Securities and Exchange Commission
Washington, D.C. 20549
Schedule 14D-1
Tender Offer Statement
(Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934)
FIRST BANKS AMERICA, INC.
-------------------------
(Name of Subject Company)
FIRST BANKS, INC.
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(Bidder)
Common Stock
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(Title of Class of Securities)
31928N-10-3
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(CUSIP Number of Class of Securities)
Allen H. Blake
Chief Operating Officer Copies to:
First Banks, Inc.
11901 Olive Boulevard John S. Daniels
Creve Coeur, Missouri 63141 Attorney at Law
(314) 692-6317 7502 Greenville Avenue, Suite 500
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(Name, Address and Telephone Number Dallas, Texas 75231
of Person Authorized to Receive Notices (214) 890-4002
and Communications on Behalf of Person(s)
Filing Statement)
January 4, 1999
---------------
(Date Tender Offer First Published, Sent or
Given to Security Holders)
Calculation of Filing Fee
Transaction Valuation* Amount of Filing Fee
$8,400,000.00 $1,680.00
*Calculated solely for the purpose of determining the filing fee, based on the
purchase of 400,000 shares of common stock at a price of $21.00 per share.
[ ] Check box if any part of the fee if offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid: Not applicable
Form or Registration No: Not applicable
Filing Party: Not applicable
Date Filed: Not applicable
<PAGE>
Item 1. Security and Subject Company.
(a) The name of the subject company is First Banks America, Inc.
("FBA"), and the address of its principal executive office is 135 North
Meramec, St. Louis, Missouri 63105.
(b) The information set forth in the Introduction to and in
Sections 1 and 9 of the Offer to Purchase is hereby incorporated by
reference.
(c) The information set forth in Section 7 of the Offer to
Purchase is hereby incorporated by reference.
Item 2. Identity and Background.
(a)-(d), (g) This statement is being filed by the Offeror. The address
of its principal executive office is 135 North Meramec, St. Louis,
Missouri 63105. The Offeror, a Missouri corporation, is a bank holding
company; the nature of the affiliation between FBA and the Offeror is
described in Sections 2 and 9 of the Offer to Purchase and is hereby
incorporated by reference.
The information concerning the name, business address, present
principal occupation or employment, material occupations, positions,
offices or employment during the last five years and citizenship of
each of the executive officers and directors of the Offeror is set
forth in Appendix 1 to this Schedule 14D-1 and is incorporated herein
by reference.
(e), (f) During the last five years, neither Offeror nor, to Offeror's
knowledge, any director, executive officer or person controlling the
Offeror has been (i) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or
finding any violations of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a) The information set forth in Section 9 of the Offer to Purchase is
hereby incorporated by reference.
(b) Not applicable.
Item 4. Source and Amount of Funds or Other Consideration.
The information set forth in Section 8 of the Offer to Purchase is
hereby incorporated by reference.
<PAGE>
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a-g) The information set forth in Section 2 of the Offer to Purchase
is hereby incorporated by reference.
Item 6. Interest in Securities of the Issuer.
The information set forth in the Introduction to and in Sections 2 and
10 of the Offer to Purchase and in Schedule A thereto is hereby
incorporated by reference.
Item 7. Contracts, Arrangements, Undertakings or Relationships With Respect to
the Subject Company's Securities.
The information set forth in Section 10 of the Offer to Purchase is
hereby incorporated by reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth in Section 15 of the Offer to Purchase is
hereby incorporated by reference.
Item 9. Financial Statements of Certain Bidders.
Not applicable.
Item 10. Additional information.
(a) None.
(b) The information set forth in Section 12 of the Offer to Purchase
is hereby incorporated by reference.
(c) Not applicable.
(d) The information set forth in Section 11 of the Offer to Purchase
is hereby incorporated by reference.
(e) None.
Item 11. Material to be filed as Exhibits.
(a)(1) Form of Offer to Purchase dated January 4, 1999.
(a)(2) Form of Letter of Transmittal, together with Guidelines for
Certification of Taxpayer Identification Number on Substitute
Form W-9.
(a)(3) Form of Notice of Guaranteed Delivery.
<PAGE>
(a)(4) Form of letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees.
(a)(5) Form of letter to FBA stockholders from James F. Dierberg,
Chief Executive Officer of the Offeror.
(a)(6) Form of Press Release issued by the Offeror.
(b)(1) Secured Credit Agreement, dated August 26, 1998, among First
Banks, Inc. and a group of unaffiliated banks.
(c) Not Applicable.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: January 4, 1999 FIRST BANKS, INC.
/s/James F. Dierberg
James F. Dierberg
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
EXHIBIT INDEX
(a)(1) Form of Offer to Purchase dated January 4, 1999.
(a)(2) Form of Letter of Transmittal, together with Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees.
(a)(5) Form of letter to stockholders from James F. Dierberg, Chief
Executive Officer of the Offeror.
(a)(6) Form of Press Release issued by the Offeror.
(b)(1) Secured Credit Agreement, dated August 26, 1998, among First
Banks, Inc. and a group of unaffiliated banks.
<PAGE>
APPENDIX 1
Directors and Executive Officers of First Banks, Inc.
The directors and executive officers of First Banks, Inc. and their positions
with First Banks, Inc. and its subsidiary banks and other subsidiaries are
set forth below:
James F. Dierberg Chairman of the Board of Directors,
President and Chief Executive Officer of
First Banks, Inc. and First Banks America,
Inc.; Director of CCB Bancorp, Inc.; and
Trustee of First Preferred Capital Trust;and
First America Capital Trust.
Allen H. Blake Executive Vice President, Chief
Operating Officer, Chief Financial Officer,
Secretary and Director of First Banks, Inc.;
Secretary and Director of First Bank;
Executive Vice President, Chief Operating
Officer, Chief Financial Officer, Secretary
and Director of First Banks America, Inc.;
Vice President and Assistant Secretary of
First Bank & Trust and First Bank of
California; and Trustee of First Preferred
Capital Trust and First America Capital
Trust.
Donald Gunn, Jr. Director of First Banks, Inc.
George J. Markos Director of First Banks, Inc.
Thomas A. Bangert Senior Vice President and Chief Operations
Officer of First Banks, Inc.; and Executive
Vice President and Director of First Bank.
Laurence J. Brost Senior Vice President and Controller
of First Banks, Inc.; Vice President,
Chief Accounting Officer of First Bank; and
Trustee of First Preferred Capital Trust and
First America Capital Trust.
John A. Schreiber Executive Vice President and Chief Lending
Officer of First Banks, Inc.; and Chairman
of the Board of Directors, President and
Chief Executive Officer of First Bank.
Mark T. Turkcan Executive Vice President, Mortgage and
Consumer Banking, of First Banks, Inc.;
and Director of First Bank.
<PAGE>
Donald W. Williams Executive Vice President and Chief Credit
Officer of First Banks, Inc.; Senior Vice
President and Director of First Bank;
Director of First Banks America, Inc.,First
Bank Texas N.A., First Bank & Trust and
First Bank of California.
James F. Dierberg is the Chairman of the Board of Directors and Chief Executive
Officer of First Banks, Inc.; positions he has held since 1988. He has also
served as a Director of First Banks, Inc. since 1979. Mr. Dierberg was President
of First Banks, Inc. from 1979 until February 1992; he was re-appointed
President in 1994 and continues to serve in that capacity. Mr. Dierberg was
appointed Chairman of the Board, President, and Chief Executive Officer of First
Banks America, Inc. in 1994. Mr. Dierberg has served in various capacities with
other bank holding companies and banks owned or controlled by him or members of
his family since 1957. In addition, Mr. Dierberg serves as a trustee of First
Preferred Capital Trust and First America Capital Trust. Mr. Dierberg's business
address is 135 North Meramec, Clayton, MO 63105.
Allen H. Blake has been an Executive Vice President of First Banks, Inc. since
1996, and was appointed Chief Operating Officer of First Banks, Inc. in October
1998. Mr. Blake joined First Banks, Inc. as Vice President and Chief Financial
Officer in 1984, and in 1988 was appointed as Secretary and Director of First
Banks, Inc. In addition, Mr. Blake was appointed Executive Vice President and
Chief Operating Officer of First Banks America, Inc. in October 1998 and has
served as Chief Financial Officer, Secretary and Director of First Banks
America, Inc. since 1994, and also serves as a trustee of First Preferred
Capital Trust and First America Captital Trust. Mr. Blake's business address is
11901 Olive Boulevard, Creve Coeur, MO 63141.
Donald Gunn, Jr. was elected a Director of First Banks, Inc. in 1992. Mr. Gunn
is a practicing attorney and has been a shareholder in the law firm of Gunn &
Gunn, P.C. during the past five years. Mr. Gunn's business address is 11901
Olive Boulevard., Creve Coeur, MO 63141.
George J. Markos was elected a Director of First Banks, Inc. in 1992. Mr. Markos
is a management consultant providing services primarily to banks, savings and
loans and related businesses, including First Banks, Inc., through his company,
Profit Management Systems, and has performed such services during the past five
years. Mr. Markos' business address is 1595 North Central Expressway,
Richardson, TX 75080.
Thomas A. Bangert is Senior Vice President and Chief Operations Officer of First
Banks, Inc., Executive Vice President and Director of First Bank, positions he
assumed in 1990. Mr. Bangert is also a Director of First Land Trustee
Corporation, a position he assumed during 1997. Mr. Bangert's business address
is #1 First Missouri Center, Creve Coeur, MO 63141.
Laurence J. Brost has been Senior Vice President and Controller of First Banks,
Inc. since 1997. Mr. Brost assumed the position of Vice President and Controller
of the Company in 1990. Mr. Brost also serves as a trustee of First Preferred
Capital Trust and First America Capital Trust. Mr. Brost's business address is
11901 Olive Boulevard, Creve Coeur, MO 63141.
<PAGE>
John A. Schreiber is Executive Vice President and Chief Lending Officer of First
Banks, Inc. and President and Chief Executive Officer of First Bank, positions
he assumed in 1996 and 1992, respectively. In 1994, he became Chairman of the
Board of Directors of First Bank. Mr. Schreiber's business address is 11901
Olive Boulevard, Creve Coeur, MO 63141.
Mark T. Turkcan is Executive Vice President, Mortgage and Consumer Banking, of
First Banks, Inc., positions he assumed in April 1996. Mr. Turkcan has been
employed in various executive capacities with First Banks, Inc. since 1985. Mr.
Turkcan is also a Director of First Bank, a position he has held since 1994. Mr.
Turkcan's business address is 135 North Meramec, Clayton, MO 63105.
Donald W. Williams is Executive Vice President and Chief Credit Officer of First
Banks, Inc. and a Senior Vice President and Director of First Bank, positions he
assumed in 1993. Mr. Williams also serves as a Director of First Banks America,
Inc., First Bank Texas N.A., First Bank & Trust and First Bank of California.
Mr. Williams' business address is 135 North Meramec, Clayton, MO 63105.
<PAGE>
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
UP TO 400,000 SHARES OF COMMON STOCK
OF FIRST BANKS AMERICA, INC.
BY FIRST BANKS, INC.
AT A PURCHASE PRICE NOT IN EXCESS OF $21.00
NOR LESS THAN $16.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M. NEW YORK CITY TIME ON WEDNESDAY, FEBRUARY 3, 1999,
UNLESS THE OFFER IS EXTENDED.
First Banks, Inc., a Missouri corporation (the "Offeror"), invites the
stockholders of the Offeror's majority-owned subsidiary, First Banks America,
Inc., a Delaware corporation ("FBA"), to tender shares of FBA's $.15 par value
Common Stock (the "Shares") to the Offeror at prices not in excess of $21.00 nor
less than $16.50 per Share in cash, specified by such stockholders, upon the
terms and subject to the conditions set forth herein and in the related Letter
of Transmittal, which together constitute the "Offer." The Offeror is the
majority stockholder of FBA; as of December 31, 1998, the Offeror was the owner
of 1,895,894 shares of Common Stock and 2,500,000 shares of Class B Common
Stock, which collectively represented approximately 76.84% of the outstanding
voting stock of FBA. The Offeror's principal purpose in conducting this Offer is
to increase its ownership to more than 80% of the combined outstanding Common
Stock and Class B Common Stock of FBA. See Section 2.
The Offeror will determine the single per Share price, not in excess of
$21.00 nor less than $16.50 per Share, net to the seller in cash (the "Purchase
Price"), that it will pay for Shares properly tendered and not withdrawn
pursuant to the Offer, taking into account the number of Shares tendered and the
prices specified by tendering stockholders. The Offeror will select the lowest
Purchase Price that will allow it to buy 400,000 Shares (or such lesser number
of Shares as are properly tendered at prices not in excess of $21.00 nor less
than $16.50 per Share). All Shares properly tendered at prices at or below the
Purchase Price and not withdrawn will be purchased at the same price, upon the
terms and subject to the conditions of the Offer, including the proration
provisions. All Shares acquired in the Offer will be acquired at the Purchase
Price. The Offeror reserves the right, in its sole discretion, to purchase more
than 400,000 Shares pursuant to the Offer. See Section 14.
The Offer is not conditioned on any minimum number of Shares being
tendered, but it is subject to certain other conditions. See Section 6.
The Shares are listed and traded on the New York Stock Exchange, Inc.
(the "NYSE") under the symbol "FBA." On December 29, 1998, the closing price per
Share of Common Stock as reported on the NYSE Composite Tape was $16.81.
Stockholders are urged to obtain current market quotations for the Shares. See
Section 7.
<PAGE>
Neither FBA nor its Board of Directors makes any recommendation to
stockholders as to whether to tender or refrain from tendering their Shares.
Each stockholder must make the decision whether to tender Shares and, if so, how
many Shares and at what price or prices Shares should be tendered.
IMPORTANT
Any stockholder wishing to tender all or any part of his or her Shares
should either:
(a) Complete and sign a Letter of Transmittal (or a facsimile thereof)
in accordance with the instructions in the Letter of Transmittal;
and (1) either mail or deliver it with any required signature
guarantee and any other required documents to ChaseMellon
Shareholder Services, L.L.C. (the "Depositary"), and either mail
or deliver the stock certificates for such Shares to the
Depositary (with all such other documents); or (2) tender such
Shares pursuant to the procedure for book-entry tender set forth
in Section 3; or
(b) Request a broker, dealer, commercial bank, trust company or other
nominee to deliver certificates on behalf of such stockholder.
Holders of Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee should contact the registered
owner if they desire to tender their Shares. Any stockholder who desires to
tender Shares and whose certificates for such Shares cannot be delivered to the
Depositary, who cannot comply with the procedure for book-entry transfer, or
whose other required documents cannot be delivered to the Depositary, in any
case by the expiration of the Offer, must tender such Shares pursuant to the
guaranteed delivery procedure set forth in Section 3.
To properly tender Shares, stockholders must validly complete the
Letter of Transmittal including the section relating to the price at which they
are tendering Shares.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery (which is included in the materials distributed with this Offer to
Purchase) may be directed to the Information Agent (as defined) at its address
and telephone number set forth on the back cover of this Offer to Purchase.
Additional copies of this Offer to Purchase, the Letter of Transmittal or the
Notice of Guaranteed Delivery may be obtained from the Information Agent.
Neither FBA nor its Board of Directors has authorized any person to
make any recommendation on behalf of FBA or its Board of Directors as to whether
stockholders should tender or refrain from tendering Shares pursuant to the
Offer. Neither the Offeror nor FBA has authorized any person to give any
information or to make any representation in connection with the Offer other
than those contained herein or in the related Letter of Transmittal. If given or
made, any such recommendation or any such information or representation must not
be relied upon as having been authorized by either the Offeror or FBA.
January 4, 1999
<PAGE>
SUMMARY
This general summary is solely for the convenience of FBA's
stockholders and is qualified in its entirety by reference to the full text and
more specific details in this Offer to Purchase. FBA stockholders are strongly
encouraged to review this entire Offer to Purchase.
Purchase Price...................... The Offeror will select a single Purchase
Price for all Shares accepted, which will
be not more than $21.00 nor less than
$16.50 per Share. All Shares purchased
by the Offeror will be purchased at the
Purchase Price even if tendered at or
below the Purchase Price. Each stockholder
desiring to tender Shares must specify
in the Letter of Transmittal the minimum
price (not more than $21.00 nor less than
$16.50 per Share) at which such
stockholder is willing to have his or her
Shares purchased by the Offeror.
Number of Shares to be Purchased.... 400,000 Shares (or such lesser number as
are properly tendered at prices not in
excess of $21.00 nor less than $16.50 per
Share).
How to Tender Shares................ Call the Information Agent, Beacon Hill
Partners, Inc., at (800) 792-2829, or
consult your broker for assistance. See
Section 3.
Brokerage Commissions............... None for registered stockholders who
tender their Shares directly to the
Depositary. Stockholders holding Shares
through brokers or banks are urged to
consult such brokers or banks to determine
whether transaction costs are applicable
if stockholders tender Shares through such
brokers or banks and not directly by the
stockholder to the Depositary.
Stock Transfer Tax.................. None, if payment is made to the
registered holder.
Expiration and Proration Dates...... Wednesday, February 3, 1999, at 5:00 p.m.
New York City time, unless extended by the
Offeror.
Payment Date........................ As soon as practicable after the
termination of the Offer.
<PAGE>
Position of FBA and its Directors... Neither FBA nor it Board of Directors
makes any recommendation to stockholders
as to whether to tender or refrain from
tendering their Shares. Each stockholder
must make the decision whether to tender
Shares and, if so, how many Shares and at
what price or prices Shares should be
tendered.
Withdrawal Rights................... Tendered Shares may be withdrawn at any
time until 5:00 p.m. New York City time,
on Wednesday, February 3, 1999, unless
the Offer is extended by the Offeror
and unless previously accepted for
payment, after 5:00 p.m. New York City
time, on Friday, March 5, 1999. See
Section 4.
Lost or Destroyed Certificates...... Contact the Depositary at (800) 777-3674
immediately for assistance tendering
securities evidenced by lost, destroyed or
misplaced certificates. See Section 3.
<PAGE>
TABLE OF CONTENTS
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PAGE
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INTRODUCTION.......................................................... 1
THE OFFER............................................................. 3
1. Number of Shares; Proration...................................... 3
2. Purpose of the Offer; Certain Effects of the Offer............... 5
3. Procedures for Tendering Shares.................................. 8
4. Withdrawal Rights................................................ 12
5. Purchase of Shares and Payment of Purchase Price................. 13
6. Certain Conditions of the Offer.................................. 14
7. Price Range of Shares; Dividends................................. 16
8. Source and Amount of Funds....................................... 16
9. Certain Information Concerning FBA; Transactions Among FBA,
the Offeror and Affiliates..................................... 17
10. Interests of Directors and Officers; Transactions
and Arrangements Concerning Shares............................. 21
11. Effects of the Offer on the Market for Shares;
Registration, Listing and Other Effects........................ 21
12. Certain Legal Matters; Regulatory Approvals....................... 22
13. Certain United States Federal Income Tax Consequences............. 22
14. Extension of Offer; Termination; Amendment........................ 25
15. Fees and Expenses................................................. 26
16. Miscellaneous..................................................... 27
SCHEDULE A -- Certain Transactions Involving Shares................... 28
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Information appearing in this Offer to Purchase and in documents referred
to herein that are filed with the Securities and Exchange Commission which are
not statements of historical fact may include forward-looking statements. Such
forward-looking statements are subject to certain risks and uncertainties, not
all of which can be predicted or anticipated. Factors that may cause actual
results to differ materially from those contemplated by such forward-looking
statements include general market conditions as well as conditions affecting the
banking industry generally and factors having a specific impact on FBA and/or
the Offeror, including but not limited to fluctuations in interest rates and in
the economy; the impact of laws and regulations applicable to FBA and the
Offeror and changes therein; competitive conditions in the markets in which FBA
and the Offeror conduct their operations; and the ability of FBA and the Offeror
to respond to changes in technology. Readers should therefore not place undue
reliance on forward-looking statements.
<PAGE>
To the Holders of Common Stock of First Banks America, Inc.:
INTRODUCTION
First Banks, Inc., a Missouri corporation (the "Offeror"), invites the
stockholders of First Banks America, Inc., a Delaware corporation ("FBA"), to
tender shares of FBA's $.15 par value Common Stock (the "Shares") to the Offeror
at prices not in excess of $21.00 nor less than $16.50 per Share in cash,
specified by such stockholders upon the terms and subject to the conditions set
forth herein and in the related Letter of Transmittal, which together constitute
the "Offer." The Offeror will determine the single per Share price, not in
excess of $21.00 nor less than $16.50 per Share, net to the seller in cash (the
"Purchase Price"), that it will pay for Shares properly tendered and not
withdrawn pursuant to the Offer, taking into account the number of Shares so
tendered and the prices specified by tendering stockholders. The Offeror will
select the lowest Purchase Price that will allow it to buy 400,000 Shares (or
such lesser number of Shares as are properly tendered at prices not in excess of
$21.00 nor less than $16.50 per Share). Shares properly tendered at prices at or
below the Purchase Price and not withdrawn will be purchased at the Purchase
Price, upon the terms and subject to the conditions of the Offer, including the
proration provisions. All Shares acquired in the Offer will be acquired at the
Purchase Price. The Offeror reserves the right, in its sole discretion, to
purchase more than 400,000 Shares pursuant to the Offer. See Section 14.
The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions. See
Section 6.
Neither FBA nor its Board of Directors makes any recommendation to
stockholders as to whether to tender or refrain from tendering their Shares.
Each stockholder must make the decision whether to tender Shares and, if so, how
many Shares and at what price or prices Shares should be tendered.
The Board of Directors of FBA concluded that the differing circumstances of
stockholders, including individual financial and investment objectives and tax
situations, makes it inadvisable to make a recommendation for all FBA
stockholders. Furthermore, the nature of the Offer, which allows a stockholder
to tender Shares at a price or prices which he or she deems appropriate, will
enable stockholders to consider their individual circumstances in deciding
whether to tender Shares and, if so, in what quantity and at what price(s).
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer more than 400,000 Shares (or such greater number of
Shares as the Offeror may elect to purchase) are properly tendered at or below
the Purchase Price and not withdrawn, the Offeror will buy Shares on a pro rata
basis from all other stockholders who properly tender Shares at prices at or
below the Purchase Price (and do not withdraw them prior to the expiration of
the Offer). The Offeror will return, at its own expense, all Shares not
purchased pursuant to the Offer. See Section 1.
<PAGE>
The Purchase Price will be paid net to the tendering stockholders in cash
for all Shares purchased. Tendering stockholders who are registered holders will
not be obligated to pay brokerage commissions, solicitation fees or, subject to
Instruction 7 of the Letter of Transmittal, stock transfer taxes on the purchase
of Shares by the Offeror. Stockholders holding Shares through brokers or banks
are urged to consult such brokers or banks to determine whether transaction
costs are applicable if stockholders tender Shares through such brokers or banks
and not directly to the Depositary. However, any tendering stockholder or other
payee who fails to complete, sign and return to the Depositary the Substitute
Form W-9 that is included as part of the Letter of Transmittal may be subject to
required United States federal income tax backup withholding of 31% of the gross
proceeds payable to such stockholder or other payee pursuant to the Offer. See
Section 3. The Offeror will pay all fees and expenses of ChaseMellon Shareholder
Services, L.L.P. (the "Depositary") and Beacon Hill Partners, Inc. (the
"Information Agent") incurred in connection with the Offer. See Section 15.
The Offeror's purpose in making the Offer is to increase its ownership of
FBA's voting securities to more than 80% of the total voting securities
outstanding. As of the date hereof, the Offeror owns 1,895,894 Shares and
2,500,000 shares of Class B Common Stock, par value $.15 ("Class B Stock"). The
Class B Stock is a separate class which is held solely by the Offeror; each
share of Class B Stock has the same voting power as a Share, or one vote per
share in the election of directors and in other matters subject to the vote of
stockholders. The Offeror recently increased its ownership of Shares by
converting a debenture previously issued by FBA in connection with FBA's
acquisition of First Commercial Bancorp, Inc. See Section 2 for additional
information regarding the purpose of the Offer.
The Offer provides FBA stockholders who are considering a sale of all or a
portion of their Shares with the opportunity to determine the price or prices
(not in excess of $21.00 nor less than $16.50 per Share) at which they are
willing to sell their Shares and, subject to the terms and conditions of the
Offer, to sell those Shares for cash without the usual transaction costs
associated with market sales, where Shares are tendered by the registered owner
thereof directly to the Depositary. In addition, stockholders owning fewer than
100 Shares whose Shares are purchased pursuant to the Offer and who tender
directly not only will avoid the payment of brokerage commissions but also will
avoid any applicable odd-lot discounts payable on a sale of their Shares in a
NYSE transaction. The Offer also allows stockholders who choose to do so and
tender at a price accepted by the Offeror to sell a portion of their Shares
while retaining a continuing equity interest in FBA.
As of December 31, 1998, FBA had issued and outstanding 3,220,991 Shares
and 2,500,000 shares of Class B Stock. The rights of the holder of Class B Stock
are in most respects equivalent to the rights associated with the Shares, except
that the Shares have a dividend preference over the Class B Stock, are
<PAGE>
unregistered and transferable only in certain limited circumstances. The
outstanding shares of Class B Stock are convertible after August 31, 1999, at
the option of the holder, into an equal number of Shares. Each Share and each
share of Class B Stock is entitled to one vote in the election of directors of
FBA and in other matters on which a vote of stockholders is taken.
In addition to the shares currently outstanding, FBA has reserved (i) 6,667
Shares for issuance upon exercise of options which are outstanding and those
that may be issued pursuant to the BancTEXAS Group Inc. 1990 Stock Option Plan
(the "Option Plan") and (ii) 2,500,000 Shares for issuance upon conversion of
the same number of outstanding shares of Class B Stock. The 400,000 Shares that
the Offeror is offering to purchase pursuant to the Offer represent
approximately 6.99% of FBA's voting stock outstanding on December 31, 1998
(approximately 6.98% assuming issuance of all of the outstanding reserved
shares). The Shares are listed and traded on the NYSE under the symbol "FBA." On
December 29, 1998, the closing price per Share as reported on the NYSE Composite
Tape was $16.81. Stockholders are urged to obtain current market quotations for
the Shares. See Section 7.
THE OFFER
1. Number of Shares; Proration
Upon the terms and subject to the conditions of the Offer, the Offeror will
purchase 400,000 Shares or such lesser number of Shares as are properly tendered
(and not withdrawn in accordance with Section 4) prior to the Expiration Date
(as defined below) at prices not in excess of $21.00 nor less than $16.50 per
Share in cash.
The term "Expiration Date" means 5:00 p.m. New York City time, on
Wednesday, February 3, 1999 unless and until the Offeror, in its sole
discretion, extends the period of time during which the Offer will remain open,
in which event the term "Expiration Date" shall refer to the latest time and
date at which the Offer, as so extended by the Offeror, shall expire. See
Section 14 for a description of the Offeror's right to extend, delay, terminate
or amend the Offer. The Offeror reserves the right to purchase more than 400,000
Shares pursuant to the Offer. In accordance with applicable regulations of the
Securities and Exchange Commission (the "Commission"), the Offeror may purchase
pursuant to the Offer an additional amount of Shares not to exceed 2% of the
outstanding Shares as of the date hereof without amending or extending the
Offer. See Section 14.
