares of First Commercial Stock shall be
issued as part of the Merger, and in lieu of fractional shares, First
Commercial shall pay a sum in cash equal to the value of any such
fractional share of First Commercial Stock to which any holder of
Bancshares Stock shall be entitled determined on the basis of the last
reported sales price on the date on which the Effective Time occurs for
shares of First Commercial Stock on The Nasdaq National Market.
(c) At and after the Effective Time, there shall be no transfers
on the stock transfer books of Bancshares with respect to shares of
Bancshares Stock issued and outstanding immediately prior to the
Effective Time. If, after the Effective Time, certificates formerly
representing shares of Bancshares Stock are presented to First
Commercial or its transfer agent, they shall be canceled and exchanged
for the Merger Consideration as provided in Section 1.06 and following,
subject to applicable law in the case of Dissenting Shares.
Section 1.06. Exchange of Certificates. From and after the
Effective Time, all certificates representing shares of Bancshares
Stock, with the exception of certificates representing Dissenting
Shares or shares of Bancshares Stock held by First Commercial, shall
represent the right to receive shares of First Commercial Stock on the
basis set forth above, and the right to receive cash in lieu of
fractional shares in exchange therefor, upon the terms and conditions
of this Plan of Merger, subject to applicable abandoned property,
escheat, and similar laws. Upon delivery of certificates representing
shares of Bancshares Stock to the transfer agent of First Commercial,
First Commercial shall cause the transfer agent to issue certificates
representing the requisite number of shares of First Commercial Stock
for each share of Bancshares Stock represented by the certificates
therefor properly delivered, and First Commercial shall pay by
certified or cashier's check the amount entitled to be received in lieu
of fractional shares. Notwithstanding the foregoing, neither First
Commercial's transfer agent nor any party hereto shall be liable to a
holder of shares of Bancshares Stock for any of the Merger
Consideration delivered to a public official pursuant to applicable
abandoned property, escheat, and similar laws.
Section 1.07. Rights of Bancshares Shareholders to Dividends.
Holders of Bancshares Stock on the Effective Date shall be entitled to
receive, subject to applicable abandoned property, escheat and similar
laws, payment of dividends declared by First Commercial subsequent to
the Effective Date, but delivery of payment of such dividends will not
be required of First Commercial until such persons have delivered their
certificates representing shares of Bancshares Stock in exchange for
certificates representing shares of First Commercial Stock in
accordance with the provisions of Section 1.06 above. Notwithstanding
the foregoing, First Commercial shall not be liable to a holder of
shares of Bancshares Stock for any such dividends delivered to a public
official pursuant to any abandoned property, escheat and similar laws.
ARTICLE II
APPROVAL OF PLAN OF MERGER
Section 2.01. Approval by Board of Directors. The Plan of Merger
incorporated herein has been adopted by the Board of Directors of each
of Bancshares and First Commercial.
Section 2.02. Approval by Shareholders.
(a) Pursuant to Ark. Code Xxx. Section 4-27-1103G, shareholder
approval of the Plan of Merger was not required by the shareholders of
First Commercial.
(b) The Plan of Merger was approved by the shareholders of
Bancshares on _________, 1997, pursuant to Ark. Code Xxx. Section
4-27-1103E at a special meeting of shareholders duly called and held
for that purpose. On the date of approval of the Plan of Merger,
Bancshares's sole outstanding class of capital stock was common stock,
$____ par value per share, each share of which was entitled to one
vote, and _____ shares of which were outstanding.
Bancshares's shareholders approved the Plan of Merger by a vote of
in favor of the proposal and against the proposal.
IN WITNESS WHEREOF, we have executed these Articles of Merger on
__________________, 1997.
SOUTHWEST BANCSHARES, INC.
By:
[Name], [Title]
FIRST COMMERCIAL CORPORATION
By:
[Name], [Title]
EXHIBIT B
Substantive Provisions of Bancshares's
Counsel's Opinion
The opinion of _______, Counsel for Bancshares, shall be dated the
Closing Date and shall opine, in substance, as follows:
1. Bancshares and the Bancshares Subsidiaries have been duly
organized and are corporations, state chartered banks, and a
partnership, respectively, validly existing in good standing under the
laws of the State of Arkansas. Each of Bancshares and the Bancshares
Subsidiaries has full corporate power to own its property and assets
and to carry on its business as presently conducted, and is duly
qualified or registered to do business in each jurisdiction where the
nature of its business or the type of its assets requires such
qualification and where the failure to so qualify would be material to
the business of Bancshares or the Bancshares Subsidiaries.
2. Bancshares has full corporate power to execute and deliver
this Agreement. All corporate action of Bancshares required to duly
authorize and execute this Agreement has been taken. This Agreement is
valid and binding on Bancshares and is enforceable in accordance with
its terms, subject, as to the enforcement of remedies, to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforceability of creditors' rights generally and to limitations on the
availability of injunctive relief, specific performance and other
equitable remedies, whether applied by a court of law or equity.
3. All shares of Bancshares Stock and common stock of the
Bancshares Subsidiaries issued and outstanding as of the Closing Date
are duly authorized, validly issued, fully paid and not subject to
assessment. None of such shares has been issued in violation of any
preemptive rights of shareholders. To the knowledge of such counsel,
neither Bancshares nor the Bancshares Subsidiaries has outstanding and
is not obligated to issue subscriptions, options or other arrangements
or commitments obligating it to issue or dispose of any shares of its
common stock.
