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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of
Report (Date of earliest event reported) April 27, 1995
CALIFORNIA BANCSHARES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-9584 94-2147553
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 Park Place, Suite 140, San Ramon, CA 94583
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(Address or principal executive office) (Zip Code)
Registrant's telephone number, including area code: (510) 743-4200
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(Former name or former address, if changed since last report)
Page 1 of _______ pages
The Index to Exhibits is located at page ______
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Item 5. OTHER EVENTS
On April 18, 1995, California Bancshares, Inc. (the "Company") and First
Community Bankshares, sole shareholder for Centennial Bank, signed a definitive
agreement for Centennial Bank to be acquired by the Company for a purchase price
of $16.25 million payable in cash at closing. Centennial Bank would then become
a wholly-owned subsidiary of the Company. The acquisition is subject to
regulatory approval and is expected to close in July, 1995.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
2.1 Purchase Agreement dated as of April 18, 1995, between California
Bancshares, Inc. and First Community Bankshares.
2.2 News release announcing the Agreement.
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SIGNATURES
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.
Date: April 24, 1995 CALIFORNIA BANCSHARES, INC.
By /s/ Joseph P. Colmery
---------------------------------
Joseph P. Colmery
President and Chief
Executive Officer
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INDEX TO EXHIBITS
Number Exhibit
- - ------ ------------------------
2.1 Purchase Agreement, dated
as of April 18, 1995.
2.2 News Release announcing the
Agreement.
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EXHIBIT 2.1
PURCHASE AGREEMENT
BETWEEN
CALIFORNIA BANCSHARES, INC.,
BUYER
NORMAN C. SCHULTZ AND
JOHN C. DAVIS AS TRUSTEE OF THE GUSTON CHARLES SCHULTZ TRUST,
SELLERS
WITH RESPECT TO
FIRST COMMUNITY BANKSHARES, INC. AND CENTENNIAL BANK
APRIL 18, 1995
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TABLE OF CONTENTS
PAGE
Section 1. THE ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Purchase and Sale of Stock. . . . . . . . . . . . . . . . . . . .1
1.2 Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 2. COVENANTS OF THE PARTIES. . . . . . . . . . . . . . . . . . . . .1
2.1 Mutual Covenants. . . . . . . . . . . . . . . . . . . . . . . . .1
(a) Government Approvals . . . . . . . . . . . . . . . . . . . .1
(b) Notification of Breach of Representations, Warranties
and Covenants. . . . . . . . . . . . . . . . . . . . . . . .2
(c) Press Releases . . . . . . . . . . . . . . . . . . . . . . .2
(d) Access to Properties, Books and Records; Confidentiality . .2
(e) Best Efforts . . . . . . . . . . . . . . . . . . . . . . . .3
2.2 Covenants of Schultz. . . . . . . . . . . . . . . . . . . . . . .3
(a) Financial Statements . . . . . . . . . . . . . . . . . . . .3
(b) Compensation . . . . . . . . . . . . . . . . . . . . . . . .3
(c) Conduct of Business in the Ordinary Course . . . . . . . . .4
(d) No Merger or Solicitation. . . . . . . . . . . . . . . . . .6
(e) Changes in Capital Stock; Dividends. . . . . . . . . . . . .6
(f) Employee Benefit Plans . . . . . . . . . . . . . . . . . . .6
(g) Capital Commitments and Expenditures . . . . . . . . . . . .6
(h) Acquisition of Option Shares . . . . . . . . . . . . . . . .7
(j) Assignment of Lease. . . . . . . . . . . . . . . . . . . . .7
(k) Repayment of Capital Note. . . . . . . . . . . . . . . . . .7
2.3 Covenants of CBI. . . . . . . . . . . . . . . . . . . . . . . . .7
(a) Business Combinations. . . . . . . . . . . . . . . . . . . .7
(b) Standard for Written Consent. . . . . . . . . . . . . . . . 7
(c) Redeployment Plan. . . . . . . . . . . . . . . . . . . . . .7
Section 3. REPRESENTATIONS AND WARRANTIES REGARDING FCB AND BANK . . . . . .7
3.1 Corporate Status and Power to Enter Into Agreements . . . . . . .7
3.2 Charter, Bylaws, Books and Records. . . . . . . . . . . . . . . .8
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TABLE OF CONTENTS
(Continued)
PAGE
3.3 Compliance With Laws, Regulations and Decrees . . . . . . . . . .8
3.4 Absence of Conflict . . . . . . . . . . . . . . . . . . . . . . .8
3.5 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . .8
3.6 Equity Interest in Any Entity . . . . . . . . . . . . . . . . . .9
3.7 Financial Statements, Regulatory Reports. . . . . . . . . . . . .9
3.8 Tax Returns.. . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.9 Material Adverse Change . . . . . . . . . . . . . . . . . . . . 10
3.10 No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . 10
3.11 Properties and Leases . . . . . . . . . . . . . . . . . . . . . 11
3.12 Material Contracts. . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.14 Restrictions on Investments . . . . . . . . . . . . . . . . . . 12
3.15 Employment Contracts and Benefits . . . . . . . . . . . . . . . 13
3.16 Compliance With ERISA . . . . . . . . . . . . . . . . . . . . . 14
3.17 Collective Bargaining and Employment Agreements . . . . . . . . 14
3.18 Compensation of Officers and Employees. . . . . . . . . . . . . 15
3.19 Legal Actions and Proceedings . . . . . . . . . . . . . . . . . 15
3.20 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.21 Loan Loss Reserves. . . . . . . . . . . . . . . . . . . . . . . 15
3.22 Transactions With Affiliates. . . . . . . . . . . . . . . . . . 15
3.23 Retention of Broker or Consultant . . . . . . . . . . . . . . . 16
3.24 Option to Purchase Option Shares. . . . . . . . . . . . . . . . 16
3.25 Accuracy of Representations and Warranties. . . . . . . . . . . 16
Section 4. REPRESENTATIONS AND WARRANTIES REGARDING SELLERS. . . . . . . . 16
4.1 Stock Ownership . . . . . . . . . . . . . . . . . . . . . . . . 16
4.2 Power To Enter Into Agreement . . . . . . . . . . . . . . . . . 16
4.3 Execution and Delivery of the Agreement . . . . . . . . . . . . 16
4.4 Retention of Broker or Consultant . . . . . . . . . . . . . . . 17
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TABLE OF CONTENTS
(Continued)
PAGE
4.5 Accuracy of Representations and Warranties. . . . . . . . . . . 17
Section 5. REPRESENTATIONS AND WARRANTIES OF CBI . . . . . . . . . . . . . 17
5.1 Corporate Status and Power to Enter Into Agreements . . . . . . 17
5.2 Compliance With Laws, Regulations and Decrees . . . . . . . . . 17
5.3 Execution and Delivery of the Agreement . . . . . . . . . . . . 17
5.4 Retention of Broker or Consultant . . . . . . . . . . . . . . . 18
5.5 Accuracy of Representations and Warranties. . . . . . . . . . . 18
Section 6. CONDITIONS TO THE OBLIGATIONS OF CBI. . . . . . . . . . . . . . 18
6.1 Representations and Warranties. . . . . . . . . . . . . . . . . 18
6.2 Compliance and Performance Under Agreement. . . . . . . . . . . 18
6.3 Material Adverse Change . . . . . . . . . . . . . . . . . . . . 18
6.4 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . 19
6.5 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 19
6.6 Government Approvals. . . . . . . . . . . . . . . . . . . . . . 19
6.7 Unaudited Financials. . . . . . . . . . . . . . . . . . . . . . 19
6.8 Closing Documents . . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Board Resolutions . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7. CONDITIONS TO THE OBLIGATIONS OF SELLERS. . . . . . . . . . . . 20
7.1 Representations and Warranties. . . . . . . . . . . . . . . . . 20
7.2 Compliance and Performance Under Agreement. . . . . . . . . . . 20
7.3 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . 20
7.4 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 20
7.5 Government Approvals. . . . . . . . . . . . . . . . . . . . . . 20
7.6 Closing Documents . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.1 Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . 21
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TABLE OF CONTENTS
(Continued)
PAGE
8.2 Delivery of Documents . . . . . . . . . . . . . . . . . . . . . 21
8.3 Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.4 Transfer of Cash and Stock. . . . . . . . . . . . . . . . . . . 21
Section 9. EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10. AMENDMENT; TERMINATION. . . . . . . . . . . . . . . . . . . . . 21
10.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.3 Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.4 Breach of Obligations . . . . . . . . . . . . . . . . . . . . . 22
10.5 Termination and Expenses. . . . . . . . . . . . . . . . . . . . 22
Section 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.2 Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . 23
11.3 Survival of Representations and Warranties. . . . . . . . . . . 23
11.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.5 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . 23
11.6 Entire Agreement; Severability. . . . . . . . . . . . . . . . . 23
11.7 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 24
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of April 18, 1995 ("Agreement"), is made
by and between California Bancshares, Inc., a Delaware corporation ("CBI"),
Norman C. Schultz ("Schultz"), and John C. Davis as Trustee of the Guston
Charles Schultz Trust (the "Trustee," and collectively with Schultz, the
"Sellers").
WITNESSETH:
A. First Community Bankshares, a California corporation ("FCB") is the
holder of 98.6% of the outstanding shares of Centennial Bank, a California
banking corporation ("Bank"). FCB has an option to acquire the remaining 1.4%
of the outstanding shares of Bank from the holders of such shares.
