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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 8-K
CURRENT REPORT
----------------------------------
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 22, 1995
ELDORADO BANCORP
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(Exact name of Registrant as specified in charter)
California 1-9709 95-3642383
- ------------------------------ ------------- --------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
17752 East 17th Street, Tustin California 92680
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (714) 832-4204
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
Page 1 of 100 Pages
Exhibit Index on Sequentially Numbered Page 4
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ITEM 5. OTHER EVENTS
On May 22, 1995, Eldorado Bancorp (the "Company") entered into a
definitive merger agreement pursuant to which the Company's wholly- owned
subsidiary, Eldorado Bank, will acquire, by merger, all of the outstanding
shares of common stock of Mariners Bancorp and Mariners Bancorp's wholly-owned
subsidiary, Mariners Bank, will be merged with and into Eldorado Bank, which
will be the surviving bank in that merger. In the merger between Eldorado Bank
and Mariners Bancorp, the shareholders of Mariners Bancorp will receive one
share of common stock of the Company and $7.30 in cash, subject to certain
adjustments, for each of their shares of common stock of Mariners Bancorp. The
completion of the transaction is subject to certain conditions, including
obtaining approval of the shareholders of the Company and Mariners Bancorp and
approval of applicable regulatory agencies.
ITEM 7. EXHIBITS
(c) EXHIBITS.
Exhibit Number
2.0 Agreement and Plan of Reorganization and
Merger dated as of May 22, 1995, by and among
Eldorado Bancorp, a California corporation,
Eldorado Bank, a California state chartered
bank, Mariners Bancorp, a California
corporation and Mariners Bank, a California
state chartered bank.
99.0 Press Release dated May 22, 1995.
Page 2 of 100 Pages
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ELDORADO BANCORP
Date: May 25, 1995 By: /s/ DAVID R. BROWN
-------------------------------------
David R. Brown,
Executive Vice President
Page 3 of 100 Pages
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EXHIBIT INDEX
The following exhibits are attached hereto and incorporated herein by reference:
<TABLE>
<CAPTION>
Sequentially
Exhibit Number Description Numbered Page
- -------------- ----------- -------------
<S> <C> <C>
2.0 Agreement and Plan of Reorganization and Merger 5
dated as of May 22, 1995, by and among
Eldorado Bancorp, a California corporation
Eldorado Bank, a California state chartered
bank, Mariners Bancorp, a California
corporation and Mariners Bank, a California
state chartered bank.*
99.0 Press Release dated May 22, 1995. 99
</TABLE>
* Schedules omitted. The Registrant shall furnish supplementally to the
Securities and Exchange Commission a copy of any omitted schedule upon
request.
Page 4 of 100 Pages
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Exhibit 2.0
AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
DATED MAY 22, 1995
BY AND AMONG
MARINERS BANCORP
MARINERS BANK
ELDORADO BANCORP
AND
ELDORADO BANK
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2. THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.2 Effect of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.3 Articles of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.4 EB Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.5 Conversion of MARINERS Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5.2.1 Stock Price Cash Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5.2.2 MARINERS Consolidated Tangible Net Worth Adjustment . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.6 Cancellation of MARINERS Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.7 Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.8 Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.9 Effect of Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.10 Boards of Directors of ELDORADO and EB following the Effective Time . . . . . . . . . . . . . . 13
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF MARINERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.1 Organization; Corporate Power; Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.2 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.4 Authorization of Agreement; No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.5 Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.6 MARINERS Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.7 Accuracy of Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.8 Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.10 Agreements with Banking Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.12 Title to Assets other than Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.13 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.14.1 Filing of Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.14.2 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.14.3 Audit History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.14.4 Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.14.5 Withholding Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.14.6 Tax Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.14.7 Safe Harbor Lease Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.14.8 Security for Tax-Exempt Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.14.9 Tax-Exempt Use Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.14.10 Foreign Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.14.11 No Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.14.12 Tax Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
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<TABLE>
