SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report: March 16, 2000
Commission File Number: 1-9383
WESTAMERICA BANCORPORATION
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(Exact name of registrant as specified in its charter)
CALIFORNIA
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(State of incorporation)
94-2156203
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(I.R.S. Employer Identification Number)
1108 FIFTH AVENUE, SAN RAFAEL, CALIFORNIA 94901
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(Address of principal executive offices and zip code)
(415) 257-8000
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(Registrant's area code and telephone number)
Item 5. Other Events
On March 15, 2000, Westamerica Bancorporation (the "Company") and
First Counties Bank announced the signing of a Definitive Merger
Agreement (the "Agreement") under which the Company will acquire
all of the outstanding shares of common stock of First Counties
Bank pursuant to a tax-free exchange of shares. The Agreement,
which has been approved by the Boards of Directors of both
companies, is subject to conditions and customary transactions of
this type, including approval by First Counties Bank shareholders,
approval by bank regulatory authorities, and satisfaction of
certain other terms and conditions. The merger will be accounted
for under the purchase method of accounting.
At December 31, 1999, the Company reported total assets of
approximately $3.9 billion, shareholders' equity of approximately
$301 million and net income of $76.1 million for the full year of
1999. At December 31, 1999, First Counties Bank had approximately
$91 million in assets, $9 million in shareholders' equity and
recorded net income of $1 million for the twelve months ended
December 31, 1999.
Item 7: Financial Statements and Exhibits
(c) Exhibits. The following is furnished in accordance
with the provisions of Item 601 of Regulation S-K.
(99) Press release dated March 15, 2000.
(2) Agreement and Plan of Reorganization and Merger dated
March 14, 2000
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Westamerica Bancorporation
/s/ DENNIS R. HANSEN
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Dennis R. Hansen
Senior Vice President and Controller
Date: March 16, 2000
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit No. Description Page
- ----------- ----------- ------------
(99) Press release dated 3
March 15, 2000
(2) Agreement and Plan
of Reorganization and
Merger 5
(99). PRESS RELEASE
For immediate Release March 15, 2000
For additional information
Contact: Westamerica Bancorporation
E. Joseph Bowler
707-863-6840
www.westamerica.com
Westamerica Bancorporation and First Counties Bank Sign Definitive
Merger Agreement
San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), and
First Counties Bank (OTC:FTCB) today announced the signing of a
Definitive Merger Agreement under which Westamerica will acquire
all of the outstanding shares of common stock of First Counties
Bank pursuant to a tax-free exchange of shares whereby First
Counties Bank shareholders will receive .888 shares of Westamerica
Bancorporation Common Stock for each share of First Counties stock.
First Counties Bank, headquartered in Clearlake, California, with
approximately $95 million in assets, operates through five offices
in Lake, Napa, and Colusa Counties.
This transaction is valued at approximately $16.5 million and
represents approximately 1.9 times First Counties Bank book value
at December 31, 1999. Based on Westamerica Bancorporation's
closing price on March 14, 2000, of $21.81, First Counties
shareholders will receive approximately $19.37 per share.
The Agreement, which has been approved by the Boards of Directors
of both companies, is subject to conditions usual and customary for
merger transactions of this type, including approval by First
Counties Bank shareholders, approval by bank regulatory
authorities, and satisfaction of certain other terms and
conditions. The merger will be accounted for under the purchase
method of accounting.
The Agreement provides that the exchange ratio is subject to
adjustment. If the average closing price of Westamerica Common
stock for the twenty days prior to the close of the merger is
greater than $25.59, then the exchange ratio will be adjusted
downward so that First Counties shareholders will receive no more
than $22.72 per share. If the average closing price is less than
$18.91, then the exchange ratio will be adjusted upwards so that
First Counties shareholders will receive no less than $16.79 per
share. If Westamerica's average common stock closing price quoted
on NASDAQ during a twenty business day period prior to the merger
is below $18.00, either Westamerica Bancorporation or First
Counties Bank may either accept the exchange ratio, renegotiate the
exchange ratio or terminate the agreement.
Based on WABC's closing price on March 14, 2000, the merger would
result in the issuance of approximately 755,500 new shares of
Westamerica Common Stock. At December 31, 1999, Westamerica had
approximately 37.1 million shares outstanding and First Counties
Bank had about 826,000 shares outstanding. Although the parties
have not adopted any formal timetable, it is estimated the merger
will be consummated in the third quarter of 2000. Stock options to
acquire First Counties Bank Common Stock outstanding at the close
of the transaction would be converted into stock options to acquire
Westamerica Common Stock.
First Counties Bank's President and CEO, David G. Perry, stated:
"Westamerica is an extremely successful community bank. In the
current environment of rapid change in the banking industry, we
concluded that merging with Westamerica presented an outstanding
course of action for our shareholders, customers and the community
we serve. Westamerica brings to the affiliation a stellar record
of earnings and dividend growth, a large array of banking,
investment and trust service products and the capital resources
needed to enhance the profitable segments in our banking business."
David L. Payne, Chairman, President and CEO of Westamerica said:
"We are extremely pleased with this opportunity to add to
Westamerica's community banking franchise in our Lake and Napa
County markets. First Counties Bank is a logical merger partner
for Westamerica due to its strong banking position in several key
markets in these important counties. We look forward to entering
the Colusa County market and increasing our presence in Northern
California."
Westamerica Bancorporation operates as a multi-bank holding company
with 90 branches in 22 Northern and Central Valley California
Counties. Westamerica's assets at December 31, 1999 were
approximately $3.9 billion. Westamerica reported record net income
of $76.1 million or $1.94 per share for 1999.
FORWARD-LOOKING INFORMATION
This press release includes forward-looking information which is
subject to the "safe harbor" created by Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements (which involve the Company's plans, beliefs and goals,
refer to estimates or use similar terms) involve certain risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Such risks and
uncertainties include, but are not limited to, the following
factors: competitive pressure in the banking industry; changes in
the interest rate environment; a potential declining health of the
economy, either nationally or regionally; the deterioration of
credit quality, which could cause an increase in the provision for
possible loan and lease losses; changes in the regulatory
environment; changes in business conditions, particularly in the
California real estate market; certain operational risks involving
data processing systems or fraud; volatility of rate sensitive
deposits; asset/liability matching risks and liquidity risks; and
changes in the securities markets. The Company undertakes no
obligation to revise or publicly release the results of any
revision to these forward-looking statements. For additional
information concerning risks and uncertainties related to the
Company and its operations please refer to the Company's Annual
Report on Form 10-K for the year ended December 31, 1998.
(2). AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
DATED: MARCH 14, 2000
BY AND AMONG
WESTAMERICA BANCORPORATION,
WESTAMERICA BANK
AND
FIRST COUNTIES BANK
MODIFIABLE AUTOMATIC HEADING NUMBERS
AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
This AGREEMENT AND PLAN OF REORGANIZATION AND MERGER (the
"Agreement") is entered into as of March 14, 2000, by and among
WESTAMERICA BANCORPORATION, a California corporation ("WEST");
WESTAMERICA BANK, a California banking corporation and wholly
owned subsidiary of WEST ("WAB") and FIRST COUNTIES BANK, a
California banking corporation ("FCOB").
RECITALS:
WHEREAS, the respective Boards of Directors of FCOB and WEST
have determined that it is in the best interests of FCOB and WEST
and their respective shareholders for FCOB to be merged with WAB,
upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the California Corporations
Code, the California Financial Code and other applicable laws;
WHEREAS, each of the Boards of Directors of FCOB and WEST
have approved this Agreement and the transactions contemplated
hereby;
WHEREAS, FCOB's Board of Directors has resolved to recommend
approval of the merger of FCOB and WAB to its shareholders; and
WHEREAS, upon the consummation of the Merger of FCOB with
and into WAB, WAB shall remain a wholly-owned subsidiary of WEST.
NOW, THEREFORE, in consideration of these premises and the
representations, warranties and agreements herein contained, FCOB
and WEST hereby agree as follows:
ARTICLE 1. DEFINITIONS
As used in this Agreement, the following terms shall have the
meanings set forth below:
"Acquisition Event" shall mean any of the following:
(a) FCOB's Board of Directors shall have approved or FCOB
shall have authorized, recommended, publicly proposed
or publicly announced an intention to authorize,
recommend or propose, or shall have entered or
announced an intention to enter into a letter of
intent, an agreement-in-principle or a definitive
agreement with any Person (other than WEST or any of
its respective Subsidiaries) to effect, an Acquisition
Transaction or failed to publicly oppose a Tender Offer
or an Exchange Offer (as defined below). As used
herein, the term "Acquisition Transaction" shall mean
(i) a merger, consolidation or similar transaction
involving FCOB, (ii) the disposition, by sale, lease,
exchange, dissolution or liquidation, or otherwise, of
all or substantially all of the assets of FCOB or any
asset or assets of FCOB the disposition or lease of
which would result in a material change in the business
or business operations of FCOB, a transfer of any
shares of stock or other securities of FCOB by FCOB, or
a material change in the assets, liabilities or results
of operations or the future prospects of FCOB,
including, but not limited to a grant of an option
entitling any Person to acquire any shares of stock of
FCOB or any assets material to the business of FCOB; or
(iii) the issuance, other than pursuant to outstanding
stock options, sale or other disposition by FCOB
(including, without limitation, by way of merger,
consolidation, share exchange or any similar
transaction) of shares of FCOB Common Stock or other
Equity Securities, or the grant of any option, warrant
or other right to acquire shares of FCOB Common Stock
or other Equity Securities, representing directly, or
on an as-exercised, as-exchanged or as-converted basis
(in the case of options, warrants, rights or
exchangeable or convertible Equity Securities), 15% or
more of the voting securities of FCOB; or
(b) Prior to termination of this Agreement (i) any Person
(other than a person who is a party to a Director
Shareholder Agreement) shall have increased the number
of shares of FCOB Common Stock over which such person
has beneficial ownership (as such term is defined in
Rule 13d-3 promulgated under the Exchange Act) by a
number that is greater than 1% of the then outstanding
shares of FCOB Common Stock if, after giving effect to
such increase, such Person owns, beneficially, more
than 5% of the outstanding shares of FCOB Common Stock,
or (ii) any "group" (as such term is defined under the
Exchange Act) shall have been formed which beneficially
owns, or has the right to acquire beneficial ownership
of, more than 5% of the then outstanding shares of FCOB
Common Stock.
"Acquisition Proposal" shall have the meaning given such
term in Section 6.2.5 and 6.4.12.
"Affected Party" shall have the meaning given to it in
Section 5.7.
"Affiliate" or "affiliate" shall mean, with respect to any
other Person, any Person that, directly or indirectly,
controls or is controlled by or is under common control with
such Person.
"Affiliate Agreements" shall have the meaning given such
term in Section 5.3.3.
"Average Closing Price" shall mean the average of the daily
closing price of a share of WEST Common Stock reported on
the NASDAQ National Market System during the 20 consecutive
trading days ending at the end of the third trading day
immediately preceding the Effective Time.
"Benefit Arrangement" shall have the meaning given such term
in Section 3.21.4.
"BHCA" shall mean the Bank Holding Company Act of 1956, as
amended.
"Business Day" shall mean any day, other than a Saturday,
Sunday or any other day, such as a legal holiday, on which
California state banks in California are not open for
substantially all their banking business.
"CDFI" shall mean the California Department of Financial
Institutions.
"California Corporations Code" shall mean the General
Corporation Law of the State of California.
"California Financial Code" shall mean the Financial Code of
the State of California.
"Classified Assets" shall have the meaning given to such
term in Section 6.1.15.
"Closing" shall have the meaning given to such term in
Section 2.1.
"Closing Date" shall have the meaning given to such term in
Section 2.1.
"Closing Schedules" shall have the meaning given to such
term in Section 5.7.
"Default" shall mean, as to any party to this Agreement, a
failure by such party to perform, in any material respect,
any of the agreements or covenants of such party contained
in Articles 5 or 6.
"Derivatives Contract" shall have the meaning given such
term in Section 3.26.
"Determination Date" shall mean the last business day of the
calendar month immediately preceding the calendar month in
which the Effective Time occurs.
"Director Shareholder Agreement" shall have the meaning
given such term in Section 7.2.10.
"Dissenting Shares" shall mean shares of FCOB Common Stock
which come within all of the descriptions set forth in
Subparagraphs (1), (2), (3) and (4) of Paragraph (b) of
Section 1300 of the California Corporations Code.
"Dissenting Shareholder Notices" shall mean the notice
required to be given to record holders of Dissenting Shares
pursuant to Paragraph (a) of Section 1301 of the California
Corporations Code.
"Effective Time" shall have the meaning given such term in
Section 2.1.
"Employee Plan" shall have the meaning given such term in
Section 3.21.3.
"Environmental Laws" shall mean and include any and all
laws, statutes, ordinances, rules, regulations, orders, or
determinations of any Governmental Entity pertaining to
health or to the environment, including, without limitation,
the Clean Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), the Federal Water Pollution
Control Act Amendments, the Occupational Safety and Health
Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976, as amended ("RCRA"), the Hazardous
Materials Transportation Act of 1975, as amended, the Safe
Drinking Water Act, as amended, and the Toxic Substances
Control Act, as amended.
"Equity Securities" shall have the meaning given to such
term in the Exchange Act.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Exchange Agent" shall mean Harris Trust Company of
California or such other Person as WEST shall have appointed
to perform the duties set forth in Section 2.8.
"Exchange Offer" shall mean the commencement (as such term
is defined in Rule 14d-2 under the Exchange Act) of an
exchange offer or the filing by any Person of a registration
statement under the Securities Act with respect to an
exchange offer to purchase any shares of FCOB Common Stock
such that, upon consummation of such offer, such Person
would own or control 15% or more of the then outstanding
shares of FCOB Common Stock.
"Exchange Ratio" shall mean 0.888 as adjusted by Section 2.6
or Section 8.1.13..
"FCOB" shall mean First Counties Bank.
"FCOB Certificates" shall have the meaning given such term
in Section 2.8.1.
"FCOB Collateralizing Real Estate" shall have the meaning
given such term in Section 3.23.1.
"FCOB Common Stock" shall mean the common stock, no par
value, of FCOB.
"FCOB Fairness Opinion" shall have the meaning given to such
term in Section 7.3.7.
"FCOB Filings" shall have the meaning given such term in
Section 3.6.
"FCOB Financial Statements" shall have the meaning given to
such term in Section 3.7.3.
"FCOB Material Adverse Event" shall have the meaning given
such term in Section 8.1.8.
"FCOB Properties" shall have the meaning given such term in
Section 3.23.1.
"FCOB Stock Options" shall mean any options to purchase any
shares of FCOB Common Stock or any other Equity Securities
of FCOB granted on or prior to the Effective Time, whether
pursuant to the FCOB Stock Option Plan or otherwise.
"FCOB Stock Option Plan" shall mean FCOB's written Stock
Option Plan as described in Section 3.24 hereto.
"FCOB Superior Proposal" shall have the meaning set forth in
Section 6.2.5.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"FDI Act" shall mean the Federal Deposit Insurance Act.
"Federal Reserve" shall mean the Board of Governors of the
Federal Reserve System.
"GAAP" shall mean generally accepted accounting principles.
"Governmental Entity" shall mean any court, federal, state,
local or foreign government or any administrative agency or
commission or other governmental authority or
instrumentality whatsoever.
"Hazardous Substances" shall have the meaning given such
term in Section 3.23.4.
"IRC" shall mean the Internal Revenue Code of 1986, as
amended.
"Proxy Statement/Prospectus" shall have the meaning given to
such term in Section 3.7.2.
"Knowledge" shall mean, with respect to any representation
or warranty contained in this Agreement; the actual
knowledge, after reasonable inquiry, of any director or
executive officer of FCOB or WEST.
"Last Regulatory Approval" shall mean the final Requisite
Regulatory Approval required, from any Governmental Entity
under applicable federal laws of the United States and laws
of any state having jurisdiction over the Merger, to permit
the parties to consummate the Merger.
"Material Adverse Effect" shall mean a material adverse
effect: (i) on the business, assets, results of operations,
financial condition or prospects of a Person and its
subsidiaries, if any, taken as a whole (unless specifically
indicated otherwise); or (ii) on the ability of a Person
that is a party to this Agreement to perform its obligations
under this Agreement or to consummate the transactions
contemplated by this Agreement.
"Merger" shall have the meaning set forth in Section 2.1.
"Merger Agreement" shall have the meaning given to such term
in Section 2.1.