In the event of an over-subscription of the Offer as described below,
Shares tendered at or below the Purchase Price prior to the Expiration Date will
be subject to proration. The proration period also expires on the Expiration
Date.
The Offeror will select the lowest Purchase Price that will allow it to buy
400,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $21.00 nor less than $16.50 per Share and not
withdrawn). All Shares properly tendered at prices at or below the Purchase
<PAGE>
Price and not withdrawn will be purchased at the Purchase Price, upon the terms
and subject to the conditions of the Offer, including the proration provisions.
All Shares purchased in the Offer will be purchased at the same Purchase Price.
The Offer is not conditioned on the tender of any minimum number of Shares,
but is subject to certain other conditions. See Section 6.
In accordance with Instruction 5 of the Letter of Transmittal, stockholders
desiring to tender Shares must agree to accept the Purchase Price that results
from the Offer or specify the price, not in excess of $21.00 nor less than
$16.50 per Share, at which they are willing to sell their Shares to the Offeror.
Stockholders may also specify in the Letter of Transmittal the order in which
their Shares are purchased if, due to the proration provisions of the Offer,
some but not all of their Shares are purchased. As promptly as practicable
following the Expiration Date, the Offeror will, in its sole discretion,
determine the Purchase Price that it will pay for Shares properly tendered
pursuant to the Offer and not withdrawn, taking into account the number of
Shares tendered and the prices specified by tendering stockholders. All Shares
tendered and not purchased pursuant to the Offer, including Shares tendered at
prices in excess of the Purchase Price and Shares not purchased because of
proration, will be returned to the tendering stockholders at the Offeror's
expense as promptly as practicable following the Expiration Date.
If the number of Shares validly tendered and not withdrawn on or prior to
the Expiration Date is less than or equal to 400,000 Shares (or such greater
number of shares as the Offeror may elect to purchase pursuant to the Offer),
the Offeror will, upon the terms and subject to the conditions of the Offer,
purchase at the Purchase Price all Shares so tendered.
Priority of Purchases. Upon the terms and subject to the conditions of the
Offer, if more than 400,000 Shares (or such greater number of Shares as the
Offeror may elect to purchase) have been properly tendered at prices at or below
the Purchase Price and not withdrawn prior to the Expiration Date, the Offeror
will purchase Shares properly tendered at prices at or below the Purchase Price
and not withdrawn prior to the Expiration Date, on a pro rata basis (with
appropriate adjustments to avoid purchases of fractional Shares) as described
below.
Proration. In the event that proration of tendered Shares is required, the
Offeror will determine the proration factor as soon as practicable following the
Expiration Date. Proration for each stockholder tendering Shares will be based
on the ratio of the number of Shares properly tendered and not withdrawn by a
stockholder to the total number of Shares properly tendered and not withdrawn by
all stockholders at or below the Purchase Price. Because of the difficulty in
determining the number of Shares properly tendered (including Shares tendered by
guaranteed delivery procedures, as described in Section 3) and not withdrawn,
the Offeror does not expect that it will be able to announce the final proration
factor or commence payment for any Shares purchased pursuant to the Offer until
approximately five NYSE trading days after the Expiration Date. The preliminary
<PAGE>
results of any proration will be announced by press release as promptly as
practicable after the Expiration Date. Stockholders may obtain such preliminary
information from the Information Agent and may be able to obtain such
information from their brokers.
As described in Section 13, the number of Shares that the Offeror will
purchase from a stockholder may affect the United States federal income tax
consequences to the stockholder and, therefore, may be relevant to a
stockholder's decision whether or not to tender Shares.
This Offer to Purchase and the related Letter of Transmittal are being
mailed to record holders of Shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on FBA's
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
2. Purpose of the Offer; Certain Effects of the Offer
The Offer provides stockholders of FBA who are considering a sale of all
or a portion of their Shares with the opportunity to determine the price or
prices (not in excess of $21.00 nor less than $16.50 per Share) at which they
are willing to sell their Shares and, subject to the terms and conditions of the
Offer, to sell those Shares for cash without, where Shares are tendered by the
registered owner thereof directly to the Depositary, the usual transaction costs
associated with market sales. In addition, Odd Lot Holders (the "Odd Lot
Holders") whose shares are purchased pursuant to the Offer not only will avoid
the payment of brokerage commissions but also will avoid any applicable odd lot
discounts payable on a sale of their shares in a NYSE transaction. The Offer
also allows FBA stockholders to sell a portion of their Shares while retaining a
continuing equity interest in FBA.
The Offeror's purpose in making the Offer is to increase its ownership of
FBA's voting securities to more than 80% of the total voting securities
outstanding. The Shares acquired pursuant to the Offer will remain outstanding
and will be held by the Offeror. As of the date hereof, the Offeror owns
1,895,894 Shares and 2,500,000 shares of Class B Stock. The Class B Stock is a
separate class which is held solely by the Offeror; each share of Class B Stock
has the same voting power as a share of Common Stock, or one vote per share in
the election of directors and in other matters subject to the vote of
stockholders. The Offeror recently increased its ownership of Shares by
converting a debenture previously issued by FBA in connection with FBA's
acquisition of First Commercial Bancorp, Inc.
The Offeror's ownership constitutes 76.84% of the total outstanding voting
stock of FBA as of the date hereof. By increasing its ownership percentage to
more than 80%, the Offeror will be able to include FBA and its subsidiaries in
the Offeror's consolidated federal and state income tax reports and returns. In
the past, FBA and its subsidiaries have comprised a separate consolidated group
for federal income tax purposes.
<PAGE>
It is particularly important to the Offeror that, by achieving greater than
80% ownership, the Offeror expects to avoid the negative effects of a financial
reporting requirement of the Financial Accounting Standards Board (the "FASB")
that would, if applicable to the Offeror in 1998 and subsequent years,
materially reduce the Offeror's reported share of FBA's net income.
Specifically, Opinion Number 109 of FASB, relating to accounting for income
taxes, requires a parent corporation (such as the Offeror) owning less than 80%
of the outstanding voting securities of a subsidiary (such as FBA) to provide
for income taxes on the parent's financial statements with respect to its
proportionate share of FBA's net income (after provision for income taxes). This
income tax provision is to be calculated based on the difference between the tax
basis of the parent's investment in the subsidiary and the accounting basis of
that investment. The effect of this requirement on the Offeror's financial
statements would be to reduce its share of the net income of FBA (that is, the
Offeror's percentage ownership interest in FBA's net income) by approximately
35%. However, there should be no difference between the tax basis and the
accounting basis of the Offeror's investment in FBA, once the Offeror reaches
and maintains more than 80% ownership of FBA's voting securities.
The Offeror has determined that, unless it increases its ownership in FBA
to more than 80%, the effects of the FASB opinion would be undesirable, and that
the most effective way to avoid this result is to increase its ownership
percentage in FBA by conducting the Offer. In deciding to conduct the Offer, the
Offeror considered several factors, including its assessment that the recent
market price of the Shares is at a relatively attractive level that would enable
the Offeror to offer a premium over the market price and thereby attract tenders
from a sufficient number of FBA stockholders to reach the intended percentage
ownership.
In order to achieve the desired ownership level, the Offeror must acquire
180,899 or more Shares, and the Offeror intends to acquire a comfortable margin
above the minimum number of Shares needed to reach 80% ownership. In
establishing the price range of the Offer and the maximum number of Shares for
which the Offer is made, the Offeror considered several factors, including the
following:
o Anticipated earnings stream of FBA relative to the offering price range
per share;
o Recent market prices compared with historic and prospective earnings
capacity;
o Number of Shares required to increase the Offeror's ownership
comfortably above 80%, but leaving a sufficient number of Shares in the
market to maintain reasonable liquidity for the remaining stockholders;
<PAGE>
o Probable price necessary to purchase the requisit number of Shares
considering the relatively small trading volume;
o After-tax cost of funds used to acquire the Shares compared with
anticipated earnings on the Shares acquired;
o Price/book and price/earnings ratios compared with other similar
securities available in the market; and,
o Benefits to the Offeror of the elimination of the requirement of
recording a second level of income taxes with respect to its equity in
the income of FBA.
FBA, with the approval of its Board of Directors, has previously
purchased 651,867 Shares, and FBA's Board has authorized the purchase of up to
an additional 165,039 Shares in open market and/or private transactions.
Depending upon future market prices, the availability of funds and other
relevant factors, the Offeror and/or FBA may from time to time engage in
additional purchases of Shares, including open market purchases and private
transactions.
One effect of the financial reporting requirement discussed above and
the Offeror's decision to seek to increase its ownership to more than 80% of
FBA's outstanding voting stock may be to make it less likely that FBA will enter
into transactions, including acquisitions of other banks, in which the
consideration paid is in the form of voting stock of FBA; see Section 11.
Except as disclosed in this Offer to Purchase, the Offeror currently
has no plans or proposals that relate to or would result in:
(a) the acquisition by any person of additional securities of FBA or the
disposition of securities of FBA;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving FBA or any of its
subsidiaries (except that, as previously disclosed, (i) FBA is party
to an agreement whereby it would acquire Redwood Bank, San Francisco,
California, and (ii) FBA has an acquisition program pursuant to which
it may acquire additional financial institutions);
(c) a sale or transfer of a material amount of assets of FBA or any of
its subsidiaries;
(d) any change in the present Board of Directors or management of FBA;
(e) any material change in the present dividend rate o policy,
indebtedness or capitalization of FBA;
(f) any other material change in FBA's corporate structure or business;
<PAGE>
(g) any change in FBA's Certificate of Incorporation or By-Laws or any
actions which may impede the acquisition of control of FBA by any
person;
(h) a class of equity security of FBA being delisted from the NYSE;
(i) a class of equity security of FBA becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the Exchange Act; or
(j) the suspension of FBA's obligation to file report pursuant to
Section 15(d) of the Exchange Act.
In the meeting of the Board of Directors of FBA held on October 30, 1998,
Mr. Mark T. Turkcan tendered his resignation as a Director of FBA, effective as
of January 1, 1999. To serve the unexpired portion of Mr. Turkcan's term, the
Board appointed Mrs. Ellen Schepman. Mrs. Schepman is the daughter of Mr. James
F. Dierberg, Chairman of the Board, Chief Executive Officer and President of the
Offeror and FBA, and Mrs. Mary W. Dierberg. In addition, Mrs. Schepman is a
Trustee of the living trust of Ellen C. Dierberg, dated July 17, 1992, the owner
of 32.6% of the outstanding common stock of the Offeror. Since her graduation
from Denison University in 1996, Mrs. Schepman has been employed as a retail
marketing specialist of First Bank & Trust, a wholly owned subsidiary of the
Offeror.
3. Procedures for Tendering Shares
Proper Tender of Shares. For Shares to be tendered properly pursuant to the
Offer, (a) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) including any required signature guarantees
and any other documents required by the Letter of Transmittal, must be received
prior to 5:00 p.m. New York City time, on the Expiration Date by the Depositary
at its address set forth on the back cover of this Offer to Purchase or (b) the
tendering stockholder must comply with the guaranteed delivery procedure set
forth below. In accordance with Instruction 5 of the Letter of Transmittal,
stockholders desiring to tender Shares pursuant to the Offer must properly
indicate in the section captioned "Price (in dollars) per Share at which Shares
are being Tendered" on the Letter of Transmittal the price (in multiples of
$.125) at which their Shares are being Tendered. Alternatively, stockholders may
elect to have their per Share price determined by the Offeror in accordance with
the terms of the Offer by checking the box under the section captioned "Shares
Tendered at Price Determined by Dutch Auction." Stockholders who desire to
tender Shares at more than one price must complete a separate Letter of
Transmittal for each price at which Shares are tendered, provided that the same
Shares cannot be tendered (unless properly withdrawn previously in accordance
with the terms of the Offer) at more than one price. To properly tender Shares,
one and only one price box must be checked in the appropriate section on each
Letter of Transmittal.
<PAGE>
Stockholders who hold Shares through brokers or banks are urged to
consult such brokers or banks to determine whether transaction costs are
applicable if stockholders tender Shares through such brokers or banks and not
directly to the Depositary.
Signature Guarantees and Method of Delivery. No signature guarantee is
required: (i) if the Letter of Transmittal is signed by the registered holder of
the Shares (which term, for purposes of this Section 3, shall include any
participant in The Depository Trust Company (the "Book-Entry Transfer Facility")
whose name appears on a security position listing as the owner of the Shares)
tendered therewith and such holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal; or (ii) if Shares are tendered for
the account of a member in good standing of the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each such entity being
hereinafter referred to as an "Eligible Institution"). See Instruction 1 of the
Letter of Transmittal. If a certificate for Shares is registered in the name of
a person other than the person executing a Letter of Transmittal, or if payment
is to be made, or Shares not purchased or tendered are to be issued, to a person
other than the registered holder, then the certificate must be endorsed or
accompanied by an appropriate stock power, in either case, signed exactly as the
name of the registered holder appears on the certificate, or stock power
guaranteed by an Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility as described above), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal. The method of delivery of all documents,
including Certificates for Shares, the Letter of Transmittal and any other
required documents, is at the election and risk of the tendering stockholder. If
delivery is by mail, then registered mail with return receipt requested,
properly insured, is recommended.
Book-Entry Delivery. The Depositary will establish an account with
respect to the Shares for purposes of the Offer at the Book-Entry Transfer
Facility within two business days after the date of this Offer to Purchase, and
any financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing such
facility to transfer Shares into the Depositary's account in accordance with the
Book-Entry Transfer Facility's procedures for transfer. Although delivery of
Shares may be effected through a book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility, either (i) a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof)
with any required signature guarantees and any other required documents must, in
any case, be transmitted to and received by the Depositary at its address set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or (ii) the guaranteed delivery procedure described below must be followed.
<PAGE>
Delivery of documents to a Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
United States Federal Income Tax Backup Withholding. Under the United
States federal income tax backup withholding rules, unless an exemption applies
under the applicable law and regulations, 31% of the gross proceeds payable to a
stockholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Internal Revenue Service ("IRS"), unless the stockholder or
other payee provides its taxpayer identification number (employer identification
number or social security number) to the Depositary (as payor) and certifies
under penalties of perjury that such number is correct. Therefore, each
tendering stockholder should complete and sign the Substitute Form W-9 included
as part of the Letter of Transmittal so as to provide the information and
certification necessary to avoid backup withholding, unless such stockholder
otherwise establishes to the satisfaction of the Depositary that it is not
subject to backup withholding. If the Depositary is not provided with the
correct taxpayer identification number, the United States Holder (as defined in
Section 13 herein) also may be subject to a penalty imposed by the IRS. If
withholding results in an overpayment of taxes, a refund may be obtained with
the filing of a tax return. Certain "exempt recipients" (including, among
others, all corporations and certain Non-United States Holders (as defined in
Section 13 herein)) are not subject to these backup withholding and information
reporting requirements. In order for a Non-United States Holder to qualify as an
exempt recipient, that stockholder must submit an IRS Form W-8 or a Substitute
Form W-8, signed under penalties of perjury, attesting to that stockholder's
exempt status. Such statements can be obtained from the Depositary. See
Instruction 10 of the Letter of Transmittal.
To prevent United States federal income tax backup withholding equal to
31% of the gross payments made to stockholders for Shares purchased pursuant to
the Offer, each stockholder who does not otherwise establish an exemption from
such backup withholding must provide the Depositary with the stockholder's
correct taxpayer identification number and provide certain other information by
completing the Substitute Form W-9 included as part of the Letter of
Transmittal.
For a discussion of certain United States federal income tax
consequences to tendering stockholders, see Section 13.
Withholding for Non-United States Holders. Even if a Non-United States
Holder has provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of the
gross payments payable to a Non-United States Holder or his agent unless the
Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because such
gross proceeds are effectively connected with the conduct of a trade or business
within the United States. In order to obtain a reduced rate of withholding
pursuant to a tax treaty, a Non-United States Holder must deliver to the
<PAGE>
Depositary before the payment a properly completed and executed IRS Form 1001.
In order to obtain an exemption from withholding on the grounds that the gross
proceeds paid pursuant to the Offer are effectively connected with the conduct
of a trade or business within the United States, a Non-United States Holder must
deliver to the Depositary a properly completed and executed IRS Form 4224. The
Depositary will determine a stockholder's status as a Non-United States Holder
and eligibility for a reduced rate of, or exemption from, withholding by
reference to any outstanding certificates or statements concerning eligibility
for a reduced rate of, or exemption from, withholding (e.g., IRS Form 1001 or
IRS Form 4224) unless facts and circumstances indicate that such reliance is not
warranted. A Non-United States Holder may be eligible to obtain a refund of all
or a portion of any tax withheld (with the filing of a tax return) if such
Non-United States Holder meets the "complete termination," "substantially
disproportionate" or "not essentially equivalent to a dividend" test described
in Section 13 or is otherwise able to establish that no tax or a reduced amount
of tax is due. Backup withholding generally will not apply to amounts subject to
the 30% or a treaty-reduced rate of withholding. Non-United States Holders are
urged to consult their own tax advisors regarding the application of United
States federal income tax withholding, including eligibility for a withholding
tax reduction or exemption, and the refund procedure. See Instruction 10 of the
Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant
to the Offer and such stockholder's Share certificates cannot be delivered to
the Depositary prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed on a timely basis) or if time will not permit all
required documents to reach the Depositary prior to the Expiration Date, such
Shares may nevertheless be tendered, provided that all of the following
conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives by hand, mail, overnight carrier, telegram
or facsimile transmission, prior to the Expiration Date, a properly completed
and duly executed Notice of Guaranteed Delivery substantially in the form
provided with this Offer to Purchase (specifying the price at which the Shares
are being tendered), including (where required) a signature guarantee by an
Eligible Institution; and
(c) the certificates for all tendered Shares, in proper form for
transfer (or confirmation of book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility), together with a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) and any required signature guarantees or other documents
required by the Letter of Transmittal, are received by the Depositary within
three NYSE trading days after the date of receipt by the Depositary of such
Notice of Guaranteed Delivery.
Return of Tendered Shares. If any tendered Shares are not purchased, or
if less than all Shares evidenced by a stockholder's certificates are tendered,
certificates for unpurchased Shares will be returned as promptly as practicable
after the expiration or termination of the Offer or, in the case of Shares
<PAGE>
tendered by book-entry transfer at the Book-Entry Transfer Facility, such Shares
will be credited to the appropriate account maintained by the tendering
stockholder at the Book-Entry Transfer Facility, in each case without expense to
such stockholder.
Dividend Reinvestment. FBA does not have a Dividend Reinvestment Plan.
Option Plan. The Offeror is not offering, as part of the Offer, to
purchase any of the options outstanding under the Option Plan, and tenders of
options will not be accepted. Holders of options who wish to participate in the
Offer may either (i) comply with the procedures for guaranteed delivery set
forth under "Guaranteed Delivery" above without having to exercise options
(pursuant to their terms) until after the results of the Offer are known
(provided, however, that an option holder will not be required to make the
requisite tender through an Eligible Institution and may personally execute and
deliver the Notice of Guaranteed Delivery) or (ii) exercise the options
(pursuant to their terms) and purchase Shares and then tender such Shares
pursuant to the Offer, provided that, in the case of either (i) or (ii), any
such exercise of an option and tender of Shares is in accordance with the terms
of the Option Plan and the options. In no event are any options to be delivered
to the Depositary in connection with a tender of Shares hereunder. An exercise
of an option cannot be revoked even if Shares received upon the exercise thereof
and tendered in the Offer are not purchased in the Offer for any reason.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid for Shares to be accepted and the validity,
form, eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Offeror, in its sole discretion, and
its determination shall be final and binding on all parties. The Offeror
reserves the absolute right to reject any or all tenders of any Shares that it
determines are not in proper form or the acceptance for payment of or payment
for which may, in the opinion of the Offeror's counsel, be unlawful. The Offeror
also reserves the absolute right to waive any of the conditions of the Offer or
any defect or irregularity in any tender with respect to any particular Shares
or any particular stockholder and the Offeror's interpretation of the terms of
the Offer will be final and binding on all parties. No tender of Shares will be
deemed to have been properly made until all defects or irregularities have been
cured by the tendering stockholder to the satisfaction of the Offeror or waived
by the Offeror. None of the Offeror, the Depositary, the Information Agent or
any other person shall be obligated to give notice of any defects or
irregularities in tenders, nor shall any of them incur any liability for failure
to give any such notice.
Tendering Stockholder's Representation and Warranty; Offeror's
Acceptance Constitutes an Agreement. A tender of Shares pursuant to any of the
procedures described above will constitute the tendering stockholder's
acceptance of the terms and conditions of the Offer, as well as the tendering
stockholder's representation and warranty to the Offeror that (a) such
<PAGE>
stockholder has a net long position in the Shares being tendered within the
meaning of Rule 14e-4 promulgated by the Commission under the Exchange Act and
(b) the tender of such Shares complies with Rule 14e-4. It is a violation of
Rule 14e-4 for a person, directly or indirectly, to tender Shares for such
person's own account unless, at the time of tender and at the end of the
proration period or period during which Shares are accepted by lot (including
any extensions thereof), the person so tendering (i) has a net long position
equal to or greater than the amount of (x) Shares tendered or (y) other
securities convertible into or exchangeable or exercisable for the Shares
tendered and will acquire such Shares for tender by conversion, exchange or
exercise and (ii) will deliver or cause to be delivered such Shares in
accordance with the terms of the Offer. Rule 14e-4 provides a similar
restriction applicable to the tender or guarantee of a tender on behalf of
another person. The Offeror's acceptance for payment of Shares tendered pursuant
to the Offer will constitute a binding agreement between the tendering
stockholder and the Offeror upon the terms and conditions of the Offer.
Lost or Destroyed Certificates. Stockholders whose certificates for
their Shares have been lost, stolen, misplaced or destroyed must contact the
Depositary at (800) 777-3674 for instructions as to documents which will be
required to be submitted together with the Letter of Transmittal in order to
replace certificate(s) representing the Shares. Such stockholders are advised to
contact the Depositary immediately to permit timely processing of such
documentation.
4. Withdrawal Rights
Except as otherwise provided in this Section 4, tenders of Shares
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Offeror pursuant to the Offer, may also be withdrawn
at any time after 5:00 p.m. New York City time, on Wednesday, February 3, 1999.
For a withdrawal to be effective, a notice of withdrawal must be in
written, telegraphic or facsimile transmission form and must be received in a
timely manner by the Depositary at its address set forth on the back cover of
this Offer to Purchase. Any such notice of withdrawal must specify the name of
the tendering stockholder, the name of the registered holder, if different from
that of the person who tendered such Shares, the number of Shares tendered and
the number of Shares to be withdrawn. If the certificates for Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the release of such certificates, the tendering stockholder must also
submit the serial numbers shown on the particular certificates for Shares to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution (except in the case of Shares tendered by an Eligible
Institution). If Shares have been tendered pursuant to the procedure for
book-entry tender set forth in Section 3, the notice of withdrawal also must
specify the name and the number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with the
procedures of such facility. None of the Offeror, the Depositary, the
Information Agent or any other person shall be obligated to give notice of any
<PAGE>
defects or irregularities in any notice of withdrawal nor shall any of them
incur liability for failure to give any such notice. All questions as to the
form and validity (including time of receipt) of notices of withdrawal will be
determined by the Offeror, in its sole discretion, which determination shall be
final and binding.
Withdrawals may not be rescinded and any Shares withdrawn will
thereafter be deemed not properly tendered for purposes of the Offer unless such
withdrawn Shares are properly retendered prior to the Expiration Date by again
following one of the procedures described in Section 3.
If the Offeror extends the Offer, is delayed in its purchase of Shares
or is unable to purchase Shares pursuant to the Offer for any reason, then,
without prejudice to the Offeror's rights under the Offer, the Depositary may,
subject to applicable law, retain tendered Shares on behalf of the Offeror, and
such Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in this Section 4.
5. Purchase of Shares and Payment of Purchase Price
Upon the terms and subject to the conditions of the Offer, as promptly
as practicable following the Expiration Date, the Offeror (i) will determine the
Purchase Price it will pay for the Shares properly tendered and not withdrawn
prior to the Expiration Date, taking into account the number of Shares so
tendered and the prices specified by tendering stockholders, and (ii) will
accept for payment and pay for (and thereby purchase) Shares properly tendered
at prices at or below the Purchase Price and not withdrawn prior to the
Expiration Date. For purposes of the Offer, the Offeror will be deemed to have
accepted for payment (and therefore purchased) Shares that are properly tendered
at or below the Purchase Price and not withdrawn (subject to the proration
provisions of the Offer) only when, as and if it gives oral or written notice to
the Depositary of its acceptance of such Shares for payment pursuant to the
Offer.
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date, the Offeror will accept for payment and pay a
single per Share Purchase Price for 400,000 Shares (subject to increase or
decrease as provided in Section 14) or such lesser number of Shares as are
properly tendered at prices not in excess of $21.00 nor less than $16.50 per
Share and not withdrawn as permitted in Section 4.
The Offeror will pay for Shares purchased pursuant to the Offer by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payment
from the Offeror and transmitting payment to the tendering stockholders.
In the event of proration, the Offeror will determine the proration
factor and pay for those tendered Shares accepted for payment as soon as
practicable after the Expiration Date; however, the Offeror does not expect to
<PAGE>
be able to announce the final results of any proration and commence payment for
Shares purchased until approximately five NYSE trading days after the Expiration
Date. Certificates for all Shares tendered and not purchased, including all
Shares tendered at prices in excess of the Purchase Price and Shares not
purchased due to proration, will be returned (or, in the case of Shares tendered
by book-entry transfer, such Shares will be credited to the account maintained
with the applicable Book-Entry Transfer Facility by the participant therein who
so delivered such Shares) to the tendering stockholder at the Offeror's expense
as promptly as practicable after the Expiration Date without expense to the
tendering stockholders. Under no circumstances will interest on the Purchase
Price be paid by the Offeror by reason of any delay in making payment. In
addition, if certain events occur, the Offeror may not be obligated to purchase
Shares pursuant to the Offer. See Section 6.
The Offeror will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
of the Purchase Price is to be made to, or (in the circumstances permitted by
the Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or such other person), payable on account of the transfer to
such person will be deducted from the Purchase Price unless satisfactory
evidence of the payment of the stock transfer taxes, or exemption therefrom, is
submitted. See Instruction 7 of the Letter of Transmittal.
Any tendering stockholder or other payee who fails to complete fully,
sign and return to the Depositary the Substitute Form W-9 included with the
Letter of Transmittal may be subject to required federal income tax backup
withholding of 31% of the gross proceeds paid to such stockholder or other payee
pursuant to the Offer. See Section 3. Also see Section 3 regarding United States
federal income tax consequences for Non-United States Holders.
