Exhibit 2.1
Agreement and Plan of Merger
By and Between
Premier Bancorp, Inc.
and
Xxxxxx Financial Corporation
January 16, 2003
TABLE OF CONTENTS
ARTICLE I - THE MERGER 8
Section 1.1 Merger 8
Section 1.2 Name 9
Section 1.3 Articles of Incorporation 9
Section 1.4 Bylaws 9
Section 1.5 Directors and Officers 9
ARTICLE II - CONVERSION OF SHARES AND EXCHANGE OF STOCK CERTIFICATES 9
Section 2.1 Conversion of Shares 9
Section 2.2 Exchange of Stock Certificates 10
Section 2.3 Treatment of Outstanding Premier Options 12
Section 2.4 Reservation of Shares 13
Section 2.5 Taking Necessary Action 13
Section 2.6 Press Releases, Etc 13
Section 2.7 Fulton Common Stock 13
Section 2.8 No Dissenters' Rights 13
Section 2.9 Premier Preferred Stock 14
Section 2.10 Certain Actions 14
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF PREMIER 14
Section 3.1 Authority 14
Section 3.2 Organization and Standing 15
Section 3.3 Subsidiaries 15
Section 3.4 Capitalization 15
Section 3.5 Charter, Bylaws and Minute Books 16
Section 3.6 Financial Statements 16
Section 3.7 Absence of Undisclosed Liabilities 16
Section 3.8 Absence of Changes 17
Section 3.9 Dividends, Distributions and Stock Purchases 17
Section 3.10 Taxes 17
Section 3.11 Title to and Condition of Assets 17
Section 3.12 Contracts 18
Section 3.13 Litigation and Governmental Directives 19
Section 3.14 Compliance with Laws; Governmental Authorizations 20
Section 3.15 Insurance 20
Section 3.16 Financial Institutions Bonds 20
Section 3.17 Labor Relations and Employment Agreements 21
Section 3.18 Employee Benefit Plans 21
Section 3.19 Related Party Transactions 22
Section 3.20 No Finder 22
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Section 3.21 Complete and Accurate Disclosure 22
Section 3.22 Environmental Matters 22
Section 3.23 Proxy Statement/Prospectus 23
Section 3.24 SEC Filings 23
Section 3.25 Reports 23
Section 3.26 Loan Portfolio of Premier Bank 24
Section 3.27 Investment Portfolio 24
Section 3.28 Regulatory Examinations 24
Section 3.29 Regulatory Agreements 25
Section 3.30 Beneficial Ownership of Fulton Common Stock 25
Section 3.31 Fairness Opinion 25
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF FULTON 25
Section 4.1 Authority 25
Section 4.2 Organization and Standing 26
Section 4.3 Capitalization 26
Section 4.4 Articles of Incorporation and Bylaws 26
Section 4.5 Subsidiaries 26
Section 4.6 Financial Statements 27
Section 4.7 Absence of Undisclosed Liabilities 27
Section 4.8 Absence of Changes; Dividends, Etc 27
Section 4.9 Litigation and Governmental Directives 27
Section 4.10 Compliance with Laws; Governmental Authorizations 28
Section 4.11 Complete and Accurate Disclosure 28
Section 4.12 Labor Relations 28
Section 4.13 Employee Benefits Plans 29
Section 4.14 Environmental Matters 29
Section 4.15 SEC Filings 29
Section 4.16 Proxy Statement/Prospectus 29
Section 4.17 Regulatory Approvals 30
Section 4.18 No Finder 30
Section 4.19 Taxes 30
Section 4.20 Title to and Condition of Assets 30
Section 4.21 Contracts 30
Section 4.22 Insurance 31
Section 4.23 Reports 31
ARTICLE V - COVENANTS OF PREMIER 31
Section 5.1 Conduct of Business 31
Section 5.2 Best Efforts 34
Section 5.3 Access to Properties and Records 34
Section 5.4 Subsequent Financial Statements 35
Section 5.5 Update Schedules 35
Section 5.6 Notice 35
Section 5.7 No Solicitation 35
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Section 5.8 Affiliate Letters 38
Section 5.9 No Purchases or Sales of Fulton Common Stock During Price
Determination Period 38
Section 5.10 Dividends 38
ARTICLE VI - COVENANTS OF FULTON 39
Section 6.1 Best Efforts 39
Section 6.2 Access to Properties and Records 40
Section 6.3 Subsequent Financial Statements 40
Section 6.4 Update Schedules 40
Section 6.5 Notice 40
Section 6.6 No Purchase or Sales of Fulton Common Stock During Price
Determination Period 41
Section 6.7 Assumption of Premier Debentures 41
Section 6.8 Employment Arrangements 41
Section 6.9 Insurance; Indemnification 42
Section 6.10 Appointment of Fulton Director 43
Section 6.11 Continuation of Premier Bank's Structure, Name and Directors 43
ARTICLE VII - CONDITIONS PRECEDENT 44
Section 7.1 Common Conditions 44
Section 7.2 Conditions Precedent to Obligations of Fulton 46
Section 7.3 Conditions Precedent to the Obligations of Premier 49
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER 51
Section 8.1 Termination 51
Section 8.2 Effect of Termination 52
Section 8.3 Amendment 53
Section 8.4 Waiver 53
ARTICLE IX - CLOSING AND EFFECTIVE TIME 53
Section 9.1 Closing 53
Section 9.2 Effective Time 54
ARTICLE X - NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES 54
Section 10.1 No Survival 54
ARTICLE XI - GENERAL PROVISIONS 54
Section 11.1 Expenses 54
Section 11.2 Other Mergers and Acquisitions 54
Section 11.3 Notices 55
Section 11.4 Counterparts 55
Section 11.5 Governing Law 55
Section 11.6 Parties in Interest 55
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Section 11.7 Disclosure Schedules. 56
Section 11.8 Entire Agreement 56
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INDEX OF SCHEDULES
Schedule 2.3 Premier Options
Schedule 3.7 Undisclosed Liabilities
Schedule 3.8 Changes
Schedule 3.9 Dividends, Distributions and Stock Purchases
Schedule 3.10 Taxes
Schedule 3.11 Title to and Condition of Assets
Schedule 3.12 Contracts
Schedule 3.13 Litigation and Governmental Directives
Schedule 3.14 Compliance with Laws; Governmental Authorizations
Schedule 3.15 Insurance
Schedule 3.16 Financial Institutions Bonds
Schedule 3.17 Labor Relations and Employment Agreements
Schedule 3.18 Employee Benefit Plans
Schedule 3.19 Related Party Transactions
Schedule 3.20 Finders
Schedule 3.22 Environmental Matters
Schedule 3.26 Loan Portfolio
Schedule 3.27 Investment Portfolio
Schedule 3.29 Regulatory Agreements
Schedule 4.5 Subsidiaries
Schedule 4.7 Undisclosed Liabilities
Schedule 4.8 Dividends, Distributions and Stock Purchases
Schedule 4.9 Litigation and Governmental Directives
Schedule 4.10 Compliance with Laws; Governmental Authorizations
Schedule 4.14 Environmental Matters
Schedule 4.19 Taxes
Schedule 5.1 (xxi) Pending and Contemplated Applications
Schedule 6.11 Current Premier Directors Fees
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INDEX OF EXHIBITS
Exhibit A Form of Warrant Agreement
Exhibit B Form of Warrant
Exhibit C Form of Voting Agreement
Exhibit D Form of Employment Agreements
Exhibit E Form of Opinion of Premier's Counsel
Exhibit F Form of Opinion of Xxxxxx'x Counsel
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER made as of the 16th day of January, 2003, by
and between XXXXXX FINANCIAL CORPORATION, a Pennsylvania business corporation
having its administrative headquarters at One Penn Square, P. O. Xxx 0000,
Xxxxxxxxx, Xxxxxxxxxxxx 00000 ("Fulton"), and PREMIER BANCORP, INC., a
Pennsylvania business corporation having its administrative headquarters at 000
Xxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Premier")
BACKGROUND:
Fulton is a financial holding company registered under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). Premier is a financial holding
company registered under the BHC Act which is the parent of Premier Bank. In
addition to Premier Bank, Premier has four directly-owned subsidiaries: PBI
Capital Trust, Premier Capital Trust II, Lenders Abstract, LLC and Premier Bank
Insurance Services, LLC. Premier Bank and all of such subsidiaries are
collectively referred to herein as the "Premier Subsidiaries". Fulton and
Premier wish to merge with each other, resulting in Premier Bank becoming a
subsidiary of Fulton. Subject to the terms and conditions of this Agreement, the
foregoing transaction will be accomplished by means of a merger (the "Merger")
in which (i) Premier will be merged with and into Fulton, (ii) Fulton will
survive the Merger, and (iii) all of the outstanding shares of the common stock
of Premier, $0.33 par value per share ("Premier Common Stock"), will be
converted into shares of the common stock of Fulton, par value $2.50 per share
("Fulton Common Stock").
Simultaneously with the execution of this Agreement, the parties are
entering into a Warrant Agreement in substantially the form of Exhibit A
attached hereto (the "Warrant Agreement"), which provides for the delivery by
Premier of a warrant in substantially the form of Exhibit B attached hereto (the
"Warrant") entitling Fulton to purchase shares of the Premier Common Stock in
certain circumstances. In addition, Premier has obtained voting agreements in
the form of Exhibit C attached hereto, from the directors and executive officers
listed on Exhibit C, who have agreed to vote shares of voting capital stock
beneficially owned by them in Premier in favor of this Agreement, the Merger
and, to the extent required, all transactions incident thereto (collectively,
the "Voting Agreements").
WITNESSETH:
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and intending to be legally bound, the parties hereby agree as follows:
ARTICLE I - THE MERGER
Subject to the terms and conditions of this Agreement, Premier shall merge
with and into Fulton in accordance with the following:
Section 1.1 Merger. At the Effective Time (as defined in Section 9.2
herein) (i) Premier shall merge with and into Fulton pursuant to the provisions
of the Pennsylvania
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Business Corporation Law of 1988, as amended (the "BCL"), whereupon the separate
existence of Premier shall cease and Fulton shall be the surviving corporation
(hereinafter sometimes referred to as the "Surviving Corporation"), and (ii) the
Premier Common Stock will be converted into Fulton Common Stock pursuant to the
provisions of Article II hereof.
Section 1.2 Name. The name of the Surviving Corporation shall be "Xxxxxx
Financial Corporation". The address of the principal office of the Surviving
Corporation will be Xxx Xxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxxx, Xxxxxxxxxxxx
00000.
Section 1.3 Articles of Incorporation. The Articles of Incorporation of the
Surviving Corporation shall be the Articles of Incorporation of Fulton as in
effect at the Effective Time.
Section 1.4 Bylaws. The Bylaws of the Surviving Corporation shall be the
Bylaws of Fulton as in effect at the Effective Time.
Section 1.5 Directors and Officers. The directors and officers of the
Surviving Corporation shall be the directors and officers of Fulton in office at
the Effective Time. Each of such directors and officers shall serve until such
time as his successor is duly elected and has qualified.
ARTICLE II - CONVERSION OF SHARES AND EXCHANGE OF STOCK CERTIFICATES
Section 2.1 Conversion of Shares. At the Effective Time (as defined in
Section 9.2 herein) the shares of Premier Common Stock then outstanding shall be
converted into shares of Fulton Common Stock, as follows:
(a) General. Subject to the provisions of Sections 2.1(b), 2.1(c) and
2.1(d) herein, each share of Premier Common Stock issued and outstanding
immediately before the Effective Time, shall, at the Effective Time, be
converted into and become without any action on the part of the holder
thereof, and Fulton shall issue, 1.34 (such number, as it may be adjusted
under Section 2.1(b) herein, the "Conversion Ratio") shares of Fulton
Common Stock and the corresponding number of rights associated therewith
pursuant to the Rights Agreement dated June 20, 1989, as amended and
restated as of April 27, 1999, between Fulton and Xxxxxx Bank (the "Fulton
Rights Agreement"). Each share of Premier Common Stock to be converted into
Fulton Common Stock pursuant to this Section 2.1 shall, by virtue of the
Merger and without any action on the part of the holders thereof, cease to
be outstanding, and be canceled, and each holder of share certificates
evidencing shares of Premier Common Stock converted into Fulton Common
Stock pursuant to this Section 2.1 shall thereafter cease to have any
rights with respect to the shares represented thereby, except the right to
receive the Xxxxxx Common Stock therefor, without interest thereon, upon
the surrender of the share certificates evidencing the Premier Common Stock
in accordance with Section 2.2 hereof.
(b) Antidilution Provision. In the event that Fulton shall at any
time before the Effective Time: (i) issue a dividend in shares of Fulton
Common Stock, (ii) combine the
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outstanding shares of Fulton Common Stock into a smaller number of shares,
or (iii) subdivide the outstanding shares of Fulton Common Stock into a
greater number of shares, then the Conversion Ratio shall be
proportionately adjusted (calculated to four decimal places), so that each
Premier shareholder shall receive at the Effective Time, in exchange for
his shares of Premier Common Stock, the number of shares of Fulton Common
Stock as would then have been owned by him if the Effective Time had
occurred before the record date of such event (For example, if Fulton were
to declare a five percent (5%) stock dividend after the date of this
Agreement and if the record date for that stock dividend were to occur
before the Effective Time, the Conversion Ratio would be adjusted from 1.34
shares to 1.407 shares).
(c) No Fractional Shares. No fractional shares of Fulton Common Stock
shall be issued in connection with the Merger. In lieu of the issuance of
any fractional share to which he would otherwise be entitled, each former
shareholder of Premier shall receive in cash an amount equal to the fair
market value of his fractional interest, which fair market value shall be
determined by multiplying such fraction by the Closing Market Price (as
defined in Section 2.1(e) herein).
(d) Cancelled Premier Shares. Notwithstanding the provisions of
Section 2.1(a) herein, the following shares of Premier Common Stock shall
not be converted into Fulton Common Stock, and shall be cancelled, at the
Effective Time: (i) shares of Premier Common Stock then owned by Fulton or
any direct or indirect subsidiary of Fulton (except for trust account
shares or shares acquired in connection with debts previously contracted);
and (ii) shares of Premier Common Stock owned by Premier or any direct or
indirect subsidiary of Premier (except for trust account shares or shares
acquired in connection with debts previously contracted).
(e) Closing Market Price. For purposes of this Agreement, the "Closing
Market Price" shall be the average of the per share closing price for
Fulton Common Stock, calculated to two decimal places, for the ten (10)
consecutive trading days immediately preceding the date which is two (2)
business days before the Effective Date (as such term is defined in Section
9.2 herein), as reported on the National Market System of the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"),
the foregoing period of ten (10) trading days being hereinafter sometimes
referred to as the "Price Determination Period." (For example, if July 1,
2003 were to be the Effective Date, then the Price Determination Period
would be June 13, 16, 17, 18, 19, 20, 23, 24, 25 and 26, 2003). In the
event that NASDAQ shall fail to report a closing price for Fulton Common
Stock for any trading day during the Price Determination Period, the
closing price for that day shall be equal to the average of the closing bid
and asked prices as quoted: (i) by X. X. Xxxxxxxxx & Company, Inc. and by
Xxxx, Xxxx & Co.; or (ii) in the event that both of these firms are not
then making a market in Fulton Common Stock, by two brokerage firms then
making a market in Fulton Common Stock to be selected by Fulton and
approved by Premier.
Section 2.2 Exchange of Stock Certificates. Premier Common Stock
certificates
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shall be exchanged for Fulton Common Stock certificates in accordance with the
following procedures:
(a) Exchange Agent. The transfer agent of Fulton shall act as exchange
agent (the "Exchange Agent") to receive Premier Common Stock certificates
from the holders thereof and to exchange such stock certificates for Fulton
Common Stock certificates and (if applicable) to pay cash for fractional
shares of Fulton Common Stock pursuant to Section 2.1(c) herein. Fulton
shall cause the Exchange Agent on or promptly, but no later than three (3)
business days after receipt of a final shareholder list following the
Effective Date, to mail to each former shareholder of Premier a notice
specifying the procedures to be followed in surrendering such shareholder's
Premier Common Stock certificates.
(b) Surrender of Certificates. As promptly as possible after receipt
of the Exchange Agent's notice, each former shareholder of Premier shall
surrender his Premier Common Stock certificates to the Exchange Agent;
provided, that if any former shareholder of Premier shall be unable to
surrender his Premier Common Stock certificates due to loss or mutilation
thereof, he may make a constructive surrender by following procedures
comparable to those customarily used by Fulton for issuing replacement
certificates to Fulton shareholders whose Fulton Common Stock certificates
have been lost or mutilated. Upon receiving a proper actual or constructive
surrender of Premier Common Stock certificates from a former Premier
shareholder, the Exchange Agent shall issue to such shareholder, in
exchange therefor, a Fulton Common Stock certificate representing the whole
number of shares of Fulton Common Stock into which such shareholder's
shares of Premier Common Stock have been converted in accordance with this
Article II, together with a check in the amount of any cash to which such
shareholder is entitled, pursuant to Section 2.1(c) herein, in lieu of the
issuance of a fractional share.
(c) Dividend Withholding. Dividends, if any, payable by Fulton after
the Effective Time to any former shareholder of Premier who has not prior
to the payment date surrendered his Premier Common Stock certificates may,
at the option of Fulton, be withheld. Any dividends so withheld shall be
paid, without interest, to such former shareholder of Premier upon proper
surrender of his Premier Common Stock certificates.
