SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 3, 1998
FIRST BANKS AMERICA, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-8937 75-1604965
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(Commissioner File Number) (IRS Employer Identification No.)
135 N. Meramec, Clayton, Missouri 63105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 854-4600
Not Applicable
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
First Banks America, Inc., executed an Agreement and Plan of Reogrganization
effective September 3, 1998, relating to the previously announced acquisition of
Redwood Bank, San Francisco, California. A copy of the Agreement and a related
Press Release appear as exhibits to this Report.
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed herewith:
Exhibit No. Exhibit
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2 Agreement and Plan of Reorganization dated September 3, 1998,
by and among Registrant and Redwood Bancorp.
99 Press release, dated September 9, 1998, announcing the
execution of the Acquisition Agreement by and between
Registrant and Redwood Bancorp.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: September 21, 1998
FIRST BANKS AMERICA, INC.
By:/s/Allen H. Blake
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Allen H. Blake
Vice President, Chief Financial
Officer and Secretary
<PAGE>
Exhibit 2
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AGREEMENT AND PLAN OF REORGANIZATION
by and among
FIRST BANKS AMERICA, INC.,
a Delaware corporation,
EMPIRE HOLDINGS, INC.,
a Delaware corporation,
and
REDWOOD BANCORP,
a California corporation
September 3, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I - TERMS OF THE MERGER & CLOSING; EXCHANGE OF SHARES
Section 1.01. The Merger........................................ 1
Section 1.02. Effect of the Merger.............................. 1
Section 1.03. Conversion of Shares.............................. 1
Section 1.04. The Closing....................................... 2
Section 1.05. Closing Date...................................... 2
Section 1.06. Actions At Closing................................ 2
Section 1.07. Exchange Procedures; Surrender of Certificates.... 3
Section 1.08. Deposit Made by FBA............................... 4
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF EMPIRE AND BANCORP
Section 2.01. Organization and Capital Stock.................... 4
Section 2.02. Authorization; No Defaults........................ 5
Section 2.03. Bancorp Subsidiaries.............................. 5
Section 2.04. Financial Information............................. 6
Section 2.05. Absence of Changes................................ 6
Section 2.06. Regulatory Enforcement Matters.................... 6
Section 2.07. Tax Matters....................................... 6
Section 2.08. Litigation........................................ 7
Section 2.09. Properties, Contracts, Employee Benefit Plans
and Other Arrangements.......................... 7
Section 2.10. Reports........................................... 8
Section 2.11. Investment Portfolio.............................. 9
Section 2.12. Loan Portfolio.................................... 9
Section 2.13. Employee Matters and ERISA........................ 9
Section 2.14. Title to Properties; Compliance of Properties
with Laws and Regulations; Insurance..........11
Section 2.15. Environmental Matters.............................11
Section 2.16. Compliance with Laws and Regulations..............12
Section 2.17. Brokerage.........................................12
Section 2.18. No Undisclosed Liabilities........................12
Section 2.19. Statements True and Correct.......................12
Section 2.20. Commitments and Contracts.........................13
Section 2.21. Material Interest of Certain Persons..............13
Section 2.22. Conduct to Date...................................13
Section 2.23. Irrevocable Proxy.................................14
<PAGE>
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF FBA
Section 3.01. Organization......................................14
Section 3.02. Authorization.....................................15
Section 3.03. Absence of Changes................................15
Section 3.04. Litigation........................................15
Section 3.05. Statements True and Correct.......................15
Section 3.06. No Default........................................15
Section 3.07. Compliance with Law...............................16
Section 3.08. Brokerage.........................................16
Section 3.09. Regulatory Status.................................16
Section 3.10. Financial Ability.................................16
ARTICLE IV - AGREEMENTS OF EMPIRE AND BANCORP
Section 4.01. Business in Ordinary Course.......................16
Section 4.02. Breaches..........................................19
Section 4.03. Shareholder Approval..............................19
Section 4.04. Consummation of Agreement.........................19
Section 4.05. Environmental Reports.............................19
Section 4.06. Access to Information.............................20
Section 4.07. Consents to Contracts and Leases..................20
Section 4.08. Subsequent Financial Statements...................20
Section 4.09. Merger Agreement..................................21
Section 4.10. Notice of Material Events.........................21
Section 4.11. Intentional Breach; Violation of Law..............21
ARTICLE V - AGREEMENTS OF FBA
Section 5.01. Regulatory Approvals..............................21
Section 5.02. Breaches..........................................21
Section 5.03. Consummation of Agreement.........................22
Section 5.04. Indemnification...................................22
Section 5.05. Separate Corporate Existence of Redwood...........22
Section 5.06. Employment Agreements.............................22
Section 5.07. Employee Benefits.................................22
Section 5.08. Merger Agreement..................................23
Section 5.09. Notice of Material Events.........................23
Section 5.10. Intentional Breach; Violation of Law..............23
<PAGE>
ARTICLE VI - CONDITIONS PRECEDENT TO THE MERGER
Section 6.01. Conditions to the Obligations of FBA..............23
Section 6.02. Conditions to the Obligations of Empire
and Bancorp.....................................24
ARTICLE VII - TERMINATION
Section 7.01. Mutual Agreement..................................25
Section 7.02. Breach of Agreements..............................25
Section 7.03. Failure of Conditions.............................25
Section 7.04. Denial of Regulatory Approval.....................26
Section 7.05. Environmental Reports.............................26
Section 7.06. Regulatory Enforcement Matters....................26
Section 7.07. Unilateral Termination............................26
Section 7.08. Damages; Remedies Cumulative......................26
ARTICLE VIII - GENERAL PROVISIONS
Section 8.01. Confidential Information..........................26
Section 8.02. Publicity.........................................27
Section 8.03. Return of Documents...............................27
Section 8.04. Notices...........................................27
Section 8.05. Non-survival of Representations, Warranties
and Agreements..................................28
Section 8.06. Costs and Expenses................................28
Section 8.07. Entire Agreement..................................28
Section 8.08. Headings and Captions.............................29
Section 8.09. Waiver, Amendment or Modification.................29
Section 8.10. Rules of Construction.............................29
Section 8.11. Counterparts......................................29
Section 8.12. Successors and Assigns............................29
Section 8.13. Governing Law.....................................29
Section 8.14. Consent Not Unreasonably Withheld.................29
Signatures..........................................................30
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization, dated as of September 3,
1998, is by and among First Banks America, Inc., a bank holding company
organized as a Delaware corporation ("FBA"), Empire Holdings, Inc., a Delaware
corporation ("Empire"), and Redwood Bancorp, a California corporation which is a
wholly-owned subsidiary of Empire ("Bancorp"). This Agreement and Plan of
Reorganization is hereinafter referred to as the "Agreement."
In consideration of the mutual representations, warranties, agreements
and covenants contained herein, FBA, Empire and Bancorp hereby agree as follows:
ARTICLE I
TERMS OF THE MERGER & CLOSING; EXCHANGE
OF SHARES
Section 1.01. The Merger. Pursuant to the terms and provisions of this
Agreement and the Agreement of Merger between Bancorp and a subsidiary of FBA to
be formed for the purpose of merging with Bancorp ("Newco"), in the form
attached hereto as Exhibit "A" (the "Merger Agreement"), Newco shall merge with
and into Bancorp pursuant to the provisions of the corporate law (collectively,
"Corporate Law") applicable to such a transaction (the "Merger").
Section 1.02. Effect of the Merger. The Merger shall have all of the
effects provided in Section 1107 of the California General Corporation Law, this
Agreement and the Merger Agreement, and the separate corporate existence of
Newco shall cease on consummation of the Merger and be combined in Bancorp. The
Articles of Association, Bylaws, directors and officers of the resulting
corporation shall be as set forth in the Merger Agreement.
Section 1.03. Conversion of Shares.
(a) At the Effective Time (as defined in Section 1.05 hereof), (i) each
share of common stock, $3.33 1/3 par value, of Bancorp ("Bancorp Common") issued
and outstanding immediately prior to the Effective Time shall be converted into
the right to receive cash in the amount of One Hundred Four Dollars ($104.00),
subject to adjustment as provided in subsection (d) (the "Merger
Consideration"); and (ii) each share of capital stock of Newco shall be
converted into one share of Bancorp Common.
(b) At the Effective Time, all of the shares of Bancorp Common
outstanding prior to the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, shall no longer be outstanding and
shall be canceled and retired and shall cease to exist, and each holder of any
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Bancorp Common (the "Certificate") shall cease
to have any rights with respect to such shares, except the right of the holder
to receive, without interest, the Merger Consideration upon the surrender of the
Certificate in accordance with Section 1.07 hereof.
<PAGE>
(c)......At the Effective Time, each share of Bancorp Common, if any,
held in the treasury of Bancorp or by any direct or indirect subsidiary of
Bancorp (other than shares held in trust accounts for the benefit of others or
in other fiduciary, nominee or similar capacities) immediately prior to the
Effective Time shall be canceled.
(d)......If the conditions specified in Section 6.01(a) - (c) and (e) -
(h) shall have been satisfied and the Closing shall not have occurred on or
before January 8, 1999, the purchase price per share of Bancorp Common shall be
increased by (i) $0.80, if the Closing shall occur from January 9 through
February 8, 1999; (ii) $1.60, if the Closing shall occur from February 9 through
March 8, 1999; (iii) $2.40, if the Closing shall occur from March 9 through
April 8, 1999; or (iv) $3.20, if the Closing shall occur from April 9 through
April 30, 1999.
Section 1.04. The Closing. The closing of the Merger (the "Closing")
shall take place at the location mutually agreeable to the parties hereto at
10:00 a.m. local time on the Closing Date described in Section 1.05 of this
Agreement.
Section 1.05. Closing Date. The Closing shall take place on or after
December 28, 1998 on a day selected by FBA, to occur after each of the
conditions in Sections 6.01 and 6.02 is satisfied or waived by the appropriate
party, or on such other date as Bancorp and FBA may agree (the "Closing Date").