"New Certificates" shall have the meaning given to such term
in Section 2.8.1.
"OCC" shall mean Office of the Comptroller of the Currency.
"OREO" shall have the meaning given such term in Section
3.13.
"Perfected Dissenting Shares" shall mean Dissenting Shares
as to which the recordholder has made demand on FCOB or WEST
in accordance with Paragraph (b) of Section 1301 of the
California Corporations Code and has not withdrawn such
demand prior to the Effective Time.
"Persons" or "persons" shall mean an individual,
corporation, partnership, limited liability company, joint
venture, trust or unincorporated organization, Governmental
Entity or any other legal entity whatsoever.
"Registration Statement" shall have the meaning given to
such term in Section 3.7.2.
"Regulatory Authority" shall mean any Governmental Entity,
the approval of which is legally required for consummation
of the Merger.
"Requisite Regulatory Approvals" shall have the meaning set
forth in Section 7.1.2.
"Returns" shall mean all returns, declarations, reports,
statements, and other documents required to be filed with
respect to federal, state, local and foreign Taxes, and the
term "Return" means any one of the foregoing Returns.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Subsidiary" shall mean, with respect to any corporation
(the "parent"), any other corporation, association or other
business entity of which more than 50% of the shares of the
Voting Stock are owned or controlled, directly or
indirectly, by the parent or by one or more Subsidiaries of
the parent, or by the parent and one or more of its
Subsidiaries.
"Surviving Corporation" shall have the meaning given to such
term in Section 2.1.
"Taxes" shall mean all federal, state, local and foreign net
income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property,
windfall profits, customs, duties, or other taxes, together
with any interest and any penalties, additions to tax, or
additional amounts with respect thereto, and the term "Tax"
means any one of the foregoing Taxes.
"Tax Filings" shall mean any applications, reports,
statements or other Returns related to any Persons taxes
required to be filed with any local, state or federal
Governmental Entity before the Merger may become effective,
including, but not limited to, any filing required to be
made with the California Franchise Tax Board to obtain a Tax
Clearance Certificate for the Merger.
"Tender Offer" shall mean the commencement (as such term is
defined in Rule 14d-2 under the Exchange Act) of a tender
offer or the filing by any person of a registration
statement under the Securities Act with respect to, a tender
offer to purchase any shares of FCOB Common Stock such that,
upon consummation of such offer, such person would own or
control 15% or more of the then outstanding voting
securities of FCOB.
"Understanding" shall have the meaning set forth in Section
6.1.5.
"Voting Securities" or "Voting Stock" shall mean the stock
or other securities or any other interest entitling the
holders thereof to vote in the election of the directors,
trustees or Persons performing similar functions of the
Person in question, including, without limitation, nonvoting
securities that are convertible or exchangeable into voting
securities, but shall not include any stock or other
interest so entitling the holders thereof to vote only upon
the happening of a contingency (other than a conversion or
exchange thereof into voting securities), whether or not
such contingency has occurred.
"WAB" shall mean Westamerica Bank.
"WEST" shall mean Westamerica Bancorporation.
"WEST Common Stock" shall mean the common stock, no par
value per share, of WEST.
"WEST Filings" shall have the meanings given such term in
Section 4.5.
"WEST Financial Statements" shall mean the financial
statements of WEST for the year ended December 31, 1999.
"WEST Market Value Per Share" shall mean the last trade of
WEST Common Stock prior to the Effective Time.
"WEST Material Adverse Event" shall have the meaning given
to such term in Section 8.1.9
ARTICLE 2. THE MERGER
Section 2.1 The Merger. Subject to the terms and
conditions of this Agreement, as promptly as practicable
following the receipt of the Last Regulatory Approval and the
expiration of all applicable waiting periods, FCOB shall be
merged with WAB, with WAB being the Surviving Corporation of the
merger, all pursuant to the Agreement of Merger attached to this
Agreement as Exhibit 2.1 (the "Merger Agreement") and in
accordance with the applicable provisions of the California
Financial Code and the California Corporations Code (the
"Merger"). The closing of the Merger (the "Closing") shall take
place at a location and time and Business Day to be designated by
WEST and reasonably concurred to by FCOB (the "Closing Date")
which shall not, however, be later than thirty (30) days after
receipt of the Last Regulatory Approval, expiration of all
applicable waiting periods and FCOB shareholder approval. The
Merger shall be effective when the Merger Agreement (together
with any other documents required by law to effectuate the
Merger) shall have been filed with the Secretary of State of the
State of California and the CDFI. When used in this Agreement,
the term "Effective Time" shall mean the time of filing of the
Merger Agreement with the Secretary of State and the CDFI, and
"Surviving Corporation" shall mean WAB.
Section 2.2 Effect of Merger. By virtue of the Merger and
at the Effective Time, all of the rights, privileges, powers and
franchises and all property and assets of every kind and
description of FCOB and WAB shall be vested in and be held and
enjoyed by the Surviving Corporation, without further act or
deed, and all the estates and interests of every kind of FCOB and
WAB, including all debts due to either of them, shall be as
effectively the property of the Surviving Corporation as they
were of FCOB and WAB immediately prior to the Effective Time, and
the title to any real estate vested by deed or otherwise in
either FCOB or WAB shall not revert or be in any way impaired by
reason of the Merger; and all rights of creditors and liens upon
any property of FCOB and WAB shall be preserved unimpaired and
all debts, liabilities and duties of FCOB and WAB shall be debts,
liabilities and duties of the Surviving Corporation and may be
enforced against it to the same extent as if such debts,
liabilities and duties had been incurred or contracted by it, and
none of such debts, liabilities or duties shall be expanded,
increased, broadened or enlarged by reason of the Merger.
Section 2.3 Articles of Incorporation and Bylaws. The
Articles of Incorporation and Bylaws of WAB in effect immediately
prior to the Effective Time shall be the Articles of
Incorporation and Bylaws of the Surviving Corporation until
amended and the name of the Surviving Corporation shall be
"Westamerica Bank."
Section 2.4 WAB Stock. The authorized and issued capital
stock of WAB immediately prior to the Effective Time, on and
after the Effective Time, pursuant to the Merger Agreement and
without any further action on the part of WAB shall remain
unchanged and shall be held by WEST.
Section 2.5 Conversion of FCOB Stock Options. At the
Effective Time, each option with respect to FCOB Common Stock be
converted into an option with respect to WEST Common Stock and
become exercisable for the number of WEST Common Stock equal to
the number of shares of FCOB Common Stock for which the holder
held options multiplied by the Exchange Ratio (except that WEST
shall not be required to issue or compensate the options holders
for any fraction of a share of WEST Shares which would result
from exercise of all or any part of said options), and be subject
to the same unaccelerated vesting schedule and other existing
terms of the FCOB options and other comparable terms, including
without limitation a per share WEST exercise price equal to the
former per share exercise price of the FCOB options divided by
the Exchange Ratio.
Section 2.6 Conversion of FCOB Common Stock.
(a) Each share of FCOB Common Stock issued and outstanding
prior to the Effective Time shall be converted into the right to
receive WEST Common Stock equal to the amount of the Exchange
Ratio. The Exchange Ratio shall be adjusted as follows:
(i) If the Average Closing Price is greater than
$25.59, then the Exchange Ratio shall equal the product of
(a) 0.888 and (b) a fraction, the numerator is equal to
$25.59 and the denominator is equal to the Average Closing
Price;
Exchange Ratio = 0.888 X $25.59
-----------------
Average Closing Price
(ii) If the Average Closing Price is less than $18.91,
then the Exchange Ratio shall equal the product of (a)
0.888 and (b) a fraction, the numerator is equal to $18.91
and the denominator is equal to the Average Closing Price;
Exchange Ratio = 0.888 X $18.91
-----------------
Average Closing Price
The Exchange Ratio is also subject to adjustment pursuant to
Section 8.1.13 if applicable.
(b) The shares held by any shareholder who properly
exercises dissenters' rights provided under the California
Corporations Code, shall not be so converted and in lieu of such
conversion shall be treated in accordance with the provisions of
the California Corporations Code.
Section 2.7 Fractional Shares. No fractional shares of
WEST Common Stock shall be issued in the Merger. In lieu
thereof, each holder of FCOB Common Stock who would otherwise be
entitled to receive a fractional share shall receive an amount in
cash equal to the product (rounded to the nearest hundredth)
obtained by multiplying (a) WEST Market Value Per Share by (b)
the fraction of a share of WEST Common Stock to which such holder
would otherwise be entitled. No such holder shall be entitled to
dividends or other rights in respect of any such fraction.
Section 2.8 Exchange Procedures. On or as soon as
practicable after the Effective Time, (i) WEST will deliver to
the Exchange Agent: (i) certificates representing the number of
shares of WEST Common Stock issuable in the Merger; and (ii) cash
for the payout of fractional shares.
2.8.1 Upon surrender to the Exchange Agent for
cancellation of one or more certificates for shares of FCOB
Common Stock ("FCOB Certificates"), accompanied by a duly
executed letter of transmittal in proper form, the Exchange Agent
shall, as promptly as practicable thereafter, deliver to each
holder of such surrendered FCOB Certificates, certificates
representing the appropriate number of shares of WEST Common
Stock ("New Certificates") and/or checks for payment of cash in
lieu of fractional shares, in respect of the FCOB Certificates.
In no event shall the holders of FCOB Certificates be entitled to
receive interest on cash amounts due them hereunder.
2.8.2 Until a FCOB Certificate has been surrendered
and exchanged as herein provided, each share of FCOB Common Stock
represented by such FCOB Certificate shall represent, on and
after the Effective Time, the right to receive the Exchange Ratio
into which each such share of FCOB Common Stock shown thereon has
been converted as provided by Section 2.6, including the right to
vote such shares of WEST Common Stock. No dividends or other
distributions that are declared on any shares of WEST Common
Stock into which any shares of FCOB Common Stock have been
converted at the Effective Time shall be paid to the holder of
such FCOB shares until the FCOB Certificates evidencing such FCOB
shares have been surrendered in exchange for New Certificates in
the manner herein provided, but upon such surrender, such
dividends or other distributions, from and after the Effective
Time, will be paid to such holders. In no event shall the
holders be entitled to receive such dividends or other
distributions be entitled to receive interest on such dividends
or other distributions.
2.8.3 No transfer taxes shall be payable by any
shareholder in respect of the issuance of New Certificates,
except that if any New Certificate is to be issued in a name
other than that in which the FCOB Certificates surrendered shall
have been registered, it shall be a condition of such issuance
that the holder requesting such issuance shall properly endorse
the certificate or certificates and shall pay to WEST or the
Exchange Agent any transfer taxes payable by reason thereof, or
of any prior transfer of such surrendered certificate, or
establish to the satisfaction of WEST or the Exchange Agent that
such taxes have been paid or are not payable.
2.8.4 Any WEST Common Stock or cash delivered to the
Exchange Agent and not distributed pursuant to this Section 2.8
at the end of nine months from the Effective Time, shall be
returned to WEST, in which event the Persons entitled thereto
shall look only to WEST for payment thereof.
2.8.5 Notwithstanding anything to the contrary set
forth in Sections 2.8.2 and 2.8.3 hereof, if any holder of FCOB
Common Stock shall be unable to surrender such holder's FCOB
Certificates because such FCOB Certificates have been lost or
destroyed, such holder may deliver in lieu thereof an affidavit
and indemnity undertaking in form and substance and, if required,
with surety satisfactory to the Exchange Agent and WEST.
2.8.6 The Exchange Agent shall not be entitled to vote
or exercise any rights of ownership with respect to the shares of
WEST Common Stock held by it from time to time hereunder, except
that it shall receive and hold all dividends or other
distributions paid or distributed with respect to such shares of
WEST Common Stock for the account of the Persons entitled
thereto.
2.8.7 After the Effective Time, there shall be no
further registration of transfers of the shares of FCOB Common
Stock which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, FCOB Certificates
representing such shares of FCOB Common Stock are presented to
WEST, they shall be canceled and exchanged for WEST Common Stock
as provided in this Article 2.
Section 2.9 Board of Directors of WEST and WAB following
the Effective Time. At the Effective Time, the then existing
Board of Directors of WEST shall remain the Board of Directors.
At the Effective Time, the Board of Directors of WAB shall remain
the Board of Directors of the Surviving Corporation.
Section 2.10 Change of Structure. WEST and FCOB agree that
WEST may change the structure of the Merger so long as the
consideration received by FCOB shareholders under Section 2.6
hereof is not modified and the Closing of the Merger is not
materially delayed.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF FCOB
FCOB represents and warrants to WEST as follows:
Section 3.1 Organization; Corporate Power; Etc. FCOB is a
California state chartered banking corporation duly organized,
validly existing and in good standing under the laws of the State
of California and has all requisite corporate power and authority
to own, lease and operate its properties and assets and to carry
on its business substantially as it is being conducted on the
date of this Agreement. FCOB has all requisite corporate power
and authority to own, lease and operate its properties and to
carry on its business substantially as it is being conducted on
the date of this Agreement, except where the failure to have such
power or authority would not have a Material Adverse Effect on
FCOB or the ability of FCOB to consummate the transactions
contemplated by this Agreement. FCOB has all requisite corporate
power and authority to enter into this Agreement and, subject to
obtaining all requisite Regulatory Approvals, FCOB will have the
requisite corporate power and authority to perform its respective
obligations hereunder with respect to the consummation of the
transactions contemplated hereby.
Section 3.2 Licenses and Permits. Except as disclosed on
Schedule 3.2, FCOB has all material licenses, certificates,
franchises, rights and permits that are necessary for the conduct
of its business, and such licenses are in full force and effect,
except for any failure to be in full force and effect that would
not, individually or in the aggregate, have a Material Adverse
Effect on FCOB or on the ability of FCOB to consummate the
transactions contemplated by this Agreement. The properties,
assets, operations and businesses of FCOB are and have been
maintained and conducted, in all material respects, in compliance
with all applicable licenses, certificates, franchises, rights
and permits.
Section 3.3 Subsidiaries. Other than as set forth on
Schedule 3.3, there is no corporation, partnership, joint venture
or other entity in which FCOB owns, directly or indirectly
(except as pledgee pursuant to loans or stock or other interest
held as the result of or in lieu of foreclosure pursuant to
pledge or other security arrangement) any equity or other voting
interest or position.
Section 3.4 Authorization of Agreement; No Conflicts.
3.4.1 The execution and delivery of this Agreement and
the Merger Agreement by FCOB, and the consummation of the
transactions contemplated hereby and thereby, have been duly
authorized by all necessary corporate action on the part of FCOB,
subject only to the approval of this Agreement, the Merger
Agreement and the Merger by FCOB's shareholders. This Agreement
has been duly executed and delivered by FCOB and constitutes a
legal, valid and binding obligation of FCOB, enforceable in
accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally and by
general equitable principles. The Merger Agreement, upon the
receipt of all Requisite Regulatory Approvals and the due
execution and filing of such Merger Agreement in accordance with
the applicable provisions of the California Corporations Code and
the California Financial Code, will constitute a legal, valid and
binding obligation of FCOB, enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and by general
equitable principles.
3.4.2 Except as disclosed on Schedule 3.4, the
execution and delivery of this Agreement and the Merger
Agreement, and the consummation of the transactions contemplated
hereby and thereby, do not and will not conflict with, or result
in any violation of or default or loss of a material benefit
under, any provision of the Articles of Incorporation or Bylaws
of FCOB, any material mortgage, indenture, lease, agreement or
other material instrument or any permit, concession, grant,
franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to FCOB or any of its
assets or properties, other than any such conflict, violation,
default or loss which (i) will not have a Material Adverse Effect
on FCOB, or on WEST following consummation of the Merger; or (ii)
will be cured or waived prior to the Effective Time.
Section 3.5 Capital Structure. The authorized capital
stock of FCOB consists of 10,000,000 shares of FCOB Common Stock,
no par value per share. On the date of this Agreement, 825,871
shares of FCOB Common Stock were outstanding and 77,423 shares of
FCOB Common Stock were reserved for issuance pursuant to
outstanding FCOB Stock Options under the FCOB Stock Option Plan.
All outstanding shares of FCOB Common Stock are validly issued,
fully paid and nonassessable and do not possess any preemptive
rights and were not issued in violation of any preemptive rights
or any similar rights of any Person. Except for the FCOB Stock
Options described on Schedule 3.5 to this Agreement, FCOB does
not have outstanding any options, warrants, calls, rights,
commitments, securities or agreements of any character to which
FCOB is a party or by which it is bound obligating FCOB to issue,
deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock of FCOB or obligating FCOB to
grant, extend or enter into any such option, warrant, call,
right, commitment or agreement.
