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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
July 11, 1996
- ------------------------------------------------------------------
Date of Report (Date of earliest event reported)
Independent Bankshares, Inc.
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(Exact name of Registrant as specified in its charter)
Texas 0-10196 75-1717279
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
547 Chestnut Street
P. O. Box 3296
Abilene, Texas 79604
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(Address of principal executive offices) (Zip Code)
(915) 677-5550
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. Other Events
On July 11, 1996, Independent Bankshares, Inc. (the "Company")
entered into a definitive agreement ("Agreement") to acquire all of
the issued and outstanding capital stock of Crown Park Bancshares,
Inc. ("Crown Park") in a cash transaction for approximately
$7,425,000, and to merge Crown Park's subsidiary bank, Western
National Bank, Lubbock, Texas ("Western National"), with First
State Bank, N.A., Abilene, Texas ("First State"), a subsidiary bank
of the Company.
As of March 31, 1996, Western National had total assets of
$56,939,000, total loans, net of unearned income, of $32,934,000,
total deposits of $51,463,000 and stockholder's equity of
$5,223,000.
Consummation of the acquisition is subject to, among other
things, regulatory approvals, Crown Park shareholders' approvals
and other customary conditions. If the approvals are received and
the conditions satisfied, the transaction is expected to be
consummated during the fourth quarter of 1996, at which time
Western National will become a branch of First State.
No material relationship exists between Crown Park and the
Company or any of its affiliates, any directors or officers of the
Company, or any associate of any such director or officer.
The above summary is qualified in its entirety by reference to
the Agreement and Plan of Reorganization, which is included in this
Current Report on Form 8-K as Exhibit 1.1.
ITEM 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits
Exhibit No. Document Description
1.1 Agreement and Plan of Reorganization
dated July 11, 1996, between the
Company and Crown Park, Agreement
and Plan of Merger dated July 11,
1996, between Western National and
First State, Idemnity Agreement
dated July 11, 1996, in favor of the
Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
INDEPENDENT BANKSHARES, INC.
Date: July 23, 1996 By: /s/ Randal N. Crosswhite
-------------------------------
Randal N. Crosswhite, Senior
Vice President and Chief
Financial Officer
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Exhibit 1.1
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AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
INDEPENDENT BANKSHARES, INC.
ABILENE, TEXAS
AND
CROWN PARK BANCSHARES, INC.
LUBBOCK, TEXAS
Dated as of July 11, 1996
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ARTICLE I. ACQUISITION OF CROWN PARK BY INDEPENDENT. . . . 1
SECTION 1.01 Merger of New Independent with and into Crown
Park . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Effects of the Merger . . . . . . . . . . . . . 2
SECTION 1.03 Articles of Incorporation and Bylaws. . . . . . 2
SECTION 1.04 Directors and Officers. . . . . . . . . . . . . 2
SECTION 1.05 Conversion of the Crown Park Common Stock . . . 2
SECTION 1.06 Shareholders' Meeting . . . . . . . . . . . . . 5
SECTION 1.07 Delivery of Consideration . . . . . . . . . . . 5
SECTION 1.08 Bank Merger Agreement . . . . . . . . . . . . . 6
ARTICLE II. THE CLOSING AND THE CLOSING DATE. . . . . . . . 6
SECTION 2.01 Time and Place of the Closing and Closing
Date . . . . . . . . . . . . . . . . . . . 6
SECTION 2.02 Actions to be Taken at the Closing by Crown
Park . . . . . . . . . . . . . . . . . . . 7
SECTION 2.03 Actions to be Taken at the Closing by
Independent. . . . . . . . . . . . . . . . 8
SECTION 2.04 Further Assurances. . . . . . . . . . . . . . . 9
SECTION 2.05 Effective Date. . . . . . . . . . . . . . . . . 9
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF CROWN PARK. . 10
SECTION 3.01 Organization and Qualification. . . . . . . . . 10
SECTION 3.02 Execution and Delivery. . . . . . . . . . . . . 10
SECTION 3.03 Crown Park Capitalization . . . . . . . . . . . 10
SECTION 3.04 Compliance with Laws, Permits and Instruments . 11
SECTION 3.05 Crown Park Financial Statements . . . . . . . . 11
SECTION 3.06 The Bank. . . . . . . . . . . . . . . . . . . . 12
SECTION 3.07 Litigation. . . . . . . . . . . . . . . . . . . 13
SECTION 3.08 Consents and Approvals. . . . . . . . . . . . . 13
SECTION 3.09 Undisclosed Liabilities . . . . . . . . . . . . 14
SECTION 3.10 Title to Assets . . . . . . . . . . . . . . . . 14
SECTION 3.11 Absence of Certain Changes or Events. . . . . . 14
SECTION 3.12 Contracts . . . . . . . . . . . . . . . . . . . 17
SECTION 3.13 Taxes . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.14 Insurance . . . . . . . . . . . . . . . . . . . 19
SECTION 3.15 No Adverse Change . . . . . . . . . . . . . . . 19
SECTION 3.16 Proprietary Rights. . . . . . . . . . . . . . . 19
SECTION 3.17 Transactions with Certain Persons and Entities. 20
SECTION 3.18 Evidences of Indebtedness . . . . . . . . . . . 20
SECTION 3.19 Employee Relationships. . . . . . . . . . . . . 20
SECTION 3.20 Condition of Assets . . . . . . . . . . . . . . 20
SECTION 3.21 Environmental Compliance. . . . . . . . . . . . 21
SECTION 3.22 Regulatory Compliance . . . . . . . . . . . . . 22
SECTION 3.23 Absence of Certain Business Practices . . . . . 22
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SECTION 3.24 Proxy Statement . . . . . . . . . . . . . . . . 22
SECTION 3.25 Dissenting Shareholders . . . . . . . . . . . . 22
SECTION 3.26 Books and Records . . . . . . . . . . . . . . . 23
SECTION 3.27 Forms of Instruments, Etc.. . . . . . . . . . . 23
SECTION 3.28 Fiduciary Responsibilities. . . . . . . . . . . 23
SECTION 3.29 Guaranties. . . . . . . . . . . . . . . . . . . 23
SECTION 3.30 Voting Trust or Buy-Sell Agreements . . . . . . 23
SECTION 3.31 Employee Benefit Plans. . . . . . . . . . . . . 23
SECTION 3.32 COBRA Responsibility. . . . . . . . . . . . . . 27
SECTION 3.33 Derivatives . . . . . . . . . . . . . . . . . . 27
SECTION 3.34 Valuation of Land, Building, Improvements . . . 27
SECTION 3.35 Representations Not Misleading. . . . . . . . . 27
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF INDEPENDENT . 27
SECTION 4.01 Organization and Qualification. . . . . . . . . 27
SECTION 4.02 Execution and Delivery. . . . . . . . . . . . . 28
SECTION 4.03 Compliance with Laws, Permits and Instruments . 28
SECTION 4.04 Litigation. . . . . . . . . . . . . . . . . . . 28
SECTION 4.05 Consents and Approvals. . . . . . . . . . . . . 28
SECTION 4.06 Proxy Statement . . . . . . . . . . . . . . . . 28
SECTION 4.07 Representations Not Misleading. . . . . . . . . 29
ARTICLE V. COVENANTS OF CROWN PARK . . . . . . . . . . . . 29
SECTION 5.01 Best Efforts. . . . . . . . . . . . . . . . . . 29
SECTION 5.02 Information for Applications. . . . . . . . . . 29
SECTION 5.03 Required Acts of Crown Park and the Bank. . . . 29
SECTION 5.04 Prohibited Acts of Crown Park and the Bank. . . 31
SECTION 5.05 Access; Pre-Closing Investigation . . . . . . . 34
SECTION 5.06 Designee of Independent . . . . . . . . . . . . 34
SECTION 5.07 Additional Financial Statements. . . . . . . . 34
SECTION 5.08 Untrue Representations. . . . . . . . . . . . . 34
SECTION 5.09 Litigation and Claims . . . . . . . . . . . . . 35
SECTION 5.10 Adverse Changes . . . . . . . . . . . . . . . . 35
SECTION 5.11 No Negotiation with Others. . . . . . . . . . . 35
SECTION 5.12 Consents and Approvals. . . . . . . . . . . . . 35
SECTION 5.13 Environmental Investigation; Right to Terminate
Agreement. . . . . . . . . . . . . . . . . 35
SECTION 5.14 Proxies . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.15 Sole Shareholder Approval . . . . . . . . . . . 37
ARTICLE VI. COVENANTS OF INDEPENDENT. . . . . . . . . . . . 37
SECTION 6.01 Best Efforts. . . . . . . . . . . . . . . . . . 38
SECTION 6.02 Incorporation and Organization of New
Independent. . . . . . . . . . . . . . . . 38
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SECTION 6.03 Acts of New Independent . . . . . . . . . . . . 38
SECTION 6.04 Information for Applications. . . . . . . . . . 38
SECTION 6.05 Untrue Representations. . . . . . . . . . . . . 38
SECTION 6.06 Litigation and Claims . . . . . . . . . . . . . 38
SECTION 6.07 Regulatory and Other Approvals. . . . . . . . . 39
ARTICLE VII. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
CROWN PARK . . . . . . . . . . . . . . . . 39
SECTION 7.01 Compliance with Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . 39
SECTION 7.02 Shareholder Approvals . . . . . . . . . . . . . 39
SECTION 7.03 Government and Other Approvals. . . . . . . . . 39
SECTION 7.04 No Litigation . . . . . . . . . . . . . . . . . 39
SECTION 7.05 Opinion of Legal Counsel to Independent . . . . 40
ARTICLE VIII. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
INDEPENDENT. . . . . . . . . . . . . . . . 40
SECTION 8.01 Compliance with Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . 40
SECTION 8.02 Shareholder Approvals . . . . . . . . . . . . . 40
SECTION 8.03 Government and Other Approvals. . . . . . . . . 40
SECTION 8.04 No Litigation . . . . . . . . . . . . . . . . . 41
SECTION 8.05 Opinion of Legal Counsel to Crown Park. . . . . 41
SECTION 8.06 Dissenting Shareholders . . . . . . . . . . . . 41
SECTION 8.07 Accounting Treatment. . . . . . . . . . . . . . 41
SECTION 8.08 No Material Adverse Change. . . . . . . . . . . 42
SECTION 8.09 Bank Merger Agreement . . . . . . . . . . . . . 42
ARTICLE IX. TERMINATION AND ABANDONMENT . . . . . . . . . . 42
SECTION 9.01 Right of Termination. . . . . . . . . . . . . . 42
SECTION 9.02 Notice of Termination . . . . . . . . . . . . . 43
SECTION 9.03 Effect of Termination . . . . . . . . . . . . . 43
ARTICLE X. CONFIDENTIAL INFORMATION. . . . . . . . . . . . 43
SECTION 10.01 Definition of "Recipient," "Disclosing Party"
and "Representative" . . . . . . . . . . . 43
SECTION 10.02 Definition of "Subject Information" . . . . . . 43
SECTION 10.03 Confidentiality . . . . . . . . . . . . . . . . 44
SECTION 10.04 Securities Law Concerns . . . . . . . . . . . . 44
SECTION 10.05 Return of Subject Information . . . . . . . . . 44
SECTION 10.06 Specific Performance/Injunctive Relief. . . . . 44
ARTICLE XI. INDEMNIFICATION . . . . . . . . . . . . . . . . 45
SECTION 11.01 Indemnification by Independent. . . . . . . . . 45
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SECTION 11.02 Indemnification by the Primary Shareholders . . 45
SECTION 11.03 General Indemnification Provisions. . . . . . . 45
SECTION 11.04 Procedure for Indemnification . . . . . . . . . 45
ARTICLE XII. MISCELLANEOUS . . . . . . . . . . . . . . . . . 46
SECTION 12.01 Survival of Representations and Warranties. . . 46
SECTION 12.02 Expenses. . . . . . . . . . . . . . . . . . . . 46
SECTION 12.03 Brokerage Fees and Commissions. . . . . . . . . 46
SECTION 12.04 Entire Agreement. . . . . . . . . . . . . . . . 47
SECTION 12.05 Further Cooperation . . . . . . . . . . . . . . 47
SECTION 12.06 Severability. . . . . . . . . . . . . . . . . . 47
SECTION 12.07 Notices . . . . . . . . . . . . . . . . . . . . 47
SECTION 12.08 GOVERNING LAW . . . . . . . . . . . . . . . . . 49
SECTION 12.09 Multiple Counterparts . . . . . . . . . . . . . 49
SECTION 12.10 Certain Definitions . . . . . . . . . . . . . . 49
SECTION 12.11 Specific Performance. . . . . . . . . . . . . . 50
SECTION 12.12 Attorneys' Fees and Costs . . . . . . . . . . . 51
SECTION 12.13 Rules of Construction . . . . . . . . . . . . . 51
SECTION 12.14 Binding Effect; Assignment. . . . . . . . . . . 51
SECTION 12.15 Public Disclosure . . . . . . . . . . . . . . . 51
SECTION 12.16 Extension; Waiver . . . . . . . . . . . . . . . 52
SECTION 12.17 Amendments. . . . . . . . . . . . . . . . . . . 52
SECTION 12.18 Delivery of Schedules . . . . . . . . . . . . . 52
<PAGE>
EXHIBITS
Exhibit A - Bank Merger Agreement
Exhibit B - Voting Agreement and Irrevocable Proxy
Exhibit C - Opinion of Counsel to Independent and New
Independent
Exhibit D - Opinion of Counsel to Crown Park
Exhibit E - Form of Promissory Note
SCHEDULES
Schedule 3.03 - Outstanding Convertible Securities
Schedule 3.04 - Compliance with Laws, Permits and
Instruments
Schedule 3.07 - Litigation
Schedule 3.08 - Consents and Approvals
Schedule 3.09 - Undisclosed Liabilities
Schedule 3.10 - Liens, Mortgages, Security Interests and
Encumbrances
Schedule 3.11 - Certain Changes or Events
Schedule 3.12 - Contracts
Schedule 3.13 - Tax Matters
Schedule 3.14 - Insurance
Schedule 3.16 - Proprietary Rights
Schedule 3.17 - Transactions With Insiders
Schedule 3.18 - Credit Information
Schedule 3.20 - Condition of Assets
Schedule 3.21 - Environmental Compliance
Schedule 3.22 - Regulatory Compliance
Schedule 3.30 - Voting Trust or Buy-Sell Agreements
Schedule 3.31 - Employee Benefit Plans
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is made and entered into as of the 11th day of July, 1996, by and
between Independent Bankshares, Inc., a Texas corporation and
registered bank holding company with its principal offices in
Abilene, Texas ("Independent"), and Crown Park Bancshares, Inc., a
Texas corporation and registered bank holding company with its
principal offices in Lubbock, Texas ("Crown Park").
W I T N E S S E T H:
WHEREAS, Crown Park owns all of the stock of Western National
Bank, Lubbock, Texas, a national banking association (the "Bank");
and
WHEREAS, Independent desires to acquire all of the issued and
outstanding stock of Crown Park through the merger of New
Independent, a wholly-owned direct or indirect subsidiary of
Independent ("New Independent") with and into Crown Park
(the "Merger"); and
WHEREAS, Independent and Crown Park believe that the Merger,
as provided for and subject to the terms and conditions set forth
in this Agreement and all exhibits, schedules and supplements
hereto, is in the best interests of Independent, Crown Park and
their respective shareholders; and
WHEREAS, Independent and Crown Park desire to set forth
certain representations, warranties and covenants made by each to
the other as an inducement to the execution and delivery of this
Agreement and certain additional agreements related to the
transactions contemplated hereby; and
WHEREAS, the respective boards of directors of Independent and
Crown Park have approved this Agreement and the proposed
transactions substantially on the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, for and in consideration of the foregoing and
of the mutual representations, warranties, covenants and agreements
contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the conditions set forth below,
Independent and Crown Park undertake, promise, covenant and agree
with each other as follows:
ARTICLE I.
ACQUISITION OF CROWN PARK BY INDEPENDENT
SECTION 1.01 Merger of New Independent with and into Crown
Park. Subject to the terms and conditions of this Agreement,
Independent shall cause New Independent to be merged
<PAGE>
with and into Crown Park pursuant to the provisions of Part Five of
the Texas Business Corporation Act (the "TBCA") and with the effect
provided in Article 5.06 of the TBCA.
SECTION 1.02 Effects of the Merger. The Merger shall have
the effects set forth in Article 5.06 of the TBCA. Following the
Merger, Crown Park shall continue as the corporation resulting from
the Merger (the "Resulting Corporation"), and the separate
corporate existence of New Independent shall cease. The name of
the Resulting Corporation shall be "Crown Park Bancshares, Inc."
The existing offices and facilities of Crown Park immediately
preceding the Merger shall be the principal offices and facilities
of the Resulting Corporation following the Merger. At the
Effective Date, all rights, title and interests to all real estate
and other property owned by each of New Independent and Crown Park
shall be allocated to and vested in the Resulting Corporation
without reversion or impairment, without further act or deed, and
without any transfer or assignment having occurred, but subject to
any existing liens or encumbrances thereon. At the Effective Date,
all liabilities and obligations of New Independent and Crown Park
shall be allocated to the Resulting Corporation, and the Resulting
Corporation shall be the primary obligor therefor and no other
party to the Merger shall be liable therefor. At the Effective
Date, at the election of the Resulting Corporation, a proceeding
pending by or against Crown Park may be continued as if the Merger
did not occur, or the Resulting Corporation may be substituted in
the proceedings.
SECTION 1.03 Articles of Incorporation and Bylaws. The
Articles of Incorporation and Bylaws, respectively, of New
Independent shall continue as the Articles of Incorporation and
Bylaws of the Resulting Corporation.
SECTION 1.04 Directors and Officers. The directors, advisory
directors and officers, respectively, of New Independent at the
Effective Date shall be the directors, advisory directors and
officers of the Resulting Corporation and each of them shall hold
office from the Effective Date until their respective successors
are duly elected or appointed, as the case may be, and qualified in
the manner provided in the Articles of Incorporation and Bylaws of
the Resulting Corporation or as otherwise provided by law.
SECTION 1.05 Conversion of the Crown Park Common Stock. At
the Effective Date by virtue of this Agreement and without any
further action on the part of Independent, Crown Park, or any
holder:
(i) Each holder of the common stock of Crown Park,
par value $5.00 per share (the "Crown Park
Common Stock"), shall be entitled to receive from New
Independent for each share of Crown Park Common Stock
owned by such holder as of the Effective Date, an amount
of cash equal to $39.00 per share (the "Per Share
Consideration"), or $7,424,508 (the "Merger
Consideration") in the aggregate, subject to adjustment
as set forth below.
(a) If the Closing Date (as defined in
Section 2.01) occurs after January 1, 1997, the
Merger Consideration will increase by an amount
equal to the amount of interest earned on the
Merger Consideration from
<PAGE>
January 1, 1997 through the Closing Date at a rate
equal to the 26-week United State Treasury Bill
rate plus two percent.
(b) The amount of the Merger Consideration
shall be reduced by $166,575.50, which amount shall
be paid at the Closing by Independent to Bryn Jan
Financial Corporation in full payment of the $0.875
per share brokerage fee.
(c) In the event that the Bank fails to
purchase a three-year "tail" coverage rider to its
D&O Insurance Policy, Independent may purchase such
coverage, and the Merger Consideration shall be
decreased dollar for dollar equal to the cost
incurred by Independent in connection with
obtaining such coverage.
(d) In addition to the Merger Consideration,
Independent agrees that Crown Park may pay a
dividend in the amount of $150,000 to its
shareholders prior to the Closing Date provided,
however, that the Merger Consideration shall be
decreased dollar for dollar by the amount by which
the Bank's shareholders' equity, after giving
effect to all such dividends and distributions, as
calculated in accordance with generally accepted
accounting principles ("GAAP") applied consistently
with past practices, at the Effective Date is less
than $5,400,000 and provided further that the
Merger Consideration shall be further reduced if
the shareholders' equity of Crown Park, after
giving effect to all such dividends and
distributions, calculated in accordance with GAAP,
applied consistently with past practices at the
Effective Date is less than $4,000,000. For
purposes of this calculation, in the event that
both the Bank's shareholders' equity and Crown
Park's shareholders' equity are below the required
amount, then the amount by which those equity
accounts are below such required amounts will be
deducted only once from the Merger Consideration.
(e) For purposes of this Section 1.05(i), the
Per Share Consideration shall be either increased
or decreased, as the case may be, by an amount
equal to the quotient of the net increase or
decrease in the Merger Consideration determined by
applying (a) through (d) above divided by the
number of shares of Crown Park issued and
outstanding at the Effective Date.
(ii) The number of shares of common stock of New
Independent (the "New Independent Common Stock")
outstanding at the Effective Date shall, at the Effective
Date and by virtue of the Merger and without any action
on the part of Independent or any other party as holder
thereof, be converted into a like number of shares of
common stock of the Resulting Corporation with a par
value of $1.00 per share, with the effect that the number
of shares of the common stock of the Resulting
Corporation outstanding immediately after the Effective
Date shall
<PAGE>
be equal to the aggregate number of shares of New
Independent Common Stock outstanding immediately before
the Effective Date. The authorized number of shares of
common stock of the Resulting Corporation shall be the
same as the authorized number of shares of New
Independent Common Stock immediately prior to the
Effective Date.