6. Certain Conditions of the Offer
Notwithstanding any other provision of the Offer, the Offeror shall not
be required to accept for payment, purchase or pay for any Shares tendered, and
may terminate or amend the Offer or may postpone the acceptance for payment of,
or the purchase of and the payment for Shares tendered, subject to applicable
rules under the Exchange Act, if at any time on or after Thursday, December 31,
1998 and prior to the time of payment for Shares tendered any of the following
events shall have occurred (or shall have been determined by the Offeror to have
occurred) that, in the Offeror's sole judgment in any such case and regardless
of the circumstances giving rise thereto (including any action or omission to
act by the Offeror), makes it inadvisable to proceed with the Offer or with such
acceptance for payment:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or administrative
agency, authority or tribunal or any other person, domestic or foreign, before
<PAGE>
any court, authority, agency or tribunal that directly or indirectly (i)
challenges the making of the Offer, the acquisition of some or all of the Shares
pursuant to the Offer or otherwise relates in any manner to the Offer, or (ii)
in the Offeror's sole judgment, could materially and adversely affect the
business, condition (financial or other), income, operations or prospects of FBA
and its subsidiaries, taken as a whole, or otherwise materially impair in any
way the contemplated future conduct of the business of FBA or any of its
subsidiaries or materially impair the contemplated benefits of the Offer to the
Offeror;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered, amended,
enforced or deemed to be applicable to the Offer or FBA or any of its
subsidiaries, by any court or any authority, agency or tribunal that, in the
Offeror's sole judgment, would or might directly or indirectly (i) make the
acceptance for payment of, or payment for, some or all of the Shares illegal or
otherwise restrict or prohibit consummation of the Offer, (ii) delay or restrict
the ability of the Offeror, or render the Offeror unable, to accept for payment
or pay for some or all of the Shares, (iii) materially impair the contemplated
benefits of the Offer to the Offeror or (iv) materially and adversely affect the
business, condition (financial or other), income, operations or prospects of FBA
and its subsidiaries, taken as a whole, or otherwise materially impair in any
way the contemplated future conduct of the business of FBA or any of its
subsidiaries;
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange or
in the over-the-counter market, (ii) the declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States, (iii) the
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, (iv) any limitation
(whether or not mandatory) by any governmental, regulatory or administrative
agency or authority on, or any event that, in the Offeror's reasonable judgment,
might affect, the extension of credit by banks or other lending institutions in
the United States, (v) any significant decrease in the market price of the
Shares, (vi) any change in the general political, market, economic or financial
conditions in the United States or abroad that could, in the sole judgment of
the Offeror, have a material adverse effect on FBA's business, operations or
prospects or the trading in the Shares, or (vii) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof, in the sole judgment of the Offeror.
(d) any change or changes shall have occurred or are threatened in the
business, financial condition, assets, income, operations, prospects or stock
ownership of FBA or its subsidiaries that, in the Offeror's sole judgment, is or
may be material to FBA or its subsidiaries; or
(e) the Offer would, if consummated, result in the delisting of the
Shares from the NYSE.
<PAGE>
The foregoing conditions are for the sole benefit of the Offeror and
may be asserted by the Offeror regardless of the circumstances (including any
action or inaction by the Offeror) giving rise to any such condition, and may be
waived by the Offeror, in whole or in part, at any time and from time to time in
its sole discretion. The Offeror's failure at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by the Offeror concerning the events
described above will be final and binding.
7. Price Range of Shares; Dividends
The Shares are listed and traded on the NYSE. The following table sets
forth, for the periods indicated, the high and low per Share sale prices on the
NYSE Composite Tape as compiled from published financial sources per Share in
each such fiscal quarters:
Period High Low
------ ---- ---
1998
Fourth Quarter(through $18.06 $16.75
December 29)
Third Quarter 21.00 16.50
Second Quarter 25.13 19.13
First Quarter 25.19 21.31
1997
Fourth Quarter 24.06 17.13
Third Quarter 18.00 12.81
Second Quarter 13.38 12.38
First Quarter 12.75 10.13
1996
Fourth Quarter 10.38 9.75
On December 29, 1998, the closing price per Share on the NYSE Composite
Tape was $16.81. Stockholders are urged to obtain current market quotations for
the Shares.
FBA did not pay any dividends on the Shares during the periods covered
in the table.
8. Source and Amount of Funds
Assuming the Offeror purchases 400,000 Shares pursuant to the Offer at
a maximum purchase price of $21.00 per Share, the Offeror expects the maximum
aggregate cost, including all fees and expenses applicable to the Offer, to be
approximately $8.50 million. It is anticipated that the Offeror will fund the
purchase of Shares pursuant to the Offer and the payment of related fees and
<PAGE>
expenses from working capital and, to the extent required, using funds borrowed
under the Offeror's existing secured credit agreement (the "Credit Agreement").
The Credit Agreement, dated August 26, 1998, among the Offeror and a
group of unaffiliated banks, with Mercantile Bank National Association, St.
Louis, Missouri, as lead bank and agent, provides for a $90 million revolving
credit facility. The advances under the Credit Agreement are secured by the
Offeror's interest in its banking subsidiaries, including FBA. Interest is
payable monthly either at the lead bank's base rate of interest or at a rate
between 87.5 and 125 basis points over the London Interbank Offering Rate at the
option of the Offeror. The Credit Agreement, which is renewable annually,
matures on August 25, 1999, at which time any principal and unpaid interest is
due and payable. The outstanding balance under the Credit Agreement was $50
million on December 29, 1998. The loan is maintained by the Offeror in the
ordinary course of business and is expected to be repaid out of the Offeror's
operations.
9. Certain Information Concerning FBA; Transactions Among FBA, the Offeror and
Affiliates
FBA is a bank holding company which was organized as a Delaware
corporation and was previously known as BancTEXAS Group Inc. FBA's executive
office is located at 135 North Meramec, St. Louis, Missouri. The principal
function of FBA is to assist the management of its two banking subsidiaries,
First Bank of California ("FB California") and First Bank Texas N.A. (formerly
known as "BankTEXAS N.A.")("FB Texas"). FB California and FB Texas are
collectively referred to herein as the "Subsidiary Banks." As of November 30,
1998, FBA had approximately $715.4 million in total assets, $512.5 million in
total loans, net of unearned discount, $591.7 million in total deposits and
$57.0 million in total stockholders' equity.
As of December 31, 1998, the total Shares and shares of Class B Stock
of FBA owned by the Offeror, including Shares issued on December 1, 1998 upon
conversion of a convertible debenture, constituted approximately 76.84% of the
outstanding voting stock of FBA. The Offeror exercises control over the
management and policies of FBA and the election of its officers and directors.
In 1994, FBA sold 2,500,000 shares of Class B Stock for $30 million
cash in a private placement to the Offeror. As a result, the Offeror became the
owner of a controlling interest in FBA, and the Offeror has exercised control
over the management and policies of FBA and the election of FBA's Board of
Directors which, as of the date hereof, includes a majority of directors who are
also directors and/or executive officers of the Offeror.
In February 1998, FBA acquired First Commercial Bancorp, Inc.,
Sacramento, California. In connection with the acquisition of FCB, FBA issued
approximately 1,555,700 Shares, of which 1,266,176 Shares were issued to the
<PAGE>
Offeror in exchange for its shares of FCB common stock and $10.0 million of
FBA's note payable to the Offeror. FBA also issued to the Offeror a convertible
debenture in the principal amount of $6.5 million in exchange for outstanding
debentures of FCB; this debenture, including the related accrued and unpaid
interest thereon, was converted in December 1998 into 629,557 Shares.
The Offeror provides management services to FBA and the Subsidiary
Banks. Management services are provided under a management fee agreement whereby
FBA compensates the Offeror on an hourly basis for its use of personnel for
various functions including internal audit, loan review, income tax preparation
and assistance, accounting, asset/liability and investment services, loan
servicing and other management and administrative services. Fees paid under this
agreement were $1.5 million for the nine months ended September 30, 1998 and
$1.4 million, $1.3 million and $521,000 for the years ended December 31, 1997,
1996 and 1995, respectively. The fees paid for management services are at least
as favorable as FBA could have obtained from unaffiliated third parties.
Because of the affiliation with the Offeror and the geographic
proximity of certain of their offices, FBA shares the cost of certain personnel
and services used by FBA and the Offeror. This includes the salaries and
benefits of certain loan and administrative personnel. The allocation of the
shared costs are charged and/or credited under the terms of cost sharing
agreements entered into during 1996. Because this involves distributing
essentially fixed costs over a larger asset base, it allows each bank to receive
the benefit of personnel and services at a reduced cost. Fees paid under these
agreements were $811,000 for the nine months ended September 30, 1998 and
$709,000 and $412,000 for the years ended December 31, 1997 and 1996,
respectively.
Effective April 1, 1997, First Services L.P., a limited partnership
indirectly owned by the Offeror's Chairman and his children through its general
partners and limited partners, began providing data processing and various
related services to FBA under the terms of data processing agreements.
Previously, these services were provided by a subsidiary of the Offeror. Fees
paid under these agreements were $1.3 million for the nine months ended
September 30, 1998 and $1.0 million, $692,000 and $374,000 for the years ended
December 31, 1997, 1996 and 1995, respectively. The fees paid for data
processing services are at least as favorable as FBA could have been obtained
from unaffiliated third parties.
The Subsidiary Banks participate in loans with other bank affiliates of
the Offeror; as of September 30, 1998, $84.8 million of purchased loan
participations and $141.8 million of sold loan participations were outstanding.
Loans are purchased and sold at prevailing interest rates and terms at the time
of such transactions and in accordance with the credit standards and policies of
the purchasing entity.
FBA borrows funds from the Offeror pursuant to a promissory note
agreement which provides for revolving advances up to $20 million. The previous
<PAGE>
balance was repaid by FBA with the proceeds of a securities offering in July
1998, and no advances have been made since that repayment.
The Subsidiary Banks have had in the past, and may have in the future,
loan transactions in the ordinary course of business with directors of FBA or
their affiliates. These loan transactions have been and will be on the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with unaffiliated persons and did not and will not
involve more than the normal risk of collectibility or present other unfavorable
features. The Subsidiary Banks do not extend credit to officers of FBA or of the
Subsidiary Banks, except extensions of credit secured by mortgages on personal
residences, loans to purchase automobiles and personal credit card accounts.
Certain of the directors and officers of FBA and their respective
affiliates have deposit accounts with the Subsidiary Banks. It is the policy of
the Subsidiary Banks not to permit any officers or directors of the Subsidiary
Banks or their affiliates to overdraw their respective deposit accounts unless
that person has been previously approved for overdraft protection under a plan
whereby a credit limit has been established in accordance with the standard
credit criteria of the Subsidiary Banks.
FBA is subject to the informational filing requirements of the Exchange
Act and, in accordance therewith, is obligated to file reports and other
information with the Commission relating to its business, financial condition
and other matters. Information, as of particular dates, concerning FBA's
directors and officers, their remuneration, options granted to them, the
principal holders of FBA's securities and any material interest of such persons
in transactions with FBA is required to be disclosed in proxy statements
distributed to FBA's stockholders and filed with the Commission. Such reports,
proxy statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 2120, Washington D.C. 20549; at its regional offices located at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade
Center, New York, New York 10048. Copies of such material may also be obtained
by mail, upon payment of the Commission's customary charges, from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549. The Commission also maintains a Web site on the World
Wide Web at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. Such reports, proxy statements and other information
concerning FBA also can be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005, on which the Shares are listed. In addition,
the Offeror will furnish without charge to each person to whom this Offer is
delivered copies of (i) FBA's Annual Report on Form 10-K as of and for the year
ended December 31, 1997, (ii) FBA's Quarterly Report on Form 10-Q as of and for
the quarter ended September 30, 1998, and (iii) the audited consolidated
financial statements referred to in Note 1 to the Summary Historical
Consolidated Financial Information below, upon request to Ms. Josephine Gahn,
<PAGE>
Assistant Secretary, First Banks, Inc., 11901 Olive Boulevard, Creve Coeur,
Missouri 63141, telephone number (314) 995-8724.
Summary Historical Consolidated Financial Information
Set forth below is certain summary historical consolidated financial
information of FBA and its subsidiaries. The historical financial information
(other than the ratios of earnings to fixed charges) was derived from the
audited consolidated financial statements of FBA as of and for the years ended
December 31, 1997 and December 31, 1996, as restated for FBA's acquisition of
First Commercial Bancorp, Inc., as more fully described in Note 1 to this
Summary Historical Consolidated Financial Information, and from the unaudited
summary consolidated financial statements included in FBA's Quarterly Reports on
Form 10-Q as of and for the quarters ended September 30, 1998 and 1997 (the
"Quarterly Reports"), and other information and data contained in FBA's 1997
Annual Report and Quarterly Reports. More comprehensive financial information is
included in such financial statements and reports, and the financial information
which follows is qualified in its entirety by reference to such financial
statements and reports, including the financial statements and related notes
contained therein, copies of which may be obtained as set forth above in Section
9.
<PAGE>
FIRST BANKS AMERICA, INC.
Summary Historical Consolidated Financial Information
(dollars expressed in thousands, except per share data)
<TABLE>
<CAPTION>
Selected Operating Data
Nine months ended Year ended
September 30, December 31,
------------- ------------
1998(1) 1997(1) 1997(1) 1996(1)
------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C>
Interest income........................................... $ 40,639 30,787 42,517 33,382
Interest expense.......................................... 17,681 13,860 19,155 15,533
Net interest income....................................... 22,958 16,927 23,362 17,849
Provision for possible loan losses........................ 725 1,750 2,000 2,405
Noninterest income........................................ 3,336 2,548 3,287 3,585
Noninterest expense....................................... 19,330 12,817 17,677 17,737
Net income................................................ 3,641 2,512 3,533 691
Earnings per share:
Basic.................................................. 0.72 0.62 0.87 0.16
Diluted................................................ 0.71 0.61 0.86 0.16
Weighted average shares of common stock
outstanding (in thousands)............................. 5,090 4,059 4,069 4,225
Ratio of earnings to fixed charges:(2)
Including interest on deposits......................... 1.34x 1.34x 1.35x 1.08x
Excluding interest on deposits......................... 3.91 2.96 3.00 1.53
=========== ======== ========= =========
</TABLE>
<TABLE>
<CAPTION>
Selected Financial Data
September 30, December 31,
1998 1997 (1) 1996(1)
------------- -------- -------
(unaudited)
<S> <C> <C> <C>
Total assets............................................... $ 722,199 643,664 529,087
Investment securities...................................... 130,609 148,181 125,139
Loans, net of unearned discount............................ 491,396 431,455 336,371
Deposits................................................... 596,094 556,527 455,942
Stockholders' equity....................................... 56,785 45,091 38,195
Book value per common share outstanding(3)................. 11.11 10.59 9.33
Shares of common stock outstanding at
period end (in thousands)............................... 5,112 4,258 4,095
=========== ========== =====
</TABLE>
(1) In connection with FBA's acquisition of First Commercial Bancorp, Inc.
("FCB") and its wholly-owned subsidiary, First Commercial Bank, as of
February 2, 1998, FBA's financial information for the periods prior to
the acquisition has been restated to include the 61.48% ownership
interest of the Offeror in FCB, consistent with the accounting
treatment applicable to entities under common control.
(2) For purposes of calculating the ratio of earnings to fixed charges,
earnings consist of income before taxes plus interest and rent
expenses. Fixed charges consist of interest and rent expense.
(3) Book value per common share outstanding is calculated by dividing total
stockholders' equity by the number of actual common shares (consisting
of Shares and shares of Class B Stock) outstanding at the end of the
appropriate period.
<PAGE>
10. Interests of Directors and Officers; Transactions and Arrangements
Concerning Shares
The 400,000 Shares that the Offeror is offering to purchase represent
approximately 6.98% of the aggregate outstanding Shares and Class B Stock,
assuming exercise of outstanding exercisable options. As of December 31, 1998,
FBA's directors and executive officers as a group (11 persons) beneficially
owned an aggregate of 4,446,003 Shares representing approximately 77.62% of the
outstanding Shares, assuming the exercise by such persons of their currently
exercisable options. If the Offeror purchases 400,000 Shares pursuant to the
Offer, and neither executive officers nor directors tender Shares pursuant to
the Offer, FBA's executive officers and directors as a group would own
beneficially approximately 84.61% of the outstanding Shares immediately after
the Offer, assuming the exercise by such persons of all currently exercisable
options.
Except as set forth in Schedule A, based on FBA's records and on
information provided to the Offeror by its directors, executive officers and
subsidiaries, and those of FBA, neither the Offeror, FBA, nor any subsidiary of
either company nor, to the best of the Offeror's knowledge, any of the directors
or executive officers of the Offeror, FBA, or any of their subsidiaries, nor any
associates or subsidiaries of any of the foregoing, has effected any
transactions involving the Shares during the 60 days prior to the date hereof.
Except as otherwise described herein, neither the Offeror, FBA, nor, to
the best of the Offeror's knowledge, any of their affiliates, is a party to any
contract, arrangement, understanding or relationship with any director or
executive officer of either the Offeror or FBA relating, directly or indirectly,
to securities of FBA including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations.
11. Effects of the Offer on the Market for Shares; Registration, Listing and
Other Effects
The Offeror's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of stockholders of FBA, thereby concentrating the voting power of the
non-tendering stockholders including the Offeror, and reducing the number of
Shares available for trading. Nonetheless, the Offeror anticipates that there
will be a sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to support a continued trading market for the Shares.
Based upon published guidelines of the NYSE, the Offeror does not believe that
its purchase of Shares pursuant to the Offer will cause FBA's remaining Shares
to be delisted from the NYSE.
<PAGE>
FBA has in the past issued voting stock as consideration in
transactions involving the acquisition of banks, in which Shares were issued in
exchange for the outstanding stock of the bank being acquired. Other
acquisitions, including one which is pending as of the date of this Offer to
Purchase, are structured so that the entire purchase price of the acquired bank
is in the form of cash. Since the requirement for the Offeror to provide income
taxes with respect to its proportionate share of FBA's net income would again
become effective if the Offeror's ownership of FBA were to decline below 80% in
the future, FBA's pursuit of acquisitions, or other transactions which include a
significant component of the consideration in the form of voting stock, could be
adversely effected. Because the Offeror controls FBA and is in a position to
control whether or not such transactions are authorized, this may decrease the
opportunities for such transactions to FBA.
The Shares are currently "margin securities" under the rules of the
Federal Reserve Board. This has the effect, among other things, of allowing
brokers to extend credit to their customers using such Shares as collateral. The
Offeror believes that, following the purchase of Shares pursuant to the Offer,
the Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that FBA furnish certain information to its stockholders and the
Commission and comply with the Commission's proxy rules in connection with
meetings of FBA's stockholders. The Offeror believes that its purchase of Shares
pursuant to the Offer will not result in the Shares becoming eligible for
deregistration under the Exchange Act.
12. Certain Legal Matters; Regulatory Approvals
The Offeror is not aware of any license or regulatory permit material
to FBA's business that might be adversely affected by the Offeror's acquisition
of Shares as contemplated herein or of any approval or other action by any
government or governmental, administrative or regulatory authority or agency,
domestic or foreign, that would be required for the acquisition or ownership of
Shares by the Offeror as contemplated herein. Should any such approval or other
action be required, the Offeror presently contemplates that such approval or
other action will be sought. The Offeror is unable to predict whether it may
determine that it is required to delay the acceptance for payment of or payment
for Shares tendered pursuant to the Offer pending the outcome of any such
matter. There can be no assurance that any such approval or other action, if
needed, would be obtained or would be obtained without substantial conditions or
that the failure to obtain any such approval or other action might not result in
adverse consequences to FBA's business. The Offeror's obligations under the
Offer to accept for payment and pay for Shares are subject to certain
conditions. See Section 6.
<PAGE>
13. Certain United States Federal Income Tax Consequences
The following summary describes the principal United States federal
income tax consequences of an exchange of Shares for cash pursuant to the Offer
by United States Holders (as defined below). This summary is based upon the
Internal Revenue Code of 1986, as amended to the date hereof (the "Code"),
existing and proposed United States Treasury Regulations promulgated thereunder,
rulings, administrative pronouncements and judicial decisions, changes to which
could affect the tax consequences described herein and could be made on a
retroactive basis.
This summary discusses only Shares held as capital assets, within the
meaning of Section 1221 of the Code, and does not address all of the tax
consequences that may be relevant to particular stockholders in light of their
personal circumstances, or to certain types of stockholders (such as certain
financial institutions, dealers or traders in securities or commodities,
insurance companies, tax-exempt organizations or persons who hold Shares as a
position in a "straddle" or as part of a "hedging" or "conversion" transaction
for United States federal income tax purposes or that have a functional currency
other than the United States dollar). For purposes of this summary, a "United
States Holder" is a holder of Shares that for United States federal income tax
purposes is (i) a citizen or resident of the United States, (ii) a corporation
or partnership created or organized in or under the laws of the United States or
any State or division thereof (including the District of Columbia), (iii) an
estate, the income of which is subject to United States federal income taxation
regardless of its source or (iv) a trust, (a) the administration over which a
United States court can exercise primary supervision and (b) all of the
substantial decisions of which one or more United States persons have the
authority to control. Notwithstanding the preceding sentence, to the extent
provided in United States Treasury Regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons prior to such date, that
elect to continue to be treated as United States persons will also be United
States Holders. A "Non-United States Holder" is a holder of Shares other than a
United States Holder. Non-United States Holders who are not subject to United
States federal income tax on a net basis should see Section 3 for a discussion
of the applicable United States withholding rules and the potential for
obtaining a refund of all or a portion of the tax withheld. This summary may not
be applicable with respect to Shares acquired as compensation (including Shares
acquired upon the exercise of stock options or which were or are subject to
forfeiture restrictions). This summary also does not address the state, local or
foreign tax consequences of participating in the Offer.
Each holder of Shares should consult such holder's tax advisor as to
the particular consequences to such holder of participation in the Offer.
<PAGE>
Consequences to tendering stockholders of the exchange of Shares for
cash pursuant to the Offer
An exchange of Shares for cash in the Offer by a United States Holder
will be a taxable transaction for United States federal income tax purposes. As
a consequence of the exchange, the United States Holder will, depending on such
holder's particular circumstances, be treated either as having sold such
holder's Shares or as having received a dividend distribution from the Offeror
with the tax consequences described below.
Under Section 302 of the Code, a United States Holder whose Shares are
exchanged pursuant to the Offer will be treated as having sold such holder's
Shares, and thus will recognize gain or loss if the exchange (i) results in a
"complete termination" of all of such holder's equity interest in FBA, (ii) is a
"substantially disproportionate" redemption with respect to such holder or (iii)
is "not essentially equivalent to a dividend" with respect to the holder, each
as discussed below. In applying each of the Section 302 tests, a United States
Holder will be treated as owning Shares actually or constructively owned by
certain related individuals and entities.
A United States Holder that exchanges all Shares actually and
constructively owned by such holder for cash pursuant to the Offer will be
treated as having completely terminated such holder's equity interest in FBA. An
exchange of Shares for cash will be "substantially disproportionate" with
respect to a United States Holder if three conditions are satisfied: (1) the
percentage of the then outstanding voting stock (including all classes which
carry voting rights) actually and constructively owned by such holder
immediately after the exchange is less than 80% of the percentage of such voting
stock actually and constructively owned by such holder immediately before the
exchange; (2) the percentage of the then outstanding common stock (including all
voting and nonvoting common stock) actually and constructively owned by such
holder immediately after the exchange is less than 80% of the percentage of such
common stock actually and constructively owned by such holder immediately before
the exchange; and (3) the holder owns, immediately after the exchange, less than
50% of the total combined voting power of all classes of voting stock. A United
States Holder will satisfy the "not essentially equivalent to a dividend" test
if the reduction in such holder's proportionate interest in FBA constitutes a
"meaningful reduction" given such holder's particular facts and circumstances.
The IRS has indicated, in one published ruling, that a reduction in the
percentage interest of a stockholder in a publicly-traded company whose relative
stock interest is exceedingly minimal, who exercises no control over corporate
affairs, and who experiences a reduction in such stockholder's right to vote,
right to participate in current earnings and accumulated surplus, and right to
share in net assets upon liquidation, will constitute a "meaningful reduction"
under such facts and circumstances. If a United States Holder sells Shares to
persons other than the Offeror at or about the time such holder also sells
Shares to the Offeror pursuant to the Offer, and the various sales effected by
the holder are part of an overall plan to reduce or terminate such holder's
proportionate interest in FBA, then the sales to persons other than the Offeror
may, for United States federal income tax purposes, be integrated with the
<PAGE>
holder's exchange of Shares pursuant to the Offer and, if integrated, may be
taken into account in determining whether the holder satisfies any of the three
tests described above.
If a United States Holder is treated as having sold such holder's
Shares under the tests described above, such holder will recognize gain or loss
equal to the difference between the amount of cash received and such holder's
adjusted tax basis in the Shares exchanged therefor. Any such gain or loss will
be capital gain or loss. In the case of a non-corporate United States Holder,
the maximum marginal United States federal income tax rate applicable to such
gain will be lower than the maximum marginal United States federal income tax
rate applicable to ordinary income if such United States Holder's holding period
for such Shares exceeds one year. If a United States Holder who exchanges Shares
pursuant to the Offer is not treated under Section 302 as having sold such
holder's Shares for cash, cash received by such holder will be treated as a
dividend to the extent of such holder's rateable share of FBA's current and
accumulated earnings and profits. Such a dividend will be includible in the
United States Holder's gross income as ordinary income without reduction for the
adjusted tax basis of the Shares exchanged, and no loss will be recognized. In
such event, the United States Holder's adjusted tax basis in its Shares
exchanged generally will be added to such holder's adjusted tax basis in the
remaining Shares. To the extent that cash received in exchange for Shares is
treated as a dividend to a corporate United States Holder, such holder will be
(i) eligible for a dividends-received deduction (subject to applicable
limitations) and (ii) subject to the "extraordinary dividend" provisions of the
Code. To the extent, if any, that the cash received by a United States Holder
exceeds FBA's current and accumulated earnings and profits, it will be treated
first as a tax-free return of such United States Holder's tax basis in the
Shares and thereafter as capital gain.
The Offeror cannot predict whether or to what extent the Offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant to
the Offer will cause the Offeror to accept fewer shares than are tendered.
Therefore, a United States Holder can be given no assurance that a sufficient
number of such holder's Shares will be exchanged pursuant to the Offer to ensure
that such exchange will be treated as a sale, rather than as a dividend, for
United States federal income tax purposes pursuant to the rules discussed above.
Consequences to stockholders who do not tender or whose tender is not
accepted pursuant to the Offer
Stockholders, none of whose Shares will be exchanged pursuant to the
Offer, will not incur any United States federal income tax liability as a result
of the consummation of the Offer. See Section 3 with respect to the application
of United States federal income tax withholding to payments made to Non-United
States Holders and backup withholding tax requirements.
The tax discussion set forth above is included for general information
only. Each stockholder is urged to consult such holder's own tax advisor to
determine the particular tax consequences to such holder of the Offer, including
the applicability and effect of state, local and foreign tax laws.