The Merger shall be effective upon the filing of the Merger Agreement with the
Secretary of State of the State of California in accordance with the California
Corporations Code (the "Effective Time").
Section 1.06. Actions At Closing. (a) At the Closing, Empire and
Bancorp shall deliver to FBA:
(i) certified copies of the Articles of Incorporation and Bylaws of
Empire and Bancorp and the certificate or articles of incorporation and
bylaws of each subsidiary of Bancorp;
(ii) a certificate signed by appropriate officers of Empire and Bancorp
stating that (A) each of the representations and warranties contained
in Article II is true and correct in all material respects at the time
of the Closing with the same force and effect as if such
representations and warranties had been made at the Closing, and (B)
all of the conditions set forth in Section 6.01 have been satisfied or
waived as provided therein;
(iii) certified copies of the resolutions of (A) Bancorp's Board of
Directors, (B) Empire in its capacity as the sole shareholder of
Bancorp, (C) Empire's Board of Directors, and (D) any other body whose
approval is required by applicable Corporate Law and the governing
documents of Empire and Bancorp, in order to establish the requisite
approvals under applicable Corporate Law of this Agreement, the Merger
and the other transactions contemplated hereby;
<PAGE>
(iv) currently effective Tax Clearance Certificates issued by the
Franchise Tax Board of the State of California (the "Franchise Tax
Board") with respect to Bancorp, Redwood and each subsidiary of Bancorp
and Redwood, reasonably satisfactory in form and substance to FBA; and
(v) a legal opinion from counsel for Empire and Bancorp regarding
Bancorp, this Agreement and the transactions contemplated hereby, in
form reasonably satisfactory to FBA.
(b) At the Closing, FBA shall deliver to Empire and Bancorp:
(i) certified copies of the Certificates of Incorporation and Bylaws of
FBA and Newco;
(ii) a certificate signed by an appropriate officer of FBA stating that
(A) each of the representations and warranties contained in Article III
is true and correct in all material respects at the time of the Closing
with the same force and effect as if such representations and
warranties had been made at the Closing, and (B) all of the conditions
set forth in Section 6.02 have been satisfied or waived as provided
therein;
(iii) certified copies of the resolutions of the Boards of Directors of
each of FBA and Newco and of FBA in its capacity as the sole
shareholder of Newco, establishing the requisite approvals of each of
them under applicable Corporate Law of this Agreement, the Merger and
the other transactions contemplated hereby;
(iv) certificates, each dated a recent date, of the Secretary of State
of the State of Delaware, stating that FBA is in good standing, and of
the appropriate official of the state of Newco's incorporation,
certifying that Newco is in good standing;
(v) a legal opinion from counsel for FBA regarding FBA, this Agreement
and the transactions contemplated hereby, in form reasonably
satisfactory to Empire and Bancorp; and
(vi) evidence satisfactory to Empire that FBA has made arrangements to
transfer funds representing the Merger Consideration to Empire at the
Closing.
(c)......At the Closing, FBA, Newco, Empire and Bancorp shall execute
the indemnification agreement contemplated by Section 5.04 hereof.
Section 1.07. Exchange Procedures; Surrender of Certificates. Empire
shall deliver at the Closing one or more certificates which evidence all of the
outstanding capital stock of Bancorp, and FBA shall deliver at the Closing
payment, in form acceptable to Empire, of the Merger Consideration (less the
amount paid to Empire pursuant to the Deposit Agreement (as defined in Section
1.08)). At the Closing, Empire shall execute such documents as FBA requests in
order to properly evidence the transfer of all of its ownership in the
outstanding capital stock of Bancorp.
<PAGE>
Section 1.08. Deposit Made by FBA. FBA has deposited with Redwood Bank,
a California banking corporation which is a wholly-owned subsidiary of Bancorp,
the sum of $400,000 (the "Deposit") in an account owned jointly by FBA and
Empire. FBA, Empire and Redwood Bank have entered into a separate letter
agreement of even date herewith (the "Deposit Agreement") governing the
disposition of the Deposit.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EMPIRE AND BANCORP
To induce FBA to enter into and consummate this Agreement, Empire and
Bancorp represent and warrant to FBA as follows:
Section 2.01. Organization and Capital Stock.
(a) Bancorp is a corporation duly organized, validly existing and in
good standing under the laws of the State of California and has the corporate
power to own all of its property and assets, to incur all of its liabilities and
to carry on its business as now being conducted.
(b) Except as disclosed in Section 2.01 of that certain document
delivered by Empire and Bancorp to FBA entitled the "Bancorp Disclosure
Schedule" and executed by Empire, Bancorp and FBA concurrently with the
execution and delivery of this Agreement (the "Bancorp Disclosure Schedule"), as
of the date hereof, the authorized capital stock of Bancorp consists solely of
1,000,000 shares of Bancorp Common, of which 250,000 are outstanding, duly and
validly issued, fully paid and non-assessable. Empire is the sole legal and
beneficial owner of all of the outstanding Bancorp Common. None of the
outstanding shares of Bancorp Common has been issued in violation of any
preemptive rights of current or past stockholders of Bancorp. Each Certificate
representing shares of Bancorp Common issued in replacement of any Certificate
theretofore issued which was claimed by the record holder thereof to have been
lost, stolen or destroyed was issued by Bancorp only upon receipt of an
affidavit of lost stock certificate and a bond sufficient to indemnify Bancorp
against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such Certificate or the issuance of such replacement
Certificate.
(c) Except as disclosed in Section 2.01 of the Bancorp Disclosure
Schedule, there are no shares of capital stock or other equity securities of
Bancorp issued or outstanding and no outstanding options, warrants, rights to
subscribe for, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of the capital
stock of Bancorp or contracts, commitments, understandings or arrangements by
which Bancorp is or may be obligated to issue additional shares of its capital
stock or other equity securities or options, warrants or rights to purchase or
acquire any additional shares of its capital stock or other equity securities.
<PAGE>
Section 2.02. Authorization; No Defaults. The Boards of Directors of
Empire and Bancorp have by all requisite action approved this Agreement, the
Merger Agreement and the Merger, and the Board of Directors of Empire has
approved an irrevocable proxy of even date herewith, whereby Empire has granted
to FBA the right to vote Empire's shares of Bancorp Common as provided therein
(the "Proxy"). The Merger Agreement and the Proxy are sometimes referred to
herein as the "Related Agreements." The Boards of Directors of Empire and
Bancorp have authorized the execution of this Agreement and the Related
Agreements on behalf of such corporations by their duly authorized officers and
the performance by Empire and Bancorp, respectively, of their obligations
hereunder. In its capacity as the sole shareholder of Bancorp, Empire has taken
all requisite action to approve this Agreement, the Related Agreements and the
Merger. Nothing in the Certificate or Articles of Incorporation or Bylaws of
Empire or Bancorp or any other agreement, instrument, decree, proceeding, law or
regulation (except as specifically referred to in or contemplated by this
Agreement) by or to which either of them or any of their respective subsidiaries
is bound or subject would prohibit or inhibit (i) Empire or Bancorp from
consummating this Agreement, (ii) Empire from giving the Proxy; or (iii) Bancorp
from consummating the Merger Agreement and the Merger, on the terms and
conditions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Empire and Bancorp, and the Proxy has been duly and
validly executed and delivered by Empire. Each of such documents constitutes a
legal, valid and binding obligation of Empire and Bancorp, and this Agreement
constitutes a legal, valid and binding obligation of Empire and Bancorp, in each
case enforceable against them in accordance with the terms hereof and thereof.
Neither Bancorp nor any Bancorp Subsidiary (as defined in Section 2.03 hereof)
is in default under nor in violation of any provision of its articles or
certificate of incorporation, bylaws or any promissory note, indenture or
evidence of indebtedness or security therefor, lease, contract, purchase or
other commitment or other agreement which is material to Bancorp and its
subsidiaries taken as a whole, and Empire is not in default or violation of any
such provision which would interfere with its ability to consummate the
transactions contemplated by this Agreement.
Section 2.03. Bancorp Subsidiaries. Each of Bancorp's direct and
indirect subsidiaries (hereinafter referred to singly as a "Bancorp Subsidiary"
and collectively as the "Bancorp Subsidiaries"), the names and jurisdictions of
incorporation of which are stated in Section 2.03 of the Bancorp Disclosure
Schedule, is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and each of the Bancorp
Subsidiaries has the corporate power to own its properties and assets, to incur
its liabilities and to carry on its business as now being conducted. The number
of issued and outstanding shares of capital stock of each Bancorp Subsidiary and
the ownership of such shares is set forth in Section 2.03 of the Bancorp
Disclosure Schedule; and all of such shares are owned by Bancorp or a Bancorp
Subsidiary, free and clear of all liens, encumbrances, rights of first refusal,
options or other rights or restrictions of any nature whatsoever, except as
disclosed in Section 2.03 of the Bancorp Disclosure Schedule. There are no
options, warrants or rights outstanding to acquire any capital stock of any
Bancorp Subsidiary, and no person or entity has any other right to purchase or
acquire any unissued stock of any Bancorp Subsidiary, nor does any Bancorp
<PAGE>
Subsidiary have any obligation of any nature with respect to its unissued shares
of stock. Except as disclosed in Section 2.03 of the Bancorp Disclosure
Schedule, neither Bancorp nor any Bancorp Subsidiary is a party to any
partnership or joint venture or owns an equity interest in any other business or
enterprise.