(iii) The shares of the Crown Park Common Stock
issued and outstanding at the Effective Date shall, by
operation of law and without any action on the part of
the holder thereof, unless dissenters' rights under
applicable law are being perfected with respect thereto,
be converted into the right to receive the consideration
set forth in Section 1.05(i); provided, however, the
holders of the Crown Park Common Stock shall have the
option to elect to receive part or all, as the case may
be, of their portion of the Merger Consideration in the
form of promissory notes payable in equal annual
principal payments over a period of five years at a rate
of interest equal to the 26-week United States Treasury
Bill rate plus two percent, with such rate adjusted
quarterly. The notes shall provide that interest shall
be paid quarterly and that principal shall be paid
annually. The promissory notes shall be in the form of
the attached Exhibit E. The maximum amount of the Merger
Consideration that the holders of the Crown Park Common
Stock may elect to have paid pursuant to promissory notes
in the form described above is $3,000,000. In the event
that the number of holders of the Crown Park Common Stock
who elect to receive a portion of the Merger
Consideration in the form of promissory notes is such
that the amount of the Merger Consideration to be paid
pursuant to promissory notes would be greater than
$3,000,000, then Independent shall allocate the payment
of the Merger Consideration by promissory notes pro rata
among the holders of Crown Park Common Stock electing
payment by promissory notes such that the total amount of
Merger Consideration paid by promissory notes is equal to
$3,000,000.
(iv) In addition to the Merger Consideration,
Independent agrees that the Resulting Corporation shall
assume the existing indebtedness on the books of Crown
Park at the Effective Date; provided, however, that the
total amount of debt incurred by Independent and its
subsidiaries, including the promissory notes issued as
part of the Merger Consideration as described in Section
1.05(iii), shall be less than or equal to $4,000,000. In
the event that the total amount of debt incurred by
Independent and its subsidiaries would be greater than
$4,000,000, then Independent shall allocate the payment
of the Merger Consideration by promissory notes pro rata
among the holders of Crown Park Common Stock electing
payment by promissory notes such that the total amount of
debt incurred by Independent and its subsidiaries is
equal to $4,000,000.
(v) On or following the Effective Date, each holder
of the Crown Park Common Stock shall be required to
surrender its shares of Crown Park Common Stock to
Independent as the Exchange Agent and, upon such
surrender, each such holder shall be entitled to receive
from Independent an amount of cash as
<PAGE>
determined pursuant to Section 1.05(i). Until so
surrendered, each such outstanding certificate
representing shares of Crown Park Common Stock shall be
deemed for all purposes, subject only to dissenters'
rights under applicable law, to evidence solely the right
to receive such consideration from Independent as
described in Section 1.05.
SECTION 1.06 Shareholders' Meeting. Crown Park, acting
through its Board of Directors, shall, in accordance with
applicable law:
A. Duly call, give notice of, convene and hold a
meeting of its shareholders (the "Shareholders' Meeting") as
soon as practicable for the purpose of approving and adopting
the Merger and this Agreement and the transactions
contemplated hereby and thereby;
B. Require no greater than the minimum vote of each
class of stock of Crown Park required by the terms of each
class of stock and applicable law in order to approve the
Merger and this Agreement;
C. Subject to its fiduciary duties to the shareholders
of Crown Park, include in the Proxy Statement (defined in
Section 1.06(D), below) the recommendation of its Board of
Directors that the shareholders of Crown Park vote in favor of
the approval and adoption of the Merger and this Agreement and
the transactions contemplated hereby and thereby; and
D. Cause the Proxy Statement to be mailed to the
shareholders of Crown Park as soon as practicable, and use its
best efforts to obtain the approval and adoption of the Merger
and this Agreement by shareholders holding at least the
minimum number of shares of each class of the stock of Crown
Park entitled to vote at the Shareholders' Meeting necessary
to approve the Merger and this Agreement under applicable law.
The letter to shareholders, notice of meeting, prospectus,
proxy statement and form of proxy to be distributed to
shareholders in connection with the Merger and this Agreement
shall be in form and substance satisfactory to Independent and
are collectively referred to herein as the "Proxy Statement."
SECTION 1.07 Delivery of Consideration. At the Closing,
Crown Park shall provide Independent with a shareholder list, which
list shall be certified by an officer of Crown Park. Provided that
all necessary shareholder and regulatory approvals have been
obtained, Independent shall forward letters of transmittal for use
in exchanging such holder's certificates for the Merger
Consideration to all of the shareholders on the certified
shareholder list as promptly as possible, but in no event later
than three (3) business days after the Effective Date. Promptly
after receipt of such certificates and letter of transmittal,
Independent shall review the executed letters of transmittal in
order to verify proper execution. Provided that the letter of
transmittal is properly completed, accompanied by all of the
appropriate stock certificates and made available for review by
Independent or its Exchange Agent, New Independent shall pay to
such shareholder the consideration set forth in Section 1.05, with
respect to shares of the Crown Park Common Stock.
<PAGE>
Shareholders who do not provide properly completed letters of
transmittal and all appropriate stock certificates to Independent
shall receive their consideration promptly following receipt of
these documents by Independent. In the event that a letter of
transmittal contains an error, is incomplete or is not accompanied
by all appropriate stock certificates, then Independent will notify
the shareholder promptly of the need for further information. If
any record shareholder of Crown Park is unable to locate any
certificate evidencing the Crown Park Common Stock, such
shareholder shall submit an indemnity agreement to Independent or
its Exchange Agent in a form acceptable to Independent in its sole
discretion in lieu of such certificate. Notwithstanding the
foregoing, neither the Exchange Agent nor any other party to this
Agreement shall be liable to any holder of certificates
representing the Crown Park Common Stock for any amount paid to a
public official pursuant to any applicable abandoned property,
escheat or similar law. Except as specifically provided by Section
1.05, no interest shall be payable with respect to the payment of
the Merger Consideration.
SECTION 1.08 Bank Merger Agreement. In its sole discretion,
Independent may request and Crown Park shall be required to cause
the Bank to enter into a merger agreement (the "Bank Merger
Agreement"), the form of which is attached hereto as Exhibit A,
pursuant to which the Bank will be merged (the "Bank Merger") with
and into First State Bank, N.A. The Bank shall execute the Bank
Merger Agreement, obtain all such corporate approvals for the Bank
Merger and take all such other actions as need be in a manner such
that Independent, the Resulting Corporation and First State Bank,
N.A. will be able to obtain all necessary regulatory approvals for
the Bank Merger prior to the Closing Date, and Independent will be
able to cause the Bank Merger to be consummated immediately after
the effective time of the Merger.
ARTICLE II.
THE CLOSING AND THE CLOSING DATE
SECTION 2.01 Time and Place of the Closing and Closing Date.
On a date mutually agreeable to Crown Park and Independent within
thirty (30) calendar days after the receipt of all necessary
regulatory, corporate and other approvals and the expiration of any
mandatory waiting periods (herein called the "Closing Date"), a
meeting (the "Closing") will take place at which the parties to
this Agreement will exchange certificates, opinions, letters and
other documents in order to determine whether all of the conditions
set forth in Articles VII and VIII of this Agreement have been
satisfied or waived or whether any condition exists that would
permit a party to this Agreement to terminate this Agreement. If
no such condition then exists or if no party elects to exercise any
right it may have to terminate this Agreement, then and thereupon
the appropriate parties shall execute such documents and
instruments as may be necessary or appropriate in order to effect
the transactions contemplated by this Agreement.
The Closing shall take place at the offices of Western
National Bank, 82nd & Nashville Avenue, Lubbock, Texas 79453 on the
Closing Date, or at such other place to which the parties may
agree.
<PAGE>
SECTION 2.02 Actions to be Taken at the Closing by Crown
Park. At the Closing, Crown Park shall execute and acknowledge
(where appropriate) and deliver to Independent, such documents and
certificates necessary to carry out the terms and provisions of
this Agreement, including without limitation, the following (all of
such actions constituting conditions precedent to Independent's
obligations to close hereunder):
A. True, correct and complete copies of the Articles of
Incorporation of Crown Park and all amendments thereto, duly
certified as of a recent date by the Secretary of State of the
State of Texas.
B. True, correct and complete copies of the Articles of
Association of the Bank and all amendments thereto, duly
certified as of a recent date by the Office of the Comptroller
of the Currency (the "OCC").
C. A certificate of existence, dated as of a recent
date, issued by the Secretary of State of the State of Texas,
duly certifying as to the existence of Crown Park in Texas.
D. A certificate of existence, dated as of a recent
date, issued by the Office of the Comptroller of the Currency,
duly certifying as to the existence of the Bank.
E. A certificate of good standing, which certificate
shall be valid for purposes of merger, dated as of a recent
date, issued by the Texas Comptroller of Public Accounts, duly
certifying as to the good standing of Crown Park in the State
of Texas.
F. A certificate of good standing, dated as of a recent
date, issued by the Texas Comptroller of Public Accounts, duly
certifying as to the good standing of the Bank in the State of
Texas.
G. A certificate, dated as of a recent date, issued by
the Federal Deposit Insurance Corporation (the "FDIC"), duly
certifying that the deposits of the Bank are insured by the
FDIC pursuant to the Federal Deposit Insurance Act
(the "FDIA").
H. A certificate duly executed by the Secretary or an
Assistant Secretary of Crown Park, acting solely in his
capacity as an officer of Crown Park, pursuant to which Crown
Park shall certify (a) the due adoption by the Board of
Directors of Crown Park of corporate resolutions attached to
such certificate authorizing the execution and delivery of
this Agreement and the other agreements and documents
contemplated hereby, and the taking of all actions
contemplated hereby and thereby; (b) the authorization of the
shareholders of Crown Park of the transactions and the
execution and delivery of this Agreement and the other
agreements and documents contemplated hereby and the taking of
all actions contemplated hereby and thereby; (c) the
incumbency and true signatures of those officers of Crown Park
duly authorized to act on its behalf in connection with the
transactions contemplated by this Agreement and to execute and
deliver this Agreement and other agreements and documents
contemplated hereby and the taking of all actions contemplated
hereby and thereby on behalf of Crown Park, and (d) that the
copy of the
<PAGE>
Bylaws of Crown Park attached to such certificate is true and
correct and such Bylaws have not been amended except as
reflected in such copy.
I. A certificate duly executed by the Cashier or an
Assistant Cashier of the Bank, acting solely in his capacity
as an officer of the Bank, pursuant to which the Bank shall
certify that the copy of the Bylaws attached to such
certificate is true and correct and such Bylaws have not been
amended except as reflected in such copy.
J. A certificate duly executed by a duly authorized
officer of Crown Park, acting solely in his capacity as an
officer of Crown Park, dated as of the Closing Date, pursuant
to which Crown Park shall certify that all of the
representations and warranties made in Article III of this
Agreement are true and correct on and as of the date of such
certificate as if made on such date and that except as
expressly permitted by this Agreement there shall have been no
Material Adverse Change since December 31, 1995.
K. All consents required to be obtained by Crown Park
from third parties to consummate the transactions contemplated
by this Agreement, including, but not limited to, those listed
on Schedule 3.08.
L. An opinion of counsel to Crown Park in accordance
with this Agreement.
M. All other documents required to be delivered to
Independent by Crown Park under the provisions of this
Agreement, and all other documents, certificates and
instruments as are reasonably requested by Independent or its
counsel.
SECTION 2.03 Actions to be Taken at the Closing by
Independent. At the Closing, Independent shall execute and
acknowledge (as appropriate) and deliver to Crown Park, such
documents and certificates necessary to carry out the terms and
provisions of this Agreement, including without limitation, the
following (all of such actions constituting conditions precedent to
Crown Park's obligations to close hereunder):
A. True, correct and complete copies of New
Independent's Articles of Incorporation and all amendments
thereto, duly certified as of a recent date by the Secretary
of State of the State of Texas.
B. Good standing and existence certificates for
Independent, dated as of a recent date, issued by the
appropriate state officials, duly certifying as to the
existence and good standing of Independent in the State of
Texas.
C. A certificate, dated as of the Closing Date,
executed by the Secretary or an Assistant Secretary of
Independent, acting solely in his capacity as an officer of
Independent, pursuant to which Independent shall certify
(a) the due adoption by the Board of Directors of Independent
of corporate resolutions attached to such certificate
authorizing the execution and delivery of this Agreement and
the other agreements and documents contemplated hereby and the
taking of all actions contemplated hereby and thereby; (b) the
<PAGE>
incumbency and true signatures of those officers of
Independent duly authorized to act on its behalf in connection
with the transactions contemplated by this Agreement and to
execute and deliver this Agreement and other agreements and
documents contemplated hereby and the taking of all actions
contemplated hereby and thereby on behalf of Independent, and
(c) that the copy of the Bylaws of Independent attached to
such certificate is true and correct and such Bylaws have not
been amended except as reflected in such copy.
D. A certificate duly executed by the Secretary or an
Assistant Secretary of New Independent, acting solely in his
capacity as an officer of New Independent, pursuant to which
New Independent shall certify (a) the due adoption by the
Board of Directors of New Independent of corporate resolutions
attached to such certificate authorizing the execution and
delivery of this Agreement and the taking of all actions
contemplated thereby; (b) the incumbency and true signatures
of those officers of New Independent duly authorized to act on
its behalf in connection with the transactions contemplated by
this Agreement and to execute and deliver this Agreement and
the taking of all actions contemplated hereby on behalf of New
Independent, and (c) that the copy of the Bylaws of New
Independent attached to such certificate is true and correct
and such Bylaws have not been amended except as reflected in
such copy.
E. True, correct and complete copies of the Certificate
of Merger of New Independent with and into Crown Park, duly
certified as of a recent date by the Secretary of State of the
State of Texas.
F. A certificate, dated as of the Closing Date,
executed by a duly authorized officer of Independent, acting
solely in his capacity as an officer of Independent, pursuant
to which Independent shall certify that all of the
representations and warranties made in Article IV of this
Agreement are true and correct on and as of the date of such
certificate as if made on such date.
G. All consents required to be obtained by Independent
from third parties to consummate the transactions contemplated
by this Agreement.
H. An opinion of counsel to Independent in accordance
with this Agreement.
SECTION 2.04 Further Assurances. At any time and from time
to time after the Closing, at the request of any party to this
Agreement and without further consideration, any party so requested
will execute and deliver such other instruments and take such other
action as the requesting party may reasonably deem necessary or
desirable in order to effectuate the transactions contemplated
hereby. In the event that, at any time after the Closing, any
further action is necessary or desirable to carry out the purposes
of this Agreement, each party hereto shall take or cause to be
taken all such action.
SECTION 2.05 Effective Date. The "Effective Date" as that
term is used in this Agreement means the effective date of the
Merger under this Agreement.
<PAGE>
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF CROWN PARK
Crown Park hereby makes the representations and warranties set
forth in this Article III to Independent. Crown Park agrees at the
Closing to provide Independent with supplemental schedules
reflecting any material changes thereto between the date of this
Agreement and the Closing Date.
SECTION 3.01 Organization and Qualification. Crown Park is
a bank holding company registered under the Bank Holding Company
Act of 1956, as amended. Crown Park is a corporation, duly
organized, validly existing and in good standing under the laws of
the State of Texas. Crown Park has all requisite corporate power
and authority (including all licenses, franchises, permits and
other governmental authorizations as are legally required) to carry
on its business as now being conducted, to own, lease and operate
its properties and assets, including, but not limited to, the Bank,
as now owned, leased or operated and to enter into and carry out
its obligations under this Agreement. True, correct and complete
copies of the Articles of Incorporation and Bylaws of Crown Park as
amended to date, have been delivered to Independent. Crown Park
does not own or control any Affiliate (as defined in Section 12.10)
or Subsidiary (as defined in Section 12.10), other than the Bank.
The nature of the business of Crown Park and its activities do not
require it to be qualified to do business in any jurisdiction other
than the State of Texas. Crown Park has no equity interest, direct
or indirect, in any other bank or corporation or in any
partnership, joint venture or other business enterprise or entity,
other than the Bank or as acquired through settlement of
indebtedness, foreclosure, the exercise of creditors' remedies or
in a fiduciary capacity, and the business carried on by Crown Park
has not been conducted through any other direct or indirect
subsidiary or affiliate of Crown Park other than the Bank.
SECTION 3.02 Execution and Delivery. Crown Park has taken
all corporate action necessary to authorize the execution, delivery
and (provided that the required regulatory and shareholder
approvals are obtained) performance of this Agreement and the other
agreements and documents contemplated hereby to which it is a
party. This Agreement has been, and the other agreements and
documents contemplated hereby have been, or at Closing will be,
duly executed by Crown Park and each constitutes the legal, valid
and binding obligation of Crown Park, enforceable in accordance
with its respective terms and conditions, except as enforceability
may be limited by bankruptcy, conservatorship, insolvency,
moratorium, reorganization, receivership or similar laws and
judicial decisions affecting the rights of creditors generally and
by general principles of equity (whether applied in a proceeding at
law or in equity).
SECTION 3.03 Crown Park Capitalization. The entire
authorized capital stock of Crown Park consists solely of 1,000,000
shares of Crown Park Common Stock, par value $5.00 per share, of
which 190,372 shares are issued and outstanding and none of which
are held in treasury. Except as disclosed on Schedule 3.03, there
are no (i) other outstanding equity securities of any kind or
character, (ii) outstanding subscriptions, options, convertible
securities, rights, warrants, calls or other agreements or
commitments of any kind issued or granted by, or binding upon,
Crown Park to purchase or otherwise acquire any security of or
equity interest in Crown Park,
<PAGE>
obligating Crown Park to issue any shares of, restricting the
transfer of or otherwise relating to shares of its capital stock of
any class. All of the issued and outstanding shares of Crown Park
Common Stock have been duly authorized, validly issued and are
fully paid and nonassessable, and have not been issued in violation
of the preemptive rights of any person. Such shares of Crown Park
Common Stock have been issued in compliance with the securities
laws of the United States and other jurisdictions having applicable
securities laws. There are no restrictions applicable to the
payment of dividends on the shares of Crown Park Common Stock
except pursuant to applicable laws and regulations, and all
dividends declared prior to the date of this Agreement have been
paid.
SECTION 3.04 Compliance with Laws, Permits and Instruments.
Except as disclosed on Schedule 3.04, Crown Park and the Bank have
in all material respects performed and abided by all obligations
required to be performed by it to the date hereof, and each of them
has complied with, and each of them is in compliance with, and is
not in default (or with the giving of notice or the passage of time
will be in default) under, or in violation of, (i) any provision of
the Articles of Incorporation or Association or Bylaws of Crown
Park or the Bank, (ii) any material provision of any material
mortgage, indenture, lease, contract, agreement or other instrument
applicable to Crown Park, the Bank or their respective assets,
operations, properties or businesses now conducted or heretofore
conducted or (iii) is in material compliance with any permit,
concession, grant, franchise, license, authorization, judgment,
writ, injunction, order, decree, award, statute, federal, state or
local law, ordinance, rule or regulation of any court, arbitrator
or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality applicable to
Crown Park, the Bank or their respective assets, operations,
properties or businesses now conducted or heretofore conducted.
Except as set forth on Schedule 3.04, the execution, delivery
and (provided the required regulatory and shareholder approvals are
obtained) performance of this Agreement and the other agreements
contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby will not conflict with, or result,
by itself or with the giving of notice or the passage of time, in
any violation of or default or loss of a benefit under, (i) any
provision of the Articles of Incorporation or Association or Bylaws
of Crown Park or the Bank, (ii) any material mortgage, indenture,
lease, contract, agreement or other instrument applicable to Crown
Park, the Bank or their respective assets, operations, properties
or businesses or (iii) any permit, concession, grant, franchise,
license, authorization, judgment, writ, injunction, order, decree,
statute, law, ordinance, rule or regulation applicable to Crown
Park, the Bank or their respective assets, operations, properties
or businesses.
SECTION 3.05 Crown Park Financial Statements. Crown Park has
furnished to Independent true and complete copies of (i) the
audited consolidated balance sheets of Crown Park as of
December 31, 1995, 1994 and 1993, and the related audited
consolidated statements of income, stockholders' equity and cash
flows for the years ended December 31, 1995, 1994 and 1993, (ii)
unaudited parent only and consolidated balance
<PAGE>
sheets of Crown Park as of March 31, 1996 and the related unaudited
consolidated statements of income for the three-month period ended
March 31, 1996 and (iii) the Statements of Condition and Income
("Call Reports") of the Bank as of and for the period ended March
31, 1996 (such parent only and consolidated balance sheets and the
related statements of income, stockholders' equity and cash flows
of Crown Park and Call Reports of the Bank are collectively
referred to herein as the "Financial Statements"). Except as
described in the notes to the Financial Statements, the Crown Park
Financial Statements fairly present, in all material respects, the
financial position of Crown Park as of the respective dates thereof
and the results of operations and changes in financial position of
Crown Park for the periods then ended, in conformity with GAAP,
unless otherwise instructed by the Instructions to the Call
Reports, which instructions represent regulatory accounting
principles ("RAP") in which instance such information is presented
in conformity with RAP, applied on a basis consistent with prior
periods (subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments and the fact that they
do not contain all of the footnote disclosures required by GAAP),
except as otherwise noted therein, and the accounting records
underlying the Financial Statements accurately and fairly reflect
in all material respects the transactions of Crown Park and the
Bank. The Financial Statements do not contain any items of special
or nonrecurring income or any other income not earned in the
ordinary course of business except as expressly specified therein.