Section 3.6 FCOB Filings. Since January 1, 1997, FCOB has
filed all reports, registrations and statements, together with
any amendments required to be made with respect thereto, that
were required to be filed with (a) the FDIC; (b) the CDFI; (c)
the OCC; (d) any other applicable federal, state or local
governmental or regulatory authority. All such reports,
registrations and filings, and all reports sent to FCOB's
shareholders during the three-year period ended December 31, 1999
(whether or not filed with any Regulatory Authority), are
collectively referred to as the "FCOB Filings". Except to the
extent prohibited by law, copies of the FCOB Filings have been
made available to WEST. As of their respective filing or mailing
dates, each of the past FCOB Filings (a) was true and complete in
all material respects (or was amended so as to be so promptly
following discovery of any discrepancy); and (b) complied in all
material respects with all of the statutes, rules and regulations
enforced or promulgated by the governmental or regulatory
authority with which it was filed (or was amended so as to be so
promptly following discovery of any such noncompliance) and none
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Section 3.7 Accuracy of Information Supplied.
3.7.1 No representation or warranty of FCOB contained
herein or any statement, schedule, exhibit or certificate given
or to be given by or on behalf of FCOB to WEST in connection
herewith and none of the information supplied or to be supplied
by FCOB to WEST hereunder contains or will contain any untrue
statement of material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they are made, not misleading.
3.7.2 None of the information supplied or to be
supplied by FCOB or relating to FCOB and approved by FCOB which
is included or incorporated by reference in (i) the Registration
Statement on Form S-4 to be filed with the SEC by WEST in
connection with the issuance of shares of WEST Common Stock in
the Merger (including the Proxy Statement of FCOB and the
Prospectus of WEST ("Proxy Statement/Prospectus") constituting a
part thereof, (the "Registration Statement") will, at the time
the Registration Statement becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances
under which they were made, not misleading; (ii) the Proxy
Statement/Prospectus and any amendment or supplement thereto
will, at all times from the date of mailing to shareholders of
FCOB through the date of the meeting of shareholders of FCOB to
be held in connection with the Merger, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading; and (iii) the applications and forms to be
filed with securities or "blue sky" authorities, self regulatory
authorities, or any Governmental Entity in connection with the
Merger, the issuance of any shares of WEST Common Stock in
connection with the Merger, or any Requisite Regulatory Approvals
will, at the time filed or at the time they become effective,
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading. The Proxy
Statement/Prospectus (except for such portions thereof that
relate only to WEST and its Subsidiaries) will comply in all
material respects with the provisions of the Exchange Act and the
rules and regulations thereunder.
3.7.3 FCOB has delivered or will deliver to WEST
copies of: (a) the audited balance sheets as of December 31,
1999, 1998 and 1997 and the related statements of income, changes
in shareholders' equity and cash flows for the years then ended
and the related notes to such financial statements, all as
audited by Perry-Smith & Company, independent public accountants
(the "FCOB Financial Statements"), and FCOB will hereafter until
the Closing Date deliver to WEST copies of additional financial
statements of FCOB as provided in Sections 5.1.1(iii) and
6.1.11(iii). The FCOB Financial Statements have been prepared
(and all of said additional financial statements will be
prepared) in accordance with GAAP, or applicable regulatory
accounting principles applied on a consistent basis during the
periods involved (except as may be indicated in the notes
thereto) consistently followed throughout the periods covered by
such statements, and present (and, when prepared, will present)
fairly the financial position of FCOB as of the respective dates
indicated and the results of operations, cash flows and changes
in shareholders' equity at the respective dates and for the
respective periods covered by such financial statements (subject,
in the case of the unaudited statements, to recurring adjustments
normal in nature and amount). In addition, FCOB has delivered or
made available to WEST copies of all management or other letters
delivered to FCOB by its independent accountants in connection
with any of the FCOB Financial Statements or by such accountants
or any consultant regarding the internal controls or internal
compliance procedures and systems of FCOB issued at any time
since January 1, 1997, and will make available for inspection by
WEST or its representatives, at such times and places as WEST may
reasonably request, reports and working papers produced or
developed by such accountants or consultants.
Section 3.8 Compliance with Applicable Laws. Except as
disclosed on Schedule 3.8, to the Knowledge of FCOB, the
respective businesses of FCOB are not being conducted in
violation of any law, ordinance or regulation, except for
violations which individually or in the aggregate would not have
a Material Adverse Effect on FCOB, or WEST at or following the
Effective Time. Except as set forth in Schedule 3.8, to the
Knowledge of FCOB no investigation or review by any Governmental
Entity with respect to FCOB, other than regular bank
examinations, is pending or threatened, nor has any Governmental
Entity indicated to FCOB an intention to conduct the same.
Section 3.9 Litigation. Except as set forth in Schedule
3.9, to the Knowledge of FCOB there is no suit, action or
proceeding or investigation pending or threatened against or
affecting FCOB which, if adversely determined, would have a
Material Adverse Effect on FCOB; nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against FCOB that has, or which, insofar
as reasonably can be foreseen, in the future would have, any such
Material Adverse Effect. Schedule 3.9 contains a true, correct
and complete list, including identification of the applicable
insurance policy covering such litigation, if any, subject to
reservation of rights, if any, the applicable deductible and the
amount of any reserve therefor, of all pending litigation in
which FCOB is a named party of which FCOB has Knowledge, and
except as disclosed on Schedule 3.9, all of the litigation shown
on such Schedule is adequately covered by insurance in force,
except for applicable deductibles, or has been adequately
reserved for in accordance with FCOB's prior business practices.
Section 3.10 Agreements with Banking Authorities. Except
as set forth in Schedule 3.10, FCOB is not a party to any written
agreement or memorandum of understanding with, or order or
directive from, any Governmental Entity.
Section 3.11 Insurance. FCOB has in full force and effect
policies of insurance with respect to their assets and businesses
against such casualties and contingencies and in such amounts,
types and forms as are customarily appropriate for their
businesses, operations, properties and assets. Schedule 3.11
contains a list of all policies of insurance and bonds carried
and owned by FCOB. FCOB is not in default under any such policy
of insurance or bond such that it can be canceled and all
material current claims outstanding thereunder have been filed in
timely fashion. FCOB has filed claims with, or given notice of
claim to, their insurers or bonding companies in timely fashion
with respect to all material matters and occurrences for which
they believe they have coverage.
Section 3.12 Title to Assets other than Real Property.
FCOB has good and marketable title to or a valid leasehold
interest in all properties and assets (other than real property
which is the subject to Section 3.13), used in its business, free
and clear of all mortgages, covenants, conditions, restrictions,
easements, liens, security interests, charges, claims,
assessments and encumbrances, except for: (a) rights of lessors,
lessees or sublessees in such matters as are reflected in a
written lease; (b) encumbrances as set forth in the FCOB
Financial Statements; (c) current Taxes (including assessments
collected with Taxes) not yet due which have been fully reserved
for; (d) encumbrances, if any, that are not substantial in
character, amount or extent and do not detract materially from
the value, or interfere with present use, or the ability of FCOB
or its Subsidiary to sell or otherwise dispose of the property
subject thereto or affected thereby; and (e) other matters as
described in Schedule 3.12. All such properties and assets are,
and require only routine maintenance to keep them, in good
working condition, normal wear and tear excepted.
Section 3.13 Real Property. Schedule 3.13 is an accurate
list and general description of all real property owned or leased
by FCOB, including Other Real Estate Owned ("OREO"). FCOB has
good and marketable title to the real properties that it owns, as
described in such Schedule, free and clear of all mortgages,
covenants, conditions, restrictions, easements, liens, security
interests, charges, claims, assessments and encumbrances, except
for (a) rights of lessors, lessees or sublessees in such matters
as are reflected in a written lease; (b) current Taxes (including
assessments collected with Taxes) not yet due and payable; (c)
encumbrances, if any, that are not substantial in character,
amount or extent and do not materially detract from the value, or
interfere with present use, or the ability of FCOB to dispose, of
FCOB's interest in the property subject thereto or affected
thereby; and (d) other matters as described in Schedule 3.13.
FCOB has valid leasehold interests in the leaseholds they
respectively hold, free and clear of all mortgages, liens,
security interest, charges, claims, assessments and encumbrances,
except for (a) claims of lessors, co-lessees or sublessees in
such matters as are reflected in a written lease; (b) title
exceptions affecting the fee estate of the lessor under such
leases; and (c) other matters as described in Schedule 3.13. To
the best of FCOB's Knowledge, the activities of FCOB with respect
to all real property owned or leased by them for use in
connection with their operations are in all material respects
permitted and authorized by applicable zoning laws, ordinances
and regulations and all laws and regulations of any Governmental
Entity. Except as set forth in Schedule 3.13, FCOB enjoys quiet
possession under all material leases to which they are the
lessees and all of such leases are valid and in full force and
effect, except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and by general
equitable principles. Materially all buildings and improvements
on real properties owned or leased by FCOB are in good condition
and repair, and do not require more than normal and routine
maintenance, to keep them in such condition, normal wear and tear
excepted.
Section 3.14 Taxes.
3.14.1 Filing of Returns. Except as set forth on
Schedule 3.14.1, FCOB has duly prepared and filed or caused to be
duly prepared and filed all federal, state, and local Returns
(for Tax or informational purposes) which were required to be
filed by or in respect of FCOB or any of their properties, income
and/or operations on or prior to the Closing Date. As of the
time they were filed, the foregoing Returns accurately reflected
the material facts regarding the income, business, asset,
operations, activities, status, and any other information
required to be shown thereon. Except as set forth on Schedule
3.14.1, no extension of time within which FCOB may file any
Return is currently in force.
3.14.2 Payment of Taxes. Except as disclosed on
Schedule 3.14.2 with respect to all amounts in respect of Taxes
imposed on FCOB or for which FCOB is or could be liable, whether
to taxing authorities (as, for example, under law) or to other
Persons (as, for example, under Tax allocation agreements), with
respect to all taxable periods or portions of periods ending on
or before the Closing Date, all applicable tax laws and
agreements have been or will be fully complied with in all
material respects, and all such amounts required to be paid by or
on behalf of FCOB to taxing authorities or others on or before
the date hereof have been paid.
3.14.3 Audit History. Except as disclosed on Schedule
3.14.3, there is no review or audit by any taxing authority of
any Tax liability of FCOB currently in progress of which FCOB has
Knowledge. Except as disclosed on Schedule 3.14.3, FCOB has not
received any written notices within the three years preceding the
Closing Date of any pending or threatened audit, by the Internal
Revenue Service or any state, local or foreign agency, for any
Returns or Tax liability of FCOB for any period. FCOB currently
has no unpaid deficiencies assessed by the Internal Revenue
Service or any state, local or foreign taxing authority arising
out of any examination of any of the Returns of FCOB or any
Subsidiaries filed for fiscal years ended on or after December
31, 1996 through the Closing Date, nor to the Knowledge of FCOB
is there reason to believe that any material deficiency will be
assessed.
3.14.4 Statute of Limitations. Except as disclosed on
Schedule 3.14.4, no agreements are in force or are currently
being negotiated by or on behalf of FCOB for any waiver or for
the extension of any statute of limitations governing the time of
assessments or collection of any Tax. No closing agreements or
compromises exist concerning Taxes of FCOB.
3.14.5 Withholding Obligations. Except as set forth
on Schedule 3.14.5, FCOB has withheld from each payment made to
any of their respective officers, directors and employees, the
amount of all applicable Taxes, including, but not limited to,
income tax, social security contributions, unemployment
contributions, backup withholding and other deductions required
to be withheld therefrom by any Tax law and have paid the same to
the proper taxing authorities within the time required under any
applicable Tax law.
3.14.6 Tax Liens. There are no Tax liens, whether
imposed by any federal, state, local or foreign taxing authority,
outstanding against any assets owned by FCOB except for liens for
Taxes that are not yet due and payable.
3.14.7 Tax Reserves. FCOB has made full and adequate
provision and reserve for all federal, state, local or foreign
Taxes for the current period for which Tax and information
returns are not yet required to be filed. The FCOB Financial
Statements contain fair and sufficient accruals for the payment
of all Taxes for the periods covered by the FCOB Financial
Statements and all periods prior thereto.
3.14.8 IRC Section 382 Applicability. FCOB, including
any party joining in any consolidated return to which FCOB is not
a member, has not undergone an "ownership change" as defined in
IRC Section 382(g) within the "testing period" (as defined in IRC
Section 382) ending immediately before the Effective Time, and
not taking into account any transactions contemplated by this
Agreement.
3.14.9 Disclosure Information. Within 45 days of the
date of this Agreement, FCOB will deliver to WEST a schedule
setting forth the following information with respect to FCOB and
as of the most recent practicable date (as well as on an
estimated pro forma basis as of the Closing giving effect to the
consummation of the transactions contemplated hereby): (a) FCOB's
basis in its assets; (b) the amount of any net operating loss,
net capital loss, unused investment or other credit, unused
foreign tax, or excess charitable contribution allocable to FCOB;
and (c) the amount of any deferred gain or loss allocable to FCOB
and arising out of any deferred intercompany transactions.
Section 3.15 Performance of Obligations. FCOB has
performed all material obligations required to be performed by it
to date and FCOB is not in material default under or in breach of
any term or provision of any covenant, contract, lease, indenture
or any other agreement, written or oral, to which any is a party,
is subject or is otherwise bound, and no event has occurred that,
with the giving of notice or the passage of time or both, would
constitute such a default or breach, where such default or breach
or failure to perform would have a Material Adverse Effect on
FCOB. To the Knowledge of FCOB, and except as disclosed on
Schedule 3.15 or in the portion of Schedule 3.16 that identifies
90-day past due or classified or nonaccrual loans, no party with
whom FCOB has an agreement that is of material importance to the
businesses of FCOB is in default thereunder.
Section 3.16 Loans and Investments. Except as set forth on
Schedule 3.16, all loans, leases and other extensions of credit,
and guaranties, security agreements or other agreements
supporting any loans or extensions of credit, and investments of
FCOB are, and constitute, in all material respects, the legal,
valid and binding obligations of the parties thereto and are
enforceable against such parties in accordance with their terms,
except as the enforceability thereof may be limited by applicable
law and otherwise by bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally and by
general equitable principles. Except as described on Schedule
3.16, as of December 31, 1999, no loans or investments held by
FCOB are: (i) more than ninety (90) days past due with respect
to any scheduled payment of principal or interest, other than
loans on a nonaccrual status; (ii) classified as "loss,"
"doubtful," "substandard" or "specially mentioned" by FCOB or any
banking regulators; or (iii) on a nonaccrual status in
accordance with FCOB's loan review procedures. Except as set
forth on Schedule 3.16, none of such assets (other than loans)
are subject to any restrictions, contractual, statutory or other,
that would materially impair the ability of the entity holding
such investment to dispose freely of any such assets at any time,
except restrictions on the public distribution or transfer of any
such investments under the Securities Act and the regulations
thereunder or state securities laws and pledges or security
interests given in connection with government deposits. All
loans, leases or other extensions of credit outstanding, or
commitments to make any loans, leases or other extensions of
credit made by FCOB to any Affiliates of FCOB are disclosed on
Schedule 3.16. For outstanding loans or extensions of credit
where the original principal amounts are in excess of $50,000 and
which by their terms are either secured by collateral or
supported by a guaranty or similar obligation, the security
interests have been duly perfected in all material respects and
have the priority they purport to have in all material respects,
other than by operation of law, and, in the case of each guaranty
or similar obligation, each has been duly executed and delivered
to FCOB and to FCOB's Knowledge, is still in full force and
effect.
Section 3.17 Brokers and Finders. Except as set forth on
Schedule 3.17, FCOB is not a party to or obligated under any
agreement with any broker or finder relating to the transactions
contemplated hereby, and neither the execution of this Agreement,
or the Merger Agreement, nor the consummation of the transactions
provided for herein or therein, will result in any liability to
any broker or finder. FCOB agrees to indemnify and hold harmless
WEST and its affiliates, and to defend with counsel selected by
WEST and reasonably satisfactory to FCOB, from and against any
liability, cost or expense, including attorneys' fees, incurred
in connection with a breach of this Section 3.17.