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3.14.13 Tax Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.14.14 IRC Section 382 Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.14.15 Disclosure Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.15 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.16 Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.17 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.18 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.19 Absence of Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.20 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.21 Employees; Employee Benefit Plans; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.22 Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.23 Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.24 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.25 Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.26 Interest Rate Risk Management Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.27 Effective Date of Representations, Warranties, Covenants and Agreements . . . . . . . . . . . . 28
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF ELDORADO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.1 Organization; Corporate Power; Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.2 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.3 Authorization of Agreement; No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.4 Capital Structure of ELDORADO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.5 ELDORADO Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.6 Accuracy of Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.7 Compliance With Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.9 Agreements with Banking Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.10 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.11 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.12 Absence of Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.13 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.15.1 Filing of Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.15.2 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.16 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.17 Effective Date of Representations, Warranties, Covenants and Agreements . . . . . . . . . . . . 34
ARTICLE 5. ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.1 Access to Information, Due Diligence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.2 Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.3 Taking of Necessary Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.4 Registration Statement and Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 5.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 5.6 Notification of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
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<TABLE>
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Section 5.7 Environmental Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.8 Closing Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.9 Additional Accruals/Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 6. CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.1 Affirmative Conduct of MARINERS and MB . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.2 Negative Covenants of MARINERS and MB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.3 Conduct of ELDORADO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 7. CONDITIONS PRECEDENT TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.1 Conditions to the Parties' Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.2 Conditions to ELDORADO's and EB's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.3 Conditions to MARINER's and MB's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 8. TERMINATION, AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 8.2 Effect of Termination; Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 8.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 8.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 8.5 Liquidated Damages; Cancellation Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 9. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.1 Non-Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.4 Entire Agreement/No Third Party Rights/Assignment . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.5 Non-disclosure of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.7 Headings/Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.8 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
This AGREEMENT AND PLAN OF REORGANIZATION AND MERGER (the
"Agreement") is entered into as of May 22, 1995 by and among MARINERS BANCORP,
a California corporation ("MARINERS"), MARINERS BANK, a California state
chartered bank ("MB"), which is a wholly-owned subsidiary of MARINERS, ELDORADO
BANCORP, a California corporation ("ELDORADO"), and ELDORADO BANK, a California
state chartered bank ("EB"), which is a wholly-owned subsidiary of ELDORADO.
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of MARINERS and ELDORADO
have determined that it is in the best interests of MARINERS and ELDORADO and
their respective shareholders for MARINERS to be merged with and into EB, and
following consummation of such Merger, that MB also be merged with and into EB,
upon the terms and subject to the conditions set forth in this Agreement and in
accordance with the California Corporations Code and other applicable laws; and
WHEREAS, it is the intention of the parties that the merger of
MARINERS with and into EB be consummated pursuant to Section 368(a)(1)(A) and
Section 368(a)(2)(D) of the IRC; and
WHEREAS, the respective Boards of Directors of MARINERS, MB, ELDORADO
and EB have approved this Agreement and the transactions contemplated hereby;
and
WHEREAS, MARINERS' Board of Directors has resolved to recommend
approval of the merger of MARINERS and EB to its shareholders; and
WHEREAS, ELDORADO's Board of Directors has resolved to recommend
approval of the merger of MARINERS and EB to its shareholders.