SECTION 3.06 The Bank.
A. The Bank is a national banking association duly
organized, validly existing and in good standing under the
laws of the United States and in good standing under all laws,
rules, and regulations applicable to national banking
associations domiciled in the State of Texas. The Bank has
all requisite corporate power and authority (including all
licenses, franchises, permits and other governmental
authorizations as are legally required) to carry on its
business as now being conducted, to own, lease and operate its
properties and assets as now owned, leased or operated and to
enter into and to carry on the business and activities now
conducted by it. The Bank is an insured bank as defined in
the Federal Deposit Insurance Act. The Bank does not own or
control any Affiliate or Subsidiary. The nature of the
business of the Bank does not require it to be qualified to do
business in any jurisdiction other than the State of Texas.
The Bank has no equity interest, direct or indirect, in any
other bank or corporation or in any partnership, joint venture
or other business enterprise or entity, except as acquired
through settlement of indebtedness, foreclosure, the exercise
of creditors' remedies or in a fiduciary capacity, and the
business carried on by the Bank has not been conducted through
any other direct or indirect Subsidiary or Affiliate of the
Bank.
B. The entire authorized capital stock of the Bank
consists solely of 200,000 shares of common stock of the Bank,
par value $7.50 per share (the "Bank Stock"), all of which are
issued and outstanding. All of the issued and outstanding
shares of the Bank Stock have been duly authorized, validly
issued and are fully paid and, except as provided in 12 U.S.C.
Section 55, nonassessable, and have not and will not have been
issued in violation of the preemptive rights of any person.
The securities of the Bank have been issued in compliance with
the securities laws of the United States and the State of
Texas. Except as set forth on Schedule 3.06B, Crown Park is,
and as of the Closing Date will be, the lawful record and
beneficial owner of all of the outstanding securities of the
Bank, free and clear of any liens, claims, encumbrances,
security interests or restrictions of any kind.
<PAGE>
There are no outstanding subscriptions, options, warrants,
calls, contracts, demands, commitments, convertible securities
or other agreements or arrangements of any character or nature
whatever under which Crown Park or the Bank is or may become
obligated to issue, assign or transfer any securities of the
Bank. There are no restrictions applicable to the payment of
dividends on the shares of the Bank Stock except pursuant to
applicable laws and regulations.
C. The Bank's March 31, 1996 Call Report fairly
presents, in all material respects, the financial position of
the Bank and the results of its operations at the date and for
the period indicated in conformity with the Instructions for
the Preparation of Call Reports as promulgated by applicable
regulatory authorities. The Call Report does not contain any
items of special or nonrecurring income or any other income
not earned in the ordinary course of business except as
expressly specified therein. The Bank has calculated its
allowance for loan losses in accordance with RAP as applied to
banking institutions and in accordance with all applicable
rules and regulations. The allowance for loan losses account
for the Bank is, and as of the Closing Date will be adequate,
and in the minimum amount of $350,000 after giving recognition
to all known losses, to provide for all losses, net of
recoveries relating to loans previously charged off, on all
outstanding loans of the Bank.
SECTION 3.07 Litigation. Except as set forth on Schedule
3.07, there are no actions, claims, suits, investigations, reviews
or other legal, quasi-judicial or administrative proceedings of any
kind or nature now pending or, to the best knowledge of Crown Park,
threatened against or affecting Crown Park or the Bank at law or in
equity, or by or before any federal, state or municipal court or
other governmental or administrative department, commission, board,
bureau, agency or instrumentality, domestic or foreign, that in any
manner involve Crown Park or the Bank or any of their properties or
capital stock that might reasonably be anticipated to result in a
Material Adverse Change or materially and adversely affect the
transactions contemplated by this Agreement, and neither Crown Park
nor the Bank know or have any reason to be aware of any basis for
the same. No legal action, suit or proceeding or judicial,
administrative or governmental investigation is pending or, to the
best knowledge of Crown Park, threatened against Crown Park or the
Bank that questions or might question the validity of this
Agreement or the agreements contemplated hereby, or any actions
taken or to be taken by Crown Park or the Bank pursuant hereto or
thereto or seeks to enjoin or otherwise restrain the transactions
contemplated hereby or thereby.
SECTION 3.08 Consents and Approvals. Crown Park's Board of
Directors (at a meeting duly called and held) has resolved to
recommend to Crown Park's shareholders for such shareholders to
vote to approve and adopt the Merger and this Agreement. Except as
disclosed in Schedule 3.08, no approval, consent, order or
authorization of, or registration, declaration or filing with, any
governmental authority or other third party is required on the part
of Crown Park or the Bank in connection with the execution,
delivery or performance of this Agreement or the agreements
contemplated hereby, or the consummation by Crown Park and the Bank
of the transactions contemplated hereby or thereby.
<PAGE>
SECTION 3.09 Undisclosed Liabilities. Neither Crown Park nor
the Bank has any material liability or obligation, accrued,
absolute, contingent or otherwise and whether due or to become due
(including, without limitation, unfunded obligations under any
Employee Benefit Plan (as defined in Section 3.31 of this
Agreement) or liabilities for federal, state or local taxes or
assessments or liabilities under any tax sharing agreements (as
described in Section 3.17 of this Agreement)) that are not
reflected in or disclosed in the Financial Statements except (i)
those liabilities and expenses incurred in the ordinary course of
business and consistent with prudent business practices since the
date of the Financial Statements or (ii) as disclosed on Schedule
3.09.
SECTION 3.10 Title to Assets. True and complete copies of
all existing deeds, leases and title insurance policies for all
real property owned or leased by the Bank and all mortgages, deeds
of trust, security agreements and other documents describing encum-
brances to which such property is subject have been made available
to Independent. Each of Crown Park and the Bank has good and
indefeasible title to all of its assets and properties including,
without limitation, all personal and intangible properties
reflected in the Financial Statements or acquired subsequent
thereto, subject to no liens, mortgages, security interests,
encumbrances or charges of any kind except (i) as described in
Schedule 3.10, (ii) as noted in the Financial Statements, (iii) as
set forth in the documents delivered to Independent pursuant to
this Section 3.10, (iv) statutory liens not yet delinquent, (v)
consensual landlord liens (vi) minor defects and irregularities in
title and encumbrances that do not materially impair the use
thereof for the purpose for which they are held, (vii) pledges of
assets in the ordinary course of business to secure public funds
deposits, and (viii) those assets and properties disposed of for
fair value in the ordinary course of business since the dates of
the Financial Statements.
SECTION 3.11 Absence of Certain Changes or Events. Except as
disclosed on Schedule 3.11, since December 31, 1995, each of Crown
Park and the Bank has conducted its business only in the ordinary
course and has not, other than in the ordinary course of business
and consistent with past practices and safe and sound banking
practices:
A. Incurred any obligation or liability, absolute,
accrued, contingent or otherwise, whether due or to become
due, except deposits taken and federal funds purchased and
current liabilities for trade or business obligations, none of
which, individually or in the aggregate, result in a Material
Adverse Change;
B. Discharged or satisfied any lien, charge or
encumbrance or paid any obligation or liability, whether
absolute or contingent, due or to become due;
C. Declared or made any payment of dividends or other
distribution to its shareholders, except for (i) dividends by
the Bank to Crown Park and (ii) the dividend specifically
authorized by Section 1.05(i)(d);
D. Purchased, retired or redeemed, or obligated itself
to purchase, retire or redeem, any of its shares of capital
stock or other securities;
<PAGE>
E. Issued, reserved for issuance, granted, sold or
authorized the issuance of any shares of its capital stock or
other securities or subscriptions, options, warrants, calls,
rights or commitments of any kind relating to the issuance
thereto;
F. Acquired any capital stock or other equity
securities or acquired any equity or ownership interest in any
bank, corporation, partnership or other entity (except
(i) through settlement of indebtedness, foreclosure, or the
exercise of creditors' remedies or (ii) in a fiduciary
capacity, the ownership of which does not expose it to any
liability from the business, operations or liabilities of such
person);
G. Mortgaged, pledged or subjected to lien, charge,
security interest or any other encumbrance or restriction any
of its property, business or assets, tangible or intangible
except (i) as described in Schedule 3.09, (ii) statutory liens
not yet delinquent, (iii) consensual landlord liens, (iv)
minor defects and irregularities in title and encumbrances
that do not materially impair the use thereof for the purpose
for which they are held, (v) pledges of assets to secure
public funds deposits, and (vi) those assets and properties
disposed of for fair value since the dates of the Financial
Statements.
H. Sold, transferred, leased to others or otherwise
disposed of any of its assets (except for assets disposed of
for fair value) or canceled or compromised any debt or claim,
or waived or released any right or claim (except pursuant to
the settlement of litigation described in Section 3.11(M)) of
material value;
I. Terminated, canceled or surrendered, or received any
notice of or threat of termination or cancellation of any
contract, lease or other agreement or suffered any damage,
destruction or loss (whether or not constituting, or
reasonably anticipated to constitute, a Material Adverse
Change covered by insurance), which, in any case or in the
aggregate, may result in a Material Adverse Change;
J. Disposed of, permitted to lapse, transferred or
granted any rights under, or entered into any settlement
regarding the breach or infringement of, any United States or
foreign license or Proprietary Right (as defined in Section
3.16) or modified any existing rights with respect thereto;
K. Made any change in the rate of compensation,
commission, bonus or other direct or indirect remuneration
payable, or paid or agreed or orally promised to pay,
conditionally or otherwise, any bonus, extra compensation,
pension or severance or vacation pay, to or for the benefit of
any of its shareholders, directors, officers, employees or
agents, or entered into any employment or consulting contract
or other agreement with any director, officer or employee or
adopted, amended in any material respect or terminated any
pension, employee welfare, retirement, stock purchase, stock
option, stock appreciation rights, termination, severance,
income protection, golden parachute, savings or profit-sharing
plan (including trust agreements and insurance contracts
embodying such plans), any deferred compensation, or
collective bargaining agreement, any group
<PAGE>
insurance contract or any other incentive, welfare or employee
benefit plan or agreement maintained by it for the benefit of
its directors, employees or former employees;
L. Except for improvements or betterments relating to
Properties (as defined in Section 3.21), made any capital
expenditures or capital additions or betterments in excess of
an aggregate of $10,000;
M. Instituted, had instituted against it, settled or
agreed to settle any litigation, action or proceeding before
any court or governmental body relating to its property, other
than routine collection suits instituted by it to collect
amounts owed or suits in which the amount in controversy is
less than $25,000;
N. Suffered any change, event or condition that, in any
case or in the aggregate, has caused or may result in a
Material Adverse Change, or any Material Adverse Change in
earnings or costs or relations with its employees, agents,
depositors, loan customers, correspondent banks or suppliers;
O. Except for the transactions contemplated by this
Agreement or as otherwise permitted hereunder, entered into
any transaction, or entered into, modified or amended any
contract or commitment;
P. Entered into or given any promise, assurance or
guarantee of the payment, discharge or fulfillment of any
undertaking or promise made by any person, firm or
corporation;
Q. Sold, or knowingly disposed of, or otherwise
divested itself of the ownership, possession, custody or
control, of any corporate books or records of any nature that,
in accordance with sound business practice, normally are
retained for a period of time after their use, creation or
receipt, except at the end of the normal retention period;
R. Made any, or acquiesced with any, change in any
accounting methods, principles or material practices except as
required by GAAP or RAP;
S. Sold (provided, however, that payment at maturity is
not deemed a sale) or purchased any investment securities in
excess of an aggregate amount of $100,000;
T. Made, renewed, extended the maturity of, or altered
any of the material terms of any loan to any single borrower
and his related interests in excess of the principal amount of
$50,000; or
U. Entered into any agreement or made any commitment
whether in writing or otherwise to take any of the types of
action described in subsections A. through T. above.
<PAGE>
SECTION 3.12 Contracts. Schedule 3.12 includes a list
identifying:
A. All collective bargaining agreements involving Crown
Park or the Bank and all other agreements with employees, as
a group, of Crown Park or the Bank;
B. All bonus, deferred compensation, pension, profit
sharing, stock options, stock purchase, incentive or
retirement plans or other employee benefit arrangements of
Crown Park or the Bank. Schedule 3.12 reflects all such plans
together with all relevant trust agreements, the latest report
of the trustee or insurance company of the value of the assets
or the cash surrender value of the assets of such plans, and
the latest actuarial evaluation or statement of individual
accounts with respect to such plans;
C. All employment agreements, contracts or commitments,
not terminable at will without contractual penalty, with or
between Crown Park or the Bank and a director, officer or
employee of Crown Park or the Bank;
D. All agreements of guaranty or indemnification, other
than signature guaranties and bank items presented for
collection in the ordinary course of business, running from
Crown Park or the Bank to any person or entity in excess of
$5,000;
E. All agreements, contracts or commitments containing
any covenant limiting the right of Crown Park or the Bank to
engage in any line of business or compete with any person or
entity;
F. All agreements, contracts, or commitments to which
Crown Park or the Bank is a party or by which either of them
is bound evidencing or providing for loans (other than student
loans or loans secured by real property or savings accounts
and made in the ordinary course of business) in excess of
$50,000 or purchase of receivables or other financing in
excess of $50,000 which have been entered into since December
31, 1995;
G. All agreements, contracts or commitments of Crown
Park or the Bank relating to material capital expenditures or
involving material future payments, excluding real estate
borrowings made in the ordinary course of business or existing
leases;
H. All agreements, contracts or commitments relating to
the acquisition of assets or capital stock of any business
enterprise other than assets acquired in the ordinary course
of business of Crown Park or the Bank;
I. All agreements, contracts or commitments involving
Crown Park or the Bank relating to the syndication or
underwriting of conventional or government or other guaranteed
mortgages, loans or mortgage loan pools or other securities
other than such agreements, contracts or commitments made in
the ordinary course of business;
J. All agreements, contracts or commitments to which
Crown Park or the Bank is a party and that may require consent
by any other person or entity in connection with
<PAGE>
the consummation of the transactions contemplated hereby
either to prevent a breach or to continue the effectiveness
thereof;
K. All letters of credit, whether direct pay or
contingent, and all other commitments undertaken by the Bank
in excess of $25,000; and
L. Each lease with a third party where total annual
lease payments are in excess of $5,000 to which Crown Park or
the Bank is a party. Each such lease or agreement is in full
force and effect and constitutes the legal, valid and binding
obligation of the respective parties thereto enforceable in
accordance with its terms except as enforceability may be
limited by bankruptcy, conservatorship, insolvency,
moratorium, reorganization, receivership or similar laws and
judicial decisions affecting the rights of creditors generally
and by general principles of equity (whether applied in a
proceeding at law or equity). Neither Crown Park nor the Bank
has received any notice of material default or any notice of
material noncompliance, including, without limitation,
noncompliance with any applicable Federal, state or local
obligation as lessee that it has not fully performed, or is
aware of any expenditure required under the provisions of any
such lease for any purpose other than payment. For each lease
in which Crown Park or the Bank is named as lessee, such party
is the owner and holder of all the leasehold estates or other
rights and interest purported to be granted by such
instruments, in each case free and clear of any security
interests, claims, liens (including tax liens), forfeitures,
mortgages, pledges, penalties, encumbrances, assignments or
charges whatsoever except as established by the lease or
applicable law. Crown Park and the Bank, respectively, enjoy
peaceful and undisturbed possession under all leases under
which they are currently operating.
SECTION 3.13 Taxes. Except as set forth on Schedule 3.13,
each of Crown Park and the Bank has duly and timely filed with the
appropriate Federal, state and local governmental agencies all tax
returns and reports required to be filed, including, without
limitation, income, excise, property, sales, use, franchise, value
added, unemployment, employees' income withholding and social
security taxes, imposed by the United States or by any foreign
country or by any state, municipality, subdivision or
instrumentality of the United States or of any foreign country, or
by any other taxing authority, and has paid, or has established
adequate reserves for the payment of, all taxes and assessments
that are or are claimed to be due, payable or owed by Crown Park or
the Bank, or for which Crown Park or the Bank may have liability,
whether as a result of their own activities or by virtue of their
affiliation with other entities and all interest and penalties
thereon, whether disputed or not. Except as set forth on Schedule
3.13, all such tax returns and reports are accurately prepared and
all deposits required by law to be made by Crown Park or the Bank,
with respect to employees' withholding taxes have been duly made.
Except set forth on Schedule 3.13, neither Crown Park nor the Bank
is or has been delinquent in the payment of any foreign or domestic
tax, assessment or governmental charge or deposit and has no tax
deficiency or claim outstanding, proposed or assessed against it,
and there is no basis for any such deficiency or claim. Within the
last six (6) years, except as set forth on Schedule 3.13, neither
Crown Park's nor the Bank's Federal income tax return has been
audited or examined and no such audit is currently pending or
threatened. Except as set forth on Schedule 3.13, neither Crown
Park nor the Bank has granted any extension of time with respect to
the date on which any tax
<PAGE>
return was or is due to be filed by or with respect to either Crown
Park or the Bank, or any waiver or agreement by any such entity for
the extension of time for the assessment or collection of any tax.
Except as set forth on Schedule 3.13, neither Crown Park nor the
Bank has committed any violation of any applicable Federal, state,
local or foreign tax laws.
The amounts set up as provisions for current or deferred taxes
on the Financial Statements and the Call Report are sufficient for
the payment of all unpaid Federal, state, county, local, foreign or
other taxes (including any interest or penalties) of or on behalf
of Crown Park and the Bank applicable to the periods covered by
each entity's financial statements, and all years and periods prior
thereto. True and complete copies of the Federal income tax
returns of Crown Park and the Bank as filed with the Internal
Revenue Service (the "IRS") for the years ended December 31, 1995,
1994, and 1993, have been delivered to Independent.
SECTION 3.14 Insurance. Schedule 3.14 contains an accurate
and complete list and brief description of all policies of
insurance, including fidelity and bond insurance, of Crown Park and
the Bank. All such policies (a) are sufficient for compliance by
Crown Park and the Bank with all requirements of law and all
agreements to which Crown Park or the Bank is a party, (b) are
valid, outstanding and enforceable except as enforceability may be
limited by bankruptcy, conservatorship, insolvency, moratorium,
reorganization, receivership, or similar laws and judicial
decisions affecting the rights of creditors generally and by
general principles of equity (whether applied in a proceeding at
law or equity), (c) will not in any significant respect be affected
by, and will not terminate or lapse by reason of, the transactions
contemplated by this Agreement, and (d) are presently in full force
and effect, no notice has been received of the cancellation, or
threatened or proposed cancellation, of any such policy and there
are no unpaid premiums due thereon. Neither Crown Park nor the
Bank is in default with respect to the provisions of any such
policy and has not failed to give any notice or present any claim
hereunder in a due and timely fashion. Neither Crown Park nor the
Bank has been refused any insurance with respect to its assets or
operations, nor has its insurance been limited by any insurance
carrier to which such entity has applied for any such insurance
within the last five (5) years. Each material property of Crown
Park is insured for the benefit of Crown Park in amounts deemed
adequate by Crown Park's management against risks customarily
insured against. Except as set forth on Schedule 3.14, there has
been no single claim under any fidelity bond of Crown Park or the
Bank within the last five (5) years and Crown Park is not aware of
any facts that would form the basis of a claim under such bonds.
SECTION 3.15 No Adverse Change. Except as disclosed in the
representations and warranties made in this Article III and as set
forth on Schedule 3.15, there has not been any Material Adverse
Change since December 31, 1995, nor has any event or condition
occurred that has resulted in, or has a reasonable possibility of
resulting in the future, in a Material Adverse Change.
SECTION 3.16 Proprietary Rights. Except as set forth on
Schedule 3.16, neither Crown Park nor the Bank owns or requires the
use of any patent, patent application, patent right, invention,
process, trademark (whether registered or unregistered), trademark
application, trademark right, trade name, service name, service
mark, copyright or any trade secret
<PAGE>
("Proprietary Rights") for the business or operations of Crown Park
or the Bank. Neither Crown Park nor the Bank are infringing upon
or otherwise acting adversely to, and have not in the past three
(3) years infringed upon or otherwise acted adversely to, any
Proprietary Right owned by any other person or persons. There is
no claim or action by any such person pending, or to the best
knowledge of Crown Park or the Bank threatened, with respect
thereto.
SECTION 3.17 Transactions with Certain Persons and Entities.
Except as disclosed in Schedule 3.17, neither Crown Park nor the
Bank owes any amount to (excluding deposit liabilities), or has any
loan, contract, lease, commitment or other obligation from or to
any of the present or former directors or officers (other than
compensation for current services not yet due and payable and
reimbursement of expenses arising in the ordinary course of
business) of Crown Park or the Bank, and none of such persons owes
any amount to Crown Park or the Bank. Except as set forth on
Schedule 3.17, there are no agreements, instruments, commitments,
extensions of credit, tax sharing or allocation agreements or other
contractual agreements of any kind between or among Crown Park,
whether on its own behalf or in its capacity as trustee or
custodian for the funds of any employee benefit plan (as defined in
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) and any of its Affiliates other than the Bank.