Section 3.18 Material Contracts. Schedule 3.18 to this
Agreement contains a complete and accurate written list of all
material agreements, obligations or understandings, written and
oral, to which FCOB is a party as of the date of this Agreement,
except for loans and other extensions of credit made by FCOB in
the ordinary course of its business and those items specifically
disclosed in the FCOB Financial Statements.
Section 3.19 Absence of Material Adverse Effect. Since
January 1, 2000, the business of FCOB has been conducted only in
the ordinary course, in the same manner as theretofore conducted,
and no event or circumstance has occurred or is expected to occur
which to FCOB's Knowledge has had or which, with the passage of
time or otherwise, could reasonably be expected to have a
Material Adverse Effect on FCOB.
Section 3.20 Undisclosed Liabilities. Except as disclosed
on Schedule 3.20, to FCOB's Knowledge FCOB has no liabilities or
obligations, either accrued, contingent or otherwise, that are
material to FCOB and that have not been: (a) reflected or
disclosed in the FCOB Financial Statements; or (b) incurred
subsequent to December 31, 1999 in the ordinary course of
business. FCOB has no Knowledge of any basis for the assertion
against FCOB of any liability, obligation or claim (including
without limitation that of any Governmental Entity) that will
have or cause, or could reasonably be expected to have or cause,
a Material Adverse Effect on FCOB that is not fully and fairly
reflected and disclosed in the FCOB Financial Statements or on
Schedule 3.20.
Section 3.21 Employees; Employee Benefit Plans; ERISA.
3.21.1 All material obligations of FCOB for payment to
trusts or other funds or to any Governmental Entity or to any
individual, director, officer, employee or agent (or his or her
heirs, legatees or legal representatives) with respect to
unemployment compensation benefits, profit-sharing, pension or
retirement benefits or social security benefits, whether arising
by operation of law, by contract or by past custom, have been
properly accrued for the periods covered thereby on the FCOB
Financial Statements and paid when due. All material obligations
of FCOB, whether arising by operation of law, by contract or by
past custom for vacation or holiday pay, bonuses and other forms
of compensation which are payable to their respective directors,
officers, employees or agents have been properly accrued on the
FCOB Financial Statements for the periods covered thereby and
paid when due. There are no unfair labor practice complaints,
strikes, slowdowns, stoppages or other controversies pending or,
to the Knowledge of FCOB, attempts to unionize or controversies
threatened between FCOB or any of its Affiliates and or relating
to, any of their employees that are likely to have a Material
Adverse Effect on FCOB, taken as a whole. FCOB is not a party to
any collective bargaining agreement with respect to any of their
employees and, except as set forth on Schedule 3.21.1, FCOB is
not a party to a written employment contract with any of its
employees and there are no understandings with respect to the
employment of any officer or employee of FCOB which are not
terminable by FCOB without liability on not more than thirty (30)
days' notice. Except as disclosed in the FCOB Financial
Statements for the periods covered thereby, all material sums due
for employee compensation have been paid and all employer
contributions for employee benefits, including deferred
compensation obligations, and all material benefit obligations
under any Employee Plan (as defined in Section 3.21.3 hereof) or
any Benefit Arrangement (as defined in Section 3.21.4 hereof)
have been duly and adequately paid or provided for in accordance
with plan documents. Except as set forth on Schedule 3.21.1, no
director, officer or employee of FCOB is entitled to receive any
payment of any amount under any existing agreement, severance
plan or other benefit plan as a result of the consummation of any
transaction contemplated by this Agreement or the Merger
Agreement. To FCOB's Knowledge, FCOB has materially complied
with all applicable federal and state statutes and regulations
which govern workers' compensation, equal employment opportunity
and equal pay, including, but not limited to, all civil rights
laws, Presidential Executive Order 1124, the Fair Labor Standards
Act of 1938, as amended, and the Americans with Disabilities Act.
3.21.2 FCOB has delivered as Schedule 3.21.2 a
complete list of:
(a) All current employees of FCOB together with
each employee's tenure with FCOB, title or job classification,
and the current annual rate of compensation anticipated to be
paid to each such employee; and
(b) All Employee Plans and Benefit Arrangements,
including all plans or practices providing for current
compensation or accruals for active employees, including, but not
limited to, all employee benefit plans, all pension, profit-
sharing, retirement, bonus, stock option, incentive, deferred
compensation, severance, long-term disability, medical, dental,
health, hospitalization, life insurance or other insurance plans
or related benefits.
3.21.3 Except as disclosed on Schedule 3.21.3, FCOB
does not maintain, administer or otherwise contribute to any
"employee benefit plan," as defined in Section 3(3) of ERISA,
which is subject to any provisions of ERISA and covers any
employee, whether active or retired, of FCOB or any of its
Subsidiaries (any such plan being herein referred to as an
"Employee Plan"). True and complete copies of each such Employee
Plan, including amendments thereto, have been previously
delivered or made available to WEST, together with (i) all
agreements regarding plan assets with respect to such Employee
Plans, (ii) a true and complete copy of the annual reports for
the most recent three years (Form 5500 Series including, if
applicable, Schedules A and B thereto) prepared in connection
with any such Employee Plan, (iii) a true and complete copy of
the actuarial valuation reports for the most recent three years,
if any, prepared in connection with any such Employee Plan
covering any active employee of FCOB or its Subsidiaries, (iv) a
copy of the most recent summary plan description of each such
Employee Plan, together with any modifications thereto, and (v) a
copy of the most recent favorable determination letter (if
applicable) from the Internal Revenue Service for each Employee
Plan. None of the Employee Plans is a "multiemployer plan" as
defined in Section 3(37) of ERISA or a "multiple employer plan"
as covered in Section 412(c) of the IRC, and none of FCOB has
been obligated to make a contribution to any such multiemployer
or multiple employer plan within the past five years. None of
the Employee Plans of FCOB is, or for the last five years has
been, subject to Title IV of ERISA. Each Employee Plan that is
intended to be qualified under Section 401(a) of the IRC is so
qualified and each trust maintained pursuant thereto is exempt
from income tax under Section 501(a) of the IRC, and FCOB is not
aware of any fact which has occurred that would cause the loss of
such qualification or exemption.
3.21.4 Except as disclosed in Schedule 3.21.4, FCOB
does not maintain (other than base salary and base wages) any
form of current or deferred compensation, bonus, stock option,
stock appreciation right, severance pay, salary continuation,
retirement or incentive plan or arrangement for the benefit of
any director, officer or employee, whether active or retired, of
FCOB or for any class or classes of such directors, officers or
employees. Except as disclosed in Schedule 3.21.4, FCOB does not
maintain any group or individual health insurance, welfare or
similar plan or arrangement for the benefit of any director,
officer or employee of FCOB, whether active or retired, or for
any class or classes of such directors, officers or employees.
Any such plan or arrangement described in this Section 3.21.4,
copies of which have been delivered or made available to WEST,
shall be herein referred to as a "Benefit Arrangement."
3.21.5 All Employee Plans and Benefit Arrangements are
operated in material compliance with the requirements prescribed
by any and all statutes, governmental or court orders, or
governmental rules or regulations currently in effect, including
but not limited to ERISA and the IRC, applicable to such plans or
arrangements, and plan documents relating to any such plans or
arrangement, materially comply with or will be amended to
materially comply with applicable legal requirements. Neither
FCOB, nor any Employee Plan nor any trusts created thereunder,
nor any trustee, administrator nor any other fiduciary thereof
has engaged in a "prohibited transaction," as defined in Section
406 of ERISA and Section 4975 of the IRC, that could subject FCOB
or WEST to liability under Section 409 or 502(i) of ERISA or
Section 4975 of the IRC or that would adversely affect the
qualified status of such plans; each "plan official" within the
meaning of Section 412 of ERISA of each Employee Plan is bonded
to the extent required by such Section 412; with respect to each
Employee Plan, to FCOB's Knowledge, no employee of FCOB, nor any
fiduciary of any Employee Plan, has engaged in any breach of
fiduciary duty as defined in Part 4 of Subtitle B of Title I of
ERISA which could subject FCOB or any of its Subsidiaries to
liability if FCOB or any such Subsidiary is obligated to
indemnify such Person against liability. Except as disclosed in
Schedule 3.21.5, FCOB has not failed to make any material
contribution or pay any amount due and owing as required by law
or the terms of any Employee Plan or Benefit Arrangement.
3.21.6 Except as set forth on Schedule 3.21.6, no
Employee Plan or Benefit Arrangement has any material liability
of any nature, accrued or contingent, including, without
limitation, liabilities for federal, state, local or foreign
taxes, interest or penalty other than liability for claims
arising in the course of the administration of each such Employee
Plan. Except as set forth on Schedule 3.21.6, to FCOB's
Knowledge there is no pending or threatened legal action,
proceeding or investigation against any Employee Plan that could
result in material liability to such Employee Plan, other than
routine claims for benefits, and there is no basis for any such
legal action, proceeding or investigation.
3.21.7 Each Benefit Arrangement which is a group
health plan (within the meaning of such term under IRC Section
4980B(g)(2)) materially complies and has materially complied with
the requirements of Section 601 through 608 of ERISA or Section
4980B of the IRC governing continuation coverage requirements for
employee-provided group health plans.
3.21.8 Except as disclosed in Schedule 3.21.8, FCOB
does not maintain any Employee Plan or Benefit Arrangement
pursuant to which any benefit or other payment will be required
to be made by FCOB or Affiliates or pursuant to which any other
benefit will accrue or vest in any director, officer or employee
of FCOB or Affiliate thereof, in either case as a result of the
consummation of the transactions contemplated by this Agreement
or the Merger Agreement.
Section 3.22 Powers of Attorney. No power of attorney or
similar authorization given by FCOB thereof is presently in
effect or outstanding other than powers of attorney given in the
ordinary course of business with respect to routine matters.
Section 3.23 Hazardous Materials. Except as set forth on
Schedule 3.23:
3.23.1 Except for ordinary and necessary quantities of
cleaning, pest control and office supplies, and other small
quantities of Hazardous Substances that are used in the ordinary
course of the respective businesses of FCOB and in compliance
with applicable Environmental Laws, or ordinary rubbish, debris
and nonhazardous solid waste stored in garbage cans or bins for
regular disposal off-site, or petroleum contained in and de
minimus quantities discharged from motor vehicles in their
ordinary operation on any of the FCOB Properties (as defined
below), FCOB has not engaged in the generation, use, manufacture,
treatment, transportation, storage (in tanks or otherwise), or
the disposal, of Hazardous Substances other than as permitted by
and only in compliance with applicable law. To FCOB's Knowledge,
no material amount of Hazardous Substances has been released,
emitted or disposed of, or otherwise deposited, on, in or from
any real property which is now or has been previously owned since
January 1, 1997, or which is currently or during the past three
years was leased, by FCOB, including OREO (collectively, the
"FCOB Properties"), or to FCOB's Knowledge, on or in any real
property in which FCOB now holds any security interest, mortgage
or other lien or interest ("FCOB Collateralizing Real Estate"),
except for (i) matters disclosed on Schedule 3.23; and (ii)
ordinary and necessary quantities of cleaning, pest control and
office supplies used and stored in compliance with applicable
Environmental Laws, or ordinary rubbish, debris and nonhazardous
solid waste stored in garbage cans or bins for regular disposal
off-site, or petroleum contained in, and de minimus quantities
discharged from, motor vehicles in their ordinary operation on
such FCOB Properties. To FCOB's Knowledge, no activity has been
undertaken on any of the FCOB Properties since January l, 1997,
and to the Knowledge of FCOB no activities have been or are being
undertaken on any of the FCOB Collateralizing Real Estate, that
would cause or contribute to:
(a) any of the FCOB Properties or FCOB
Collateralizing Real Estate becoming a treatment, storage or
disposal facility within the meaning of RCRA or any similar state
law or local ordinance;
(b) a release or threatened release of any
Hazardous Substances under circumstances which would violate any
Environmental Laws; or
(c) the discharge of Hazardous Substances into
any soil, subsurface water or ground water or into the air, or
the dredging or filling of any waters, that would require a
permit or any other approval under the Federal Water Pollution
Control Act, 33 U.S.C. 1251 et seq., the Clean Air Act, as
amended, 42 U.S.C. 7401 et seq., or any similar federal or state
law or local ordinance; the cumulative effect of which would have
a material adverse effect on the FCOB Property or FCOB
Collateralizing Real Estate involved.
3.23.2 Except as disclosed on Schedule 3.23, to the
Knowledge of FCOB, there are not, and never have been, any
underground storage tanks located in or under any of the FCOB
Properties or the FCOB Collateralizing Real Estate.
3.23.3 FCOB has not received any written notice of,
and to the Knowledge of FCOB has not received any verbal notice
of, any pending or threatened claims, investigations,
administrative proceedings, litigation, regulatory hearings or
requests or demands for remedial or responsive actions or for
compensation, with respect to any of the FCOB Properties or FCOB
Collateralizing Real Estate, alleging noncompliance with or
violation of any Environmental Law or seeking relief under any
Environmental Law and none of the FCOB Properties or FCOB
Collateralizing Real Estate is listed on the United States
Environmental Protection Agency's National Priorities List of
Hazardous Waste Sites, or, to the Knowledge of FCOB, any other
list, schedule, log, inventory or record of hazardous waste sites
maintained by any federal, state or local agency.
3.23.4 "Hazardous Substances" shall mean any
hazardous, toxic or infectious substance, material, gas or waste
which is regulated by any local, state or federal Governmental
Entity, or any of their agencies.
Section 3.24 Stock Options. Schedule 3.5 to this Agreement
contains a description of the FCOB Stock Option Plan and list of
all FCOB Stock Options outstanding, indicating for each: (a) the
grant date; (b) whether vested or unvested; (c) exercise price;
and (d) a vesting schedule by optionee.
Section 3.25 Parachute Payments. Except as set forth in
Schedule 3.25, the consummation of the Merger will not entitle
any director, officer or employee of FCOB to any payment that
would constitute a parachute payment under IRC 280G
Section 3.26 Risk Management Instruments. Neither FCOB nor
any Subsidiary of FCOB is a party or has agreed to enter into an
exchange traded or over-the-counter equity, interest rate,
foreign exchange or other swap, forward, future, option, cap,
floor or collar or any other contract that is not included on the
balance sheet and is a derivatives contract (including various
combinations thereof) (each, a "Derivatives Contract") or owns
securities that (i) are referred to generally as "structured
notes," "high risk mortgage derivatives," "capped floating rate
notes" or "capped floating rate mortgage derivatives" or (ii) are
likely to have changes in value as a result of interest or
exchange rate changes that significantly exceed normal changes in
value attributable to interest or exchange rate changes, except
for those Derivatives Contracts and other instruments legally
purchased or entered into in the ordinary course of business
consistent with safe and sound banking practices and regulatory
guidance and previously disclosed to WEST.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF WEST
WEST and WAB represents and warrants to FCOB that:
Section 4.1 Organization; Corporate Power; Etc. WEST is a
California corporation duly organized, validly existing and in
good standing under the laws of the State of California and has
all requisite corporate power and authority to own, lease and
operate its properties and assets and to carry on its business
substantially as it is being conducted on the date of this
Agreement. WEST is a bank holding company registered under the
BHCA. Each of WEST's Subsidiaries has all requisite corporate
power and authority to own, lease and operate its properties and
to carry on its business substantially as it is being conducted
on the date of this Agreement, except where the failure to have
such power or authority would not have a Material Adverse Effect
on WEST taken as a whole or the ability of WEST to consummate the
transactions contemplated by this Agreement. WEST has all
requisite corporate power and authority to enter into this
Agreement and, subject to obtaining all Requisite Regulatory
Approvals, WEST will have the requisite corporate power and
authority to perform its respective obligations hereunder with
respect to the consummation of the transactions contemplated
hereby. WEST is the sole shareholder of WAB. WAB is a state
chartered banking corporation licensed to conduct banking
business in California. WAB is a member of the Federal Reserve
System. WAB's deposits are insured by the FDIC in the manner and
to the full extent provided by law.
Section 4.2 Licenses and Permits. Except as disclosed on
Schedule 4.2, WEST and WAB have all material licenses,
certificates, franchises, rights and permits that are necessary
for the conduct of their respective businesses, and such licenses
are in full force and effect, except for any failure to be in
full force and effect that would not, individually or in the
aggregate, have a Material Adverse Effect on WEST taken as a
whole, or on the ability of WEST to consummate the transactions
contemplated by this Agreement.