(d) Failure to Surrender Certificates. All Premier Common Stock
certificates must be actually or constructively (as referenced in (b)
above) surrendered to the Exchange Agent within two (2) years after the
Effective Date. In the event that any former shareholder of Premier shall
not have properly surrendered his Premier Common Stock certificates within
two (2) years after the Effective Date, the shares of Fulton Common Stock
that would otherwise have been issued to him may, at the option of Fulton,
be sold and the net proceeds of such sale, together with the cash (if any)
to which he is entitled in lieu of the issuance of a fractional share and
any previously accrued dividends, shall be held by the Exchange Agent in a
noninterest bearing account for his benefit. From and after any such sale,
the sole right of such former shareholder of
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Premier shall be the right to collect such net proceeds, cash and
accumulated dividends. Subject to all applicable laws of escheat, such net
proceeds, cash and accumulated dividends shall be paid to such former
shareholder of Premier, without interest, upon proper actual or
constructive surrender of his Premier Common Stock certificates.
(e) Expenses. All costs and expenses associated with the foregoing
surrender and exchange procedure shall be borne by Fulton.
Section 2.3 Treatment of Outstanding Premier Options.
(a) At the Effective Time, each holder of an option (collectively,
"Premier Options") to purchase shares of Premier Common Stock that (i) is
outstanding at the Effective Time, (ii) has been granted pursuant to the
Premier Bancorp, Inc. 1995 Incentive Stock Option Plan (collectively, the
"Premier Stock Option Plan") or otherwise granted by the Premier Board of
Directors and evidenced by stock option agreements but not pursuant to any
Premier Stock Option Plan; and (iii) would otherwise survive the Effective
Time shall be entitled to receive, in substitution for such Premier Option,
an option to acquire shares of Fulton Common Stock on the terms set forth
below (each Premier Option as substituted, a "Fulton Stock Option").
(b) A Fulton Stock Option shall be a stock option to acquire shares of
Fulton Common Stock with the following terms: (i) the number of shares of
Fulton Common Stock which may be acquired pursuant to such Fulton Stock
Option shall be equal to the product of the number of shares of Premier
Common Stock covered by the Premier Option multiplied by the Conversion
Ratio, provided that any fractional share of Fulton Common Stock resulting
from such multiplication shall be rounded to the nearest whole share; (ii)
the exercise price per share of Fulton Common Stock shall be equal to the
exercise price per share of Premier Common Stock of such Premier Option,
divided by the Conversion Ratio, provided that such exercise price shall be
rounded to the nearest whole cent; (iii) the duration and other terms of
such Fulton Stock Option shall be identical to the duration and other terms
of such Premier Option, except that all references to Premier shall be
deemed to be references to Fulton and its affiliates, where the context so
requires and shall remain exercisable until the stated expiration date of
the corresponding Premier Option; (iv) Fulton shall assume such Premier
stock option, whether vested or not vested, as contemplated by Section
424(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and
(v) to the extent Premier Options qualify as incentive stock options under
Section 422 of the Code, the Xxxxxx Stock Options exchanged therefor shall
also so qualify. Subject to the Xxxxxx Stock Options and the foregoing, the
Premier Stock Option Plans and all options or other rights to acquire
Premier Common Stock issued thereunder shall terminate at the Effective
Time. Fulton shall not issue or pay for any fractional shares otherwise
issuable upon exercise of a Fulton Stock Option.
(c) Prior to the Effective Time, Fulton shall take appropriate action
to reserve for issuance and, if not previously registered pursuant to the
Securities Act of 1933, as
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amended (the "1933 Act"), register the number of shares of Fulton Common
Stock necessary to satisfy Xxxxxx'x obligations with respect to the
issuance of Fulton Common Stock pursuant to the exercise of Fulton Stock
Options and under Section 2.3.
(d) Prior to the Effective Time (to the extent required as determined
by Fulton or Premier under applicable law, the terms of the Premier Stock
Option Plan or otherwise), Fulton shall receive agreements from each holder
of a Premier Option, pursuant to which each such holder agrees to accept a
Fulton Stock Option in substitution for the Premier Option, as of the
Effective Time.
(e) Schedule 2.3 sets forth a listing of each Premier Option as of the
date of this Agreement (copies of which have been provided to Fulton),
including the optionee, date of grant, shares of Premier Common Stock
subject to such Option, the exercise price of such Option, expiration date,
classification as an incentive stock option or a nonqualified stock option,
vesting schedule and any special features thereof.
Section 2.4 Reservation of Shares. Fulton agrees that (i) prior to the
Effective Time it will take appropriate action to reserve a sufficient number of
authorized but unissued shares of Fulton Common Stock to be issued in accordance
with this Agreement, and (ii) at the Effective Time, Fulton will issue shares of
Fulton Common Stock to the extent set forth in, and in accordance with, this
Agreement.
Section 2.5 Taking Necessary Action. Fulton and Premier shall take all such
actions as may be reasonably necessary or appropriate in order to effectuate the
transactions contemplated hereby including, without limitation, providing
information necessary for preparation of any filings needed to obtain the
regulatory approvals required to consummate the Merger. In case at any time
after the Effective Time any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest Fulton with full title to all
properties, assets, rights, approvals, immunities and franchises of Premier, the
officers and directors of Premier, at the expense of Fulton, shall take all such
necessary action.
Section 2.6 Press Releases, Etc. Fulton and Premier agree that all press
releases or other public communications relating to this Agreement or the
transactions contemplated hereby will require mutual approval by Fulton and
Premier, unless counsel has advised any such party that such release or other
public communication must immediately be issued and the issuing party has not
been able, despite its good faith efforts, to obtain such approval.
Section 2.7 Fulton Common Stock. Each share of Fulton Common Stock that is
issued and outstanding immediately before the Effective Time shall, on and after
the Effective Time, remain issued and outstanding as one (1) share of Fulton
Common Stock, and each holder thereof shall retain his rights therein. The
holders of the shares of Fulton Common Stock outstanding immediately prior to
the Effective Time shall, immediately after the Effective Time, continue to hold
a majority of the outstanding shares of Xxxxxx Common Stock.
Section 2.8 No Dissenters' Rights. Pursuant to Section 1571(b)(1)(i) of
the BCL, the
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shareholders of Premier shall not be entitled to exercise dissenters' rights
under the provisions of Subchapter D of Chapter 15 of the BCL.
Section 2.9 Premier Preferred Stock. The outstanding shares of Premier's
Series A 9.25% Non-Cumulative Perpetual Preferred Stock (the "Premier Preferred
Stock") shall not be converted into Xxxxxx Common Stock as part of the Merger.
As set forth in Section 7.2(e) herein, all of the outstanding shares of the
Premier Preferred Stock shall be redeemed as of or prior to the Effective Time
in accordance with Sections 7 and 8 of the terms of the Premier Preferred Stock.
Section 2.10 Certain Actions. Prior to the Effective Time, Xxxxxx and
Premier shall take all such steps as may be required to cause any dispositions
of shares of Premier Common Stock (including derivative securities with respect
to such shares) resulting from the transactions contemplated by Article II of
this Agreement by each individual who is subject to the reporting requirements
of Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), with respect to Premier to be exempt under Rule 16b-3 promulgated under
the Exchange Act, such steps to be taken in accordance with the No-Action Letter
dated January 12, 1999 issued by the SEC to Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF PREMIER
Premier represents and warrants to Xxxxxx, as of the date of this
Agreement, as follows:
Section 3.1 Authority. The execution and delivery of this Agreement, the
Warrant Agreement and the Warrant and the performance of the transactions
contemplated herein and therein have been authorized by the Board of Directors
of Premier (its Board of Directors), at a meeting duly called and held, by a
vote of at least a majority of the members of the Board of Directors, the Board
of Directors (i) approved the Merger and this Agreement, and (ii) directed that
the Agreement be submitted for consideration by its shareholders with the
recommendation of the Board of Directors that the shareholders of Premier
approve this Agreement and the transactions contemplated thereby, and, except
for the approval of this Agreement by its shareholders, Premier has taken all
corporate action necessary on its part to authorize this Agreement, the Warrant
Agreement and the Warrant and the performance of the transactions contemplated
herein and therein. This Agreement, the Warrant Agreement and the Warrant have
been duly executed and delivered by Premier and, assuming due authorization,
execution and delivery by Xxxxxx, constitute valid and binding obligations of
Premier, enforceable in accordance with their respective terms, except to the
extent enforcement is limited by bankruptcy, insolvency and other similar laws
affecting creditor's rights and the laws, regulations and rules affecting
financial institutions. The execution, delivery and performance of this
Agreement, the Warrant Agreement and the Warrant will not constitute a violation
or breach of or default under (i) the Articles of Incorporation or Bylaws of
Premier, (ii) the Articles of Incorporation or Bylaws of Premier Bank, (iii) any
statute, rule, regulation, order, decree or directive of any governmental
authority or court applicable to Premier or any Premier Subsidiary, subject to
the receipt of all required governmental approvals, or (iv) any agreement,
contract, memorandum of understanding, indenture or other instrument to which
Premier or any
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Premier Subsidiary is a party or by which Premier or any Premier Subsidiary or
any of their properties are bound.
Section 3.2 Organization and Standing. Premier is a business corporation
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Pennsylvania. Premier is a financial holding company under
the BHC Act, and has full power and lawful authority to own and hold its
properties and to carry on its business as presently conducted. Premier Bank is
a banking corporation that is duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania. Premier Bank is an
insured bank under the provisions of the Federal Deposit Insurance Act, as
amended (the "FDI Act"), and is a member of the Federal Reserve System. Premier
Bank has full power and lawful authority to own and hold its properties and to
carry on its business as presently conducted. Each of the Premier Subsidiaries
currently conducting operations other than Premier Bank is an entity or business
trust that is duly organized, validly existing and in good standing under the
laws of its state of incorporation or formation. Each of the Premier
Subsidiaries currently conducting operations has full power and lawful authority
to own and hold its properties and to carry on its business as presently
conducted.
Section 3.3 Subsidiaries. Premier Bank is a wholly-owned subsidiary of
Premier. Premier owns 100% of the common securities of PBI Capital Trust and
Premier Capital Trust II. Premier has a 1% membership interest in each of
Lenders Abstract, LLC and Premier Bank Insurance Services, LLC. Premier Bank has
a 99% membership interest in each of these limited liability companies Except
for the Premier Subsidiaries, Premier owns no subsidiaries, directly or
indirectly.
Section 3.4 Capitalization. The authorized capital of Premier consists
exclusively of 30,000,000 shares of Premier Common Stock and 20,000,000 shares
of the Premier Preferred Stock. As of the date of this Agreement, there are
552,000 shares of Premier Preferred Stock outstanding, 3,452,273 shares of
Premier Common Stock validly issued, fully paid and non-assessable, and 109,858
shares are held as treasury shares. In addition, 303,748 shares of Premier
Common Stock are reserved for issuance upon the exercise of Premier Options and
835,000 shares of Premier Common Stock will be reserved for issuance upon
exercise of the Warrant. Except for the Premier Options and the Warrant, there
are no outstanding obligations, options or rights of any kind entitling other
persons to acquire shares of Premier Common Stock and there are no outstanding
securities or other instruments of any kind that are convertible into shares of
Premier Common Stock. The authorized capital of Premier Bank consists
exclusively of shares of common stock (the "Premier Bank Common Stock"). All of
the outstanding shares of Premier Bank Common Stock are owned beneficially and
of record by Premier and are validly issued, outstanding and fully-paid and
non-assessable. There are no outstanding obligations, options or rights of any
kind entitling other persons to acquire shares of Premier Bank Common Stock, and
there are no outstanding securities or instruments of any kind that are
convertible into shares of Premier Bank Common Stock. All outstanding shares of
the capital stock of the other Premier Subsidiaries are owned beneficially and
of record by Premier or Premier Bank, as appropriate, except that, in the case
of PBI Capital Trust and Premier Capital Trust II, Premier owns 100% of the
common securities and the purchasers thereof own the
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capital securities issued by each said Trust. There are no outstanding
obligations, options or rights of any kind entitling other persons to acquire
shares of such subsidiaries, and there are no outstanding securities or
instruments of any kind that are convertible into shares of such subsidiaries.
The Common Stock of Premier Bank the other Premier Subsidiaries is sometimes
collectively referred to herein as the "Premier Subsidiaries Common Stock".
Section 3.5 Charter, Bylaws and Minute Books. The copies of the Articles
of Incorporation and Bylaws (or, with respect to PBI Capital Trust and Premier
Capital Trust II, their trust declarations) of Premier and the Premier
Subsidiaries that have been delivered to Xxxxxx are true, correct and complete.
Except as previously disclosed to Xxxxxx in writing, the minute books of Premier
and the Premier Subsidiaries that have been made available to Xxxxxx for
inspection are true, correct and complete in all material respects and
accurately record the actions taken by the Boards of Directors and shareholders
of Premier and the Premier Subsidiaries at the meetings documented in such
minutes, excluding information related to the transactions contemplated by this
Agreement and to any other merger, consolidation, share exchange or sale,
exchange or other disposition of all, or substantially all, of Premier's
property or assets.
Section 3.6 Financial Statements. Premier has delivered to Xxxxxx the
following financial statements: Consolidated Balance Sheets at December 31, 2001
and 2000 and Consolidated Statements of Income, Statements of Stockholders'
Equity, and Consolidated Statements of Cash Flows of Premier for the years ended
December 31, 1999, 2000 and 2001, audited by KPMG LLP, and set forth in the 2001
Annual Report to Premier's shareholders and unaudited Consolidated Balance
Sheets of Premier at September 30, 2002 and unaudited Consolidated Statements of
Income for the nine-month periods ended September 30, 2002 and 2001, unaudited
Consolidated Statements of Stockholders' Equity for the nine-month periods ended
September 30, 2002 and 2001 and unaudited Consolidated Statements of Cash Flows
for the nine-month periods ended September 30, 2002 and 2001, as filed with the
Securities and Exchange Commission (the "SEC") in a Quarterly Report on Form
10-Q (the aforementioned Consolidated Statement of Condition as of September 30,
2002 being hereinafter referred to as the "Premier Balance Sheet"). Each of the
foregoing financial statements fairly present the consolidated financial
condition, assets and liabilities, and results of operations of Premier at their
respective dates and for the respective periods then ended and has been prepared
in accordance with generally accepted accounting principles consistently
applied, except as otherwise noted in a footnote thereto and except for the
omission of the notes from the financial statements applicable to any interim
period.
Section 3.7 Absence of Undisclosed Liabilities. Except as disclosed in
Schedule 3.7, or as reflected, noted or adequately reserved against in the
Premier Balance Sheet, at September 30, 2002, Premier had no material
liabilities (whether accrued, absolute, contingent or otherwise) which were
required to be reflected, noted or reserved against in the Premier Balance Sheet
under generally accepted accounting principles. Except as disclosed in Schedule
3.7, Premier and the Premier Subsidiaries have not incurred, since September 30,
2002, any such liability, other than liabilities of the same nature as those set
forth in the Premier Balance Sheet, all of which have been reasonably incurred
in the Ordinary Course of Business. For purposes of this
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Agreement, the term "Ordinary Course of Business" shall mean the ordinary course
of business consistent with Premier's and the Premier Subsidiaries' customary
business practices.
Section 3.8 Absence of Changes. Since September 30, 2002, Premier and
the Premier Subsidiaries have each conducted their businesses in the Ordinary
Course of Business and, except as disclosed in Schedule 3.8, neither Premier nor
the Premier Subsidiaries have undergone any changes in its condition (financial
or otherwise), assets, liabilities, business or operations, other than changes
in the Ordinary Course of Business, which have not been, in the aggregate,
materially adverse as to Premier and the Premier Subsidiaries on a consolidated
basis.
Section 3.9 Dividends, Distributions and Stock Purchases. Since
September 30, 2002, Premier has not declared, set aside, made or paid any
dividend or other distribution in respect of the Premier Common Stock, or
purchased, issued or sold any shares of Premier Common Stock or the Premier
Subsidiaries Common Stock. Since the issuance of the outstanding shares of the
Premier Preferred Stock, regular quarterly dividends of $0.578125 per share have
been paid (the most recent such dividend was declared on January 6, 2003,
payable on January 31, 2003 to shareholders of record on January 16, 2003).
Section 3.10 Taxes. Premier and Premier Bank have filed all federal,
state, county, municipal and foreign tax returns, reports and declarations which
are required to be filed by them or either of them as of September 30, 2002.
Except as disclosed in Schedule 3.10: (i) Premier and Premier Bank have paid all
taxes, penalties and interest which have become due pursuant thereto or which
became due pursuant to federal, state, county, municipal or foreign tax laws
applicable to the periods covered by the foregoing tax returns, (ii) neither
Premier nor the Premier Subsidiaries have received any notice of deficiency or
assessment of additional taxes, and no tax audits are in process; and (iii) the
Internal Revenue Service (the "IRS") has not commenced or given notice of an
intention to commence any examination or audit of the federal income tax returns
of Premier or Premier Bank for any year through and including the year ended
December 31, 2002. Except as disclosed in Schedule 3.10, neither Premier nor the
Premier Subsidiaries have granted any waiver of any statute of limitations or
otherwise agreed to any extension of a period for the assessment of any federal,
state, county, municipal or foreign income tax. Except as disclosed in Schedule
3.10, the accruals and reserves reflected in the Premier Balance Sheet are
adequate to cover all taxes (including interest and penalties, if any, thereon)
that are payable or accrued as a result of Premier's consolidated operations for
all periods prior to the date of such Balance Sheet.