Section 2.04. Financial Information. The audited consolidated balance
sheets of Bancorp and its subsidiaries as of December 31, 1997 and related
consolidated income statements and statements of changes in shareholders' equity
and of cash flows for the two years ended December 31, 1997, together with the
notes thereto, in the form previously provided to FBA; the unaudited
consolidated balance sheets of Bancorp and its subsidiaries as of March 31, 1998
and related consolidated income statements and statements of changes in
shareholders' equity for the three months ended March 31, 1998, together with
the notes thereto, in the form previously provided to FBA; and the year-end and
quarter-end Reports of Condition of Income of Redwood for 1997 and for the three
month period ending March 31, 1998, respectively, as filed with the Federal
Deposit Insurance Corporation (the "FDIC") (all of such financial statements and
notes collectively referred to herein as the "Bancorp Financial Statements"),
(i) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as disclosed therein and except
for regulatory reporting differences required for Redwood's reports) and (ii)
present fairly the consolidated financial position and the consolidated results
of operations, changes in shareholders' equity and cash flows of the respective
entity and its consolidated subsidiaries as of the dates and for the periods
indicated.
Section 2.05. Absence of Changes. Except as disclosed in Section 2.05
of the Bancorp Disclosure Schedule, since December 31, 1997 there has not been
any material adverse change in the financial condition, the results of
operations or the business or prospects of Bancorp and its subsidiaries taken as
a whole, nor have there been any events or transactions having such a material
adverse effect which should be disclosed in order to make the Bancorp Financial
Statements not misleading. Since January 31, 1997, the date of the most recent
examination of Redwood by the Department of Financial Institutions of the State
of California, there has been no material adverse change in Redwood's financial
condition, results of operations or business except for any such changes as are
disclosed in Redwood's Reports of Condition and Income filed with the FDIC since
such date.
Section 2.06. Regulatory Enforcement Matters. Except as disclosed in
Section 2.06 of the Bancorp Disclosure Schedule, neither Empire, Bancorp nor any
Bancorp Subsidiary is subject to, or has received any notice or advice that it
may become subject to, any order, agreement, memorandum of understanding or
other regulatory enforcement action or proceeding with or by any foreign,
federal or state agency charged with the supervision or regulation of banks or
bank holding companies or engaged in the insurance of bank deposits or any other
governmental agency having supervisory or regulatory authority with respect to
Bancorp or any of its subsidiaries.
Section 2.07. Tax Matters. Except as disclosed in Section 2.07 of the
Bancorp Disclosure Schedule, Bancorp and the Bancorp Subsidiaries have filed all
foreign, federal, state and local income, franchise, excise, sales, use, real
<PAGE>
and personal property and other tax returns required to be filed. All such
returns fairly reflect the information required to be presented therein. All
provisions for accrued but unpaid taxes contained in the Bancorp Financial
Statements were made in accordance with generally accepted accounting principles
and in the aggregate do not fail materially to provide for tax liabilities.
Section 2.08. Litigation. Except as disclosed in Section 2.08 of the
Bancorp Disclosure Schedule, there is no litigation, claim or other proceeding
pending or, to the knowledge of Bancorp, threatened (i) against Bancorp or any
of the Bancorp Subsidiaries, (ii) of which the property of Bancorp or any of the
Bancorp Subsidiaries is or would be subject; or (iii) against Empire, with
respect to (i) its control of Bancorp or Redwood, (ii) the transfer of capital
stock of Bancorp or Redwood, or (iii) the ability of Empire to grant the Proxy
or perform its obligations pursuant to this Agreement.
Section 2.09. Properties, Contracts, Employee Benefit Plans and Other
Arrangements. Section 2.09 of the Bancorp Disclosure Schedule specifically
identifies the following:
(a) all real property owned by Bancorp and each Bancorp Subsidiary and
the principal buildings and structures located thereon, together with a legal
description of such real estate, and each lease of real property to which
Bancorp or any Bancorp Subsidiary is a party, identifying the parties thereto,
the annual rental, the expiration date thereof and a brief description of the
property covered;
(b) all loan and credit agreements, conditional sales contracts or
other title retention agreements or security agreements relating to money
borrowed by Bancorp or a Bancorp Subsidiary (exclusive of agreements between
Redwood and its customers entered into in the ordinary course of business
relating to deposit accounts, the purchase of federal funds and repurchase
agreements);
(c) all agreements, loans, contracts, guaranties, letters of credit,
lines of credit or commitments of Bancorp and each Bancorp Subsidiary not
referred to elsewhere in this Section 2.09 which:
(i) (except for loans, loan commitments or letters of
credit) involve payment by Bancorp or any Bancorp
Subsidiary of more than $100,000;
(ii) involve payments based on profits of Bancorp or any
Bancorp Subsidiary;
(iii) relate to the future purchase of goods or services in
excess of the requirements of its respective business
at current levels or for normal operating purposes;
(iv) were not made in the ordinary course of business; or
(v) materially affect the business o r financial
condition of Bancorp or any Bancorp Subsidiary;
<PAGE>
(d) all contracts, agreements, plans and arrangements by which any
profit sharing, group insurance, hospitalization, stock option, pension,
retirement, bonus, deferred compensation, stock bonus, stock purchase,
collective bargaining agreements, contracts or arrangements under which
pensions, deferred compensation or other retirement benefits are being paid, or
plans or arrangements established or maintained, sponsored or undertaken by
Bancorp or any Bancorp Subsidiary for the benefit of officers, directors or
employees, including each trust or other agreement with any custodian or any
trustee for funds held under any such agreement, plan or arrangement, and in
respect to any of them, the latest reports or forms, if any, filed with the
Department of Labor and Pension Benefit Guaranty Corporation under ERISA (as
defined below), any current financial or actuarial reports and any currently
effective IRS private ruling or determination letters obtained by or for the
benefit of Bancorp or any Bancorp Subsidiary;
(e) all leases, subleases or licenses with respect to real or personal
property, whether as lessor, lessee, licensor or licensee, with annual rental or
other payments due thereunder in excess of $25,000;
(f) all agreements for the employment, retention or engagement, or with
respect to the severance, of any officer, employee, agent, consultant or other
person or entity which by its terms is not terminable by Bancorp or a Bancorp
Subsidiary on thirty (30) days written notice or less without any payment by
reason of such termination; and
(g) the name and compensation arrangement as of June 1, 1998 of each
officer, director or employee of Bancorp or any Bancorp Subsidiary with annual
compensation in excess of $75,000;
Copies of each document, plan or contract identified in Section 2.09 of
the Bancorp Disclosure Schedule are appended to such Schedule and are hereby
incorporated into and constitute a part of the Bancorp Disclosure Schedule.
Section 2.10. Reports. Since January 1, 1993, Empire, Bancorp and the
Bancorp Subsidiaries have filed all reports and statements, together with any
amendments required to be made with respect thereto, required to be filed with
the Department of Financial Institutions of the State of California, the FDIC
and all foreign, federal and state banking or securities authorities and all
other governmental authorities with jurisdiction over Empire, Bancorp or any
Bancorp Subsidiary. As of the dates indicated thereon, each of such reports and
documents, including any financial statements, exhibits and schedules thereto,
complied in all material respects with the relevant statutes, rules and
regulations enforced or promulgated by the regulatory authority with which they
were filed, and did not contain any untrue statement of a material fact or omit
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.
<PAGE>
Section 2.11. Investment Portfolio. All United States Treasury
securities, obligations of other United States Government agencies and
corporations, obligations of States and political subdivisions of the United
States and other securities held by Bancorp and the Bancorp Subsidiaries, as
reflected in the consolidated balance sheet of Bancorp dated March 31, 1998
included in the Bancorp Financial Statements, are carried in accordance with
generally accepted accounting principles.
Section 2.12. Loan Portfolio. Except as disclosed in Section 2.12 of
the Bancorp Disclosure Schedule, (i) all loans and discounts reflected in the
Bancorp Financial Statements at March 31, 1998 or which were or will be entered
into after March 31, 1998 but before the Closing Date were and will be made in
all material respects for good, valuable and adequate consideration in the
ordinary course of the business of Bancorp and the Bancorp Subsidiaries, in
accordance in all material respects with sound lending practices, and they are
not subject to any material defenses, setoffs or counterclaims, including
without limitation any such as are afforded by usury or truth in lending laws,
except as may be provided by bankruptcy, insolvency or similar laws or by
general principles of equity; (ii) the notes and other evidences of indebtedness
evidencing such loans and all forms of pledges, mortgages and other collateral
documents and security agreements are and will be in all material respects
enforceable, valid, true and genuine and what they purport to be, except as
provided by bankruptcy, insolvency or similar laws or by general principles of
equity; and (iii) Bancorp and the Bancorp Subsidiaries have complied and will
through the Closing Date comply with all laws and regulations relating to such
loans, or to the extent there has not been such compliance, such failure does
not and will not interfere materially with the collection of any loan. All loans
and loan commitments extended by Bancorp and all extensions, renewals or
continuations of such loans and loan commitments were made in accordance with
its customary lending standards in the ordinary course of business. Such loans
are evidenced by appropriate and sufficient documentation based upon Bancorp's
customary and ordinary past practices. To the best of Bancorp's knowledge, the
reserve for possible loan and lease losses shown on Redwood's Report of
Condition and Income as of March 31, 1998 is adequate in all material respects
to provide for possible losses, net of recoveries relating to loans previously
charged off, on loans outstanding (including, without limitation, accrued
interest receivable) as of March 31, 1998.
Section 2.13. Employee Matters and ERISA.
(a) Neither Bancorp nor any Bancorp Subsidiary has entered into any
collective bargaining agreement with any labor organization with respect to any
group of employees of Bancorp or any Bancorp Subsidiary, and to the knowledge of
Bancorp there is no present effort nor existing proposal to attempt to unionize
any group of employees of Bancorp or any Bancorp Subsidiary.