B. Schultz, Trustee and the Board of Directors of CBI deem it advisable
and in their respective best interests that the parties enter into a business
combination whereby CBI shall acquire all the outstanding stock of FCB (the
"Shares") from Sellers, FCB shall become a wholly-owned subsidiary of CBI and
Bank shall become an indirect wholly-owned subsidiary of CBI (collectively, the
"Acquisition"), and immediately thereafter FCB shall be merged or liquidated
with and into CBI (the "Merger").
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. THE ACQUISITION.
1.1 PURCHASE AND SALE OF STOCK. Subject to the terms and conditions of
this Agreement, at the Closing, Sellers shall sell to CBI, and CBI shall
purchase from Sellers, the Shares.
1.2 PURCHASE PRICE. In consideration of the sale by Sellers of the
Shares, CBI, on the conditions set forth herein, shall deliver to Sellers at the
Closing (as defined in Section 8.1) the sum of $16,250,000 (as adjusted pursuant
to Section 8.4 hereof), payable in cash or other form of immediately available
funds. The purchase price shall be paid pro rata to Schultz and Trustee in
proportion to the respective number of shares of FCB held by each as of the
Closing.
SECTION 2. COVENANTS OF THE PARTIES.
2.1 MUTUAL COVENANTS. Sellers and CBI agree to comply with the following
covenants. In the case of covenants of FCB and Bank, Sellers agree to cause FCB
and Bank to comply with such covenants.
(a) GOVERNMENT APPROVALS. Each party will use its best efforts in good
faith to take or cause to be taken as promptly as practicable all such steps
within their reasonable control to obtain the prior approval of the Acquisition
by all bank regulatory agencies with jurisdiction over such transaction,
including the Board of Governors of the Federal Reserve System (the "FRB") and
the
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California State Banking Department (the "Department"), and to obtain all other
consents and approvals of government agencies as are required by law or
otherwise, and shall do any and all acts and things necessary or appropriate in
order to cause the Acquisition to be consummated on the terms provided in this
Agreement as promptly as practicable. The approvals referred to in this
Section 2.1(a) are hereinafter referred to as the "Government Approvals." CBI
shall have responsibility for preparing applications for the Government
Approvals, and CBI shall pay any fees required for applications by it to any
regulatory agencies. Sellers, FCB and Bank shall respond to a written request
for information sought by CBI for the purpose of obtaining the Government
Approvals promptly and in all cases within 10 days after receipt of such
request. CBI shall file applications for the Government Approvals within four
business days after the date of this Agreement.
(b) NOTIFICATION OF BREACH OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
Each party shall promptly give written notice to the other parties upon becoming
aware of the occurrence or impending or threatened occurrence of any event which
would cause or constitute a breach of any of the representations, warranties or
covenants of that party contained or referred to in this Agreement and shall use
its best efforts to prevent the same or remedy the same promptly.
(c) PRESS RELEASES. No party shall issue any press release or written
statement for general circulation relating to this Agreement unless previously
provided to the other parties for review and approval (which approval will not
be unreasonably withheld or delayed) and shall cooperate with the other parties
in the development and distribution of all news releases and other public
information disclosures with respect to the Acquisition or this Agreement;
provided that either party may, without the consent of the other party, make any
disclosure with regard to this Agreement that it determines, after consulting
with its counsel, is required under any applicable law or regulation.
(d) ACCESS TO PROPERTIES, BOOKS AND RECORDS; CONFIDENTIALITY. Prior to
the Closing, subject to the requirements of applicable law, FCB and Bank shall
give CBI and its counsel and accountants full access, during normal business
hours and upon reasonable request, to all of their properties, books, contracts,
commitments and records including, but not limited to, the corporate, financial
and operational records, papers, reports, instructions, procedures, tax returns
and filings, tax settlement letters, material contracts or commitments,
regulatory examinations and correspondences, and shall allow CBI at its expense
to make copies of such materials and shall furnish CBI with all such information
concerning their affairs as CBI may reasonably request. FCB and Bank shall also
use their best efforts to cause their independent accounting firm to make
available to CBI, its accountants, counsel and other agents, to the extent
reasonably requested in connection with such review, such firm's work papers and
documentation relating to its work papers and its audits of the books and
records of FCB and Bank. The availability or actual delivery of such
information about either party shall not affect the covenants, representations
and warranties of either party contained in this Agreement. Each party shall
use its best efforts to cause its officers, directors, employees, auditors, and
attorneys to cooperate with the other in its reasonable requests for
information. CBI shall treat as confidential all such information in the same
manner as it treats similar confidential information of its own, and if this
Agreement is terminated, CBI shall continue to treat all such information as
confidential and to cause its employees to keep all such information
confidential and shall return such documents theretofore delivered by FCB or
Bank or copied by CBI, and shall use such information, or cause it to be used,
solely for the purposes of evaluating and completing the transactions
contemplated hereby; provided that CBI may disclose any such
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information to the extent required (upon advice of counsel) by federal or state
securities laws or otherwise required by any governmental agency or authority,
or by generally accepted accounting principles. The foregoing confidentiality
obligations shall not apply in respect of any information publicly available
(unless made publicly available by CBI or its agents in violation of this
Agreement or applicable law) or to any information previously known to the party
in question, the use of which is not otherwise restricted.
(e) BEST EFFORTS. Each party will use its best efforts in good faith to
perform its obligations under this Agreement and to see that all conditions
within its reasonable control to completion of the Acquisition shall be
satisfied. Sellers shall cooperate in good faith with CBI with respect to CBI's
applications for the Government Approvals.
2.2 COVENANTS OF SCHULTZ.
Schultz agrees that he shall comply, or shall cause FCB and Bank to comply,
with each of the following covenants.
(a) FINANCIAL STATEMENTS.
(i) FCB and Bank have delivered or shall deliver to CBI prior to
the Closing true and correct copies of statements of income and statements
of cash flows for FCB and Bank for the fiscal years ended December 31,
1994, 1993 and 1992 (and any subsequent quarter-end periods), and
statements of financial condition at December 31, 1994, 1993 and 1992 (and
any subsequent quarter-ends). The financial statements for such year ends
have been audited by the independent public accountants for FCB and Bank
during the relevant periods, and include an unqualified opinion of such
accounting firm to the effect that such financial statements have been
prepared in accordance with generally accepted accounting principles and
present fairly, in all material respects, the financial positions, results
of operations and cash flows of FCB and Bank at the dates indicated and for
the periods then ending.
(ii) FCB and Bank have delivered or shall deliver to CBI true and
complete copies of year-end call reports relating to Bank filed with the
Department, Federal Deposit Insurance Corporation ("FDIC") or the FRB
during 1992 through 1994 and shall deliver true and complete copies of the
Bank's quarterly call reports filed in 1995 prior to the Closing. As of
their respective dates, each of the documents described in the preceding
sentence complied or shall comply in all material respects with all legal
and regulatory requirements applicable thereto.
(iii) FCB and Bank shall deliver to CBI, as soon as practicable
after the end of each calendar month, copies of their month-end financial
statements and management reports as prepared for internal use by FCB's and
Bank's management.
(b) COMPENSATION. Neither FCB nor Bank shall make or approve any increase
in the compensation payable or to become payable by them to any of their
directors, officers, employees or agents with annual salaries in excess of
$60,000 (including but not limited to compensation through any profit sharing,
pension, retirement, incentive or other employee benefit program or
arrangement), nor shall any bonus payment or any agreement or commitment to make
a bonus payment be made, nor shall any stock option, warrant or other right to
acquire capital stock be
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granted, or employment agreement (other than any such employment agreement that
may arise by operation of law upon the hiring of any new employee) or consulting
agreement be entered into by FCB or Bank with any such directors, officers,
employees or agents unless CBI has given its prior written consent. Nothing
herein shall prevent the payment to FCB's or Bank's employees (with salaries of
$60,000 or less) of regular salary increases, consistent with past practices in
connection with regular salary reviews or bonuses consistent with past
practices, as heretofore disclosed to CBI. Bank may pay nonrecurring bonuses,
severance payments or similar nonrecurring compensation payments to officers,
directors, employees and agents of FCB or Bank in connection with the
Acquisition in an aggregate amount not to exceed $60,000. Without the prior
consent of CBI, neither FCB nor Bank shall hire any new employee at an annual
rate in excess of current customary practice or, in any event, in excess of
$60,000 per year, except with the prior written consent of CBI.