SECTION 3.18 Evidences of Indebtedness. To the best
knowledge of Crown Park and the Bank, all evidences of indebtedness
and leases that are reflected as assets of Crown Park or the Bank
are legal, valid and binding obligations of the respective obligors
thereof, enforceable in accordance with their respective terms
(except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors
generally and the availability of injunctive relief, specific
performance and other equitable remedies) and are not subject to
any known or threatened defenses, offsets or counterclaims that may
be asserted against Crown Park, the Bank or the present holder
thereof, except as disclosed in Schedule 3.18. Except as disclosed
in Schedule 3.18, to the best knowledge of Crown Park and the Bank,
the credit files of the Bank contain all information (excluding
general, local or national industry, economic or similar
conditions) known to Crown Park or the Bank that is reasonably
required to evaluate in accordance with generally prevailing
practices in the banking industry the collectibility of the loan
portfolio of the Bank (including loans that will be outstanding if
any of them advances funds they are obligated to advance). Crown
Park has disclosed all of the substandard, doubtful, loss,
nonperforming or problem loans on the internal watch list of Crown
Park and the Bank, a copy of which as of April 30, 1996 has been
provided to Independent.
SECTION 3.19 Employee Relationships. Each of Crown Park and
the Bank has complied with all applicable material laws relating to
its relationships with its employees, and Crown Park believes that
the relationships between Crown Park and its employees and between
the Bank and its employees are good. To the best knowledge of
Crown Park, no key executive officer or manager of any of the
operations operated by Crown Park or the Bank or any group of
employees of Crown Park or the Bank has or have any present plans
to terminate their employment with Crown Park or the Bank.
SECTION 3.20 Condition of Assets. Except as set forth on
Schedule 3.20, all tangible assets used by Crown Park or the Bank
are in good operating condition, ordinary wear and tear
<PAGE>
excepted, and conform with all applicable ordinances, regulations,
zoning and other laws, whether Federal, state or local. Neither
Crown Park's nor the Bank's premises or equipment are in need of
maintenance or repairs other than ordinary routine maintenance and
repairs that are not material in nature or cost.
SECTION 3.21 Environmental Compliance. Except as disclosed
on Schedule 3.21:
A. Crown Park and all of the Properties and Crown
Park's operations are in material compliance with all
Environmental Laws (as defined in Section 12.10). Neither
Crown Park nor the Bank is aware of, nor has Crown Park or the
Bank received notice of, any past, present, or future
conditions, events, activities, practices or incidents that
may interfere with or prevent the material compliance of Crown
Park or the Bank with all Environmental Laws.
B. Crown Park and the Bank have obtained all material
permits, licenses and authorizations that are required under
all Environmental Laws.
C. No Hazardous Materials (as defined in Section 12.10)
exist on, about or within any of the Properties, nor have any
Hazardous Materials previously existed on, about or within or
been used, generated, stored, transported, disposed of, on or
released from any of the Properties during the period from
their respective dates of acquisition by Crown Park or the
Bank to the present, nor, to the best knowledge of Crown Park,
have any Hazardous Materials previously existed on, about or
within or been used, generated, stored, transported, disposed
of, on or released from any of the Properties prior to their
respective dates of acquisition by Crown Park or the Bank.
The use that Crown Park and the Bank make and intend to make
of the Properties will not result in the use, generation,
storage, transportation, accumulation, disposal or release of
any Hazardous Material on, in or from any of the Properties.
D. There is no action, suit, proceeding, investigation,
or inquiry before any court, administrative agency or other
governmental authority pending or, to the best knowledge of
Crown Park, threatened, against Crown Park or the Bank
relating in any way to any Environmental Law. Neither Crown
Park nor the Bank has any liability for remedial action under
any Environmental Law. Neither Crown Park nor the Bank has
received any request for information by any governmental
authority with respect to the condition, use or operation of
any of the Properties nor has Crown Park or the Bank received
any notice of any kind from any governmental authority or
other person with respect to any violation of or claimed or
potential liability of any kind under any Environmental Law
(including, without limitation, any letter, notice or inquiry
from any person or governmental entity informing Crown Park or
the Bank that they are or may be liable in any way under
CERCLA (as defined in Section 12.10) or requesting information
to enable such a determination to be made).
E. As used in this Section 3.21, the term "Property" or
"Properties" shall include all real property owned or leased
by Crown Park or the Bank, including, but not
<PAGE>
limited to properties that the Bank has foreclosed on as well
as their respective premises and all improvements and fixtures
thereon.
SECTION 3.22 Regulatory Compliance. Except as set forth on
Schedule 3.22, all reports, records, registrations, statements,
notices and other documents or information required to be filed by
Crown Park and the Bank with any federal or state regulatory
authority, including, without limitation, the Federal Reserve, the
OCC, the FDIC and the IRS have been duly and timely filed and all
information and data contained in such reports, records or other
documents are true, accurate, correct and complete. Except as set
forth on Schedule 3.22, neither Crown Park nor the Bank is now or
has been within the last five (5) years subject to any memorandum
of understanding, cease and desist order, written agreement or
other formal or informal administrative action with any such
regulatory bodies. Crown Park does not believe any such regulatory
bodies have any present intent to place Crown Park or the Bank
under any such administrative action. Except as set forth on
Schedule 3.22, there are no actions or proceedings pending or
threatened against Crown Park or the Bank by or before any such
regulatory bodies or any other nation, state or subdivision
thereof, or any other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to government.
SECTION 3.23 Absence of Certain Business Practices. Neither
Crown Park nor the Bank, nor any officer, employee or agent of
Crown Park or the Bank, nor any other person acting on their
behalf, has, directly or indirectly, within the past five (5)
years, given or agreed to give any gift or similar benefit to any
customer, supplier, governmental employee or other person who is
or may be in a position to help or hinder the business of Crown
Park or the Bank (or assist Crown Park or the Bank in connection
with any actual or proposed transaction) that (i) might subject
Crown Park or the Bank to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, (ii) if not
given in the past, might have resulted in a Material Adverse Change
or (iii) if not continued in the future might result in a Material
Adverse Change or might subject the Bank to suit or penalty in any
private or governmental litigation or proceeding.
SECTION 3.24 Proxy Statement. None of the information
supplied or to be supplied by Crown Park, the Bank, or any of their
directors, officers, employees or agents for inclusion in the Proxy
Statement, or any amendment thereof or supplement thereto, will be
false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading, or at the time of the Shareholders' Meeting, be
false or misleading with respect to any material fact, or omit to
state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of any proxy
for the Shareholders' Meeting. All documents that Crown Park or
the Bank are responsible for filing with any regulatory or
governmental agency in connection with the Merger will comply in
all material respects with the provisions of applicable law.
SECTION 3.25 Dissenting Shareholders. Crown Park has no
knowledge of any plan or intention on the part of any Crown Park
shareholders to make written demand for payment of the fair value
of their shares of the Crown Park Common Stock in the manner
provided by applicable law.
<PAGE>
SECTION 3.26 Books and Records. The minute books, stock
certificate books and stock transfer ledgers of Crown Park and the
Bank (i) have been kept accurately in the ordinary course of
business, (ii) are complete and correct in all material respects,
(iii) the transactions entered therein represent bona fide
transactions, and (iv) there have been no transactions involving
the business of Crown Park or the Bank that properly should have
been set forth therein and that have not been accurately so set
forth.
SECTION 3.27 Forms of Instruments, Etc. Crown Park has made,
and will make, available to Independent copies of all standard
forms of notes, mortgages, deeds of trust and other routine
documents of a like nature used on a regular and recurring basis by
Crown Park in the ordinary course of its business.
SECTION 3.28 Fiduciary Responsibilities. Crown Park and the
Bank have performed in all material respects all of their
respective duties as a trustee, custodian, guardian or as an escrow
agent in a manner that complies in all material respects with all
applicable laws, regulations, orders, agreements, instruments and
common law standards, where the failure to so perform would result
in a Material Adverse Change or materially and adversely affect the
transactions contemplated by this Agreement, and neither Crown Park
nor the Bank has any reason to be aware of any basis for the same.
SECTION 3.29 Guaranties. Except for items in the process of
collection in the ordinary course of the Bank's business, none of
the obligations or liabilities of Crown Park or the Bank are
guaranteed by any other person, firm or corporation, nor, except in
the ordinary course of business, according to prudent business
practices and in compliance with applicable law, has Crown Park or
the Bank guaranteed the obligations or liabilities of any other
person, firm or corporation.
SECTION 3.30 Voting Trust or Buy-Sell Agreements. Except as
set forth on Schedule 3.30, Crown Park is not aware of any
agreement between any of its shareholders relating to a right of
first refusal with respect to the purchase or sale by any such
shareholder of capital stock of Crown Park or any voting agreement
or voting trust with respect to shares of capital stock of Crown
Park.
SECTION 3.31 Employee Benefit Plans.
(a) Except as disclosed on Schedule 3.31, neither Crown Park
nor any Affiliate maintains an "employee welfare benefit plan" (as
defined in Section 3(1) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") ("Welfare Benefit Plan")) and
neither Crown Park nor any Affiliate makes or has made (within the
last five years) any contributions to any Welfare Benefit Plan.
Except as disclosed on Schedule 3.31, neither Crown Park nor any
Affiliate is (or has been within the last five years) required to
contribute to any Welfare Benefit Plan on behalf of any Employee or
former employee, including any multiemployer welfare plan (such
Welfare Benefit Plans disclosed on Schedule 3.31 to be hereinafter
collectively referred to as the "Crown Park Welfare Benefit
Plans"). Schedule 3.31 sets forth the amount of any liability of
Crown Park or any Affiliate for any payments past due with respect
to each Crown Park
<PAGE>
Welfare Benefit Plan as of the Closing Date and as of the end of
any month from the date hereof and ending prior to the Closing
Date. Neither Crown Park nor any Affiliate maintains or has
maintained (within the last five years) a voluntary employees'
beneficiary association ("VEBA") which is intended to fund or
implement any Welfare Benefit Plan. Neither Crown Park nor any
Affiliate maintains or has maintained a Welfare Benefit Plan that
is a member of (or participates in) a "multiple employer welfare
arrangement" as defined in Section 3(40) of ERISA or Section 3.95-
1(5) of the Texas Insurance Code, as amended.
(b) Except as disclosed in Schedule 3.31, neither Crown Park
nor any Affiliate maintains an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA and not exempted under Sections
4(b) or 201 of ERISA) ("Pension Benefit Plan"). Except as
disclosed in Schedule 3.31, neither Crown Park nor any Affiliate
contributes to (or within the last five years has been required to
contribute to) any Pension Benefit Plan (such Pension Benefit Plans
disclosed on Schedule 3.31 to be hereinafter collectively referred
to as the "Crown Park Pension Benefit Plans"). With respect to
each Crown Park Pension Benefit Plan which is subject to Title I,
Subtitle B, Part 3 of ERISA, the funding method used in connection
with such Pension Benefit Plan is acceptable under ERISA, and the
actuarial assumptions used in connection with funding such Pension
Benefit Plan, in the aggregate, are reasonable (taking into account
the experience of such Pension Benefit Plan and reasonable
expectations). No "accumulated funding deficiency" (as defined in
Section 302(a)(2) of ERISA) (whether or not waived and whether
arising on account of inadequate Crown Park or Affiliate
contributions, improper amortization of charges or credits in any
funding standard account, improper determination of any such charge
or credit, or any other reason) exists with respect to any plan
year of any Crown Park Pension Benefit Plan subject to Title I,
Subtitle B, Part 3 of ERISA. Neither Crown Park nor any Affiliate
maintains a Pension Benefit Plan that is an "individual account
plan" (as defined in Section 3(34) of ERISA) to which Crown Park
contributes or has in the past contributed. With respect to each
Pension Benefit Plan to which Crown Park or any Affiliates
contribute or to which in the past has contributed, Schedule 3.31
sets forth (A) the amount of any liability of Crown Park or any
Affiliate for contributions due with respect to such Pension
Benefit Plan as of the latest fiscal year end and as of the end of
any subsequent plan year ending prior to the Closing, and the date
as of which such amounts were paid, and (B) the amount of any
contribution paid with respect to such Pension Benefit Plan for the
plan year in which the Closing occurs. As of the Closing Date,
each Crown Park Pension Benefit Plan subject to Title IV of ERISA
could be terminated in a standard termination under Section 4041(b)
of ERISA. Since 1975, neither Crown Park nor any Affiliate: (i)
has or does contribute to; (ii) has or is required to contribute
to; or (iii) has otherwise established or maintained, any
multiemployer plan (as defined in Section 3(37) of ERISA) (such
multiemployer plans being hereinafter collectively referred to as
the "Multiemployer Plans.")
(c) All of the Crown Park Pension Benefit Plans and Crown
Park Welfare Benefit Plans and any related trust agreements or
annuity contracts (or any other funding instruments) comply
currently, and have complied in the past, both as to form and
operation, with the provisions of the applicable documents and all
laws, rules and regulations governing or applying to such plans,
including but not limited to ERISA, the Code, and the Age
Discrimination in Employment Act; all necessary governmental
approvals for the Crown Park Pension Benefit Plans and Crown Park
Welfare Benefit Plans have been obtained; and a favorable
determination as to the qualification
<PAGE>
under the Code of each of the Crown Park Pension Benefit Plans and
each amendment thereto has been made by the Internal Revenue
Service. Each Crown Park Welfare Benefit Plan and each Crown Park
Pension Benefit Plan has been administered to date in compliance
with the requirements of the Code and ERISA, and all reports and
filings required by any government agency with respect to each
Crown Park Welfare Benefit Plan and each Crown Park Pension Benefit
Plan have been timely and completely filed. Future compliance with
the requirements of ERISA as in effect on the date of the Closing
or any collective bargaining agreements to which Crown Park or an
Affiliate is a party will not result in any increase in the rate of
benefit accrual under any Crown Park Pension Benefit Plan except as
otherwise stated in Schedule 3.31.
(d) On and after January 1, 1975, neither Crown Park nor any
Affiliate, nor, to the knowledge of Crown Park or any Affiliate,
any plan fiduciary of any Welfare Benefit Plan or Pension Benefit
Plan, has engaged in any transaction in violation of Sections
406(a) or (b) of ERISA or any "prohibited transaction" (as defined
in Section 4975(c)(1) of the Code), which would subject Crown Park,
any Affiliate, New Independent or Independent to any taxes,
penalties or other liabilities resulting from such prohibited
transaction, and no condition exists that would subject Crown Park,
any Affiliate, New Independent or Independent to any excise tax,
penalty tax or fine related to any Welfare Benefit Plan or Pension
Benefit Plan.
(e) With respect to each Crown Park Pension Benefit Plan
subject to the minimum funding requirements of Code Section 412 and
Title IV of ERISA, (i) Crown Park and Affiliates have paid all
premiums (and interest charges and penalties for late payment, if
applicable) due the Pension Benefit Guaranty Corporation ("PBGC")
with respect to each such Pension Benefit Plan ("Plan") and each
plan year thereof for which such premiums are required, (ii) there
has been no "reportable event" (as defined in Section 4043(b) of
ERISA and the regulations of the PBGC under such Section) for which
the 30 day notice is not waived, (iii) the termination of, or
withdrawal from, any such Plan, on or prior to the Closing Date,
has not and will not subject Crown Park, any Affiliate, New
Independent or Independent to any liability to the PBGC nor to any
other party, (iv) no filing has been made by Crown Park (or any
Affiliate) with the PBGC (and no proceeding has been commenced by
the PBGC) to terminate any such Pension Benefit Plan, (v) no
amendment has occurred which has required or could require Crown
Park, any Affiliate, New Independent or Independent to provide
security to any such Pension Benefit Plan under Code Section
401(a)(29), (vi) all installment contributions required pursuant to
Code Section 412(m) have been paid by Crown Park and all Affiliates
before the due date for such contribution as set forth in Code
Section 412(m) for each such Plan, and (vii) no partial termination
has occurred or is expected to occur in connection with the Closing
or otherwise. Neither Crown Park nor any Affiliate has at any time
prior to Closing (i) incurred any liabilities under the provisions
of Section 4062 of ERISA, (ii) withdrawn as a substantial employer
so as to become subject to the provisions of Section 4063 of ERISA,
(iii) ceased making contributions on or before the date of the
Closing to any Multiemployer Plan or (iv) made a complete or
partial withdrawal from a Multiemployer Plan so as to incur
withdrawal liability as defined in Section 4201 of ERISA (without
regard to subsequent reduction or waiver of such liability under
Sections 4207 or 4208 of ERISA). All Crown Park Pension Benefit
Plans, if such plans are terminated and all assets are distributed
therefrom in accordance with their provisions before, at or after
Closing, will have sufficient assets to fund any and all benefit
liabilities (as defined in Section 4001(a)(16)
<PAGE>
of ERISA) with respect to such Pension Benefit Plan so as to
accomplish a standard termination filing in accordance with and
pursuant to Section 4041(b) of ERISA.
(f) Schedule 3.31 lists each deferred compensation plan,
bonus plan, stock option plan, employee stock purchase plan and any
other employee benefit plan, agreement, arrangement or commitment
not required under a previous subsection to be listed in Schedule
3.31 (other than normal policies concerning holidays, vacations and
salary continuation during short absences for illness or other
reasons) maintained by Crown Park or any Affiliate for Employees.
All such plans, agreements, arrangements and commitments comply
currently and have complied in the past, both as to form and
operation with all applicable laws, rules and regulations. Except
as disclosed on Schedule 3.31, neither Crown Park nor any Affiliate
has prior to Closing maintained any such plan, arrangement or
commitment described in the first sentence of this Subsection (f)
of Section 3.31 of this Agreement.
(g) There are no agreements which will provide payments to
any officer, Employee, shareholder, or highly compensated
individual which will be "parachute payments" under Section 280G of
the Code that are nondeductible to Crown Park or subject to tax
under Section 4999 of the Code for which Crown Park, any Affiliate,
New Independent or Independent would have withholding liability.
(h) All Crown Park Welfare Benefit Plans, Crown Park Pension
Benefit Plans, related trust agreements or annuity contracts (or
any other funding instruments), and all plans, agreements,
arrangements and commitments referred to in Subsection (f) of this
Section 3.31 are legally valid and binding and in full force and
effect. To the best of Crown Park's knowledge, no Crown Park
Welfare Benefit Plan nor Crown Park Pension Benefit Plan is being
audited or investigated by any governmental agency. There are no
actions, suits or claims (other than routine claims for benefits in
the ordinary course) pending, or to the best knowledge of Crown
Park, threatened, and Crown Park has no knowledge to any facts
which could give rise to any such actions, suits or claims.
(i) True and complete copies of each Crown Park Welfare
Benefit Plan and each Crown Park Pension Benefit Plan, related
trust agreements or annuity contracts (or any other funding
instruments); each plan, agreement, arrangement, and commitment
referred to in Subsection (f) of this Section 3.31 covering
Employees; the most recent determination letter issued by the
Internal Revenue Service with respect to each Crown Park Pension
Benefit Plan covering Employees; Annual Reports on Form 5500 Series
required to be filed with any governmental agency for each Crown
Park Welfare Benefit Plan and each Crown Park Pension Benefit Plan
covering employees for the two most recent plan years of each such
plan; and the two most recent actuarial reports for each such Crown
Park Pension Benefit Plan have previously been delivered by Crown
Park to Independent at the date this Agreement is executed. No
unwritten amendment exists with respect to any Welfare Benefit
Plan, Pension Benefit Plan or other plan, agreement, arrangement or
commitment referred to in Subsection (f) of this Section 3.31.
(j) Neither Crown Park nor any Affiliate maintains any plan
or arrangement which provides benefits to any Employee or such
Employee's dependents after the Employee terminates
<PAGE>
employment other than as required by law. No written or oral
representations have been made to any Employee or former employee
promising or guaranteeing any employer payment or funding for the
continuation of medical, dental or disability coverage beyond that
legally required.
SECTION 3.32 COBRA Responsibility. Crown Park shall retain
all responsibility and liability for compliance with the
requirements of Code Section 4980B ("COBRA") through the Closing
Date, which includes any terminations of employment that occur on
such date as a result of this transaction, and shall indemnify and
hold harmless Independent for the same.
SECTION 3.33 Derivatives. Except as disclosed on Schedule
3.33, Crown Park has not purchased, invested in, created, renewed
or held any Derivatives (as defined in Section 12.10).
SECTION 3.34 Valuation of Land, Building, Improvements. The
actual appraised fair value of the land, the building and the
improvements and the furniture, fixtures and equipment is at least
equal to or greater than the value of the land, the building and
the improvements and the furniture, fixtures and equipment
reflected on Crown Park's and the Bank's books as of March 31,
1996.
SECTION 3.35 Representations Not Misleading. All material
facts relating to the business operations, properties, assets,
liabilities (contingent or otherwise) and financial condition of
Crown Park and the Bank have been disclosed to Independent in or in
connection with this Agreement. No representation or warranty by
Crown Park contained in this Agreement, nor any statement, exhibit
or schedule furnished to Independent by Crown Park under and
pursuant to, or in anticipation of this Agreement, contains or will
contain on the Closing Date any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make
the statements contained herein or therein, in light of the
circumstances under which it was or will be made, not misleading
and such representations and warranties would continue to be true
and correct following disclosure to any governmental authority
having jurisdiction over Crown Park or its properties of the facts
and circumstances upon which they were based. Except as disclosed
herein, there is no matter that materially adversely affects, or to
the knowledge of Crown Park, will in the future result in a
Material Adverse Change, other than general economic conditions.