(b)(i) Bancorp and the Bancorp Subsidiaries have been and are in
compliance with all applicable laws and regulations respecting employment and
employment practices (including federal, state and local laws and regulations
<PAGE>
governing worker safety), terms and conditions of employment and wages and
hours, including, without limitation, any laws respecting employment
discrimination and occupational safety and health requirements, and neither
Bancorp nor any Bancorp Subsidiary is engaged in any unfair labor practice; (ii)
there is no unfair labor practice complaint against Bancorp or any Bancorp
Subsidiary pending or, to the knowledge of Bancorp, threatened before the
National Labor Relations Board; (iii) there is no labor dispute, strike,
slowdown or stoppage actually pending or, to the knowledge of Bancorp,
threatened against or directly affecting Bancorp or any Bancorp Subsidiary; and
(iv) neither Bancorp nor any Bancorp Subsidiary has experienced any work
stoppage or other material labor difficulty during the past five years.
(c) Except as disclosed in Section 2.13(c) of the Bancorp Disclosure
Schedule, neither Bancorp nor any Bancorp Subsidiary maintains, contributes to
or participates in or has any liability under any employee benefit plans, as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or any non-qualified employee benefit plans or deferred
compensation, bonus, stock or incentive plans, or other employee benefit or
fringe benefit programs for the benefit of former or current employees of
Bancorp or any Bancorp Subsidiary (collectively, the "Employee Plans"). To the
knowledge of Bancorp, no present or former employee of Bancorp or any Bancorp
Subsidiary has been charged with breaching nor has breached a fiduciary duty
under any Employee Plan. Neither Bancorp nor any Bancorp Subsidiary participates
in, nor has it in the past five years participated in, nor has it any present or
future obligation or liability under, any multi-employer plan (as defined at
Section 3(37) of ERISA). Except as separately disclosed in Section 2.13(c) of
the Bancorp Disclosure Schedule, neither Bancorp nor any Bancorp Subsidiary
maintains, contributes to, or participates in any plan that provides health,
major medical, disability or life insurance benefits to former employees of
Bancorp or any Bancorp Subsidiary.
(d) All liabilities of the Employee Plans have been funded on the basis
of consistent methods in accordance with sound actuarial assumptions and
practices, and no Employee Plan, at the end of any plan year, or at March 31,
1998, had an accumulated funding deficiency. No actuarial assumptions have been
changed since the last written report of actuaries on the Employee Plans. All
insurance premiums (including premiums to the Pension Benefit Guaranty
Corporation) have been paid in full, subject only to normal retrospective
adjustments in the ordinary course. Except as reflected in the Bancorp Financial
Statements, Bancorp and the Bancorp Subsidiaries have no contingent or actual
liabilities under Title IV of ERISA. No accumulated funding deficiency (within
the meaning of Section 302 of ERISA or Section 412 of the Internal Revenue Code
of 1986, as amended (the "Code")) has been incurred with respect to any Employee
Plan, whether or not waived. No reportable event (as defined in Section 4043 of
ERISA) has occurred with respect to any Employee Plan as to which a notice would
be required to be filed with the Pension Benefit Guaranty Corporation. No claim
is pending, threatened or imminent with respect to any Employee Plan (other than
a routine claim for benefits for which plan administrative review procedures
have not been exhausted) for which Bancorp or any Bancorp Subsidiary would be
liable, except as is reflected in the Bancorp Financial Statements. Bancorp and
<PAGE>
the Bancorp Subsidiaries have no liability for excise taxes under Sections 4971,
4975, 4976, 4977, 4979 or 4980B of the Code or for a fine under Section 502 of
ERISA with respect to any Employee Plan. All Employee Plans have in all material
respects been operated, administered and maintained in accordance with the terms
thereof and in compliance with the requirements of all applicable laws,
including, without limitation, ERISA.
Section 2.14. Title to Properties; Compliance of Properties with Laws
and Regulations; Insurance. Except as disclosed in Section 2.14 of the Bancorp
Disclosure Schedule: (i) Bancorp and the Bancorp Subsidiaries have marketable
title, insurable at standard rates, free and clear of all liens, charges and
encumbrances (except taxes which are a lien but not yet payable and liens,
charges or encumbrances reflected in the Bancorp Financial Statements and
easements, rights-of-way, and other restrictions which are not material, and
further excepting in the case of other Real Estate Owned ("OREO"), as such real
estate is internally classified on the books of Bancorp or any Bancorp
Subsidiary, rights of redemption under applicable law) to all of their real
properties; (ii) all leasehold interests for real property and any material
personal property used by Bancorp or any Bancorp Subsidiary in its business are
held pursuant to lease agreements which are valid and enforceable in accordance
with their terms, except as provided by bankruptcy, insolvency or similar laws
or by general principles of equity; (iii) all such properties comply in all
material respects with all applicable zoning requirements, governmental laws and
regulations (including federal, state and local laws and regulations governing
access to properties by persons with disabilities), and private agreements, and
there are no regulatory or condemnation proceedings pending or, to Bancorp's
knowledge, threatened with respect to any of such properties; (iv) Bancorp and
the Bancorp Subsidiaries have valid title or other ownership rights under
enforceable licenses to all material intangible personal and intellectual
property used by Bancorp or any Bancorp Subsidiary in its business, free and
clear of any material claim, defense or right of any other person or entity,
subject only to rights of the licensors pursuant to applicable license
agreements, which rights do not materially and adversely interfere with the use
of such property; and (v) all material insurable properties owned or held by
Bancorp or any Bancorp Subsidiary are adequately insured by financially sound
and reputable insurers in such amounts and against fire and other risks insured
against by extended coverage and public liability insurance, as is customary
with banks of similar size.
Section 2.15. Environmental Matters. As used in this Agreement,
"Environmental Laws" means all local, state and federal environmental, health
and safety laws and regulations in all jurisdictions in which Bancorp or any
Bancorp Subsidiary has done business or owned, leased or operated property,
including, without limitation, the Federal Resource Conservation and Recovery
Act, the Federal Comprehensive Environmental Response, Compensation and
Liability Act, the Federal Clean Water Act, the Federal Clean Air Act, and the
Federal Occupational Safety and Health Act.
<PAGE>
Neither the conduct nor operation of Bancorp or any Bancorp Subsidiary
nor any condition of any property presently or previously owned, leased or
operated by any of them on their own behalf or in a fiduciary capacity violates
any Environmental Law in any respect material to the business of Bancorp and the
Bancorp Subsidiaries, taken as a whole, and no condition or event has occurred
with respect to any of them or any property that, with notice or the passage of
time, or both, would constitute a violation material to the business of Bancorp
and the Bancorp Subsidiaries, taken as a whole, of any Environmental Law or
obligate (or potentially obligate) Bancorp or any Bancorp Subsidiary to remedy,
stabilize, neutralize or otherwise alter the environmental condition of any
property, where the aggregate cost of such actions would be material to Bancorp
and the Bancorp Subsidiaries, taken as a whole. Neither Bancorp nor any Bancorp
Subsidiary has received notice from any person or entity that Bancorp or any
Bancorp Subsidiary, or the operation or condition of any property ever owned,
leased or operated by any of them on their own behalf or in a fiduciary
capacity, are or were in violation of any Environmental Law, or that Bancorp or
any Bancorp Subsidiary is responsible (or potentially responsible) for
remedying, or the cleanup of, any pollutants, contaminants, or hazardous or
toxic wastes, substances or materials at, on or beneath any such property.
Section 2.16. Compliance with Laws and Regulations. Except as disclosed
in Section 2.16 of the Bancorp Disclosure Schedule, Empire, Bancorp and the
Bancorp Subsidiaries have all licenses, franchises, permits and other
governmental authorizations that are required to enable them to conduct their
respective businesses in all material respects, are qualified to conduct
business in every jurisdiction in which such qualification is required and are
in compliance in all material respects with all applicable laws and regulations.
Section 2.17. Brokerage. There are no existing claims or agreements for
brokerage commissions, finders' fees, investment banking fees, financial
advisory fees or similar compensation in connection with the transactions
contemplated by this Agreement payable by Empire, Bancorp, any Bancorp
Subsidiary or any affiliate of any of such entities or, if there are any such
claims or agreements, they will be for the sole account of Empire, and neither
Bancorp nor any Bancorp Subsidiary nor any affiliate thereof shall have any
liability therefor.
Section 2.18. No Undisclosed Liabilities. Neither Bancorp nor any
Bancorp Subsidiary has any material liability, whether known or unknown,
asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated
or unliquidated, and whether due or to become due (and there is no past or
present fact, situation, circumstance, condition or other basis for any present
or future action, suit or proceeding, hearing, charge, complaint, claim or
demand against Bancorp or any Bancorp Subsidiary giving rise to any such
liability), except (i) liabilities reflected in the Bancorp Financial
Statements, (ii) liabilities of the same type incurred in the ordinary course of
business of Bancorp and the Bancorp Subsidiaries since March 31, 1998, and (iii)
as disclosed in Section 2.18 of the Bancorp Disclosure Schedule.
Section 2.19. Statements True and Correct. None of the information
supplied or to be supplied by Empire, Bancorp or Redwood for inclusion in any
document to be filed with the Securities and Exchange Commission ("SEC") or any
regulatory authority in connection with the transactions contemplated hereby
will, at the respective times such documents are filed, be false or misleading
<PAGE>
with respect to any material fact, or omit to state any material fact necessary
in order to make the statements therein not misleading. All documents that
Empire, Bancorp and Redwood are responsible for filing with any regulatory
authority in connection with the transactions contemplated hereby will comply in
all material respects with the provisions of applicable law and the applicable
rules and regulations thereunder.