Section 3.11 Title to and Condition of Assets. Except as disclosed in
Schedule 3.11, Premier and the Premier Subsidiaries have good and marketable
title to all material consolidated real and personal properties and assets
reflected in the Premier Balance Sheet or acquired subsequent to September 30,
2002, (other than property and assets disposed of in the Ordinary Course of
Business), free and clear of all liens or encumbrances of any kind whatsoever;
provided, however, that the representations and warranties contained in this
sentence do not cover liens or encumbrances that: (i) are reflected in the
Premier Balance Sheet or in Schedule 3.11; (ii) represent liens of current taxes
not yet due or which, if due, may be paid without penalty, or which are being
contested in good faith by appropriate proceedings; and (iii)
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represent such imperfections of title, liens, encumbrances, zoning requirements
and easements, if any, as are not substantial in character, amount or extent and
do not materially detract from the value, or interfere with the present use, of
the properties and assets subject thereto. The material structures and other
improvements to real estate, furniture, fixtures and equipment reflected in the
Premier Balance Sheet or acquired subsequent to September 30, 2002: (A) are in
good operating condition and repair (ordinary wear and tear excepted), and (B)
comply in all material respects with all applicable laws, ordinances and
regulations, including without limitation all building codes, zoning ordinances
and other similar laws, except where any noncompliance would not materially
detract from the value, or interfere with the present use, of such structures,
improvements, furniture, fixtures and equipment. Premier and the Premier
Subsidiaries own or have the right to use all real and personal properties and
assets that are material to the conduct of their respective businesses as
presently conducted.
Section 3.12 Contracts.
(a) Each written or oral contract entered into by Premier or the
Premier Subsidiaries (other than contracts with customers reasonably
entered into by Premier or the Premier Subsidiaries in the Ordinary Course
of Business) which involves aggregate payments or receipts in excess of
$50,000 per year, including without limitation every employment contract,
employee benefit plan, agreement, lease, license, indenture, mortgage and
other commitment to which either Premier or the Premier Subsidiaries are a
party or by which Premier or the Premier Subsidiaries or any of their
properties may be bound (collectively referred to herein as "Material
Contracts") is identified in Schedule 3.12. Except as disclosed in Schedule
3.12, all Material Contracts are enforceable against Premier or the Premier
Subsidiaries, as the case may be, and Premier or the Premier Subsidiaries
have in all material respects performed all obligations required to be
performed by them to date and are not in default in any material respect
and Premier is not aware of any default by a third party under a Material
Contract. Schedule 3.12 identifies all Material Contracts which require the
consent or approval of third parties to the execution and delivery of this
Agreement or to the consummation of the transactions contemplated herein.
(b) Except for the Warrant Agreement and as set forth in Schedule
3.12, as of the date of this Agreement, neither Premier nor the Premier
Subsidiaries is a party to, or bound by, any oral or written:
(i) "material contract" as such term is defined in Item 601(b)(10)
of Regulation S-K promulgated by the SEC;
(ii) consulting agreement not terminable on thirty (30) days or less
notice involving the payment of more than $20,000 per annum, in the
case of any such agreement;
(iii) agreement with any officer or other key employee the benefits
of which are contingent, or the terms of which are materially altered,
upon the occurrence
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of a transaction of the nature contemplated by this Agreement;
(iv) agreement with respect to any officer providing any term of
employment or compensation guarantee extending for a period longer
than one year or for a payment in excess of $25,000;
(v) agreement or plan, including any stock option plan, stock
appreciation rights plan, employee stock ownership plan, restricted
stock plan or stock purchase plan, any of the benefits of which will
be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by
this Agreement;
(vi) agreement containing covenants that limit its ability to
compete in any line of business or with any person, or that involve
any restriction on the geographic area in which, or method by which,
it may carry on its business (other than as may be required by law or
any regulatory agency);
(vii) agreement, contract or understanding, other than this
Agreement, and the Warrant Agreement, regarding the capital stock of
Premier and/or Premier Bank or committing to dispose of some or all of
the capital stock or substantially all of the assets of Premier and/or
Premier Bank;
(viii) collective bargaining agreement, contract, or other agreement
or understanding with a labor union or labor organization; or
(ix) deferred compensation plan or arrangement.
(c) Neither Premier nor Premier Bank is in default under or in
violation of any provision of any note, bond, indenture, mortgage, deed of
trust, loan agreement, lease or Material Contract to which it is a party or
to which any of its respective properties or assets is subject, other than
such defaults or violations as could not reasonably be expected,
individually or in the aggregate, to have a material and adverse change on
it.
Section 3.13 Litigation and Governmental Directives. Except as disclosed
in Schedule 3.13, (i) there is no litigation, investigation or proceeding
pending, or to the Knowledge (as that term is defined below) of Premier or the
Premier Subsidiaries, threatened, that involves Premier or the Premier
Subsidiaries or any of their properties and that, if determined adversely, would
materially and adversely affect the condition (financial or otherwise), assets,
liabilities, business, operations or future prospects of Premier or the Premier
Subsidiaries; (ii) there are no outstanding orders, writs, injunctions,
judgments, decrees, regulations, directives, consent agreements or memoranda of
understanding issued by any federal, state or local court or governmental agency
or authority or arbitration tribunal issued against or with the consent of
Premier or the Premier Subsidiaries that materially and adversely affect the
condition (financial or otherwise), assets, liabilities, business, operations or
future
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prospects of Premier or the Premier Subsidiaries or that in any manner restrict
the right of Premier or the Premier Subsidiaries to carry on their businesses as
presently conducted taken as a whole; and (iii) neither Premier nor the Premier
Subsidiaries are aware of any fact or condition presently existing that might
give rise to any litigation, investigation or proceeding which, if determined
adversely to either Premier or the Premier Subsidiaries, would materially and
adversely affect the consolidated condition (financial or otherwise), assets,
liabilities, business, operations or future prospects of Premier or the Premier
Subsidiaries or would restrict in any manner the right of Premier or the Premier
Subsidiaries to carry on their businesses as presently conducted taken as a
whole. All litigation (except for bankruptcy proceedings in which Premier or the
Premier Subsidiaries have filed proofs of claim) in which Premier or the Premier
Subsidiaries are involved as a plaintiff (other than routine collection and
foreclosure suits initiated in the Ordinary Course of Business) in which the
amount sought to be recovered is greater than $50,000 is identified in Schedule
3.13. In this Agreement, the terms "Knowledge of Premier or Premier Bank" and
"Knowledge of Premier and the Premier Subsidiaries" shall mean the actual
knowledge of the officers of Premier.
Section 3.14 Compliance with Laws; Governmental Authorizations. Except as
disclosed in Schedule 3.14 or where noncompliance would not have a material and
adverse effect upon the condition (financial or otherwise), assets, liabilities,
business, operations or future prospects of Premier or the Premier Subsidiaries:
(i) Premier and the Premier Subsidiaries are in compliance with all statutes,
laws, ordinances, rules, regulations, judgments, orders, decrees, directives,
consent agreements, memoranda of understanding, permits, concessions, grants,
franchises, licenses, and other governmental authorizations or approvals
applicable to Premier or the Premier Subsidiaries or to any of their properties;
and (ii) all material permits, concessions, grants, franchises, licenses and
other governmental authorizations and approvals necessary for the conduct of the
business of Premier or the Premier Subsidiaries as presently conducted have been
duly obtained and are in full force and effect, and there are no proceedings
pending or threatened which may result in the revocation, cancellation,
suspension or materially adverse modification of any thereof.
Section 3.15 Insurance. All policies of insurance relating to Premier's
and Premier Subsidiaries' operations (except for title insurance policies),
including without limitation all financial institutions bonds, held by or on
behalf of Premier or the Premier Subsidiaries are listed in Schedule 3.15. All
such policies of insurance are in full force and effect, and no notices of
cancellation have been received in connection therewith.
Section 3.16 Financial Institutions Bonds. Since January 1, 1999, Premier
Bank or its predecessors have continuously maintained in full force and effect
one or more financial institutions bonds listed in Schedule 3.16 insuring
Premier Bank against acts of dishonesty by each of its employees. No claim has
been made under any such bond and Premier Bank is not aware of any fact or
condition presently existing which might form the basis of a claim under any
such bond. Premier Bank has received no notice that its present financial
institutions bond or bonds will not be renewed by its carrier on substantially
the same terms as those now in effect.
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Section 3.17 Labor Relations and Employment Agreements. Neither Premier nor
any of the Premier Subsidiaries are a party to or bound by any collective
bargaining agreement. Premier and the Premier Subsidiaries enjoy good working
relationships with their employees, and there are no labor disputes pending, or
to the Knowledge of Premier or Premier Bank threatened, that might materially
and adversely affect the condition (financial or otherwise), assets,
liabilities, business, operations or prospects of Premier or the Premier
Subsidiaries. Except as disclosed in Schedule 3.17, neither Premier nor the
Premier Subsidiaries have any employment contract, change of control agreement
or policy, severance agreement, deferred compensation agreement, consulting
agreement or similar obligation (including the amendments referred to below, an
"Employment Obligation") with any director, officer, employee, agent or
consultant; provided however, that, as of the date of this Agreement (and
effective as of the Effective Time), each of Xxxxx X. Frame, Xxxx X. Xxxxxxxxxx
and Xxxx X. Xxxxxx has executed an employment agreement with Premier Bank so as
to, among other things, consent to certain respective changes in their duties,
powers and functions following the Merger and waiving any right to obtain
"change of control" or severance payments as a result of the Merger, such
agreements to be substantially in the form of Exhibit D attached hereto. For the
purposes of this Agreement, Messrs. Frame, Soffronoff and Xxxxxx, shall be
referred to herein as the "Contract Employees". Except as disclosed in Schedule
3.17, as of the Effective Time (as defined in Section 9.2 herein), neither
Premier nor the Premier Subsidiary will have any liability for employee
termination rights arising out of any Employment Obligation and neither the
execution nor the consummation of this Agreement shall, by itself, entitle any
employee of Premier or the Premier Subsidiaries to any "change of control"
payments or benefits. Except as set forth on Schedule 3.17, no payment that is
owed or may become due to any director, officer, employee, or agent of Premier
or an Premier Subsidiary will be non-deductible to Premier or an Premier
Subsidiary or subject to tax under IRC (S) 280G or (S) 4999; nor will Premier or
an Premier Subsidiary be required to "gross up" or otherwise compensate any such
person because of the imposition of any excise tax on a payment to such person.
Section 3.18 Employee Benefit Plans. All employee benefit plans,
contracts or arrangements to which Premier or the Premier Subsidiaries are a
party or by which Premier or the Premier Subsidiaries are bound, including
without limitation all pension, retirement, deferred compensation, savings,
incentive, bonus, profit sharing, stock purchase, stock option, life insurance,
death or survivor's benefit, health insurance, sickness, disability, medical,
surgical, hospital, severance, layoff or vacation plans, contracts or
arrangements (collectively the "Premier Benefit Plans"), but not including the
Employment Obligations described in Section 3.17, are identified in Schedule
3.18. Each of the Premier Benefit Plans which is an "employee pension benefit
plan" as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"; each such Plan being herein called a "Premier
Pension Plan") is exempt from tax under Sections 401 and 501 of the Code and has
been maintained and operated in material compliance with all applicable
provisions of the Code and ERISA. No "prohibited transaction" (as such term is
defined in Section 4975 of the Code or in ERISA) and not otherwise exempt under
ERISA or the Code has occurred in respect of the Premier Pension Plans. There
have been no material breaches of fiduciary duty by any fiduciary under or with
respect to the Premier Pension Plans or any other Premier Benefit Plan which is
an employee welfare benefit plan as defined in ERISA, and no claim is pending
or, to the Knowledge of
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Premier, threatened with respect to any Premier Benefit Plan other than claims
for benefits made in the Ordinary Course of Business. Neither Premier nor the
Premier Subsidiaries have incurred any material penalty imposed by the Code or
by ERISA with respect to the Premier Pension Plans or any other Premier Benefit
Plan. There has not been any audit of any Premier Benefit Plan by the Department
of Labor or the IRS.
Section 3.19 Related Party Transactions. Except as disclosed in Schedule
3.19, neither Premier nor any of the Premier Subsidiaries have any contract,
extension of credit, business arrangement or other relationship of any kind with
any of the following persons: (i) any executive officer or director (including
any person who has served in such capacity since January 1, 1999) of Premier or
any of the Premier Subsidiaries; (ii) any shareholder owning five percent (5%)
or more of the outstanding Premier Common Stock; and (iii) any "associate" (as
defined in Rule 405 under the 0000 Xxx) of the foregoing persons or any business
in which any of the foregoing persons is an officer, director, employee or five
percent (5%) or greater equity owner. Each such contract or extension of credit
disclosed in Schedule 3.19, except as otherwise specifically described therein,
has been made in the Ordinary Course of Business on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable arms' length transactions with other persons that do not involve
more than a normal risk of collectability or present other unfavorable features.
Section 3.20 No Finder. Except as disclosed in Schedule 3.20, neither
Premier nor any of the Premier Subsidiaries have paid or become obligated to pay
any fee or commission of any kind whatsoever to any investment banker, broker,
finder, financial advisor or other intermediary for, on account of or in
connection with the transactions contemplated in this Agreement.
Section 3.21 Complete and Accurate Disclosure. Neither this Agreement
(insofar as it relates to Premier, the Premier Subsidiaries, the Premier Common
Stock, the Premier Preferred Stock, the Premier Subsidiaries' Common Stock, and
the involvement of Premier and the Premier Subsidiaries in the transactions
contemplated hereby) nor any financial statement, schedule (including without
limitation its Schedules to this Agreement), certificate, or other statement or
document delivered by Premier or the Premier Subsidiaries to Xxxxxx in
connection herewith contains any statement which, at the time and in light of
the circumstances under which it is made, is false or misleading with respect to
any material fact or omits to state any material fact necessary to make the
statements contained herein or therein not false or misleading.
Section 3.22 Environmental Matters. Except as disclosed in Schedule 3.22,
neither Premier nor any of the Premier Subsidiaries has any material liability
relating to any environmental contaminant, pollutant, toxic or hazardous waste
or other similar substance has been generated, used, stored, processed, disposed
of or discharged onto any of the real estate now or previously owned or acquired
(including without limitation any real estate acquired by means of foreclosure
or exercise of any other creditor's right) or leased by Premier or any of the
Premier Subsidiaries and which is required to be reflected, noted or adequately
reserved against in Premier's consolidated financial statements under generally
accepted accounting principles. In particular, without limiting the generality
of the foregoing sentence, except as disclosed in
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Schedule 3.22, neither Premier nor any of the Premier Subsidiaries have used or
incorporated: (i) any materials containing asbestos in any building or other
structure or improvement located on any of the real estate now or previously
owned or acquired (including without limitation any real estate acquired by
means of foreclosure or exercise of any other creditor's right) or leased by
Premier or any of the Premier Subsidiaries; (ii) any electrical transformers,
fluorescent light fixtures with ballasts or other equipment containing PCB's on
any of the real estate now or previously owned or acquired (including without
limitation any real estate acquired by means of foreclosure or exercise of any
other creditor's right) or leased by Premier or any of the Premier Subsidiaries;
or (iii) any underground storage tanks for the storage of gasoline, petroleum
products or other toxic or hazardous wastes or similar substances located on any
of the real estate now or previously owned or acquired (including without
limitation any real estate acquired by means of foreclosure or exercise of any
other creditor's right) or leased by Premier or any of the Premier Subsidiaries.
Section 3.23 Proxy Statement/Prospectus. At the time the Proxy
Statement/Prospectus (as defined in Section 6.1(b) herein) is mailed to the
shareholders of Premier and at all times subsequent to such mailing, up to and
including the Effective Time, the Proxy Statement/Prospectus (including any pre-
and post-effective amendments and supplements thereto), with respect to all
information relating to Premier, the Premier Subsidiaries, Premier Common Stock,
the Premier Subsidiaries Common Stock and all actions taken and statements made
by Premier and the Premier Preferred Stock Subsidiaries in connection with the
transactions contemplated herein (except for information provided by Xxxxxx to
Premier or the Premier Subsidiaries) will: (i) comply in all material respects
with applicable provisions of the 1933 Act, and the 1934 Act and the applicable
rules and regulations of the SEC thereunder; and (ii) not contain any statement
which, at the time and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or omits to state any
material fact that is required to be stated therein or necessary in order (A) to
make the statements therein not false or misleading, or (B) to correct any
statement in an earlier communication with respect to the Proxy
Statement/Prospectus which has become false or misleading.