14. Extension of Offer; Termination; Amendment
The Offeror expressly reserves the right, in its sole discretion, at
any time and from time to time, and regardless of whether or not any of the
events set forth in Section 6 shall have occurred or shall be deemed by the
Offeror to have occurred, to extend the period of time during which the Offer is
open and thereby delay acceptance for payment of, and payment for, any Shares by
giving oral or written notice of such extension to the Depositary and making a
public announcement thereof. The Offeror also expressly reserves the right, in
its sole discretion, to terminate the Offer and not accept for payment or pay
for any Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 6 hereof by giving oral or written notice of
such termination or postponement to the Depositary and making a public
announcement thereof. The Offeror's reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rule 14e-1
promulgated under the Exchange Act, which requires that the Offeror must pay the
consideration offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law, the
Offeror further reserves the right, in its sole discretion, and regardless of
whether any of the events set forth in Section 6 shall have occurred or shall be
deemed by the Offeror to have occurred, to amend the Offer in any respect
(including, without limitation, by decreasing or increasing the consideration
offered in the Offer to holders of Shares or by decreasing or increasing the
number of Shares being sought in the Offer). Amendments to the Offer may be made
<PAGE>
at any time and from time to time effected by public announcement thereof, such
announcement, in the case of an extension, to be issued no later than 9:00 a.m.
New York City time, on the next business day after the last previously scheduled
or announced Expiration Date. Any public announcement made pursuant to the Offer
will be disseminated promptly to stockholders in a manner reasonably calculated
to inform stockholders of such change. Without limiting the manner in which the
Offeror may choose to make a public announcement, except as required by
applicable law, the Offeror shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by making a
release to the Dow Jones News Service.
If the Offeror materially changes the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Offeror will extend the Offer to the extent required by applicable
rules under the Exchange Act. These rules require that the minimum period during
which an offer must remain open following material changes in its terms or
information concerning the offer (other than a change in price or a change in
percentage of securities sought) will depend on the facts and circumstances,
including the relative materiality of such terms or information. If (i) the
person making an offer increases or decreases the price to be paid for shares,
the number of shares being sought and, in the event of an increase in the number
of shares being sought, such increase exceeds 2% of the outstanding shares, and
(ii) the offer is scheduled to expire at any time earlier than the expiration of
a period ending on the tenth business day from, and including, the date that
such notice of an increase or decrease is first published, sent or given in the
manner specified in this Section 14, the offer must be extended until the
expiration of such period of ten business days. Under applicable rules, a
"business day" means any day other than a Saturday, Sunday or Federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight New York
City time.
15. Fees and Expenses
The Offeror has retained Beacon Hill Partners, Inc. to act as
Information Agent and ChaseMellon Shareholder Services, L.L.C. to act as
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telegraph and personal interviews and may
request brokers, dealers and other nominee stockholders to forward materials
relating to the Offer to beneficial owners. The Information Agent and the
Depositary will each receive reasonable and customary compensation for their
respective services, will be reimbursed by the Offeror for certain reasonable
out-of-pocket expenses and will be indemnified against certain liabilities in
connection with the Offer, including certain liabilities under the federal
securities laws.
No fees or commissions will be payable by the Offeror to brokers,
dealers or other persons (other than fees to the Information Agent and the
Depositary as described above) for soliciting tenders of Shares pursuant to the
Offer. Stockholders holding Shares through brokers or banks are urged to consult
such brokers or banks to determine whether transaction costs are applicable if
stockholders tender Shares through such brokers or banks and not directly to the
Depositary. The Offeror, however, upon request, will reimburse brokers, dealers
and commercial banks for customary mailing and handling expenses incurred by
such persons in forwarding the Offer and related materials to the beneficial
owners of Shares held by any such person as a nominee or in a fiduciary
capacity. No broker, dealer, commercial bank or trust company has been
authorized to act as the agent of the Offeror, the Information Agent or the
Depositary for purposes of the Offer. The Offeror will pay or cause to be paid
all stock transfer taxes, if any, on its purchase of Shares except as otherwise
provided in Instruction 7 in the Letter of Transmittal.
16. Miscellaneous
The Offeror is not aware of any jurisdiction where the making of the
Offer is not in compliance with applicable law. If the Offeror becomes aware of
any jurisdiction where the making of the Offer is not in compliance with any
valid applicable law, the Offeror will make a good faith effort to comply with
such law. If, after such good faith effort, the Offeror cannot comply with such
<PAGE>
law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing in such jurisdiction.
Pursuant to rules and regulations under the Exchange Act, the Offeror
has filed with the Commission a Tender Offer Statement on Schedule 14D-1 which
contains additional information with respect to the Offer. Such Schedule 14D-1,
including the exhibits and any amendments thereto, may be examined, and copies
may be obtained, at the same places and in the same manner as is set forth in
Section 9 with respect to information concerning FBA.
No person has been authorized to give any information or make any
representation on behalf of the Offeror in connection with the Offer other than
those contained in this Offer to Purchase or in the related Letter of
Transmittal. If given or made, such information or representation must not be
relied upon as having been authorized by the Offeror.
FIRST BANKS, INC.
January 4, 1999
<PAGE>
SCHEDULE A
CERTAIN TRANSACTIONS INVOLVING SHARES
Except as set forth in the table below, based upon the records of the
Offeror and FBA and upon information provided to the Offeror by officers and
directors of the Offeror and FBA, neither the Offeror, FBA, nor any executive
officer or director of either company, nor any associate or subsidiary of any of
them, effected any transaction in Shares during the 60 days preceding the date
on which the Offer was commenced. All of the transactions identified in the
table were purchases of Shares by FBA in open market transactions:
Date Number of Shares Price per Share ($)
November 6, 1998 6,000 17.958
November 9, 1998 6,300 18.000
November 10 1998 2,100 18.000
November 11, 1998 2,100 18.000
The Letter of Transmittal and certificates for Shares and any other
required documents should be sent or delivered by each stockholder or such
stockholder's broker, dealer, commercial bank, trust company or nominee to the
Depositary at one of its addresses set forth on the back cover of this offer to
Purchase. Facsimile copies of the Notice of Guaranteed Delivery but not the
Letter of Transmittal will be accepted from Eligible Institutions.
<PAGE>
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Mail By Facsimile: By Hand:
P.O. Box 3301 (201) 296-4293 120 Broadway
South Hackensack, NJ 07606 13th Floor
New York, NY 10271
Facsimile confirmation number (for
eligible institutions only):
(201) 296-4860
By Overnight Delivery:
85 Challenger Road
Mail Drop Reorg
Ridgefield Park, NJ 07660
Attn: Reorganization Dept.
Any questions or requests for assistance or additional copies of the
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
locations listed below. Stockholders may also contact their broker, dealer,
commercial bank, trust company or nominee for assistance concerning the Offer.
To confirm delivery of Shares, stockholders are directed to contact the
Depositary.
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, NY 10004
(212) 843-8500 (call collect)
or (800) 792-2829 (toll-free)
January 4, 1999
<PAGE>
Letter of Transmittal Exhibit (a)(2)
To Tender Shares of Common Stock
of
First Banks America, Inc.
To
First Banks, Inc.
Pursuant to the Offer to Purchase Dated January 4, 1999
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON WEDNESDAY, FEBRUARY 3, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Mail: By Overnight Delivery: By Hand:
Reorganization Depart Reorganization Depart Reorganization Depart
P.O. Box 3301 85 Challenger Road 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Mail Drop--Reorg New York, NY 10271
Ridgefield Park, NJ 07660
By Facsimile Transmission: Confirm Facsimile by Telephone only:
(for eligible institutions only) (201) 296-4860
(201) 296-4293
Delivery of this instrument to an address other than as set forth above
will not constitute a valid delivery. Delivery to the Offeror will not be
forwarded to the Depositary and therefore will not constitute valid delivery.
Deliveries to book-entry transfer facilities will not constitute valid delivery
to the Depositary.
This Letter of Transmittal is to be used only if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase (as defined below).
Stockholders who cannot deliver their Share certificates and any other
required documents to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares using the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2.
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
<TABLE>
<CAPTION>
- -------------------------------------------------------------- -----------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) Shares Tendered
(Please fill in, if blank, exactly as name(s) appear(s) on (Attach additional signed list if necessary)
certificate(s)
- ------------------------------------------------------------ -------------------------------------------------------
<S> <C> <C> <C>
----------------- -------------------- ----------------
Total Number
Share of Shares Number of
Certificate Represented By Shares
Number(s)(1) Certificate(s) Tendered(2)
----------------- -------------------- ----------------
----------------- -------------------- ----------------
----------------- -------------------- ----------------
----------------- -------------------- ----------------
----------------- -------------------- ----------------
----------------- -------------------- ----------------
----------------- -------------------- ----------------
----------------- -------------------- ----------------
----------------- -------------------- ----------------
----------------- -------------------- ----------------
----------------- -------------------- ----------------
-------------------------------------------------------
Total Shares . . . . . . . . . . . . . . . . . . .
-------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Indicate in this box the order (by certificate number) in which Shares are to be
purchased in the event of proration.(3) (Attach additional signed list if
necessary.) See Instruction 13.
1st: 2nd: 3rd: 4th: 5th:
- --------------------------------------------------------------------------------
(1) Need not be completed by stockholders tendering Shares by book-entry
transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares
represented by each Share certificate delivered to the Depositary are
being tendered hereby. See Instruction 4.
(3) If you do not designate an order, then in the event less than all
Shares tendered are purchased due to proration, Shares will be selected
for purchase by the Depositary. See Instruction 13.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
|_| Check here if you cannot locate your certificates and require
assistance in replacing them. Upon receipt of this Letter of
Transmittal, the Depositary will contact you directly with replacement
instructions.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
|_| CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE DTC AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
Account No.:
Transaction Code No.:
|_| CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s):
---------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------
Name of Institution that Guaranteed Delivery:
--------------------------
If delivery is by book-entry transfer:
Name of Tendering Institution:
-----------------------------------------
Account No.:
-----------------------------------------------------------
Transaction Code No.:
--------------------------------------------------
Ladies and Gentlemen:
The undersigned hereby tenders to First Banks, Inc., a Missouri
corporation (the "Offeror"), the above-described shares of common stock of First
Banks America, Inc., a Delaware corporation ("FBA"), par value $.15 per share
(the "Shares"), pursuant to the Offeror's offer to purchase up to 400,000 Shares
at a price per Share hereinafter set forth, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
January 4, 1999 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constitute the
"Offer").
Subject to, and effective upon, acceptance for payment of and payment
for the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Offeror all right,
title and interest in and to all the Shares that are being tendered hereby and
orders the registration of all such Shares tendered by book-entry transfer that
are purchased pursuant to the Offer or upon the order of the Offeror and
constitutes and appoints the Depositary as the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver certificates for such Shares, or
transfer ownership of such Shares on the account books maintained by the DTC,
together with all accompanying evidences of transfer and authenticity, to or
upon the order of the Offeror upon receipt by the Depositary, as the
undersigned's agent, of the Purchase Price with respect to such Shares, (ii)
<PAGE>
present certificates for such Shares for cancellation and transfer on the books
of FBA and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by the Offeror, the Offeror will acquire good, marketable and
unencumbered title thereto, free and clear of all security interests, liens,
restrictions, charges, encumbrances, conditional sales agreements and other
obligations relating to the sale or transfer thereof, and the same will not be
subject to any adverse claims. The undersigned will, upon request, execute and
deliver any additional documents deemed by the Depositary or the Offeror to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby.
The undersigned has read and agrees to all of the terms of the Offer.
All authority herein conferred or agreed to be conferred shall not be affected
by, and shall survive the death or incapacity of, the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Except as
stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one
of the procedures described in Section 3 of the Offer to Purchase and in the
instructions will constitute the undersigned's acceptance of the terms and
conditions of the Offer, including the undersigned's representation and warranty
that (i) the undersigned has a net long position in the Shares or equivalent
securities being tendered, within the meaning of Rule 14e-4 promulgated under
the Securities Exchange Act of 1934, as amended, and (ii) the tender of such
Shares complies with Rule 14e-4. The Offeror's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement between the
undersigned and the Offeror upon the terms and subject to the conditions of the
Offer. The undersigned acknowledges that no interest will be paid on the
Purchase Price for tendered Shares regardless of any extension of the Offer or
any delay in making payment.
The undersigned recognizes that, under certain circumstances set forth
in the Offer to Purchase, the Offeror may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may accept
for payment fewer than all of the Shares tendered hereby.
The undersigned understands that the Offeror will determine a single
per Share price (not greater than $21.00 nor less than $16.50 per Share) that it
will pay for Shares validly tendered and not properly withdrawn pursuant to the
Offer (the "Purchase Price"), taking into account the number of Shares so
tendered and the prices specified by tendering stockholders. The undersigned
understands that the Offeror will select the lowest Purchase Price that will
enable it to purchase 400,000 Shares (or such lesser number of Shares as are
validly tendered at prices not greater than $21.00 nor less than $16.50 per
Share) and not withdrawn pursuant to the Offer. The undersigned understands that
all Shares properly tendered prior to the Expiration Date at prices at or below
the Purchase Price and not withdrawn will be purchased at the Purchase Price,
upon the terms and subject to the conditions of the Offer, including the
proration provisions, and that the Offeror will return all other Shares,
including Shares tendered at prices greater than the Purchase Price and not
withdrawn and Shares not purchased because of proration.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Shares purchased, and/or return
any Shares not tendered or not purchased, in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at the applicable Book-Entry Transfer Facility). Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the Purchase Price of any Shares purchased and/or any certificates for
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Payment Instructions" and "Special
Delivery Instructions" are completed, please issue the check for the Purchase
Price of any Shares purchased and/or return any Shares not tendered or not
purchased in the name(s) of, and mail said check and/or any certificates to, the
person(s) so indicated. The undersigned recognizes that neither the Offeror nor
FBA has an obligation, pursuant to the "Special Payment Instructions," to
transfer any Shares from the name of the registered holder(s) thereof if the
Offeror does not accept for payment any of the Shares so tendered.
The undersigned recognizes that, under certain circumstances set forth
in the Offer to Purchase, the Offeror may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered, may
not be required to purchase any of the Shares tendered, or may accept for
payment fewer than all of the Shares tendered hereby.
All capitalized terms used herein and not defined shall have the
meaning ascribed to them in the Offer to Purchase.
<PAGE>
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED (SEE
INSTRUCTION 5) CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX
IS CHECKED, THERE IS NO PROPER TENDER OF SHARES.
SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION.
|_| I want to maximize the chance of having the Offeror accept all the Shares I
am tendering (subject to the possibility of proration). Accordingly, by checking
this one box instead of one of the price Boxes below, I hereby tender Shares at,
and am willing to accept, the Purchase Price resulting from the Offer Process.
This action could result in receiving a price as low as $16.50 per Share.
OR
SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER
By checking ONE of the boxes below INSTEAD OF THE BOX ABOVE, the
undersigned hereby tenders Shares at the price checked. This action could result
in none of the Shares being purchased if the Purchase Price for the Shares is
less than the price checked. A stockholder who desires to tender Shares at more
than one price must complete a separate Letter of Transmittal for each price at
which Shares are tendered. The same Shares cannot be tendered at more than one
price.
Price (in dollars) per Share at which Shares are being tendered:
|_| $16.50 |_| $17.50 |_| $18.50 |_| $19.375 |_| $20.25
|_| $16.625 |_| $17.625 |_| $18.625 |_| $19.50 |_| $20.375
|_| $16.75 |_| $17.75 |_| $18.75 |_| $19.625 |_| $20.50
|_| $16.875 |_| $17.875 |_| $18.875 |_| $19.75 |_| $20.625
|_| $17.00 |_| $18.00 |_| $19.00 |_| $19.875 |_| $20.75
|_| $17.125 |_| $18.125 |_| $19.125 |_| $20.00 |_| $20.875
|_| $17.25 |_| $18.25 |_| $19.25 |_| $20.125 |_| $21.00
|_| $17.375 |_| $18.375
<TABLE>
<CAPTION>
- --------------------------------------------------- --------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 6, 7 and 8) (See Instructions 1, 6, 7 and 8)
To be completed ONLY if the check for the Purchase To be completed ONLY if the check for the Purchase
Price of Shares purchased and/or certificates for price of Shares purchased and/or certificates for
Shares not tendered or no purchased are to be Shares not tendered or not purchased are to be
issued in the name of someone other than the mailed to someone other than the undersigned or to
the undersigned. the undersigned at an address other than that
shown below the undersigned's signature(s).
<S> <C> <C>
Issue: |_| check and/or |_| certificates to:
MAIL: |_| check and/or |_| certificates to:
Name
---------------------------------------------
(Please Print) Name
Address -------------------------------------------
------------------------------------------- (Please Print)
Address
-------------------------- -----------------------------------------
(Include Zip code)
--------------------------
-------------------------- (Include Zip Code)
(Tax ID or Social Security No.)
-----------------------------
(Tax ID or Social Security No.)
- --------------------------------------------------- ---------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY STOCKHOLDER(S))
Signature(s) of Owner(s)
Dated:
-------------------------------------------------------------------------
Name(s):
-----------------------------------------------------------------------
(Please Print)
Capacity (full title):
---------------------------------------------------------
Address:
-----------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.:
---------------------------------------------------
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please provide full title and see Instruction 6.)
GUARANTEE OF SIGNATURE(S) (See
Instructions 1 and 6)
Certain signatures must be guaranteed by an Eligible Institution.
Name of Firm:
------------------------------------------------------------------
Authorized Signature:
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Name (Please Print):
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Title:
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Address:
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Area Code and Telephone No.:
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Dated:
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INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution (as defined in the Offer to Purchase). Signatures on this Letter of
Transmittal need not be guaranteed (i) if this Letter of Transmittal is signed
by the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in one of the Book-Entry Transfer
Facilities whose name appears on a security position listing as the owner of
Shares) tendered herewith and such holder(s) have not completed the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
<PAGE>
Instructions" on this Letter of Transmittal or (ii) if such Shares are tendered
for the account of an Eligible Institution. See Instruction 6.
2. Delivery of Letter of Transmittal and Share Certificates. This
Letter of Transmittal is to be used either if certificates are to be forwarded
herewith or if delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth in Section 3 of the Offer to Purchase. Certificates
for all physically delivered Shares, or a confirmation of a book-entry transfer
into the Depositary's account at the DTC of all Shares delivered electronically,
as well as a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on this Letter of Transmittal on or prior to 5:00 p.m., New
York City time, on the Expiration Date (as defined in the Offer to Purchase).
Stockholders whose certificates are not immediately available or who
cannot deliver their Shares and all other required documents to the Depositary
on or prior to 5:00 p.m. New York City time on the Expiration Date, or whose
Shares cannot be delivered on a timely basis pursuant to the procedures for
book-entry transfer, may tender their Shares pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such
procedure: (i) such tender must be made by or through an Eligible Institution,
(ii) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Offeror (with any required signature
guarantees) must be received by the Depositary on or prior to 5:00 p.m. New York
City time on the Expiration Date and (iii) the certificates for all physically
delivered Shares in proper form for transfer by delivery, or a confirmation of a
book-entry transfer into the Depositary's account at the DTC of all Shares
delivered electronically, in each case together with a properly completed and
duly executed Letter of Transmittal (or manually signed facsimile thereof) and
any other documents required by this Letter of Transmittal must be received by
the Depositary within three New York Stock Exchange trading days after the date
of receipt by the Depositary of such Notice of Guaranteed Delivery, all as
provided in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING SHARE CERTIFICATES AND THE LETTER OF TRANSMITTAL, IS AT THE ELECTION
AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
No alternative or contingent tenders will be accepted. By executing
this Letter of Transmittal (or a facsimile thereof), the tendering stockholder
waives any right to receive any notice of the acceptance for payment of the
Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
4. Partial Tenders (Not Applicable to Stockholders Who tender by
Book-Entry Transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box entitled "Number of Shares
Tendered." In such case, if any tendered Shares are purchased, a new certificate
for the remainder of the Shares represented by the old certificate will be sent
to the person(s) signing this Letter of Transmittal, unless otherwise provided
in the "Special Payment Instructions" or "Special Delivery Instructions" boxes
on this Letter of Transmittal, as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. Indication of Price at which Shares are being Tendered. For Shares
to be validly tendered, the stockholder must either:
(a) check the box under "Shares Tendered at Price Determined by Dutch
Auction;" or
(b) check the box indicating the price per Share at which he is
tendering Shares under "Shares Tendered at Price Determined by
Stockholder."
By checking the box under "Shares Tendered at Price Determined by Dutch
Auction," a stockholder agrees to accept the Purchase Price that results from
the "Dutch Auction" tender process, which may be as low as $16.50 or as high as
$21.00 per Share. By checking a box under "Shares Tendered at Price Determined
<PAGE>
by Stockholder," a stockholder acknowledges that doing so could result in none
of the Shares being purchased if the Purchase Price for the Shares is less than
the price you checked.
ONLY ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED, OR IF NO
BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES. A stockholder wishing to
tender portions of his or her Share holdings at different prices must complete a
separate Letter of Transmittal for each price at which such stockholder wishes
to tender each such portion of such stockholder's Shares. The same Shares cannot
be tendered (unless previously properly withdrawn as provided in Section 4 of
the Offer to Purchase) at more than one price.
6. Signatures on Letter of Transmittal; Stock Powers and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the certificates without alteration, enlargement or any
change whatsoever. If this Letter of Transmittal is signed by a participant in
DTC whose name is shown as the owner of the Shares tendered hereby, the
signature must correspond with the name shown on the security position listing
as the owner of the Shares.
If any of the Shares hereby is held of record by two or more persons,
all such persons must sign this Letter of Transmittal. If any of the Shares
tendered hereby are registered in different names on different certificates, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the Purchase Price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s), in which case signed exactly as the
name(s) of the registered holder(s) appear(s) on such certificates. Signatures
on any such certificates or stock powers must be guaranteed by an Eligible
Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Offeror of the authority of such person so to act must be
submitted.
7. Stock Transfer Taxes. The Offeror will pay or cause to be paid any
stock transfer taxes with respect to the sale and transfer of any Shares to it
or its order pursuant to the Offer. If, however, payment of the Purchase Price
is to be made to, or Shares not tendered or not purchased are to be registered
in the name of, any person other than the registered holder(s), or if tendered
Shares are registered in the name of any person other than the person(s) signing
this Letter of Transmittal, the amount of any stock transfer taxes (whether
imposed on the registered holder(s), such other person or otherwise) payable on
account of the transfer to such person will be deducted from the Purchase Price
unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted. See Section 5 of the Offer to Purchase. Except as
provided in this Instruction 7, it will not be necessary to affix transfer tax
stamps to the Certificates representing Shares tendered hereby.
8. Special Payment and Delivery Instructions. If a check for the
Purchase Price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal, or if the check and/or
any certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of Shares
Tendered," then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed.
Stockholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such stockholder at the Book-Entry Transfer Facility from which the transfer was
made.
9. Substitute Form W-9 and Form W-8. Under the United States federal
income tax backup withholding rules, unless an exemption applies under the
applicable law and regulations, 31% of the gross proceeds payable to a
<PAGE>
stockholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Treasury, unless the stockholder or other payee provides
such person's taxpayer identification number (employer identification number or
social security number) to the Depositary and certifies that such number is
correct. Therefore, each tendering stockholder should complete and sign the
Substitute Form W-9 included as part of the Letter of Transmittal so as to
provide the information and certification necessary to avoid backup withholding,
unless such stockholder otherwise establishes to the satisfaction of the
Depositary that it is not subject to backup withholding. Certain stockholders
(including, among others, all corporations and certain foreign stockholders (in
addition to foreign corporations)) are not subject to these backup withholding
and reporting requirements. In order for a foreign stockholder to qualify as an
exempt recipient, that stockholder must submit an IRS Form W-8 or a Substitute
Form W-8 signed under penalties of perjury, attesting to that stockholder's
exempt status. Such statements may be obtained from the Depositary.
10. Withholding on Foreign Stockholders. Even if a foreign stockholder
has provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of the
gross payments payable to a foreign stockholder or his or her agent unless the
Depositary determines that an exemption from or a reduced rate of withholding is
available pursuant to a tax treaty or that an exemption from withholding is
applicable because such gross proceeds are effectively connected with the
conduct of a trade or business in the United States. For this purpose, a foreign
stockholder is a stockholder that is not (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States, any state or any political subdivision
thereof, (iii) an estate or trust described in Section 7701(a)(30) of the Code
or (iv) a person whose worldwide income or gain is subject to United States
federal income taxation on a net income basis. In order to obtain a reduced rate
of withholding pursuant to a tax treaty, a foreign stockholder must deliver to
the Depositary a properly completed IRS Form 1001. In order to obtain an
exemption from withholding on the ground that the gross proceeds paid pursuant
to the Offer are effectively connected with the conduct of a trade or business
within the United States, a foreign stockholder must deliver to the Depositary a
properly completed IRS Form 4224. The Depositary will determine a stockholder's
status as a foreign stockholder and eligibility for a reduced rate of, or an
exemption from, withholding by reference to outstanding certificates or
statements concerning eligibility for a reduced rate of, or exemption from,
withholding (e.g., IRS Form 1001 or IRS Form 4224), unless facts and
circumstances indicate that such reliance is not warranted. A foreign
stockholder may be eligible to obtain a refund of all or a portion of any tax
withheld if such stockholder meets the "complete termination," "substantially
disproportionate" or "not essentially equivalent to a dividend" test described
in Section 13 of the Offer to Purchase or is otherwise able to establish that no
tax or a reduced amount of tax is due. Backup withholding generally will not
apply to amounts subject to the 30% or treaty-reduced rate of withholding.
Foreign stockholders are urged to consult their tax advisors regarding the
application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and refund procedures.
11. Requests for Assistance or Additional Copies. Any questions or
requests for assistance may be directed to the Information Agent at its
telephone number and address listed in this Letter of Transmittal. Requests for
additional copies of the Offer to Purchase, this Letter of Transmittal or other
tender offer materials may be directed to the Information Agent, and such copies
will be furnished promptly at the Offeror's expense. Stockholders may also
contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
12. Irregularities. All questions as to the number of Shares to be
accepted, the Purchase Price and the validity, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by the Offeror, in its sole discretion, which shall be final and binding on all
parties. The Offeror reserves the absolute right to reject any or all tenders
that it determines are not in proper form or the acceptance for payment for
which may, in the opinion of the Offeror's counsel, be unlawful. The Offeror
also reserves the absolute right to waive any of the conditions to the Offer or
any defect or irregularity in any tender of Shares or any particular
stockholder. The Offeror's interpretation of the terms and conditions of the
Offer (including these instructions) shall be final and binding on all parties.
None of the Offeror, the Depositary, the Information Agent or any other person
is or will be obligated to give notice of any defects or irregularities in
tenders, nor shall any of them incur any liability for failure to give any such
notice. Tenders will not be deemed to have been made until all defects and
irregularities have been cured or waived.
13. Order of Purchase in Event of Proration. As described in the Offer
to Purchase, stockholders may designate the order in which their Shares are to
be purchased in the event of proration. The order of purchase may affect whether
any capital gain or loss recognized on the Shares purchased is long-term or
short-term (depending on the holding period for the Shares purchased) and the
amount of gain or loss recognized for federal income tax purposes. See Section 1
of the Offer to Purchase.
14. Lost, Stolen or Destroyed Certificates. If your certificate(s)
representing Shares have been lost, stolen or destroyed, indicate the occurrence
of such event on the front of this Letter of Transmittal. The Depositary will
send you additional documentation that must be completed to effectively
surrender such lost, stolen or destroyed certificates.