Section 4.3 Authorization of Agreement; No Conflicts
4.3.1 The execution and delivery of this Agreement and
the Merger Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of WEST. This Agreement
has been duly executed and delivered by WEST and constitutes a
legal, valid and binding obligation of WEST, enforceable in
accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally and by
general equitable principles. The Merger Agreement, upon the
receipt of all Requisite Regulatory Approvals and the due
execution and filing of such Merger Agreement in accordance with
the applicable provisions of the California Corporations Code,
will constitute a legal, valid and binding obligation of WEST and
WAB, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting the rights of
creditors generally or by general equitable principles.
4.3.2 Except as discussed on Schedule 4.3, the
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby does not and will not result
in any violation of or default or loss of a material benefit
under, any provision of the Articles of Incorporation or Bylaws
of WEST, or any material mortgage, indenture, lease, agreement
or other material instrument, or any permit, concession, grant,
franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to WEST or any of its
assets or properties or any of its Subsidiaries, other than any
such conflict, violation, default or loss which (i) will not have
a Material Adverse Effect on WEST taken as a whole; or (ii) will
be cured or waived prior to the Effective Time.
Section 4.4 Capital Structure of WEST. The authorized
capital stock of WEST consists of 150,000,000 shares of WEST
Common Stock, no par value per share, 1,000,000 shares of WEST
Class "B" Common Stock and 1,000,000 shares of WEST preferred
stock. On December 31, 1999 37,124,734 shares of WEST Common
Stock were outstanding, 1,066,707 shares of WEST Common Stock
were reserved for issuance pursuant to employee stock option and
other employee stock plans (the "WEST Stock Plans"), and no
shares of WEST Class "B" Common Stock and WEST preferred stock
were outstanding or were reserved for issuance by WEST. All
outstanding shares of WEST Common Stock are validly issued, fully
paid and nonassessable and do not possess any preemptive rights
and were not issued in violation of any preemptive rights or any
similar rights of any Person. The issuance of the shares of WEST
Common Stock proposed to be issued pursuant to this Agreement at
the Effective Time will have been duly authorized by all
requisite corporate action of WEST, and such shares, when issued
as contemplated by this Agreement, will constitute duly
authorized, validly issued, fully paid and nonassessable shares
of WEST Common Stock, and will not have been issued in violation
of any preemptive or similar rights of any Person. As of the
date of this Agreement, and except for this Agreement, the WEST
Stockholders Rights Plan and the WEST Stock Plans, WEST does not
have outstanding any options, warrants, calls, rights,
commitments, securities or agreements of any character to which
WEST is a party or by which it is bound obligating WEST to issue,
deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock of WEST or obligating WEST to
grant, extend or enter into any such option, warrant, call,
right, commitment or agreement.
Section 4.5 WEST Filings. Since January 1, 1997, WEST has
filed all reports, registrations and statements, together with
any amendments required to be made with respect thereto, that
were required to be filed with (a) the Federal Reserve or any
Federal Reserve Bank; (b) the CDFI; (c) the SEC; and (d) any
other applicable federal, state or local governmental or
regulatory authority. All such reports, registrations and
filings including the WEST Financial Statements are collectively
referred to as the "WEST Filings". Except to the extent
prohibited by law, copies of the WEST Filings have previously
been made available to FCOB. As of their respective filing or
mailing dates, each of the past WEST Filings (a) was true and
complete in all material respects (or was amended so as to be so
promptly following discovery of any discrepancy); and (b)
complied in all material respects with all of the statutes, rules
and regulations enforced or promulgated by the governmental or
regulatory authority with which it was filed (or was amended so
as to be so promptly following discovery of any such
noncompliance) and none contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
Section 4.6 Accuracy of Information Supplied.
4.6.1 No representation or warranty of WEST contained
herein or any statement, schedule, exhibit or certificate given
or to be given by or on behalf of WEST or any of its Subsidiaries
to FCOB in connection herewith and none of the information
supplied or to be supplied by WEST to FCOB hereunder contains or
will contain any untrue statement of material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
4.6.2 None of the information supplied or to be
supplied by WEST or relating to WEST which is included or
incorporated by reference in (i) the Registration Statement in
connection the issuance of shares of WEST Common Stock in the
Merger will, at the time the Registration Statement becomes
effective under the Securities Act, contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading; (ii) the Proxy Statement/Prospectus and any amendment
or supplement thereto will, at all times from the date of mailing
to shareholders of FCOB through the date of the meeting of
shareholders of FCOB to be held in connection with the Merger,
contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading; and (iii) the applications
and forms to be filed with securities or "blue sky" authorities,
self regulatory authorities, or any Governmental Entity in
connection with the Merger, the issuance of any shares of WEST
Common Stock in connection with the Merger, or any Requisite
Regulatory Approvals will, at the time filed or at the time they
become effective, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
Registration Statement (except for such portions thereof that
relate only to FCOB) will comply in all material respects with
the applicable provisions of the Securities Act and the Exchange
Act and the rules and regulations thereunder.
4.6.3 WEST has delivered or will deliver to FCOB
copies of: (a) the audited balance sheets of WEST and its
Subsidiaries as of December 31, 1999, 1998 and 1997 and the
related statements of income, changes in shareholders' equity and
cash flows for the years then ended and the related notes to such
financial statements, all as audited by KPMG, LLP and its
predecessors, independent public accountants (the "WEST Financial
Statements"). The WEST Financial Statements have been prepared
(and all of said additional financial statements will be
prepared) in accordance with GAAP, or applicable regulatory
accounting principles, applied on a consistent basis during the
periods involved (except as may be indicated in the notes
thereto) consistently followed throughout the periods covered by
such statements, and present (and, when prepared, will present)
fairly the financial position of WEST and its Subsidiaries as of
the respective dates and for the respective periods covered by
such financial statements (subject, in the case of the unaudited
statements, to recurring adjustments normal in nature and
amount).
Section 4.7 Compliance With Applicable Laws. Except as
disclosed on Schedule 4.7, to the best of WEST's Knowledge, the
respective businesses of WEST and its Subsidiaries are not being
conducted in violation of any law, ordinance or regulation,
except for violations which individually or in the aggregate
would not have a Material Adverse Effect on WEST and its
Subsidiaries, taken as a whole. No investigation or review by
any Governmental Entity with respect to WEST is pending or, to
the Knowledge of WEST, threatened, nor has any Governmental
Entity indicated to WEST an intention to conduct the same, other
than regular bank examinations and those the outcome of which, as
far as can be reasonably foreseen, will not have a Material
Adverse Effect on WEST and its Subsidiaries, taken as a whole.
Section 4.8 Performance of Obligations. WEST has performed
all material obligations required to be performed by them to date
and WEST is not in material default under or in material breach
of any term or provision of any covenant, contract, lease,
indenture or any other agreement, written or oral, to which it is
a party, is subject or is otherwise bound, and no event has
occurred that, with the giving of notice or the passage of time
or both, would constitute such a default or breach, where such
default or breach or failure to perform would have a Material
Adverse Effect on WEST.
Section 4.9 Absence of Material Adverse Effect. Since
January 1, 2000, no event or circumstance has occurred or is
expected to occur which to WEST's Knowledge has had or which,
with the passage of time or otherwise, could reasonably be
expected to have a Material Adverse Effect on WEST and its
Subsidiaries, taken as a whole.
Section 4.10 Undisclosed Liabilities. Except as disclosed
on Schedule 4.10, none of WEST or any of its Subsidiaries to
WEST's Knowledge has any liabilities or obligations, either
accrued, contingent or otherwise, that are material to WEST and
its Subsidiaries, taken as a whole, and that have not been: (a)
reflected or disclosed in the WEST Financial Statements; or (b)
incurred subsequent to December 31, 1999 in the ordinary course
of business. WEST has no Knowledge of any basis for the
assertion against WEST or any of its Subsidiaries, of any
liability, obligation or claim (including without limitation that
of any Governmental Entity) that will have or cause, or could
reasonably be expected to have or cause, a Material Adverse
Effect on WEST and its Subsidiaries, taken as a whole, that is
not fairly reflected in the WEST Financial Statements or on
Schedule 4.10.
ARTICLE 5. ADDITIONAL AGREEMENTS
Section 5.1 Access to Information, Due Diligence, etc.
5.1.1 Upon reasonable notice, FCOB shall permit WEST
and its accountants, counsel and other representatives reasonable
access to their officers, employees, properties, books,
contracts, commitments and records and from the date hereof
through the Effective Time, and shall furnish or provide access
to WEST as soon as practicable, (i) a copy of each of FCOB's
Filings filed subsequent to the date of this Agreement promptly
after such document has been filed with the appropriate
Governmental Entity, provided, however, that copies of any
Returns relating to Taxes of FCOB shall be furnished to WEST at
least 15 Business Days prior to the proposed date of filing
thereof and shall not be filed without the prior approval of
WEST, which approval shall not be unreasonably withheld or
delayed; (ii) unless otherwise prohibited by law, a copy of each
report, schedule and other documents filed or received by FCOB
during such period with any Regulatory Authority or the Internal
Revenue Service, as to documents other than related to employees
or customers and other than those distributed to banks generally;
(iii) as promptly as practicable following the end of each
calendar month after the date hereof, a balance sheet of FCOB as
of the end of such month; and (iv) all other information
concerning FCOB's business, properties, assets, financial
condition, results of operations, liabilities, personnel and
otherwise as WEST may reasonably request.
5.1.2 Until the Effective Time, a representative of
WEST shall be entitled and shall be invited to attend meetings of
the Board of Directors of FCOB and of the Loan Committee of FCOB,
and at least five (5) days' prior written notice of the dates,
times and places of such meetings shall be given to WEST except
that in the case of special meetings WEST shall receive the same
number of days' prior notice as FCOB's directors receive for such
meetings; provided, however, that such representative shall
excuse himself or herself from any portion of any such meetings
that (i) relate to approval of, or the exercise of any rights
under, this Agreement by FCOB, (ii) involve discussions between
such Board of Directors or such Loan Committee and legal counsel
for FCOB that are entitled to be protected from disclosure under
an attorney-client privilege which would be lost due to the
presence of such representative of WEST, or (iii) constitute the
Executive Session of any Board of Directors meeting.
5.1.3 WEST and FCOB each agrees to keep confidential
and not divulge to any other party or Person (other than to the
employees, attorneys, accountants and consultants of each who
have a need to receive such information and other than as may be
required by law) any information received from the other, unless
and until such documents and other information otherwise becomes
publicly available or unless the disclosure of such information
is authorized by each party. In the event of termination of this
Agreement for any reason, the parties shall promptly return, or
at the election of the other party destroy, all nonpublic
documents obtained from the other and any copies or notes of such
documents (except as otherwise required by law) and, upon the
request of the other party, confirm such destruction to the other
in writing.
Section 5.2 Shareholder Approval.
5.2.1 FCOB shall promptly call a meeting of its
shareholders to be held at the earliest practicable date after
the date on which the initial Registration Statement is declared
effective by the SEC, but in no event later than July 1, 2000,
for the purpose of approving this Agreement and authorizing the
Merger Agreement and the Merger. FCOB's Board of Directors will
recommend to the shareholders approval of this Agreement, the
Merger Agreement and the Merger; provided, however, that FCOB's
Board of Directors may withdraw its recommendation if such Board
of Directors believes in good faith (based on a written opinion
of a financial advisor that is experienced in evaluating the
fairness of Acquisition Proposals) that a FCOB Superior Proposal
(defined below) has been made and shall have determined in good
faith, after consultation with and based on written advice of its
outside legal counsel, that the withdrawal of such recommendation
is necessary for FCOB's Board of Directors to comply with its
fiduciary duties under applicable law.
5.2.2 If the Merger is approved by vote of the
shareholders of FCOB, then, within ten (10) days thereafter FCOB
shall send a Dissenting Shareholder Notice to each recordholder
of any Dissenting Shares.
Section 5.3 Taking of Necessary Action
5.3.1 Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees, subject to
applicable laws and the fiduciary duties of FCOB's or WEST's
Boards of Directors, as advised in writing by their respective
counsel, to use all reasonable efforts promptly to take or cause
to be taken all action and promptly to do or cause to be done all
things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
contemplated by this Agreement and the Merger Agreement,
including, without limitation, the delivery of any certificate or
other document reasonably requested by counsel to a party to this
Agreement. Without limiting the foregoing, WEST and FCOB will
use their reasonable efforts to obtain all consents of third
parties and Government Entities necessary or, in the reasonable
opinion of WEST or FCOB advisable for the consummation of the
transactions contemplated by this Agreement. In case at any time
after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the Merger
Agreement, or to vest the Surviving Corporation with full title
to all properties, assets, rights, approvals, immunities and
franchises of FCOB, the proper officers or directors of WEST, WAB
or FCOB, as the case may be, shall take all such necessary
action. Notwithstanding the foregoing, nothing in this Agreement
shall be construed to require FCOB to take any action (or omit to
take any action) which may affect the Exchange Ratio, except as
may be specifically provided for or required by this Agreement.
5.3.2 The obligations of FCOB contained in Section
6.2.5 of this Agreement shall continue to be in full force and
effect despite any Default under Section 6.2.5 or FCOB's receipt
of a FCOB Superior Proposal (defined below) and any Default under
Section 6.2.5 by FCOB shall entitle WEST to such legal or
equitable remedies as may be provided in this Agreement or by law
notwithstanding that any action or inaction of the Board of
Directors or officers of the defaulting party which is required
to enable such party to fulfill such obligations may be excused
based on the continuing fiduciary obligations of such party's
Board of Directors and officers to its shareholders.
5.3.3 FCOB shall use its best efforts to cause each
director, executive officer and other person who is an
"Affiliate" of FCOB (for purposes of Rule 145 under the
Securities Act) to deliver to WEST, on the date of this
Agreement, a written agreement in the form attached hereto as
Exhibit 5.3 (the "Affiliates Agreement").
Section 5.4 Registration Statement and Applications.
5.4.1 WEST and FCOB will cooperate and jointly prepare
and file as promptly as practicable the Registration Statement,
the statements, applications, correspondence or forms to be filed
with appropriate State securities law regulatory authorities, and
the statements, correspondence or applications to be filed to
obtain the Requisite Regulatory Approvals to consummate the
transactions contemplated by this Agreement. Each of WEST and
FCOB shall use all reasonable efforts to have the S-4
Registration Statement declared effective under the Securities
Act as promptly as practicable after such filing, and FCOB shall
thereafter mail the Proxy Statement/Prospectus to the
shareholders of FCOB. Each party will furnish all financial or
other information, certificates, consents and opinions of counsel
concerning it and its Subsidiaries received by such party.
5.4.2 Each party shall provide to the other at the
request of the other party: (i) immediately prior to the filing
thereof, copies of all material statements, applications,
correspondence or forms to be filed with state securities law
regulatory authorities, the SEC and other appropriate regulatory
authorities to obtain the Requisite Regulatory Approvals; and
(ii) promptly after delivery to, or receipt from, such regulatory
authorities all written communications, letters, reports or other
documents relating to the transactions contemplated by this
Agreement.
Section 5.5 Expenses.
5.5.1 Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party
incurring the same.
5.5.2 FCOB shall use its best efforts to ensure that
its attorneys, accountants, financial advisors, investment
bankers and other consultants engaged by them in connection with
the transaction contemplated by this Agreement submit full and
final bills on or before the Closing Date and that such expenses
are properly reflected on the books of FCOB.
Section 5.6 Notification of Certain Events.
5.6.1 FCOB shall provide to WEST, as soon as
practicable, written notice (sent via facsimile and overnight
mail or courier) of the occurrence or failure to occur of any of
the events, circumstances or conditions that are the subject of
Sections 6.1 and 6.2, which notice shall provide reasonable
detail as to the subject matter thereof.
5.6.2 WEST shall provide to FCOB, as soon as
practicable, written notice (sent via facsimile and overnight
mail or courier) of the occurrence or failure to occur of any of
the events, circumstances or conditions that are the subject of
Section 6.3 and 6.4, which notice shall provide reasonable detail
as to the subject matter thereof.
5.6.3 Each party shall promptly advise the others in
writing of any change or event which could reasonably be expected
to have a Material Adverse Effect on such party or on its ability
to consummate the transactions contemplated by this Agreement or
the Merger Agreement.
5.6.4 FCOB and WEST shall immediately notify the other
in writing in the event that such party becomes aware that the
Registration Statement or Proxy Statement/Prospectus at any time
contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary
in order to make the statement therein, in light of the
circumstances under which they were made, not misleading or that
the Registration Statement or the Proxy Statement/Prospectus
otherwise is required to be amended and supplemented, which
notice shall specify, in reasonable detail, the circumstances
thereof. WEST shall promptly amend and supplement such materials
and disseminate the new or modified information so as to fully
comply with the Securities Act. If the amendment or supplement
so required relates to information concerning or provided by
FCOB, the out-of-pocket costs and expenses of preparing, filing
and disseminating such amendment or supplement shall be borne by
FCOB.