Section 2.20. Commitments and Contracts. Except as disclosed in Section
2.20 of the Bancorp Disclosure Schedule (a true and correct copy of each
document or other item in question having been made available to FBA for
inspection), neither Bancorp nor any Bancorp Subsidiary is a party or subject to
any of the following (whether written or oral, express or implied):
(i) any agreement, arrangement or commitment not made in the ordinary
course of business;
(ii) any agreement, indenture or other instrument not reflected in the
Bancorp Financial Statements relating to the borrowing of money by
Bancorp or a Bancorp Subsidiary or the guarantee by Bancorp or a
Bancorp Subsidiary of any obligation (other than trade payables or
instruments related to transactions entered into in the ordinary course
of business by Bancorp or a Bancorp Subsidiary, such as deposits,
federal funds borrowings and repurchase agreements), other than
agreements, indentures or instruments providing for annual payments of
less than $50,000; or
(iii) any contract containing covenants which limit the ability of
Bancorp or a Bancorp Subsidiary to compete in any line of business or with any
person or containing any restriction of the geographical area in which, or
method by which, Bancorp or any Bancorp Subsidiary may carry on its business.
Section 2.21. Material Interest of Certain Persons. Except as disclosed
in Section 2.21 of the Bancorp Disclosure Schedule:
(a) no officer or director of Bancorp or any "associate" (as such term
is defined in Rule 14a-1 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of any such officer or director, has any material interest
in any material contract or property (real or personal, tangible or intangible),
used in or pertaining to the business of Bancorp or any Bancorp Subsidiary; and
(b) all outstanding loans from Bancorp to any present officer,
director, employee or any associate or related interest of any such person
("Insider Loans") were approved by or reported to the Board of Directors in
accordance with all applicable laws and regulations.
Section 2.22. Conduct to Date. Except as disclosed in Section 2.22 of
the Bancorp Disclosure Schedule, from and after December 31, 1997, neither
Bancorp nor any Bancorp Subsidiary has (i) failed to conduct its business in the
<PAGE>
ordinary and usual course consistent with past practices; (ii) issued, sold,
granted, conferred or awarded any common or other stock, or any corporate debt
securities which would be classified under generally accepted accounting
principles applied on a consistent basis as long-term debt on the balance sheets
of Bancorp or any Bancorp Subsidiary; (iii) effected any stock split or
adjusted, combined, reclassified or otherwise changed its capitalization; (iv)
declared, set aside or paid any dividend or other distribution in respect of its
capital stock, or purchased, redeemed, retired, repurchased, or exchanged, or
otherwise directly or indirectly acquired or disposed of any of its capital
stock; (v) incurred any material obligation or liability (absolute or
contingent), except normal trade or business obligations or liabilities incurred
in the ordinary course of business, or subjected to lien any of its assets or
properties other than in the ordinary course of business consistent with past
practice; (vi) discharged or satisfied any material lien or paid any material
obligation or liability (absolute or contingent), other than in the ordinary
course of business; (vii) sold, assigned, transferred, leased, exchanged, or
otherwise disposed of any of its properties or assets other than for a fair
consideration in the ordinary course of business; (viii) except as required by
contract or law, (A) increased the rate of compensation of, or paid any bonus
to, any of its directors, officers, or other employees, except merit or
promotion increases in accordance with existing policy, (B) entered into any
new, or amended or supplemented any existing, employment, management,
consulting, deferred compensation, severance or other similar contract, (C)
entered into, terminated or substantially modified any of the Employee Plans or
(D) agreed to do any of the foregoing; (ix) suffered any material damage,
destruction, or loss, whether as the result of fire, explosion, earthquake,
accident, casualty, labor trouble, requisition, or taking of property by any
regulatory authority, flood, windstorm, embargo, riot, act of God or the enemy,
or other casualty or event, and whether or not covered by insurance; (x)
canceled or compromised any debt, except in accordance with past practice; (xi)
entered into any material transaction, contract or commitment outside the
ordinary course of its business or (xii) made or guaranteed any loan to any of
the Employee Plans.
Section 2.23. Irrevocable Proxy. Empire has delivered to FBA
concurrently with the execution of this Agreement the Proxy, which is a legal,
valid and binding obligation of Empire, enforceable in accordance with its
terms.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FBA
To induce Empire and Bancorp to enter into and consummate this
Agreement, FBA represents and warrants to Empire and Bancorp as follows:
Section 3.01. Organization. FBA is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
<PAGE>
FBA has the corporate power to own all of its property and assets, to incur all
of its liabilities and to carry on its business as now being conducted.
At the Closing, Newco will be a duly organized, validly existing
corporation pursuant to the laws of the state of its incorporation, qualified to
business in every jurisdiction in which such qualification is required, and
Newco will have no material liabilities.
Section 3.02. Authorization. The Board of Directors of FBA has by all
requisite action approved this Agreement and the Merger and authorized the
execution hereof on its behalf by its duly authorized officers and the
performance by FBA of its obligations hereunder. Nothing in the Certificate of
Incorporation or Bylaws of FBA or any other agreement, instrument, decree,
proceeding, law or regulation (except as specifically referred to in or
contemplated by this Agreement) by or to which FBA or any of FBA's subsidiaries
is bound or subject would prohibit or inhibit FBA from consummating this
Agreement and the Merger on the terms and conditions herein contained. This
Agreement has been duly and validly executed and delivered by FBA and
constitutes a legal, valid and binding obligation, enforceable against FBA in
accordance with its terms.
Section 3.03. Absence of Changes. Since March 31, 1998 there has not
been any material adverse change in the financial condition, the results of
operations or the business or prospects of FBA that would prevent FBA from
consummating this Agreement and the Merger.
Section 3.04. Litigation. There is no litigation, claim or other
proceeding pending or, to the best of FBA's knowledge, threatened against FBA or
any of its subsidiaries that would prohibit FBA or Newco from consummating the
Merger.
Section 3.05. Statements True and Correct. None of the information
supplied or to be supplied by FBA for inclusion in any documents to be filed
with the SEC or any banking or other regulatory authority in connection with the
transactions contemplated hereby will, at the respective times such documents
are filed, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein not misleading.
All documents that FBA is responsible for filing with any regulatory authority
in connection with the transactions contemplated by this Agreement will comply
in all material respects with the provisions of applicable law and the
applicable rules and regulations thereunder.
Section 3.06. No Default. FBA and the FBA Subsidiaries are neither in
default under nor in violation of any provision of their respective Articles or
Certificates of Incorporation or Bylaws, or, to the best of FBA's knowledge, any
promissory note, indenture or any evidence of indebtedness or security therefor,
lease, contract, purchase or other commitment or any other agreement which is
material to FBA and the FBA Subsidiaries, taken as a whole, where the effect of
such default or violation substantially impairs the ability of FBA to carry out
its obligations under this Agreement.
<PAGE>
Section 3.07. Compliance with Law. FBA and the FBA Subsidiaries have
all licenses, franchises, permits and other governmental authorizations that are
legally required to enable them to conduct their respective businesses in all
material respects, are qualified to conduct business in every jurisdiction
(whether federal, state, local or foreign) in which such qualification is
required and, to the best of FBA's knowledge, are in compliance in all material
respects with all applicable laws and regulations.
Section 3.08. Brokerage. There are no existing claims or agreements for
brokerage commissions, finders' fees, investment banking fees, financial
advisory fees or similar compensation in connection with the transactions
contemplated by this Agreement payable by FBA, any FBA Subsidiary or any
affiliate of such entities.
Section 3.09. Regulatory Status. To the best of FBA's knowledge,
neither FBA nor any of the FBA Subsidiaries has taken or agreed to take any
action or has knowledge of any fact or circumstance that would materially impede
or delay the approval of the Merger by any regulatory authority.
Section 3.10. Financial Ability. FBA has sufficient financial resources
to carry out its obligations pursuant to this Agreement, including, without
limitation, the ability to pay Empire the Merger Consideration, and FBA will
maintain sufficient financial resources for such purpose from the date hereof to
the Closing Date, including assets in the form of cash, cash equivalents,
securities held for sale and the ability to borrow funds from First Banks, Inc.
pursuant to the existing line of credit in the amount of $20,000,000.
ARTICLE IV
AGREEMENTS OF EMPIRE AND BANCORP
Section 4.01. Business in Ordinary Course. Empire agrees to cause
Bancorp to comply with each of the agreements and covenants contained in this
Article IV, and Bancorp agrees to comply, or, if applicable, cause the Bancorp
Subsidiaries to comply with each of such covenants and agreements:
(a) Bancorp and each Bancorp Subsidiary shall continue to carry on
their respective businesses and the discharge or incurrence of obligations and
liabilities only in the usual, regular and ordinary course of business, as
heretofore conducted, and by way of amplification and not limitation, Bancorp
and each Bancorp Subsidiary will not do any of the following or enter into any
agreement to do so:
(i) declare or pay any dividend or make any other distribution to
shareholders, whether in cash, stock or other property;
<PAGE>
(ii) issue any capital stock or other stock or any options, warrants,
or other rights to subscribe for or purchase capital stock or any other
stock or any securities convertible into or exchangeable for any
capital stock;
(iii) directly or indirectly redeem, purchase or otherwise acquire any
Bancorp Capital Stock or any other stock of Bancorp or any Bancorp
Subsidiary;
(iv) effect a reclassification, recapitalization, split-up, exchange of
shares, readjustment or other similar change in or to any capital
stock, or otherwise reorganize or recapitalize; or
(v) change its certificate or articles of incorporation or association,
as the case may be, or bylaws, nor merge or consolidate with, or sell a
significant portion of its assets to, any person or entity.