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF)
TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO
PURCHASE). STOCKHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED SUBSTITUTE FORM W-9
WITH THIS LETTER OF TRANSMITTAL.
PAYOR'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<PAGE>
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Part 1 - PLEASE PROVIDE Social Security
YOUR TIN IN THE BOX AT Number or Employer
RIGHT AND CERTIFY BY Identification
SUBSTITUTE SIGNING AND DATING BELOW: Number
Form W-9
Department of the Treasury Part 2 - Certification - Under penalties
of perjury, I certify that:
Internal Revenue Service
(1) The number shown on this form is my
correct Taxpayer Identification Number
(or I am waiting for a number to be
issued to me), and
Payer's Request for Taxpayer
Identification Number ("TIN") (2) I am not subject to
backup withholding because: (a) I am
exempt from backup withholding, or (b) I
have not been notified by the Internal
Revenue Service (the "IRS") that I am
subject to backup withholding as a result
of a failure to report all interest and
dividends, or (c) the IRS has notified me
that I am no longer subject to backup
withholding.
CERTIFICATION INSTRUCTIONS - You must
cross out item (2) above if you have been
notified by the IRS that you are
currently subject to backup withholding
because of underreporting interest or
dividends on your tax return. However, if
after being notified by the IRS that you
were subject to backup withholding you
received another notification from the
IRS that you are no longer subject to
backup withholding, do not cross out such
item (2).
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Signature: Part 3 -
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Awaiting TIN |_|
Date:
----------------- , 1999.
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NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING
CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9.
<PAGE>
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CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all payments of the Purchase Price made to me thereafter will be withheld
until I provide a number.
Signature Date
-------------------------------------- -----------------, 1999
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THE INFORMATION AGENT IS:
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, New York 10004
(212) 843-8500 (collect)
(800) 792-2829 (toll-free)
<PAGE>
Exhibit (a)(3)
Notice of Guaranteed Delivery
of Shares of Common Stock
Of
First Banks America, Inc.
to
First Banks, Inc.
This form, or a form substantially equivalent to this form, must be
used to accept the Offer (as defined below) if certificates for the shares of
common stock, par value $.15 per share, of First Banks America, Inc. are not
immediately available, if the procedure for book-entry transfer cannot be
completed on a timely basis or if time will not permit all other documents
required by the Letter of Transmittal to be delivered to the Depositary on or
prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase
(defined below)). Such form may be delivered by hand or transmitted by mail or
overnight courier, or, for Eligible Institutions only, by facsimile
transmission, to the Depositary. See Section 3 of the Offer to Purchase. THE
ELIGIBLE INSTITUTION THAT COMPLETES THIS FORM MUST COMMUNICATE THE GUARANTEE TO
THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND CERTIFICATES FOR
SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN. FAILURE TO DO SO COULD
RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
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By Mail By Overnight Delivery: By Hand:
Reorganization Department Reorganization Department Reorganization Department
P.O. Box 3301 85 Challenger Road 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Mail Drop-Reorg New York, NY 10271
Ridgefield Park, NJ 07660
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By Facsimile Transmission:
(201) 296-4293
Confirm Receipt of Notice of Guaranteed Delivery Only:
(201) 296-4860
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON
A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX IN THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to First Banks, Inc., a Missouri
corporation (the "Offeror"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated January 4, 1999 (the "Offer to Purchase"),
and the related Letter of Transmittal (which together constitute the "Offer"),
receipt of which is hereby acknowledged, the number of shares listed below of
the common stock, par value $.15 per share, of First Banks America, Inc. (the
"Shares"), pursuant to the guaranteed delivery procedure set forth in Section 3
of the Offer to Purchase.
Number of Shares If Shares will be tendered by book-entry transfer:
-------------
Name of Tendering
Signature(s) Institution
-------------------------------
Name(s) of Record Holders
Area Code and Telephone No(s)
(Please Type or Print)
Certificate Nos. (if available) Account No.
-------------------
Dated
-------------------, 1999
Address(es)
-------------------------------
(Include Zip Code)
<PAGE>
SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION
|_| The undersigned wants to maximize the chance of having the Offeror purchase
all the Shares tendered (subject to the possibility of proration). Accordingly,
by checking this ONE box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the
undersigned hereby tenders Shares and is willing to accept the Purchase Price
resulting from the "Dutch Auction" tender process. This action will result in
receiving a price per Share of as low as $16.50 or as high as $21.00.
OR
SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER
Price (in dollars) per Share at which Shares are being tendered: Check
ONLY ONE BOX. If more than one box is checked, or if no box is checked, there is
no proper tender of shares.
|_| $16.50 |_| $17.50 |_| $18.50 |_| $19.375 |_| $20.25
|_| $16.625 |_| $17.625 |_| $18.625 |_| $19.50 |_| $20.375
|_| $16.75 |_| $17.75 |_| $18.75 |_| $19.625 |_| $20.50
|_| $16.875 |_| $17.875 |_| $18.875 |_| $19.75 |_| $20.625
|_| $17.00 |_| $18.00 |_| $19.00 |_| $19.875 |_| $20.75
|_| $17.125 |_| $18.125 |_| $19.125 |_| $20.00 |_| $20.875
|_| $17.25 |_| $18.25 |_| $19.25 |_| $20.125 |_| $21.00
|_| $17.375 |_| $18.375
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States which is a participant in an approved Signature Guarantee Medallion
Program (each of the foregoing, an "Eligible Institution"), guarantees (i) that
the above-named person(s) has a net long position in the Shares being tendered
within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act
of 1934, as amended, (ii) that such tender of Shares complies with Rule 14e-4,
and (iii) to deliver to the Depositary, at one of its addresses set forth above,
certificate(s) for the Shares tendered hereby, in proper form for transfer, or a
confirmation of the book-entry transfer of the Shares tendered hereby into the
Depositary's account at The Depository Trust Company, in each case, together
with a properly completed and duly executed Letter(s) of Transmittal (or
manually signed facsimile(s) thereof), with any required signature guarantee(s)
and any other required documents, all within three New York Stock Exchange
trading days after the date hereof.
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Name of Firm Authorized Signature
Address Please Type or Print Name
Title
City, State, Zip Code -------------------------------
Dated:
----------------------- , 1999
Area Code and Tel. No.
Dated:
-------------------------,1999
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NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE
CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL.
<PAGE>
Exhibit (a)(4)
FIRST BANKS, INC.
OFFER TO PURCHASE FOR CASH UP TO
400,000 SHARES OF THE COMMON STOCK OF FIRST BANKS AMERICA, INC.
AT A PURCHASE PRICE NOT IN EXCESS OF $21.00
NOR LESS THAN $16.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M. NEW YORK CITY TIME, ON WEDNESDAY, FEBRUARY 3, 1999
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated
January 4, 1999, and the related Letter of Transmittal (which together
constitute the "Offer") in connection with the Offer by First Banks, Inc., a
Missouri corporation (the "Offeror"), to purchase 400,000 shares (or such lesser
number of shares as are properly tendered and not withdrawn) of the $.15 par
value common stock of First Banks America, Inc. (the "Shares"), at prices not in
excess of $21.00 nor less than $16.50 per Share in cash, specified by such
stockholders, upon the terms and subject to the conditions set forth in the
Offer.
The Offeror will determine the single per Share price, not in excess of
$21.00 nor less than $16.50 per Share, net to the seller in cash (the "Purchase
Price"), that it will pay for Shares properly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Offeror will select the lowest Purchase Price that
will allow it to buy 400,000 Shares (or such lesser number of Shares as are
properly tendered at prices not in excess of $21.00 nor less than $16.50 per
Share). All Shares properly tendered prior to the Expiration Date (as defined in
the Offer to Purchase) at prices at or below the Purchase Price and not
withdrawn will be purchased at the Purchase Price, upon the terms and subject to
the conditions of the Offer, including the proration provisions. All Shares
acquired in the Offer will be acquired at the Purchase Price. Shares tendered at
prices in excess of the Purchase Price and Shares not purchased because of
proration will be returned at the Offeror's expense to the stockholders who
tendered such Shares. The Offeror reserves the right, in its sole discretion, to
purchase more than 400,000 Shares pursuant to the Offer. See Sections 1 and 14
of the Offer to Purchase.
If the number of Shares validly tendered and not withdrawn on or prior
to the Expiration Date is less than or equal to 400,000 Shares (or such greater
number of shares as the Offeror may elect to purchase pursuant to the Offer),
the Offeror will, upon the terms and subject to the conditions of the Offer,
purchase at the Purchase Price all Shares so tendered.
Upon the terms and subject to the conditions of the Offer, if at the
Expiration Date more than 400,000 Shares (or such greater number of Shares as
the Offeror may elect to purchase) are properly tendered at or below the
Purchase Price and not withdrawn, the Offeror will buy Shares on a pro rata
basis from all other FBA stockholders who properly tender Shares at prices at or
below the Purchase Price (and do not withdraw them prior to the Expiration
Date). See Sections 1 and 3 of the Offer to Purchase.
We are the owner of record of Shares held for your account. As such, we
are the only ones who can tender your Shares, and then only pursuant to your
instructions. We are sending you the Letter of Transmittal for your information
only; you cannot use it to tender Shares we hold for your account.
Please instruct us as to whether you wish us to tender any or all of
the Shares we hold for your account on the terms and subject to the conditions
of the Offer.
We call your attention to the following:
1. You may tender Shares at prices not in excess of $21.00 nor less
than $16.50 per Share as indicated in the attached Instruction Form,
net to you in cash.
<PAGE>
2. The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions
set forth in the Offer to Purchase.
3. The Offer, proration period and withdrawal rights will expire at
5:00 p.m. New York City time, on Wednesday, February 3, 1999, unless
the Offeror extends the Offer.
4. The Offer is for 400,000 Shares, constituting approximately 6.99% of
the Shares outstanding as of December 31, 1998.
5. Tendering stockholders who are registered holders of FBA will not be
obligated to pay any brokerage commissions or solicitation fees to the
Depositary, Information Agent or the Offeror or, subject to Instruction
7 of the Letter of Transmittal, stock transfer taxes on the Offeror's
purchase of Shares pursuant to the Offer.
6. If you wish to tender portions of your Shares at different prices,
you must complete a separate Instruction Form for each price at which
you wish to tender each such portion of your Shares. We must submit
separate Letters of Transmittal on your behalf for each such price you
will accept for each such portion tendered.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your Instruction Form to us is enclosed.
If you authorize us to tender your Shares, we will tender all such Shares unless
you specify otherwise on the attached Instruction Form.
Your Instruction Form should be forwarded to us in ample time to permit
us to submit a tender on your behalf on or before the Expiration Date of the
Offer. The Offer, Proration Period and Withdrawal Rights Expire at 5:00 p.m. New
York City time, on Wednesday, February 3, 1999, unless the Offeror extends the
Offer.
As described in Section 1 of the Offer to Purchase, if more than
400,000 Shares (or such greater number of Shares as the Offeror may elect to
purchase) have been properly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date, the Offeror will purchase Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
prior to the Expiration Date on a pro rata basis (with appropriate adjustments
to avoid purchases of fractional Shares) as described in Section 1 of the Offer
to Purchase.
The Offer is being made to all holders of Shares. The Offeror is not
aware of any jurisdiction where the making of the Offer is not in compliance
with applicable law. If the Offeror becomes aware of any jurisdiction where the
making of the Offer is not in compliance with any valid applicable law, the
Offeror will make a good faith effort to comply with such law. If, after such
good faith effort, the Offeror cannot comply with such law, the Offer will not
be made to, nor will tenders be accepted from or on behalf of, the holders of
Shares residing in such jurisdiction.
<PAGE>
INSTRUCTION FORM
Instructions With Respect to Offer to Purchase for Cash
up to 400,000 Shares of Common Stock
of First Banks America, Inc.
By First Banks, Inc.
At a Purchase Price Not Greater than $21.00
Nor Less Than $16.50 per Share
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated January 4, 1999, and the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer") in
connection with the Offer by First Banks, Inc. (the "Offeror") to purchase up to
400,000 shares of common stock, par value $.15 per share (the "Shares"), of
First Banks America, Inc. ("FBA"), at prices not greater than $21.00 nor less
than $16.50 per Share, net to the undersigned in cash, specified by the
undersigned, upon the terms and subject to the conditions of the Offer.
This will instruct you to tender to the Offeror the number of Shares
indicated below (or, if no number is indicated below, all Shares) that are held
by you for the account of the undersigned, at the price per Share indicated
below, upon the terms and subject to the conditions of the Offer.
<PAGE>
SHARES TENDERED
[_] By checking this box, all Shares held by us for your account will be
tendered. If fewer than all Shares are to be tendered, please check the
box and indicate below the aggregate number of Shares to be tendered by
us.
Shares
----------
SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION
|_| The undersigned wants to maximize the chance of having the Offeror
purchase all the Shares the undersigned is tendering (subject to the
possibility of proration). Accordingly, by checking this ONE box
INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders
Shares and is willing to accept the Purchase Price resulting from the
"Dutch Auction" tender process. This action will result in receiving a
price per Share of as low as $16.50 or as high as $21.00.
OR
SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER
Price (in dollars) per Share at which Shares are being tendered: Check
ONLY ONE BOX. If more than one box is checked, or if no box is checked,
there is no proper tender of shares.
|_| $16.50 |_| $17.50 |_| $18.50 |_| $19.375 |_| $20.25
|_| $16.625 |_| $17.625 |_| $18.625 |_| $19.50 |_| $20.375
|_| $16.75 |_| $17.75 |_| $18.75 |_| $19.625 |_| $20.50
|_| $16.875 |_| $17.875 |_| $18.875 |_| $19.75 |_| $20.625
|_| $17.00 |_| $18.00 |_| $19.00 |_| $19.875 |_| $20.75
|_| $17.125 |_| $18.125 |_| $19.125 |_| $20.00 |_| $20.875
|_| $17.25 |_| $18.25 |_| $19.25 |_| $20.125 |_| $21.00
|_| $17.375 |_| $18.375
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF
THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
SIGN HERE
Dated: , 199
--------------------
Signature(s)
-------------------------------
Name
--------------------------------------
Address
Social Security of Taxpayer ID No.:
<PAGE>
Exhibit (a)(5)
FIRST BANKS, INC.
135 North Meramec
St. Louis, Missouri 63105
January 4, 1999
To the Stockholders of First Banks America, Inc.:
First Banks, Inc. is offering to purchase up to 400,000 shares of
common stock (the "Shares") of First Banks America, Inc. ("FBA") from
stockholders of FBA. The price will not be in excess of $21.00 nor less than
$16.50 per Share. First Banks, Inc. is conducting the tender offer through a
procedure commonly referred to as a "Dutch Auction". This allows you to select
the price within the specified price range at which you are willing to sell
Shares to First Banks, Inc.
On December 29, 1998, the closing price per Share for FBA's common
stock on the New York Stock Exchange ("NYSE") was $16.81. Any FBA stockholder
tendering Shares directly to the Depositary whose Shares are purchased in the
offer will receive the net purchase price in cash and will not incur the usual
transaction costs associated with open-market sales. Any FBA stockholder owning
an aggregate of less than 100 Shares whose Shares are properly tendered directly
to the Depositary and purchased pursuant to the offer will avoid the applicable
odd lot discounts payable on sales of odd lots on the NYSE.
The offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. I encourage you to read these materials carefully before
making any decision with respect to the offer. The instructions on how to tender
Shares are also explained in detail in the accompanying materials.
Neither First Banks, Inc., FBA, nor the Board of Directors of either
company makes any recommendation to stockholders as to whether to tender or
refrain from tendering their Shares. Each stockholder must make the decision
whether to tender Shares and, if so, how many Shares and at what price or prices
Shares should be tendered.
Sincerely,
/s/James F. Dierberg
--------------------
James F. Dierberg
Chairman, President and
Chief Executive Officer
First Banks, Inc.
<PAGE>
Exhibit (a)(6)
First Banks, Inc.
St. Louis, Missouri
Contact: Allen H. Blake
Executive Vice President & Chief Financial Officer
(314) 995-8700
FOR IMMEDIATE RELEASE:
First Banks, Inc. Announces
"Dutch Auction" Tender Offer
ST. LOUIS MO, DECEMBER 30, 1998. First Banks, Inc. (the "Offeror")
announced today that it will commence a "Dutch Auction" tender offer to purchase
for cash up to 400,000 shares of the issued and outstanding common stock, par
value $.15 per share, of FIRST BANKS AMERICA, INC. (NYSE: FBA). The tender offer
is expected to begin Monday, January 4, 1999, and to expire, unless extended, at
5:00 p.m. New York City time, on Wednesday, February 3, 1999. The Offeror
currently owns approximately 76.84% of the outstanding voting stock of FBA.
Terms of the tender offer, which are described more fully in the Offer
to Purchase and the Letter of Transmittal, invite the stockholders of FBA to
tender up to 400,000 shares of FBA common stock to the Offeror at prices not
greater than $21.00 nor less than $16.50 per share, as specified by the
tendering stockholders. The Offeror will determine the lowest single price (not
greater than $21.00 nor less than $16.50 per share) net to the seller in cash
that will allow it to purchase 400,000 shares (or such lesser number of shares
as are validly tendered and not withdrawn) pursuant to the offer. That price
will be the purchase price the Offeror will pay for shares validly tendered at
prices at or below such purchase price and not withdrawn. If more than 400,000
shares are tendered, there will be a proration. Shares tendered at prices in
excess of the purchase price and shares not purchased because of proration will
be returned to the tendering stockholders at the Offeror's expense. The Offeror
reserves the right, in its sole discretion, to purchase more than 400,000 shares
pursuant to the offer. The offer is subject to certain conditions described in
the Offer to Purchase.
The Offer to Purchase, the Letter of Transmittal and related documents
will be mailed to FBA stockholders of record and will also be made available for
distribution to beneficial owners of FBA common stock.
Neither FBA nor the Boards of Directors of either company makes any
recommendation to FBA stockholders as to whether to tender or refrain from
tendering their shares.
On December 29, 1998, the closing price of FBA common stock was $16.81
per share.
Beacon Hill Partners, Inc. will serve as the information agent for the
offer. Any questions or requests for copies of tender offer materials may be
directed to Beacon Hill Partners, Inc. at (800) 755-5001.
<PAGE>
Exhibit (b)(1)
SECURED CREDIT AGREEMENT
($90,000,000 Revolving Loan)
dated as of August 26, 1998
among
First Banks, Inc.
and
Mercantile Bank National Association
American National Bank and Trust Company of Chicago
Harris Trust and Savings Bank
The Frost National Bank
Norwest Bank Minnesota, National Association
and
Mercantile Bank National Association,
as Agent
<PAGE>
TABLE OF CONTENTS
-----------------
Page
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS.............................. 1
Section 1.01. Defined Terms..................................... 1
Section 1.02. Accounting Terms.................................. 7
ARTICLE II. AMOUNT AND TERMS OF REVOLVING LOAN .......................... 8
Section 2.01. Revolving Loan Commitments........................ 8
Section 2.02. Termination or Reduction of Revolving
Loan Commitment................................................ 8
Section 2.03. Interest on Revolving Loans....................... 8
Section 2.04. Notice and Manner of Borrowing.................... 9
Section 2.05. Revolving Notes................................... 11
Section 2.06. Method of Payment................................. 11
Section 2.07. Use of Proceeds................................... 11
Section 2.08. Zero Balance ..................................... 12
Section 2.09. Advances and Payment.............................. 12
Section 2.10. Revolving Loan Commitment Fee..................... 12
Section 2.11. Reimbursement..................................... 12
Section 2.12. Failure of Any Bank to Make Revolving Loans....... 13
Section 2.13. Banks Not Required to Extend Credit............... 13
ARTICLE III. CONDITIONS PRECEDENT ..................................... 13
Section 3.01. Conditions Precedent to the Initial Loans......... 13
Section 3.02. Conditions Precedent to All Revolving Loans....... 15
ARTICLE IV. REPRESENTATIONS AND WARRANTIES............................... 16
Section 4.01. Incorporation, Good Standing,
and Due Qualification.......................................... 16
Section 4.02. Corporate Power and Authority..................... 16
Section 4.03. Legally Enforceable Agreement..................... 16
Section 4.04. Financial Statements; Financial Condition......... 17
Section 4.05. Other Agreements.................................. 17
Section 4.06. Litigation ..................................... 17
Section 4.07. Ownership of Subsidiaries......................... 17
Section 4.08. ERISA ........................................... 17
Section 4.09. Taxes ........................................... 18
Section 4.10. Use of Proceeds, Margin Regulations............... 18
Section 4.11. Year 2000 Compliance.............................. 18
<PAGE>
ARTICLE V. AFFIRMATIVE COVENANTS......................................... 18
Section 5.01. Maintenance of Existence.......................... 19
Section 5.02. Maintenance of Records............................ 19
Section 5.03. Maintenance of Subsidiaries....................... 19
Section 5.04. Compliance With Laws.............................. 19
Section 5.05. Right of Inspection............................... 19
Section 5.06. Reporting Requirements............................ 19
Section 5.07. Operations........................................ 21
Section 5.08. Additional Collateral............................. 21
Section 5.09. Year 2000 Compliance.............................. 21
ARTICLE VI. NEGATIVE COVENANTS........................................... 21
Section 6.01. Liens ........................................... 21
Section 6.02. Mergers, Etc...................................... 22
Section 6.03. Indebtedness...................................... 22
Section 6.04. Dividends......................................... 22
Section 6.05. Stock Issue; Additional Issue of Stock
of Subsidiary.................................................. 22
Section 6.06. Stock Redemption.................................. 23
Section 6.07. Loans ........................................... 23
Section 6.08. Debentures........................................ 23
Section 6.09. Continuation of Business.......................... 23
ARTICLE VII. FINANCIAL COVENANTS......................................... 24
Section 7.01. Tier I Leverage Ratio............................. 24
Section 7.02. Tier I Leverage Ratio............................. 24
Section 7.03. Tier I Risk Based Capital Ratio................... 24
Section 7.04. Total Risk Based Capital Ratio.................... 24
Section 7.05. Loan Loss Reserve................................. 24
Section 7.06. Net Income to Average Total Assets................ 24
Section 7.07. Non-Performing Assets............................. 25
ARTICLE VIII. EVENTS OF DEFAULT.......................................... 25
Section 8.01. Events of Default................................. 25
ARTICLE IX. AUTHORITY AND RESPONSIBILITY OF AGENT........................ 27
Section 9.01. Grant of Authority................................ 27
Section 9.02. Action upon Indemnification
Instructions.................................................. 27
Section 9.03. Reports; Responsibility of the
Agent; Disclaimer............................................. 28
Section 9.04. Correction of Errors.............................. 29
Section 9.05. Expenses; Indemnification......................... 29
Section 9.06. Rights as Bank.................................... 29
Section 9.07. Representation of Each Bank....................... 29
Section 9.08. Rights to Resign; Appointment
of a Successor Agent........................................... 30
Section 9.09. Notice of Default................................. 30
Section 9.10. Agent Compensation................................ 31
ARTICLE X. MISCELLANEOUS ........................................... 31
Section 10.01. Capital Adequacy Reimbursement................... 31
Section 10.02. Amendments, Etc.................................. 31
Section 10.03. Notices, Etc..................................... 31
Section 10.04. No Waiver; Remedies.............................. 32
Section 10.05. Successors and Assigns........................... 32
Section 10.06. Costs and Expenses............................... 32
<PAGE>
Section 10.07. Right of Setoff.................................. 33
Section 10.08. Sharing of Setoffs............................... 33
Section 10.09. Governing Law; Jurisdiction and Venue............ 33
Section 10.10. Severability of Provisions....................... 33
Section 10.11. Counterparts..................................... 34
Section 10.12. Headings......................................... 34
Section 10.13. Oral Agreements.................................. 34
EXHIBIT A................................................................ 35
EXHIBIT B................................................................ 36
EXHIBIT C................................................................ 38
EXHIBIT D................................................................ 39
EXHIBIT D-1.............................................................. 45
EXHIBIT E................................................................ 51
EXHIBIT F................................................................ 55
EXHIBIT G................................................................ 59
EXHIBIT H................................................................ 60
EXHIBIT I................................................................ 61
EXHIBIT J................................................................ 62
EXHIBIT K................................................................ 63
SCHEDULE 4.05............................................................ 65
SCHEDULE 4.06............................................................ 66
SCHEDULE 4.08............................................................ 68
SCHEDULE 8.01(10)........................................................ 69
<PAGE>
SECURED CREDIT AGREEMENT
THIS SECURED CREDIT AGREEMENT dated as of August 26, 1998, is
entered into by and among FIRST BANKS, INC., a Missouri corporation
("Borrower"), and MERCANTILE BANK NATIONAL ASSOCIATION, a national banking
association, AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, a national
banking association, HARRIS TRUST AND SAVINGS BANK, an Illinois state banking
corporation, THE FROST NATIONAL BANK, a national banking association, and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association
(each individually a "Bank" and collectively the "Banks"), and MERCANTILE BANK
NATIONAL ASSOCIATION, a national banking association, as Agent.
W I T N E S S E T H T H A T:
WHEREAS, Borrower has requested that the Banks severally make
available to Borrower a revolving credit facility in the aggregate amount of
Ninety Million Dollars ($90,000,000); and
WHEREAS, the Banks are willing severally to provide such loan
and facility to the Borrower, subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Defined Terms. As used in this Agreement, the
following terms have the following meanings (terms defined in the singular to
have the same meaning when used in the plural and vice versa):
"Affiliate" means any Person (1) which directly or indirectly
----------
controls, or is controlled by, or is under common control with, the Borrower or
any Subsidiary; (2) which directly or indirectly beneficially owns or holds five
percent (5%) or more of any class of voting stock of Borrower or any Subsidiary;
or (3) five percent (5%) or more of the voting stock of which is directly or
indirectly beneficially owned or held by Borrower or any Subsidiary. The term
"Control" for the purposes of this Agreement means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise. For the purposes of the foregoing definition, a
shareholder of Borrower shall not be deemed to be directly or indirectly
controlling or controlled by the Borrower or a subsidiary, provided the person
in question will not receive any proceeds from the Loans.
"Agent" means Mercantile Bank National Association, acting in
-----
its capacity as Agent pursuant to Article IX hereof and any duly appointed
successor.
<PAGE>
"Agreement" means this Secured Credit Agreement, as amended,
---------
supplemented or modified from time to time.