Section 3.24 SEC Filings. No registration statement, offering circular,
proxy statement, schedule or report filed and not withdrawn by Premier or
Premier Bank with the SEC or the Federal Reserve Board (the "FRB"), as
applicable, under the 1933 Act or the 1934 Act, on the date of effectiveness (in
the case of any registration statement or offering circular) or on the date of
filing (in the case of any report or schedule) or on the date of mailing (in the
case of any proxy statement), contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
Section 3.25 Reports. Premier and Premier Bank have filed all material
reports, registrations and statements that are required to be filed with the
FRB, the Federal Deposit Insurance Company ("FDIC"), the Pennsylvania Department
of Banking (the "Department") and any other applicable federal, state or local
governmental or regulatory authorities and such reports, registrations and
statements referred to in this Section 3.25 were, as of their respective dates,
in compliance in all material respects with all of the statutes, rules and
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regulations enforced or promulgated by the governmental or regulatory authority
with which they were filed; provided, however, that the failure to file any such
report, registration, or statement or the failure of any report, registration or
statement to comply with the applicable regulatory standard shall not be deemed
to be a breach of the foregoing representation unless such failure has or may
have a material adverse impact on Premier and the Premier Subsidiaries on a
consolidated basis. Premier has furnished Xxxxxx with, or made available to
Xxxxxx, copies of all such filings made in the last three fiscal years and in
the period from January 1, 2002 through the date of this Agreement. Premier is
required to file reports with the SEC pursuant to Section 12 of the 1934 Act,
and, except as set forth on Schedule 3.25, Premier has made all appropriate
filings under the 1934 Act and the rules and regulations promulgated thereunder;
provided, however, that the failure to make any such filing shall not be deemed
to be a breach of the foregoing representation unless such failure has or may
have a material adverse impact on Premier and the Premier Subsidiaries on a
consolidated basis. The Premier Common Stock is traded on the American Stock
Exchange ("AMEX") under the symbol "PPA" and the Premier Preferred Stock is
traded on the AMEX under the symbol "PPA.Pr.A."
Section 3.26 Loan Portfolio of Premier Bank.
(a) Attached hereto as Schedule 3.26 is a list of (i) all outstanding
commercial relationships, i.e. commercial loans, commercial loan
commitments and commercial letters of credit, of Premier Bank in excess of
$1,500,000, (ii) all loans of Premier Bank classified by Premier Bank or
any regulatory authority as "Monitor," "Substandard," "Doubtful" or "Loss,"
(iii) all commercial and mortgage loans of Premier Bank classified as
"non-accrual," and (iv) all commercial loans of Premier Bank classified as
"in substance foreclosed."
(b) Premier Bank has adequately reserved for or charged off loans in
accordance with applicable regulatory requirements, generally accepted
accounting principles and current written policies of Premier Bank.
(c) Premier Bank does not engage in so-called "subprime lending."
Section 3.27 Investment Portfolio. Attached hereto as Schedule 3.27 is a
list of all securities held by Premier and the Premier Subsidiaries for
investment, showing the holder, principal amount, book value and market value of
each security as of a recent date, and of all short-term investments held by it
as of September 30, 2002. These securities are free and clear of all liens,
pledges and encumbrances, except as shown on Schedule 3.27. Except as set forth
on Schedule 3.27, the investment portfolio of Premier or the Premier
Subsidiaries does not include any financial derivatives.
Section 3.28 Regulatory Examinations.
(a) Except for normal examinations conducted by a regulatory agency
in the Ordinary Course of Business, no regulatory agency has initiated any
proceeding or investigation into the business or operations of Premier or
any of the Premier
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Subsidiaries. Except as otherwise disclosed in Section 3.29, neither
Premier nor any of the Premier Subsidiaries have received any objection
from any regulatory agency to Premier's or any of the Premier Subsidiaries'
response to any violation, criticism or exception with respect to any
report or statement relating to any examinations of Premier and any of the
Premier Subsidiaries which would have a materially adverse effect on
Premier and any of the Premier Subsidiaries on a consolidated basis.
(b) Neither Premier nor any of the Premier Subsidiaries are required
to divest any assets currently held by it or discontinue any activity
currently conducted as a result of the Federal Deposit Insurance
Corporation Improvement Act of 1991, any regulations promulgated
thereunder, or otherwise which would have a materially adverse effect on
Premier and any of the Premier Subsidiaries on a consolidated basis.
Section 3.29 Regulatory Agreements. Except as set forth on Schedule 3.29,
on the date hereof, neither Premier nor Premier Bank is a party to any
assistance agreement, directive, commitment letter, supervisory agreement or
letter, memorandum of understanding, consent order, cease and desist order, or
condition of any regulatory order, decree or similar directive with or by the
FDIC, the Federal Reserve, the Department or any other financial services
regulatory agency having jurisdiction over Premier or Premier Bank that relates
to the conduct of the business of Premier or Premier Bank, nor has Premier or
Premier Bank been advised by any such regulatory agency or other governmental
entity that it is considering issuing or requesting any such agreement, order or
decree.
Section 3.30 Beneficial Ownership of Xxxxxx Common Stock. Premier and the
Premier Subsidiaries do not, and prior to the Effective Time, Premier and the
Premier Subsidiaries will not, own beneficially (within the meaning of SEC Rule
13-d-3(d)(1)) more than five percent (5%) of the outstanding shares of Xxxxxx
Common Stock.
Section 3.31 Fairness Opinion. Premier's Board of Directors has received
a written opinion from Boenning & Scattergood, Inc., to be updated in writing
prior to the publication of the Proxy Statement/Prospectus (a copy of such
updating written opinion being provided simultaneously to Xxxxxx at the time of
receipt), to the effect that the Conversion Ratio, at the time of execution of
this Agreement and the mailing of the Proxy materials, is fair to Premier's
shareholders from a financial point of view.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx represents and warrants to Premier, as of the date of this Agreement
and as of the date of the Closing, as follows:
Section 4.1 Authority. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein have been authorized by the
Board of Directors of Xxxxxx, and no other corporate action on the part of
Xxxxxx is necessary to authorize this Agreement or the consummation by Xxxxxx of
the transactions contemplated herein. This Agreement has been duly executed and
delivered by Xxxxxx and, assuming due authorization,
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execution and delivery by Premier, constitutes a valid and binding obligation of
Xxxxxx. The execution, delivery and consummation of this Agreement will not
constitute a violation or breach of or default under the Articles of
Incorporation or Bylaws of Xxxxxx or any statute, rule, regulation, order,
decree, directive, agreement, indenture or other instrument to which Xxxxxx is a
party or by which Xxxxxx or any of its properties are bound.
Section 4.2 Organization and Standing. Xxxxxx is a business corporation
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Pennsylvania. Xxxxxx is a registered financial holding
company under the BHC Act and has full power and lawful authority to own and
hold its properties and to carry on its business as presently conducted.
Section 4.3 Capitalization. The authorized capital of Xxxxxx consists
exclusively of 400,000,000 shares of Xxxxxx Common Stock and 10,000,000 shares
of preferred stock without par value (the "Xxxxxx Preferred Stock"). As of the
date of this Agreement, there were 104,027,373 shares of Xxxxxx Common Stock
validly issued, fully paid and non-assessable and 2,837,958 shares are held as
treasury shares. No shares of Xxxxxx Preferred Stock have been issued as of the
date of this Agreement, and Xxxxxx has no present intention to issue any shares
of Xxxxxx Preferred Stock. As of the date of this Agreement, there are no
outstanding obligations, options or rights of any kind entitling other persons
to acquire shares of Xxxxxx Common Stock or shares of Xxxxxx Preferred Stock and
there are no outstanding securities or other instruments of any kind convertible
into shares of Xxxxxx Common Stock or into shares of Xxxxxx Preferred Stock,
except as follows: (i) 2,820,919 shares of Xxxxxx Common Stock were issuable
upon the exercise of outstanding stock options granted under the Xxxxxx
Incentive Stock Option Plan and the Xxxxxx Employee Stock Purchase Plan and (ii)
there were outstanding 106,848,292 Rights representing the right under certain
circumstances to purchase shares of Xxxxxx Common Stock pursuant to the terms of
a Xxxxxx Rights Agreement and (iii) 2,329,021 shares of Xxxxxx Common Stock
reserved from time to time for issuance pursuant to Xxxxxx'x Employee Stock
Purchase and Dividend Reinvestment Plans. All shares of Xxxxxx Common Stock that
are issued in the Merger shall include purchase Rights under the Xxxxxx
Shareholder Rights Agreement unless, prior to the Effective Date, all Rights
issued under said Agreement shall have been redeemed by Xxxxxx without a
Distribution Date having occurred under such Agreement.
Section 4.4 Articles of Incorporation and Bylaws. The copies of the
Articles of Incorporation, as amended, and of the Bylaws, as amended, of Xxxxxx
that have been delivered to Premier are true, correct and complete.
Section 4.5 Subsidiaries. Schedule 4.5 contains a list of all subsidiaries
("Subsidiaries") which Xxxxxx owns, directly or indirectly. Except as otherwise
disclosed on Schedule 4.5: (i) Xxxxxx owns, directly or indirectly, all of the
outstanding shares of capital stock of each Subsidiary, and (ii) as of the date
of this Agreement: (A) there are no outstanding obligations, options or rights
of any kind entitling persons (other than Xxxxxx or any Subsidiary) to acquire
shares of capital stock of any Subsidiary, and (B) there are no outstanding
securities or other instruments of any kind held by persons (other than Xxxxxx
or any Subsidiary) that are convertible into shares of capital stock of any
Subsidiary. Each Subsidiary is duly organized,
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validly existing and in good standing under the laws of the jurisdiction
pursuant to which it is incorporated. Each Subsidiary has full power and lawful
authority to own and hold its properties and to carry on its business as
presently conducted. Each Subsidiary which is a banking institution is an
insured bank under the provisions of the FDI Act.
Section 4.6 Financial Statements. Fulton has delivered to Premier the
following financial statements: Consolidated Balance Sheets at December 31, 2001
and 2000 and Consolidated Statements of Income, Consolidated Statements of
Shareholders' Equity, and Consolidated Statements of Cash Flows for the years
ended December 31, 2001, 2000 and 1999, audited by Xxxxxx Xxxxxxxx LLP for the
years 1999, 2000 and 2001 and set forth in the Annual Report to the shareholders
of Xxxxxx for the year ended December 31, 2001, and unaudited Consolidated
Balance Sheets as of September 30, 2002, unaudited Consolidated Statements of
Income for the nine-month periods ended September 30, 2002 and 2001, and
unaudited Consolidated Statements of Cash Flows for the nine-months ended
September 30, 2002 and 2001 as filed with the SEC in a Quarterly Report on Form
10-Q (the Consolidated Balance Sheet as of September 30, 2002 being hereinafter
referred to as the "Xxxxxx Balance Sheet"). Each of the foregoing financial
statements fairly presents the consolidated financial position, assets,
liabilities and results of operations of Xxxxxx at their respective dates and
for the respective periods then ended and has been prepared in accordance with
generally accepted accounting principles consistently applied, except as
otherwise noted in a footnote thereto.
Section 4.7 Absence of Undisclosed Liabilities. Except as disclosed in
Schedule 4.7 or as reflected, noted or adequately reserved against in the Xxxxxx
Balance Sheet, at September 30, 2002 Xxxxxx had no material liabilities (whether
accrued, absolute, contingent or otherwise) which were required to be reflected,
noted or reserved against in the Xxxxxx Balance Sheet under generally accepted
accounting principles. Except as described in Schedule 4.7, since September 30,
2002 Xxxxxx has not incurred any such liability other than liabilities of the
same nature as those set forth in the Xxxxxx Balance Sheet, all of which have
been reasonably incurred in the ordinary course of business.
Section 4.8 Absence of Changes; Dividends, Etc. Since September 30, 2002
(a) there has not been any material and adverse change in the condition
(financial or otherwise), assets, liabilities, business, operations or future
prospects of Xxxxxx and the Xxxxxx Subsidiaries on a consolidated basis and (b)
except as disclosed in Schedule 4.8, Xxxxxx has not declared, set aside, made or
paid any dividend or other distribution in respect of the Xxxxxx Common Stock,
or purchased, issued or sold any shares of Xxxxxx Common Stock or the Xxxxxx
Subsidiaries Common Stock.
Section 4.9 Litigation and Governmental Directives. Except as disclosed in
Schedule 4.9: (i) there is no litigation, investigation or proceeding pending,
or to the Knowledge of Xxxxxx threatened, that involves Xxxxxx or any Xxxxxx
Subsidiary or its properties and that, if determined adversely to Xxxxxx or the
Xxxxxx Subsidiary, would materially and adversely affect the condition
(financial or otherwise), assets, liabilities, business, operations or future
prospects of Xxxxxx; (ii) there are no outstanding orders, writs, injunctions,
judgments, decrees, regulations, directives, consent agreements or memoranda of
understanding issued by any federal, state or
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local court or governmental agency or authority or of any arbitration tribunal
against Xxxxxx which materially and adversely affect the condition (financial or
otherwise), assets, liabilities, business, operations or future prospects of
Xxxxxx or restrict in any manner the right of Xxxxxx to carry on its business as
presently conducted; and (iii) Xxxxxx is not aware of any fact or condition
presently existing that might give rise to any litigation, investigation or
proceeding which, if determined adversely to Xxxxxx, would materially and
adversely affect the condition (financial or otherwise), assets, liabilities,
business, operations or future prospects of Xxxxxx or restrict in any manner the
right of Xxxxxx to carry on its business as presently conducted.
Section 4.10 Compliance with Laws; Governmental Authorizations. Except as
disclosed in Schedule 4.10 or where noncompliance would not have a material and
adverse effect upon the condition (financial or otherwise), assets, liabilities,
business, operations or future prospects of Xxxxxx: (i) Xxxxxx and each of its
Subsidiaries are in compliance with all statutes, laws, ordinances, rules,
regulations, judgments, orders, decrees, directives, consent agreements,
memoranda of understanding, permits, concessions, grants, franchises, licenses,
and other governmental authorizations or approvals applicable to their
respective operations and properties; and (ii) all permits, concessions, grants,
franchises, licenses and other governmental authorizations and approvals
necessary for the conduct of the respective businesses of Xxxxxx and each of its
Subsidiaries as presently conducted have been duly obtained and are in full
force and effect, and there are no proceedings pending or threatened which may
result in the revocation, cancellation, suspension or materially adverse
modification of any thereof.
Section 4.11 Complete and Accurate Disclosure. Neither this Agreement
(insofar as it relates to Xxxxxx, Xxxxxx Common Stock, and the involvement of
Xxxxxx in the transactions contemplated hereby) nor any financial statement,
schedule (including, without limitation, its Schedules to this Agreement),
certificate or other statement or document delivered by Xxxxxx to Premier in
connection herewith contains any statement which, at the time and under the
circumstances under which it is made, is false or misleading with respect to any
material fact or omits to state any material fact necessary to make the
statements contained herein or therein not false or misleading. In particular,
without limiting the generality of the foregoing sentence, the information
provided and the representations made by Xxxxxx to Premier in connection with
the Registration Statement (as defined in Section 6.1(b)), both at the time such
information and representations are provided and made and at the time of the
Closing, will be true and accurate in all material respects and will not contain
any false or misleading statement with respect to any material fact or omit to
state any material fact required to be stated therein or necessary in order (i)
to make the statements made not false or misleading, or (ii) to correct any
statement contained in an earlier communication with respect to such information
or representations which has become false or misleading.
Section 4.12 Labor Relations. Neither Xxxxxx nor any of its Subsidiaries is
a party to or bound by any collective bargaining agreement. Xxxxxx and each of
its Subsidiaries enjoy good working relationships with their employees, and
there are no labor disputes pending, or to the knowledge of Xxxxxx or any
Subsidiary threatened, that might materially and adversely affect the condition
(financial or otherwise), assets, liabilities, business, operations or prospects
of Xxxxxx.
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Section 4.13 Employee Benefits Plans. Xxxxxx'x contributory profit-sharing
plan, defined benefits pension plan and 401(k) plan (hereinafter collectively
referred to as the "Xxxxxx Pension Plans") are exempt from tax under Sections
401 and 501 of the Code, have been maintained and operated in compliance with
all applicable provisions of the Code and ERISA, are not subject to any
accumulated funding deficiency within the meaning of ERISA and the regulations
promulgated thereunder, and do not have any outstanding liability to the Pension
Benefit Guaranty Corporation (the "PBGC"). No "prohibited transaction" or
"reportable event" (as such terms are defined in the Code or ERISA) has occurred
with respect to the Xxxxxx Pension Plans or any other employee benefit plan to
which Xxxxxx or any of its subsidiaries are a party or by which Xxxxxx or any of
its subsidiaries are bound (each hereinafter called a "Xxxxxx Benefit Plan").
There have been no breaches of fiduciary duty by any fiduciary under or with
respect to the Xxxxxx Pension Plans or any other Xxxxxx Benefit Plan, and no
claim is pending or threatened with respect to any Xxxxxx Benefit Plan other
than claims for benefits made in the Ordinary Course of Business. Neither Xxxxxx
or any of its subsidiaries have incurred any liability for any tax imposed by
Section 4975 of the Code or for any penalty imposed by the Code or by ERISA with
respect to the Xxxxxx Pension Plans or any other Xxxxxx Benefit Plan. There has
not been any audit of any Xxxxxx Benefit Plan by the Department of Labor, the
IRS or the PBGC since 1990.
Section 4.14 Environmental Matters. Except as disclosed in Schedule 4.14,
Xxxxxx has no material liability relating to any environmental contaminant,
pollutant, toxic or hazardous waste or other similar substance that has been
used, generated, stored, processed, disposed of or discharged onto any of the
real estate now or previously owned or acquired (including without limitation
real estate acquired by means of foreclosure or other exercise of any creditor's
right) or leased by Xxxxxx and which is required to be reflected, noted or
adequately reserved against in Xxxxxx'x consolidated financial statements under
generally accepted accounting principles.