NOW, THEREFORE, in consideration of these premises and the
representations, warranties and agreements herein contained, MARINERS and MB
and ELDORADO and EB hereby agree as follows:
ARTICLE 1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
"Acquisition Event" shall mean any of the following:
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(a) Prior to the termination of this Agreement, MARINERS
shall have authorized, recommended, publicly proposed or publicly announced an
intention to authorize, recommend or propose, or shall have entered or
announced an intention to enter into a letter of intent, an
agreement-in-principle or a definitive agreement with any Person (other than
ELDORADO or any Subsidiary of ELDORADO) to effect, an Acquisition Transaction
or failed to publicly oppose a Tender Offer or an Exchange Offer (as defined
below). As used herein, the term "Acquisition Transaction" shall mean (i) a
merger, consolidation or similar transaction involving MARINERS or any of its
Subsidiaries (other than internal mergers, reorganizations, consolidations or
dissolutions involving only existing Subsidiaries), (ii) the disposition, by
sale, lease, exchange, dissolution or liquidation, or otherwise, of all or
substantially all of the assets of MARINERS or MB or any asset or assets of
MARINERS or MB the disposition or lease of which would result in a material
change in the business or business operations of MARINERS or MB, a transfer of
any shares of stock or other securities of MB to any Person other than
MARINERS, or a material change in the assets, liabilities or results of
operations or in the future prospects of MARINERS or MB, including, but not
limited to a grant of an option entitling any Person (other than ELDORADO or
any Subsidiary of ELDORADO) to acquire any shares of stock of MB or any assets
material to either of the respective businesses of MARINERS or MB; or (iii)
the issuance, sale or other disposition (including, without limitation, by way
of merger, consolidation, share exchange or any similar transaction) of shares
of Common Stock or other Equity Securities, or the grant of any option, warrant
or other right to acquire shares of Common Stock or other Equity Securities,
representing directly, or on an as-exercised, as-exchanged or as-converted
basis (in the case of options, warrants, rights or exchangeable or convertible
Equity Securities), 15% or more of the voting securities of MARINERS; or
(b) Prior to termination of this Agreement (i) any Person
(other than ELDORADO, or any Subsidiary of ELDORADO or a person who is a party
to a Director-Shareholder Agreement) shall have increased the number of shares
of MARINERS' Common Stock over which such person has beneficial ownership (as
such term is defined in Rule 13d-3 promulgated under the Exchange Act) by a
number that is greater than 1% of the then outstanding shares of MARINERS'
Common Stock if, after giving effect to such increase, such Person owns,
beneficially, more than 5% of MARINERS' outstanding shares of Common Stock, or
(ii) any "group" (as such term is defined under the Exchange Act) shall have
been formed which beneficially owns, or has the right to acquire beneficial
ownership of, more than 5% of the then outstanding shares of MARINERS Common
Stock; or
(c) The approval by MARINERS' shareholders of, or the
consummation by MARINERS or MB of, any Acquisition Transaction as described in
Subsection (a) of this Paragraph within a period of two hundred seventy (270)
days following: (i) the termination of this Agreement by ELDORADO pursuant to
Sections 8.1.1, 8.1.3, 8.1.5, 8.1.6, 8.1.9, 8.1.11 or 8.1.13, or by ELDORADO
pursuant to Section 8.1.15 solely by reason of the failure of any of the
conditions set forth in Sections 7.2.1, 7.2.3, 7.2.4 or 7.2.5 to have been
satisfied, where such failure shall have been caused in whole or in part by any
action or inaction within the control of MARINERS, MB, any Subsidiary of
MARINERS or MB, or the directors or executive officers of MARINERS or of MB or
any of their Subsidiaries (it being understood that any action or inaction
outside of the control of MARINERS, MB, their Subsidiaries, and the respective
directors and executive officers thereof, such as, by way of example only, the
filing of a lawsuit against any of them or the outcome of the vote by
shareholders of MARINERS (other than shareholders who are also directors of
MARINERS) on approval of this Merger and this
2
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Agreement, shall not come within this Subsection (c) of this paragraph); or
(ii) the termination of this Agreement by MARINERS pursuant to Section 8.1.14
by reason of the failure of the condition set forth in Section 7.3.7 to have
been satisfied.
"Acquisition Proposal" shall have the meaning given such term in
Section 6.2.5.
"Affected Party" shall have the meaning given to it in Section 5.8.