No information material to the Merger, and that is necessary to
make the representations and warranties herein contained not
misleading, has been withheld by Crown Park.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF INDEPENDENT
Independent hereby makes the representations and warranties
set forth in this Article IV to Crown Park.
SECTION 4.01 Organization and Qualification. Independent is
a corporation, duly organized, validly existing under the laws of
the State of Texas, and in good standing under all laws, rules, and
regulations applicable to corporations located in the State of
Texas. Independent has all requisite corporate power and authority
(including all licenses, franchises, permits and
<PAGE>
other governmental authorizations as are legally required) to carry
on its business as now being conducted, to own, lease and operate
its properties and assets as now owned, leased or operated and to
enter into and carry out its obligations under this Agreement.
SECTION 4.02 Execution and Delivery. Independent has taken
all corporate action necessary to authorize the execution, delivery
and (provided the required regulatory approvals are obtained)
performance of this Agreement and the other agreements and
documents contemplated hereby to which it is a party. This
Agreement has been, and the other agreements and documents
contemplated hereby have been, or at Closing will be, duly executed
by Independent and each constitutes the valid and binding
obligation of Independent, enforceable in accordance with its
respective terms and conditions, except as enforceability may be
limited by bankruptcy, conservatorship, insolvency, moratorium,
reorganization, receivership or similar laws and judicial decisions
affecting the rights of creditors generally and by general
principles of equity (whether applied in a proceeding at law or in
equity).
SECTION 4.03 Compliance with Laws, Permits and Instruments.
The execution, delivery and (provided the required regulatory
approvals are obtained) performance of this Agreement and the other
agreements contemplated hereby, and the consummation of the
transactions contemplated hereby and thereby, will not conflict
with, or result, by itself or with the giving of notice or the
passage of time, in any violation of or default or loss of a
benefit under, (i) any provision of the Articles of Incorporation
or Bylaws of Independent, (ii) any material provision of any
mortgage, indenture, lease, contract, agreement or other instrument
applicable to Independent or its assets, operations, properties or
businesses now conducted or heretofore conducted or (iii) any
statute, law, ordinance, rule or regulation applicable to
Independent.
SECTION 4.04 Litigation. No legal action, suit or proceeding
or judicial, administrative or governmental investigation is
pending or, to the knowledge of Independent, threatened against
Independent that questions or might question the validity of this
Agreement or the agreements contemplated hereby, or any actions
taken or to be taken by Independent pursuant hereto or thereto or
seeks to enjoin or otherwise restrain the transactions contemplated
hereby or thereby.
SECTION 4.05 Consents and Approvals. Except for regulatory
and shareholder approvals, no approval, consent, order or
authorization of, or registration, declaration or filing with, any
governmental authority or other third party is required on the part
of Independent in connection with the execution, delivery or
performance of this Agreement or the agreements contemplated
hereby, or the consummation by Independent of the transactions
contemplated hereby or thereby.
SECTION 4.06 Proxy Statement. None of the information
supplied or to be supplied by Independent or any of its directors,
officers, employees or agents for inclusion in the Proxy Statement,
or any amendment thereof or supplement thereto, will be false or
misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading, or at the time of the Shareholders' Meeting, be false
or misleading with respect to any material fact, or omit to state
any material fact necessary to correct any statement in any earlier
communication
<PAGE>
with respect to the solicitation of any proxy for the Shareholders'
Meeting. All documents that Independent is responsible for filing
with any regulatory or governmental agency in connection with the
Merger will comply in all material respects with the provisions of
applicable law.
SECTION 4.07 Representations Not Misleading. No
representation or warranty by Independent contained in this
Agreement, nor any statement, exhibit or schedule furnished to
Crown Park or the Bank by Independent under and pursuant to, or in
anticipation of this Agreement, contains or will contain on the
Closing Date any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances under
which it was or will be made, not misleading and such
representations and warranties would continue to be true and
correct following disclosure to any governmental authority having
jurisdiction over Independent of the facts and circumstances upon
which they were based. No information material to the Merger and
that is necessary to make the representations and warranties herein
contained not misleading has been withheld by Independent.
ARTICLE V.
COVENANTS OF CROWN PARK
Crown Park hereby makes the covenants set forth in this
Article V to Independent.
SECTION 5.01 Best Efforts. Crown Park will use its best
efforts to cause the consummation of the transactions contemplated
hereby in accordance with the terms and conditions of this
Agreement.
SECTION 5.02 Information for Applications and Statements.
Crown Park will, and will cause the Bank to, promptly, but in no
event later than ten (10) business days after receipt of a request
by Independent, furnish to Independent all information concerning
Crown Park and the Bank, including, but not limited to, financial
statements, required for inclusion in any application or statement
to be made by Independent to or filed by Independent with any
governmental body in connection with the transactions contemplated
by this Agreement, or in connection with any unrelated transactions
during the pendency of this Agreement, and Crown Park represents
and warrants that all information so furnished for such statements
and applications shall be true and correct in all material respects
and shall not omit any material fact required to be stated therein
or necessary to make the statements made, in light of the
circumstances under which they were made, not misleading. Crown
Park and the Bank shall otherwise fully cooperate with Independent
in the filing of any applications or other documents necessary to
consummate the transactions contemplated by this Agreement,
including the Merger.
SECTION 5.03 Required Acts of Crown Park and the Bank. Prior
to the Closing, Crown Park and the Bank shall, unless otherwise
permitted in writing by Independent:
A. Operate only in the ordinary course of business and
consistent with prudent banking practices;
<PAGE>
B. Except as required by prudent business practices,
use all reasonable efforts to preserve its business
organization intact and to retain its present customers,
depositors, suppliers, correspondent banks, officers,
directors, employees and agents;
C. Act in a manner intended to preserve or attempt to
preserve its goodwill;
D. Perform all of its obligations under contracts,
leases and documents relating to or affecting its assets,
properties and business except such obligations as Crown Park
may in good faith reasonably dispute;
E. Except as required by prudent business practices,
maintain all offices, machinery, equipment, materials,
supplies, inventories, vehicles and other properties owned,
leased or used by it (whether under its control or the control
of others), in good operating condition and repair, ordinary
wear and tear excepted;
F. Maintain in full force and effect all insurance
policies now in effect or renewals thereof and, except as
required by prudent business practices that do not jeopardize
insurance coverage, give all notices and present all claims
under all insurance policies in due and timely fashion;
G. Purchase three-year "tail" coverage in connection
with the Bank's existing D&O Insurance policy;
H. Timely file all reports required to be filed with
governmental authorities and observe and conform to all
applicable laws, rules, regulations, ordinances, codes,
orders, licenses and permits, except those being contested in
good faith by appropriate proceedings;
I. Timely file all tax returns required to be filed by
it and promptly pay all taxes, assessments, governmental
charges, duties, penalties, interest and fines that become due
and payable up to and including the date immediately preceding
the Merger, except those being contested in good faith by
appropriate proceedings;
J. Withhold from each payment made to each of its
employees the amount of all taxes (including, but not limited
to, federal income taxes, FICA taxes and state and local
income and wage taxes) required to be withheld therefrom and
pay the same to the proper tax receiving officers;
K. Continue to follow and implement policies,
procedures and practices regarding the identification,
monitoring, classification and treatment of all assets in
substantially the same manner as it has in the past;
L. Comply in all respects with all applicable laws and
regulations, domestic and foreign including, but not limited
to, all environmental laws and regulations; and
<PAGE>
M. Consult with Independent regarding hiring or
employment of new employees.
SECTION 5.04 Prohibited Acts of Crown Park and the Bank.
Prior to the Closing, neither Crown Park nor the Bank shall,
without the prior written consent of Independent (which consent
shall be deemed to have been given three (3) business days after
actual receipt by Independent of notice given pursuant to Section
12.07 with respect to such act, unless Independent sooner objects
to such act):
A. Introduce any new material method of management or
operation;
B. Take any action that could reasonably be anticipated
to result in a Material Adverse Change;
C. Take, or fail to take, any action that would cause
or permit the representations and warranties made in Article
III hereof to be inaccurate at the time of the Closing or
preclude Crown Park from making such representations and
warranties at the time of the Closing;
D. Mortgage, pledge or subject to lien, charge,
security interest or any other encumbrance or restriction any
of its property, business or assets, tangible or intangible
except in the ordinary course of business and consistent with
prudent banking practices;
E. Cause or allow the loss of insurance coverage,
unless replaced with coverage which is substantially similar
(in amount and insurer) to that now in effect;
F. Incur any obligation or liability, whether absolute,
accrued, contingent or otherwise, except in the ordinary
course of business and consistent with prudent banking
practices;
G. Except in connection with the indebtedness reflected
on the Financial Statements, discharge or satisfy any lien,
charge or encumbrance or other than interest owed on existing
subordinated debentures, pay any obligation or liability,
whether absolute or contingent, due or to become due, except
in the ordinary course of business and consistent with prudent
banking practices;
H. Issue, reserve for issuance, grant, sell or
authorize the issuance of any shares of its capital stock or
other securities or subscriptions, options, warrants, calls,
rights or commitments of any kind relating to the issuance
thereto;
I. Purchase, retire or redeem, or obligate itself to
purchase, retire or redeem, any of its shares of capital stock
or other securities or declare or pay any distribution on its
outstanding capital stock, except for (i) dividends by the
Bank to Crown Park and (ii) the dividend specifically
authorized by Section 1.05(i)(d);
<PAGE>
J. Change its articles or bylaws or its authorized
capital stock;
K. Sell, transfer, lease to others or otherwise dispose
of any of its assets or cancel or compromise any debt or
claim, or waive or release any right or claim of material
value, except in the ordinary course of business and
consistent with past practices and safe and sound banking
principles;
L. Enter into any transaction other than in the
ordinary course of business;
M. Enter into or give any promise, assurance or
guarantee of the payment, discharge or fulfillment of any
undertaking or promise made by any other person, firm or
corporation except for letters of credit entered into by the
Bank in the ordinary course of business and consistent with
prudent banking practices;
N. Sell or knowingly dispose of, or otherwise divest
itself of the ownership, possession, custody or control, of
any corporate books or records of any nature that, in
accordance with sound business practice, normally are retained
for a period of time after their use, creation or receipt,
except at the end of the normal retention period;
O. Except for the payment of bonuses, for which the
Bank has accrued, and the giving of raises that are not,
individually, or in the aggregate, greater than 1994 bonuses
and raises, make any change in the rate of compensation,
commission, bonus or other direct or indirect remuneration
payable, or pay or agree or orally promise to pay,
conditionally or otherwise, any bonus, extra compensation,
pension or severance or vacation pay, to or for the benefit of
any of its shareholders, directors, officers, employees or
agents, or enter into any employment or consulting contract
(other than as contemplated by this Agreement) or other
agreement with any director, officer or employee or adopt,
amend in any material respect or terminate any pension,
employee welfare, retirement, stock purchase, stock option,
stock appreciation rights, termination, severance, income
protection, golden parachute, savings or profit-sharing plan
(including trust agreements and insurance contracts embodying
such plans), any deferred compensation, or collective
bargaining agreement, any group insurance contract or any
other incentive, welfare or employee benefit plan or agreement
maintained by it for the benefit of its directors, employees
or former employees, except in the ordinary course of business
and consistent with past practices and safe and sound banking
principles;
P. Except as explicitly permitted hereunder or in
accordance with applicable law and made in the ordinary course
of business consistent with past practices, engage in any
transaction with any affiliated person, including, without
limitation, officers and employees, or allow such persons to
withdraw any assets from Crown Park or the Bank except in the
form of wages, salaries and reimbursement of expenses, and
except for (i) loans to employees of the Bank, not to exceed
$10,000 per employee, made in the ordinary course of business
consistent with prudent banking practices, (ii) loans secured
by liquid collateral having a fair market value at least equal
to the principal balance due on such loan to its officers,
directors and employees in the ordinary course of business,
<PAGE>
and (iii) renewals in the ordinary course of business and
consistent with prudent banking practices;
Q. Acquire any capital stock or other equity securities
or acquire any equity or ownership interest in any bank,
corporation, partnership or other entity (except (i) through
settlement of indebtedness, foreclosure, or the exercise of
creditors' remedies or (ii) in a fiduciary capacity, the
ownership of which does not expose it to any liability from
the business, operations or liabilities of such person);
R. Terminate, cancel or surrender any contract, lease
or other agreement or suffer any damage, destruction or loss
(whether or not constituting, or reasonably anticipated to
constitute, a Material Adverse Change covered by insurance),
which, in any case or in the aggregate, may result in a
Material Adverse Change;
S. Dispose of, permit to lapse, transfer or grant any
rights under, or breach or infringe upon, any United States or
foreign license or Proprietary Right or modify any existing
rights with respect thereto, except in the ordinary course of
business and consistent with past practices and safe and sound
banking principles;
T. Except for improvements or betterments relating to
Properties, make any capital expenditures or capital additions
or betterments in excess of an aggregate of $10,000;
U. Hire or employ any person with an annual salary
equal to or greater than $20,000;
V. Make any, or acquiesce with any, change in any
accounting methods, principles or material practices other
than as required by GAAP or RAP;
W. Sell or purchase any investment securities in an
aggregate amount of $100,000 between the date of the Agreement
and the Closing Date;
X. With the exception of loans secured solely by
automobiles made in accordance with the Bank's policies and
procedures with respect to such loans, make, renew, extend the
maturity of, or alter any of the material terms of any loan to
any single borrower and his related interests in excess of the
principal amount of $50,000;
Y. Purchase, invest in, create, review or hold any
Derivatives (as defined in Section 12.10); or
Z. Make any, or acquiesce with any, change in any
accounting methods, principles or material practices other
than as required by GAAP or RAP or make any available federal
income tax elections or make any changes in methods of
accounting for federal income purposes.
<PAGE>
SECTION 5.05 Access; Pre-Closing Investigation. Subject to
the provisions of Article X, Crown Park shall afford the officers,
directors, employees, attorneys, accountants, investment bankers
and authorized representatives of Independent full access to the
properties, books, contracts and records of Crown Park and the
Bank, permit Independent to make such inspections (including
without limitation with regard to such properties physical
inspection of the surface and subsurface thereof and any structure
thereon) as they may require and furnish to Independent during such
period all such information concerning Crown Park and the Bank and
their respective affairs as Independent may reasonably request, in
order that Independent may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs
of Crown Park and the Bank, including, without limitation, access
sufficient to verify the value of the assets and the liabilities of
Crown Park and the Bank and the satisfaction of the conditions
precedent to Independent's obligations described in Article VIII of
this Agreement. Crown Park agrees at any time, and from time to
time, to furnish to Independent as soon as practicable, any
additional information that Independent may reasonably request.
Independent agrees that any inspections made pursuant to this
Section 5.05 will be conducted in the least disruptive manner
possible for the business and operations of Crown Park and the
Bank.
SECTION 5.06 Designee of Independent. Crown Park shall give
notice, and shall cause the Bank to give notice, to a designee of
Independent, and shall invite such person to attend all regular and
special meetings of the board of directors of Crown Park and the
Bank and all regular and special meetings of any senior management
committee of Crown Park or the Bank. In addition, Crown Park shall
permit one designee of Independent (the "Designee") to be present
in the offices of the Bank during all business hours of the Bank,
and Crown Park shall provide the Designee with office space,
telephone and office machine usage and secretarial assistance while
the Designee is present at the Bank. Crown Park shall provide the
Designee with full access to the properties, books and records of
the Bank. Crown Park shall allow the Designee generally to
participate in Bank functions. After receipt of all necessary
regulatory approvals and prior to the Closing Date, the Designee
may hold himself or herself out to the public as a representative
of Independent.
SECTION 5.07 Additional Financial Statements. Crown Park
shall promptly furnish Independent with (i) unaudited statements of
condition and income of Crown Park as of and for the periods ended
June 30, 1996 and September 30, 1996, (ii) true, correct and
complete copies of each additional Call Report of the Bank, as soon
as such reports are made available to the OCC, (iii) each month's
directors' report and month-end daily statement, and (iv) any tax
return or submission to any taxing authority.
SECTION 5.08 Untrue Representations. Crown Park shall
promptly notify Independent in writing if Crown Park becomes aware
of any fact or condition that makes untrue, or shows to have been
untrue, in any material respect, any schedule or any other
information furnished to Independent or any representation or
warranty made in or pursuant to this Agreement or that results in
Crown Park's failure to comply with any covenant, condition or
agreement contained in this Agreement.
<PAGE>
SECTION 5.09 Litigation and Claims. Crown Park shall
promptly notify Independent in writing of any litigation, or of any
claim, controversy or contingent liability that might be expected
to become the subject of litigation, against Crown Park or the Bank
or affecting any of their properties, if such litigation or
potential litigation might, in the event of an unfavorable outcome,
result in a Material Adverse Change, and Crown Park shall promptly
notify Independent of any legal action, suit or proceeding or
judicial, administrative or governmental investigation, pending or,
to the knowledge of Crown Park, threatened against Crown Park or
the Bank that questions or might question the validity of this
Agreement or the agreements contemplated hereby, or any actions
taken or to be taken by Crown Park or the Bank pursuant hereto or
thereto or seeks to enjoin or otherwise restrain the transactions
contemplated hereby or thereby.
SECTION 5.10 Adverse Changes. Crown Park shall promptly
notify Independent in writing if any change shall have occurred or
been threatened (or any development shall have occurred or been
threatened involving a prospective change) in the business,
financial condition, operations or prospects of Crown Park or the
Bank that has or may reasonably be expected to have or lead to a
Materially Adverse Change. Notwithstanding the disclosure to
Independent of any such change, Crown Park shall not be relieved of
any liability to Independent pursuant to this Agreement for, nor
shall the providing of such information by Crown Park to
Independent be deemed a waiver by Independent of, the breach of any
representation or warranty of Crown Park contained in this
Agreement.
SECTION 5.11 No Negotiation with Others. Crown Park shall
not, directly or indirectly, nor shall it permit the Bank or its
officers, directors, employees, representatives or agents to,
directly or indirectly (i) encourage, solicit or initiate
discussions or negotiations with, or (ii) except upon advice of
counsel to the extent required to fulfill the fiduciary duties owed
to the shareholders of Crown Park, entertain, discuss or negotiate
with, or provide any information to, or cooperate with, any
corporation, partnership, person or other entity or group (other
than Independent or its Affiliates or associates or officers,
partners, employees or other authorized representatives of
Independent or such Affiliates or associates) concerning any
merger, tender offer or other takeover offer, sale of substantial
assets, sale of shares of capital stock or similar transaction
involving Crown Park or the Bank. Immediately upon receipt of any
unsolicited offer, Crown Park will communicate to Independent the
terms of any proposal or request for information and the identity
of the parties involved.
SECTION 5.12 Consents and Approvals. Crown Park shall use
its best efforts to obtain all consents and approvals from third
parties, including those listed on Schedule 3.08, at the earliest
practicable time.
SECTION 5.13 Environmental Investigation; Right to Terminate
Agreement.
A. At Independent's sole expense, Independent and its
consultants, agents and representatives shall have the right
to the same extent that Crown Park or the Bank has such right,
but not the obligation or responsibility, to inspect any
Property, including, without limitation, conducting asbestos
surveys and sampling, environmental assessments and
investigation, and other environmental surveys and analyses
including soil and ground
<PAGE>
sampling ("Environmental Inspections") at any time on or prior
to August 31, 1996. Independent shall notify Crown Park prior
to any physical inspections of the Property, and Crown Park
may place reasonable restrictions on the time of such
inspections. If, as a result of any such Environmental
Inspection, further investigation ("secondary investigation")
including, without limitation, test borings, soil, water and
other sampling is deemed desirable by Independent, Independent
shall (i) notify Crown Park of any Property for which it
intends to conduct such a secondary investigation and the
reasons for such secondary investigation, and (ii) commence
such secondary investigation, on or prior to September 16,
1996. Independent shall give reasonable notice to Crown Park
of such secondary investigations, and Crown Park may place
reasonable time and place restrictions on such secondary
investigations.
B. Crown Park agrees to indemnify and hold harmless
Independent for any claims for damage to property, or injury
or death to persons, made as a result of any Environmental
Inspection or secondary investigation conducted by Independent
or its agents, which damage or injury is attributable to the
negligent actions or negligent omissions of Crown Park or the
Bank or their agents. Independent agrees to indemnify and
hold harmless Crown Park for any claims for damage to
property, or injury or death to persons, made as a result of
any Environmental Inspection or secondary investigation
conducted by Independent or its agents, which damage or injury
is attributable to the negligent actions or omissions of
Independent or its agents. Independent shall not have any
liability or responsibility of any nature whatsoever for the
results, conclusions or other findings related to any
Environmental Inspection, secondary investigation or other
environmental survey. If this Agreement is terminated, then
except as otherwise required by law, reports to any
governmental authority of the results of any Environmental
Inspection, secondary investigation or other environmental
survey shall be made by Crown Park or the Bank and not by
Independent. Independent shall make no such report prior to
Closing unless required to do so by law, and in such case will
give Crown Park reasonable notice of Independent's intentions.