Section 5.7 Closing Schedules. FCOB has delivered to WEST
on or before the date of this Agreement all of the Schedules to
this Agreement which FCOB is required to deliver to WEST
hereunder (the "FCOB Schedules"). WEST has delivered to FCOB on
or before the date of this Agreement all of the Schedules to this
Agreement which WEST is required to deliver to FCOB hereunder (
the "WEST Schedules"). Immediately prior to the Closing Date,
FCOB shall have prepared updates of the FCOB Schedules provided
for in this Agreement and shall deliver to WEST revised schedules
containing the updated information (or a certificate signed by
FCOB's Chief Executive Officer stating that there have been no
changes on the applicable schedules); and WEST shall have
prepared updates of the WEST Schedules provided for in this
Agreement and shall deliver to FCOB revised Schedules containing
updated information (or a certificate signed by WEST's Chief
Executive Officer stating that there has been no change on the
applicable schedules). Such updated schedules shall sometimes be
referred to collectively, as the "Closing Schedules." The
Closing Schedules shall be dated as of the day prior to the
Closing Date and shall contain information as of the day prior to
the Closing Date or as of such earlier date as is practicable
under the circumstances. In the event the Closing Schedules
disclose an event, occurrence or circumstance that has had or
could reasonably be expected to have a Material Adverse Effect on
FCOB, on the one hand, or on WEST, on the other hand, or on
consummation of the transactions contemplated by this Agreement,
that was not disclosed in the previously delivered Schedules
hereto, the party delivering such Closing Schedules (the
"Affected Party") shall so notify the other party in the letter
of transmittal for such Closing Schedules, the Closing Date shall
be delayed for seven (7) Business Days and such other party shall
be entitled to terminate this Agreement within five (5) Business
Days after receiving such Closing Schedules that disclose such
event, occurrence or circumstance. In the event of any such
termination, the terminating party shall have no liability for
such termination. The Affected Party shall have no liability to
the terminating party in such an event unless (i) as a result of
the existence of such event, occurrence or circumstance so
disclosed in the Closing Schedules any of the representations or
warranties of the Affected Party contained in this Agreement are
found to have been untrue in any material respect as of the date
of this Agreement, or (ii) the event, occurrence or circumstance
could have been prevented in the exercise of reasonable diligence
by any officers or directors of the Affected Party, in either of
which cases the Affected Party shall be liable to the terminating
party for Liquidated Damages as provided in Section 8.5 hereof.
Section 5.8 Additional Accruals/Appraisals. Immediately
prior to the Closing Date, at WEST's request, FCOB shall,
consistent with GAAP and applicable banking regulations,
establish such additional accruals and reserves as may be
necessary to conform FCOB's accounting and credit and OREO loss
reserve practices and methods to those of WEST, provided,
however, that no accrual or reserve made by FCOB pursuant to this
Section 5.8, or any litigation or regulatory proceeding arising
out of any such accrual or reserve, or any other effect on FCOB
resulting from FCOB's compliance with this Section 5.8, shall
constitute or be deemed to be a breach, violation of or failure
to satisfy any representation, warranty, covenant, condition or
other provision of this Agreement or otherwise be considered in
determining whether any such breach, violation or failure to
satisfy shall have occurred.
Section 5.9 Employee Plans. Immediately prior to the
Closing Date, at WEST's request, FCOB shall terminate any
Employment Plan or Benefit arrangement, provided, however, that
no accrual or reserve made by FCOB as a result of a termination
requested by WEST pursuant to this Section 5.9, or any litigation
or regulatory proceeding arising out of any such accrual or
reserve, or any other effect on FCOB resulting from FCOB's
compliance with this Section 5.9, shall constitute or be deemed
to be a breach, violation of or failure to satisfy any
representation, warranty, covenant, condition or other provision
of this Agreement or otherwise be considered in determining
whether any such breach, violation or failure to satisfy shall
have occurred.
ARTICLE 6. CONDUCT OF BUSINESS
Section 6.1 Affirmative Conduct of FCOB. During the period
from the date of execution of this Agreement through the
Effective Time, FCOB shall carry on its business, and shall cause
each of its respective Subsidiaries to carry on its business, in
the ordinary course in substantially the manner in which
heretofore conducted, subject to changes in law applicable to all
state-chartered banks or all nonmember banks insured by the FDIC
and directives from regulators, and use all commercially
reasonable efforts to preserve intact its business organization,
keep available the services of its officers and employees, (other
than terminations in the ordinary course of business) and
preserve its relationships with customers, depositors, suppliers
and others having business dealings with it; and, to these ends,
shall fulfill each of the following:
6.1.1 Use its commercially reasonable efforts, or
cooperate with others, to expeditiously bring about the
satisfaction of the conditions specified in Article 7 hereof;
6.1.2 Advise WEST promptly in writing of any change
that would have a Material Adverse Effect on it, or of any matter
which would make the representations and warranties set forth in
Article 3 hereof not true and correct in any material respect as
of the effective date of the Registration Statement and at the
Effective Time;
6.1.3 Keep in full force and effect all of its
existing material permits and licenses and those of its
Subsidiaries;
6.1.4 Use its commercially reasonable efforts to
maintain insurance or bonding coverage on all material properties
for which it is responsible and on its business operations, and
carry not less than the same coverage for fidelity, public
liability, personal injury, property damage and other risks equal
to that which is in effect as of the date of this Agreement; and
notify WEST in writing promptly of any facts or circumstances
which could affect its ability, or that of any of its
Subsidiaries, to maintain such insurance or bonding coverage;
6.1.5 Perform its contractual obligations and not
breach or come into default on any of such obligations, and not
amend, modify, or, except as they may be terminated in accordance
with their terms, terminate any material contract, agreement,
understanding, commitment, or offer, whether written or oral,
(collectively referred to as an "Understanding") or materially
default in the performance of any of its obligations under any
Understanding where such default would have a Material Adverse
Effect on FCOB;
6.1.6 Duly observe and conform to all legal
requirements applicable to its business, except for any failure
to so observe and conform that would not, individually or in the
aggregate, and, in the future will not, have a Material Adverse
Effect on FCOB;
6.1.7 Duly and timely file as and when due all reports
and Returns required to be filed with any Governmental Entity;
6.1.8 Maintain its tangible assets and properties in
good condition and repair, normal wear and tear excepted in
accordance with prior practices;
6.1.9 Promptly advise WEST in writing of any event or
any other transaction within the Knowledge of FCOB, whereby any
Person or related group of Persons acquires, or proposes to
acquire, after the date of this Agreement, directly or
indirectly, record or beneficial ownership (as defined in Rule
13d-3 promulgated by the SEC pursuant to the Exchange Act) or
control of 5% or more of the outstanding shares of FCOB Common
Stock either prior to or after the record date fixed for the FCOB
shareholders' meeting or any adjourned meeting thereof to approve
the transactions contemplated herein;
6.1.10 (a) Maintain a reserve for loan and lease
losses ("Loan Loss Reserve") at a level which is adequate to
provide for all known and reasonably expected losses on loans,
leases and other extensions of credit outstanding and other
inherent risks in FCOB's portfolio of loans and leases, in
accordance with GAAP and applicable regulatory accounting
principles and banking laws and regulations;
(b) Charge off all loans, receivables and other
assets, or portions thereof, deemed uncollectible in accordance
with GAAP, regulatory accounting principles, and applicable law
or regulation, or which have been classified as "loss" or as
directed by any regulatory authority, unless such classification
or direction has been disregarded in good faith by FCOB, FCOB has
submitted in writing to such regulatory authority the basis upon
which it has so disregarded such classification or direction, and
such regulatory authority retracts its direction requiring such
charge-off;
6.1.11 Furnish to WEST, as soon as practicable, and in
any event within fifteen (15) days after it is prepared: (i) a
copy of any report submitted to the Board of Directors of FCOB
and access to the working papers related thereto, provided,
however, that FCOB need not furnish WEST any materials relating
to deliberations of FCOB's Board of Directors with respect to its
approval of this Agreement, communications of FCOB's legal
counsel with the Board of Directors or officers of FCOB regarding
FCOB's rights against or obligations to WEST or its Subsidiaries
under this Agreement, or books, records and documents covered by
the attorney-client privilege or which are attorneys' work
product; (ii) copies of all material reports, renewals, filings,
certificates, statements, correspondence and other documents
specific to FCOB or filed with or received from any CDFI, FDIC or
any Governmental Entity; (iii) monthly unaudited balance sheets,
statements of income and changes in shareholders' equity for FCOB
and quarterly unaudited balance sheets, statements of income and
changes in shareholders' equity for FCOB, in each case prepared
on a basis consistent with past practice; and (iv) such other
reports as WEST may reasonably request (which are otherwise
deliverable under this Section 6.1.11) relating to FCOB. Each of
the financial statements of FCOB delivered pursuant to this
Section 6.1.11 shall be accompanied by a certificate of the Chief
Financial Officer of FCOB to the effect that such financial
statements fairly present the financial information presented
therein of FCOB for the periods covered and as of the dates
indicated, subject to recurring adjustments normal in nature and
amount, necessary for a fair presentation and are prepared on a
basis consistent with past practice;
6.1.12 FCOB agrees that through the Effective Time, as
of their respect dates, (i) each FCOB Filing will be true and
complete in all material respects; and (ii) each FCOB Filing will
comply in all material respects with all of the statutes, rules
and regulations enforced or promulgated by the Governmental
Entity with which it will be filed and none will contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they will be made, not misleading. Any financial statement
contained in any of such FCOB Filings that is intended to present
the financial position of FCOB during the periods involved to
which it relates will fairly present in all material respects the
financial position of FCOB and will be prepared in accordance
with GAAP or consistent with applicable regulatory accounting
principles and banking law and banking regulations, except as
stated therein;
6.1.13 Maintain reserves for contingent liabilities in
accordance with GAAP or applicable regulatory accounting
principles and consistent with past practices;
6.1.14 Inform WEST of the amounts and categories of
any loans, leases or other extensions of credit, or other assets,
that have been classified by any bank regulatory authority as
"Specially Mentioned," "Renegotiated," "Substandard," "Doubtful,"
"Loss" or any comparable classification ("Classified Assets").
FCOB will furnish to WEST, as soon as practicable, and in any
event within fifteen (15) days after the end of each calendar
month, schedules including the following: (i) Classified Assets
by type (including each credit or other asset in an amount equal
to or greater than $10,000), and its classification category;
(ii) nonaccrual credits by type (including each credit in an
amount equal to or greater than $10,000); (iii) renegotiated
loans by type (loans on which interest has been renegotiated to
lower than market rates because of the financial condition of the
borrowers); (iv) delinquent credits by type (including each
delinquent credit in an amount equal to or greater than $10,000),
including an aging into 30-89 and 90+ day categories; (v) loans
or leases or other assets charged off, in whole or in part,
during the previous month by type (including each such loan or
lease or other asset in an amount equal to or greater than
$10,000); and (vi) OREO or assets owned stating with respect to
each its type;
6.1.15 Furnish to WEST, upon WEST's request, schedules
with respect to the following: (i) participating loans and
leases, stating, with respect to each, whether it is purchased or
sold and the loan or lease type; (ii) loans or leases (including
any commitments) by FCOB to any director or officer (at or above
the Vice President level) of FCOB or to any Person holding 5% or
more of the capital stock of FCOB, including, with respect to
each such loan or lease, the identity and, to the best Knowledge
of FCOB, the relation of the borrower to FCOB, the loan or lease
type and the outstanding and undrawn amounts; and (iii) standby
letters of credit, by type, (including each letter of credit in a
face amount equal to or greater than $10,000); and
6.1.16 Make available to WEST copies of each credit
authorization package, consisting of all applications for and
financial information regarding loans, renewals of loans or other
extensions of credit of $50,000 or more (on a noncumulative
basis) for secured loans or secured extensions of credit, $50,000
in the case of unsecured loans or unsecured extensions of credit,
and renewals of any classified or criticized loans which are
considered by FCOB after the date of this Agreement, concurrently
with submission to FCOB's loan committee.
Section 6.2 Negative Covenants of FCOB. During the period
from the date of execution of this Agreement through the
Effective Time, FCOB agrees that without WEST's prior written
consent, it shall not and its Subsidiaries shall not:
6.2.1 (a) Declare or pay any dividend or make any
other distribution in respect of any of its capital stock; (b)
split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock; or
(c) repurchase or otherwise acquire any shares of its capital
stock;
6.2.2 Take any action that would or might result in
any of the representations and warranties of FCOB set forth in
the Agreement becoming untrue in any material respect or any of
the conditions to the Merger set forth in Article 7 not being
satisfied, except to the extent such actions are required to be
undertaken by applicable law, regulation or at the direction of
any Regulatory Authority;
6.2.3 Issue, deliver, sell, or grant, or authorize the
issuance, delivery, sale or grant of, or purchase, any shares of
the capital stock of FCOB or any securities convertible or
exercisable into or exchangeable for such capital stock, or any
rights, warrants or options, including options under any stock
option plans or enter into any agreements to do any of the
foregoing, except in connection with the issuance of FCOB Common
Stock pursuant to the exercise of FCOB Stock Options;
6.2.4 Amend its Articles of Incorporation or Bylaws,
except as required by applicable law or by the terms of this
Agreement;
6.2.5 Authorize or knowingly permit any of its
representatives, directly or indirectly, to solicit or encourage
any Acquisition Proposal (as hereinafter defined) or participate
in any discussions or negotiations with, or provide any nonpublic
information to, any Person or group of persons (other than WEST,
and its representatives) concerning any such solicited
Acquisition Proposal. FCOB shall notify WEST immediately if any
inquiry regarding an Acquisition Proposal is received by FCOB,
including the terms thereof. For purposes of this Section 6.2.5,
"Acquisition Proposal" shall mean any (a) proposal pursuant to
which any Person other than WEST would acquire or participate in
a merger or other business combination or reorganization
involving FCOB; (b) proposal by which any Person or group, other
than WEST, would acquire the right to vote ten percent (10%) or
more of the capital stock of FCOB entitled to vote for the
election of directors; (c) acquisition of the assets of FCOB
other than in the ordinary course of business; or (d) acquisition
in excess of ten percent (10%) of the outstanding capital stock
of FCOB, other than as contemplated by this Agreement.
Notwithstanding the foregoing, nothing contained in this
Agreement shall prevent FCOB or FCOB's Board of Directors from
(i) furnishing nonpublic information to, or entering into
discussions or negotiations with, any person or entity in
connection with an unsolicited bona fide written Acquisition
Proposal by such person or entity, or recommending an unsolicited
bona fide written Acquisition Proposal to the shareholders of
FCOB, if and only to the extent that (A) the Board of Directors
of FCOB has determined and believes in good faith (after
consultation with and the concurrence of its financial advisor)
that such Acquisition Proposal would, if consummated, result in a
transaction materially more favorable, from a financial point of
view, to FCOB's shareholders than the transaction contemplated by
this Agreement (any such more favorable Acquisition Proposal
being referred to in this Agreement as a "FCOB Superior
Proposal") and FCOB's Board of Directors has determined in good
faith, after consultation with and based on written advice from
its outside legal counsel, that such action is necessary for FCOB
to comply with its fiduciary duties to shareholders under
applicable law, and (B) prior to furnishing such nonpublic
information to, or entering into discussions or negotiations
with, such person or entity, FCOB's Board of Directors has
received from such person or entity an executed confidentiality
agreement, with terms no more favorable to such party than those
contained in the Confidentiality Agreement between FCOB and WEST,
or (ii) complying with Rule 14e-2 promulgated under the Exchange
Act with regard to an Acquisition Proposal, if such Rule is
applicable thereto;
6.2.6 Acquire or agree to acquire by merging,
consolidating with, or by purchasing all or a substantial portion
of the assets of, or in any other manner, any business or any
Person or otherwise acquire or agree to acquire any assets which
are material to FCOB, other than in the ordinary course of
business consistent with prior practice;
6.2.7 Sell, lease or otherwise dispose of any of its
assets which are material, individually or in the aggregate, to
FCOB, except in the ordinary course of business consistent with
prior practice and after Notice to and consultation with WEST.