4. The consummation of the Merger will not violate any provision
of either Bancshares's or the Bancshares Subsidiaries' Articles of
Incorporation or Bylaws, or violate any provision of, or result in the
acceleration of any material obligation under, any mortgage, loan
agreement, order, judgment, law or decree known to such counsel to
which Bancshares or any of the Bancshares Subsidiaries is a party or by
which any of them is bound, and will not violate or conflict with any
other material restriction of any kind or character known to such
counsel to which Bancshares or any of the Bancshares Subsidiaries is
subject.
5. To the knowledge of such counsel, each of Bancshares and the
Bancshares Subsidiaries has all licenses, permits, approvals and other
authorizations from Federal and state agencies and authorities having
jurisdiction in the premises required in the conduct of its business as
presently being conducted where the failure to do so would have a
material adverse effect on Bancshares and the Bancshares Subsidiaries,
taken as a whole.
6. To the knowledge of such counsel, there is no claim, action,
suit or proceeding pending or threatened against Bancshares or any of
the Bancshares Subsidiaries which, if adversely determined, would have
a material adverse effect on the business, assets, operations or
financial condition of Bancshares and the Bancshares Subsidiaries,
taken as a whole, would question the validity of the Agreement or would
prevent, hinder or delay consummation of the transactions contemplated
by the Agreement.
7. To the knowledge of such counsel, each of Bancshares and the
Bancshares Subsidiaries is, in the conduct of its business, in
compliance with all applicable Federal, state and local laws, statutes,
ordinances and regulations, which the failure to comply with would
materially adversely affect the business or the value of the properties
or assets of Bancshares and the Bancshares Subsidiaries, taken as a
whole.
In rendering such opinions, such counsel may rely as to factual
matters upon certificates of one or more officers of Bancshares and any
of the Bancshares Subsidiaries and of public officials and, as to
litigation where they are not counsel of record, on opinions of counsel
handling such litigation, copies of which opinions shall be delivered
to First Commercial.
EXHIBIT C
Substantive Provisions of First Commercial
Counsel's Opinion
The opinion of Friday, Xxxxxxxx & Xxxxx, Counsel for First
Commercial, shall be dated the Closing Date and shall opine, in
substance, as follows:
1. First Commercial and the First Commercial Banks have been
duly organized and are a corporation, state chartered banks and
national banking associations, respectively, validly existing in good
standing under the laws of the State of Arkansas and the United States
of America and have full corporate power to own their property and
assets and to carry on their business as presently conducted.
2. All corporate action of First Commercial required to
authorize the Agreement and to effectuate the Merger contemplated by
the Agreement has been taken. The Agreement is valid and binding on
First Commercial and is enforceable in accordance with its terms,
subject as to the enforcement of remedies to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and to limitations on the availability
of injunctive relief, specific performance and other equitable
remedies, whether applied by a court of law or equity.
3. The consummation of the Merger will not violate any provision
of the Articles of Incorporation or Association or Bylaws of First
Commercial or any First Commercial Bank or violate any provision of, or
result in the acceleration of any material obligation under, any
mortgage, loan agreement, order, judgment, law or decree known to such
counsel to which First Commercial or any First Commercial Bank is a
party or by which it is bound, and will not violate or conflict with
any other material restriction of any kind or character known to such
counsel to which First Commercial or any First Commercial Bank is
subject.
4. To the knowledge of such counsel, there is no claim, action,
suit or proceeding pending or threatened against First Commercial or
any of the First Commercial Banks which, if adversely determined, would
have a material adverse effect on the business, assets, operations or
financial condition of First Commercial and the First Commercial Banks,
taken as a whole, would question the validity of the Agreement or would
prevent, hinder or delay consummation of the transactions contemplated
by the Agreement.
5. To the knowledge of such counsel, each of First Commercial
and the First Commercial Banks has all licenses, permits, approvals and
other authorizations from Federal and state agencies and authorities
having jurisdiction in the premises required in the conduct of its
business as presently being conducted where the failure to do so would
have a material adverse effect on First Commercial and the First
Commercial Banks, taken as a whole.
6. To the knowledge of such counsel, each of First Commercial
and the First Commercial Banks is, in the conduct of its business, in
compliance with all applicable Federal, state and local laws, statutes,
ordinances and regulations, which the failure to comply with would
materially adversely affect the business or the value of the properties
or assets of First Commercial and the First Commercial Banks, taken as
a whole.
7. No facts have come to such counsel's attention that lead them
to believe that the joint proxy statement/prospectus (other then the
financial and statistical data contained or incorporated therein, as to
which such counsel need not express any opinion or belief) contains as
of this date any untrue statement of material fact or omits to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(Such counsel need not pass upon nor assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
joint proxy statements/prospectus, and such opinion may be based upon a
limited review of, and participation and conferences relating to, the
joint proxy statement/prospectus, without independent verification.)
8. The shares of First Commercial Stock to be issued to the
shareholders of Bancshares following the Closing will be fully paid,
validly authorized and duly issued and are not subject to assessment
and are not issued in violation of any preemptive rights of First
Commercial's shareholders. Such shares have been registered with the
Security and Exchange Commission pursuant to Section 5 of the
Securities Act of 1933, as amended (the "Act"), and may be sold or
transferred by the shareholders of Bancshares without further
registration under Section 5 of the Act except as may otherwise be
provided by Rules 144 and 145 of the Securities and Exchange Commission
and the terms of certain continuity of interest letters to be delivered
by certain shareholders of Bancshares pursuant to Section 5.01(n) of
this Agreement.
In rendering such opinions, such counsel may rely as to factual
matters upon certificates of officers of First Commercial and of public
officials and, as to litigation where they are not counsel of record,
on opinions of counsel handling such litigation, copies of which
opinions shall be delivered to Bancshares.