(c) CONDUCT OF BUSINESS IN THE ORDINARY COURSE. Prior to the Closing:
(i) FCB and Bank shall conduct their business in the Ordinary
Course as heretofore conducted. For purposes of this Agreement, the
"Ordinary Course" of Bank shall consist of the banking and related
businesses as presently conducted by it and permitted under applicable
banking laws, and the "Ordinary Course" of FCB shall consist of the
businesses currently conducted by it and permitted under applicable bank
holding company laws. Unless CBI has given its previous written consent to
any act or omission to the contrary, FCB and Bank shall, until the Closing,
cause its officers to:
(A) preserve their business and business organizations intact;
(B) preserve the good will of customers and others having
business relations with them and take no action that would impair the
benefit to CBI of such goodwill or the other benefits of the Acquisition;
(C) consult with CBI as to the making of any decisions or the
taking of any actions in matters other than in the Ordinary Course;
(D) maintain their properties in good repair, working order and
condition (reasonable wear and tear excepted);
(E) comply with all laws, regulations and decrees applicable to
the conduct of their businesses, the violation of which would have a
materially adverse effect on the financial condition, results of operations
or business prospects of FCB or Bank;
(F) use their best efforts to keep in force at not less than its
present limits all policies of insurance, including deposit insurance of
the FDIC, to the extent reasonably practicable in light of the prevailing
market conditions in the insurance industry;
(G) use their best efforts to keep available to CBI the services
of their present officers and employees, (it being understood that FCB and
Bank shall have the right to terminate the employment of any of their
officers or employees for cause or otherwise in accordance with their
established employment procedures);
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(H) comply with all orders, agreements and memoranda of
understanding with respect to them made by or with any regulatory authority
of competent jurisdiction, and promptly forward to CBI all communications
received from any such authority that are not prohibited by such authority
from being so disclosed and inform the other party of any material
restrictions imposed by any governmental authority on their businesses;
(I) file in a timely manner (taking into account any extensions
duly obtained) all reports, tax returns and other documents required to be
filed with federal, state, local and other authorities;
(J) conduct an environmental audit prior to foreclosure on any
property as to which they have knowledge, or should have knowledge, that
asbestos or asbestos-containing material, PCB's or PCB-contaminated
materials, any petroleum product, or hazardous substance or waste (as
defined under any applicable environmental laws) was or is present,
manufactured, recycled, reclaimed, released, stored, treated, or disposed
of, and provide the results of such audit to and consult with CBI regarding
the significance of the audit prior to the foreclosure on any such
property;
(K) not sell, lease, pledge, assign, encumber or otherwise
dispose of any of their assets except in the Ordinary Course consistent
with Bank's customary practices;
(L) with respect to any extension of credit in excess of
$50,000, not waive or release any right or collateral or cancel or
compromise any debt or claim, except in the Ordinary Course;
(M) not make, renegotiate, renew, increase, extend or purchase
any loans, advances or loan commitments, in each case to any of their
officers, directors or any affiliated or related persons of such directors
or officers except in the Ordinary Course consistent with their established
loan procedures and in compliance with FRB Regulation O, or other
applicable restrictions on transactions with officers, directors or other
affiliated or related persons;
(N) not take any action to create, relocate or terminate the
operations of any office, banking office or branch, or to form any new
subsidiary or affiliated entity; and
(O) not settle or otherwise take any action to release or reduce
any of their rights with respect to any litigation involving a claim of
more than $50,000 in which they are a party, except in the Ordinary Course.
(ii) FCB and Bank shall not, without first having obtained the written
consent of CBI, cause its officers to:
(A) commit itself to any loan with a principal amount in excess
of $500,000 if unsecured, or in excess of $500,000 and with a loan-to-value
ratio above 75% if secured by real property;
(B) purchase or sell any investment security with a remaining
term to maturity of one year or more; or
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(C) issue any certificate of deposit with a rate of interest in
excess of 50 basis points above average for the same maturity as reflected
in CBI's internally published rates (which CBI shall provide to FCB and
Bank on at least a weekly basis).
(d) NO MERGER OR SOLICITATION.
Neither Sellers, FCB nor Bank shall effect or agree to effect
any Business Combination relating to FCB or Bank, cause FCB or Bank to
acquire or agree to acquire any of its own capital stock or the capital
stock or assets (except in the Ordinary Course) of any other entity (except
for FCB's acquisition of the Option Shares), or commence any proceedings
for winding up and dissolution affecting FCB or Bank.
"Business Combination" shall mean any merger, sale or purchase of
a subsidiary, sale or purchase of a substantial portion of any person's or
entity's assets, or tender offer or other means of acquisition of
substantially all the outstanding capital stock of any entity.
(e) CHANGES IN CAPITAL STOCK; DIVIDENDS. At or after the date hereof and
at or prior to the Closing, except with the prior written consent of CBI or as
otherwise provided in this Agreement, neither FCB nor Bank shall amend their
Articles of Incorporation or Bylaws, make any change in their authorized, issued
or outstanding capital stock or any other equity security; issue, sell, pledge,
assign or otherwise encumber or dispose of, or purchase, redeem or otherwise
acquire, any shares of capital stock or other equity securities or enter into
any agreement, call or commitment of any character to do so; declare or pay any
cash dividend; grant or issue any stock option relating to, right to acquire, or
security convertible into, shares of its capital stock or other equity security;
purchase, redeem, retire or otherwise acquire (other than in a fiduciary
capacity) any shares of, or any security convertible into, capital stock or
other equity security, or agree to do any of the foregoing, except as expressly
provided herein, except that:
(i) Bank may declare and pay dividends to its shareholders in
1995 and prior to Closing in an aggregate amount which, when added to the
amount (net of tax benefit) of any bonuses paid or accrued by the Bank with
respect to the Acquisition, shall not exceed $720,000; and
(ii) FCB may and shall acquire the Option Shares and repay the
capital note described in Section 2.2(j).
(f) EMPLOYEE BENEFIT PLANS. FCB and Bank shall cooperate with any efforts
of CBI to terminate, freeze, modify or merge any of FCB's or Bank's employee
benefit plans, as defined in Section 3(l) of ERISA, into CBI's or any of CBI's
subsidiary banks' employee benefit plans as of or after the Closing, as
determined by CBI, in each case consistent with provisions of the Internal
Revenue Code, as amended (the "IRC").
(g) CAPITAL COMMITMENTS AND EXPENDITURES. After the execution of this
Agreement, except with the prior written consent of CBI, no new capital
commitments shall be entered into, and no capital expenditures in excess of
$25,000 shall be made by FCB or Bank, including but not limited to, creation of
any new branches and acquisitions or leases of real property, except commitments
or expenditures within existing operating and capital budgets previously
furnished to CBI.
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(h) ACQUISITION OF OPTION SHARES. On or about April 30, 1995, but in no
event later than five days prior to Closing, FCB shall exercise its option to
purchase, and shall purchase for cash, the Option Shares.
(i) ASSIGNMENT OF LEASE. On or before the Closing, FCB shall assign to
Schultz all of its rights as lessee under its lease of premises located at 50
Osgood Place, San Francisco, California, and Schultz shall assume, and hold FCB
harmless from, all of FCB's obligations as lessee under such lease from and
after the Closing. Schultz shall be entitled to retain all furniture, fixtures,
equipment and leasehold improvements associated with such premises.
(j) REPAYMENT OF CAPITAL NOTE. On or before the Closing, FCB shall repay
in full all principal, interest and other amounts due under that certain capital
note payable to and held by Schultz.
2.3 COVENANTS OF CBI.
(a) BUSINESS COMBINATIONS. CBI agrees not to enter into any Business
Combination with any other party that does not contemplate, and effectively
precludes, the performance by CBI of its obligations under this
Agreement.
(b) STANDARD FOR WRITTEN CONSENT. Whenever CBI's written consent is
required as a condition to any action by Sellers, FCB or Bank, CBI shall not
withhold such consent unreasonably. Whenever Sellers, FCB or Bank shall request
CBI's written consent in accordance with this Agreement and shall provide CBI
with documentation or other evidence reasonably supporting such request, CBI
shall respond within two business days.
(c) REDEPLOYMENT PLAN. CBI shall treat all persons (other than Schultz)
who are employees of Bank as of the Closing and who CBI determines will not
continue in their present or comparable positions after Closing as eligible to
participate in CBI's Redeployment Plan and, for purposes of such plan, shall
give such persons credit for service with CBI for their term of employment with
Bank.
SECTION 3. REPRESENTATIONS AND WARRANTIES REGARDING FCB AND BANK.
Schultz represents and warrants to CBI that:
3.1 CORPORATE STATUS AND POWER TO ENTER INTO AGREEMENTS. Bank is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of California as a state-chartered commercial bank. FCB is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of California and is a registered bank holding company under
the Bank Holding Company Act of 1956, as amended. Subject to receipt of the
Government Approvals, FCB and Bank have all necessary corporate power to carry
out all of the terms and provisions hereof to be carried out by them. Bank
holds a currently valid license issued by the Department to engage in the
commercial banking business at its principal office in Castro Valley,
California, and at each of its existing branch offices. Bank is not subject to
any order of the FRB, FDIC, Department or any other regulatory authority having
jurisdiction over its business or any of its assets or properties. Neither the
scope of the business of FCB and Bank nor the location of their properties
requires them to be licensed to do business in any jurisdiction other than the
State of
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California. Bank's deposits are insured by the FDIC to the maximum extent
permitted by applicable law and regulation. Bank is not a member of the Federal
Reserve System.
3.2 CHARTER, BYLAWS, BOOKS AND RECORDS. The copies of the Articles of
Incorporation and Bylaws of FCB and Bank that FCB and Bank previously delivered
to CBI are complete and accurate copies thereof as in effect on the date hereof.
The minute books of FCB and Bank that FCB and Bank made available to CBI contain
a complete and accurate record of all meetings of FCB's and Bank's Board of
Directors (and committees thereof) and all annual meetings of FCB's and Bank's
shareholders. The corporate books and records (including financial statements)
of FCB and Bank that FCB and Bank made available to CBI fairly reflect the
material transactions to which FCB and Bank are a party or by which their
properties are subject or bound, and such books and records have been properly
kept and maintained.
3.3 COMPLIANCE WITH LAWS, REGULATIONS AND DECREES. FCB and Bank (i) have
the corporate power to own or lease their properties and to conduct their
businesses as currently conducted, (ii) have complied with, and are not in
default of any laws, regulations, ordinances, orders or decrees applicable to
the conduct of their businesses and the ownership of their properties, including
but not limited to all federal and state laws, rules and regulations relating to
the offer, sale or issuance of securities, and the operation of a bank holding
company and a state-chartered commercial bank, other than where such
noncompliance or default is not likely to result in a material limitation on the
conduct of their businesses or is not likely to otherwise have a material
adverse effect on FCB or Bank, and (iii) have all material approvals,
authorizations, consents, licenses, clearances and orders of, and have currently
effective all material registrations with, all governmental and regulatory
authorities which are necessary to the business and operations of FCB and Bank
as now being conducted.