WEST shall respond to FCOB within five (5) business days of
Notice by FCOB which contains all appropriate documents;
6.2.8 Incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt
securities of FCOB or guarantee any debt securities of others
other than in the ordinary course of business consistent with
prior practice;
6.2.9 Enter into any Understanding, except: (a)
deposits incurred, and short-term debt securities (obligations
maturing within one year) issued, in its ordinary course of
business consistent with prior practice, and liabilities arising
out of, incurred in connection with, or related to the
consummation of this Agreement; (b) commitments to make loans or
other extensions of credit in the ordinary course of business
consistent with prior practice; and (c) loan sales in the
ordinary course of business, without any recourse, provided that
no commitment to sell loans shall extend beyond the Effective
Time;
6.2.10 Make or enter into a commitment to make any
loan or other extension of credit in a secured amount in excess
of $50,000, and an unsecured amount in excess of $50,000 and a
renewal of any criticized or classified loan; provided further
for purposes of this Section 6.2.10, if WEST has not provided
written objection to FCOB within five (5) days of Notice by FCOB,
WEST shall have consented to such commitment, loan or extension
of credit. Notice by FCOB for this Section 6.2.10 shall mean
WEST's receipt of all written material presented to FCOB's loan
committee or other persons authorized to approve such loans. Any
objection of WEST for any loan or extension of credit under this
Section 6.2.10 shall be in writing and shall include a full
description of the rationale for objection. Further provided that
WEST shall not object to any commitment, loan or extension of
credit that is made by FCOB in the ordinary course of business
and consistent with safe and sound underwriting practices. In
case of any disagreement with respect to approval of a loan or
extension of credit made under this Section 6.2.10, the
disagreement shall be referred to FCOB's third party loan review
consultant, whose decision shall bind the parties;
6.2.11 Except in the ordinary course of business
consistent with prior practice or as required by an existing
contract, and provided prior disclosure thereof has been made in
Schedule 6.2.11, grant any general or uniform increase in the
rates of pay of employees or employee benefits or any increase in
salary or employee benefits of any officer, employee or agent or
pay any bonus to any Person;
6.2.12 Sell, transfer, mortgage, encumber or otherwise
dispose of any assets or other liabilities except in the ordinary
course of business consistent with prior practice or as required
by any existing contract;
6.2.13 Make the credit underwriting policies,
standards or practices relating to the making of loans and other
extensions of credit, or commitments to make loans and other
extensions of credit, or the Loan Loss Reserve policies, less
stringent than those in effect on December 31, 1999 or reduce the
amount of the Loan Loss Reserves or any other reserves for
potential losses or contingencies;
6.2.14 Make any capital expenditures, or commitments
with respect thereto, except those in the ordinary course of
business which do not exceed $20,000 individually or $100,000 in
the aggregate;
6.2.15 Renew, extend or amend any existing employment
contract or agreement, enter into any new employment contract or
agreement or make any bonus or any special or extraordinary
payments to any Person;
6.2.16 Acquire any investment security, other than
U.S. Treasury Securities with a term to maturity of less than one
year;
6.2.17 Except as otherwise required to correct a prior
filing, compromise or otherwise settle or adjust any assertion or
claim of a deficiency in Taxes (or interest thereon or penalties
in connection therewith) or file any appeal from an asserted
deficiency except in a form previously approved by WEST, which
approval will not be unreasonably withheld, in writing, or file
or amend any federal, foreign, state or local Tax Return or
report or make any tax election or change any method or period of
accounting unless required by GAAP or applicable law and, then,
only after submitting such Tax return or report or proposed Tax
election or change in any method or period of accounting, to WEST
for its approval, which it shall not unreasonably withhold or
delay;
6.2.18 Except as contemplated in this Agreement,
terminate any Employee Plan or Benefit Arrangement;
6.2.19 Change its fiscal year or methods of accounting
in effect at December 31, 1999, except as required by changes in
GAAP or regulatory accounting principles as concurred to by
FCOB's independent public accountants or by Section 5.8 of this
Agreement;
6.2.20 Take or cause to be taken any action which
would disqualify the Merger as a "reorganization" within the
meaning of Section 368(a) of the IRC as a tax-free
reorganization;
6.2.21 Take or cause to be taken into OREO any
commercial property without an environmental report reporting no
adverse environmental condition on such property, with a copy of
such report delivered to WEST prior to taking such property into
OREO;
6.2.22 Make any new elections with respect to Taxes or
any changes in current elections with respect to Taxes affecting
the assets owned by FCOB. WEST shall be deemed to have consented
in writing to any election FCOB shall desire to make if: (i) the
electing Person shall have notified the Chief Executive Officer
of WEST in writing of its desire to make such election, including
in such notice a reasonably complete summary of the election it
desires to make and the reasons it desires to make such election
at least 20 Business Days prior to the due date (including
extensions thereof) for filing such election; and (ii) WEST shall
not have responded in writing to such notice by the fifth
Business Day prior to the due date (including extensions thereof)
for filing such election;
6.2.23 Incur any merger-related expenses (including
attorneys', accountants' and advisors' fees, meeting costs,
printing and mailing costs, and retention payments to employees
not made under existing contract provisions), but not including
contractual change-of-control payments to employees under
existing agreements, in excess of $200,000 in the aggregate;
provided, if FCOB determines in good faith that compliance with
other terms of this Agreement requires it to make additional
noncontractual retention payments to employees, FCOB may, after
reasonable notice to and consultation with WEST, make such
additional payments not to exceed $17,500 in the aggregate; or
6.2.24 Materially change its pricing practices on
loans or deposit products.
Section 6.3 Affirmative Conduct of WEST. During the period
from the date of execution of this Agreement through the
Effective Time, WEST shall carry on its business in a reasonable
manner consistent with applicable laws and use all commercially
reasonable efforts to preserve intact its business organization
and preserve its relationships with customers; and, to these
ends, shall fulfill each of the following:
6.3.1 Use its commercially reasonable efforts, or
cooperate with others, to expeditiously bring about the
satisfaction of the conditions specified in Article 7 hereof;
6.3.2 Advise FCOB promptly in writing of any change
that would have a Material Adverse Effect on it or of any matter
which would make the representations and warranties set forth in
Article 4 hereof not true and correct in any material respect as
of the effective date of the Registration Statement and at the
Effective Time;
6.3.3 Duly observe and conform to all legal
requirements applicable to its business, except for any failure
to so observe and conform that would not, individually or in the
aggregate, and, in the future will not, have a Material Adverse
Effect on FCOB;
6.3.4 Duly and timely file as and when due all
material regulatory reports and Returns required to be filed with
any Governmental Entity; and
6.3.5 File all necessary applications with the Federal
Reserve and CDFI for the transaction as soon as possible, but no
later than May 15, 2000 and furnish to FCOB, as soon as
practicable, and in any event within fifteen days after it has
prepared all applications to be submitted to the Federal Reserve
and CDFI for approval of the Merger.
Section 6.4 Negative Covenants of WEST. During the period
from the date of execution of this Agreement through the
Effective Time, WEST agrees that without FCOB's prior written
consent, it shall not and its Subsidiaries shall not:
6.4.1 Declare or pay any extraordinary dividend;
6.4.2 Take any action that would or might result in
any of the representations and warranties of WEST set forth in
the Agreement becoming untrue in any material respect or any of
the conditions to the Merger set forth in Article 7 not being
satisfied or otherwise materially delay or impair completion of
the Merger, except to the extent such actions are required to be
undertaken by applicable law, regulation or at the direction of
any Regulatory Authority; or
6.4.3 Take or cause to be taken any action which would
disqualify the Merger as a "reorganization" within the meaning of
Section 368(a) of the IRC as a tax-free reorganization.
ARTICLE 7. CONDITIONS PRECEDENT TO CLOSING
Section 7.1 Conditions to the Parties' Obligations. The
obligations of all the parties to this Agreement to effect the
Merger shall be subject to the fulfillment of the following
conditions:
7.1.1 This Agreement, the Merger Agreement and the
Merger shall have been validly approved by the holders of a
majority of the outstanding shares of FCOB Common Stock entitled
to vote;
7.1.2 All permits, approvals and consents required to
be obtained, and all waiting periods required to expire, prior to
the consummation of the Merger under applicable federal laws of
the United States or applicable laws of any state having
jurisdiction over the transactions contemplated by this Agreement
and the Merger Agreement shall have been obtained or expired, as
the case may be (all such permits, approvals and consents and the
lapse of all such waiting periods being referred to as the
"Requisite Regulatory Approvals"), without the imposition of any
condition which in the reasonable judgment of any party to be
affected by such condition is materially burdensome upon such
party or its respective Affiliates or the Surviving Corporation;
7.1.3 There shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the Merger, by any Government Entity which:
(i) makes the consummation of the Merger illegal; (ii) requires
the divestiture by WEST of any material asset or of a material
portion of the business of WEST; or (iii) imposes any condition
upon WEST or its Subsidiaries (other than general provisions of
law applicable to all banks and bank holding companies) which in
the judgment of WEST would be materially burdensome;
7.1.4 The Registration Statement shall have become
effective under the Securities Act and no stop order suspending
the effectiveness of the Registration Statement shall have been
issued and shall remain in effect. No legal, administrative,
arbitration, investigatory or other proceeding by any
Governmental Entity or any other Person shall have been
instituted and, at what otherwise would have been the Effective
Time, remain pending by or before any Governmental Entity to
restrain or prohibit the transactions contemplated hereby;
7.1.5 WEST and FCOB shall have received an opinion
from KPMG, LLP, dated the Effective Time, subject to assumptions
and exceptions normally included, and in form and substance
reasonably satisfactory to WEST and FCOB, to the effect that the
Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the IRC
and that WEST and FCOB will each be a party to that
reorganization within the meaning of Section 368(b) of the IRC;
7.1.6 WEST and FCOB shall have received opinions of
counsel for the other party in substantially the forms previously
agreed to by the parties as set forth in Exhibits 7.1.6A and
7.1.6B, respectively, dated as of the Closing Date;
7.1.7 No action, suit or proceeding shall have been
instituted or threatened before any court or governmental body
seeking to challenge or restrain the transactions contemplated by
this Agreement or the Merger Agreement which presents a
substantial risk that such transactions will be restrained or
that either party hereto may suffer material damages or other
relief as a result of consummating such transactions; and
Section 7.2 Conditions to WEST's Obligations. The
obligations of WEST to effect the Merger shall be subject to the
fulfillment (or waiver, in writing, by WEST) of each of the
following conditions:
7.2.1 Except as otherwise provided in this Section
7.2, (a) the representations and warranties of FCOB contained in
Article 3 shall be true in all material respects as of the
Effective Time as though made at the Effective Time, except to
the extent they expressly refer to an earlier time and except
where the failure to be true, individually or in the aggregate,
would not have or would not be reasonably likely to have, a
Material Adverse Effect on the Surviving Corporation or upon the
consummation of the transactions contemplated hereby; (b) FCOB
shall have duly performed and complied in all material respects
with all agreements and covenants required by this Agreement to
be performed or complied with by it prior to or at the Effective
Time, except where the failure to so perform and comply,
individually or in the aggregate, would not have or would not be
reasonably likely to have a Material Adverse Effect on FCOB, or
upon the consummation of the transactions contemplated hereby;
(c) none of the events or conditions entitling WEST to terminate
this Agreement under Article 8 shall have occurred and be
continuing; and (d) FCOB shall have delivered to WEST
certificates dated the date of the Effective Time and signed by
the President and Chief Executive Officer to the effect set forth
in Subsections 7.2.1(a), (b) and (c);
7.2.2 There shall have been obtained, without the
imposition of any material burden or restriction on any of the
parties hereto not in existence on the date hereof, each consent
to the consummation of the Merger required to be obtained from
any Person under any agreement, contract or license to which FCOB
is a party or by or under which it is bound or licensed, the
withholding of which might have a Material Adverse Effect on
FCOB, the Surviving Corporation or WEST at or following the
Effective Time, or on the transactions contemplated by this
Agreement;
7.2.3 FCOB shall have delivered its Closing Schedules
to WEST on the day immediately preceding the Closing Date and
none of such Closing Schedules shall reflect any item that was
not on the FCOB Schedules (or in the FCOB Financial Statements)
delivered on the date of execution of this Agreement that has
had, would have, or could be reasonably likely to have, a
Material Adverse Effect on FCOB, the Surviving Corporation or
WEST at or after the Effective Time, or on the consummation of
the transactions contemplated hereby;
7.2.4 Between the date of this Agreement and the
Effective Time, no event or circumstance shall have occurred
which has had or could reasonably be expected to have a Material
Adverse Effect on FCOB, and WEST shall have received a
certificate signed on behalf of FCOB by the President and Chief
Executive Officer of FCOB to such effect;
7.2.5 Counsel for WEST shall have approved, in the
exercise of counsel's reasonable discretion, the validity of all
transactions herein contemplated, as well as the form and
substance of all opinions, certificates, instruments of transfer
and other documents to be delivered to WEST hereunder or that are
reasonably requested by such counsel;
7.2.6 The sale of the WEST Common Stock resulting from
the Merger shall have been qualified or registered with the
appropriate State securities law or "blue sky" regulatory
authorities of all States in which qualification or registration
is required under the State securities laws, and such
qualifications or registration shall not have been suspended or
revoked;
7.2.7 FCOB shall have delivered to WEST not later than
the date of this Agreement all of the executed Affiliate
Agreements in the form attached hereto as Exhibit 5.3.
7.2.8 FCOB shall not be subject to any memorandum of
understanding, cease and desist order, or other agreement with
any Governmental Entity restricting the conduct of any of its
respective businesses, prospects and operations, so as to have a
Material Adverse Effect;
7.2.9 All of FCOB's director-shareholders shall have
delivered to WEST on the date of this Agreement the Director-
Shareholder Agreements in the form attached hereto as Exhibit
7.2.9; and
7.2.10 FCOB's shareholders' equity as of the
Determination Date shall be no less than the December 31, 1999
shareholders' equity of FCOB plus eighty five percent (85%) of
the budgeted income for FCOB as of such date pursuant to the Year
2000 budget provided by FCOB to WEST. For purposes of this
Section 7.2.10 and the calculation of shareholders' equity as of
the Determination Date, FCOB shall not be required to expense the
following: (a) merger-related expenses permitted under Section
6.2.23 up to $200,000; (b) contractual change-of-control payments
to employees under existing agreements; or (c) any other item
that WEST agrees in writing need not be expensed for purposes of
this Section 7.2.10. To confirm compliance with this Section, a
reasonable period before Closing FCOB shall provide to WEST a
certificate of its chief financial officer, dated after the
Determination Date, as to FCOB's shareholders' equity as of the
Determination Date, calculated in accordance with this Section,
and written assurance of FCOB's independent accountants under, or
consistent with the standards of, SAS 71 to the effect that the
accountants are not aware that the financial statements of FCOB
from which shareholders' equity is determined for purposes of
this Section require any material modifications in order to
comply with GAAP. WEST shall be permitted reasonable review and
inquiry with respect to the calculation of shareholders' equity
and the supporting certificate and accountant's assurance.