C. Independent shall have the right to terminate this
Agreement if (i) the factual substance of any warranty or
representation set forth in Section 3.21 is not true and
accurate; (ii) the results of such Environmental Inspection,
secondary investigation or other environmental survey are
disapproved by Independent because the environmental
inspection, secondary investigation or other environmental
survey identifies violations or potential violations of
Environmental Laws; (iii) Crown Park or the Bank has refused
to allow Independent to conduct an Environmental Inspection or
secondary investigation in a manner that Independent
reasonably considers necessary; (iv) the Environmental
Inspection, secondary investigation or other environmental
survey identifies any past or present event, condition or
circumstance that would or potentially would require remedial
or cleanup action or result in a Material Adverse Change; (v)
the Environmental Inspection, secondary investigation or other
environmental survey identifies the presence of any
underground or above ground storage tank in, on or under any
Property that is not shown to be in compliance with all
Environmental Laws applicable to the tank either now or at a
future time certain, or that has had a release of petroleum or
some other Hazardous
<PAGE>
Material that has not been cleaned up to the satisfaction of
the relevant governmental authority or any other party with a
legal right to compel cleanup; or (vi) the Environmental
Inspection, secondary investigation or other environmental
survey identifies the presence of any asbestos-containing
material in, on or under any Property, the removal of which
would result in a Material Adverse Change. On or prior to
October 6, 1996, Independent shall advise Crown Park in
writing as to whether Independent intends to terminate this
Agreement because Independent disapproves of the results of
the Environmental Inspection, secondary investigation or other
environmental survey. Crown Park shall have the opportunity
to correct any objected to violations or conditions to
Independent's reasonable satisfaction prior to November 6,
1996. In the event that Crown Park fails to demonstrate its
satisfactory correction of the violations or conditions to
Independent, Independent may terminate the Agreement on or
before November 6, 1996.
D. Crown Park agrees to make available to Independent
and its consultants, agents and representatives all documents
and other material relating to environmental conditions of any
Property including, without limitation, the results of other
environmental inspections and surveys. Crown Park also agrees
that all engineers and consultants who prepared or furnished
such reports may discuss such reports and information with
Independent and shall be entitled to certify the same in favor
of Independent and its consultants, agents and representatives
and make all other data available to Independent and its
consultants, agents and representatives.
E. For purposes of this Section, the term "Property" or
"Properties" shall have the same meaning given in Section
3.21(E).
SECTION 5.14 Proxies. Mr. Claud Cypert, Mr. Larry Cypert,
Mr. Roy Cypert, Mr. B.J. Randles, Mr. Milton Montgomery, Ms. Judy
Ann Miller, Ms. Jone Fisher, Mr. William Jewel Davis, Cabco, Inc.,
Elois S. Badley, Royal "C", Inc., J. Miles Fisher, Royal Grand "C"
Trust Ms. Carol Murrow and Ms. Becky Sykes collectively own at
least two-thirds of the outstanding shares of Crown Park and
together with Crown Park shall execute the Voting Agreement and
Irrevocable Proxy in the form of Exhibit B attached hereto, and
Crown Park acknowledges that the such shareholders have agreed that
they will vote the shares of the Crown Park Common Stock owned by
them in favor of this Agreement and the Merger and the transactions
contemplated hereby and thereby, subject to required regulatory
approvals.
SECTION 5.15 Sole Shareholder Approval. Crown Park shall
execute a sole shareholder consent authorizing the execution of the
Bank Merger Agreement and approving the vote of all of the Bank
common stock in favor of the Bank Merger.
ARTICLE VI.
COVENANTS OF INDEPENDENT
Independent hereby makes the covenants set forth in this
Article VI to Crown Park.
<PAGE>
SECTION 6.01 Best Efforts. Independent agrees to use its
best efforts to cause the consummation of the transactions
contemplated hereby in accordance with the terms and conditions of
this Agreement.
SECTION 6.02 Incorporation and Organization of New
Independent. Independent will incorporate, charter and organize
New Independent as a Texas corporation.
SECTION 6.03 Acts of New Independent. Independent will cause
New Independent to duly authorize and enter into this Agreement and
shall cause New Independent to perform all of its obligations
hereunder. Independent shall vote all of the stock of New
Independent in favor of the Merger and this Agreement. Independent
shall cause sufficient funds to be contributed to New Independent
to enable New Independent to consummate the transactions
contemplated by this Agreement. Prior to the Closing, Independent
shall not cause New Independent to take any action or execute any
agreement, document or certificate except as contemplated by this
Agreement and the other agreements contemplated hereby.
SECTION 6.04 Information for Applications and Statements.
Independent will promptly furnish to Crown Park all information
concerning Independent and New Independent, including, but not
limited to, financial statements, required for inclusion in (i) any
proxy statement, prospectus or offering document to be used by
Crown Park in connection with the approval of the shareholders of
Crown Park of the transactions contemplated hereby and (ii) any
application or statement to be made by Crown Park or filed by Crown
Park with any governmental body in connection with the transactions
contemplated by this Agreement, or in connection with any unrelated
transactions during the pendency of this Agreement, and Independent
represents and warrants that all information so furnished for such
statements and applications shall be true and correct in all
material respects and shall not omit any material fact required to
be stated therein or necessary to make the statements made, in
light of the circumstances under which they were made, not
misleading. Independent shall otherwise fully cooperate with Crown
Park and the Bank in the filing of any applications or other
documents necessary to consummate the transactions contemplated by
this Agreement, including the Merger.
SECTION 6.05 Untrue Representations. Independent shall
promptly notify Crown Park in writing if Independent becomes aware
of any fact or condition that makes untrue, or shows to have been
untrue, in any material respect, any schedule or any other
information furnished to Crown Park or any representation or
warranty made in or pursuant to this Agreement or that results in
Independent's failure to comply with any covenant, condition or
agreement contained in this Agreement.
SECTION 6.06 Litigation and Claims. Independent shall
promptly notify Crown Park of any legal action, suit or proceeding
or judicial, administrative or governmental investigation, pending
or, to the knowledge of Independent, threatened against Independent
or New Independent that questions or might question the validity of
this Agreement or the agreements contemplated hereby, or any
actions taken or to be taken by Independent or New Independent
pursuant hereto or thereto or seeks to enjoin or otherwise restrain
the transactions contemplated hereby or thereby.
<PAGE>
SECTION 6.07 Regulatory and Other Approvals. Independent
shall promptly file or cause to be filed applications for all
regulatory approvals required to be obtained by Independent or New
Independent in connection with this Agreement and the other
agreements contemplated hereby. Independent shall promptly furnish
Crown Park with copies of all such regulatory filings and all
correspondence for which confidential treatment has not been
requested. Independent shall use its best efforts to obtain all
such regulatory approvals and any other approvals from third
parties, at the earliest practicable time.
ARTICLE VII.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CROWN PARK
All obligations of Crown Park under this Agreement are subject
to the fulfillment, prior to or at the Closing, of each of the
following conditions, any or all of which may be waived in whole or
in part by Crown Park:
SECTION 7.01 Compliance with Representations, Warranties and
Agreements. All representations and warranties made by Independent
in this Agreement or in any document or schedule delivered to Crown
Park pursuant hereto shall have been true and correct in all
material respects when made and shall be true and correct in all
material respects as of the Closing with the same force and effect
as if such representations and warranties were made at and as of
the Closing, except with respect to those representations and
warranties specifically made as of an earlier date (in which case
such representations and warranties shall be true as of such
earlier date). Independent shall have performed or complied in all
material respects with all agreements, terms, covenants and
conditions required by this Agreement to be performed or complied
with by Independent prior to or at the Closing.
SECTION 7.02 Shareholder Approvals. The holders of at least
two-thirds of the shares of each class of stock entitled to vote on
the Merger and this Agreement shall have approved the Merger and
this Agreement.
SECTION 7.03 Government and Other Approvals. Independent
shall have received approvals, acquiescence or consents, all on
terms and conditions acceptable to Independent in its sole
discretion, of the transactions contemplated by this Agreement,
from all necessary governmental agencies and authorities and other
third parties, including but not limited to the Federal Reserve,
and all applicable waiting periods shall have expired, and the
approvals and consents of all third parties required to consummate
this Agreement and the other agreements contemplated hereby, and
the transactions contemplated hereby and thereby, including all
consents described on Schedule 3.08. Such approvals and the
transactions contemplated hereby shall not have been contested or
threatened to be contested by any Federal or state governmental
authority or by any other third party (except shareholders
asserting statutory dissenters' appraisal rights) by formal
proceedings.
SECTION 7.04 No Litigation. No action shall have been taken,
and no statute, rule, regulation or order shall have been
promulgated, enacted, entered, enforced or deemed applicable
<PAGE>
to the acquisition by any Federal, state or foreign government or
governmental authority or by any court, domestic or foreign,
including the entry of a preliminary or permanent injunction, that
would (a) make the Agreement or any other agreement contemplated
hereby, or the transactions contemplated hereby or thereby illegal,
invalid or unenforceable, (b) impose material limits in the ability
of any party to this Agreement to consummate the Agreement or any
other agreement contemplated hereby, or the transactions
contemplated hereby or thereby, or (c) if the Agreement or any
other agreement contemplated hereby, or the transactions
contemplated hereby or thereby are consummated, subject Crown Park
or the Bank or subject any officer, director, shareholder or
employee of Crown Park or the Bank to criminal or civil liability.
No action or proceeding before any court or governmental authority,
domestic or foreign, by any government or governmental authority or
by any other person, domestic or foreign, shall be threatened,
instituted or pending that would reasonably be expected to result
in any of the consequences referred to in clauses (a) through (c)
above.
SECTION 7.05 Opinion of Legal Counsel to Independent. Crown
Park shall have received an opinion of counsel to Independent in
connection with the transactions, contemplated by this Agreement,
dated the Closing Date and addressed to Crown Park, and as
described in Exhibit C.
ARTICLE VIII.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF INDEPENDENT
All obligations of Independent under this Agreement are
subject to the fulfillment, prior to or at the Closing, of each of
the following conditions, any or all of which may be waived in
whole or in part by Independent.
SECTION 8.01 Compliance with Representations, Warranties and
Agreements. All representations and warranties made by Crown Park
in this Agreement or in any schedule delivered to Independent
pursuant hereto shall have been true and correct when made and
shall be true and correct as of the Closing with the same force and
effect as if such representations and warranties were made at and
as of the Closing, except with respect to those representations and
warranties specifically made as of an earlier date (in which case
such representations and warranties shall be true as of such
earlier date). Crown Park shall have performed or complied in all
material respects with all agreements, terms, covenants and
conditions required by this Agreement to be performed or complied
with by Crown Park prior to or at the Closing.
SECTION 8.02 Shareholder Approvals. The holders of at least
two-thirds of the shares of each class of stock entitled to vote on
the Merger and this Agreement shall have approved the Merger and
this Agreement.
SECTION 8.03 Government and Other Approvals. Independent and
its subsidiaries shall have received approvals, acquiescence or
consents, all on terms and conditions acceptable to Independent in
its sole discretion, of the transactions contemplated by this
Agreement from all necessary governmental agencies and authorities,
including but not limited to the Federal Reserve
<PAGE>
and the OCC, and all applicable waiting periods shall have expired,
and the approvals and consents of all third parties required to
consummate this Agreement and the other agreements contemplated
hereby, and the transactions contemplated hereby and thereby,
including all consents described on Schedule 3.08. Such approvals
and the transactions contemplated hereby shall not have been
contested or threatened to be contested by any Federal or state
governmental authority or by any other third party (except
shareholders asserting statutory dissenters' appraisal rights) by
formal proceedings. It is understood that, if such contest is
brought by formal proceedings, the Independent may, but shall not
be obligated to, answer and defend such contest or otherwise pursue
this transaction over such objection.
SECTION 8.04 No Litigation. No action shall have been taken,
and no statute, rule, regulation or order shall have been
promulgated, enacted, entered, enforced or deemed applicable to
this Agreement, the Merger, or the transactions contemplated hereby
or thereby by any Federal, state or foreign government or
governmental authority or by any court, domestic or foreign,
including the entry of a preliminary or permanent injunction, that
would (a) make this Agreement or any other agreement contemplated
hereby, or the transactions contemplated hereby or thereby illegal,
invalid or unenforceable, (b) require the divestiture of a material
portion of the assets of Crown Park or the Bank, (c) impose
material limits in the ability of any party to this Agreement to
consummate the Agreement or any other agreement contemplated
hereby, or the transactions contemplated hereby or thereby, (d)
otherwise result in a Material Adverse Change, (e) if this
Agreement or any other agreement contemplated hereby, or the
transactions contemplated hereby or thereby are consummated,
subject Independent or New Independent or subject any officer,
director, shareholder or employee of Independent or New Independent
to criminal or civil liability or (f) claim that Crown Park or any
of the shareholders or directors, officers, employees of affiliates
of Crown Park or the Bank had an agreement to sell stock in Crown
Park or for Crown Park or the Bank to engage in a merger, sale of
assets or similar corporate transaction. No action or proceeding
before any court or governmental authority, domestic or foreign, by
any government or governmental authority or by any other person,
domestic or foreign, shall be threatened, instituted or pending
that would reasonably be expected to result in any of the
consequences referred to in clauses (a) through (f) above.
SECTION 8.05 Opinion of Legal Counsel to Crown
Park. Independent shall have received an opinion of counsel to
Crown Park in connection with the transactions contemplated by this
Agreement, dated the Closing Date and addressed to Independent, and
as described in Exhibit D.
SECTION 8.06 Dissenting Shareholders. No more than ten
percent (10%) of the holders of the outstanding shares of the Crown
Park Common Stock shall have demanded or be entitled to demand
payment of the fair value of their shares as dissenting
shareholders.
SECTION 8.07 Accounting Treatment. All accounting and tax
treatment, entries and adjustments in connection with the
transactions contemplated by this Agreement and the other
agreements contemplated hereby shall be satisfactory to
Independent, Independent shall not have received notification from
any proper regulatory authority that Independent's accounting and
tax treatment, entries and adjustments used in connection with the
Merger are improper, and
<PAGE>
Independent shall not have been required by any such regulatory
authority to make any accounting or tax adjustments that would
constitute a Material Adverse Change.
SECTION 8.08 No Material Adverse Change. Except as set forth
on Schedule 3.15, there shall have been no Material Adverse Change
in Crown Park and the Bank, taken as a whole, since December 31,
1995.
SECTION 8.09 Bank Merger Agreement. Crown Park shall have
caused the Bank to enter into the Bank Merger Agreement pursuant,
the form of which is attached hereto as Exhibit A, to which the
Bank will be merged with a wholly-owned subsidiary (either direct
or indirect) of Independent. Crown Park shall have caused the Bank
to execute the Bank Merger Agreement at a time such that
Independent is able to obtain all necessary regulatory approvals
prior to the Closing Date.
ARTICLE IX.
TERMINATION AND ABANDONMENT
SECTION 9.01 Right of Termination. This Agreement and the
transactions contemplated hereby may be terminated and abandoned at
any time prior to or at the Closing (notwithstanding approval
thereof by the shareholders of Crown Park), as follows, and in no
other manner:
A. By the mutual consent of Crown Park and Independent,
duly authorized by the board of directors of each of Crown
Park and Independent.
B. By either Crown Park or Independent if the
conditions precedent to such parties' obligations to close
specified in Articles VII and VIII, respectively, hereof have
not been met or waived and the Closing Date shall not have
occurred by March 31, 1997, or such later date as has been
approved by Crown Park and Independent.
C. By either Crown Park or Independent if any of the
transactions contemplated by this Agreement are disapproved by
any regulatory authority whose approval is required to
consummate such transactions or if any court of competent
jurisdiction in the United States or other United States
(federal or state) governmental body shall have issued an
order, decree or ruling or taken any other action restraining,
enjoining, invalidating or otherwise prohibiting the
Agreement or the transactions contemplated hereby and such
order, decree, ruling or other action shall have been final
and nonappealable.
D. By Independent if it reasonably determines, in good
faith and after consulting with counsel, there is substantial
likelihood that any necessary regulatory approval will not be
obtained or will be obtained only upon a condition or
conditions that make it inadvisable to proceed with the
transactions contemplated by this Agreement.
E. By Independent if there shall have been any Material
Adverse Change.
<PAGE>
F. By Independent if Crown Park shall fail to comply in
any material respect with any of its covenants or agreements
contained in this Agreement or in any other agreement
contemplated hereby, and such failure shall not have been
cured within a period of ten (10) calendar days after notice
from Independent, or if any of the representations or
warranties of Crown Park contained herein or therein shall be
inaccurate in any material respect.
G. By Crown Park if Independent shall fail to comply in
any material respect with any of its covenants or agreements
contained in this Agreement or in any other agreement
contemplated hereby and such failure shall not have been cured
within a period of ten (10) calendar days after notice from
Crown Park, or if any of the representations or warranties of
Independent contained herein or therein shall be inaccurate in
any material respect.
SECTION 9.02 Notice of Termination. The power of termination
provided for by Section 9.01 hereof may be exercised only by a
notice given in writing, as provided in Section 12.07 of this
Agreement.
SECTION 9.03 Effect of Termination. Without limiting any
other relief to which either party hereto may be entitled for
breach of this Agreement, in the event of the termination and
abandonment of this Agreement pursuant to the provisions of Section
9.01 hereof, no party to this Agreement shall have any further
liability or obligation in respect of this Agreement, except for
(a) liability of a party for expenses pursuant to Section 12.02
hereof, and (b) the provisions of Article X hereof shall remain
applicable.
ARTICLE X.
CONFIDENTIAL INFORMATION
SECTION 10.01 Definition of "Recipient," "Disclosing Party"
and "Representative". For purposes of this Article X, the term
"Recipient" shall mean the party receiving the Subject Information
(as defined in Section 10.02) and the term "Disclosing Party" shall
mean the party furnishing the Subject Information. The terms
"Recipient" or "Disclosing Party", as used herein, include: (1) all
persons and entities related to or affiliated in any way with the
Recipient or the Disclosing Party, as the case may be, and (2) any
person or entity controlling, controlled by or under common control
with the Recipient or the Disclosing Party, as the case may be.
The term "Representative" as used herein, shall include all
directors, officers, shareholders, employees, representatives,
advisors, attorneys, accountants and agents of any of the
foregoing. The term "person" as used in this Article X shall be
broadly interpreted to include, without limitation, any
corporation, company, group, partnership, governmental agency or
individual.
SECTION 10.02 Definition of "Subject Information". For
purposes of this Article X, the term "Subject Information" shall
mean all information furnished to the Recipient or its
Representatives (whether prepared by the Disclosing Party, its
Representatives or otherwise and whether or not identified as being
nonpublic, confidential or proprietary) by or on behalf of the
<PAGE>
Disclosing Party or its Representatives relating to or involving
the business, operations or affairs of the Disclosing Party or
otherwise in possession of the Disclosing Party. The term "Subject
Information" shall not include information that (i) was already in
the Recipient's possession at the time it was first furnished to
Recipient by or on behalf of Disclosing Party, provided that such
information is not known by the Recipient to be subject to another
confidentiality agreement with or other obligation of secrecy to
the Disclosing Party, its Subsidiaries or another party, or (ii)
becomes generally available to the public other than as a result of
a disclosure by the Recipient or its Representatives, or
(iii) becomes available to the Recipient on a non-confidential
basis from a source other than the Disclosing Party, its
Representative or otherwise, provided that such source is not known
by the Recipient to be bound by a confidentiality agreement with or
other obligation of secrecy to the Disclosing Party, its
Representative or another party.
SECTION 10.03 Confidentiality. Each Recipient hereby agrees
that the Subject Information will be used solely for the purpose of
reviewing and evaluating the transactions contemplated by this
Agreement and the other agreements contemplated hereby, and that
the Subject Information will be kept confidential by the Recipient
and the Recipient's Representatives; provided, however, that (i)
any of such Subject Information may be disclosed to the Recipient's
Representatives (including, but not limited to, the Recipient's
accountants, attorneys and investment bankers) who need to know
such information for the purpose of evaluating any such possible
transaction between the Disclosing Party and the Recipient (it
being understood that such Representatives shall be informed by the
Recipient of the confidential nature of such information and that
the Recipient shall direct and cause such persons to treat such
information confidentially); and (ii) any disclosure of such
Subject Information may be made to which the Disclosing Party
consents in writing prior to any such disclosure by Recipient.
SECTION 10.04 Securities Law Concerns. Each Recipient hereby
acknowledges that the Recipient is aware, and the Recipient will
advise the Recipient's Representatives who are informed as to the
matters that are the subject of this Agreement, that the United
States securities laws prohibit any person who has received
material, non-public information from an issuer of securities from
purchasing or selling securities of such issuer or from
communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities.
SECTION 10.05 Return of Subject Information. In the event of
termination of this Agreement for any reason, the Recipient shall
promptly return to the Disclosing Party all written material
containing or reflecting any of the Subject Information other than
information contained in any application, notice or other document
filed with any governmental agency and not returned to the
Recipient by such governmental agency. In making any such filing,
the Recipient will request confidential treatment of such Subject
Information included in any application, notice or other document
filed with any governmental agency.