(b) Bancorp and each Bancorp Subsidiary will not, without the prior
written consent of FBA, do any of the following or enter into an agreement to do
so:
(i) grant any increase (other than ordinary and normal increases
consistent with past practices) in the compensation payable or to
become payable to officers or salaried employees, grant any stock
options or, except as required by law, adopt or make any change in any
bonus, insurance, pension, or other Employee Plan, agreement, payment
or arrangement made to, for or with any of such officers or employees;
(ii) borrow or agree to borrow any amount of funds, except in the
ordinary course of business, or directly or indirectly guarantee or
agree to guarantee any obligations of others;
(iii) make or commit to make any new loan or letter of credit or any
new or additional discretionary advance under any existing line of
credit, except in the ordinary course of business, consistent with
prudent lending standards and past practice. Bancorp shall provide to
FBA copies of all minutes of meetings of the Loan Committee of Redwood,
and a representative of FBA shall be permitted to attend all meetings
of the Loan Committee from the date hereof until the Closing;
(iv) purchase or otherwise acquire any investment security for its own
account, except in the ordinary course of business, consistent with
Redwood's investment policies and its past practice. On or before the
fifteenth day of each month prior to the Closing, Bancorp shall submit
to FBA a written report for the preceding month if during such
preceding month Bancorp or any Bancorp Subsidiary acquired any
investment security having an average remaining life greater than three
years or any asset-backed securities other than those issued or
guaranteed by the Federal National Mortgage Association or the Federal
<PAGE>
Home Loan Mortgage Corporation, identifying each such security and the
terms of the acquisition;
(v) enter into any agreement, contract or commitment having a term in
excess of three (3) months other than letters of credit, loan
agreements, deposit agreements, and other lending, credit and deposit
agreements and documents made in the ordinary course of business;
(vi) except in the ordinary course of business, place on any of its
assets or properties any mortgage, pledge, lien, charge, or other
encumbrance;
(vii) except in the ordinary course of business, cancel or accelerate
any material indebtedness owing to Bancorp or a Bancorp Subsidiary or
any claims which Bancorp or any Bancorp Subsidiary may possess, or
waive any material rights of substantial value;
(viii) sell or otherwise dispose of any real property or any material
amount of any tangible or intangible personal property, other than (A)
properties acquired in foreclosure or otherwise in the ordinary
collection of indebtedness, and (B) property disposed of in connection
with the relocation of the headquarters office and San Rafael branch
office of Redwood;
(ix) foreclose upon or otherwise take title to or possession or control
of any real property without first obtaining a phase one environmental
report thereon which indicates that the property is free of pollutants,
contaminants or hazardous or toxic waste materials or, if not free,
that the property can be remediated without unreasonable expense or
liability; provided, however, that Bancorp and the Bancorp Subsidiaries
shall not be required to obtain such a report with respect to single
family, non-agricultural residential property of one acre or less to be
foreclosed upon unless the entity proposing to acquire the property has
reason to believe that such property might contain any such waste
materials or otherwise might be contaminated;
(x) commit any act or fail to do any act which will cause a breach of
any agreement, contract or commitment and which will have a material
adverse effect on the business, financial condition or earnings of
Bancorp or a Bancorp Subsidiary;
(xi) violate any law, statute, rule, governmental regulation or order,
which violation might have a material adverse effect on the business,
financial condition, or earnings of Bancorp or a Bancorp Subsidiary;
(xii) purchase any real or personal property or make any other capital
expenditure where the amount paid or committed therefor is in excess of
$75,000; or
<PAGE>
(xiii) increase or decrease the rate of interest paid on time deposits
or on certificates of deposit, except in a manner consistent with past
practices.
(c) Bancorp and the Bancorp Subsidiaries will not, without the prior
written consent of FBA, engage in any transaction or take any action that would
render untrue in any material respect any of the representations and warranties
of Bancorp contained in Article II hereof, if such representations and
warranties were given immediately following such transaction or action.
(d) Bancorp shall promptly notify FBA of the occurrence of any matter
or event known to and directly involving Bancorp that is materially adverse to
the business, operations, properties, assets, or condition (financial or
otherwise) of Bancorp and the Bancorp Subsidiaries, taken as a whole.
(e) Neither Empire nor Bancorp shall solicit or encourage, or hold
discussions or negotiations with or provide information to, any person or entity
in connection with any proposal for the acquisition of all or a substantial
portion of the business, assets, shares of Bancorp Common or other securities or
assets of Bancorp or any Bancorp Subsidiary. Empire and Bancorp shall promptly
advise FBA of its receipt of any such proposal or inquiry and the substance
thereof.
Section 4.02. Breaches. Bancorp shall, in the event it has knowledge of
the occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused or constituted a
breach had such event occurred or been known prior to the date hereof) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to FBA and use its best efforts to prevent or promptly
remedy the same.
Section 4.03. Shareholder Approval. Empire will not take any action or
permit any other party to take any action which is inconsistent with the Proxy
or Empire's approval of this Agreement and the Merger.
Section 4.04. Consummation of Agreement. Empire and Bancorp shall
perform and fulfill all conditions and obligations on their parts to be
performed or fulfilled under this Agreement and to cause the Merger to be
consummated as expeditiously as reasonably practicable. Empire and Bancorp shall
furnish to FBA in a timely manner all information, data and documents requested
by FBA for filing with any regulatory authority or otherwise required to effect
the transactions contemplated by this Agreement and shall join with FBA and/or
Newco in making any application with respect to which FBA determines it is
necessary or desirable for Bancorp to do so.
Section 4.05. Environmental Reports. Empire and Bancorp shall provide
to FBA, as soon as reasonably practical, but not later than forty-five (45) days
after the date hereof, a report of a phase one environmental investigation on
all real property owned, leased or operated by Bancorp or any Bancorp Subsidiary
<PAGE>
as of the date hereof (other than space in retail and similar establishments
leased by Bancorp for automatic teller machines), and within ten (10) days after
the acquisition or lease of any real property acquired or leased by Bancorp or
any Bancorp Subsidiary after the date hereof (other than space in retail and
similar establishments leased or operated for automatic teller machines), except
as otherwise provided in Section 4.01(b)(ix). If required by the phase one
investigation, in FBA's reasonable opinion, Bancorp shall obtain and provide to
FBA a report of a phase two investigation on properties requiring such
additional study. FBA shall have fifteen (15) business days from the receipt of
any such phase two report to notify Bancorp of any objection to the contents of
such report. Should the cost of taking all remedial and corrective actions and
measures (i) required by applicable law or (ii) recommended or suggested by such
report or prudent in light of serious life, health or safety concerns, in the
aggregate, exceed the sum of $100,000 as reasonably estimated by an
environmental expert retained for such purpose by FBA and reasonably acceptable
to Bancorp, or if the cost of such actions and measures cannot be so reasonably
estimated by such expert to be $100,000 or less with a reasonable degree of
certainty, then FBA shall have the right pursuant to Section 7.05 hereof, for a
period of ten (10) business days following receipt of such estimate or
indication that the cost of such actions and measures can not be so reasonably
estimated, to terminate this Agreement, which shall be FBA's sole remedy in such
event.
Section 4.06. Access to Information. Bancorp shall permit FBA
reasonable access, in a manner which will avoid undue disruption or interference
with Bancorp's normal operations to its properties and shall cause the Bancorp
Subsidiaries to provide to FBA comparable access to their properties, and
Bancorp shall disclose and make available to FBA all books, documents, papers
and records relating to the assets, stock ownership, properties, operations,
obligations and liabilities of Bancorp and the Bancorp Subsidiaries including,
but not limited to, all books of account (including the general ledger), tax
records, minute books of directors' and shareholders' meetings, organizational
documents, material contracts and agreements, loan files, filings with any
regulatory authority, accountants' workpapers (if available and subject to the
respective independent accountants' consent), litigation files, plans affecting
employees, and any other business activities or prospects in which FBA may have
a reasonable and legitimate interest in furtherance of the transactions
contemplated by this Agreement. FBA will comply with the Confidentiality
Agreement dated June 8, 1998, by and between Bancorp and FBA, in connection with
information made available to FBA pursuant to this Section 4.06.
Section 4.07. Consents to Contracts and Leases. Bancorp shall obtain
all necessary consents with respect to all interests of Bancorp and the Bancorp
Subsidiaries in any leases, licenses, contracts, instruments and rights which
require the consent of another person for the Merger.
Section 4.08. Subsequent Financial Statements. As soon as available
after the date hereof, Bancorp shall deliver to FBA the monthly unaudited
consolidated balance sheets and profit and loss statements of Bancorp prepared
for its internal use, its Report of Condition and Income for each quarterly
<PAGE>
period completed prior to the Closing, and all other financial reports or
statements submitted to regulatory authorities after the date hereof, to the
extent permitted by law (collectively, the "Subsequent Bancorp Financial
Statements"). The Subsequent Bancorp Financial Statements shall be prepared on a
basis consistent with past accounting practices and generally accepted
accounting principles consistently applied, shall fairly present the financial
condition and results of operations for the dates and periods presented, and
shall not include any material assets or omit to state any material liabilities,
absolute or contingent, or other facts, which inclusion or omission would render
such financial statements misleading in any material respect.
Section 4.09. Merger Agreement. Promptly following the satisfaction or
waiver by Empire and Bancorp of all of the conditions set forth in Section 6.02,
Bancorp will enter into the Merger Agreement (as amended, if necessary, to
conform to any requirements imposed by any regulatory authority having
jurisdiction over the Merger) and perform its obligations thereunder.
Section 4.10. Notice of Material Events. Empire and Bancorp shall
promptly notify FBA of the occurrence of any matter or event known to and
directly involving Empire, Bancorp or any Bancorp Subsidiary that is materially
adverse to the business, operations, properties, assets or condition (financial
or otherwise) of Bancorp and the Bancorp Subsidiaries, taken as a whole.
Section 4.11. Intentional Breach; Violation of Law. Neither Empire nor
Bancorp shall (i) intentionally commit any act or fail to do any act which will
cause a breach of any agreement, contract or commitment and which will have a
material adverse effect on the ability of Empire or Bancorp to perform its
obligations under this Agreement, or (ii) knowingly violate any law, statute,
rule, governmental regulation or order, which violation would have a material
adverse effect on the ability of Empire or Bancorp to perform its obligations
under this Agreement.