"Applicable Margin" shall mean, with respect to each Revolving
-----------------
Loan accruing interest based on the Eurodollar Rate, the rate per annum listed
in the applicable column below:
- -If the Performance Ratio is greater than 1.00:1, the Applicable Margin is 0.85%
- -If the Performance Ratio is less than 1.00:1, the Applicable Margin is 1.00%
- -If the Performance Ratio is less than 1.75:1, the Applicable Margin is 1.125%
- -If the Performance Ratio is less than 2.25:1, the Applicable Margin is 1.25%
- -If the Performance Ratio is greater than 1.75:1, the Applicable Margin is 1.00%
- -If the Performance Ratio is greater than 2.25:1, the Applicable Margin is 1.25%
The determination of the Applicable Margin as of any date shall be based on the
Performance Ratio as of the end of the most recently ended fiscal quarter of
Borrower for which consolidated financial statements of Borrower and its
Subsidiaries have been delivered to the Banks pursuant to Section 5.06, and
shall be effective for purposes of determining the Applicable Margin from and
after the first day of the month immediately following the date on which such
delivery of financial statements is required until the first day of the first
month immediately following the next such date on which delivery of consolidated
financial statements of Borrower and its Subsidiaries is so required. For
example, the Performance Ratio as of the end of the fiscal quarter of Borrower
ending September 30, 1998, would be determined from the consolidated financial
statements of Borrower and its Subsidiaries as of and for the period ending
September 30, 1998 (which are required to be delivered to Agent on or before
November 14, 1998), and would be used in determining the Applicable Margin from
and after December 1, 1998. All such adjustments shall be applicable to all
existing Revolving Loans as well as any new Revolving Loans made or issued;
provided, that, an adjustment in the Applicable Margin during the course of an
Interest Period will not result in a change in the Eurodollar Rate applicable to
that Interest Period.
"Average Total Assets" for any Person, at any time, means the
--------------------
amount set forth on the most recent report on form FRY-9C filed by Borrower with
the Board of Governors of the Federal Reserve System (or any successor report)
as "Average Total Assets."
"Bank" or "Banks" has the meaning assigned to such term in the
------ -----
preamble to this Agreement.
"Borrower" has the meaning assigned to such term in the
--------
preamble of this Agreement.
"Business Day" means any day other than a Saturday, Sunday, or
------------
other day on which commercial banks are authorized or required to close under
the laws of the States of Missouri, Illinois, Texas or California; provided,
that, when used in connection with a Revolving Loan, such day shall also be a
day on which dealings between banks are carried on in U.S. dollar deposits in
London, England.
"Call Report" has the meaning assigned to such term in Section
-----------
5.06(4).
"Certificate" has the meaning assigned to such term in Section
-----------
2.04.
<PAGE>
"Collateral" means all property which is subject or is to be
----------
subject to the Liens granted by the Pledge Agreement and/or the Subsidiary
Pledge Agreements.
"Commitment" means the several commitments of the Banks in the
----------
aggregate original principal amount of $90,000,000, or when used with reference
to a particular Bank, the portion of the several commitments allocated to such
Bank to make loans to the Borrower pursuant to Section 2.01 equal to the amount
stated in Exhibit A, as such amount may be reduced from time to time pursuant to
Section 2.02 hereof.
"Default" means any of the events specified in Section 8.01,
-------
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Equity Capital" for any Person, at any time, means the amount
--------------
set forth on the most recent report on form FRY-9C filed by Borrower with the
Board of Governors of the Federal Reserve System (or any successor report) as
"Total Equity Capital."
"ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended from time to time, and the regulations and published
interpretations thereof.
"ERISA Affiliate" means any trade or business (whether or not
----------------
incorporated) which together with the Borrower would be treated as a single
employer under Section 4001 of ERISA.
"Eurodollar Rate" means, for each applicable Interest Period,
---------------
an interest rate per annum equal to (i) the rate per annum (rounded upward to
the nearest whole multiple of 1/32 of 1% per annum, if such average is not such
a multiple) at which deposits in United States Dollars are offered or available
to banks in the London interbank market at 9:00 A.M. (St. Louis time) two (2)
Business Days before the first day of such Interest Period as reported on Dow
Jones Markets page 3750 (or such other page as may replace such page 3750 on
such system for the purpose of reporting comparable rates of major banks) under
the heading for British Bankers Association Interest Settlement Rates in the
column designated "USD" (United States Dollar) for a period comparable to such
Interest Period for an amount comparable to the subject Eurodollar Rate Loan
divided by (ii) a percentage equal to 100% minus the then stated maximum rate of
all reserve requirements (including any marginal, emergency, supplemental,
special or other reserves) applicable on such date to any member bank of the
Federal Reserve System in respect of "Eurocurrency liabilities" as defined in
Regulation D (or any other successor category of liabilities under Regulation
D).
"Event of Default" means any of the events specified in
------------------
Section 8.01, provided that any requirement for the giving of notice, the lapse
of time, or both, or any other applicable condition, has been satisfied.
"Federal Funds Rate" means, for any day, the rate per annum
-------------------
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates of overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
<PAGE>
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (ii) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to the
Agent on such day on such transactions as determined by the Agent.
"Funded Debt" shall mean as of any date, the outstanding
------------
principal amount of all Revolving Loans on such date.
"GAAP" means generally accepted accounting principles in the
----
United States as in effect from time to time, including such principles as are
utilized in the preparation of Call Reports and other regulatory reports
required to be filed by Borrower and its Subsidiaries.
"Interest Period" means the period commencing on the date of
----------------
making or conversion to or continuation of a Loan that accrues interest based on
the Eurodollar Rate. The Borrower shall have the option to select a one month,
two month, or three month Interest Period; provided, however, that whenever the
last day of any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur on
the next succeeding Business Day; provided, however, that if such extension
would cause the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the next
preceding Business Day. Notwithstanding the foregoing, the Borrower may not
select an Interest Period which ends after the Revolving Credit Termination
Date. For purposes of determining an Interest Period, a month means a period
starting on one day in a calendar month and ending on a numerically
corresponding day in the next calendar month, provided, however, if an Interest
Period begins on the last day of a month or if there is no numerically
corresponding day in the month in which an Interest Period is to end, then such
Interest Period shall end on the last Business Day of such month.
"Lien" means any mortgage, deed of trust, pledge, security
----
interest, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), or preference, priority, or other security agreement or
preferential arrangement, charge, or encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction to evidence
any of the foregoing).
"Loan Document(s)" means this Agreement, the Notes, the Pledge
----------------
Agreement, and the Subsidiary Pledge Agreements, as each may be renewed,
extended, amended, rearranged, restructured, restated, replaced or otherwise
modified from time to time, including without limitation, modifications to
interest rates or other payment terms.
"Loan Loss Reserve" for any Person, for any period, means the
-----------------
amount set forth on the most recent report on form FRY-9C filed by Borrower with
<PAGE>
the Board of Governors of the Federal Reserve System (or any successor report)
applicable to such period as "Allowance for loan and lease losses."
"Loans" means the Revolving Loans.
-----
"Majority" has the meaning assigned to such term in Section
--------
9.01.
"Multiemployer Plan" means a Plan described in Section
--------------------
4001(a)(3) of ERISA which covers employees of a Borrower or any ERISA Affiliate.
"Net Income" for any period means the amount set forth on the
-----------
report on form FRY-9C filed by Borrower with the Board of Governors of the
Federal Reserve System or any successor report applicable to such period as "Net
Income."
"Non-performing Assets" for any Person, at any time, means the
---------------------
sum of the amounts set forth on the most recent report on form FRY-9C filed by
Borrower with the Board of Governors of the Federal Reserve System (or any
successor report) as loans "past due 90 days or more and still accruing,"
"non-accrual," and "other real estate owned."
"Notes" means the Revolving Notes.
-----
"PBGC" means the Pension Benefit Guaranty Corporation or any
----
entity succeeding to any or all of its functions under ERISA.
"Performance Ratio" means, as of any date, the ratio of (x)
------------------
Funded Debt outstanding on such date to (y) Borrower's Net Income less
extraordinary and/or nonrecurring items (as determined in accordance with GAAP)
for the most recently ended period of four fiscal quarters of Borrower.
"Person" means an individual, partnership, corporation,
------
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority, or other juridical entity of whatever nature.
"Plan" means any employee benefit or other plan established,
----
maintained, or to which contributions have been made by the Borrower or any
ERISA Affiliate.
"Pledge Agreement" means the collateral pledge agreement in
-----------------
the form of Exhibit D, pledging to the Agent for the ratable benefit of the
Banks all of the stock of the Pledged Subsidiaries (exclusive of directors'
qualifying shares of stock) and certain stock acquired after the date of this
Agreement.
"Pledged Subsidiaries" means the Subsidiaries listed on
----------------------
Exhibit G attached hereto.
"Primary Capital" for any Person, for any period and without
----------------
duplication, means the sum of Equity Capital plus the Loan Loss Reserve of such
Person.
<PAGE>
"Prime Rate" means the per annum rate of interest announced by
----------
Mercantile Bank National Association (or its successor) from time to time as its
Prime Rate, which rate is not intended or represented to be the lowest rate of
interest charged by such Bank to its borrowers.
"Prohibited Transaction" means any transaction set forth in
-----------------------
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1954, as
amended from time to time.
"Reportable Event" means any of the events set forth in
-----------------
Section 4043 of ERISA.
"Revolving Credit Termination Date" means August 25, 1999.
---------------------------------
"Revolving Loan" means the aggregate of all loans made to
---------------
Borrower by the Banks as provided herein; or when used with respect to a
particular Bank, a loan made to Borrower by such Bank as provided herein; or
when used with respect to a request by Borrower for the making of loans on a
particular date as provided herein, the aggregate of such loans.
"Revolving Loan Limit" has the meaning assigned to such term
---------------------
in Section 2.01.
"Revolving Loan Commitment" means, as to each Bank, the
---------------------------
maximum amount which such Bank shall be obligated to loan to Borrower as a
Revolving Loan pursuant to Section 2.01 hereof.
"Revolving Loan Commitment Fee" has the meaning assigned to
--------------------------
such term in Section 2.10.
"Revolving Loan Notice of Borrowing" has the meaning assigned
----------------------------------
to such term in Section 2.04.
"Revolving Notes" has the meaning assigned to such term in
----------------
Section 2.05.
"Subsidiary" means, as to Borrower, any corporation of which
----------
shares of stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are at the time owned,
or the management of which corporation is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by a Borrower or a
Subsidiary of Borrower.
"Subsidiary Pledge Agreement" means the collateral pledge
-----------------------------
agreement (subsidiary) in the form of Exhibit D-1, pledging to the Agent for the
ratable benefit of the Banks all of the stock owned by CCB Bancorp, Inc. listed
on the Subsidiary Pledge Agreement Exhibit A attached thereto (exclusive of
directors' qualifying shares of stock) and certain stock acquired after the date
of this Agreement.
<PAGE>
"Tier I Leverage Ratio" means the ratio, expressed as a
-----------------------
percentage, of regulatory "core" capital (Tier I) to assets, all as defined and
determined from time to time by applicable bank regulatory authorities.
"Tier I Risk Based Capital Ratio" means the ratio of
-------------------------------------
regulatory "core" capital (Tier I) to weighted-risk assets and off-balance sheet
items, all as defined and determined from time to time by applicable bank
regulatory authorities.
"Total Assets" for any Person, at any time, means the amount
------------
set forth on the most recent report on form FRY-9C filed by Borrower with the
Board of Governors of the Federal Reserve System (or any successor report) as
"Total Assets."
"Total Loans" means, at any time, the amount set forth on the
-----------
most recent report on form FRY-9C filed by Borrower with the Board of Governors
of the Federal Reserve System (or any successor report) as the total of "Loans
and Leases, net of unearned income."
"Total Risk Based Capital Ratio" of any Person means, at any
-------------------------------
time, the ratio of regulatory "core" capital (Tier I) and supplementary capital
elements (Tier II) to weighted-risk assets and off-balance sheet items, all as
defined and determined from time by applicable bank regulatory authorities.
"Year 2000 Compliant" shall mean, with respect to any Person,
-------------------
that all software, embedded microchips and/or other computer and/or processing
capabilities utilized by such Person, and/or included in any software, products,
goods and/or services sold and/or leased by such Person, are able to correctly
and properly recognize, interpret, process, calculate, compare, sequence and
manipulate data and date-sensitive functions on and involving all calendar dates
(including, without limitation, dates in and after the year 2000).
Section 1.02. Accounting Terms. All accounting terms not
-----------------
specifically defined herein shall be construed in accordance with GAAP
consistent with those applied in the preparation of the financial statements and
reports referred to in Section 5.06, and all financial data submitted pursuant
to this Agreement shall be prepared in accordance with such principles.
ARTICLE II.
AMOUNT AND TERMS OF REVOLVING LOAN
----------------------------------
Section 2.01. Revolving Loan Commitments Subject to the terms
and conditions of this Agreement (including, without limitation, the terms and
conditions of Article III hereof), the Banks severally and not jointly agree
from time to time on any Business Day to make loans to the Borrower from time to
time during the period from the date hereof up to but not including the
Revolving Credit Termination Date in individual amounts not to exceed each
Bank's Revolving Loan Commitment as set forth opposite such Bank's name in
Exhibit A, the aggregate principal amount of which at any time shall not exceed
Ninety Million Dollars ($90,000,000) (the "Revolving Loan Limit"). Any amounts
advanced and repaid by Borrower shall be treated as prepayments and shall be
eligible for reborrowing by Borrower in the absence of a Default or an Event of
Default, subject to the terms and conditions of this Agreement.
Section 2.02. Termination or Reduction of Revolving Loan
----------------------------------------------
Commitment. The Borrower shall have the right, upon at least fifteen (15)
- -----------
Business Days' notice to the Agent, to terminate in whole or permanently reduce
in part the unused portion of the Revolving Loan Commitment. Any such reduction
by Borrower of the Revolving Loan Commitment shall result in a pro rata
reduction of each Bank's Revolving Loan Commitment.
Section 2.03. Interest on Revolving Loans. The Borrower shall
----------------------------
pay interest to the Agent for the account of the Banks on the outstanding and
unpaid principal amount of the Revolving Loans made under this Agreement at the
following intervals and at the following rates per annum:
(1) Prime Rate. If such Revolving Loan is accruing at the
------------
Prime Rate, a fluctuating rate per annum equal to the Prime Rate in
effect from time to time. Any change in the interest rate resulting
from a change in the Prime Rate shall become effective as of the
opening of business on the day on which such change in the Prime Rate
shall become effective. Interest shall be calculated on the basis of
the actual number of days elapsed over a year of 360 days. Interest
shall be paid in immediately available funds on or before 12:00 Noon
(St. Louis time) on the first day of each calendar month beginning
October 1, 1998, and on the Revolving Credit Termination Date. In the
event of receipt of funds after 12:00 Noon (St. Louis time) on the date
of payment, the funds shall be deemed to be received on the next
Business Day, and the accrual of interest will be calculated
accordingly;
(2) Eurodollar Rate. If such Revolving Loan is accruing
-----------------
interest based on the Eurodollar Rate, a rate per annum equal at all
times during the applicable Interest Period for such Revolving Loan to
the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Margin in effect from time to time, payable on the last day
of the Interest Period applicable to each such Revolving Loan and on
the Revolving Credit Termination Date. Interest shall be calculated on
the basis of the actual number of days elapsed over a year of 360 days.
Interest shall be paid in immediately available funds on or before
12:00 Noon (St. Louis time) on the last day of the Interest Period
applicable to each such Revolving Loan and on the Revolving Credit
Termination Date. In the event of receipt of funds after 12:00 Noon
(St. Louis time) on the date of payment, the funds shall be deemed to
be received on the next Business Day, and the accrual of interest will
be calculated accordingly;
provided, however, that, from and after the occurrence of an Event of Default
- -------- -------
and unless and until such Event of Default is waived, the Borrower shall pay
interest on the unpaid principal amount of each Revolving Loan outstanding at a
rate per annum equal to four percent (4%) per annum above the interest rate
otherwise in effect from time to time with respect to such Revolving Loan,
including without limitation any interest rate in effect as a consequence of the
provisions of Section 2.04(1), such interest being payable on demand. The Agent
shall give prompt notice to the Borrower and the Banks of the applicable
interest rate for each Revolving Loan determined by the Agent for purposes of
this Section 2.03.
<PAGE>
Section 2.04. Notice and Manner of Borrowing
------------------------------
(1) The Borrower shall give the Agent (who shall promptly
notify the Banks) telephonic notice (followed immediately by written or telex
notice substantially in the form of Exhibit C hereto) of any request for a
Revolving Loan under this Agreement (a "Revolving Loan Notice of Borrowing") at
least five (5) Business Days before such Revolving Loan is requested to be made,
specifying (i) the date such Loan is requested to be made, the purpose and
amount thereof, and (ii) the interest rate applicable to such Revolving Loan.
The written form of the Revolving Loan Notice of Borrowing shall be accompanied
by a Compliance Certificate (the "Certificate") in the form of Exhibit E hereto.
At least three (3) Business Days before the end of each Interest Period, the
Borrower shall give the Agent (who shall promptly notify the Banks) a Revolving
Loan Notice of Borrowing with respect to the relevant Revolving Loan accruing
interest based on the Eurodollar Rate specifying the new Interest Period or, in
the event that the relevant Revolving Loan is to accrue interest at the Prime
Rate, specifying the same. In the event that in any Revolving Loan Notice of
Borrowing hereunder the interest rate of the Revolving Loan to be advanced is
not specified (or if Borrower is not entitled to request the Eurodollar Rate
pricing option pursuant to the terms hereof), the Revolving Loan to be advanced
shall accrue interest at Prime Rate. Subject to the limitations in the next
sentence and in Section 2.04(2)(c), Borrower may in any Revolving Loan Notice of
Borrowing request a Revolving Loan that is the aggregate of separate Revolving
Loans that will accrue interest at different interest rates and for different
Interest Periods as provided herein. Each Revolving Loan shall be in an amount
of at least One Million Dollars ($1,000,000) and integral multiples of One
Hundred Thousand Dollars ($100,000) in excess thereof or, if less, the unused
amount of the Revolving Loan Commitment. Not later than 2:00 P.M. (St. Louis
time) on the date such Revolving Loan is requested to be made, or if later, upon
fulfillment of the applicable conditions set forth herein, the Banks via the
Agent will make such Revolving Loan available to the Borrower in immediately
available funds by wire transfer of Federal funds to the Borrower. Upon the
request (in writing) of the Borrower, the Agent and the Banks shall use their
reasonable best efforts to make such Revolving Loans available to the Borrower
prior to 2:00 P.M. (St. Louis time), provided, however, neither the Agent nor
the Banks shall have any liability to the Borrower or any other Person for any
failure to provide such funds prior to 2:00 P.M. (St. Louis time) pursuant to
such request. All notices given under this Section 2.04 shall be irrevocable,
and telephonic notices shall be given not later than 11:00 A.M. (St. Louis time)
on the day which is not later than the number of Business Days specified above
for such notice. If an Event of Default exists hereunder at the end of the
Interest Period of a Revolving Loan accruing interest based on the Eurodollar
Rate, such Revolving Loan shall immediately and automatically, and without
necessity of any further act by the Borrower, the Banks or the Agent, be
refinanced by a Revolving Loan accruing at the Prime Rate (as adjusted pursuant
to Section 2.03) in the same principal amount. Any costs and expenses incurred
by the Banks or the Agent by virtue of such refinancing (including without
limitation any costs and expenses that may be due under Section 10.06(2)) shall
be promptly paid by Borrower to the Agent for the account of the applicable
Banks on the demand of the Agent, and all the Revolving Loans shall thereafter
accrue interest at the Prime Rate (as adjusted pursuant to Section 2.03).
(2) Anything in subsection (1) above to the contrary
notwithstanding,
<PAGE>
(a) if the Agent shall notify the Borrower that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for the Agent or any of the Banks to
perform its obligations hereunder with respect to the making of a Revolving Loan
accruing interest based on the Eurodollar Rate or to fund or maintain a
Revolving Loan based on the Eurodollar Rate hereunder, the right of the Borrower
to select, continue or convert a Revolving Loan to the Eurodollar Rate shall be
suspended until the Agent shall notify the Borrower that the circumstances
causing such suspension no longer exist; and upon the sending of such notice and
without the necessity of any further act by the Borrower, the Banks or the
Agent, the outstanding Revolving Loans accruing interest based on the Eurodollar
Rate shall immediately and automatically be refinanced by Revolving Loans in the
same principal amount, and all of the Revolving Loans shall thereafter accrue
interest at the Prime Rate; and the Borrower in such event shall pay the Agents
for the account of the applicable Banks any costs and expenses identified in
Section 10.06(2); and
(b) if the Agent is unable, after reasonable efforts, due to
prevailing market conditions, to obtain timely information for the determination
of the Eurodollar Rate, or is otherwise unable to determine the Eurodollar Rate
at any time, the right of the Borrower to select, continue or convert a
Revolving Loan to the Eurodollar Rate shall be suspended until the Agent shall
notify Borrower that the circumstances causing such suspension no longer exist,
and each Revolving Loan requested by the Borrower after such notice shall accrue
interest at the Prime Rate, and each Revolving Loan outstanding on the date of
such notice that is accruing interest based on the Eurodollar Rate shall, after
the end of the applicable Interest Period for such Revolving Loan, accrue
interest at the Prime Rate; and
(c) if, at any time, five (5) or more Revolving Loans are
accruing at an interest rate based upon the Eurodollar Rate with Interest
Periods ending on different days, Borrower shall not have the right to select
the Eurodollar Rate as the interest rate applicable to any new Revolving Loan or
convert the interest rate applicable to an existing Revolving Loan from the
Prime Rate to the Eurodollar Rate.
(3) A Revolving Loan Notice of Borrowing shall be irrevocable
and binding on the Borrower. In the case of a Revolving Loan Notice of Borrowing
which specifies a request for a Eurodollar Rate of interest, the Borrower shall
indemnify the Agent and the Banks against any loss, reasonable costs or expense
incurred by the Agent and/or the Banks as a result of any failure to fulfill on
or before the date specified in the Revolving Loan Notice of Borrowing as the
requested date of the Revolving Loan the applicable conditions set forth in
Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by the Agent and/or the Banks
to fund the Revolving Loan when it, as a result of such failure, is not made on
such date.
Section 2.05. Revolving Notes. The Revolving Loans made by each
----------------
Bank and the Borrower's obligation to repay the Revolving Loans shall be
evidenced by, and be payable with interest in accordance with the terms of, this
Agreement and a revolving note of the Borrower payable to the order of that Bank
<PAGE>
(collectively, the "Revolving Notes"). Each Revolving Note shall (i) be dated
the date hereof, (ii) be in the original principal amount equal to that Bank's
Revolving Loan Commitment as set forth opposite such Bank's name in Exhibit A,
and (iii) be executed by duly authorized officers of the Borrower. Each Bank's
Revolving Note shall be in substantially the form of Exhibit B. The failure of
any Bank to make a Revolving Loan shall not relieve any other Bank of its
obligation to make a Revolving Loan pursuant to the terms and conditions of this
Agreement. When used in this Agreement, the term "Revolving Note" or "Revolving
Notes" shall include any extensions, modifications, renewals, refundings,
replacements or restatements thereof.
Section 2.06. Method of Payment. Borrower shall make each
------------------
payment under this Agreement and under the Revolving Notes not later than 12:00
Noon (St. Louis time) on the date when due in lawful money of the United States
to the Agent by wire transfer of Federal funds. Upon receipt of such payment the
Agent shall immediately remit to each Bank by wire transfer of Federal funds the
amount of the payment received which is due each Bank under the Revolving Note
held by each Bank or otherwise under this Agreement. In the event of receipt of
funds after 12:00 Noon (St. Louis time) on the date of payment, the funds shall
be deemed to be received on the next Business Day and the accrual of interest
will be calculated accordingly. Whenever any payment to be made under this
Agreement or under a Revolving Note shall be stated to be due on a day which is
not a Business Day, such payment shall be made on the next succeeding Business
Day, the amount of such payment, in such case, to include all interest or fees
accrued to the date of actual payment.
Section 2.07. Use of Proceeds. The proceeds of the Revolving
---------------
Loans hereunder shall be used by Borrower to refinance existing indebtedness and
to finance the acquisition by Borrower of banks and thrift institutions and
their holding companies. The Borrower will not, directly or indirectly, use any
part of the proceeds of the Revolving Loans for the purpose of: (i) paying
dividends on or other distributions with respect to capital stock of Borrower or
its Subsidiaries; (ii) paying interest or principal on outstanding debt of
Borrower or its Subsidiaries (other than existing indebtedness to be refinanced
with the proceeds of the Revolving Loans); or (iii) purchasing or carrying any
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or to extend credit to others for the purpose of
purchasing or carrying any such margin stock.
Section 2.08. Zero Balance. The Banks and the Borrower
-------------
acknowledge that the outstanding balance of the Revolving Notes may be zero
($00.00) from time to time, and that prior to the Revolving Credit Termination
Date such fact shall not mean the Revolving Loan Commitment and the availability
of the Revolving Loans have been terminated nor does it mean the security
interest has been released.
Section 2.09. Advances and Payment. The Revolving Loans shall
--------------------
be made by each of the Banks concurrently. Each payment and prepayment of the
Revolving Loans made to the Agent for the account of the Banks shall be made pro
rata on the basis of each Bank's Revolving Loan Commitment as set forth in
Exhibit A. If the Borrower prepays any Revolving Loan or a portion thereof which
is accruing interest based on the Eurodollar Rate, the Borrower shall compensate
the Banks in accordance with Section 10.06(2). Any such prepayment shall be made
<PAGE>
upon at least three (3) Business Days' notice to the Agent stating the proposed
date and aggregate principal amount of the prepayment, and if such notice is
given, the Borrower shall prepay such principal amount of the Revolving Loan
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that each partial prepayment shall be in an
aggregate principal amount of not less than One Hundred Thousand Dollars
($100,000) and integral multiples of Fifty Thousand Dollars ($50,000) in excess
thereof, and provided further, that a partial prepayment shall not reduce the
principal balance of each Revolving Loan below the minimum levels prescribed in
Section 2.04(1). In the event more than one Revolving Loan accruing interest
based on the Eurodollar Rate is outstanding at the time of any such prepayment,
the Borrower shall have the right to specify which such Revolving Loan is to be
prepaid by the Borrower.
Section 2.10. Revolving Loan Commitment Fee. Borrower shall pay
-----------------------------
to Agent for the account of the Banks on a pro-rata basis, within twenty (20)
days from the date of the Agent's invoice therefor, a Revolving Loan Commitment
Fee (the "Revolving Loan Commitment Fee") at the rate of one-eighth of one
percent (0.125%) per annum on the average daily unused portion of the Revolving
Loan Commitment. The Revolving Loan Commitment Fee shall be payable quarterly in
arrears commencing on December 1, 1998 (which payment shall include the period
commencing on the date hereof), March 1, 1999, June 1, 1999 and on the Revolving
Credit Termination Date. The Revolving Loan Commitment Fee shall be computed on
the basis of a year deemed to consist of 360 days and paid for the actual number
of days elapsed.
Section 2.11. Reimbursement. Whenever any Bank shall sustain
-------------
or incur any losses or out-of-pocket expenses in connection with:
(1) the failure by the Borrower to pay the principal amount of
any Revolving Loan when due (whether at maturity, by reason of acceleration,
notice of prepayment/termination by Borrower or otherwise);
(2) the repayment of overdue amounts of any Revolving Loan; or
(3) the acceleration of the maturity date of any Revolving Note by
reason of the occurrence of an Event of Default;
the Borrower shall pay to the Agent, upon its demand and for the account of the
applicable Banks, an amount certified in writing by the Agent as the amount
required to reimburse the applicable Banks for all reasonable losses and
out-of-pocket expenses claimed. All determinations, estimates, assumptions,
allocations and the like required for the determination thereof shall be made by
the Agent in good faith and the Borrower shall have the burden of proving that
the Agent's determination thereof is not correct.