SECTION 10.06 Specific Performance/Injunctive Relief. Each
Recipient acknowledges that the Subject Information constitutes
valuable, special and unique property of the Disclosing Party
critical to its business and that any breach of Article X of this
Agreement by it will give rise to irreparable injury to the
Disclosing Party that is not compensable in damages. Accordingly,
<PAGE>
each Recipient agrees that the Disclosing Party shall be entitled
to obtain specific performance and/or injunctive relief against the
breach or threatened breach of Article X of this Agreement by the
Recipient or its Representatives. Each Recipient further agrees to
waive, and use its reasonable efforts to cause its Representatives
to waive, any requirement for the securing or posting of any bond
in connection with such remedies. Such remedies shall not be
deemed the exclusive remedies for a breach of Article X of this
Agreement, but shall be in addition to all other remedies available
at law or in equity to the Disclosing Party.
ARTICLE XI.
INDEMNIFICATION
SECTION 11.01 Indemnification by Independent. Independent
hereby agrees to indemnify and hold the Primary Shareholders
harmless with respect to any and all liabilities, losses, damages,
deficiencies, judgments, costs, expenses (including, without
limitation, the fees and expenses of counsel), and interest or
penalties arising out of any misrepresentation or an act of fraud
resulting from actions or omissions of Independent taken or not
taken after the Effective Date.
SECTION 11.02 Indemnification by the Primary Shareholders.
The parties who have executed this document and are signatories
hereto as Primary Shareholders (collectively, the "Primary
Shareholders") hereby jointly and severally agree to indemnify and
hold Independent and each of its subsidiaries, affiliates,
directors, officers, employees and agents harmless with respect to
any and all liabilities, losses, damages, deficiencies, judgments,
costs, expenses (including, without limitation, the fees and
expenses of counsel), and interest or penalties arising out of any
misrepresentation or an act of fraud suffered by Independent, Crown
Park or the Bank resulting from actions or omissions of any of
Crown Park, the Bank or any of their respective officers, directors
or shareholders which actions or omissions are taken or not taken
prior to the Effective Date.
SECTION 11.03 General Indemnification Provisions.
A. The amount of indemnification owed to Independent
pursuant to Section 11.02 is unlimited.
B. The shareholders agree that they will not seek
indemnification or contribution from Independent, Crown Park
or the Bank or any of their respective officers or directors
for any Losses.
SECTION 11.04 Procedure for Indemnification. The indemnified
party shall, within ten (10) business days after the service of
process in a lawsuit or within thirty (30) calendar days after such
indemnified party acquires knowledge of a claim covered by the
indemnities under Article XI of this Agreement, give written notice
to the indemnifying party, pursuant to Section 12.07, describing
the lawsuit or claim and the estimated amount thereof; provided,
however, that any failure by the indemnified party to give the
foregoing written notice within such period shall not
<PAGE>
affect the indemnities under this Article XI to the extent the
indemnifying party is not actually prejudiced by such failure.
Upon receipt of such notice, the indemnifying party shall be
entitled, at its own cost and expense: (i) to assume responsibility
and control of the defense, compromise or settlement of any
judicial proceeding that involves solely a claim for one or more
liabilities for which indemnity may be sought hereunder, and (ii)
in any other case, to be consulted by the indemnified party (who
shall consider in good faith all requests of the indemnifying party
with respect to all such proceedings) with respect to proceedings
subject to control of the indemnified party. For so long as the
indemnifying party is contesting any such claim in good faith and
by appropriate proceedings, the indemnifying party shall not be
required to make payment under this provision to the indemnified
party. If the indemnifying party is controlling the conduct of any
such proceeding, the indemnifying party shall, on request of the
indemnified party, provide to the indemnified party, at reasonable
intervals, a summary of any developments respecting such proceeding
that have occurred since the date of the last such summary so
provided to indemnified party. The indemnified party may
participate at its own expense in any judicial proceeding
controlled by the indemnifying party pursuant to the preceding
provision. The indemnified party shall supply the indemnifying
party with such information requested by the indemnifying party as
in the reasonable opinion of counsel to the indemnifying party is
necessary and advisable for the indemnifying party to control and
conduct the defense of any proceeding, to prosecute any
counterclaim or to participate in any proceeding to the extent
permitted by this provision and shall cooperate with the
indemnifying party in the conduct of the defense and the assertion
of any counterclaim in any such proceeding. The indemnified party
shall not enter into any settlement or other compromise with
respect to any liability as to which indemnity may be sought
without the prior written consent of the indemnifying party, which
consent shall not be unreasonably withheld. The indemnified party
shall be entitled to communicate solely with the person designated
in Section 12.07 to receive notices on behalf of all of the
indemnifying party, and the indemnifying party hereby appoints such
person as their duly authorized agent and attorney-in-fact, with
authority to make binding decisions on behalf of the indemnifying
party with respect to this Agreement.
ARTICLE XII.
MISCELLANEOUS
SECTION 12.01 Survival of Representations and
Warranties. The parties hereto agree that all of their respective
representations and warranties contained in this Agreement shall
survive for three (3) years following the Closing Date.
SECTION 12.02 Expenses. Independent shall pay all of its
expenses and costs (including, without limitation, all counsel fees
and expenses) and Crown Park shall pay all of its expenses and
costs (including, without limitation, all counsel fees and
expenses), incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby.
SECTION 12.03 Brokerage Fees and Commissions. Independent
hereby represents to Crown Park that no agent, representative or
broker has represented Independent in connection with the
transactions described in this Agreement. Crown Park shall not
have any responsibility
<PAGE>
or liability for any fees, expenses or commissions payable to any
agent, representative or broker of Independent, and Independent
hereby agrees to indemnify and hold Crown Park harmless for any
amounts owed to any agent, representative or broker of Independent.
Except for the brokerage relationship with Bryn Jan Financial
Corporation, Crown Park hereby represents to Independent that no
agent, representative or broker has represented Crown Park, the
Bank or any or all of the shareholders in connection with the
transactions described in this Agreement. Independent shall have
no responsibility or liability for any fees, expenses or
commissions payable to any agent, representative or broker of Crown
Park, the Bank or any shareholder of Crown Park, and Crown Park and
the Primary Shareholders hereby agree to indemnify and hold
Independent harmless for any amounts owed to any agent,
representative or broker of Crown Park, the Bank or any shareholder
of Crown Park.
SECTION 12.04 Entire Agreement. This Agreement and the other
agreements, documents, schedules and instruments executed and
delivered by the parties to each other at the Closing constitute
the full understanding of the parties, a complete allocation of
risks between them and a complete and exclusive statement of the
terms and conditions of their agreement relating to the subject
matter hereof and supersede any and all prior agreements, whether
written or oral, that may exist between the parties with respect
thereto. Except as otherwise specifically provided in this
Agreement, no conditions, usage of trade, course of dealing or
performance, understanding or agreement purporting to modify, vary,
explain or supplement the terms or conditions of this Agreement
shall be binding unless hereafter or contemporaneously herewith
made in writing and signed by the party to be bound, and no
modification shall be effected by the acknowledgment or acceptance
of documents containing terms or conditions at variance with or in
addition to those set forth in this Agreement.
SECTION 12.05 Further Cooperation. The parties agree that
they will, at any time and from time to time after the Closing,
upon request by the other and without further consideration, do,
perform, execute, acknowledge and deliver all such further acts,
deeds, assignments, assumptions, transfers, conveyances, powers of
attorney, certificates and assurances as may be reasonably required
in order to fully consummate the transactions contemplated hereby
in accordance with this Agreement or to carry out and perform any
undertaking made by the parties hereunder.
SECTION 12.06 Severability. In the event that any provision
of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws, then (a) such provision shall be
fully severable and this Agreement shall be construed and enforced
as if such illegal, invalid or unenforceable provision were not a
part hereof; (b) the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by such
illegal, invalid or unenforceable provision or by its severance
from this Agreement; and (c) there shall be added automatically as
a part of this Agreement a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and
still be legal, valid and enforceable.
SECTION 12.07 Notices. Any and all payments (other than
payments at the Closing), notices, requests, instructions and other
communications required or permitted to be given under this
Agreement after the date hereof by any party hereto to any other
party may be delivered
<PAGE>
personally or by nationally recognized overnight courier service or
sent by mail or (except in the case of payments) by telex or
facsimile transmission, at the respective addresses or transmission
numbers set forth below and shall be effective (a) in the case of
personal delivery, telex or facsimile transmission, when received;
(b) in the case of mail, upon the earlier of actual receipt or five
(5) business days after deposit in the United States Postal
Service, first class certified or registered mail, postage prepaid,
return receipt requested; and (c) in the case of nationally-
recognized overnight courier service, one (1) business day after
delivery to such courier service together with all appropriate fees
or charges and instructions for such overnight delivery. The
parties may change their respective addresses and transmission
numbers by written notice to all other parties, sent as provided in
this Section 12.07. All communications must be in writing and
addressed as follows:
IF TO CROWN PARK:
Ms. Jone Fisher
Chairman of the Board
Crown Park Bancshares, Inc.
82nd & Nashville Avenue
P.O. Box 54500
Lubbock, Texas 79453
Telecopy: (806) 794-2395
WITH A COPY TO:
Mr. Claud Cypert
7713 NW 41st Circle
Bethany, Oklahoma 73008
and
Mr. John Hudson
Attorney at Law
1601 N.W. Expressway
Suite 2101
Oklahoma City, Oklahoma 73118
Telecopy: (405) 840-4671
IF TO THE PRIMARY SHAREHOLDERS:
Mr. Claud Cypert
7713 NW 41st Circle
Bethany, Oklahoma 73008
<PAGE>
IF TO INDEPENDENT:
Mr. Bryan Stephenson
President
Independent Bankshares, Inc.
547 Chestnut
Abilene, Texas 79602
Telecopy: (915) 677-5943
WITH A COPY TO:
Mr. Peter G. Weinstock
Jenkens & Gilchrist,
a Professional Corporation
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202-2799
Telecopy: (214) 855-4300
SECTION 12.08 GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF TEXAS (INCLUDING THOSE LAWS RELATING TO CHOICE OF LAW) APPLYING
TO CONTRACTS ENTERED INTO AND TO BE PERFORMED WITHIN THE STATE OF
TEXAS, WITHOUT REGARD FOR THE PROVISIONS THEREOF REGARDING CHOICE
OF LAW. VENUE FOR ANY CAUSE OF ACTION ARISING FROM THIS AGREEMENT
SHALL LIE IN LUBBOCK COUNTY, TEXAS.
SECTION 12.09 Multiple Counterparts. For the convenience of
the parties hereto, this Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all
counterparts hereof so executed by the parties hereto, whether or
not such counterpart shall bear the execution of each of the
parties hereto, shall be deemed to be, and shall be construed as,
one and the same Agreement. A telecopy or facsimile transmission
of a signed counterpart of this Agreement shall be sufficient to
bind the party or parties whose signature(s) appear thereon.
SECTION 12.10 Certain Definitions.
A. "Affiliate" means, with respect to any person, any
person that, directly or indirectly, controls, is controlled
by, or is under common control with, such person in question.
For the purposes of this definition, "control" (including,
with correlative meaning, the terms "controlled by" and "under
common control with") as used with respect to any person,
shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such person, whether through the ownership of
voting securities or by contract or otherwise.
B. "Derivatives" shall mean financial contracts the
value, purpose, or terms of which are derived from the
performance of assets, interest rates, currency exchange
<PAGE>
rates, or indexes, including, by way of illustration and
without limitation, structured debt obligations and deposits,
swaps, futures, options, caps, floors, collars, forwards and
various combinations thereof.
C. "Environmental Laws" mean all federal, state and
local laws, regulations, statutes, ordinances, codes, rules,
decisions, orders or decrees relating or pertaining to the
public health and safety or the environment, or otherwise
governing the generation, use, handling, collection,
treatment, storage, transportation, recovery, recycling,
removal, discharge or disposal of Hazardous Materials,
including, without limitation, the Solid Waste Disposal Act,
42 U.S.C. 6901 et seq., as amended ("SWDA," also known as
"RCRA" for a subsequent amending act), (b) the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et seq., as amended ("CERCLA"), (c) the
Clean Water Act, 33 U.S.C. Section 1251 et seq., as amended
("CWA"), (d) the Clean Air Act, 42 U.S.C. Section 7401 et
seq., as amended ("CAA"), (e) the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., as amended ("TSCA"), (f)
the Emergency Planning and Community Right to Know Act, 15
U.S.C. Section 2601 et seq., as amended ("EPCRKA"), and (g)
the Occupational Safety and Health Act, 29 U.S.C. Section 651
et seq., as amended.
D. "Hazardous Material" means, without limitation, (a)
any "hazardous wastes" as defined under RCRA, (b) any
"hazardous substances" as defined under CERCLA, (c) any toxic
pollutants as defined under CWA, (d) any hazardous air
pollutants as defined under CAA, (e) any hazardous chemicals
as defined under TSCA, (f) any hazardous substances or
extremely hazardous substances as defined under EPCRKA, (g)
asbestos, (h) polychlorinated biphenyls, (i) underground
storage tanks, whether empty, filled or partially filled with
any substance, (j) any substance the presence of which on the
property in question is prohibited under any Environmental
Law, and (k) any other substance which under any Environmental
Law requires special handling or notification of or reporting
to any federal, state or local governmental entity in its
generation, use, handling, collection, treatment, storage, re-
cycling, treatment, transportation, recovery, removal,
discharge or disposal.
E. "Material Adverse Change" means any material adverse
change in the financial condition, assets, properties,
liabilities (absolute, accrued, contingent or otherwise),
reserves, business or results of operations or prospects of
Crown Park or the Bank and specifically includes any change
that reduces the shareholders' equity of Crown Park and the
Bank (on a consolidated basis) by an amount equaling or
exceeding $50,000.
F. "Subsidiary" means, when used with reference to an
entity, any corporation, a majority of the outstanding voting
securities of which are owned directly or indirectly by such
entity or any partnership, joint venture or other enterprise
in which any entity has, directly or indirectly, any equity
interest.
SECTION 12.11 Specific Performance. Each of the parties
hereto acknowledges that the other parties would be irreparably
damaged and would not have an adequate remedy at law for money
damages in the event that any of the covenants contained in this
Agreement were not
<PAGE>
performed in accordance with its terms or otherwise were materially
breached. Each of the parties hereto therefore agrees that,
without the necessity of proving actual damages or posting bond or
other security, the other party shall be entitled to temporary
and/or permanent injunction or injunctions to prevent breaches of
such performance and to specific enforcement of such covenants in
addition to any other remedy to which they may be entitled, at law
or in equity.
SECTION 12.12 Attorneys' Fees and Costs. In the event
attorneys' fees or other costs are incurred to secure performance
of any of the obligations herein provided for, or to establish
damages for the breach thereof, or to obtain any other appropriate
relief, whether by way of prosecution or defense, the prevailing
party shall be entitled to recover reasonable attorneys' fees and
costs incurred therein.
SECTION 12.13 Rules of Construction. Each use herein of the
masculine, neuter or feminine gender shall be deemed to include the
other genders. Each use herein of the plural shall include the
singular and vice versa, in each case as the context requires or as
it is otherwise appropriate. The word "or" is used in the
inclusive sense. All articles and sections referred to herein are
articles and sections, respectively, of this Agreement and all
exhibits and schedules referred to herein are exhibits and
schedules, respectively, attached to this Agreement. Descriptive
headings as to the contents of particular sections are for
convenience only and shall not control or affect the meaning,
construction or interpretation of any provision of this Agreement.
Any and all schedules, exhibits, annexes, statements, reports,
certificates or other documents or instruments referred to herein
or attached hereto are and shall be incorporated herein by
reference hereto as though fully set forth herein verbatim.
SECTION 12.14 Binding Effect; Assignment. All of the terms,
covenants, representations, warranties and conditions of this
Agreement shall be binding upon, and inure to the benefit of and be
enforceable by, the parties hereto and their respective successors,
representatives and permitted assigns. Nothing expressed or
referred to herein is intended or shall be construed to give any
person other than the parties hereto any legal or equitable right,
remedy or claim under or in respect of this Agreement, or any
provision herein contained, it being the intention of the parties
hereto that this Agreement, the assumption of obligations and
statements of responsibilities hereunder, and all other conditions
and provisions hereof are for the sole benefit of the parties to
this Agreement and for the benefit of no other person. Nothing in
this Agreement shall act to relieve or discharge the obligation or
liability of any third party to any party to this Agreement, nor
shall any provision give any third party any right of subrogation
or action over or against any party to this Agreement. No party to
this Agreement shall assign this Agreement, by operation of law or
otherwise, in whole or in part, without the prior written consent
of the other parties. Any assignment made or attempted in
violation of this Section 12.14 shall be void and of no effect.
SECTION 12.15 Public Disclosure. Neither Crown Park nor
Independent will make, issue or release any announcement,
statement, press release, acknowledgment or other public disclosure
of the existence of, or reveal the terms, conditions or the status
of, this Agreement or the transactions contemplated hereby without
the prior written consent of the other parties to this Agreement;
provided, however, that notwithstanding the foregoing, Crown Park
and Independent
<PAGE>
will be permitted to make any public disclosures or governmental
filings as legal counsel may deem necessary to maintain compliance
with or to prevent violations of applicable federal or state laws
or regulations or that may be necessary to obtain regulatory
approval for the transactions contemplated hereby.
SECTION 12.16 Extension; Waiver. At any time prior to the
Closing Date, the parties may (i) extend the time for the
performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations
and warranties contained herein or in any document, certificate or
writing delivered pursuant hereto, or (iii) waive compliance with
any of the agreements or conditions contained herein. Such action
shall be evidenced by a signed written notice given in the manner
provided in Section 12.07 hereof. No party to this Agreement shall
by any act (except by a written instrument given pursuant to
Section 12.07 hereof) be deemed to have waived any right or remedy
hereunder or to have acquiesced in any breach of any of the terms
and conditions hereof. No failure to exercise, nor any delay in
exercising any right, power or privilege hereunder by any party
hereto shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver of any party of any right or
remedy on any one occasion shall not be construed as a bar to any
right or remedy that such party would otherwise have on any future
occasion or to any right or remedy that any other party may have
hereunder.
SECTION 12.17 Amendments. To the extent permitted by
applicable law, this Agreement may be amended by action taken by or
on behalf of the Board of Directors of Independent and Crown Park
at any time before or after adoption of this Agreement by the
shareholders of Crown Park but, after any submission of this
Agreement to such shareholders for approval, no amendment shall be
made that (i) affects the consideration to be paid for the Crown
Park Common Stock as set forth in Section 1.05 or that materially
and adversely affects the rights of Crown Park's shareholders
hereunder without the requisite approval of such shareholders.
This Agreement may be amended, modified or supplemented only by an
instrument in writing executed by the party against which
enforcement of the amendment, modification or supplement is sought.
SECTION 12.18 Delivery of Schedules. In order to provide for
the prompt execution of this Agreement, the parties hereto agree
that with respect to the schedules to this Agreement:
A. Full and complete originals of all of the schedules
to this Agreement described in Article III of this Agreement
shall be delivered to Independent pursuant to Section 12.07
within ten (10) business days after the date of this
Agreement.
B. Independent will have five (5) business days after
receipt of true, correct and complete schedules to this
Agreement to review such schedules to determine whether they
are in form and substance satisfactory to Independent in its
sole discretion. If such schedules are satisfactory, then
this Agreement shall remain in full force and effect, and the
parties shall proceed in accordance with their respective
rights and obligations hereunder. If such schedules are not
satisfactory to Independent, in its sole discretion,
Independent shall have the unconditional right to terminate
this Agreement and all of its
<PAGE>
obligations hereunder by providing Crown Park notice of such
termination in accordance with the terms of Section 12.07 of
this Agreement no later than 6:00 p.m., Lubbock, Texas time on
the fifth business day after receipt of the schedules to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the date first above written.
INDEPENDENT BANKSHARES, INC.
By: /s/ Bryan Stephenson
-------------------------------
Bryan Stephenson, President
CROWN PARK BANCSHARES, INC.
By: /s/ Larry A. Cypert
--------------------------------
Print Name: Larry A. Cypert
Title: Vice President
New Independent hereby joins in the foregoing Agreement and
undertakes that it will be bound thereby and will do and perform
all acts therein referred to or provided to be done by it.
IN WITNESS WHEREOF, New Independent has caused this
undertaking to be made in counterparts by its duly authorized
officers as of the date first above written.
NEW INDEPENDENT ACQUISITION CORPORATION
By: /s/ Bryan Stephenson
---------------------------------
Bryan Stephenson, President
<PAGE>
The Primary Shareholders hereby join in the foregoing
Agreement and undertakes that each of them will be bound thereby
and will do and perform all acts therein referred to or provided to
be done by them.
IN WITNESS WHEREOF, the Primary Shareholders have each
executed this Agreement to be made in counterparts as of the date
first above written.