Section 4.15 SEC Filings. No registration statement, offering circular,
proxy statement, schedule or report filed and not withdrawn by Xxxxxx with the
SEC under the 1933 Act or the 1934 Act, on the date of effectiveness (in the
case of any registration statement or offering circular) or on the date of
filing (in the case of any report or schedule) or on the date of mailing (in the
case of any proxy statement), contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
Section 4.16 Proxy Statement/Prospectus. At the time the Proxy
Statement/Prospectus (as defined in Section 6.1(b)) is mailed to the
shareholders of Premier and at all times subsequent to such mailing, up to and
including the Effective Time, the Proxy Statement/Prospectus (including any pre-
and post-effective amendments and supplements thereto), with respect to all
information relating to Xxxxxx, Xxxxxx Common Stock, and actions taken and
statements made by Fulton in connection with the transactions contemplated
herein (other than information provided by Premier or Premier Bank to Fulton),
will: (i) comply in all material respects with applicable provisions of the 1933
Act and 1934 Act and the pertinent rules and regulations thereunder; and (ii)
not contain any statement which, at the time and in light of the circumstances
under which it is made, is false or misleading with respect to any material
fact,
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or omits to state any material fact that is required to be stated therein or
necessary in order (A) to make the statements therein not false or misleading,
or (B) to correct any statement in an earlier communication with respect to the
Proxy Statement/Prospectus which has become false or misleading.
Section 4.17 Regulatory Approvals. Xxxxxx is not aware of any reason why
any of the required regulatory approvals to be obtained in connection with the
Merger should not be granted by such regulatory authorities or why such
regulatory approvals should be conditioned on any requirement which would be a
significant impediment to Xxxxxx'x ability to carry on its business.
Section 4.18 No Finder. Xxxxxx has not paid or become obligated to pay any
fee or commission of any kind whatsoever to any broker, finder, advisor or other
intermediary for, on account of, or in connection with the transactions
contemplated in this Agreement.
Section 4.19 Taxes. Xxxxxx has filed, or has received extension for filing,
all federal, state, county, municipal and foreign tax returns, reports and
declarations which are required to be filed by it as of September 30, 2002.
Except as disclosed in Schedule 4.19, (i) Xxxxxx has paid all taxes, penalties
and interest which have become due pursuant thereto or which became due pursuant
to federal, state, county, municipal or foreign tax laws applicable to the
periods covered by the foregoing tax returns, and (ii) Xxxxxx has not received
any notice of deficiency or assessment of additional taxes. Except as disclosed
in Schedule 4.19, the accruals and reserves reflected in the Xxxxxx Balance
Sheet are adequate to cover all material taxes (including interest and
penalties, if any, thereon) that are payable or accrued as a result of Xxxxxx'x
consolidated operations for all periods prior to the date of such Balance Sheet.
Section 4.20 Title to and Condition of Assets. Xxxxxx has good and
marketable title to all material consolidated real and personal properties and
assets reflected in the Xxxxxx Balance Sheet or acquired subsequent to September
30, 2002 (other than property and assets disposed of in the Ordinary Course of
Business), free and clear of all liens or encumbrances of any kind whatsoever;
provided, however, that the representations and warranties contained in this
sentence do not cover liens or encumbrances that: (i) are reflected in the
Xxxxxx Balance Sheet; (ii) represent liens of current taxes not yet due or
which, if due, may be paid without penalty, or which are being contested in good
faith by appropriate proceedings; and (iii) represent such imperfections of
title, liens, encumbrances, zoning requirements and easements, if any, as are
not substantial in character, amount or extent and do not materially detract
from the value, or interfere with the present or proposed use, of the properties
and assets subject thereto.
Section 4.21 Contracts. All Xxxxxx Material Contracts are enforceable
against Xxxxxx, and Xxxxxx has in all material respects performed all
obligations required to be performed by it to date and is not in default in any
material respect. "Xxxxxx Material Contracts" shall be defined as each written
or oral contract entered into by Xxxxxx or any Xxxxxx Subsidiary (other than
contracts with customers reasonably entered into by Xxxxxx in the Ordinary
Course of Business) which involves aggregate payments or receipts in excess of
$100,000 per year, including without limitation every employment contract,
employee benefit plan, agreement,
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lease, license, indenture, mortgage and other commitment to which either Xxxxxx
or Xxxxxx Subsidiaries are a party or by which Xxxxxx or any of the Xxxxxx
Subsidiaries or any of their properties may be bound.
Section 4.22 Insurance. All policies of insurance covering operations of
Xxxxxx which are, in the aggregate, material (except for title insurance
policies), including without limitation all financial institutions bonds, held
by or on behalf of Xxxxxx are in full force and effect, and no notices of
cancellation have been received in connection therewith.
Section 4.23 Reports. Xxxxxx and the Xxxxxx Subsidiaries has filed all
material reports, registrations and statements that are required to be filed
with the FRB, the FDIC, the Department, and any other applicable federal, state
or local governmental or regulatory authorities and such reports, registrations
and statements referred to in this Section 4.23 were, as of their respective
dates, in compliance in all material respects with all of the statutes, rules
and regulations enforced or promulgated by the governmental or regulatory
authority with which they were filed; provided, however, that the failure to
file any such report, registration or statement or the failure of any report,
registration or statement to comply with the applicable regulatory standard
shall not be deemed such failure has or may have a material adverse impact on
Xxxxxx and the Xxxxxx Subsidiaries on a consolidated basis. Xxxxxx has furnished
Premier with, or made available to Premier, copies of all such filings made in
the last three fiscal years and in the period from January 1, 2003 to the date
of this Agreement. Xxxxxx is required to file reports with the SEC pursuant to
Section 12 of the 1934 Act, and Xxxxxx has made all appropriate filings under
the 1934 Act and the rules and regulations promulgated thereunder; provided,
however, that the failure to make any such filing shall not be deemed to be a
breach of the foregoing representation unless such failure has or may have a
material adverse impact on Xxxxxx and the Xxxxxx subsidiaries. The Xxxxxx Common
Stock is traded on NASDAQ under the symbol "FULT."
ARTICLE V - COVENANTS OF PREMIER
From the date of this Agreement until the Effective Time, Premier
covenants and agrees to do, and shall cause the Premier Subsidiaries to do, the
following:
Section 5.1 Conduct of Business. Except as otherwise consented to by
Xxxxxx in writing, Premier and the Premier Subsidiaries shall:
(i) use all reasonable efforts to carry on their respective
businesses in, and only in, the Ordinary Course of Business;
(ii) use all reasonable efforts to preserve their present
business organizations, to retain the services of their present
officers and employees, and to maintain their relationships with
customers, suppliers and others having business dealings with
Premier or any of the Premier Subsidiaries;
(iii) maintain all of their structures, equipment and other real
property and tangible personal property in good repair, order and
condition, except for ordinary
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wear and tear and damage by unavoidable casualty;
(iv) use all reasonable efforts to preserve or collect all
material claims and causes of action belonging to Premier or any
of the Premier Subsidiaries;
(v) keep in full force and effect all insurance policies now
carried by Premier or any of the Premier Subsidiaries;
(vi) perform in all material respects each of their obligations
under all Material Contracts (as defined in Section 3.12 herein)
to which Premier or any of the Premier Subsidiaries are a party
or by which any of them may be bound or which relate to or affect
their properties, assets and business;
(vii) maintain their books of account and other records in the
Ordinary Course of Business;
(viii) comply in all material respects with all statutes, laws,
ordinances, rules and regulations, decrees, orders, consent
agreements, memoranda of understanding and other federal, state,
and local governmental directives applicable to Premier or any of
the Premier Subsidiaries and to the conduct of their businesses;
(ix) not amend Premier's or any of the Premier Subsidiaries'
Articles of Incorporation or Bylaws except in accordance with the
terms hereof or to the extent necessary to consummate the
transactions contemplated by this Agreement;
(x) not enter into or assume any Material Contract, incur any
material liability or obligation, or make any material
commitment, except in the Ordinary Course of Business;
(xi) not enter into or assume any material contract, incur any
material liability or obligation, make any material acquisition
or disposition of any properties or assets (except for
acquisitions or dispositions of properties or assets in
accordance with any Material Contract disclosed on Schedule 3.12
or which do not exceed, in any case, $200,000), or subject any of
their properties or assets to any material lien, claim, charge,
or encumbrance of any kind whatsoever, except for loan and
investment activity engaged in the Ordinary Course of Business
and consistent with past practice;
(xii) not knowingly take or permit to be taken any action which
would constitute or cause a material breach of any
representation, warranty or covenant set forth in this Agreement
as of or subsequent to the date of this Agreement or as of the
Effective Date;
(xiii) except as permitted in Section 5.10 herein, not declare,
set aside or pay any dividend or make any other distribution in
respect of Premier Common Stock
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or of Premier Preferred Stock;
(xiv) not authorize, purchase, redeem, issue (except upon the
exercise of outstanding options under the Premier Stock Option
Plans) or sell (or grant options or rights to purchase or sell)
any shares of Premier Common Stock or any other equity or debt
securities of Premier (other than the Warrant or the Premier
Common Stock issuable under the Warrant);
(xv) not increase the rate of compensation of, pay a bonus or
severance compensation to, establish or amend any Premier Benefit
Plan, except as required by law (as defined in Section 3.18
herein) for, or enter into or amend any Employment Obligation (as
defined in Section 3.17 herein), severance or "change in control"
agreement or arrangement with any officer, director, employee or
consultant of Premier or any of the Premier Subsidiaries, except
that Premier and the Premier Subsidiaries may grant reasonable
salary increases and bonuses to their officers and employees in
the Ordinary Course of Business to the extent consistent with
past practice or their current policy disclosed in writing to
Xxxxxx, and are consistent, in magnitude and otherwise, with the
current policy disclosed in writing to Xxxxxx of Premier and the
Premier Subsidiaries (provided, however, that no Contract
Employees nor Xxxxx Xxxxxx shall receive a salary increase or
bonus);
(xvi) not enter into any related party transaction of the kind
contemplated in Section 3.19 herein;
(xvii) in determining the additions to loan loss reserves and
the loan write-offs, writedowns and other adjustments that
reasonably should be made by Premier Bank and classifying,
valuing and retaining its investment portfolio, during the fiscal
year ending December 31, 2003 and thereafter, Premier and the
Premier Subsidiaries shall consult with Xxxxxx and shall act in
accordance with generally accepted accounting principles;
(xviii) file with appropriate federal, state, local and other
governmental agencies all tax returns and other material reports
required to be filed, pay in full or make adequate provisions for
the payment of all taxes, interest, penalties, assessments or
deficiencies shown to be due on tax returns or by any taxing
authorities and report all information on such returns
truthfully, accurately and completely;
(xix) not renew any existing contract for services, goods,
equipment or the like or enter into, amend in any material
respect or terminate any contract or agreement (including without
limitation any settlement agreement with respect to litigation)
involving an amount in excess of $10,000 or for a term of one
year or more;
(xx) except as permitted by (xi) above, not make any capital
expenditures other
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than in the Ordinary Course of Business or as necessary to
maintain existing assets in good repair;
(xxi) not make application for the opening or closing of any,
or open or close any, branches or automated banking facility
other than as disclosed on Schedule 5.1(xxi);
(xxii) not make any equity investment or commitment to make such
an investment in real estate or in any real estate development
project, other than in connection with foreclosures, settlements
in lieu of foreclosure or troubled loan or debt restructuring in
the Ordinary Course of Business consistent with customary banking
practice;
(xxiii) not take any other action similar to the foregoing which
would have the effect of frustrating the purposes of this
Agreement or the Merger or cause the Merger not to qualify as a
tax-free reorganization under Section 368 of the Code; and
(xxiv) following receipt of both shareholder and regulatory
approval of the Merger and upon agreement as to the Effective
Date by Xxxxxx and Premier, conform its practices to the
standards used by Xxxxxx, with respect to its investment and loan
portfolios and loan loss reserve; provided, however, (A) in
taking such actions, Premier shall not be required to breach any
existing contractual obligations and (B) any such actions taken
at the request of Xxxxxx shall be subject to the provisions of
subparagraph (a) of Section 7.2(f) herein.
Section 5.2 Best Efforts. Premier and the Premier Subsidiaries shall
cooperate with Xxxxxx and shall use their best efforts to do or cause to be done
all things necessary or appropriate on its part in order to fulfill the
conditions precedent set forth in Article VII of this Agreement and to
consummate the transactions contemplated by this Agreement, including the
Merger. In particular, without limiting the generality of the foregoing
sentence, Premier and the Premier Subsidiaries shall: (i) cooperate with Xxxxxx
in the preparation of all required applications for regulatory approval of the
transactions contemplated by this Agreement and in the preparation of the
Registration Statement (as defined in Section 6.1(b)); and (ii) cooperate with
Xxxxxx in making Premier's and the Premier Subsidiaries' employees reasonably
available for training by Xxxxxx at Premier's and the Premier Subsidiaries'
facilities prior to the Effective Time, to the extent that such training is
deemed reasonably necessary by Xxxxxx to ensure that Premier's and the Premier
Subsidiaries' facilities will be properly operated in accordance with Xxxxxx'x
policies after the Merger.
Section 5.3 Access to Properties and Records. Premier and the Premier
Subsidiaries shall give to Xxxxxx and its authorized employees and
representatives (including without limitation its counsel, accountants, economic
and environmental consultants and other designated representatives) such access
during normal business hours to all properties, books, contracts, documents and
records of Premier and the Premier Subsidiaries as Xxxxxx may
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reasonably request, subject to the obligation of Xxxxxx and its authorized
employees and representatives to maintain the confidentiality of all nonpublic
information concerning Premier and the Premier Subsidiaries obtained by reason
of such access and subject to applicable law.
Section 5.4 Subsequent Financial Statements. Between the date of signing
of this Agreement and the Effective Time, Premier and the Premier Subsidiaries
shall promptly prepare and deliver to Xxxxxx as soon as practicable all internal
monthly and quarterly financial statements, all quarterly and annual reports to
shareholders and all reports to regulatory authorities prepared by or for either
Premier or any of the Premier Subsidiaries (including, without limitation,
delivery of Premier's audited annual financial statements for 2002 as soon as
they are available) (which additional financial statements and reports are
hereinafter collectively referred to as the "Additional Premier Financial
Statements"). The representations and warranties set forth in Sections 3.6, 3.7
and 3.8 shall apply to the Additional Premier Financial Statements.
Section 5.5 Update Schedules. Premier or any of the Premier Subsidiaries
shall promptly disclose to Xxxxxx in writing any material change, addition,
deletion or other modification to the information set forth in its Schedules
hereto.
Section 5.6 Notice. Premier or any of the Premier Subsidiaries shall
promptly notify Xxxxxx in writing of any actions, claims, investigations,
proceedings or other developments which, if pending or in existence on the date
of this Agreement, would have been required to be disclosed to Xxxxxx in order
to ensure the accuracy of the representations and warranties set forth in this
Agreement or which otherwise could materially and adversely affect the condition
(financial or otherwise), assets, liabilities, business operations or future
prospects of Premier or any of the Premier Subsidiaries or restrict in any
manner their ability to carry on their respective businesses as presently
conducted.
Section 5.7 No Solicitation.
(a) Premier and the Premier Subsidiaries shall not, and shall not
authorize or permit any of their officers, directors or employees or any
investment banker, financial advisor or attorney to initiate or encourage
(including by way of furnishing non-public information), or take any
other action to facilitate, any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal, provided, however, that if, at any time the Board
of Directors of Premier determines in good faith, after consultation with
outside counsel, that failure to do so would be reasonably likely to
constitute a breach of its fiduciary duties under applicable law,
Premier, in response to a written Acquisition Proposal that (i) was
unsolicited or that did not otherwise result from a breach of this
Section, and (ii) is reasonably likely to lead to a Superior Proposal,
may (x) furnish non-public information with respect to Premier or the
Premier Subsidiaries to the person who made such Acquisition Proposal
pursuant to a customary confidentiality agreement and (y) participate in
negotiations regarding such Acquisition Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set
forth in the preceding sentence by any director or officer of Premier
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or any of the Premier Subsidiaries or any investment banker, financial
advisor, attorney, accountant, or other representative of Premier or
any of the Premier Subsidiaries, whether or not acting on behalf of
Premier or any of its subsidiaries, shall be deemed to be a breach of
this Section by Premier.
(b) Premier shall call a meeting of its shareholders to be held as
promptly as practicable for the purpose of voting upon this Agreement
and shall take, in good faith, all actions which are necessary or
appropriate on its part in order to secure the approval of this
Agreement by its shareholders at the meeting, including recommending
the approval of this Agreement by Premier's shareholders; provided,
however, that Premier's Board of Directors shall not be required to
take any action otherwise required by this sentence that it has
determined in good faith, after consultation with outside counsel,
would be reasonably likely to constitute a breach of its fiduciary
duties under applicable law.
(c) The Board of Directors of Premier shall not (1) fail to
recommend this Agreement, withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Xxxxxx, its approval or recommendation
of this Agreement or the Merger unless there is an Acquisition Proposal
outstanding, (2) approve or recommend, or propose to approve or
recommend, an Acquisition Proposal or (3) cause Premier to enter into
any letter of intent, agreement in principle, acquisition agreement or
other agreement with respect to an Acquisition Proposal unless (x) the
Board of Directors of Premier shall have determined in good faith,
after consultation with outside counsel, that failure to do so would be
reasonably likely to constitute a breach of its fiduciary duties under
applicable law and (y) the applicable Acquisition Proposal is a
Superior Proposal.