3.4 ABSENCE OF CONFLICT. The consummation of the transactions herein
contemplated (i) do not violate any provision of the Articles of Incorporation
or Bylaws of FCB or Bank, any provision of federal or state law or any
governmental rule or regulation applicable to FCB or Bank (assuming receipt of
the Government Approvals and accuracy of the representations of CBI set forth
herein), and (ii) do not require any consent of any person under, conflict with
or result in a breach of, or accelerate the performance required by any of the
terms of, any material debt instrument, lease, license, covenant, agreement or
understanding to which FCB or Bank is a party or by which they are bound (except
the leases for its San Leandro and Fairway Park branches) or any order, ruling,
decree, judgment, arbitration award or stipulation to which FCB or Bank is
subject, or constitute a default thereunder or result in the creation of any
lien, claim, security interest, encumbrance, charge, restriction or right of any
third party of any kind whatsoever upon any of the properties or assets of FCB
or Bank.
3.5 CAPITALIZATION. The authorized capital stock of Bank consists of
2,000,000 shares of common stock, no par value, of which 344,288 shares are duly
authorized, validly issued, fully paid and nonassessable and currently
outstanding, 98.6% of which are owned by FCB as of the date of this Agreement,
and all of which will be owned by FCB on the Closing. The authorized capital
stock of FCB consists of 8,000 shares of voting common stock, no par value, of
which 3,200 shares are duly authorized, validly issued, fully paid and
nonassessable and currently outstanding, and all of which are owned by Schultz,
and 2,000 shares of nonvoting common stock, of which 800 shares are duly
authorized, validly issued, fully paid and nonassessable, and of which 400 are
owned by
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Schultz and 400 are owned by Trustee. Said stock has been issued in compliance
with all applicable securities laws. There are no outstanding (i) options,
agreements, calls or commitments of any character which would obligate FCB or
Bank to issue, sell, pledge, assign or otherwise encumber or dispose of, or to
purchase, redeem or otherwise acquire, any FCB or Bank common stock (except for
FCB's option to purchase the Option Shares) or any other equity security of FCB
or Bank, or (ii) warrants or options relating to, rights to acquire, or debt or
equity securities convertible into, shares of FCB or Bank common stock or any
other equity security of FCB or Bank. The outstanding common stock of FCB or
Bank is not registered with the SEC or any other agency pursuant to the
Securities Exchange Act of 1934.
3.6 EQUITY INTEREST IN ANY ENTITY. Except for FCB's ownership of Bank
common stock and except as collateral for outstanding loans held in Bank's loan
portfolio, FCB and Bank do not own, directly or indirectly, any equity interest
in any bank, corporation or other entity.
3.7 FINANCIAL STATEMENTS, REGULATORY REPORTS. No financial statement to
be provided to CBI by FCB or Bank under or in connection with this Agreement, as
of the date of such financial statement, contained, or as to documents to be
delivered after the date hereof, will contain, any untrue statement of a
material fact, or, at the date thereof, omitted or will omit to state a material
fact necessary in order to make the statements contained therein, in light of
the circumstances under which such statements were or will be made, not
misleading; provided, however, that information as of a later date shall be
deemed to modify information as of any earlier date. FCB and Bank have filed
all material documents and reports required to be filed by either of them with
the FRB, FDIC, Department and any other governmental authority having
jurisdiction over FCB's or Bank's businesses or any of FCB's or Bank's assets or
properties. All such reports conform in all material respects with the
requirements promulgated by such regulatory agencies. All compliance or
corrective action relating to FCB or Bank required by governmental authorities
and regulatory agencies having jurisdiction over FCB or Bank have been taken.
Neither FCB nor Bank has received any notification, formally or informally, from
any agency or department of any federal, state or local government or any
regulatory agency or the staff thereof (i) asserting that it is not in
compliance with any of the statutes, regulations or ordinances which such
government or regulatory authority enforces, or (ii) threatening to revoke any
license, franchise, permit or governmental authorization. FCB and Bank have
paid all assessments made or imposed by any governmental agency. FCB and Bank
have delivered to CBI copies of all annual management letters and opinions, and
have made available to CBI for inspection all reviews, correspondence and other
documents in the files of FCB and Bank prepared by their independent accounting
firm delivered to FCB or Bank since December 31, 1992. The financial records of
FCB and Bank have been, and are being and shall be, maintained in all material
respects in accordance with all applicable legal and accounting requirements
sufficient to insure that all transactions reflected therein are, in all
material respects, executed in accordance with management's general or specific
authorization and recorded in conformity with generally accepted accounting
principles at the time in effect. The data processing equipment, data
transmission equipment, related peripheral equipment and software used by FCB
and Bank in the operation of their businesses to generate and retrieve their
financial records are reasonably adequate for the current needs of FCB and Bank.
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3.8 TAX RETURNS.
(a) FCB and Bank have timely filed all federal, state, county, local and
foreign tax returns required to be filed by them, including, without limitation,
estimated tax, use tax, excise tax, real property and personal property tax
reports and returns, employer's withholding tax returns, other withholding tax
returns and Federal Unemployment Tax Returns, and all other reports or other
information required or requested to be filed by each of them, and each such
return, report or other information was, when filed, complete and accurate in
all material respects. FCB and Bank have paid all taxes, fees and other
governmental charges, including any interest and penalties thereon, when they
have become due, except those that are being contested in good faith, which
contested matters have been disclosed to CBI. FCB and Bank have not been
requested to give or given any currently effective waivers extending the
statutory period of limitation applicable to any tax return required to be filed
by either of them for any period. There are no claims pending against FCB or
Bank for any alleged deficiency in the payment of any taxes, and FCB and Bank do
not know of any pending or threatened audits, investigations or claims for
unpaid taxes or relating to any liability in respect of any taxes. Except for
the transactions contemplated by this Agreement, there has been no event,
including a change in ownership, that would result in a reappraisal and
establishment of a new base-year full value for purposes of Article XIII.A of
the California Constitution, of any real property owned in whole or in part by
FCB or Bank or to the best of FCB's or Bank's knowledge, of any real property
leased by FCB or Bank.
(b) FCB and Bank have delivered to CBI copies of all their tax returns
with respect to taxes payable to the United States of America and the State of
California for the fiscal years ended December 31, 1993 and 1992.
(c) No consent has been filed relating to FCB or Bank pursuant to
Section 341(f) of the IRC.
3.9 MATERIAL ADVERSE CHANGE. Since December 31, 1994, there has been
(i) no material adverse change in the business, assets, licenses, permits,
franchises, results of operations or financial condition of FCB or Bank (whether
or not in the Ordinary Course), (ii) no change in any of the assets, licenses,
permits or franchises of FCB or Bank that has had or can reasonably be expected
to have a material adverse effect on any of the items listed in clause (i)
above, (iii) no damage, destruction, or other casualty loss (whether or not
covered by insurance) that has had or can reasonably be expected to have a
material adverse effect on any of the items listed in clause (i) above, (iv) no
amendment, modification, or termination of any existing, or entering into of any
new, contract, agreement, plan, lease, license, permit or franchise that is
material to the business, financial condition, assets, liabilities or operations
of FCB or Bank, except in the Ordinary Course; and (v) no disposition by FCB or
Bank of one or more assets that, individually or in the aggregate, are material
to FCB or Bank, except sales of assets in the Ordinary Course.
3.10 NO UNDISCLOSED LIABILITIES. Except as disclosed in Schedule 3.10 or
in financial statements provided to CBI, the obligations disclosed in the
contracts set forth in Schedule 3.12 and items for which reserves have been
established in the audited consolidated statements of financial condition of FCB
and Bank as of December 31, 1994, FCB and Bank have not incurred or discharged,
and are not legally obligated with respect to any indebtedness, liability
(including, without limitation, a liability arising out of an indemnification,
guarantee, hold harmless or similar arrangement) or obligation (accrued or
contingent, whether due or to become due, and whether or
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not subordinated to the claims of its general creditors), other than as a result
of operations in the Ordinary Course after such date. No agreement pursuant to
which any loans or other assets have been or will be sold by FCB or Bank
entitled the buyer of such loans or other assets, unless there is material
breach of a representation or covenant by the seller, to cause FCB or Bank to
repurchase such loan or other asset or the buyer to pursue any other form of
recourse against FCB or Bank. FCB and Bank have not knowingly made and shall
not make any representation or covenant in any such agreement that contained or
shall contain any untrue statement of a material fact or omitted or shall omit
to state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which such representations and/or
covenants were made or shall be made, not misleading.