ARTICLE V
AGREEMENTS OF FBA
Section 5.01. Regulatory Approvals. FBA shall file all regulatory
applications required in order to consummate the Merger, including but not
limited to the necessary applications for the prior approval of the Federal
Reserve Board, use its best efforts to obtain all necessary approvals and
authorizations required to consummate the transactions contemplated by this
Agreement, keep Empire and Bancorp reasonably informed as to the status of such
applications and make available to Empire and Bancorp, upon reasonable request
by Bancorp from time to time, copies of such applications and any supplementally
filed materials. FBA shall file a draft application with the Federal Reserve
Bank of St. Louis no later than 45 days after the date of this Agreement.
Section 5.02. Breaches. FBA shall, in the event it has knowledge of the
occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused or constituted a
breach had such event occurred or been known prior to the date hereof) of any of
<PAGE>
its representations or agreements contained or referred to herein, give prompt
written notice thereof to Empire and Bancorp and use its best efforts to prevent
or promptly remedy the same.
Section 5.03. Consummation of Agreement. FBA shall perform and fulfill
all conditions and obligations on its part to be performed or fulfilled under
this Agreement and to cause the Merger to be consummated as expeditiously as
reasonably practicable.
Section 5.04. Indemnification. At the Closing, FBA, Newco, Empire and
Bancorp shall execute and deliver an indemnification agreement providing for
Newco and FBA to indemnify the present and former officers, directors, employees
and agents of Bancorp and the Bancorp Subsidiaries against losses, subject to
limitations agreed to by FBA, Newco, Empire and Bancorp.
Section 5.05. Separate Corporate Existence of Redwood. For a period of
not less than three (3) years following the Closing, FBA will cause Redwood to
retain its charter to engage in the banking business and, except in a
transaction in which Redwood is the surviving entity, FBA will not cause or
permit Redwood to enter into a merger, reorganization, consolidation or other
similar transaction. During such three year period, FBA will cause Redwood to
have seven (7) directors, of whom three will be elected after having been
designated by the chief executive officer of Redwood (subject to FBA's
approval), three will be designated by FBA, and one will be elected after the
chief executive officer of Redwood has been given the opportunity to suggest an
appropriate candidate.
Section 5.06. Employment Agreements. At the Closing, FBA will cause
Redwood to enter into employment agreements with each of Messrs. Anthony S. Dee
and David T. Currie and Ms. Susan Chase, in the form previously agreed to by FBA
and Bancorp.
Section 5.07. Employee Benefits. FBA shall provide the benefits
described in this Section 5.07 with respect to each person who remains an
employee of Bancorp or any Bancorp Subsidiary following the Closing Date (each a
"Continued Employee"). Subject to FBA's ongoing right to adopt subsequent
amendments or modifications of any plan referred to in this Section 5.07 or to
terminate any such plan, in FBA's sole discretion, each Continued Employee shall
be entitled, as a new employee of a subsidiary of FBA, to participate in such
employee benefit plans, as defined in Section 3(3) of ERISA, or any
non-qualified employee benefit plans or deferred compensation, stock option,
bonus or incentive plans, or other employee benefit or fringe benefit programs
as may be in effect generally for employees of all of FBA's subsidiaries (the
"FBA Plans"), if and as a Continued Employee shall be eligible and, if required,
selected for participation therein under the terms thereof and otherwise shall
not be participating in a similar plan which is maintained by Bancorp or a
Bancorp Subsidiary after the Effective Time. Bancorp employees shall participate
therein on the same basis as similarly situated employees of other subsidiaries
of FBA. All such participation shall be subject to the terms of such plans as
may be in effect from time to time, and this Section 5.07 is not intended to
<PAGE>
give Continued Employees any rights or privileges superior to those of other
employees of subsidiaries of FBA. FBA may terminate or modify all Employee
Plans, and FBA's obligation under this Section 5.07 shall not be deemed or
construed so as to provide duplication of similar benefits but, subject to that
qualification, FBA shall credit each Continued Employee with his or her term of
service with Bancorp and the Bancorp Subsidiaries, for purposes of vesting and
any age or period of service requirements for commencement of participation with
respect to any FBA Plan in which Continued Employees may participate.
Section 5.08. Merger Agreement. Promptly following the satisfaction or
waiver by FBA of all of the conditions set forth in Section 6.01, FBA will cause
Newco to enter into the Merger Agreement (as amended, if necessary, to conform
to any requirements imposed by any regulatory authority having jurisdiction over
the Merger) and to perform its obligations thereunder.
Section 5.09. Notice of Material Events. FBA shall promptly notify
Empire and Bancorp of the occurrence of any matter or event known to and
directly involving FBA or any FBA Subsidiary that is materially adverse to the
business, operations, properties, assets or condition (financial or otherwise)
of FBA and the FBA Subsidiaries, taken as a whole.
Section 5.10. Intentional Breach; Violation of Law. FBA shall not (i)
intentionally commit any act or fail to do any act which will cause a breach of
any agreement, contract or commitment and which will have a material adverse
effect on the ability of FBA to perform its obligations under this Agreement, or
(ii) knowingly violate any law, statute, rule, governmental regulation or order,
which violation would have a material adverse effect on the ability of FBA to
perform its obligations under this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
6.01.....Conditions to the Obligations of FBA. FBA's obligations to
effect the Merger and the other transactions contemplated by this Agreement
shall be subject to the satisfaction (or waiver by FBA) prior to or on the
Closing Date of the following conditions:
(a) the representations and warranties made by Empire and Bancorp in
this Agreement shall be true in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had been
made or given on and as of the Closing Date;
(b) Empire and Bancorp shall have performed and complied in all
material respects with all of their obligations and agreements required to be
performed prior to the Closing Date;
(c) no temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other legal
<PAGE>
restraint or prohibition preventing the consummation of the Merger shall be in
effect, nor shall any proceeding by any regulatory authority or other person
seeking any of the foregoing be pending. There shall not be any action taken, or
any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger which makes the consummation of the Merger illegal;
(d) all necessary approvals, consents and authorizations required by
law for consummation of the Merger, including all legally required regulatory
approvals, shall have been obtained, and all waiting periods required by law
shall have expired;
(e) FBA shall have received the environmental reports required by
Section 4.05 hereof and shall not have elected pursuant to Section 7.05 hereof
to terminate this Agreement;
(f) FBA shall have received all documents required to be received from
Empire and Bancorp on or prior to the Closing Date, all in form and substance
reasonably satisfactory to FBA;
(g) the Bancorp Financial Statements and the Subsequent Bancorp
Financial Statements shall not be inaccurate in any material respect; and
(h) the matters referred to in Section 2.01 of the Bancorp Disclosure
Schedule shall have been resolved to FBA's reasonable satisfaction.
Section 6.02. Conditions to the Obligations of Empire and Bancorp. The
obligations of Empire and Bancorp to effect the Merger and the other
transactions contemplated by this Agreement shall be subject to the satisfaction
(or waiver by Empire and Bancorp) prior to or on the Closing Date of the
following conditions:
(a) the representations and warranties made by FBA in this Agreement
shall be true in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made or given
on the Closing Date;
(b) FBA shall have performed and complied in all material respects with
all of its obligations and agreements hereunder required to be performed prior
to the Closing Date;
(c) no temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger shall be in
effect, nor shall any proceeding by any bank regulatory authority or other
person seeking any of the foregoing be pending. There shall not be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the Merger which makes the consummation of the Merger or
the other transactions contemplated hereby illegal;
<PAGE>
(d) all necessary approvals, consents and authorizations required by
law for consummation of the Merger, including the requisite approval of the
shareholders of Bancorp and all legally required regulatory approvals, shall
have been obtained, and all waiting periods required by law shall have expired;
and
(e) Empire and Bancorp shall have received all documents required to be
received from FBA on or prior to the Closing Date, all in form and substance
reasonably satisfactory to Empire and Bancorp;
(f) FBA shall have received written notice on or before February 15,
1999 from the Federal Reserve Bank of St. Louis that FBA's application for
approval to acquire control of Bancorp and the Bancorp Subsidiaries has been
accepted for filing by such Federal Reserve Bank;
(g) No litigation, proceeding or investigation (other than as
contemplated by the regulatory approval process) shall be pending or threatened
before any governmental agency with respect to the transactions contemplated by
this Agreement which, if decided adversely, would have a material adverse effect
upon the economic benefits to be received by Empire upon the Closing of the
transactions; and
(h) Empire and Redwood shall have entered into the indemnification
agreement contemplated by Section 5.04 hereof.
ARTICLE VII
TERMINATION
Section 7.01. Mutual Agreement. This Agreement may be terminated by the
mutual written agreement of the parties at any time prior to the Closing Date,
regardless of whether approval of this Agreement and the Merger by the
shareholders of Bancorp or FBA shall have been previously obtained.
Section 7.02. Breach of Agreements. In the event that there is a
material breach of any of the representations and warranties or agreements of
FBA, on the one hand, or Empire or Bancorp, on the other hand, which breach is
not cured within thirty (30) days after notice to cure such breach is given to
the breaching party by the non-breaching party, then the non-breaching party,
regardless of whether any approval of the transactions contemplated by this
Agreement shall have been previously obtained, may terminate and cancel this
Agreement by providing written notice of such action to the other parties
hereto.
Section 7.03. Failure of Conditions. In the event that any of the
conditions to the obligations of a party are not satisfied or waived on or prior
to the Closing Date, and if any applicable cure period provided in Section 7.02
hereof has lapsed, then such party may terminate and cancel this Agreement by
delivery of written notice of such action to the other parties.
<PAGE>
Section 7.04. Denial of Regulatory Approval. If any regulatory
application filed pursuant to Section 5.01 hereof should be finally denied or
disapproved by a regulatory authority, then this Agreement thereupon shall be
deemed terminated and canceled; provided, however, that a request for additional
information or undertaking by FBA, as a condition for approval, shall not be
deemed to be a denial or disapproval so long as FBA diligently provides the
requested information or undertaking. In the event an application is denied
pending an appeal, petition for review or similar such act on the part of FBA
(hereinafter referred to as the "Appeal") then the application will be deemed
denied unless FBA prepares and timely files an Appeal and continues the
appellate process for purposes of obtaining the necessary approval.