(d) Nothing contained in this Section shall prohibit Premier from
at any time taking and disclosing to its shareholders a position
contemplated by Rule 14e-2(a) promulgated under the Securities Exchange
Act of 1934, as amended, provided, however, that neither Premier nor
its Board of Directors shall, except as permitted by paragraph (b) of
this section, propose to approve or recommend, an Acquisition Proposal.
(e) Premier shall promptly (but in any event within one day)
advise Xxxxxx orally and in writing of any Acquisition Proposal or any
inquiry regarding the making of an Acquisition Proposal including any
request for information, the material terms and conditions of such
request, Acquisition Proposal or inquiry and the identity of the person
making such request, Acquisition Proposal or inquiry. Premier will, to
the extent reasonably practicable, keep Xxxxxx fully informed of the
status and details (including amendments or proposed amendments) of any
such request, Acquisition Proposal or inquiry.
(i) In the event the Board of Directors of Premier takes any of
the actions set forth in clauses (1), (2) and/or (3) of Section
5.7(c) in compliance with the standards in (x) and (y) therein,
such action shall allow termination of this Agreement by Xxxxxx
under Section 8.1(b)(iii) herein which shall be treated in the
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same manner as termination under Section 8.1(a) herein and shall allow
exercise of the Warrant. In the event the Board of Directors of Premier
takes any of the actions set forth in clauses (1), (2) and/or (3) of
Section 5.7(c) without compliance with the standards in (x) and (y)
therein, such action shall constitute a breach allowing termination of
this Agreement by Xxxxxx under Section 8.1(c)(iii) herein which shall
be treated in the same manner as termination by Xxxxxx under Section
8.1(b)(i) herein and shall allow exercise of the Warrant.
(ii) This Agreement may be terminated by Premier prior to the
shareholders meeting of Premier if (A) the Board of Directors of
Premier shall have determined in good faith after consultation with
outside counsel that failure to do so would be reasonably likely to
constitute a breach of its fiduciary duties to Premier's shareholders
under applicable law, (B) it is not in breach of its obligations under
this Section 5.7 in any material respect and has complied with, and
continues to comply with, all requirements and procedures of this
Section 5.7 in all material respects and has authorized, subject to
complying with the terms of this Agreement, Premier to enter into a
binding written agreement for a transaction that constitutes a Superior
Proposal and Premier notifies Xxxxxx in writing that it intends to
enter into such agreement, attaching the most current version of such
agreement to such notice; (C) Xxxxxx does not make, within five (5)
business days after receipt of Premier's written notice of its
intention to enter into a binding agreement for a Superior Proposal,
any offer that the Board of Directors reasonably and in good faith
determines, after consultation with its financial and legal advisors,
is at least as favorable to the shareholders of Premier as the Superior
Proposal and during such period Premier reasonably considers and
discusses in good faith all proposals submitted by Xxxxxx and, without
limiting the foregoing, meets with, and causes its financial and legal
advisors to meet with, Xxxxxx and its advisors from time to time as
required by Xxxxxx to consider and discuss in good xxxxx Xxxxxx'x
proposals, and (D) prior to Premier's termination pursuant to this
Section 5.7(e)(ii), Premier confirms in writing that such termination
allows exercise of the Warrant. Premier agrees (x) that it will not
enter into a binding agreement referred to in clause (B) above until at
least the five (5) business days after Xxxxxx has received the notice
to Xxxxxx required by clause (B) and (y) to notify Xxxxxx promptly if
its intention to enter into a binding agreement referred to in its
notice to Xxxxxx shall change at any time after giving such notice.
(f) For the purpose of this Section 5.7:
(i) "Acquisition Proposal" shall mean a written proposal or
written offer (other than by another party hereto) for a tender or
exchange offer for securities of Premier or any of the Premier
Subsidiaries, or a merger, consolidation or other business combination
involving an acquisition of Premier or any of the Premier Subsidiaries
or any proposal to acquire in any manner a substantial equity interest
in or a substantial portion of the assets of Premier or any of the
Premier
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Subsidiaries.
(ii) A "Superior Proposal" shall be an Acquisition Proposal
that the Board of Directors of Premier believes in good faith (after
consultation with its financial advisor) is reasonably capable of being
completed, taking into account all relevant legal, financial,
regulatory and other aspects of the Acquisition Proposal and the source
of its financing, on the terms proposed and, believes in good faith
(after consultation with its financial advisor and after taking into
account the strategic benefits anticipated to be derived from the
Merger and the long-term prospects of Premier and the Premier
Subsidiaries as a combined company), would, if consummated, result in a
transaction more favorable to the shareholders of Premier from a
financial point of view, than the transactions contemplated by this
Agreement and believes in good faith (after consultation with its
financial advisor) that the person making such Acquisition Proposal
has, or is reasonably likely to have or obtain, any necessary funds or
customary commitments to provide any funds necessary to consummate such
Acquisition Proposal.
Section 5.8 Affiliate Letters. Premier shall use its best efforts to
deliver or cause to be delivered to Xxxxxx, at or before the Closing, a letter
from each of the officers and directors of Premier (and shall use its best
efforts to obtain and deliver such a letter from each shareholder of Premier)
who may be deemed to be an "affiliate" (as that term is defined for purposes of
Rules 145 and 405 promulgated by the SEC under the 0000 Xxx) of Premier, in form
and substance satisfactory to Xxxxxx, under the terms of which each such
officer, director or shareholder acknowledges and agrees to abide by all
limitations imposed by the 1933 Act and by all rules, regulations and releases
promulgated thereunder by the SEC with respect to the sale or other disposition
of the shares of Xxxxxx Common Stock to be received by such person pursuant to
this Agreement.
Section 5.9 No Purchases or Sales of Xxxxxx Common Stock During Price
Determination Period. Premier and the Premier Subsidiaries shall not, and shall
use their best efforts to ensure that their executive officers and directors do
not, and shall use their best efforts to ensure that each shareholder of Premier
who may be deemed an "affiliate" (as defined in SEC Rules 145 and 405) of
Premier does not, purchase or sell on NASDAQ, or submit a bid to purchase or an
offer to sell on NASDAQ, directly or indirectly, any shares of Xxxxxx Common
Stock or any options, rights or other securities convertible into shares of
Xxxxxx Common Stock during the Price Determination Period.
Section 5.10 Dividends. Between the date of this Agreement and the
Effective Date, Premier shall only declare and pay cash dividends as provided in
this Section 5.10. Premier shall only pay (a) quarterly cash dividends on its
Common Stock in an amount not in excess of $0.05 per share during each of the
first and second calendar quarters of 2003, maintaining the same record and
payment dates as Xxxxxx; provided, however, that if the Effective Date has not
occurred on or before June 30, 2003, Premier may, for each calendar quarter
thereafter until the Effective Date (using the same record and payment dates as
referenced above), pay a cash dividend in such amount as would have been
received by Premier's Shareholders had the
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Effective Date occurred on July 16, 2003 taking into account any adjustments
required by Section 2.1(b), and (b) its regular quarterly cash dividends on its
Preferred Stock in accordance with its terms. With respect to dividends on the
Premier Common Stock, it is the intent of Xxxxxx and Premier that Premier be
permitted to pay a dividend on the Premier Common Stock on the dates indicated
only if the shareholders of Premier, upon becoming shareholders of Xxxxxx, would
not be entitled to receive a dividend on the Xxxxxx Common Stock on the
applicable payment dates. Xxxxxx shall provide Premier with prompt written
notice of the declaration of a dividend on the Xxxxxx Common Stock.
ARTICLE VI - COVENANTS OF XXXXXX
From the date of this Agreement until the Effective Time, or until such
later date as may be expressly stipulated in any Section of this Article VI,
Xxxxxx covenants and agrees to do the following:
Section 6.1 Best Efforts. Xxxxxx shall cooperate with Premier and the
Premier Subsidiaries and shall use its best efforts to do or cause to be done
all things necessary or appropriate on its part in order to fulfill the
conditions precedent set forth in Article VII of this Agreement and to
consummate the transactions contemplated by this Agreement, including the
Merger. In particular, without limiting the generality of the foregoing
sentence, Xxxxxx agrees to do the following:
(a) Applications for Regulatory Approval. Xxxxxx shall
promptly prepare and file, with the cooperation and assistance of (and
after review by) Premier and its counsel and accountants, all required
applications for regulatory approval of the transactions contemplated
by this Agreement, including without limitation applications for
approval under the BHC Act, the Pennsylvania Banking Code of 1965, as
amended and the Federal Deposit Insurance Act, as amended.
(b) Registration Statement. Fulton shall promptly prepare,
with the cooperation and assistance of (and after review by) Premier
and its counsel and accountants, and file with the SEC a registration
statement (the "Registration Statement") for the purpose of registering
the shares of Xxxxxx Common Stock to be issued to shareholders of
Premier under the provisions of this Agreement and a proxy statement
and prospectus which is prepared as a part thereof (the "Proxy
Statement/Prospectus") for the purpose of registering the shares of
Xxxxxx'x Common Stock to be issued to the shareholders of Premier, and
the soliciting of the proxies of Premier's shareholders in favor of the
Merger, under the provisions of this Agreement. Fulton may rely upon
all information provided to it by Premier and Premier Bank in this
connection and Fulton shall not be liable for any untrue statement of a
material fact or any omission to state a material fact in the
Registration Statement, or in the Proxy Statement/Prospectus, if such
statement is made by Xxxxxx in reliance upon any information provided
to Xxxxxx by Premier or the Premier Subsidiaries or by any of their
officers, agents or representatives. Xxxxxx shall provide a draft of
the Registration Statement to Premier and its counsel for comment and
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review at least ten (10) business days in advance of the anticipated
filing date.
(c) State Securities Laws. Xxxxxx, with the cooperation and
assistance of Premier and its counsel and accountants, shall promptly
take all such actions as may be necessary or appropriate in order to
comply with all applicable securities laws of any state having
jurisdiction over the transactions contemplated by this Agreement.
(d) Stock Listing. Xxxxxx, with the cooperation and
assistance of Premier and its counsel and accountants, shall promptly
take all such actions as may be necessary or appropriate in order to
list the shares of Xxxxxx Common Stock to be issued in the Merger on
NASDAQ.
(e) Adopt Amendments. Xxxxxx shall not adopt any amendments
to its charter or bylaws or other organizational documents that would
alter the terms of Xxxxxx'x Common Stock or could reasonably be
expected to have a material adverse effect on the ability of Xxxxxx to
perform its obligations under this Agreement.
(f) Tax Treatment. Xxxxxx shall take no action which would
have the effect of causing the Merger not to qualify as a tax-free
reorganization under Section 368 of the Code.
Section 6.2 Access to Properties and Records. Xxxxxx shall give to
Premier and to its authorized employees and representatives (including without
limitation Premier's counsel, accountants, economic and environmental
consultants and other designated representatives) such access during normal
business hours to all properties, books, contracts, documents and records of
Xxxxxx as Premier may reasonably request, subject to the obligation of Premier
and its authorized employees and representatives to maintain the confidentiality
of all nonpublic information concerning Xxxxxx obtained by reason of such
access.
Section 6.3 Subsequent Financial Statements. Between the date of
signing of this Agreement and the Effective Time, Xxxxxx shall promptly prepare
and deliver to Premier as soon as practicable each Quarterly Report to Xxxxxx'x
shareholders and any Annual Report to Xxxxxx'x shareholders normally prepared by
Xxxxxx. The representations and warranties set forth in Sections 4.6, 4.7 and
4.8 herein shall apply to the financial statements (hereinafter collectively
referred to as the "Additional Xxxxxx Financial Statements") set forth in the
foregoing Quarterly Reports and any Annual Report to Xxxxxx'x shareholders.
Section 6.4 Update Schedules. Xxxxxx shall promptly disclose to
Premier in writing any change, addition, deletion or other modification to the
information set forth in its Schedules to this Agreement.
Section 6.5 Notice. Xxxxxx shall promptly notify Premier in writing
of any actions, claims, investigations or other developments which, if pending
or in existence on the date of this Agreement, would have been required to be
disclosed to Premier in order to ensure the accuracy of the representations and
warranties set forth in this Agreement or which otherwise could materially and
adversely affect the condition (financial or otherwise), assets, liabilities,
business,
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operations or future prospects of Fulton or restrict in any manner the
right of Fulton to carry on its business as presently conducted.
Section 6.6 No Purchase or Sales of Xxxxxx Common Stock During Price
Determination Period. Neither Fulton nor any Subsidiary of Fulton, nor any
executive officer or director of Fulton or any Subsidiary of Fulton, nor any
shareholder of Fulton who may be deemed to be an "affiliate" (as that term is
defined for purposes of Rules 145 and 405 promulgated by the SEC under the 0000
Xxx) of Fulton, shall purchase or sell on NASDAQ, or submit a bid to purchase or
an offer to sell on NASDAQ, directly or indirectly, any shares of Xxxxxx Common
Stock or any options, rights or other securities convertible into shares of
Xxxxxx Common Stock during the Price Determination Period; provided, however,
that Fulton may purchase shares of Xxxxxx Common Stock in the ordinary course of
business during the Price Determination Period for the benefit of Xxxxxx'x
Benefit Plans or Xxxxxx'x Dividend Reinvestment Plan.
Section 6.7 Assumption of Premier Debentures. Fulton agrees that,
effective with the Effective Date, it shall assume Premier's 8.57% Junior
Subordinated Deferrable Interest Debentures due August 15, 2028 and Variable
Rate Junior Subordinated Deferrable Interest Debentures due November 30, 2032
and all of Premier's obligations under the related Indentures, and shall take
all actions necessary or appropriated in accordance therewith, including, if
requested by the trustee, execution of a supplemental indenture and other
appropriate documents or certificates.
Section 6.8 Employment Arrangements.
(a) From and after the Effective Time, (i) Fulton, Premier Bank
or another subsidiary of Fulton (any such parties employing employees
of Premier or a Premier subsidiary, the "Fulton Employers") shall: (A)
satisfy each of the Employment Obligations (as defined in Section 3.17
herein), and (B) use its good faith efforts to retain each present
employee of Premier and the Premier Subsidiaries in such employee's
current position and salary compensation (or, if offered to, and
accepted by, an employee, a position for which the employee is
qualified with the Xxxxxx Employers at a compensation commensurate with
the position), (ii) in the event that the Xxxxxx Employers shall
continue to employ officers or employees of Premier and the Premier
Subsidiaries as of the Effective Time, the Xxxxxx Employers shall
employ such persons on the Effective Time who are not Contract
Employees (as that term is defined in Section 3.17 herein) as "at will"
employees, and (iii) in the event the Xxxxxx Employers are not willing
to employ, or terminate the employment (other than as a result of
unsatisfactory performance of their respective duties) of any officers
or employees of Premier or the Premier Subsidiaries who are not
Contract Employees and who do not receive any payment as a result of a
Change of Control Agreement with Premier or Premier Bank, the Fulton
Employers shall pay severance benefits to such employees (other than
Contract Employees) as follows: (A) in the event employment is
terminated on or prior to the date which is one year after the
Effective Date, the greater of (I) three months' salary or (II) one
week's salary and one week's salary for each year of service with
Premier or an
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Premier Subsidiary, thereafter, up to a maximum of 26 weeks' salary; or
(B) in the event employment is terminated thereafter, in accordance
with the then existing severance policy of Fulton or its successor.
(b) The Xxxxxx Employers shall be obligated to provide employee
benefits to each person who is an employee, on the Effective Time and
continues to be employed that are substantially equivalent, in the
aggregate, to the benefits under the Premier Benefit Plans prior to the
Effective Time, until the earlier of: (A) at least three (3) years
after the Effective Date, or (B) the date that the Xxxxxx Employers can
no longer satisfy the applicable qualified retirement plan
discrimination testing under the Code. For vesting and eligibility
purposes for employee benefits, under each Fulton Benefit Plan and/or
any employee benefit plan established by Fulton after the Effective
Date, employees of the Premier Subsidiaries shall receive credit for
years of service with the Premier Subsidiaries.
Section 6.9 Insurance; Indemnification.
(a) For four (4) years after the Effective Date, Fulton shall
(and Premier Bank shall cooperate in these efforts) obtain and maintain
"tail" coverage relating to Premier's existing directors and officers
liability insurance policy (provided that such insurance shall be in
such amount and with terms and conditions no less favorable to the
Director and Officer Liability Policy of Premier as of the date of this
Agreement and carry such premium (not to exceed 150% of the current
premium for Premier's existing directors and officers liability
insurance policy) and that Fulton may substitute therefor policies of
at least the same coverage and amounts containing terms and conditions
which are substantially no less advantageous) with respect to claims
arising from facts or circumstances which occur prior to the Effective
Date (other than relating to this Agreement and the transactions
contemplated hereby) and covering persons who are covered by such
insurance immediately prior to the Effective Date.