3.11 PROPERTIES AND LEASES.
(a) FCB and Bank have good and marketable title, free and clear of all
liens and encumbrances, and the right of possession to all real properties
(including Bank's Castro Valley branch and Hayward branch) and good title to
all other property and assets, tangible and intangible, reflected in FCB's and
Bank's consolidated statement of financial condition as of December 31, 1994
(except property held as lessee under leases disclosed in writing prior to the
date hereof and except personal property sold or otherwise disposed of since
December 31, 1994, in the Ordinary Course), except (i) liens for taxes or
assessments not delinquent, (ii) such other liens and encumbrances and
imperfections of title as do not materially affect the value of such property as
reflected in FCB's and Bank's consolidated statement of financial condition as
of December 31, 1994, or as currently shown on the books and records of FCB and
Bank and which do not interfere with or impair its present and continued use, or
(iii) exceptions disclosed in title reports and preliminary title reports,
copies of which have been provided to CBI. All tangible properties of FCB and
Bank conform in all material respects with all applicable ordinances,
regulations and zoning laws. All tangible properties of FCB and Bank are in a
good state of maintenance and repair and are adequate for the current business
of FCB and Bank. No properties of FCB or Bank, and, to the best of FCB's and
Bank's knowledge, no properties in which either of them holds a collateral or
contingent interest or purchase option, are the subject of any pending or
threatened investigation, claim or proceeding relating to the use, storage or
disposal on such property or contamination of such property by any toxic or
hazardous waste material or substance. Except as disclosed by FCB or Bank to
CBI in writing, to the best of FCB's and Bank's knowledge, FCB and Bank do not
own, possess or have a collateral or contingent interest or purchase option in
any properties or other assets which contain or have located within or thereon
any hazardous or toxic waste material or substance unless the location of such
hazardous or toxic waste material or other substance or its use thereon conforms
in all material respect with all federal, state and local laws, rules,
regulations or other provisions regulating the discharge of materials into the
environment. As to any asset not owned or leased by FCB or Bank, FCB and Bank
have not controlled, directed or participated in the operation or management of
any such asset or any facilities or enterprise conducted thereon, such that it
has become an owner or operator of such asset under applicable environmental
laws. Schedule 3.11(a) to this Agreement identifies all properties held by Bank
in fee by address and status as branch office or other usage.
(b) All properties held by FCB and Bank under leases (including Bank's San
Leandro branch and Fairway Park branch) are held by them under valid, binding
and enforceable leases, with such exceptions as are not material and do not
interfere with the conduct of the business of FCB and
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Bank, and FCB and Bank enjoy quiet and peaceful possession of such leased
property. FCB and Bank are not in default in any respect under any material
lease, agreement or obligation regarding their properties to which they are a
party or by which they are bound. Schedule 3.11(b) to this Agreement identifies
all properties held by Bank under leases by address, lease date, lessor,
expiration date, status as a branch office and the necessity under the lease for
any other party's consent to the Acquisition or the Merger.
(c) Except as disclosed in Schedule 3.11(c), succession of CBI to all of
FCB's rights and obligations under the leases referred to in Section 3.11(b)
above and CBI's acquisition of control of Bank does not require the consent of
any other party to such leases. Where required, FCB shall use its best efforts
to obtain, prior to the Closing, the consent of all parties to any such lease.
3.12 MATERIAL CONTRACTS. Except for loans, lines of credit, loan
commitments or letters of credit to which Bank is a party as lender or as set
forth on Schedule 3.12, FCB and Bank are not a party to or bound by any contract
or other agreement made in the Ordinary Course which involves aggregate future
payments by or to FCB or Bank of more than $25,000 and which is made for a fixed
period expiring more than one year from the date hereof, and FCB and Bank are
not a party to or bound by any agreement not made in the Ordinary Course which
is to be performed at or after the date hereof. Each of the contracts and
agreements disclosed to CBI pursuant to this Section is a legal and binding
obligation (subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to enforceability, to
equitable principles of general applicability), and no breach or default (and no
condition which, with notice or passage of time, or both, could become a breach
or default) exists with respect thereto.
3.13 LOANS. FCB and Bank have disclosed to CBI in writing prior to the
date hereof, and will promptly inform CBI of the amounts of, all loans, leases,
other extensions of credit or commitments, or other interest-bearing assets of
FCB or Bank, that have been classified as of the date hereof or hereafter by any
internal bank examiner or any bank regulatory agency as "Other Loans Specially
Mentioned," "Special Mention," "Substandard," "Doubtful," "Loss," or words of
similar import in the case of loans (or that would have been so classified, in
the case of other interest-bearing assets, had they been loans). To the best of
their abilities, FCB and Bank have furnished and will continue to furnish to CBI
true and accurate information concerning the loan portfolio of Bank, and no
material information with respect to the loan portfolio has been or will be
withheld from CBI. All loans and investments of FCB and Bank are legal, valid
and binding obligations enforceable against the obligors thereunder in
accordance with their respective terms and are not subject to any setoffs,
counterclaims or disputes (subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general applicability), except as
disclosed to CBI in writing or reserved for in the consolidated statement of
financial condition of FCB and Bank as of December 31, 1994, and were duly
authorized under and made in compliance with applicable federal and state laws
and regulations. FCB and Bank do not have any extensions of credit,
investments, guarantees, indemnification agreements or commitments for the same
(including without limitation commitments to issue letters of credit, to create
acceptances, or to repurchase securities, federal funds or other assets) other
than those documented on the books and records of FCB and Bank.
3.14 RESTRICTIONS ON INVESTMENTS. Except for pledges to secure public and
trust deposits and repurchase agreements in the Ordinary Course and subject to
compliance with applicable
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banking, securities and other governmental regulations, none of the investments
reflected in the FCB's and Bank's consolidated statement of financial condition
as of December 31, 1994, and none of the investments made by FCB or Bank since
December 31, 1994, is subject to any restriction, whether contractual or
statutory, which materially impairs the ability of FCB and Bank to freely
dispose of such investment at any time.
3.15 EMPLOYMENT CONTRACTS AND BENEFITS.
(a) FCB and Bank have delivered to CBI an accurate list setting forth all
bonus, incentive compensation, profit-sharing, pension, retirement, stock
purchase, stock option, deferred compensation, severance, hospitalization,
medical, dental, vision, group insurance, death benefits, disability and other
fringe benefit plans, trust agreements, arrangements and commitments of FCB and
Bank (including but not limited to such plans, agreements, arrangements and
commitments applicable to former employees or retired employees, or for which
such persons are eligible), if any, together with copies of all such plans,
agreements, arrangements and commitments that are documented, any and all
contracts of employment and has made available to CBI any Board of Directors'
minutes (or committee minutes) authorizing, approving or guaranteeing such plans
and contracts.
(b) With respect to each employee benefit plan (as defined in Section 3(3)
of ERISA) which is listed in subsection (a) and which is subject to the
reporting, disclosure and record retention requirements set forth in the IRC and
Part 1 of Subtitle B of Title I of ERISA and the regulations thereunder, each of
such requirements has been fully met on a timely basis.
(c) To the best of FCB's and Bank's knowledge, with respect to each
employee benefit plan (as defined in Section 3(3) of ERISA) which is listed in
subsection (a) and which is subject to Part 4 of Subtitle B of Title I of ERISA,
none of the following now exists or has existed within the six-year period
ending on the date hereof:
(i) Any act or omission constituting a material violation of
Section 402 of ERISA;
(ii) Any act or omission constituting a violation of Section 403 of
ERISA;
(iii)Any act or omission by FCB and Bank, or by any director, officer
or employee thereof, constituting a violation of Sections 404 or 405 of
ERISA;
(iv) To the knowledge of FCB and Bank, any act or omission by any
other person constituting a violation of Sections 404 or 405 of ERISA;
(v) Any act or omission which constitutes a violation of Sections 406
or 407 of ERISA and is not exempted by Section 408 of ERISA or which
constitutes a violation of Section 4975(c) of the IRC and is not exempted
by Section 4975(d) of the IRC; or
(vi) Any act or omission constituting a violation of Sections 503, 510
or 511 of ERISA.
(d) All contributions, premiums or other payments due from FCB and Bank to
(or under) any plan listed in subsection (a) have been fully paid or adequately
provided for on their audited
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financial statements for the year ended December 31, 1994, and on their most
recent unaudited financial statement before the Closing. All accruals thereon
(including, where appropriate, proportional accruals for partial periods) have
been made in accordance with generally accepted accounting principles
consistently applied on a reasonable basis.
(e) Each plan listed in subsection (a) complies with all applicable
requirements of (A) the Age Discrimination in Employment Act of 1967, as
amended, and the regulations thereunder and (B) Title VII of the Civil Rights
Act of 1964, as amended, and the regulations thereunder.
(f) Each plan listed in subsection (a) complied in all material respects
with all applicable requirements of the health care continuation coverage
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 and the
regulations thereunder.
(g) FCB and Bank have heretofore disclosed in writing to CBI the names of
each director, officer and employee of FCB and Bank and the salary and terms of
employment of each such person.
3.16 COMPLIANCE WITH ERISA. FCB and Bank have not, since their inception,
either maintained or contributed to an employee pension benefit plan, as defined
in Section 3(2) of ERISA, other than the Centennial Bank Saving Plan (the
"Plan"), which was originally adopted by the Bank's Board of Directors on July
1, 1979 and a true and accurate copy of which has been provided to CBI. With
respect to the Plan, as of the Closing (i) the Plan will in all material
respects be (and currently is) in compliance with all the applicable
requirements of Section 401(a) of the IRC, and the Plan Trust will be exempt
from income tax under Section 501(a) of the IRC; (ii) the Plan is an adaptation
of a prototype document which has received a favorable opinion letter from the
IRS, the qualified status of the Plan as adopted, under Section 401(a) of the
IRC will be determined upon the filing with the IRS of a request for a favorable
determination to be made before December 31, 1995, or such other date prescribed
by the IRS, and the IRS has not raised any question on audit or otherwise with
respect to the qualified status of the Plan or the Plan Trust prior to the
Closing; (iii) Bank shall not have amended the Plan or administered the Plan in
such a manner that would preclude the issuance of a favorable Determination
Letter to the Plan; (iv) no contributions have exceeded the limitations set
forth in Section 415 of the IRC; (v) all required and necessary filings with the
IRS, Department of Labor and any other governmental agencies with respect to the
Plan for all periods ending at or prior to the Closing will have been made on a
timely basis by Plan and the Plan administrator, except where the failure to
make such timely filings does not, and is not likely to, result in a material
limitation on the operation of the Plan or have a material adverse effect on FCB
or the Bank; (vi) there shall have been no material violation of Parts 1 and 4
of Subtitle B of Title I of ERISA or of Section 4975 of the IRC; and (vii) there
shall have been no action, claim or demand of any kind known to FCB or Bank
brought or threatened by any potential claimant or representative of such
claimant under the Plan where FCB, Bank or the Plan may be either (A) liable
directly on such action, claim or demand, or (B) obligated to indemnify any
person, group of persons or entity with respect to such action, claim or demand,
unless such action, claim or demand is covered by adequate reserves reflected in
Bank's December 31, 1994 financial statements or an insurer of FCB or Bank has
agreed to defend against and pay the amount of any resulting liability without
reservation.