Section 7.05. Environmental Reports. FBA may terminate this Agreement
to the extent provided in Section 4.05 by giving written notice of such
termination to Empire and Bancorp.
Section 7.06. Regulatory Enforcement Matters. In the event that Bancorp
or any Bancorp Subsidiary shall become a party or subject to any new or amended
written agreement, memorandum of understanding, cease and desist order,
imposition of civil money penalties or other regulatory enforcement action or
proceeding with any regulatory authority after the date of this Agreement, then
FBA may terminate this Agreement by giving written notice of such termination to
Bancorp.
Section 7.07. Unilateral Termination. If the Closing Date does not
occur on or prior to April 30, 1999, then this Agreement may be terminated by
any party by giving written notice to the other parties.
Section 7.08. Damages; Remedies Cumulative. (a) In the event that this
Agreement is terminated by a party or the Merger is abandoned pursuant to
Section 7.02 hereof by a party on account of a material breach of any of the
representations or warranties or a material breach of any of the agreements of
the other party hereto, then the non-breaching party shall be entitled to
institute an action for appropriate damages against the breaching party.
(b) The remedy provided in subsection (a) shall be cumulative of any
other remedy available to a non-breaching party, including without limitation
any remedy available pursuant to the Deposit Agreement.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01 Confidential Information. The parties acknowledge the
confidential and proprietary nature of the "Information" (as herein defined)
which has heretofore been exchanged and which will be received from each other
hereunder and agree to hold and keep the same confidential. Such Information
will include any and all financial, technical, commercial, marketing, customer
or other information concerning the business, operations and affairs of a party
<PAGE>
that may be provided to the others, irrespective of the form of the
communications, by such party's employees or agents. Such Information shall not
include information which is or becomes generally available to the public other
than as a result of a disclosure by a party or its representatives in violation
of this Agreement. The parties agree that the Information will be used solely
for the purposes contemplated by this Agreement and that such Information will
not be disclosed to any person other than employees and agents of a party who
are directly involved in implementing the Merger, who shall be informed of the
confidential nature of the Information and directed individually to abide by the
restrictions set forth in this Section 8.01. The Information shall not be used
in any way detrimental to a party, including use directly or indirectly in the
conduct of the other party's business or any business or enterprise in which
such party may have an interest, now or in the future, and whether or not now in
competition with such other party. Neither Bancorp nor any person to whom it
discloses Information shall purchase or sell any security issued by FBA for so
long as this Agreement remains in effect.
Section 8.02. Publicity. FBA and Bancorp shall cooperate with each
other in the development and distribution of all news releases and other public
disclosures concerning this Agreement and the Merger. Neither party shall issue
any news release or make any other public disclosure without the prior written
consent of the other party, unless such is required by law upon the written
advice of counsel or is in response to published newspaper or other mass media
reports regarding the transaction contemplated hereby, in which latter event the
parties shall consult with each other to the extent practicable regarding such
responsive public disclosure.
Section 8.03. Return of Documents. Upon termination of this Agreement
without the Merger becoming effective, each party shall deliver to the others
originals and all copies of all Information made available to such party and
will not retain any copies, extracts or other reproductions, in whole or in
part, of such Information.
Section 8.04. Notices. Any notice or other communication shall be in
writing and shall be deemed to have been given or made on the date of delivery,
in the case of hand delivery, or three (3) business days after deposit in the
United States Registered Mail, postage prepaid, or upon receipt if transmitted
by facsimile telecopy or any other means, addressed (in any case) as follows:
(a) if to FBA: First Banks America, Inc.
11901 Olive Boulevard
Creve Coeur, Missouri 63141
Attention: Mr. Allen H. Blake
Facsimile: (314) 567-3490
with a copy to: John S. Daniels
Attorney at Law
8117 Preston Road, Suite 800
Dallas, Texas 75225
Facsimile: (214) 692-0508
<PAGE>
(b) if to Empire: Empire Holdings, Inc.
c/o Mr. Anthony S. Dee, President
and Chief Executive Officer
Redwood Bank
735 Montgomery Street
San Francisco, California 94111
Facsimile: (415) 788-0174
with a copy to: Kerry C. Smith, Esq.
Hovis, Smith, et al.
100 Pine Street, 21st Floor
San Francisco, California 94111
Facsimile: (415) 421-0320
(c) if to Bancorp: Redwood Bancorp
c/o Mr. Anthony S. Dee, President
and Chief Executive Officer
Redwood Bank
735 Montgomery Street
San Francisco, California 94111
Facsimile: (415) 788-0174
with a copy to: Kerry C. Smith, Esq.
Hovis, Smith, et al.
100 Pine Street, 21st Floor
San Francisco, California 94111
Facsimile: (415) 421-0320
or to such other address as any party may from time to time designate by notice
to the others.
Section 8.05. Non-survival of Representations, Warranties and
Agreements. Except for the agreements set forth in Sections 5.04, 5.05, 5.06 and
5.07, no representation, warranty or agreement contained herein shall survive
the Closing. In the event that this Agreement is terminated prior to Closing,
the representations, warranties and agreements set forth herein shall survive
such termination.
Section 8.06. Costs and Expenses. Except as may be otherwise provided
herein, each party shall pay its own costs and expenses incurred in connection
with this Agreement and the matters contemplated hereby, including without
limitation all fees and expenses of attorneys, accountants, brokers, financial
advisors and other professionals.
Section 8.07. Entire Agreement. This Agreement, together with the
Merger Agreement, the Proxy and the Deposit Agreement, constitutes the entire
agreement among the parties and supersedes and cancels any and all prior
discussions, negotiations, undertakings, agreements in principle and other
agreements among the parties relating to the subject matter hereof.
<PAGE>
Section 8.08. Headings and Captions. The captions of Articles and
Sections hereof are for convenience only and shall not control or affect the
meaning or construction of any of the provisions of this Agreement.
Section 8.09. Waiver, Amendment or Modification. The conditions of this
Agreement which may be waived may only be waived by written notice delivered to
the other parties. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. This Agreement may not be amended or modified
except by a written document duly executed by the parties hereto.
Section 8.10. Rules of Construction. Unless the context otherwise
requires: (a) a term has the meaning assigned to it; (b) an accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles; (c) "or" is not exclusive; and (d) words in the
singular may include the plural and in the plural include the singular.
Section 8.11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which shall
be deemed one and the same instrument.
Section 8.12. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. There shall be no third party beneficiaries hereof.
Section 8.13. Governing Law. This Agreement shall be governed by the
laws of the State of California, the general corporate laws of the State of
Delaware applicable to FBA and any applicable federal laws and regulations.
Section 8.14. Consent Not Unreasonably Withheld. If any party to this
Agreement is requested to consent to a proposed action of another party, the
party whose consent is requested will not withhold such consent unreasonably.
<PAGE>
IN WITNESS WHEREOF, FBA, Empire and Bancorp have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
FIRST BANKS AMERICA, INC.
By: /s/Allen H. Blake
----------------------
Allen H. Blake
Vice President
EMPIRE HOLDINGS, INC.
By: /s/Philip T. Ang
---------------------
Philip T. Ang
Chairman
REDWOOD BANCORP
By: /s/Anthony S. Dee
----------------------
Anthony S. Dee
President and Chief Executive Officer
<PAGE>
EXHIBIT A
AGREEMENT OF MERGER
This Agreement of Merger is entered into between Redwood Acquisition
Company, a corporation ("Merging Corporation"), and Redwood Bancorp, a
California corporation ("Surviving Corporation").
1.......Merging Corporation shall be merged into Surviving Corporation.
2.......Each outstanding share of common stock of Merging Corporation
shall be converted into one share of common stock of Surviving Corporation.
3........The shares of Surviving Corporation outstanding prior to the
merger shall be converted into the right to receive cash consideration equal to
$ per share from the parent company of Merging Corporation, First Banks America,
Inc., a Delaware corporation. The Articles of Incorporation and Bylaws of
Surviving Corporation immediately following the merger shall be as set forth on
Exhibits A and B attached hereto, and the officers and directors of Surviving
Corporation shall be the persons who are its officers and directors immediately
prior to the merger.
4........Merging Corporation shall from time to time, as and when
requested by Surviving Corporation, execute and deliver all such documents and
instruments and take all such action as is necessary or desirable to evidence or
carry out the merger.
5........The effect of the merger and the effective date of the merger
are as prescribed by law.
In Witness Whereof, the parties have executed this Agreement as of,
1998.
REDWOOD ACQUISITION COMPANY REDWOOD BANCORP
- ------------------- -------------------
- ------------------- -------------------
President President
- ------------------- ------------------
- ------------------- ------------------
Secretary Secretary
<PAGE>
Exhibit 99
----------
Press Release
First Banks America, Inc. Redwood Bancorp, Inc.
St. Louis, Missouri San Francisco, California
Contact: Allen H. Blake Anthony S. Dee
Vice President and Chief President and Chief
Financial Officer Executive Officer
314) 995-8700 (415) 788-3700
Traded: NYSE
Symbol: FBA
FOR IMMEDIATE RELEASE:
First Banks America, Inc. and
Redwood Bancorp Announce Execution of
Acquisition Agreement
St. Louis, Missouri, September 9, 1998. James F. Dierberg, Chairman, President
and Chief Executive Officer of First Banks America, Inc. (FBA), and Anthony S.
Dee, President and Chief Executive Officer of Redwood Bancorp (Redwood), jointly
announced the execution of an agreement providing for the acquisition of
Redwood, and its wholly owned subsidiary Redwood Bank, by FBA.
As previously announced on June 8, 1998, the agreement provides for the
shareholders of Redwood to receive $26.0 million in the transaction. The
acquisition, which is subject to regulatory approvals, is expected to be
completed during the fourth quarter of 1998.