(b) From and after the Effective Date, Fulton shall indemnify,
defend and hold harmless each person who is now, or has been at any
time prior to the date hereof, or who becomes prior to the Effective
Date, an officer, employee or director of Premier or a Premier
Subsidiary (the "Indemnified Parties") against all losses, claims,
damages, costs, expenses (including reasonable attorneys' fees),
liabilities or judgments or amounts that are paid in settlement (which
settlement shall require the prior written consent of Fulton, which
consent shall not be unreasonably withheld) or in connection with any
claim, action, suit, proceeding or investigation (a "Claim") in which
an Indemnified Party is, or is threatened to be made, a party or a
witness based in whole or in part out of the fact that such person is
or was a director, officer or employee of Premier or a Premier
Subsidiary if such Claim pertains to any matter of fact arising,
existing or occurring prior to the Effective Date (including, without
limitation, the Merger and other transactions contemplated by this
Agreement) regardless of whether such Claim is asserted or claimed
prior to, at, or after the Effective Date (the "Indemnified
Liabilities") to the full extent permitted under applicable law as to
the date hereof or amended prior to the Effective
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Date and under the Articles of Incorporation or Bylaws of Premier or a
Premier Subsidiary as in effect as of the date hereof (and Fulton shall
pay expenses in advance of the full disposition of any such action or
proceeding to each of the Indemnified Parties to the full extent
permitted by applicable law and Xxxxxx'x Articles of Incorporation and
Bylaws). Any Indemnified Party wishing to claim indemnification under
this provision, upon learning of any claim, shall notify Fulton (but
the failure to so notify Fulton shall not relieve Fulton from any
liability which Fulton may have under this section except to the extent
Fulton is materially prejudiced thereby). In the defense of any action
covered by this Section 6.10(b), Fulton shall have the right to direct
the defense of such action and retain counsel of its choice; provided,
however, that, notwithstanding the foregoing, the Indemnified Parties
as a group may retain a single law firm to represent them with respect
to each matter under this section if there is, under applicable
standards of professional conduct, a conflict on any significant issue
between the positions of Fulton and the Indemnified Parties (the
Indemnified Parties may also retain more than one law firm if there is,
under applicable standards of professional conduct, a conflict of any
significant issues between the positions of two or more Indemnified
Parties). Fulton shall have an obligation to advance funds to satisfy
an obligation of Fulton or any successor to Fulton under this Section
6.10(b) to the same extent that Fulton would be obligated to advance
funds under the indemnification provisions of its Articles of
Incorporation and/or Bylaws.
Section 6.10 Appointment of Xxxxxx Director. Fulton shall, on or
promptly after the Effective Date (but no later than Xxxxxx'x next Board of
Directors meeting following the Effective Date), appoint to Xxxxxx'x Board of
Directors Xxxxx X. Frame (or one of Premier's other current directors
designated, subject to the reasonable approval of Fulton, by vote of Premier's
Board of Directors prior to the Effective Date) to serve as a director of
Fulton. Such director shall stand for election at Xxxxxx'x 2004 annual meeting,
at which time Fulton shall nominate and recommend for election such director for
an additional term of three (3) years. Fulton has a mandatory retirement policy
for directors who attain age 70; however, Fulton would "grandfather" the present
director of Premier appointed as set forth above from the application of such
policy for a three year period after the Effective Date unless such director
would have otherwise been obligated to retire from the Board of Premier under
any policy it currently has in effect.
Section 6.11 Continuation of Premier Bank's Structure, Name and
Directors.
(a) For a period of three (3) years after the Effective Date,
Fulton shall (subject to the right of Fulton and the Premier Bank
Continuing Directors to terminate such obligations under this Section
6.11(a) under subsections (b) and (c) below) (i) preserve the business
structure of Premier Bank as a Pennsylvania commercial bank (provided
that Fulton may cause Premier Bank's branch offices located in
Northampton County, Pennsylvania to be transferred to another bank
subsidiary of Fulton); (ii) preserve and use the present name of
Premier Bank, and (iii) continue in office the present directors of
Premier Bank who indicate their desire to serve the "Premier Bank
Continuing Directors"), provided, that (A) for such three year period,
each non-employee Premier
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Bank Continuing Director shall continue to receive director's fees from
Premier Bank on the same basis as prior to the Effective Date and shall
continue to receive such other incidental benefits as he or she was
receiving from Premier Bank prior to the Effective Date (the current
fees and benefits being set forth on Schedule 6.11 and to remain
unchanged through the Effective Date); provided that, in the event an
individual Premier Bank Continuing Director ceases to act as a director
or as a member of any committee thereof, the foregoing obligation to
maintain existing fees and benefits shall not apply to successors in
such positions and (B) after such three-year period, each Premier Bank
Continuing Director shall be subject to Xxxxxx'x mandatory retirement
rules for directors and shall receive the standard fee paid to
directors of subsidiary banks of Fulton.
(b) Fulton shall have the right to terminate its obligations
under subsection (a) of this Section 6.11 as a result of (i) regulatory
requirements, (ii) safe and sound banking practices as enunciated by
bank regulatory agencies, or (iii) the exercise of their fiduciary
duties by Xxxxxx'x directors.
(c) Notwithstanding anything herein to the contrary, the Premier
Bank Continuing Directors, in their exercise of their fiduciary duty as
to the best interests of Premier Bank and Fulton, may, by a majority
vote of such directors, modify or waive any or all of the foregoing
provisions in subsection (a) of this Section 6.11.
ARTICLE VII - CONDITIONS PRECEDENT
Section 7.1 Common Conditions. The obligations of the parties to
consummate this Agreement shall be subject to the satisfaction of each of the
following common conditions prior to or as of the Closing, except to the extent
that any such condition shall have been waived in accordance with the provisions
of Section 8.4 herein:
(a) Shareholder Approval: This Agreement shall have been duly
authorized, approved and adopted by the shareholders of Premier in
accordance with applicable law, AMEX rules and regulations, and the
Articles of Incorporation of Premier.
(b) Regulatory Approvals: The approval of each federal and
state regulatory authority having jurisdiction over the transactions
contemplated by this Agreement (including the Merger), including
without limitation, the Federal Reserve Board, the Department and the
Federal Deposit Insurance Corporation, shall have been obtained and all
applicable waiting and notice periods shall have expired, subject to no
terms or conditions which would (i) require or could reasonably be
expected to require (A) any divestiture by Fulton of a portion of the
business of Fulton, or any subsidiary of Fulton or (B) any divestiture
by Premier or the Premier Subsidiaries of a portion of their businesses
which Fulton in its good faith judgment believes will have a
significant adverse impact on the business or prospects of Premier or
the Premier Subsidiaries, as the case may be, or (ii) impose any
condition upon Fulton or Premier Bank, or their other subsidiaries,
taken as a whole, which in Xxxxxx'x good faith judgment (x) would be
materially burdensome to Fulton and its subsidiaries taken as a whole,
(y) would significantly
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increase the costs incurred or that will be incurred by Fulton as a
result of consummating the Merger or (z) would prevent Fulton from
obtaining any material benefit contemplated by it to be attained as a
result of the Merger.
(c) Stock Listing. The shares of Xxxxxx Common Stock to be
issued in the Merger shall have been authorized for listing on NASDAQ.
(d) Tax Opinion. Each of Fulton and Premier shall have received
an opinion of Xxxxxx'x counsel, Barley, Snyder, Xxxxx & Xxxxx, LLC,
reasonably acceptable to Fulton and Premier, addressed to Fulton and
Premier, with respect to federal tax laws or regulations, to the effect
that:
(i) The Merger will constitute a reorganization within the
meaning of Section 368(a)(1)(A) of the Code and Fulton and
Premier will each be a "party to a reorganization" within the
meaning of Section 368(b)(1) of the Code;
(ii) No gain or loss will be recognized by Fulton or Premier by
reason of the Merger;
(iii) The bases of the assets of Premier in the hands of Fulton
will be the same as the bases of such assets in the hands of
Premier immediately prior to the Merger;
(iv) The holding period of the assets of Premier in the hands
of Fulton will include the period during which such assets were
held by Premier prior to the Merger;
(v) A holder of Premier Common Stock who receives shares of
Xxxxxx Common Stock in exchange for his Premier Common Stock
pursuant to the reorganization (except with respect to cash
received in lieu of fractional shares of Xxxxxx Common Stock
deemed issued as described below) will not recognize any gain or
loss upon the exchange.
(vi) A holder of Premier Common Stock who receives cash in lieu
of a fractional share of Xxxxxx Common Stock will be treated as
if he received a fractional share of Xxxxxx Common Stock pursuant
to the reorganization which Fulton then redeemed for cash. The
holder of Premier Common Stock will recognize capital gain or
loss on the constructive redemption of the fractional share in an
amount equal to the difference between the cash received and the
adjusted basis of the fractional share.
(vii) The tax basis of the Xxxxxx Common Stock to be received by
the shareholders of Premier pursuant to the terms of this
Agreement will include the holding period of the Premier Common
Stock surrendered in exchange therefor, provided that such
Premier Common Stock is held as a capital interest at the
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Effective Time.
(viii) The holding period of the shares of Xxxxxx Common Stock to be
received by the shareholders of Premier will include the period during
which they held the shares of Premier Common Stock surrendered,
provided the shares of Premier Common Stock are held as a capital
asset on the date of the exchange.
(e) Registration Statement: The Registration Statement (as defined in
Section 6.1(b), including any amendments thereto) shall have been declared
effective by the SEC; the information contained therein shall be true,
complete and correct in all material respects as of the date of mailing of
the Proxy Statement/Prospectus (as defined in Section 6.1(b)) to the
shareholders of Premier; regulatory clearance for the offering contemplated
by the Registration Statement (the "Offering") shall have been received
from each federal and state regulatory authority having jurisdiction over
the Offering; and no stop order shall have been issued and no proceedings
shall have been instituted or threatened by any federal or state regulatory
authority to suspend or terminate the effectiveness of the Registration
Statement or the Offering.
(f) No Suits: No action, suit or proceeding shall be pending or
threatened before any federal, state or local court or governmental
authority or before any arbitration tribunal which seeks to modify, enjoin
or prohibit or otherwise adversely and materially affect the transactions
contemplated by this Agreement; provided, however, that if Fulton agrees to
defend and indemnify Premier and Premier Bank and their respective officers
and directors with regard to any such action, suit or proceeding pending or
threatened against them or any of them, then such pending or threatened
action, suit or proceeding shall not be deemed to constitute the failure of
a condition precedent to the obligation of Premier to consummate this
Agreement.
Section 7.2 Conditions Precedent to Obligations of Fulton. The obligations
of Fulton to consummate this Agreement shall be subject to the satisfaction of
each of the following conditions prior to or as of the Closing, except to the
extent that any such condition shall have been waived by Fulton in accordance
with the provisions of Section 8.4 herein:
(a) Accuracy of Representations and Warranties: All of the
representations and warranties of Premier as set forth in this Agreement,
all of the information contained in Schedules hereto and all Premier
Closing Documents (as defined in Section 7.2(j)) shall be true and correct
in all material respects as of the Closing as if made on such date (or on
the date to which it relates in the case of any representation or warranty
which expressly relates to an earlier date).
(b) Covenants Performed: Premier shall have performed or complied in
all material respects with each of the covenants required by this Agreement
to be performed or complied with by it.
(c) Opinion of Counsel for Premier: Fulton shall have received an
opinion,
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dated the Effective Time, from Xxxxxxxx Xxxxxxxx P.C., special counsel to
Premier, in substantially the form of Exhibit C hereto. In rendering any
such opinion, such special counsel may require and, to the extent they deem
necessary or appropriate may rely upon, opinions of other counsel and upon
representations made in certificates of officers of Premier, Fulton,
affiliates of the foregoing, and others.
(d) Affiliate Agreements: Shareholders of Premier who are or will be
affiliates of Premier or Fulton for the purposes of Accounting Series
Release No. 135 and the 1933 Act shall have entered into agreements with
Fulton, in form and substance satisfactory to Fulton, reasonably necessary
to assure compliance with Rule 145 under the 1933 Act.
(e) Premier Options: As may be required by Section 2.3 herein, all
holders of Premier Options shall have delivered documentation reasonably
satisfactory to Fulton substituting the Xxxxxx Stock Options for the
Premier Stock Options.
(f) No Material Adverse Change: Fulton (together with its accountants,
if the advice of such accountants is deemed necessary or desirable by
Fulton) shall have established to its reasonable satisfaction that, since
the date of this Agreement, there shall not have been any material and
adverse change in the condition (financial or otherwise), assets,
liabilities, business or operations or future prospects of Premier and the
Premier Subsidiaries on a consolidated basis taken as a whole. In
particular, without limiting the generality of the foregoing sentence, the
Additional Premier Financial Statements (as defined in Section 5.4) shall
indicate that the consolidated financial condition, assets, liabilities and
results of operations of Premier as of the respective dates reported
therein do not vary adversely in any material respect from the consolidated
financial condition, assets, liabilities and results of operations
presented in the Premier Balance Sheet. For purposes of this Section
7.2(f), a material and adverse change shall mean an event, change, or
occurrence which, individually or together with any other event, change, or
occurrence, has a material adverse impact on (i) the financial position,
business or results of operations or future prospects of Premier or (ii)
the ability of Premier to perform its obligations under this Agreement,
provided that "material and adverse change" shall not be deemed to include
the impact of (a) changes in banking and similar laws of general
applicability or interpretations thereof by courts or governmental
authorities, (b) changes in GAAP or regulatory accounting principles
generally applicable to banks and their holding companies, (c) actions or
omissions of Premier taken at the direction or behest of Fulton with the
prior written consent of Fulton, including any action or actions,
individually or in the aggregate, taken by Premier or the Premier
Subsidiaries, (d) changes in economic conditions generally affecting
financial institutions including changes in the general level of interest
rates, and (e) the direct effects of compliance with this Agreement and of
satisfying or causing to be satisfied the conditions set forth in this
Article VII on the operating performance of Premier, including reasonable
expenses incurred by Premier in consummating the transactions contemplated
by the Agreement. At the Closing, Premier shall deliver to Fulton a
certificate confirming the absence of a material adverse change described
herein and a certificate (from appropriate officers of Premier and/or
Premier's transfer agent) as to the issued and outstanding shares of
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Xxxxxxx Xxxxxx Stock and Premier Preferred Stock, shares issuable under
outstanding stock options granted under Premier's Stock Option Plan and any
outstanding obligations, options or rights of any kind entitling persons to
purchase or sell any shares of Premier Common Stock or Premier Preferred
Stock and any outstanding securities or other instruments of any kind that
are convertible into such shares
(g) Accountants' Letter. Subject to the requirements of Statement of
Auditing Standards No. 72 of the American Institute of Certified Public
Accountants, KPMG LLP, or such other accounting firm as is acceptable to
Fulton, shall have furnished to Fulton an "agreed upon procedures" letter,
dated the Effective Date, in form and substance satisfactory to Fulton to
the effect that:
(i) In their opinion, the consolidated financial statements of
Premier examined by them and included in the Registration Statement comply
as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations
thereunder; and
(ii) On the basis of limited procedures, not constituting an audit,
including a limited review of the unaudited financial statements referred
to below, a limited review of the latest available unaudited consolidated
interim financial statements of Premier , inspection of the minute books of
Premier and the Premier Subsidiaries since December 31, 2001, inquiries of
officials of Premier and the Premier Subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) any unaudited Consolidated Balance Sheets, Consolidated
Statements of Income, Consolidated Statements of Shareholders'
Equity and Consolidated Statements of Cash Flows of Premier
included in the Registration Statement are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements covered by their report included in the Registration
Statement;
(B) as of a specified date not more than five days prior to the
date of delivery of such letter, there have been any changes in
the consolidated shareholders' equity of Premier as compared with
amounts shown in the balance sheet as of December 31, 2002
included in the Registration Statement, except in each case for
such changes, increases or decreases which the Registration
Statement discloses have occurred or may occur and except for
such changes, decreases or increases as aforesaid which are
immaterial; and
(C) for the period from January 1, 2003 to such specified date,
there were any decreases in the consolidated total net interest
income,
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consolidated net interest income after provision for loan losses,
consolidated other income, consolidated net income or net income
per share amounts of Premier as compared with the comparable
period of the preceding year, except in each case for decreases
which the Registration Statement discloses have occurred or may
occur, and except for such decreases which are immaterial.
(h) Federal and State Securities and Antitrust Laws: Fulton and its
counsel shall have determined to their satisfaction that, as of the
Closing, all applicable securities and antitrust laws of the federal
government and of any state government having jurisdiction over the
transactions contemplated by this Agreement shall have been complied with.
(i) Environmental Matters: No environmental problem of the kind
contemplated in Section 3.22 and not disclosed in Schedule 3.22 shall have
been discovered which would, or which potentially could, materially and
adversely affect the condition (financial or otherwise), assets,
liabilities, business, operations or future prospects of either Premier or
Premier Bank.
(j) Closing Documents: Premier shall have delivered to Fulton: (i) a
certificate signed by Premier's President and Chief Executive Officer and
by its Secretary (or other officers reasonably acceptable to Fulton)
verifying that, to their knowledge, all of the representations and
warranties of Premier set forth in this Agreement are true and correct in
all material respects as of the Closing and that Premier has performed in
all material respects each of the covenants required to be performed by it
under this Agreement; (ii) all consents and authorizations of landlords and
other persons that are necessary to permit this Agreement to be consummated
without violation of any lease or other agreement to which Premier or
Premier Bank is a party or by which they or any of their properties are
bound; and (iii) such other certificates and documents as Fulton and its
counsel may reasonably request (all of the foregoing certificates and other
documents being herein referred to as the "Premier Closing Documents").