3.17 COLLECTIVE BARGAINING AND EMPLOYMENT AGREEMENTS. Except as provided
in this Agreement or as previously disclosed to CBI in writing, FCB and Bank do
not have any union or
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collective bargaining or written employment agreements, contracts or other
agreements with any labor organization or with any member of management, or any
management or consultation agreement not terminable at will by FCB or Bank
without liability and no such contract or agreement has been requested by, or is
under discussion by management with, any group of employees, any member of
management or any other person. There are no material controversies pending
between FCB and Bank and any current or former employees and, to the best of
FCB's and Bank's knowledge, there are no efforts presently being made by any
labor union seeking to organize any of such employees.
3.18 COMPENSATION OF OFFICERS AND EMPLOYEES. Except as disclosed in
Schedule 3.18, no officer or employee of FCB or Bank is receiving aggregate
direct remuneration at a rate exceeding $60,000 per annum. The consummation of
the transactions contemplated by this Agreement will not (either alone or upon
the occurrence of any additional or further acts or events) result in any
payment (whether of severance pay or otherwise) becoming due from FCB, Bank or
CBI to any employee of FCB or Bank, except such severance payments as FCB or
Bank has agreed to pay pursuant to Section 2.1(f) of this Agreement and any
severance payments under CBI's Redeployment Plan pursuant to Section 2.3(c).
3.19 LEGAL ACTIONS AND PROCEEDINGS. Except as disclosed in Schedule 3.19,
FCB and Bank are not a party to, or so far as either of them is aware,
threatened with any legal action or other proceeding or investigation before any
court, any arbitrator of any kind or any government agency, and neither FCB nor
Bank is subject to any potential adverse claim, the outcome of which could
involve the payment or receipt by FCB or Bank of any amount in excess of
$50,000. FCB and Bank have no knowledge of any pending or threatened claims or
charges under the Community Reinvestment Act, before the Equal Employment
Opportunity Commission, the California Department of Fair Housing & Economic
Development, the California Unemployment Appeals Board, or any human relations
commission. There is no labor dispute, strike, slow-down or stoppage pending
or, to the best of the knowledge of FCB and Bank, threatened against FCB or
Bank.
3.20 INSURANCE. Bank is, and for the five years preceding the date of
this Agreement has been, insured with reputable insurers against all risks
normally insured against by commercial banks, and all of the insurance policies
and bonds maintained by Bank are in full force and effect, Bank is not in
default thereunder and all material claims thereunder have been filed in due and
timely fashion. To the knowledge of Schultz, such insurance coverage is
adequate for Bank. Since December 31, 1994 and as of the Closing, there has not
been any damage to, destruction of, or loss of any assets of Bank not covered by
insurance that could materially and adversely affect the business, financial
condition, properties, assets or results of operations of Bank.
3.21 LOAN LOSS RESERVES. To the knowledge of FCB's and Bank's management,
the allowances for loan losses in the statements of financial condition as of
December 31, 1994, and as of the Closing are and will be adequate in all
material respects under the requirements of all applicable state and federal
laws and regulations to provide for probable loan losses on outstanding loans,
net of recoveries.
3.22 TRANSACTIONS WITH AFFILIATES. Except as shown on Schedule 3.22, FCB
and Bank have not extended credit, committed itself to extend credit, or
transferred any asset to or assumed or guaranteed any liability of the employees
or directors of FCB or Bank, or any spouse or child of any
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of them, or to any of their "affiliates" or "associates" as such terms are
defined in Rule 405 under the Securities Act of 1933. FCB and Bank have not
entered into any other transactions with the employees or directors of FCB or
Bank or any spouse or child of any of them, or any of their affiliates or
associates, except as disclosed in writing to CBI. Any such transactions have
been on terms no less favorable to FCB or Bank than those which would prevail in
an arms-length transaction with an independent third party.
3.23 RETENTION OF BROKER OR CONSULTANT. No broker, agent, finder,
consultant or other party (other than legal, compliance, loan auditors and
accounting advisors) has been retained by FCB or Bank or is entitled to be paid
based upon any agreements, arrangements or understandings made by FCB or Bank in
connection with any of the transactions contemplated by this Agreement.
3.24 OPTION TO PURCHASE OPTION SHARES. FCB has an option to purchase the
Option Shares, and can exercise such option and purchase the Option Shares for a
price equal to book value per share based on Bank's most recent quarterly call
report.
3.25 ACCURACY OF REPRESENTATIONS AND WARRANTIES. No representation or
warranty by FCB or Bank, and no statement by FCB or Bank in any certificate,
agreement, schedule or other document furnished in connection with the
transactions contemplated by this Agreement, contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary to make such representation, warranty or statement not misleading to
CBI; provided, that information as of a later date shall be deemed to modify
information as of any earlier date.
SECTION 4. REPRESENTATIONS AND WARRANTIES REGARDING SELLERS.
Sellers represent and warrant to CBI that, except as set forth on a
Schedule attached to this Agreement and corresponding in number with the
applicable section:
4.1 STOCK OWNERSHIP. Sellers own all of the outstanding equity securities
of FCB.
4.2 POWER TO ENTER INTO AGREEMENT. Subject to receipt of the Government
Approvals, each Seller has all necessary power to enter into this Agreement and
to carry out all of the terms and provisions hereof to be carried out by it.
4.3 EXECUTION AND DELIVERY OF THE AGREEMENT.
(a) This Agreement has been duly executed and delivered by Sellers and
(assuming due execution and delivery by CBI) constitutes a legal and binding
obligation of Sellers in accordance with its terms.
(b) The execution and delivery by Sellers of this Agreement and the
consummation of the transactions herein contemplated (i) do not violate the
trust agreement of Trustee or any provision of federal or state law or any
governmental rule or regulation applicable to Sellers (assuming receipt of the
Government Approvals and accuracy of the representations of CBI set forth
herein), and (ii) do not require any consent of any person under, conflict with
or result in a breach of, or accelerate the performance required by any of the
terms of, any material debt instrument, lease, license, covenant, agreement or
understanding to which either Seller is a party or by which either of them is
bound or
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any order, ruling, decree, judgment, arbitration award or stipulation to which
either Seller is subject, or constitute a default thereunder or result in the
creation of any lien, claim, security interest, encumbrance, charge, restriction
or right of any third party of any kind whatsoever upon any of the properties or
assets of either Seller.
4.4 RETENTION OF BROKER OR CONSULTANT. No broker, agent, finder,
consultant or other party (other than legal and accounting advisors) has been
retained by Sellers or is entitled to be paid based upon any agreements,
arrangements or understandings made by Sellers in connection with any of the
transactions contemplated by this Agreement.
4.5 ACCURACY OF REPRESENTATIONS AND WARRANTIES. No representation or
warranty by Sellers, and no statement by Sellers in any certificate, agreement,
schedule or other document furnished in connection with the transactions
contemplated by this Agreement, contains or will contain any untrue statement of
a material fact or omits or will omit to state any material fact necessary to
make such representation, warranty or statement not misleading to CBI, provided,
that information as of a later date shall be deemed to modify information as of
any earlier date.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF CBI.
CBI represents and warrants to Sellers that, except as set forth on a
Schedule attached to this Agreement and corresponding in number to the
appropriate section:
5.1 CORPORATE STATUS AND POWER TO ENTER INTO AGREEMENTS. CBI is a
corporation duly incorporated, validly existing and in good standing under
Delaware law, is duly qualified and in good standing as a foreign corporation
under California law and is a registered bank holding company under the Bank
Holding Company Act of 1956, as amended. Subject to receipt of the Government
Approvals, CBI has all necessary corporate power to enter into this Agreement
and to carry out all of the terms and provisions hereof to be carried out by it.
CBI is not subject to any order of the FRB or any other regulatory authority
having jurisdiction over its business or any of its assets or properties.
5.2 COMPLIANCE WITH LAWS, REGULATIONS AND DECREES. CBI (i) has the
corporate power to own or lease its properties and to conduct its business as
currently conducted, (ii) has complied with, and is not in default of any laws,
regulations, ordinances, orders or decrees applicable to the conduct of its
business and the ownership of its properties, including but not limited to all
federal and state laws, and the rules and regulations relating to the offer,
sale or issuance of securities, other than where such noncompliance or default
is not likely to result in a material limitation on the conduct of its business
or is not likely to otherwise have a material adverse effect on CBI taken as a
whole, (iii) has not failed to file with the proper federal, state, local or
other authorities any material report or other document required to be to filed,
and (iv) has all approvals, authorizations, consents, licenses, clearances and
orders of, and has currently effective all registrations with, all governmental
and regulatory authorities which are necessary to its business and operations as
now being conducted.
5.2 EXECUTION AND DELIVERY OF THE AGREEMENT.
(a) The execution and delivery of this Agreement have been duly authorized
by the Board of Directors of CBI.