Section 7.3 Conditions to FCOB's Obligations. The
obligations of FCOB to effect the Merger shall be subject to the
fulfillment (or waiver, in writing, by FCOB) of each of the
following conditions:
7.3.1 Except as otherwise provided in this Section
7.3, (a) the representations and warranties of WEST contained in
Article 4 shall be true in all material respects as of the
Effective Time as though made at the Effective Time, except to
the extent they expressly refer to an earlier time and except
where the failure to be true, individually or in the aggregate,
would not have or would not be reasonably likely to have, a
Material Adverse Effect on WEST or upon consummation of the
transactions contemplated hereby; (b) WEST shall have duly
performed and complied in all material respects with all
agreements and covenants required by this Agreement to be
performed or complied with it prior to or at the Effective Time,
except where the failure to so perform and comply, individually
or in the aggregate, would not have or would not be reasonably
likely to have a Material Adverse Effect on WEST, taken as a
whole, or upon the consummation of the transactions contemplated
hereby; (c) none of the events or conditions entitling FCOB to
terminate this Agreement under Article 8 shall have occurred and
be continuing; and (d) WEST shall have delivered to FCOB
certificates dated the date of the Effective Time and signed by a
duly authorized officer to the effect set forth in Subsections
7.3.1(a), (b) and (c);
7.3.2 Counsel for FCOB shall have approved, in the
exercise of counsel's reasonable discretion, the validity of all
transactions herein contemplated, as well as the form and
substance of all opinions, certificates, instruments of transfer
and other documents to be delivered to FCOB hereunder or that are
reasonably requested by such counsel;
7.3.3 WEST has taken such action as appropriate to
convert FCOB stock options to WEST stock options adjusted for the
Exchange Ratio;
7.3.4 WEST shall have delivered its Closing Schedules
to FCOB on the day immediately preceding the Closing Date and
none of such Closing Schedules shall reflect any item that was
not on the WEST Schedules (or in the WEST Financial Statements)
delivered on the date of execution of this Agreement that has
had, or would have a Material Adverse Effect on WEST and its
Subsidiaries, taken as a whole, at or after the Effective Time,
or on the consummation of the transactions contemplated hereby;
7.3.5 The fairness opinion (the "FCOB Fairness
Opinion") commissioned by FCOB's Board of Directors shall provide
as of the date of mailing the Proxy Statement/Prospectus to
FCOB's shareholders that the terms of the Merger, from a
financial standpoint, are fair to the shareholders of FCOB, and
shall not have been revoked, at any time prior to the meeting of
FCOB's shareholders at which the Merger is to be voted on. WEST
shall be provided immediate notification by FCOB of the
revocation of the FCOB Fairness Opinion; and
7.3.6 The sale of the WEST Common Stock resulting from
the Merger shall have been qualified or registered with the
appropriate State securities law or "blue sky" regulatory
authorities of all States in which qualification or registration
is required under the State securities laws, and such
qualifications or registration shall not have been suspended or
revoked.
ARTICLE 8. TERMINATION, AMENDMENTS AND WAIVERS
Section 8.1 Termination. This Agreement may be terminated
at any time prior to the Effective Time:
8.1.1 By mutual consent of the Boards of Directors of
WEST and FCOB;
8.1.2 By WEST or FCOB upon the failure to satisfy any
conditions specified in Section 7.1 if such failure is not caused
by any action or inaction of the party requesting termination of
this Agreement;
8.1.3 By WEST if an Acquisition Event involving FCOB
shall have occurred;
8.1.4 By FCOB if there shall have been a material
breach of any of the representations or warranties of WEST set
forth in this Agreement, which breach, in the reasonable opinion
of FCOB, by its nature cannot be cured or is not cured prior to
the Closing and which breach would, in the reasonable opinion of
FCOB, individually or in the aggregate, have, or be reasonably
likely to have, a Material Adverse Effect on WEST or upon the
consummation of the transactions contemplated hereby;
8.1.5 By WEST if there shall have been a material
breach of any of the representations or warranties of FCOB set
forth in this Agreement, which breach, in the reasonable opinion
of WEST, by its nature cannot be cured or is not cured prior to
the Closing and which breach would, in the reasonable opinion of
WEST, individually or in the aggregate, have, or be reasonably
likely to have, a Material Adverse Effect on FCOB or upon the
consummation of the transactions contemplated hereby;
8.1.6 By FCOB after the occurrence of a Default by
WEST and the continuance of such Default for a period of 20
Business Days after written notice of such Default, if such
Default, in the reasonable opinion of FCOB, cannot be cured prior
to the Closing or, even though curable by the Closing, it is not
cured prior to the Closing;
8.1.7 By WEST after the occurrence of a Default by
FCOB and the continuance of such Default for a period of 20
Business Days after written notice of such Default, if such
Default, in the reasonable opinion of WEST, cannot be cured prior
to the Closing or, even though curable by the Closing, it is not
cured prior to the Closing;
8.1.8 By WEST if the Closing Schedules delivered by
FCOB disclose the occurrence of an event or the existence of any
facts or circumstances, not disclosed in the Schedules or the
FCOB Financial Statements delivered to WEST on or before the date
hereof, that has had or could reasonably be expected to have a
Material Adverse Effect on FCOB or after the Effective Time, on
WEST, or on the consummation of the transactions contemplated
hereby (a "FCOB Material Adverse Event");
8.1.9 By FCOB if the Closing Schedules delivered by
WEST disclose the occurrence of an event or the existence of any
facts or circumstances, not disclosed in the Schedules or the
WEST Financial Statements delivered to FCOB on or before the date
hereof, that has had or could reasonably be expected to have a
Material Adverse Effect on WEST or on the consummation of the
transactions contemplated hereby (a "WEST Material Adverse
Event");
8.1.10 By FCOB upon the failure of any of the
conditions specified in Section 7.3 to have been satisfied prior
to September 29, 2000 (or October 31, 2000 if any applicable
waiting period for Requisite Regulatory Approval requires
additional time) provided that FCOB may not terminate this
Agreement under this Section 8.1.10 if the relevant condition
shall have failed to occur as a result of any act, delay or
omission by FCOB;
8.1.11 By WEST upon the failure of any of the
conditions specified in Section 7.2 to have been satisfied prior
to September 29, 2000 (or October 31, 2000 if any applicable
waiting period for Requisite Regulatory Approval requires
additional time) provided that WEST may not terminate this
Agreement under this Section 8.1.11 if the relevant conditions
shall have failed to occur as a result of any act, delay or
omission by WEST;
8.1.12 By WEST if FCOB's Fairness Opinion is revoked;
8.1.13 By WEST or FCOB, if the Average Closing Price
is less than $18.00. However, if FCOB elects to exercise its
termination right pursuant to the immediately preceding sentence,
it shall give written notice to WEST no later than the end of the
first Business Day following the Determination Date. Prior to
the Effective Time, WEST shall have the option of adjusting the
Exchange Ratio to equal the quotient obtained by dividing (i)
$16.7943 by (ii) the Average Closing Price or a lower Exchange
Ratio agreeable to a majority of the members of the Board of
Directors of FCOB. If WEST makes an election contemplated by the
preceding sentence, it shall give prompt written notice of such
election and the revised Exchange Ratio, whereupon no termination
shall have occurred pursuant to this Section 8.1.13 and this
Agreement shall remain in effect in accordance with its terms
(except as the Exchange Ratio shall have been so modified), and
any references in this Agreement to the "Exchange Ratio" shall
thereafter be deemed to refer to the Exchange Ratio as adjusted
pursuant to this Section 8.1.13.
Section 8.2 Effect of Termination; Survival. Except as
provided in Section 8.5, no termination under Section 8.1 for any
reason or in any manner shall release, or be construed as so
releasing, any party hereto from its obligations pursuant to
Sections 5.1.3, 5.5, 8.5 or 9.5 hereof or from any liability or
damage to any other party hereto arising out of, in connection
with, or otherwise relating to, directly or indirectly, said
party's material breach, Default or failure in performance of any
of its covenants, agreements, duties or obligations arising
hereunder, or any breaches of any representation or warranty
contained herein arising prior to the date of termination of this
Agreement.
Section 8.3 Amendment. This Agreement may be amended by
the parties hereto, at any time before or after approval hereof
by the shareholders of FCOB; provided, however, that after any
such approval by such shareholders, no amendments shall be made
which by law require further approval by such shareholders
without such further approval.
Section 8.4 Waiver. Any term or provision of this
Agreement, other than regulatory approval or any of the
provisions required by law, may be waived in writing at any time
by the party which is, or whose shareholders are, entitled to the
benefits thereof.
Section 8.5 Liquidated Damages; Cancellation Fee.
8.5.1 In the event of the occurrence of an Acquisition
Event involving FCOB, then FCOB shall pay to WEST the sum of One
Million Seven Hundred Fifty Thousand Dollars ($1,750,000) in
cash.
8.5.2 In the event of termination of this Agreement by
FCOB pursuant to Section 8.1.10 or by WEST pursuant to Section
8.1.12 as a result of the revocation of the FCOB Fairness
Opinion; or a termination of this Agreement by WEST pursuant to
(i) Section 8.1.2 (no approval by FCOB shareholders), or (ii)
pursuant to Section 8.1.5 (breach of representations or
warranties of FCOB) or Section 8.1.7 (Default) or Section 8.1.8
(disclosure in the Closing Schedules of a FCOB Material Adverse
Event), where such breach of representation or warranty, Default
or FCOB Material Adverse Event shall have been caused in whole or
in material part by any action or inaction within the control of
FCOB or any of its Subsidiaries, or any of their directors or
executive officers (it being understood that any FCOB Material
Adverse Event that occurred after the date of this Agreement and
was outside of the control of FCOB, its directors and executive
officers shall not come within this Section 8.5.2), then, FCOB
shall pay to WEST the sum of Three Hundred Thousand Dollars
($300,000), in cash; provided, however, that if an Acquisition
Event occurs involving FCOB within one year following any
termination by WEST to which this Section 8.5.2 applies, FCOB
shall pay to WEST an additional One Million Four Hundred Fifty
Thousand Dollars ($1,450,000) in cash.
8.5.3 In the event of a termination of this Agreement
by FCOB pursuant to 8.1.4 (breach of representations and
warranties of WEST) or Section 8.1.6 (Default), or Section 8.1.9
(disclosure in Closing Schedules of a WEST Material Adverse
Event), where such breach of representation or warranty, or such
Default or WEST Material Adverse Event shall have been caused in
whole or in material part by any action or inaction within the
control of WEST or any of its Subsidiaries, or any of their
directors or executive officers (it being understood that any
WEST material adverse effect that occurs after the date of this
Agreement and was outside of the control of WEST, its
Subsidiaries and their directors and executive officers, shall
not come within this Section 8.5.3), then, WEST shall pay to FCOB
the sum of Three Hundred Thousand Dollars ($300,000) in cash;
provided, however, if this Agreement is terminated by WEST or
FCOB due to the fact that WEST enters into another merger or
acquisition transaction where WEST as a condition to such
transaction cannot complete the Merger or such action shall cause
unreasonable delay, WEST shall pay to FCOB the sum of One Million
Dollars ($1,000,000) in cash.
8.5.4 The parties have determined that the occurrence
of any of the events or circumstances set forth in Sections
8.5.1, 8.5.2 and 8.5.3 would cause a substantial damage and loss
and lost business opportunities to the party terminating this
Agreement as a result thereof and that the payments contemplated
by Sections 8.5.1, 8.5.2 and 8.5.3 above provide reasonable and
fair compensation for such damage, loss and lost business
opportunities and are not intended to be and do not constitute a
penalty or forfeiture. Such payments will be made within 10
Business Days following a termination of the Agreement that gives
rise to the payment of such liquidated damages pursuant to
Sections 8.5.1, 8.5.2 or 8.5.3, as applicable. Upon the making
and receipt of payments due under this Section 8.5, neither
party, nor any Affiliates of any party, shall have any further
obligation or liability of any kind under this Agreement to the
other party, except pursuant to Section 5.1.3, 5.5, 8.5.2 (in
case of an Acquisition Event) and 9.5.
8.5.5 In the event of the termination of this
Agreement by WEST or FCOB and for any reason other than as
specified in Sections 8.5.1, 8.5.2 or 8.5.3 above, none of the
parties hereto, nor any Affiliates of any such parties, shall
have any further obligation or liability of any kind to the other
party, except pursuant to Sections 5.1.3, 5.5 and 9.5.
ARTICLE 9. GENERAL PROVISIONS
Section 9.1 Nonsurvival of Representations and Warranties.
None of the representations, warranties, covenants and agreements
in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time, except for those
covenants and agreements contained herein and therein which by
their terms apply in whole or in part after the Effective Time or
to a termination of this Agreement.
Section 9.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, mailed by registered or certified mail
(return receipt requested), sent by confirmed overnight courier
or telecopied (with electronic confirmation and verbal
confirmation for the person to whom such telecopy is addressed),
on the date such notice is so delivered, mailed or sent, as the
case may be, to the parties at the following addresses (or any
such other address for a party as shall be specified by like
notice):
If to FCOB at: First Counties Bank
15145 Lakeshore Drive
Clearlake, California 95422
Fax No. (707) 995-4008
Attention: Dave Perry, President/CEO
with a copy to: Gary Steven Findley & Associates
1470 North Hundley Street
Anaheim, California 92806
Fax No. (714) 630-7910
Attention: Gary Steven Findley, Esq.
If to WEST at: Westamerica Bancorporation
4550 Mangels Boulevard
Fairfield, California 94585-1200
Fax No. (707) 863-6226
Attention: David Payne, Chairman
with a copy to: McCutchen, Doyle, Brown & Enersen,LLP
3 Embarcadero Center #180
San Francisco, CA 94111
Fax No. (415) 393-2286
Attention: Thomas Reddy
Section 9.3 Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered one
and the same agreement, and shall become effective when one or
more counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 9.4 Entire Agreement/No Third Party
Rights/Assignment. This Agreement (including the documents and
instruments referred to herein): (a) constitutes the entire
agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the
subject matter hereof; (b) except as expressly set forth herein,
is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder; (c) shall not be
assigned by a party, by operation of law or otherwise, without
the consent of the other parties; and (d) subject to the
foregoing, shall be binding upon and shall inure to the benefit
of the parties hereto and their permitted successors and assigns.
Section 9.5 Nondisclosure of Agreement. WEST and FCOB
agree, except as required by law or the rules of the NASDAQ, so
long as this Agreement is in effect, not to issue any public
notice, disclosure or press release with respect to the
transactions contemplated by this Agreement without seeking the
consent of the other party, which consent shall not be
unreasonably withheld.
Section 9.6 Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the State
of California, without regard to any applicable conflicts of law.
Section 9.7 Headings/Table of Contents. The table of
contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 9.8 Enforcement of Agreement. The parties hereto
agree that irreparable damage will occur in the event that any of
the provisions of this Agreement or the Bank Merger Agreement is
not performed in accordance with its specific terms or is
otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms
and provisions hereof in any court of the State of California or
any state having jurisdiction, this being in addition to any
remedy to which they are entitled at law or in equity.
Section 9.9 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction
shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of
the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as
to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable.
Section 9.10 Attorneys' Fees. If any legal action or any
arbitration upon mutual agreement is brought for the enforcement
of this Agreement or because of an alleged dispute, breach or
default in connection with this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees and other
costs and expenses incurred in that action or proceeding, in
addition to any other relief to which it may be entitled.
IN WITNESS WHEREOF, WEST and FCOB have caused this Agreement to
be signed by their respective officers thereunto duly authorized,
all as of the date first above written.
WESTAMERICA BANCORPORATION FIRST COUNTIES BANK
By:/s/ DAVID L. PAYNE By:/s/ JAMES E. JONAS
- --------------------- ---------------------
David L. Payne, Chairman, James E. Jonas, Chairman
President and Chief
Executive Officer
By:/s/ JENNIFER J. FINGER By:/s/ DAVE G. PERRY
- ------------------------- --------------------
Jennifer J. Finger, Dave G. Perry, President
SVP and Chief Financial and Chief Executive
Officer Officer
WESTAMERICA BANK
By:/s/ DAVID L. PAYNE
- ---------------------
David L. Payne, Chairman,
President and Chief
Executive Officer
By:/s/ JENNIFER J. FINGER
- -------------------------
Jennifer J. Finger,
SVP and Chief Financial
Officer
INDEX OF EXHIBITS AND SCHEDULES
PREVIOUSLY DELIVERED BY THE PARTIES
Exhibits
Exhibit 2.1 Form of Merger Agreement
Exhibit 5.3 Form of Affiliate Agreements
Exhibit 7.1.6A Form of Opinion of FCOB Counsel
Exhibit 7.1.6B Form of Opinion of WEST Counsel
Exhibit 7.2.9 Form of Director-Shareholder Agreements
Schedules
Schedule 3.2 Licenses and Permits
Schedule 3.3 Subsidiaries
Schedule 3.4 Required Consents and Conflicts
Schedule 3.5 FCOB Stock Options
Schedule 3.8 Compliance with Laws
Schedule 3.9 Litigation
Schedule 3.11 Insurance Policies
Schedule 3.12 Title Exceptions
Schedule 3.13 Real Property
Schedule 3.14 Tax Matters
Schedule 3.15 Performance of Obligations
Schedule 3.16 Loans and Investments
Schedule 3.17 FCOB's Brokers and Finders
Schedule 3.18 Material Contracts
Schedule 3.20 Undisclosed Liabilities
Schedule 3.21 Employees; Employee Benefit Plans; ERISA
Schedule 3.23 Potential Environmental Liabilities
Schedule 3.25 Parachute Payments
Schedule 4.2 Licenses and Permits
Schedule 4.3 Required Consents and Conflicts
Schedule 4.7 Compliance with Laws
Schedule 4.10 Undisclosed Liabilities
Schedule 6.2.11 Pay or Benefit Increases