(k) Redemption of Premier Preferred Stock. All of the outstanding
shares of the Premier Preferred Stoc shall be redeemed as set forth in
Section 2.9.
Section 7.3 Conditions Precedent to the Obligations of Premier. The
obligation of Premier to consummate this Agreement shall be subject to the
satisfaction of each of the following conditions prior to or as of the Closing,
except to the extent that any such condition shall have been waived by Premier
in accordance with the provisions of Section 8.4 herein:
(a) Accuracy of Representations and Warranties: All of the
representations and warranties of Fulton as set forth in this Agreement,
all of the information contained in its Schedules hereto and all Xxxxxx
Closing Documents (as defined in Section 7.3(g) of this Agreement) shall be
true and correct in all material respects as of the Closing as if made on
such date (or on the date to which it relates in the case of any
representation or
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warranty which expressly relates to an earlier date).
(b) Covenants Performed: Xxxxxx shall have performed or complied in
all material respects with each of the covenants required by this Agreement
to be performed or complied with by Xxxxxx.
(c) Opinion of Counsel for Xxxxxx: Premier shall have received an
opinion from Barley, Snyder, Xxxxx & Xxxxx, LLC, counsel to Xxxxxx, dated
the Effective Time, in substantially the form of Exhibit F hereto. In
rendering any such opinion, such counsel may require and, to the extent
they deem necessary or appropriate may rely upon, opinions of other counsel
and upon representations made in certificates of officers of Xxxxxx,
Premier, affiliates of the foregoing, and others.
(d) Xxxxxx Options: Xxxxxx Stock Options shall have been substituted
for the Premier Options pursuant to Section 2.3 herein. The Xxxxxx Stock
Option agreements shall have been delivered and the Registration Statement
for the purpose of registering the shares necessary to satisfy Xxxxxx'x
obligation with respect to the issuance of Xxxxxx Common Stock pursuant to
the exercise of the Xxxxxx Stock Options shall have been declared
effective.
(e) No Material Adverse Change: Premier (together with its
accountants, if the advice of such accountant is deemed necessary or
desirable by Premier) shall have established to its reasonable satisfaction
that, since the date of this Agreement, there shall not have been any
material and adverse change in the condition (financial or otherwise),
assets, liabilities, business or operations or future prospects of Xxxxxx.
In particular, without limiting the generality of the foregoing sentence,
the Additional Xxxxxx Financial Statements (as defined in Section 6.3)
shall indicate that the consolidated financial condition, assets,
liabilities and results of operations of Xxxxxx as of the respective dates
reported therein do not vary adversely in any material respect from the
consolidated financial condition, assets, liabilities and results of
operations presented in the Xxxxxx Balance Sheet. For purposes of this
Section 7.3(e), a material and adverse change shall mean an event, change,
or occurrence which, individually or together with any other event, change,
or occurrence, has a material adverse impact on (i) the financial position,
business or results of operations or future prospects of Xxxxxx or (ii) the
ability of Xxxxxx to perform its obligations under this Agreement, provided
that "material and adverse change" shall not be deemed to include the
impact of (a) changes in banking and similar laws of general applicability
or interpretations thereof by courts or governmental authorities, (b)
changes in GAAP or regulatory accounting principles generally applicable to
banks and their holding companies, (c) changes in economic conditions
generally affecting financial institutions including changes in the general
level of interest rates, and (d) the direct effects of compliance with this
Agreement and of satisfying or causing to be satisfied the conditions set
forth in this Article VII on the operating performance of Xxxxxx, including
reasonable expenses incurred by Xxxxxx in consummating the transactions
contemplated by the Agreement. At the Closing, Xxxxxx shall deliver to
Premier a certificate confirming the absence of a material adverse change
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described herein and a certificate (from appropriate officers of Xxxxxx
and/or Xxxxxx'x transfer agent) as to the issued and outstanding shares of
Xxxxxx Common Stock, shares of Xxxxxx Common Stock reserved for issuance
upon the exercise of stock options, under Xxxxxx'x Employee Stock Purchase
Plan, under Xxxxxx'x Dividend Reinvestment Plan and under Xxxxxx'x
Shareholders Rights Plan, any outstanding obligations, options or rights of
any kind entitling persons to purchase or sell any shares of Xxxxxx'x
Common Stock and any outstanding securities or other instruments of any
kind that are convertible into such shares.
(f) Fairness Opinion: Premier shall have obtained from Boenning &
Scattergood, Inc., or from another independent financial advisor selected
by the Board of Directors of Premier, an opinion dated within five (5) days
of the Proxy Statement/Prospectus to be furnished to the Board of Directors
of Premier stating that the Conversion Ratio contemplated by this Agreement
is fair to the shareholders of Premier from a financial point of view.
(g) Closing Documents: Xxxxxx shall have delivered to Premier: (i) a
certificate signed by Xxxxxx'x Chairman and Chief Executive Officer (or
other officer reasonably acceptable to Premier) verifying that, to their
knowledge, all of the representations and warranties of Xxxxxx set forth in
this Agreement are true and correct in all material respects as of the
Closing and that Xxxxxx has performed in all material respects each of the
covenants required to be performed by Xxxxxx; and (ii) such other
certificates and documents as Premier and its counsel may reasonably
request (all of the foregoing certificates and documents being herein
referred to as the "Xxxxxx Closing Documents").
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at any time
before the Effective Time (whether before or after the authorization, approval
and adoption of this Agreement by the shareholders of Premier) as follows:
(a) Mutual Consent: This Agreement may be terminated by mutual consent
of the parties upon the affirmative vote of a majority of each of the
Boards of Directors of Premier and Xxxxxx, followed by written notices
given to the other party.
(b) Unilateral Action by Xxxxxx: This Agreement may be terminated
unilaterally by the affirmative vote of the Board of Directors of Xxxxxx,
followed by written notice given promptly to Premier, if: (i) there has
been a material breach by Premier of any representation, warranty or
material failure to comply with any covenant set forth in this Agreement
and such breach has not been cured within thirty (30) days after written
notice of such breach has been given by Xxxxxx to Premier; (ii) any
condition precedent to Xxxxxx'x obligations as set forth in Article VII of
this Agreement remains unsatisfied, through no fault of Xxxxxx, on
September 30, 2003; provided, that such date may be extended until December
31, 2003 by Premier by written notice to Xxxxxx (given not later than
September 15, 2003) if the Closing shall not have occurred because of
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failure to obtain approval from one or more regulatory authorities whose
approval is required in connection with this Agreement; or (iii) Xxxxxx'x
Board of Directors makes an election provided for in Section 5.7(e)(i)
herein.
(c) Unilateral Action By Premier: This Agreement may be terminated
unilaterally by the affirmative vote of a majority of the Board of
Directors of Premier, followed by written notice given promptly to Xxxxxx,
if: (i) there has been a material breach by Xxxxxx of any representation,
warranty or material failure to comply with any covenant set forth in this
Agreement and such breach has not been cured within thirty (30) days after
written notice of such breach has been given by Premier to Xxxxxx; (ii) any
condition precedent to Premier's obligations as set forth in Article VII of
this Agreement remains unsatisfied, through no fault of Premier, on
September 30, 2003; provided, that such date may be extended until December
31, 2003 by Xxxxxx by written notice to Premier (given not later than
September 15, 2003) if the Closing shall not have occurred because of
failure to obtain approval from one or more regulatory authorities whose
approval is required in connection with this Agreement; or (iii) Premier's
Board of Directors makes an election provided for in, and subject to the
conditions of, Section 5.7(e)(ii) herein.
(d) Market Price of Xxxxxx Common Stock. Premier shall have the right
to terminate this Agreement, through a resolution adopted by its Board of
Directors, if the Closing Market Price is both less than (A) $11.18, i.e.,
.60 multiplied by the Starting Price (the "Floor Price") and (B) the amount
per share equal to (x) the Starting Price multiplied by (y) .80 multiplied
by (z) the quotient of the Average NASDAQ Bank Index for the Price
Determination Period (the numerator) over the NASDAQ Bank Index on the
Pre-Announcement Date (the denominator). Thus, for example, assuming the
Average NASDAQ Bank Index for the Price Determination Period reflects a
decline of 30% from the Starting Date, (A) would be $11.18 and (b) would be
$10.44 ($18.64 x .80 x .70) and the Closing Market Price would be required
to be $10.44 or lower for Premier to have the right to terminate this
Agreement under this Section 8.1(d).
(i) For purposes of this Section 8.1(d),(A) "Pre-Announcement Date"
shall mean January 15, 2003, i.e., the business day immediately
preceding the date of this Agreement, and (B) "Starting Price" shall
mean $18.64, i.e., the last sale price for Xxxxxx Common Stock on the
Pre-Announcement Date as reported on NASDAQ.
(ii) The Starting Price, the Closing Market Price, the Floor Price and
the other amounts above shall be appropriately adjusted for an event
described in Section 2.1(b) herein.
Section 8.2 Effect of Termination.
(a) Effect. In the event of a permitted termination of this Agreement
under Section 8.1 herein, the Agreement shall become null and void and the
transactions
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contemplated herein shall thereupon be abandoned, except that the
provisions relating to limited liability and confidentiality set forth in
Sections 8.2(b) and 8.2(c) herein shall survive such termination.
(b) Limited Liability. Subject to the terms of the Warrant Agreement
and the Warrant, the termination of this Agreement in accordance with the
terms of Section 8.1 herein shall create no liability on the part of either
party, or on the part of either party's directors, officers, shareholders,
agents or representatives, except that if this Agreement is terminated by
Xxxxxx by reason of a material breach by Premier, or if this Agreement is
terminated by Premier by reason of a material breach by Xxxxxx, and such
breach involves an intentional, willful or grossly negligent
misrepresentation or breach of covenant, the breaching party (i.e., Xxxxxx
or Premier) shall be liable to the nonbreaching party for all costs and
expenses reasonably incurred by the nonbreaching party in connection with
the preparation, execution and attempted consummation of this Agreement,
including the reasonable fees of its counsel, accountants, consultants and
other advisors and representatives. In no event shall either party's
directors, officers, shareholders, agents or representatives have any
personal liability for any misrepresentation or breach in connection with
this Agreement.
(c) Confidentiality. In the event of a termination of this Agreement,
neither Xxxxxx nor Premier nor Premier Bank shall use or disclose to any
other person any confidential information obtained by it during the course
of its investigation of the other party or parties, except as may be
necessary in order to establish the liability of the other party or parties
for breach as contemplated under Section 8.2(b) herein.
Section 8.3 Amendment. To the extent permitted by law, this Agreement may
be amended at any time before the Effective Time (whether before or after the
authorization, approval and adoption of this Agreement by the shareholders of
Premier), but only by a written instrument duly authorized, executed and
delivered by Xxxxxx and by Premier; provided, however, that, except as set forth
in Section 8.1(d) herein any amendment to the provisions of Section 2.1 herein
relating to the consideration to be received by the former shareholders of
Premier in exchange for their shares of Premier Common Stock shall not take
effect until such amendment has been approved, adopted or ratified by the
shareholders of Premier in accordance with applicable provisions of the BCL.
Section 8.4 Waiver. Any term or condition of this Agreement may be waived,
to the extent permitted by applicable federal and state law, by the party or
parties entitled to the benefit thereof at any time before the Effective Time
(whether before or after the authorization, approval and adoption of this
Agreement by the shareholders of Premier) by a written instrument duly
authorized, executed and delivered by such party or parties.
ARTICLE IX - CLOSING AND EFFECTIVE TIME
Section 9.1 Closing. Provided that all conditions precedent set forth in
Article VII of this Agreement shall have been satisfied or shall have been
waived in accordance with Section
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8.4 of this Agreement, the parties shall hold a closing (the "Closing") at the
offices of Xxxxxx at Xxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx, within thirty
(30) days after the receipt of all required regulatory and shareholder approvals
and after the expiration of all applicable waiting periods on a date to be
agreed upon by the parties, at which time the parties shall deliver the Premier
Closing Documents, the Xxxxxx Closing Documents, the opinions of counsel
required by Sections 7.1(d), 7.2(c) and 7.3(c) herein, and such other documents
and instruments as may be necessary or appropriate to effectuate the purposes of
this Agreement.
Section 9.2 Effective Time. Immediately following the Closing, and
provided that this Agreement has not been terminated or abandoned pursuant to
Article VIII hereof, Xxxxxx and Premier will cause Articles of Merger (the
"Articles of Merger") to be delivered and properly filed with the Department of
State of the Commonwealth of Pennsylvania (the "Department of State"). The
Merger shall become effective on 11:59 p.m. on the day on which the Closing
occurs and Articles of Merger are filed with the Department of State or such
later date and time as may be specified in the Articles of Merger (the
"Effective Time"). The "Effective Date" when used herein means the day on which
the Effective Time occurs.
ARTICLE X - NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Section 10.1 No Survival. The representations and warranties of Premier and
of Xxxxxx set forth in this Agreement shall expire and be terminated on the
Effective Time by consummation of this Agreement, and no such representation or
warranty shall thereafter survive. Except with respect to the agreements of the
parties which by their terms are intended to be performed either in whole or in
part after the Effective Time, the agreements of the parties set forth in this
Agreement shall not survive the Effective Time, and shall be terminated and
extinguished at the Effective Time, and from and after the Effective Time none
of the parties hereto shall have any liability to the other on account of any
breach of such agreements.
ARTICLE XI - GENERAL PROVISIONS
Section 11.1 Expenses. Except as provided in Section 8.2(b) herein, each
party shall pay its own expenses incurred in connection with this Agreement and
the consummation of the transactions contemplated herein. For purposes of this
Section 11.1 herein, the cost of printing the Proxy Statement/Prospectus shall
be deemed to be an expense of Xxxxxx.
Section 11.2 Other Mergers and Acquisitions. Subject to the right of
Premier to refuse to consummate this Agreement pursuant to Section 8.1(c)(i)
herein by reason of a material breach by Xxxxxx of the warranty and
representation set forth in Section 4.7 herein, nothing set forth in this
Agreement shall be construed: (i) to preclude Xxxxxx from acquiring, or to limit
in any way the right of Xxxxxx to acquire, prior to or following the Effective
Time, the stock or assets of any other financial services institution or other
corporation or entity, whether by issuance or exchange of Xxxxxx Common Stock or
otherwise; (ii) to preclude Xxxxxx from issuing, or to limit in any way the
right of Xxxxxx to issue, prior to or following the Effective Time, Xxxxxx
Common Stock, Xxxxxx Preferred Stock or any other equity or debt securities; or
(iii) to preclude Xxxxxx from taking, or to limit in any way the right of Xxxxxx
to take, any other
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action not expressly and specifically prohibited by the terms of this Agreement.
Section 11.3 Notices. All notices, claims, requests, demands and other
communications which are required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly delivered if delivered
in person, transmitted by telegraph or facsimile machine (but only if receipt is
acknowledged in writing), or mailed by registered or certified mail, return
receipt requested, as follows:
(a) If to Xxxxxx, to:
Xxxxx X. Xxxxxx, Xx., Chairman and Chief Executive Officer
Xxxxxx Financial Corporation
Xxx Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxxxxx 00000
With a copy to:
Xxxx X. Xxxxxxxx, Esquire
Barley, Snyder, Xxxxx & Xxxxx, LLC
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
(b) If to Premier, to:
Xxxx X. Xxxxxxxxxx, President and Chief Executive Officer
Premier Bancorp, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
With a copy to:
Xxxxxxxx Xxxxx, Xx., Esquire
Xxxxxxxx Xxxxxxxx P.C.
0000 Xxxxxxx Xxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Section 11.4 Counterparts. This Agreement may be executed simultaneously in
several counterparts, each of which shall be deemed an original, but all such
counterparts together shall be deemed to be one and the same instrument.
Section 11.5 Governing Law. This Agreement shall be deemed to have been
made in, and shall be governed by and construed in accordance with the
substantive laws of, the Commonwealth of Pennsylvania.
Section 11.6 Parties in Interest. This Agreement shall be binding upon and
inure to
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the benefit of the parties hereto and their respective successors, assigns
and legal representatives; provided, however, that neither party may assign its
rights or delegate its duties under this Agreement without the prior written
consent of the other party. Other than the right to receive the consideration
payable as a result of the Merger pursuant to Article II hereof, this Agreement
is not intended to and shall not confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 11.7 Disclosure Schedules. The inclusion of a given item in a
disclosure schedule annexed to this Agreement shall not be deemed a conclusion
or admission that such item (or any other item) is material or is a material and
adverse change. Information disclosed for one section shall constitute
disclosure for other sections whether or not specifically referenced.
Section 11.8 Entire Agreement. This Agreement, together with the Warrant
Agreement and the Warrant being executed by the parties on the date hereof, sets
forth the entire understanding and agreement of the parties hereto and
supersedes any and all prior agreements, arrangements and understandings,
whether oral or written, relating to the subject matter hereof and thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers all as of the day and year first above
written.
XXXXXX FINANCIAL CORPORATION
By:
R. Xxxxx Xxxxx, Jr.
President and Chief Operating Officer
Attest:
Xxxxxx X. Xxxx, Xx.
Secretary
PREMIER BANCORP, INC.
By:
Xxxx X. Xxxxxxxxxx
President and Chief Executive Officer
Attest:
Xxxx X. Xxxxxx
Secretary
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