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(b) This Agreement has been duly executed and delivered by CBI and
(assuming due execution and delivery by Sellers) constitutes a legal and binding
obligation of CBI in accordance with its terms.
(c) The execution and delivery by CBI of this Agreement and the
consummation of the transactions herein contemplated (i) do not violate any
provision of the Certificate of Incorporation or Bylaws of CBI, any provision of
federal or state law or any governmental rule or regulation applicable to CBI
(assuming receipt of the Government Approvals and accuracy of the
representations of Sellers herein), and (ii) do not require any consent of any
person under, conflict with or result in a breach of, or accelerate the
performance required by any of the terms of, any material debt instrument,
lease, license, covenant, agreement or understanding to which CBI is a party or
by which they are bound or any order, ruling, decree, judgment, arbitration
award or stipulation to which CBI is subject, or constitute a default thereunder
or result in the creation of any lien, claim, security interest, encumbrance,
charge, restriction or right of any third party of any kind whatsoever upon any
of the properties or assets of CBI.
5.4 RETENTION OF BROKER OR CONSULTANT. No broker, agent, finder,
consultant or other party (other than legal, compliance, loan auditors and
accounting advisors) has been retained by CBI or is entitled to be paid based
upon any agreements, arrangements or understandings made by CBI in connection
with any of the transactions contemplated by this Agreement.
5.5 ACCURACY OF REPRESENTATIONS AND WARRANTIES. No representation or
warranty by CBI, and no statement by CBI in any certificate, agreement, schedule
or other document furnished in connection with the transactions contemplated by
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state any material fact necessary to make such
representation, warranty or statement not misleading to Sellers; provided, that
information as of a later date shall be deemed to modify information as of any
earlier date.
SECTION 6. CONDITIONS TO THE OBLIGATIONS OF CBI.
The obligations of CBI under this Agreement are, at its option, subject to
the satisfaction at or prior to the Closing of each of the following conditions;
provided, however, that any one or more of such conditions may be waived by the
Board of Directors of CBI at any time at or prior to the Closing:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Schultz in Section 3 and of Sellers in Section 4 shall be true and correct in
all material respects when made and on and as of the Closing, with the same
effect as though such representations and warranties had been made on and as of
such date except as to any representation or warranty which specifically relates
to an earlier date.
6.2 COMPLIANCE AND PERFORMANCE UNDER AGREEMENT. Sellers, FCB and Bank
shall have performed and complied in all material respects with all terms of
this Agreement required to be performed or complied with by them at or prior to
the Closing.
6.3 MATERIAL ADVERSE CHANGE. No materially adverse change shall have
occurred since December 31, 1994, in the business, financial condition or
results of operations of FCB or Bank and neither FCB nor Bank shall be a party
to or, so far as Sellers, FCB and Bank are aware, threatened
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with any legal action or other proceeding before any court, any arbitrator of
any kind or any Government agency if, in the reasonable judgment of CBI, such
legal action or proceeding could materially adversely affect FCB or Bank or
their business, financial condition or results of operations.
6.4 OFFICER'S CERTIFICATE. CBI shall have received a certificate, dated
the Closing, signed (i) on behalf of Sellers and (ii) on behalf of FCB and Bank
by their respective President, Chief Credit Officer and Chief Financial Officer,
to the effect that the conditions in Sections 6.1-6.3 have been satisfied.
6.4 OPINION OF COUNSEL. Sellers, FCB and Bank shall have delivered to CBI
such documents as may reasonably be requested by CBI to evidence compliance by
Sellers, FCB and Bank with the provisions of this Agreement, including an
opinion of their counsel reasonably satisfactory to CBI.
6.6 GOVERNMENT APPROVALS. All Government Approvals shall be in effect
with only such conditions as are customary in similar transactions, and all
conditions or requirements prescribed by law or by any such Government Approval
shall have been satisfied; provided, however, that no Government Approval shall
be deemed to have been received if it shall require the divestiture or cessation
of any of the present businesses or operations conducted by any of the parties
hereto or shall impose any other condition or requirement, which divestiture,
cessation, condition or requirement CBI in its reasonable judgment deems to be
materially burdensome (in which case CBI shall promptly notify Sellers).
6.7 UNAUDITED FINANCIALS. Not later than five business days prior to the
Closing, FCB and Bank shall have furnished CBI a copy of their most recently
prepared unaudited year-to-date financial statements, including statements of
financial condition and year-to-date statement of income of FCB and Bank
(adjusted to reflect any expenses to this transaction not yet recognized, any
dividends to be paid before Closing and any amounts to be paid by FCB for
acquisition of the Option Shares and not yet accrued), and which shall indicate
that:
(i) FCB has no liabilities and is the owner of all of the outstanding
equity securities of Bank;
(ii) Bank has made cumulative provisions to its allowance for loan losses
in 1995 in at least the amount set forth for such purposes in the Bank's 1995
budget as in effect on the date of this Agreement and disclosed to CBI; and
(iii) Bank's shareholder's equity is not less than:
(A) $10,984,000 (the amount of shareholders' equity shown on Bank's
audited statement of financial condition as of December 31, 1994);
(B) PLUS the amount of Bank's retained earnings in 1995 before any
dividends (but not reduced for any loss in 1995);
(C) LESS dividends permitted to be paid to FCB in 1995 under Section
2.2(e) (the "Required Equity Amount").
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6.8 CLOSING DOCUMENTS. CBI shall have received such certificates and
other closing documents as counsel for CBI shall reasonably request.
6.9 CONSENTS. FCB and Bank shall have received, or CBI shall have
satisfied itself that FCB and Bank will receive, all consents of other parties
to and required by material mortgages, notes, leases, franchises, agreements,
licenses and permits applicable to FCB and Bank as set forth in Schedule 6.9, in
each case in form and substance reasonably satisfactory to CBI, and no such
consent or license or permit shall have been withdrawn or suspended.
6.10 BOARD RESOLUTIONS. CBI shall have received certified resolutions of
the Boards of Directors of FCB and Bank approving the Acquisition and the Merger
and such resolutions shall be in full force and effect.
SECTION 7. CONDITIONS TO THE OBLIGATIONS OF SELLERS.
The obligations of Sellers under this Agreement are, at their option,
subject to the satisfaction at or prior to the Closing of each of the following
conditions; provided, however, that any one or more of such conditions may be
waived by them at any time at or prior to the Closing:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
CBI in Section 5 hereof shall be true and correct in all material respects when
made and on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of such date except as to
any representation or warranty which specifically related to an earlier date.
7.2 COMPLIANCE AND PERFORMANCE UNDER AGREEMENT. CBI shall have performed
and complied in all material respects with all of the terms of this Agreement
required to be performed or complied with by it at or prior to the Closing.
7.3 OFFICER'S CERTIFICATE. Sellers shall have received a certificate,
dated the Closing, signed on behalf of CBI by its President and Chief Financial
Officer certifying to the satisfaction of the conditions stated in Sections 7.1
and 7.2 hereof.
7.4 OPINION OF COUNSEL. CBI shall have delivered to Sellers such
documents as may reasonably be requested by Sellers to evidence compliance by
CBI with the provisions of this Agreement, including an opinion of its counsel
reasonably satisfactory to Sellers.
7.5 GOVERNMENT APPROVALS. The Government Approvals shall have been
received and shall be in effect with only such conditions as are customary in
similar transactions, and all conditions or requirements prescribed by law or by
any such approval shall have been satisfied provided, however, that no
Government Approval shall be deemed to have been received if it shall require
the divestiture or cessation of any of the present businesses or operations
conducted by any of the parties hereto or shall impose any other condition or
requirement, which divestiture, cessation, condition or requirement Sellers in
their reasonable judgment deems to be materially burdensome to them (in which
case they shall promptly notify CBI).
7.6 CLOSING DOCUMENTS. Sellers shall have received such certificates and
other closing documents as counsel for Sellers shall reasonably request.
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SECTION 8. CLOSING.
8.1 CLOSING DATE. The completion of the transactions contemplated by this
Agreement (the "Closing") shall, unless another date, time or place is agreed to
in writing by CBI and Sellers, be held at 8:00 a.m. at the offices of CBI in San
Ramon, California, as soon as practicable after receipt of all Government
Approvals and the expiration of any applicable waiting periods.
8.2 DELIVERY OF DOCUMENTS. At the Closing, the opinions, certificates,
resolutions, resignations and other documents required to be delivered by this
Agreement shall be delivered.
8.3 FILINGS. At the Closing, CBI and Sellers shall instruct their
respective representatives to make or confirm such filings as shall be required
in the opinion of counsel to CBI and Sellers to give effect to the Acquisition.
8.4 TRANSFER OF CASH AND STOCK. At the Closing, (a) Sellers shall deliver
or cause to be delivered to CBI certificates representing all of the Shares of
FCB with such assignments or endorsements as CBI shall reasonably require, and
reasonable evidence that FCB has possession of certificates representing all of
the outstanding equity securities of Bank, and (b) CBI shall deliver or cause to
be delivered to Sellers cash or other form of immediately available funds in the
amount of $16,250,000, less an amount equal to the amount (up to $500,000) by
which Bank's shareholder's equity as of the Closing (determined in a manner
consistent with Section 6.7) is less than the Required Equity Amount, payable to
Sellers as provided in Section 1.2.