Section 2.12. Failure of Any Bank to Make Revolving Loans.
---------------------------------------------
Should any Bank default in making a Revolving Loan, the other Banks shall not be
released from their several obligations to make Revolving Loans as agreed
hereunder, and, in the event such defaulting Bank is the Agent, the other Banks
<PAGE>
shall forthwith appoint one of themselves to act as Agent. However, such default
shall not obligate any of the Banks to increase their Revolving Loan Commitment
hereunder. Borrower shall be released from all liability to pay such defaulting
Bank any accrued or future fees under Sections 2.04 and 2.10 and the other
obligations of the Borrower to such defaulting Bank under the Loan Documents,
except the obligation to repay the outstanding Revolving Loans theretofore made
by such Bank and interest accrued thereon as provided in the Loan Documents,
shall terminate; provided, however, once such default is cured, then such
defaulting Bank shall, subsequent thereto, have all rights under the Loan
Documents.
Section 2.13. Banks Not Required to Extend Credit. No Bank
--------------------------------------
shall be required to make any Revolving Loan if, after giving effect thereto,
the then aggregate outstanding principal amount of all Revolving Loans would
exceed $90,000,000, as such amount may be reduced from time to time pursuant to
Section 2.02, or such Bank would exceed its Revolving Loan Commitment (after
giving effect to all Revolving Loans, whether or not funded by any particular
Bank, as if each Bank had funded its respective Revolving Loans in accordance
with the terms of this Agreement).
ARTICLE III
CONDITIONS PRECEDENT
--------------------
Section 3.01. Conditions Precedent to the Initial Loans. The
obligation of each Bank to make its initial Revolving Loan to the Borrower is
subject to the conditions precedent that the Agent, on behalf of the Banks,
shall have received, on or before the date hereof and approved, each of the
following:
(1) Notes. The Revolving Notes duly executed by the Borrower;
-----
(2) Pledge Agreement. The Pledge Agreement, duly executed by
----------------
the Borrower, together with (a) acknowledgment copies of the financing
statements (Form UCC-1) duly filed under the Uniform Commercial Code of all
jurisdictions necessary or, in the opinion of the Agent, desirable to perfect
the security interest created by the Pledge Agreement, and (b) stock powers or
powers of attorney which are necessary or appropriate for the security interest
of the Agent in the Collateral;
(3) Subsidiary Pledge Agreement. The Subsidiary Pledge
------------------------------
Agreement, duly executed by CCB Bancorp, Inc. together with (a) acknowledgment
copies of the financing statements (Form UCC-1) duly filed under the Uniform
Commercial Code of all jurisdictions necessary or, in the opinion of the Agent,
desirable to perfect the security interest created by the Subsidiary Pledge
Agreement, and (b) stock powers or powers of attorney which are necessary or
appropriate for the security interest of the Agent in the Collateral;
(4) Evidence of all Corporate Action by the Borrower and
---------------------------------------------------------
Subsidiaries. Certified (as of the date of this Agreement) copies of all
- ------------
corporate action taken by the Borrower and CCB Bancorp, Inc., including
resolutions of the Board of Directors of Borrower and CCB Bancorp, Inc.,
<PAGE>
authorizing the execution, delivery, and performance of all Loan Documents to
which Borrower and/or CCB Bancorp, Inc. is a party and each other document to be
delivered by Borrower and/or CCB Bancorp, Inc. pursuant to this Agreement;
(5) Incumbency Certificates. Certificates dated as of the date
-----------------------
of this Agreement of the Secretary of each of Borrower and CCB Bancorp, Inc.
certifying the names and true signatures of the officers of the Borrower and CCB
Bancorp, Inc., as the case may be, authorized to sign the Loan Documents and
each other document to be delivered by the Borrower and CCB Bancorp, Inc. under
this Agreement;
(6) Opinion of Counsel for the Borrower. A favorable opinion
-----------------------------------
of counsel for the Borrower, in substantially the form of Exhibit F, and as to
such other matters as the Agent may reasonably request;
(7) Form U-1. Federal Reserve Form U-1 Purpose Statements,
---------
executed by Borrower;
(8) Stock Certificates. Delivery to Agent of the original
-------------------
stock certificates for all of the issued and outstanding shares of stock of each
Pledged Subsidiary (exclusive of directors' qualifying shares), together with
stock powers;
(9) Corporate Existence. Certificates and certified copies of
-------------------
charters and articles of incorporation demonstrating the due organization and
current good standing of Borrower and each Pledged Subsidiary and certified
copies of the Bylaws of Borrower and each Pledged Subsidiary;
(10) Termination of Existing Secured Credit Agreement. The
--------------------------------------------------
existing Secured Credit Agreement dated as of November 24, 1997 among the
Borrower, NationsBank, N.A., as agent, and the banks named as parties thereto
shall be refinanced in its entirety and all funding costs (including any
additional losses, costs or expenses incurred by such banks as a result of such
refinancing occurring on other than the last day of an interest period) payable
by Borrower under such Agreement shall have been paid in full;
(11) Financial Statements. Audited consolidated financial
---------------------
statements for the fiscal years 1996 and 1997 and the unaudited consolidated
financial statements as of June 30, 1998, of the Borrower and First Banks
America, Inc.;
(12) Officer's Certificate. A certificate from the Borrower,
----------------------
dated the date hereof, stating that there has not occurred a material adverse
change since December 31, 1997, in the financial condition, operation,
properties, or business of the Borrower and its Subsidiaries or in the facts or
information regarding such entities as represented to the Agent and the Banks to
date; and
(13) Additional Documentation. Such other approvals, opinions
------------------------
or documents as the Agent may reasonably request.
<PAGE>
Section 3.02. Conditions Precedent to All Revolving Loans The
obligation of each Bank to make each Revolving Loan (including the initial
Revolving Loans) shall be subject to the further conditions precedent that on
the date of each such Revolving Loan:
(1) The Agent shall have received the Revolving Loan Notice of
Borrowing which shall specify whether the requested Revolving Loan shall accrue
interest based on the Eurodollar Rate or at the Prime Rate;
(2) No Default or Event of Default shall have occurred and be
continuing, or would result from such Revolving Loan.
(3) The following statements shall be true and the Agent on
behalf of the Banks shall have received a Certificate signed by at least two of
the chief executive officer, the chief financial officer, the chief accounting
officer and the chief credit officer of Borrower and dated the date of the
Revolving Loan Notice of Borrowing requesting such Revolving Loan, containing
the confirmations of compliance with certain of the financial covenants as
herein provided, and stating that:
(a) The representations and warranties contained in
Article IV of this Agreement are correct on and as of such date;
(b) No Default or Event of Default has occurred and
is continuing, or would result from such Revolving Loan;
(c) Attached is an accurate listing of all of the
Affiliates of Borrower; and
(d) The use of the proceeds of the requested
Revolving Loan will be as indicated in the Revolving Loan Notice of Borrowing.
(4) The Agent shall have received such other approvals,
information or documents as the Agent may reasonably request, in form and
substance satisfactory to the Agent.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Banks that:
Section 4.01. Incorporation, Good Standing, and Due
--------------------------------------------
Qualification. Borrower is a corporation duly incorporated, validly existing and
- -------------
in good standing under the laws of the State of Missouri and is in good standing
in all states and jurisdictions wherein it owns property or does business
requiring such qualification as a foreign corporation. Borrower is a "bank
holding company" as that term is defined in the federal Bank Holding Company Act
of 1956, as amended, 12 U.S.C. Section 1841 et seq., and as such, Borrower has
received all necessary approvals from and has filed all necessary reports with
the Board of Governors of the Federal Reserve System. The list of Affiliates of
<PAGE>
Borrower as shown on Exhibit H attached is as of the date hereof true and
accurate. Each Subsidiary of the Borrower is a bank, bank holding company or
corporation duly organized and in good standing under the laws of its respective
jurisdiction of organization.
Section 4.02. Corporate Power and Authority. The execution,
-------------------------------
delivery and performance by the Borrower of the Loan Documents as provided for
herein are within the corporate powers of Borrower, have been duly authorized by
all necessary corporate action and require no action by or in respect to, or
filing with any governmental body, agency or official. The execution, delivery
and performance by Borrower of the Loan Documents do not conflict with, or
result in a material breach of the terms, conditions or provisions of or
constitute a default under or result in any violation of, and Borrower is not
now in default under or in violation of the terms of its Articles of
Incorporation or Bylaws or any rule, regulation, order, writ, judgment or decree
of any court or government agency or instrumentality, or any agreement or
instrument to which Borrower or any of its Subsidiaries is a party or by which
it or they are bound or to which it or they are subject.
Section 4.03.Legally Enforceable Agreement. This Agreement has
-----------------------------
been duly executed and delivered and constitutes a legal, valid and binding
agreement of the Borrower enforceable in accordance with its terms, and the
other Loan Documents, when executed and delivered in accordance with this
Agreement, will constitute a legal, valid and binding obligation of the
Borrower, enforceable in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally. Each of the Subsidiary
Pledge Agreements and the other Loan Documents to which any Subsidiary is a
party, when executed and delivered in accordance with this Agreement, will
constitute legal, valid and binding obligations of such Subsidiary, enforceable
in accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency or other similar laws affecting creditors'
rights generally.
Section 4.04. Financial Statements; Financial Condition. The
-------------------------------------------
financial information furnished by Borrower representing the financial condition
of Borrower or any Subsidiary, such information being identified in Exhibit I
attached, is true and correct as of the date furnished and there has been no
material adverse change in the financial condition, operations or business of
any of them since the date of such financial information.
Section 4.05. Other Agreements. Except for those matters
-----------------
disclosed on Schedule 4.05 attached, Borrower is not a party to any indenture,
loan, or credit agreement, or to any lease or other agreement or instrument or
subject to any charter or corporate restriction which could reasonably be
expected to have a material adverse effect on its financial condition,
operations, properties, or business, or on its ability to carry out its
obligations under the Loan Documents. Neither the Borrower nor any of its
Subsidiaries is in default in any material respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument material to their respective business
to which each is a party.
Section 4.06. Litigation. Except for those matters disclosed
----------
on Schedule 4.06 attached, there is no pending or, to the best of Borrower's
<PAGE>
knowledge, threatened action or proceeding against or affecting Borrower or any
Subsidiary before any court, governmental agency, or arbitrator, which if
determined adversely to Borrower in any one case or in the aggregate, could
reasonably be expected to have a material adverse affect on the financial
condition, operations, properties, or business of Borrower or any Subsidiary, or
the ability of Borrower or any Subsidiary to perform its obligations under this
Agreement or the Loan Documents.
Section 4.07. Ownership of Subsidiaries. The ownership of each
-------------------------
Subsidiary is as shown on Exhibit J attached. Upon the extension of the initial
Revolving Loans, all shares of common stock of each Subsidiary owned by Borrower
will be free and clear of all liens, claims and encumbrances, except as to
Pledged Subsidiaries the security interests under the Pledge Agreement and the
Subsidiary Pledge Agreements as provided for herein.
Section 4.08. ERISA. Borrower and each Subsidiary are in
-----
compliance in all material respects with all applicable provisions of ERISA.
Neither a Reportable Event nor a Prohibited Transaction has occurred and is
continuing with respect to any Plan; except as provided on Schedule 4.08
attached, no notice of intent to terminate a Plan has been filed nor has any
Plan been terminated; no circumstances exist which constitute grounds under
Section 4042 of ERISA entitling the PBGC to institute proceedings to terminate,
or appoint a trustee to administer, a Plan, nor has the PBGC instituted any such
proceedings; except as provided on Schedule 4.08 attached, neither Borrower nor
any Subsidiary has completely or partially withdrawn under Sections 4201 or 4204
of ERISA from a Multiemployer Plan; Borrower and each Subsidiary have met
minimum funding requirements under ERISA with respect to their respective Plans
and the present fair market value of all Plan assets exceeds the present value
of all vested benefits under each Plan, as determined on the most recent
valuation date of the Plan and in accordance with the provisions of ERISA and
the regulations thereunder for calculating potential liability to the PBGC or
the Plan under Title IV of ERISA; Borrower and all Subsidiaries have incurred no
liability to the PBGC under ERISA.
Section 4.09. Taxes. Borrower and each Subsidiary have filed
-----
(or received extensions of the time to file) and will in the ordinary course of
business file all tax returns (federal, state, and local) required to be filed
and have paid and will pay all taxes, assessments, and governmental charges and
levies shown thereon to be due, including interest and penalties, provided,
however, that nothing herein will prevent the contest in good faith of any
assessment or imposition of any tax as long as an adverse determination will
have no material adverse impact upon Borrower or the Pledged Subsidiaries.
Section 4.10. Use of Proceeds; Margin Regulations. Neither the
-----------------------------------
making of any Loan nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulations T, U or X of the Board of
Governors of the Federal Reserve System.
Section 4.11. Year 2000 Compliance. Each of the Borrower and
---------------------
its Subsidiaries has (a) undertaken a detailed inventory, review and assessment
of all areas within its business and operations that could be adversely affected
by the failure of Borrower or such Subsidiary, as the case may be, to be Year
2000 Compliant on a timely basis, (b) developed a detailed plan and timeline for
<PAGE>
becoming Year 2000 Compliant on a timely basis, and (c) to date, implemented
such plan in accordance with such timetable in all material respects. Borrower
reasonably anticipates that it and each Subsidiary will be Year 2000 Compliant
on a timely basis, except to the extent such noncompliance could not reasonably
be expected to have a material adverse effect on the financial condition,
operations, properties, or business of the Borrower or any Subsidiary. Neither
Borrower nor any Subsidiary is aware that any of its key suppliers, vendors or
customers will not, on a timely basis, be Year 2000 Compliant, except to the
extent such noncompliance could not reasonably be expected to have a material
adverse effect on the financial condition, operations, properties, or business
of the Borrower or any Subsidiary. For purposes of this Section 4.11, "key
suppliers, vendors and customers" refers to those suppliers, vendors and
customers of Borrower or the applicable Subsidiary, as the case may be, whose
business failure could reasonably be expected to have a material adverse effect
on the financial condition, operations, properties, or business of the Borrower
or any Subsidiary.
ARTICLE V.
AFFIRMATIVE COVENANTS
---------------------
So long as any portion of the indebtedness evidenced by the
Notes shall remain unpaid, or the Banks shall have any Commitment under this
Agreement, Borrower and each Pledged Subsidiary will:
Section 5.01. Maintenance of Existence. Except as expressly
-------------------------
permitted pursuant to Section 6.02 hereof, preserve and maintain its corporate
existence and good standing in the jurisdiction of its incorporation, and
qualify and remain qualified as a foreign corporation in each jurisdiction in
which such qualification is required.
Section 5.02. Maintenance of Records. Keep adequate records and
----------------------
books of account, in which complete entries will be made in accordance with GAAP
consistently applied, reflecting all financial transactions.
Section 5.03. Maintenance of Subsidiaries. Maintain and keep
----------------------------
each Subsidiary in good standing with the jurisdiction of its organization,
except to the extent a Subsidiary dissolves or ceases to exist pursuant to a
transaction permitted by the terms of Section 6.02.
Section 5.04. Compliance With Laws. Comply in all respects, and
--------------------
cause compliance on behalf of each Subsidiary, with all applicable laws, rules,
regulations, and orders. Compliance shall include, without limitation, paying
before the same become delinquent all taxes, assessments, and governmental
charges imposed upon it or upon its property, except for such taxes, assessments
or governmental charges that are being diligently contested in good faith by
appropriate proceedings if it has maintained adequate reserves with respect
thereto in accordance with generally accepted accounting principles.
Section 5.05. Right of Inspection. At any time during normal
--------------------
business hours and from time to time, upon at least one (1) Business Day's
advance notice, permit the Agent and any Bank or any agent or representative
thereof to examine and make copies of and abstracts from the records and books
of account of and visit the properties of, Borrower and each Subsidiary, and to
<PAGE>
discuss the affairs, finances, and accounts of Borrower and each Subsidiary,
with any of its or their officers and directors and with the Borrower's
independent accountants, provided, however, that with respect to the loans of
Borrower or a Pledged Subsidiary, the Agent and any Bank may only review and
make copies of summaries of the Watch List prepared on a quarterly basis and
loan audit reports; review of specific loan accounts and loan review reports may
be requested by the Agent or any Bank, whereupon Borrower and Agent or the Bank
shall within ten (10) days agree as to the number of such accounts and reports
that are reasonable and appropriate to review, and provided further, that upon
and during the existence of an Event of Default hereunder, there shall be no
restrictions or conditions on the scope of the review, inspection and
reproduction rights of Agent and the Banks concerning the loans of Borrower or a
Pledged Subsidiary.
Section 5.06. Reporting Requirements Furnish to the Agent:
----------------------
(1) Quarterly Financial Statements. As soon as practicable, or
------------------------------
in any event within forty-five (45) days after the end of each fiscal quarter of
Borrower (a) parent only and consolidated balance sheets of Borrower and its
Subsidiaries as of the end of such fiscal quarter and (b) parent only and
consolidated statements of income and earnings retained in the business of
Borrower and its Subsidiaries for such fiscal quarter, all of which shall be
prepared in accordance with GAAP (subject to normal year-end adjustments) and
certified by the chief financial officer or chief accounting officer of
Borrower.
(2) Annual Financial Statements. As soon as practicable, or in
---------------------------
any event within ninety (90) days after the close of each fiscal year of
Borrower (a) parent only and consolidated balance sheets of Borrower and its
subsidiaries at year end and (b) parent only and consolidated statements of
income and earnings retained in the business of Borrower and its Subsidiaries
including consolidated and parent only statements of cash flow for such fiscal
year, all of which shall include comparative statements for the preceding year
and shall be prepared in accordance with GAAP consistently applied, and shall be
certified by, and accompanied by an unqualified audit opinion of a firm of
certified public accountants acceptable to Agent; provided, however, that the
opinion may be limited to the consolidated statements of Borrower.
(3) Reports. Within forty-five (45) days after such report is
-------
filed and to the extent not prohibited by law, copies of all reports filed by
Borrower (on a consolidated and parent only basis), and First Banks America,
Inc. (on a consolidated and parent only basis) with the Board of Governors of
the Federal Reserve System or any Federal Reserve Bank, the Federal Deposit
Insurance Corporation ("FDIC"), Securities and Exchange Commission ("SEC"), or
other bank or thrift regulatory agency; within forty-five (45) days after the
end of each fiscal quarter of Borrower, a list of all such reports. Irrespective
of the foregoing procedures for the request for copies of reports, Borrower
shall submit to the Agent, within forty-five (45) days from the date of
submission to the SEC, copies of the following SEC reports with respect to the
Borrower and First Banks America, Inc.: 10-K, 10-Q, and 8-K. Borrower shall also
submit (or cause to be submitted) to the Agent, within fifteen (15) days from
the date of such agreement, copies of any and all agreements entered into by
Borrower or any of Borrower's Subsidiaries with the Board of Governors of the
Federal Reserve System, any Federal Reserve Bank, the FDIC, the SEC, or other
bank or thrift regulatory agency.
<PAGE>
(4) Subsidiary Reports. Copies of all Quarterly Reports of
-------------------
Condition and Income ("Call Report"), certified as required by law, filed by
each Subsidiary with the FDIC or any other governmental or regulatory agency,
within forty-five (45) days from the date any such Call Report is submitted to
such agency, and, to the extent permitted by law, copies of all examination
reports and supervisory comment letters pertaining to each Subsidiary.
(5) Examination; Litigation. Promptly after the commencement
------------------------
thereof, notice of all suits and proceedings before any court or governmental
department, commission, board, or agency affecting Borrower or any Subsidiary
which could reasonably be expected to have a material adverse effect on the
financial condition, properties or operations of Borrower or any Subsidiary;
promptly after the receipt thereof, notice of any report or comment letter from
any regulatory authority of Borrower or any Subsidiary, or from the independent
auditors of Borrower, which requires any action of a material adverse nature by
Borrower or any Subsidiary.
(6) Compliance Certificate. Within forty-five (45) days after
----------------------
the end of each fiscal quarter of Borrower, a Compliance Certificate signed by
at least two of the chief executive officer, the chief financial officer, the
chief accounting officer and the chief credit officer of the Borrower,
substantially in the form of Exhibit E attached hereto.
(7) Other Information. Such other information and reports
------------------
regarding the financial condition, operations or regulatory affairs of Borrower
or any Subsidiary as Agent or a Bank may from time to time reasonably request.
Section 5.07. Operations. Operate and maintain its business and
----------
property, and those of its Subsidiaries, in the ordinary course in a prudent
manner consistent with sound banking practices and in such a manner that the
performance by Borrower of its obligations hereunder are not jeopardized or
impaired.
Section 5.08. Additional Collateral. Pursuant to the Pledge
----------------------
Agreement and/or the Subsidiary Pledge Agreements, pledge and deliver to Agent
shares of stock of (i) a bank, thrift institution, bank holding company or
savings holding company hereafter acquired by Borrower or any Pledged Subsidiary
(other than as may be acquired by First Banks America, Inc.) with all or a
portion of such shares having been acquired with the proceeds of a Loan, or (ii)
a bank, thrift institution, bank holding company or savings holding company
which becomes a Subsidiary (other than as may be acquired by First Banks
America, Inc.).
Section 5.09 Year 2000 Compliance. Borrower will, and it will
--------------------
cause each Subsidiary to, take any and all actions necessary to assure that
Borrower and each Subsidiary will be Year 2000 Compliant as soon as reasonably
practical, except to the extent such noncompliance could not reasonably be
expected to have a material adverse effect on the financial condition,
operations, properties, or business of the Borrower or any Subsidiary. Borrower
will be, and it will cause each Subsidiary to be, Year 2000 Compliant by January
1, 2000, except to the extent such noncompliance could not reasonably be
expected to have a material adverse effect on the financial condition,
<PAGE>
operations, properties, or business of the Borrower or any Subsidiary. At the
request of Lender, Borrower will from time to time provide Lender with written
reports in form and detail reasonably satisfactory to Lender on the status of
the efforts of Borrower and its Subsidiaries to be Year 2000 Compliant.
ARTICLE VI.
NEGATIVE COVENANTS
------------------
So long as any portion of the indebtedness evidenced by the
Notes shall remain unpaid, or any Bank shall have any Commitment under this
Agreement, Borrower will not, without the prior written consent of the Agent,
which consent shall not be unreasonably withheld:
Section 6.01.Liens. Create, incur, assume, or suffer to exist,
-----
any Lien, or permit any Subsidiary to create, incur, assume, or suffer to exist,
any lien, upon or with respect to any of the Collateral or any capital stock
held by any Subsidiary, except in favor of the Agent.
Section 6.02. Mergers, Etc. Merge or consolidate with any
--------------
Person having Total Assets in excess of $250,000,000 or which is subject to a
regulatory action or proceeding or any cease and desist order which relates in
any material adverse way to the management, financial condition, or operations
of such Person, or permit the merger or consolidation of any Subsidiary with any
Person having Total Assets in excess of $250,000,000 or which is subject to a
regulatory action or proceeding or any cease and desist order which relates in
any material adverse way to the management, financial condition, or operations
of such Person, or sell, assign, lease, or otherwise dispose of (whether in one
transaction or in a series of transactions) any Subsidiary or all or
substantially all of its other assets, or permit the sale, assignment, lease, or
other disposition of any Subsidiary, or the sale of all or substantially all of
the assets of any Subsidiary (whether now owned or hereafter acquired), to any
Person; provided, however, that nothing in this Section 6.02 shall prevent
mergers or sale of assets as between two entities that are Pledged Subsidiaries.
Section 6.03. Indebtedness. Incur, create, assume or allow to
------------
exist, nor permit any Subsidiary to incur, create, assume or allow to exist, any
indebtedness, whether contingent or absolute, except indebtedness: (i) evidenced
by the Notes; (ii) evidenced by certain unsecured notes issued by Borrower
relating to the acquisition of Southside Bancshares, Inc. common stock and in an
aggregate principal amount not to exceed $155,000; (iii) evidenced by
subordinated debentures issued to First Preferred Capital Trust in an aggregate
amount not to exceed $88,917,550; (iv) evidenced by subordinated debentures
issued by First Banks America, Inc. to First America Capital Trust in an
aggregate principal not to exceed $47,422,700; (v) evidenced by certain
debentures payable to Borrower issued by First Banks America, Inc. in an amount
not to exceed $6,500,000; (vi) for advances made by Borrower or any Subsidiary
to Borrower or any Subsidiary in the ordinary course of business or for
acquisition purposes in an aggregate amount not to exceed $20,000,000; (vii) of
accrued expenses or accounts payable in the ordinary course of business not yet
payable; (viii) for any other purpose not to exceed in the aggregate the amount
of $2,500,000; and (ix) refundings, renewals and replacements of any of the
foregoing.
<PAGE>
Section 6.04. Dividends. Pay or declare any dividends on the
---------
common stock of Borrower; pay or declare any dividends upon the preferred stock
of Borrower designated as Class A or Class B preferred stock in the financial
statements of Borrower if a Default or an Event of Default exists or if, after
giving effect thereto, a Default or Event of Default would exist.
Section 6.05. Stock Issue; Additional Issue of Stock of
----------------------------------------------
Subsidiary. Create any new class or amend the terms of any existing class of
- ----------
stock of Borrower, or issue any shares of stock of any class of Borrower, the
terms of which have not been approved by the Agent; except for stock now or
hereafter issued by First Banks America, Inc. for acquisition purposes and upon
exercise of stock options granted to employees, none of which shall cause
Borrower to own, in the aggregate, less than 55% of the issued and outstanding
shares of voting capital stock of First Banks America, Inc., issue or permit any
Subsidiary to issue any additional shares of stock of any class or any capital
notes or other long-term debt instruments, or create any new class of stock or
amend the terms of any existing class of stock.
Section 6.06. Stock Redemption. Redeem, purchase or retire any
----------------
shares of any existing class of stock of Borrower (except for trust preferred
securities issued by First America Capital Trust) or any capital notes of
Borrower or permit any Subsidiary to redeem, purchase or retire any shares of
any existing class of stock of such Subsidiary or any capital notes of such
Subsidiary; provided, however, that as long as no Event of Default shall have
occurred and be continuing, with respect to Subsidiaries which are not wholly
owned by the Borrower, such Subsidiary(ies) may redeem, purchase or retire
shares of any existing class of stock (except for trust preferred securities) of
such Subsidiary.
Section 6.07. Loans. Loan money or extend credit to, or become
-----
a surety or guarantor for, or permit any Pledged Subsidiary to do likewise, the
benefit of any Affiliate or any Subsidiary or any executive officer or
shareholder of any Affiliate or any Subsidiary; provided, however, that Borrower
and the Pledged Subsidiaries may extend credit to executive officers or
shareholders of any Affiliate or Subsidiary if the loan or extension of credit
complies in all respects with applicable law and regulations, and provided
further, that the following items of indebtedness are permitted: (i) loans to
Subsidiaries for the purpose of acquiring and holding OREO properties, (ii)
loans for operating purposes to Hermanhoff Winery, Inc., in an aggregate amount
not to exceed $500,000 at any one time, (iii) loans for operating purposes to
Tidal Insurance, Ltd., in an aggregate amount not to exceed $250,000 at any one
time, (iv) the purchase by Borrower of convertible debentures issued by First
Banks America, Inc. in an amount not to exceed $6,500,000, (v) loans by Borrower
or any Subsidiary to Borrower or any Subsidiary made in the ordinary course of
business or for acquisition purposes in an aggregate amount not to exceed at any
one time $20,000,000; and (vii) refundings, renewals and replacements of any of
the foregoing.