/s/ Larry A. Cypert
--------------------------------------
Print Name: Larry A. Cypert
/s/ Claud A. Cypert
--------------------------------------
Print Name: Claud A. Cypert
/s/ Milton Montgomery
--------------------------------------
Print Name: Milton Montgomery
/s/ Judy Ann Miller
Print Name: Judy Ann Miller
/s/ Roy J. Cypert
Print Name: Roy J. Cypert
_____________________________________
Print Name: ______________________________
_____________________________________
Print Name: ______________________________
_____________________________________
Print Name: ______________________________
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Bank Merger
Agreement"), is made as of this 11th day of July, 1996, by and
between WESTERN NATIONAL BANK, LUBBOCK, TEXAS (the "Lubbock Bank")
and FIRST STATE BANK, N.A., ABILENE, TEXAS (the "Abilene Bank").
W I T N E S S E T H:
A. The Lubbock Bank is a national banking association duly
organized and existing under the laws of the United States, having
its principal office in the City of Lubbock, County of Lubbock,
State of Texas, with authorized capital stock consisting of 200,000
shares of common stock, par value $7.50 per share (the "Lubbock
Bank Common Stock"), all of which are issued and outstanding;
B. The Abilene Bank is a national banking association duly
organized and existing under the laws of the United States, having
its principal office in the City of Abilene, County of Taylor,
State of Texas, with authorized capital stock consisting of 250,000
shares of common stock, par value $5.00 per share (the "Abilene
Bank Common Stock"), all of which are issued and outstanding;
C. A majority of the Boards of Directors of each of the
Lubbock Bank and the Abilene Bank pursuant to the authority given
by and in accordance with the provisions of the National Bank Act,
have approved this Bank Merger Agreement pursuant to which the
Lubbock Bank shall be merged with and into the Abilene Bank (the
"Bank Merger") and have authorized the execution hereof; and
D. As and when required by the provisions of this Bank
Merger Agreement, all such action as may be necessary or
appropriate shall be taken by the Lubbock Bank and the Abilene Bank
in order to consummate the Bank Merger.
NOW, THEREFORE, in consideration of the foregoing premises,
the Lubbock Bank and the Abilene Bank hereby agree that the Lubbock
Bank shall be merged with and into the Abilene Bank on the
following terms and conditions:
1. Merger of the Abilene Bank and the Lubbock Bank. At the
Effective Date (as defined in Section 12 of this Bank Merger
Agreement), the Lubbock Bank shall be merged with and into the
Abilene Bank pursuant to the provisions of Section 215 of the
National Bank Act ("Section 215").
2. Effects of the Bank Merger. The Bank Merger shall have
the effects set forth in Section 215. The bank resulting from the
Bank Merger (the "Resulting Bank") shall be deemed
<PAGE>
to be a continuation in entity and identity of each of the Lubbock
Bank and the Abilene Bank; shall be subject to all the liabilities,
obligations, duties and relations of each merging bank, and shall
without the necessity of any conveyance, assignment or transfer,
become the owner of all of the assets of every kind and character
formerly belonging to the Lubbock Bank and the Abilene Bank. If,
on the Effective Date, the Lubbock Bank is acting as trustee,
guardian, executor, administrator or in any other fiduciary
capacity, the Resulting Bank shall, without the necessity of any
judicial action or action by the creator of such trust, continue
such office, trust or fiduciary relationship and shall perform all
of the duties and obligations and exercise all of the powers and
authority connected with or incidental to such fiduciary
relationship in the same manner as though the Resulting Bank had
been originally named or designated as such fiduciary. The naming
or designating by a testator, or the creator of a living trust, of
the Lubbock Bank to act as trustee, guardian, executor or in any
other fiduciary capacity shall be considered the naming or
designating of the Resulting Bank. The name of the Resulting Bank
shall be "First State Bank, N.A." The principal office of the
Abilene Bank shall be the principal office of the Resulting Bank,
and the facilities of the Lubbock Bank and the Abilene Bank shall
be the facilities of the Resulting Bank following the Bank Merger.
3. The Resulting Bank's Articles of Association and Bylaws.
The Articles of Association and Bylaws of the Resulting Bank shall
be as set forth on the attached Exhibits A and B, until the same
shall be amended and changed as provided by law.
4. Directors, Advisory Directors and Officers. The
directors, advisory directors and officers of the Resulting Bank at
the Effective Date shall be the directors, advisory directors and
officers of the Abilene Bank, and each of such persons shall hold
office from the Effective Date until their respective successors
are duly elected or appointed and qualified in the manner provided
in the Articles of Association and Bylaws of the Resulting Bank or
as otherwise provided by law.
5. Conversion of the Abilene Bank Common Stock and the
Lubbock Bank Common Stock. At the Effective Date by virtue of this
Agreement and without any further action on the part of any holder,
all shares of the Abilene Bank Common Stock and the Lubbock Bank
Common Stock outstanding at the Effective Date shall be converted
into 250,000 shares of common stock of the Resulting Bank with a
par value of $5.00 per share.
6. Stock Transfer Books. The stock transfer books of the
Lubbock Bank shall be closed as of the close of business at the
Effective Date, and no transfer of record of any of the shares of
the Lubbock Bank Common Stock shall take place thereafter.
7. Shareholder Approval. This Bank Merger Agreement shall
be submitted to the shareholders of the Lubbock Bank and the
Abilene Bank. Upon approval of the shareholders of the Lubbock
Bank and the Abilene Bank, this Bank Merger Agreement shall be made
effective as soon as practicable thereafter in the manner provided
in Section 12 hereof.
8. Conditions to Consummation of the Bank Merger. All
obligations of the parties under this Bank Merger Agreement are
subject to the fulfillment, prior to or at the Closing, of each of
the conditions precedent set forth in the Agreement and Plan of
Reorganization (the
<PAGE>
"Reorganization Agreement"), by and between Crown Park Bancshares,
Inc., the sole shareholder of the Lubbock Bank, and Independent
Bankshares, Inc., the sole shareholder of the Abilene Bank, any or
all of which may be waived in whole or in part in the manner set
forth in the Reorganization Agreement. Terms with their initial
letter capitalized and not otherwise defined herein shall have the
meanings given them in the Reorganization Agreement.
9. Termination. This Bank Merger Agreement may be
terminated and abandoned at any time prior to or on the Closing
Date, whether before or after action thereon by the shareholders of
each of the Lubbock Bank and the Abilene Bank, pursuant to the
terms and provisions of the Reorganization Agreement.
10. Effect of Termination. In the event of the termination
and abandonment of this Bank Merger Agreement pursuant to the
provisions of Section 9, the liability by reason of this Bank
Merger Agreement or the termination thereof shall be determined
pursuant to the terms and provisions of the Reorganization
Agreement, which terms and provisions are hereby incorporated
herein by reference for all purposes.
11. Waiver, Amendment and Modification. Any of the terms or
conditions of this Bank Merger Agreement may be waived at any time,
whether before or after action thereon by the shareholder of the
Lubbock Bank by the party that is entitled to the benefits thereof.
This Bank Merger Agreement may be modified or amended at any time,
whether before or after action thereon by the shareholder of the
Lubbock Bank or the Abilene Bank, by the party that is entitled to
the benefits thereof. Any waiver, modification or amendment of
this Bank Merger Agreement shall be in writing.
12. Effective Date. Subject to the terms, and upon
satisfaction on or before the Closing Date of all requirements of
law, and the conditions specified in this Bank Merger Agreement,
the Bank Merger shall become effective at the opening of business
on the date specified in the Certificate of Authority to be issued
by Office of the Comptroller of the Currency under the seal of that
office authorizing the Resulting Bank to conduct the business of
banking, such time being herein called the "Effective Date."
13. Multiple Counterparts. For the convenience of the
parties hereto, this Bank Merger Agreement may be executed in
multiple counterparts, each of which shall be deemed an original,
and all counterparts hereof so executed by the parties hereto,
whether or not such counterpart shall bear the execution of each of
the parties hereto, shall be deemed to be, and shall be construed
as, one and the same Bank Merger Agreement. A telecopy or
facsimile transmission of a signed counterpart of this Bank Merger
Agreement shall be sufficient to bind the party or parties whose
signature(s) appear thereon.
14. Governing Law. THIS BANK MERGER AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF TEXAS. VENUE FOR ANY CAUSE OF ACTION ARISING FROM THIS
AGREEMENT SHALL LIE IN LUBBOCK COUNTY, TEXAS.
<PAGE>
15. Further Assurances. Each party hereto agrees from time
to time, as and when requested by the other party hereto, or by its
successors or assigns, to execute and deliver, or cause to be
executed and delivered, all such deeds and instruments and to take
or cause to be taken such further or other acts, either before or
after the Effective Date, as may be deemed necessary or desirable
in order to vest in and confirm to the Resulting Bank title to and
possession of any assets of the Abilene Bank or the Lubbock Bank
acquired or to be acquired by reason of or as a result of the Bank
Merger and otherwise to carry out the intent and purposes hereof,
and the officers and directors of the parties hereto are fully
authorized in the name of their respective corporate names to take
any and all such actions.
16. Assignment. This Bank Merger Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns, but no party to this Bank Merger
Agreement shall assign this Bank Merger Agreement, by operation of
law or otherwise, in whole or in part, without the prior written
consent of the other parties; provided, however, that the Abilene
Bank may assign its rights and obligations hereunder to any of its
affiliates. Any assignment made or attempted in violation of this
Section 16 shall be void and of no effect.
17. Severability. In the event that any provision of this
Bank Merger Agreement is held to be illegal, invalid or
unenforceable under present or future laws, then (a) such provision
shall be fully severable and this Bank Merger Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable
provision were not a part hereof; (b) the remaining provisions of
this Bank Merger Agreement shall remain in full force and effect
and shall not be affected by such illegal, invalid or unenforceable
provision or by its severance from this Bank Merger Agreement; and
(c) there shall be added automatically as a part of this Bank
Merger Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and still be
legal, valid and enforceable.
18. Specific Performance. Each of the parties hereto
acknowledges that the other parties would be irreparably damaged
and would not have an adequate remedy at law for money damages in
the event that any of the covenants contained in this Bank Merger
Agreement were not performed in accordance with its terms or
otherwise were materially breached. Each of the parties hereto
therefore agrees that, without the necessity of proving actual
damages or posting bond or other security, the other party shall be
entitled to temporary and/or permanent injunction or injunctions to
prevent breaches of such performance and to specific enforcement of
such covenants in addition to any other remedy to which they may be
entitled, at law or in equity.
19. Rules of Construction. Descriptive headings as to the
contents of particular sections are for convenience only and shall
not control or affect the meaning, construction or interpretation
of any provision of this Bank Merger Agreement. Each use herein of
the masculine, neuter or feminine gender shall be deemed to include
the other genders. Each use herein of the plural shall include the
singular and vice versa, in each case as the context requires or as
it is otherwise appropriate. The word "or" is used in the
inclusive sense.
20. Articles, Sections, Exhibits and Schedules. Unless
otherwise indicated, all articles and sections referred to herein
are articles and sections, respectively, of this Bank Merger
<PAGE>
Agreement and all exhibits referred to herein are exhibits attached
to this Bank Merger Agreement. Any and all schedules, exhibits,
annexes, statements, reports, certificates or other documents or
instruments referred to herein or attached hereto are and shall be
incorporated herein by reference hereto as though fully set forth
herein verbatim.
21. Binding Effect. All of the terms, covenants,
representations, warranties and conditions of this Bank Merger
Agreement shall be binding upon, and inure to the benefit of and be
enforceable by, the parties hereto and their respective successors,
representatives and permitted assigns. Nothing expressed or
referred to herein is intended or shall be construed to give any
person other than the parties hereto any legal or equitable right,
remedy or claim under or in respect of this Bank Merger Agreement,
or any provision herein contained, it being the intention of the
parties hereto that this Bank Merger Agreement, the assumption of
obligations and statements of responsibilities hereunder, and all
other conditions and provisions hereof are for the sole benefit of
the parties to this Bank Merger Agreement and for the benefit of no
other person. Nothing in this Bank Merger Agreement shall act to
relieve or discharge the obligation or liability of any third party
to any party to this Bank Merger Agreement, nor shall any provision
give any third party any right of subrogation or action over or
against any party to this Bank Merger Agreement.
<PAGE>
IN WITNESS WHEREOF, the Lubbock Bank and the Abilene Bank have
caused this Bank Merger Agreement to be executed by their duly
authorized officers as of the date first above written, and the
directors constituting a majority of the Board of Directors of each
such bank have hereunto subscribed their names.
WESTERN NATIONAL BANK
/s/ Jone Fisher
---------------------------------
By: Jone Fisher
Its: Chairman
ATTEST:
/s/ Carrie Byrd
- ------------------------------
Carrie Byrd, Cashier
/s/ Judy Ann Miller /s/ Claud Cypert
- ------------------------------ -------------------------
Judy Ann Miller Claud Cypert
/s/ Roy J. Cypert /s/ Larry Cypert
- ------------------------------ -------------------------
Roy J. Cypert Larry Cypert
/s/ Dr. Jewel Davis /s/ Jone L. Fisher
- ------------------------------ -------------------------
Dr. Jewel Davis Jone L. Fisher
/s/ Milton P. Montgomery /s/ B. J. Randles
- ------------------------------ -------------------------
Milton P. Montgomery B. J. Randles
A Majority of the Directors of
WESTERN NATIONAL BANK, LUBBOCK, TEXAS
<PAGE>
FIRST STATE BANK, N.A.
/s/ Bryan Stephenson
---------------------------------
Bryan Stephenson, Chairman of the
Board
ATTEST:
/s/ Albert Jordan
- ------------------------------
Albert Jordan, Cashier
/s/ Bryan Stephenson /s/ Jack Bargainer
- ------------------------------ -------------------------
Bryan Stephenson Jack Bargainer, M.D.
/s/ Scott L. Taliaferro, Jr. /s/ Stanley Whisenhunt
- ------------------------------ -------------------------
Scott L. Taliaferro, Jr. Stanley Whisenhunt
/s/ Jim Fitzhugh /s/ Randal Crosswhite
- ------------------------------ -------------------------
Jim Fitzhugh Randal Crosswhite
A Majority of the Directors of
FIRST STATE BANK, N.A., ABILENE, TEXAS
<PAGE>
INDEMNITY AGREEMENT
THIS Indemnity Agreement is made as of the 11th day of July,
1996 by and among the individuals who are signatories hereto as
indemnitors (collectively, the "Indemnitors") and Independent
Bankshares, Inc., a Texas corporation (the "Indemnitee").
W I T N E S S E T H
WHEREAS, Indemnitee has negotiated an Agreement and Plan of
Reorganization (the "Agreement") with Crown Park Bancshares, Inc.
("Crown Park") pursuant to which Indemnitee will acquire Crown Park
and its wholly-owned subsidiary, Western National Bank, Lubbock,
Texas (the "Bank").
WHEREAS, the Indemnitors are shareholders and directors of
Crown Park.
WHEREAS, Indemnitee has agreed to enter into the Agreement
only upon the condition that Indemnitee be protected against any
Prior Loss (as defined below).
WHEREAS, to induce Indemnitee to enter into the Agreement, the
Indemnitors desire to execute this Indemnity Agreement.
NOW, THEREFORE, in consideration of the premises and the
covenants herein contained, and in consideration of the execution
by the Indemnitee of the Agreement, the Indemnitee and the
Indemnitors hereby agree as follows:
1. Indemnification. The Indemnitors hereby jointly and
severally acknowledge and agree to indemnify and hold Indemnitee
harmless from any loss ("Prior Loss") arising out of any prior
contract for the sale or merger of Crown Park and/or the Bank
("Prior Transaction"). The Indemnitors further agree that the
amount of indemnification owed to Indemnitee pursuant to this
Indemnity Agreement is unlimited.
2. Procedure for Indemnification. The Indemnitee shall,
within ten (10) business days after the service of process in a
lawsuit, within thirty (30) calendar days after such Indemnitee
acquires knowledge of a claim covered by the indemnities under this
Indemnity Agreement or at Closing (as such term is defined in the
Agreement) in the event that the lawsuit is filed prior to the
Closing, give written notice to the Indemnitors, pursuant to
Section 7, describing the lawsuit or claim and the estimated amount
thereof; provided, however, that any failure by the Indemnitee to
give the foregoing written notice within such period shall not
affect the indemnities under this Article XI to the extent the
Indemnitors are not actually prejudiced by such failure. Upon
receipt of such notice, the Indemnitors shall be entitled, at their
own cost and expense: (i) to assume responsibility and control of
the defense, compromise or settlement of any judicial proceeding
that involves solely a claim for one or more liabilities for which
indemnity may be sought hereunder, and (ii) in any other case, to
be consulted by the Indemnitee (who shall consider in good faith
all requests of the Indemnitors with respect to all such
proceedings) with respect to proceedings subject to control of the
Indemnitee. For so long as the Indemnitors are contesting any such
claim
<PAGE>
in good faith and by appropriate proceedings, the Indemnitors shall
not be required to make payment under this provision to the
Indemnitee. If the Indemnitors are controlling the conduct of any
such proceeding, the Indemnitors shall, on request of the
Indemnitee, provide to the Indemnitee, at reasonable intervals, a
summary of any developments respecting such proceeding that have
occurred since the date of the last such summary so provided to
Indemnitee. The Indemnitee may participate at its own expense in
any judicial proceeding controlled by the Indemnitors pursuant to
the preceding provision. The Indemnitee shall supply the
Indemnitors with such information requested by the Indemnitors as
in the reasonable opinion of counsel to the Indemnitors is
necessary and advisable for the Indemnitors to control and conduct
the defense of any proceeding, to prosecute any counterclaim or to
participate in any proceeding to the extent permitted by this
provision and shall cooperate with the Indemnitors in the conduct
of the defense and the assertion of any counterclaim in any such
proceeding. The Indemnitee shall not enter into any settlement or
other compromise with respect to any liability as to which
indemnity may be sought without the prior written consent of the
Indemnitors, which consent shall not be unreasonably withheld. The
Indemnitee shall be entitled to communicate solely with the person
designated in Section 7 to receive notices on behalf of all of the
Indemnitors, and the Indemnitors hereby appoint such person as
their duly authorized agent and attorney-in-fact, with authority to
make binding decisions on behalf of the Indemnitors with respect to
this Indemnity Agreement.
3. Successors and Assigns. This Indemnity Agreement shall
bind or inure to the benefit of the respective personal
representatives, heirs, successors and permitted assigns of the
respective parties. The obligations of the Indemnitors hereunder
shall not be assignable without the prior written consent of
Indemnitee.
4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
5. Specific Performance. Each of the parties hereto
acknowledges that the other party would be irreparably damaged and
would not have an adequate remedy at law for money damages in the
event that any of the covenants contained in this Indemnity
Agreement were not performed in accordance with its terms or
otherwise were materially breached. Each of the parties hereto
therefore agrees that the other party shall be entitled to an
injunction or injunctions to prevent breaches of such performance
and to specific enforcement of such covenants in addition to any
other remedy to which it may be entitled, at law or in equity.
6. Attorneys' Fees and Costs. In the event attorneys' fees
or other costs are incurred to secure performance of any of the
obligations herein provided for, or to establish damages for the
breach thereof, or to obtain any other appropriate relief, whether
by way of prosecution or defense, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs incurred
therein.
7. Notices. Any notice, request, instruction or other
document to be given under this Indemnity Agreement after the date
hereof by any party hereto to any other party shall be in writing
and shall be delivered personally or sent by registered or
certified mail, postage prepaid, at the addresses set forth below.
The parties may change their respective addresses by written notice
to the other parties sent as provided in this Section 7.
<PAGE>
IF TO INDEMNITEE:
Mr. Bryan Stephenson
President
Independent Bankshares, Inc.
547 Chestnut
Abilene, Texas 79602
IF TO THE INDEMNITORS:
Mr. Claud Cypert
7713 NW 41st Circle
Bethany, Oklahoma 73008
8. Severability. If any provision of this Indemnity
Agreement is held to be illegal, invalid or unenforceable under
present or future laws effective during the term of this Indemnity
Agreement, such provision shall be fully severable; this Indemnity
Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of
this Indemnity Agreement; and the remaining provisions of this
Indemnity Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable provision
or by its severance from this Indemnity Agreement.
9. Counterparts. This Indemnity Agreement may be executed
in a number of counterparts, each of which for all purposes is to
be deemed an original. All counterparts so executed by the parties
to this Indemnity Agreement, whether or not such counterpart shall
bear the execution of each of the parties, shall be deemed to be
and shall be construed as one and the same Indemnity Agreement.
10. Facsimile. A telecopy or facsimile transmission of a
signed counterpart of this Indemnity Agreement shall be sufficient
to bind the party or parties whose signature(s) appear therein.
IN WITNESS WHEREOF, this Indemnity Agreement has been executed
as of the date first above written.
INDEMNITORS:
/s/ Larry S. Cypert
-------------------------------------
Print Name: Larry S. Cypert
/s/ Claud A. Cypert
-------------------------------------
Print Name: Claud A. Cypert
<PAGE>
/s/ Milton Montgomery
-------------------------------------
Print Name: Milton Montgomery
/s/ Roy J. Cypert
-------------------------------------
Print Name: Roy J. Cypert
____________________________________
Print Name: ______________________________
____________________________________
Print Name: ______________________________
____________________________________
Print Name: ______________________________
____________________________________
Print Name: ______________________________
INDEMNITEE:
INDEPENDENT BANKSHARES, INC.
By: /s/ Bryan Stephenson
-----------------------------------------
Bryan Stephenson, President