SECTION 9. EXPENSES
Except as provided in Section 10.4, CBI agrees to pay, without right of
reimbursement from the Sellers and whether or not the transactions contemplated
by this Agreement shall be consummated, the costs incurred by CBI, and Sellers
agree to pay, without right of reimbursement from CBI and whether or not the
transactions contemplated by this Agreement shall be consummated, the costs
incurred by Sellers, FCB and Bank, in each case incident to the performance of
its obligations under this Agreement, including without limitation costs
incident to the preparation of this Agreement and incident to the consummation
of the Acquisition and of the other transactions contemplated herein, including
the fees and disbursements of counsel, accountants, consultants and financial
advisers employed by such party in connection therewith. Notwithstanding the
foregoing, FCB may pay Sellers' expenses to the extent of its cash on hand.
SECTION 10. AMENDMENT; TERMINATION.
10.1 AMENDMENT. This Agreement may be amended by mutual agreement of CBI
and Sellers at any time prior to the Closing.
10.2 TERMINATION. This Agreement may be terminated as follows:
(a) By the mutual consent of the Sellers and Board of Directors of CBI at
any time prior to the consummation of the Acquisition.
(b) By the Board of Directors of CBI on or after September 30, 1995, if
any of the conditions in Section 6 to which the obligations of CBI are subject
have not been satisfied.
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(c) By the Board of Directors of CBI if (i) a materially adverse change
shall have occurred since December 31, 1994, in the business, financial
condition, results of operations or properties of FCB or Bank, or (ii) there has
been material failure or prospective material failure on the part of Sellers,
FCB or Bank to comply with any of their material obligations under this
Agreement, or any material failure or prospective failure to comply with any of
the material conditions set forth in Section 6 hereof; or (iii) if the Required
Equity Amount exceeds Bank's shareholder's equity as of the proposed Closing
(determined in a manner consistent with Section 6.7) by more than $500,000.
(d) By the Sellers on or after September 30, 1995, if any of the
conditions contained in Section 7 to which the obligations of Sellers, FCB and
Bank are subject have not been satisfied.
10.3 NOTICE. The right of termination hereunder may be exercised by CBI
or Sellers, as the case may be, only by giving written notice to the other
party.
10.4 BREACH OF OBLIGATIONS. If there has been a material breach by either
party in the performance of any of the obligations herein which shall not have
been cured within 10 business days after written notice thereof has been given
to the defaulting party, the nondefaulting party shall have the right to
terminate this Agreement upon written notice to the defaulting party. In any
event, the nondefaulting party shall have no obligation to consummate any
transaction or take any further steps toward such consummation contemplated
hereunder until such breach is cured. Notwithstanding such termination, the
nondefaulting party shall be entitled to damages resulting from a material
breach by the defaulting party. Notwithstanding any of the foregoing, CBI may
not terminate this Agreement or have any other rights or remedies on account of
a breach of this Agreement by CBI, and Sellers may not terminate this Agreement
or have any other rights or remedies on account of a breach of this Agreement by
Sellers.
10.5 TERMINATION AND EXPENSES.
Termination of this Agreement shall not terminate or affect the obligations
of the parties to maintain the confidentiality of the other party's information
pursuant to Section 2.1(d), to pay expenses as provided in Section 9 or to
observe their obligations under Sections 11.1-11.7.
SECTION 11. MISCELLANEOUS
11.1 NOTICES. Any notice or other communication required or permitted
under this Agreement shall be effective only if it is in writing and delivered
personally, or by overnight courier, or by facsimile or sent by first class
United States mail, postage prepaid, registered or certified mail, addressed as
follows:
To CBI: To Sellers:
California Bancshares, Inc. Norman C. Schultz
100 Park Place, Suite 140 First Community Bankshares
San Ramon, CA 94583 50 Osgood Place
Attn: Joseph P. Colmery San Francisco, CA 94133
Fax: 510 838-3990 Fax: 415 788-9892
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With a copy to: With a copy to:
McCutchen, Doyle, Brown & Enersen Morrison & Foerster
Three Embarcadero Center 345 California Street
San Francisco, CA 94111 San Francisco, CA 94104
Attn: Thomas G. Reddy Attn: David E. Baudler
Fax: 415 393-2286 Fax: 415 677-5722
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt. Notice shall be deemed
given upon receipt, if sent by personal delivery, courier or facsimile, and
three business days after deposit in the U.S. mail if sent by mail. A facsimile
transmission received after 5:00 p.m. or on a day other than a business day
shall be deemed received as of the open of business on the next business day.
11.2 BINDING AGREEMENT. This Agreement is binding upon and is for the
benefit of CBI, Sellers, FCB and Bank and their respective successors and
permitted assigns. This Agreement is not made for the benefit of any person,
firm, corporation or association not a party hereto, and no other person, firm,
corporation or association shall acquire or have any right under or by virtue of
this Agreement. Except as expressly provided herein, no party may assign this
Agreement or any of its rights, privileges, duties or obligations hereunder
without the prior written consent of the other party to this Agreement, which
consent shall not be unreasonably withheld.
11.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. No investigation by CBI,
Sellers, FCB or Bank made before or after the date of this Agreement shall
affect the representations and warranties which are contained in this Agreement,
and such representations and warranties shall survive such investigation;
provided that, except with respect to covenants and agreements to be performed
in whole or in part after the Closing, the representations, warranties,
covenants and agreements of CBI, Sellers, FCB and Bank contained in this
Agreement shall not survive the Closing.
11.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
11.5 ATTORNEYS' FEES. In any action at law or suit in equity in relation
to this Agreement, the prevailing party in such action or suit shall be entitled
to receive a reasonable sum for its attorneys' fees and all other reasonable
costs and expenses incurred in such action or suit.
11.6 ENTIRE AGREEMENT; SEVERABILITY. This Agreement and the documents,
certificates, agreements, letters, schedules and exhibits attached or required
to be delivered pursuant hereto set forth the entire agreement and
understandings of the parties in respect of the transactions contemplated
hereby, and supersede all prior agreements, arrangements and understandings
relating to the subject matter hereof, excluding that certain confidentiality
and evaluation agreement between the parties dated January 9, 1995. Each
provision of this Agreement shall be interpreted in a manner to be effective and
valid under applicable law, but if any provision hereof shall be prohibited or
ruled invalid under applicable law, the validity, legality and enforceability of
the remaining provisions shall not, except as otherwise required by law, be
affected or impaired as a result of such prohibition or ruling.
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11.7 TRUSTEE. All representations, warranties, covenants or other
agreements made or entered into by the Trustee under this Agreement are made or
entered into by Trustee solely in his capacity as Trustee of the Guston Charles
Schultz Trust, and not in his individual capacity.
11.8 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, CBI, Sellers, FCB and Bank have each caused this
Agreement to be duly executed as of the day and year first above written.
CALIFORNIA BANCSHARES, INC.
/s/ NORMAN C. SCHULTZ By /s/ JOSEPH P. COLMERY
- - ---------------------------------- -------------------------------
Norman C. Schultz Its President and CEO
-------------------------------
/s/ JOHN C. DAVIS
- - ----------------------------------
John C. Davis as Trustee of the Guston
Charles Schultz Trust
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LIST OF SCHEDULES
(Additional schedules may be required to qualify the
representations of the parties set forth in Section 3, 4 and 5)
SCHEDULE 3.9 Material Adverse Changes
SCHEDULE 3.10 Liabilities
SCHEDULE 3.11(a) Properties Owned in Fee
SCHEDULE 3.11(b) Leases
SCHEDULE 3.11(c) Lease Consents
SCHEDULE 3.12 Material Contracts
SCHEDULE 3.15 Bonus, Incentive Compensation, Profit Sharing and similar
benefit plans
SCHEDULE 3.18 Officer/Employee Compensation
SCHEDULE 3.19 Legal Actions
SCHEDULE 3.22 Loans to Affiliates
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NEWS RELEASE
- - -------------------------------------------------------------------------------
DATE: April 18, 1995
[LOGO CALIFORNIA BANCSHARES INC.]
DIRECT LINE: (510) 743-4201
CONTACT: Joseph P. Colmery
CALIFORNIA BANCSHARES TO ACQUIRE CENTENNIAL BANK
San Ramon, CA - California Bancshares, Inc. and Centennial Bank's sole
shareholder, First Community Bankshares have signed a definitive agreement for
Centennial Bank to be acquired by California Bancshares for $16.25 million
payable in cash at closing. First Community Bankshares, owned by Norman C.
Schultz, acquired Centennial Bank in 1986.
The acquisition is subject to regulatory approval and is expected to close
in July, 1995.
Centennial Bank operates four branches in Castro Valley, San Leandro and
Hayward (2). Total assets at March 31, 1995 were $119 million. 1994 net income
was $1.59 million for a return on assets of 1.35%. Earnings for the first
quarter of 1995 were $452,000 representing a return on assets of 1.55%.
California Bancshares is the holding company for Alameda First National
Bank, Bank of Livermore, The Bank of Milpitas, N.A., The Bank of San Ramon
Valley, Commercial Bank of Fremont, Community First National Bank, Concord
Commercial Bank, Lamorinda National Bank, Modesto Banking Company, Westside Bank
and CBI Mortgage.
According to Joseph P. Colmery, President and CEO of California Bancshares,
the acquisition "solidifies California Bancshares' presence in this growing
market area with a bank that has a record of solid financial performance and an
excellent reputation in the community. California Bancshares' financial and
technological resources will enhance Centennial Bank's ability to be the leading
community bank in this area."
California Bancshares, Inc.'s common stock trades on The Nasdaq Stock
Market under the symbol CABI.
For more information contact:
Joseph P. Colmery, President and CEO
California Bancshares, Inc.
(510) 743-4201
# # # #
100 Park Place, Suite 140, San Ramon, CA 94583 (510)743-4200 Fax: (510)838-3991