Section 6.08. Debentures. Redeem in whole or in part, the
----------
subordinated debentures issued to First Preferred Capital Trust or permit First
Banks America, Inc. to redeem, in whole or in part, the subordinated debentures
issued to First America Capital Trust; pay any interest on or permit First Banks
America, Inc. to pay any interest on such subordinated debentures if a Default
or Event of Default exists, or if after giving effect thereto, a Default or
Event of Default would exist.
<PAGE>
Section 6.09. Continuation of Business. Substantially change,
------------------------
nor permit any of its Subsidiaries to change substantially, the nature of the
respective businesses in which they are now engaged, nor engage in, nor permit
any Subsidiary to engage in, any line of business if, as a result thereof, the
business of the Borrower and its Subsidiaries, taken as a whole, would not be
predominately the banking or thrift business (and activities deemed closely
related to banking and/or the thrift business by applicable regulatory
authorities) as currently constituted as of the date hereof.
ARTICLE VII.
FINANCIAL COVENANTS
-------------------
So long as any portion of the indebtedness evidenced by the
Notes shall remain unpaid or any Bank shall have any Commitment under this
Agreement, Borrower and the Pledged Subsidiaries will comply with each of the
following covenants:
Section 7.01. Tier I Leverage Ratio. Borrower and Subsidiaries,
---------------------
on a consolidated basis, shall maintain a minimum Tier I Leverage Ratio at the
end of each quarterly accounting period of not less than 5.0% or such greater
amount as may be required to be considered "well capitalized" by applicable
regulatory authorities from time to time.
Section 7.02. Tier I Leverage Ratio of Subsidiaries. Each bank
-------------------------------------
Subsidiary of Borrower shall maintain a minimum Tier I Leverage Ratio at the end
of each quarterly accounting period of not less than 5.0% or such greater amount
as may be required to be considered "well capitalized" by applicable regulatory
authorities from time to time.
Section 7.03. Tier I Risk Based Capital Ratio. Each bank
----------------------------------
Subsidiary of Borrower shall maintain a minimum Tier I Risk Based Capital Ratio
at the end of each quarterly accounting period of not less than 6.0% or such
greater amount as may be required to be considered "well capitalized" by
applicable regulatory authorities from time to time.
Section 7.04. Total Risk Based Capital Ratio. Each bank
------------------------------------
Subsidiary of Borrower shall maintain a minimum Total Risk Based Capital Ratio
at the end of each quarterly accounting period of not less than 10.0% or such
greater amount as may be required to be considered "well capitalized" by
applicable regulatory authorities from time to time.
Section 7.05. Loan Loss. Borrower and Subsidiaries, on a
----------
consolidated basis, shall maintain a minimum Loan Loss Reserve, expressed as a
percentage of Total Loans, for each quarterly accounting period of 1.25% or such
greater amount as may be required by regulatory authorities or prudent banking
standards from time to time.
Section 7.06. Net Income to Average Total Assets.
----------------------------------
(a) Borrower and Subsidiaries, on a consolidated
basis, shall maintain a minimum ratio, expressed as a percentage, of Net Income
less extraordinary and/or non-recurring items (as determined in accordance with
GAAP), for the most recently ended period of four fiscal quarters of Borrower,
to Average Total Assets of not less than 0.70%.
<PAGE>
(b) First Bank and First Bank & Trust, on a combined
basis, shall maintain a minimum ratio, expressed
as a percentage, of Net Income less extraordinary and/or non-recurring items (as
determined in accordance with GAAP), for the most recently ended period of four
calendar quarters, to Average Total Assets of not less than 0.70%.
Section 7.07. Non-Performing Assets. Borrower and Subsidiaries,
---------------------
on a consolidated basis, shall have Non-performing Assets, in the aggregate, of
not more than 25% of Primary Capital.
ARTICLE VIII.
EVENTS OF DEFAULT
-----------------
Section 8.01. Events of Default If any of the following events
("Events of Default") shall occur:
(1) Borrower shall fail to pay (a) the principal of, or
interest on, a Note, within five (5) calendar days after notice of such failure
shall have been given to the Borrower by the Agent;
(2) Borrower shall fail to pay any fees or any other amount
payable hereunder when due and such failure shall remain unremedied for ten (10)
consecutive calendar days after notice of such failure shall have been given to
the Borrower by the Agent;
(3) Any representation or warranty made or deemed made by the
Borrower or any Subsidiary in this Agreement, the Pledge Agreement, the
Subsidiary Pledge Agreements, or which is contained in any certificate,
document, opinion, or financial or other statement furnished at any time under
or in connection with any Loan Document, shall be reasonably determined by the
Agent to have been incorrect in any material respect on or as of the date made
or deemed made and such default remains unremedied for thirty (30) consecutive
calendar days after notice thereof shall have been given to the Borrower by the
Agent;
(4) (a) Borrower shall fail to perform or observe any term,
covenant, or agreement contained in any Loan Document (other than as contained
in Article VII hereof and other than as contained in a Note) on its part to be
performed or observed, and such failure shall remain unremedied for thirty (30)
consecutive calendar days after notice thereof shall have been given to the
Borrower by the Agent, provided, however, that in the event two or more such
notices are required to be given in any consecutive six month period, Agent at
its option need not give such notice, and there shall not be any period for the
cure of such failure with respect to such second or succeeding failure, or (b)
Borrower shall fail to perform or observe any term, covenant, or agreement
contained in Article VII hereof or in a Note;
(5) Borrower or any Subsidiary (a) shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts as
such debts become due; or (b) shall make an assignment for the benefits of
creditors, petition or apply to any tribunal for the appointment of a custodian,
<PAGE>
receiver, or trustee for it or a substantial part of its assets; or (c) shall
commence any proceedings under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution, or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or (d) shall have any such
petition or application filed or any such proceeding commenced against it, in
which an order for relief is entered or adjudication or appointment is made and
which remains undismissed for a period of forty-five (45) calendar days or more;
or (e) by any act or omission shall indicate its consent to, approval of, or
acquiescence in any such petition, application, or proceeding, or order for
relief, or the appointment of a custodian, receiver, or trustee for all or any
substantial part of its properties; or (f) shall suffer any such custodianship,
receivership or trusteeship to continue undischarged for a period of forty-five
(45) calendar days or more;
(6) One or more judgments, decrees, or orders for the payment
of money in excess of Two Million Dollars ($2,000,000) in the aggregate shall be
rendered against Borrower or any Subsidiary, and such judgments, decrees, or
orders shall continue unsatisfied and in effect for a period of thirty (30)
consecutive calendar days without being vacated, discharged, satisfied, or
stayed or bonded pending appeal;
(7) Any of the Pledge Agreement and/or the Subsidiary Pledge
Agreements shall at any time after its execution and delivery and for any reason
(other than by the action of the Agent) cease (a) to create a valid and
perfected Lien in and to the property purported to be subject thereto, of the
priority represented therein, or (b) to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by Borrower or any Subsidiary, or Borrower or any Pledged Subsidiary,
as applicable, shall deny or disclaim further liability or obligation
thereunder, or Borrower or any Pledged Subsidiary shall fail to perform any of
its obligations thereunder, and solely with respect to performance of
obligations by the Borrower or any Pledged Subsidiary, as applicable, under the
Pledge Agreement and/or the Subsidiary Pledge Agreements, such default remains
unremedied for thirty (30) consecutive calendar days after notice thereof shall
have been given to the Borrower by the Agent (the other events described in this
Section 8.01(7) shall become Events of Default immediately upon occurrence
without notice to the Borrower);
(8) Any of the following events occur or exist with respect to
Borrower or any Subsidiary: (a) any Prohibited Transaction involving any Plan;
(b) any Reportable Event with Respect to any Plan; (c) the filing under Section
4041 of ERISA of a notice of intent to terminate any Plan or the termination of
any Plan; (d) any event or circumstance that might constitute grounds entitling
the PBGC to institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer, any Plan, or
the institution by the PBGC of any such proceedings; (e) complete or partial
withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency or termination of any Multiemployer Plan; and in each
case above, such event or condition, together with all other events or
conditions, if any, subjects the Borrower or any Subsidiary to any tax, penalty,
or other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or
any combination thereof) which in the aggregate exceed or may exceed Two Million
Dollars ($2,000,000);
<PAGE>
(9) If James F. Dierberg and/or Mary W. Dierberg (together
with any trust or partnership or other entity over which he or she has voting
control) cease to own in the aggregate at least 51% of the voting shares of
stock of First Banks, Inc.;
(10) Except for those matters disclosed on Schedule 8.01(10),
if any regulatory action or proceeding shall be commenced, or any cease and
desist order shall be entered into, between any state or federal regulatory
authority and Borrower or any Subsidiary which relates in any material adverse
way to the management or operations of Borrower or any Subsidiary;
(11) A default or an event of default exists or is declared
under the terms of (i) any indebtedness aggregating Two Million Dollars
($2,000,000) or more of the Borrower or any Subsidiary, or (ii) any other
material agreements of the Borrower or any Subsidiary that involves a potential
aggregate liability of at least Two Million Dollars ($2,000,000) or which could
be reasonably expected to have a material adverse effect on the financial
condition, operations, properties, or business of the Borrower or any
Subsidiary, and which in any such case continues beyond any applicable notice
and cure period; or
(12) The Borrower shall fail to have positive Net Income for
any two consecutive fiscal quarters;
then, in any such event Agent shall at the request of the Majority (as
hereinafter defined) declare the Banks' obligations to make Revolving Loans to
be terminated, whereupon the same shall forthwith terminate, and declare the
outstanding Notes, all interest thereon, and all other amounts payable under
this Agreement to be forthwith due and payable in full, whereupon the Notes, all
such interest, and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest, or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, that in the
case of any of the Events of Default specified in subsection (5) above, without
any notice to the Borrower or any other act by the Agent or the Banks, the
Banks' obligations to make Revolving Loans shall be automatically terminated and
the Notes, all interest thereon, and all other amounts payable under this
Agreement shall be forthwith due and payable in full, without presentment,
demand, protest, or further notice of any kind, all of which are hereby
expressly waived by the Borrower.
ARTICLE IX.
AUTHORITY AND RESPONSIBILITIES OF AGENT
---------------------------------------
Section 9.01. Grant of Authority. Each of the Banks hereby
-------------------
irrevocably appoints and authorizes Mercantile Bank National Association, as the
Agent under this Agreement and each other Loan Document, on its behalf, to take
such action and exercise such powers under this Agreement and each other Loan
Document as are specifically delegated to the Agent by the terms thereof,
together with such other powers as are reasonably incidental thereto. The Agent
shall have no duty to exercise any right or power or remedy hereunder or to take
any affirmative action hereunder unless directed to do so by the Majority (as
hereafter defined). For purposes of this Agreement, the term "Majority" shall
mean the Banks holding at least sixty-six percent (66%) in dollar amount of the
Commitment.
<PAGE>
Section 9.02. Action upon Indemnification Instructions. The
------------------------------------------
Agent shall in all cases be fully justified and protected in acting or
continuing, failing or refusing to take any action hereunder or under any other
Loan Document upon the written instructions signed by the Majority, and such
instructions and any action taken or any failure to act pursuant hereto shall be
binding on all of the Banks, all holders of the Notes and their respective
successors and assigns.
Section 9.03. Reports; Responsibility of the Agent; Disclaimer.
------------------------------------------------
Promptly upon the receipt thereof from the Borrower, Agent shall photocopy and
forward to each Bank each report, statement and other written information
received by Agent pursuant to the terms of Section 5.06 of this Agreement.
Neither the Agent nor any of its respective directors, officers, agents,
employees, attorneys-in-fact or affiliates shall be liable for any action taken
or omitted to be taken under or in connection with this Agreement or any other
Loan Document, except for its or their willful misconduct or gross negligence.
Without limiting the generality of the foregoing, the Agent:
(1) shall not be responsible to any Bank for any statement,
representation or warranty made by any Bank other than Agent or any officer
thereof under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby;
(2) shall not be responsible for the due execution,
effectiveness, validity, enforceability or sufficiency of this Agreement, the
Notes, the Pledge Agreement, the Subsidiary Pledge Agreements or any other
document or instrument furnished pursuant hereto or in connection herewith;
(3) shall not be bound to ascertain or inquire as to the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Loan Document on the part of the Borrower or any
Subsidiary or as to the business, operation, property, assets or condition
(financial or otherwise) of the Borrower or its Subsidiaries;
(4) shall be entitled to rely upon any writing, statement,
notice or any telegraph, telex, teletype or telecopy message or any telephone
conversation believed by it to be genuine and correct and, in the case of any
writing, to have been signed or sent by the proper person;
(5) may consult with counsel and independent accountants and
other experts selected by the Agent and shall be fully protected in any action
taken or omitted to be taken in accordance with the advice of such counsel,
independent accountants or other experts;
(6) may employ agents and attorneys-in-fact and shall not be
liable for the default, negligence or misconduct of any such agents and
attorneys-in-fact selected by the Agent with reasonable care;
<PAGE>
(7) may treat the payee of a Note as the holder thereof until
it receives written notice of the assignment or transfer thereof signed by such
payee and in form satisfactory to the Agent. Any request, authority or consent
of any person who at such time is the holder of any Note shall be conclusive and
binding on any subsequent holder, transferee or assignee of such Note or Note
issued in exchange therefor; and
(8) shall have no liability or responsibility to Borrower for
any failure on the part of any Bank to comply with an obligation on its part to
be performed under this Agreement.
Section 9.04. Correction of Errors. If the Agent shall pay any
--------------------
amount to any Bank pursuant hereto in the belief or expectation that a related
payment has been or will be received or collected from the Borrower in
connection with any Loan and such related payment is not actually received or
collected by the Agent then such Bank will promptly, on demand by the Agent,
return such amount to the Agent, together with interest thereon at the Federal
Funds Rate for overnight deposits.
Section 9.05. Expenses; Indemnification. To the extent that the
-------------------------
Borrower fails to do so, each Bank, and each subsequent holder of a Note by its
acceptance thereof, agrees to reimburse the Agent upon demand in proportion to
the unpaid principal amount of its Notes, or if no Notes are at the time
outstanding in proportion to the Commitments, and to indemnify and hold the
Agent and its directors, officers, employees and agents in their respective
capacities harmless in such proportion against any and all losses, liabilities,
damages, demand, judgment, claim, counterclaim, set-off, cost, disbursement or
expenses of any kind whatsoever (including reasonable attorney's fees and
expenses) incurred by or asserted against the Agent or its directors, officers,
employees and agents under or in connection with any of the foregoing arising
out of or in connection with this Agreement, the Notes or any other Loan
Documents, the transactions contemplated hereunder, the enforcement, collection
or realization of any thereof or any action taken or omitted by the Agent,
provided that no Bank shall be liable for any portion of the foregoing incurred
by the Agent as a result of its willful misconduct or gross negligence. The
agreements in this Section 9.05 shall survive the payment of the Loans, or any
other amounts payable hereunder or under the Notes and the termination of the
Commitments.
Section 9.06. Rights as Bank. With respect to its Loans and the
--------------
Notes issued to it, the Agent shall have the same rights and powers hereunder as
any Bank and may exercise the same as though it were not the Agent, and the term
"Bank" or "Banks" shall include the Agent in its individual capacity. The Agent
and any of its affiliates may accept deposits from, lend money to, and generally
engage in any kind of banking or trust business with, the Borrower and any
affiliates as if it were not the Agent and may accept fees and other
consideration from the Borrower for services in connection with this Agreement
and otherwise without having to account for the same to the Banks.
Section 9.07. Representation of Each Bank. Each Bank expressly
---------------------------
acknowledges that the Agent has not made any representations or warranties to it
and that no action taken or hereafter taken by the Agent shall be deemed to
constitute a representation or warranty by the Agent to any other Bank. Each
Bank represents and warrants to the Agent that it has made and will continue to
make its own independent investigation of the condition (financial and
<PAGE>
otherwise) and affairs of the Borrower and the Subsidiaries in connection with
this Agreement and the Notes without reliance on the Agent or on any information
or documents prepared by the Agent. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank or any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates any other information or documentation
pertaining to Borrower, the Subsidiaries, or their financial affairs.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Agent.
Section 9.08. Rights to Resign; Appointment of a Successor
----------------------------------------------
Agent. The Agent may resign as such at any time upon thirty (30) calendar days'
- -----
notice to the Borrower and the Banks. In such event, the Majority shall appoint
a successor Agent which shall be an incorporated bank or trust company,
provided, however, that if there is no Default or Event of Default at the time
of such appointment and provided further the successor Agent is to be a bank
other than Harris Trust and Savings Bank, Norwest Bank Minnesota, National
Association, American National Bank and Trust Company of Chicago, or The Frost
National Bank, the Agent shall send to Borrower a list of at least three (3)
banks which are satisfactory to the Majority to serve as the successor Agent,
whereupon the Borrower shall have three (3) Business Days in which to select
which bank on the list is to be the successor Agent. In the event of the failure
of the Borrower to select a bank from the list, then the right of selection
granted to the Borrower hereunder shall forever lapse. If no successor shall
have been so appointed and accepted such appointment within thirty (30) days
after the retiring Agent's giving of notice of resignation or the Majority's
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor, which shall be a Bank, or, if no such Bank accepts
such appointment, which shall be a bank or trust company with an office (or an
affiliate with an office) in St. Louis, Missouri, having a combined capital and
surplus of not less than One Hundred Million Dollars ($100,000,000). Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article IX shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
Section 9.09. Notice of Default. The Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Bank or the Borrower
referring to this Agreement, describing such Default or Event of Default and, in
the case of any Default or Event of Default other than those described in
Section 8.01 of this Agreement, stating that such notice is a "notice of
default." In the event that the Agent receives such a notice of the occurrence
of a Default or Event of Default, the Agent shall give prompt notice thereof to
the Banks. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Majority, provided that
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Banks.
<PAGE>
Section 9.10. Agent Compensation. For its services as Agent
-------------------
hereunder, Borrower shall pay to Agent on the date of this Agreement and on each
anniversary date thereof, certain compensation as heretofore agreed between
Agent and Borrower.
ARTICLE X
MISCELLANEOUS
Section 10.01. Capital Adequacy Reimbursement. If after the
-------------------------------
date hereof, the Agent shall be advised that or shall determine that with
respect to any of the Banks the adoption or the taking effect of any applicable
law, rule or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency or compliance by the Banks with any
request or directive regarding capital adequacy (whether or nor having the force
of law) of any such authority, central bank or comparable authority, has or
would have the effect of reducing the rate of return on or increasing the cost
of maintaining all of the Banks' capital as a direct consequence of their
obligations hereunder (taking into consideration the Banks' policies with
respect to capital adequacy) then from time to time, within fifteen (15)
calendar days after demand by Agent, Borrower shall pay to Agent such additional
amount or amounts as will compensate the Banks for such reduction or increase.
In the event any such compensation is demanded, Agent shall provide to Borrower
a certificate showing the calculation of the amount demanded in reasonable
detail. Borrower shall have the burden of proving that the amount as so
calculated is not correct.
Section 10.02. Amendments, Etc. Except as expressly provided
-----------------
in Article VI hereof, no amendment, modification, termination, or waiver of any
provision of any Loan Document, nor consent to any departure by the Borrower
from any Loan Document, shall in any event be effective unless the same shall be
in writing and signed by the Majority, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such amendment, modification, termination or
waiver of any provision of any Loan Document shall: (a) postpone the stated
maturity of principal of, or interest on, any of the Loans, or reduce the
principal amount of, the rate of interest on, or the fees in connection with
this Agreement; (b) increase the maximum amount of the Revolving Loan Commitment
or the Revolving Loan Commitment of any Bank; (c) change the percentages
required for action by the Banks under this Section 10.02 or by the Majority
under this Agreement; or (d) release or subordinate any Liens in favor of the
Agent on any of the Collateral, except as otherwise expressly provided herein.
The consent of all of the Banks is required to effect any amendment,
modification or waiver of the provisions of this Agreement and of each Loan
Document which provisions are of a type described in clauses (a), (b), (c) or
(d) of this Section 10.02 or to effect any amendment, modification, or waiver of
this Section 10.02 or Section 10.05. The consent of the Borrower will not be
required to effect any amendment, modification or waiver of the provisions of
Article IX of this Agreement other than Section 9.08.
Section 10.03. Notices, Etc. All notices and other
---------------
communications provided for under this Agreement and under the other Loan
Documents shall be in writing (including facsimile communication) and mailed,
<PAGE>
sent by facsimile machine or delivered, to the parties at the addresses set
forth on Exhibit K attached or, as to each party, at such other address as shall
be designated by such party in a written notice to the other party complying as
to delivery with the terms of this Section 10.03. All such notices and
communications shall, when mailed, be effective when deposited in the mails
respectively addressed as aforesaid, except that notices to the Agent and the
Banks pursuant to the provisions of Article II shall not be effective until
received by the Agent and such Banks.
Section 10.04. No Waiver; Remedies. No failure on the part of
--------------------
the Agent or any Bank to exercise, and no delay in exercising, any right, power,
or remedy under any Loan Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The
remedies provided in the Loan Documents are cumulative and not exclusive of any
remedies provided by law.
Section 10.05. Successors and Assigns. This Agreement shall be
----------------------
binding upon and inure to the benefit of the Borrower and the Banks and their
respective successors and assigns, except that Borrower may not assign or
transfer any of its rights or obligations under any Loan Document to which
Borrower is a party without the prior written consent of the Banks, and a Bank
may not sell, assign or participate all or any portion of its Notes (other than
a sale, assignment, or participation to an affiliate bank) without the prior
written consents of Borrower and Agent.
Section 10.06. Costs and Expenses. (1) The Borrower agrees to
------------------
pay to Agent on demand, all costs and expenses, if any, incurred by Agent in
connection with the preparation of the Loan Documents, including, without
limitation, the reasonable fees and expenses of counsel for the Agent (subject
to the limitations as heretofore agreed between Agent and Borrower.) The
Borrower agrees to pay to Agent and the Banks on demand, all costs and expenses,
if any, incurred by Agent and the Banks in connection with any modification of
this Agreement or any of the other Loan Documents that is requested by Borrower
or made in response to a Default or Event of Default, and in connection with the
enforcement of any of the Loan Documents, including, without limitation, the
reasonable fees and expenses of counsel for the Agent (with respect to
modifications and enforcement) and the Banks (with respect to enforcement only)
with respect thereto.
(2) If any payment or prepayment of principal with respect to
any Loans accruing interest based on the Eurodollar Rate Loan is made by the
Borrower other than on the last day of the Interest Period for such Loans, and
such payment is permitted pursuant to Section 2.09, or is made as a result of an
acceleration of the maturity of the Notes pursuant to Section 8.01 or for any
other reason, the Borrower shall, upon demand by the Agent on behalf of the
Banks, pay the Agent for the account of the Banks any amounts required to
compensate the Banks for any additional losses, costs or expenses which they may
reasonably incur as a result of such payment, including, without limitation, any
loss (including loss of anticipated profits), costs or expenses incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
the Banks to fund or maintain such Loan.
Section 10.07. Right of Setoff. Upon the occurrence and during
---------------
the continuance of any Event of Default, each Bank is hereby authorized at any
time and from time to time, without notice to the Borrower (any such notice
<PAGE>
being expressly waived by the Borrower), to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by a Bank to or for the credit or
the account of Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement, the Notes or any other Loan
Document, irrespective of whether or not the Agent shall have made any demand
under this Agreement or the Notes or such other Loan Document and although such
obligations may be unmatured. Each Bank agrees promptly to notify the Borrower
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application. The rights
under this Section 10.07 are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which the Banks may
have.
Section 10.08. Sharing of Setoffs. Each Bank agrees that if it
------------------
shall, by exercising any right of setoff receive payment of a proportion of the
aggregate amount of principal and interest due with respect to any of the Notes
held by it (or any other obligations of Borrower hereunder to such Bank) which
is greater than the proportion received by any other Bank in respect of the
aggregate amount of principal and interest due with respect to any of the Notes
held by such other Bank (or any other obligations of Borrower hereunder to such
Bank), the Bank receiving such proportionately greater payment shall purchase
such participations in the Notes held by the other Banks (or any other
obligations of Borrower hereunder to the other Banks) and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest on the Notes (or other obligations of Borrower hereunder to the Banks)
shall be shared by the Banks pro rata, provided that if any such non-pro rata
payment is thereafter recovered or otherwise set aside such purchase of
participations shall be rescinded (without interest).
Section 10.09. Governing Law; Jurisdiction and Venue. This
---------------------------------------
Agreement and the other Loan Documents shall be governed by, and construed in
accordance with, the laws of the State of Missouri. The Borrower hereby consents
to the jurisdiction of the Circuit Court of the County of St. Louis, Missouri,
and the United States District Court for the Eastern District of Missouri, as
well as to the jurisdiction of all courts from which an appeal may be taken from
any such courts, for the purpose of any suit, action or other proceeding arising
out of any of its obligations arising hereunder or with respect to the
transactions contemplated hereby, and expressly waives any and all objections it
may have as to venue in any such courts and agrees that any proceeding initiated
in another court which relates to such matters may be, at the option of the
Agent, transferred to any of such courts.
Section 10.10. Severability of Provisions. Any provision of
---------------------------
any Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
Section 10.11. Counterparts. This Agreement may be executed in
------------
any number of counterparts and by different parties to this Agreement in
separate counterparts, each which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
<PAGE>
Section 10.12. Headings. Article and Section headings in the
--------
Loan Documents are included in such Loan Documents for the convenience of
reference only and shall not constitute a part of the applicable Loan Documents
for any other purpose.
Section 10.13. Oral Agreements. Oral agreements or commitments
---------------
to loan money, extend credit or to forbear from enforcing repayment of a debt
including promises to extend or renew such debt are not enforceable. To protect
you (Borrower) and us (creditors) from misunderstanding or disappointment, any
agreements we reach covering such matters are contained in this writing, which
is the complete and exclusive statement of the agreement between us, except as
we may later agree in writing to modify it.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
FIRST BANKS, INC.
By: /s/ Allen H. Blake
-------------------
Allen H. Blake
Executive Vice President
MERCANTILE BANK NATIONAL
ASSOCIATION, as Agent and as a Bank
By: /s/David C. Buettner
--------------------
Name: David C. Buettner
Title: Vice President
HARRIS TRUST AND SAVINGS BANK
By: /s/ Patrick A. Horne
-----------------------
Name: Patrick A. Horne
Title: Vice President
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
By: /s/ Tim Ruby
-------------
Name: Tim Ruby
Title: Correspondent Banking Officer
THE FROST NATIONAL BANK
By: /s/ Jerry L. Crutsinger
------------------------
Name: Jerry L. Crustinger
Title: Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:/s/ Alphonse Buscemi
--------------------
Name: Alphonse Buscemi
Title: Vice President