"Affiliate" or "affiliate" shall mean, with respect to any other
Person, any Person that, directly or indirectly, controls or is controlled by
or is under common control with such Person.
"Affiliate Agreements" shall have the meaning given to such term in
Section 5.3.3.
"Average ELDORADO Closing Price" shall have the meaning given to that
term in Section 2.5.
"Bank Merger" shall have the meaning given such term in Section 2.8.
"Bank Merger Agreement" shall have the meaning given such term in
Section 2.8.
"Benefit Arrangement" shall have the meaning given such term in
Section 3.21.4.
"BHCA" shall mean the Bank Holding Company Act of 1956, as amended.
"Book Value" shall have the meaning given to it in Section 5.9.2
"Business Day" shall mean any day, other than a Saturday, Sunday or
any other day, such as a legal holiday, on which California state banks in
California are not open for substantially all their banking business.
"California Corporations Code" shall mean the General Corporation Law
of the State of California.
"California Financial Code" shall mean the Financial Code of the State
of California.
"Cash Component" shall have the meaning given to such term in Section
2.5.
"Classified Assets" shall have the meaning given to such term in
Section 6.1.15.
"Closing" shall have the meaning given to such term in Section 2.1.
"Closing Date" shall have the meaning given to such term in Section
2.1.
"Closing Schedules" shall have the meaning given to such term in
Section 5.8.
"Collateralizing Real Estate" shall have the meaning given to such
term in Section 3.24.1.
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"Default" shall mean, as to any party to this Agreement, a failure by
such party to perform, in any material respect, any of the agreements or
covenants of such party contained in Articles 5 or 6.
"Determination Date" shall mean the last business day of the calendar
month immediately preceding the calendar month in which the Effective Time
occurs.
"Disclosed Matters" shall have the meaning given such term in Section
5.7.1.
"Dissenting Shares" shall mean shares of Common Stock of MARINERS
which come within all of the descriptions set forth in Subparagraphs (1), (2),
(3) and (4) of Paragraph (a) of Section 1300 of the California Corporations
Code.
"Dissenting Shareholder Notices" shall mean the notice required to be
given to record holders of Dissenting Shares pursuant to Paragraph (a) of
Section 1301 of the California Corporations Code.
"EB" shall have the meaning set forth in the preamble to this
Agreement.
"Effective Time" shall have the meaning given such term in Section 2.1.
"ELDORADO" shall have the meaning set forth in the preamble to this
Agreement.
"ELDORADO Common Stock" shall mean the Common Stock, no par value per
share, of ELDORADO.
"ELDORADO Fairness Opinion" shall have the meaning given to such term
in Section 7.2.13.
"ELDORADO Filings" shall have the meanings given such term in Section
4.5.
"ELDORADO Financial Statements" shall mean the financial statements of
ELDORADO that were filed on SEC Form 10-K for the year ended December 31, 1994
and the unaudited financial statements filed on SEC Form 10-Q for the quarter
ended March 31, 1995.
"ELDORADO SEC Documents" shall have the meaning set forth in Section
4.5.2.
"Employee plan" shall have the meaning given such term in Section
3.21.3.
"Environmental Laws" shall mean and include any and all laws,
statutes, ordinances, rules, regulations, orders, or determinations of any
Governmental Entity pertaining to health or to the environment, including,
without limitation, the Clean Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Federal Water Pollution Control Act Amendments, the
Occupational Safety and Health Act of 1970, as amended, the Resource
Conversation and Recovery Act of 1976, as amended ("RCRA"), the Hazardous
Materials Transportation Act of 1975, as amended, the Safe Drinking Water Act,
as amended, and the Toxic Substances Control Act, as amended.
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"Equity Securities" shall have the meaning given to such term in the
Exchange Act.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" shall mean First Interstate Bank, or such other
Person as ELDORADO shall have appointed to perform the duties set forth in
Section 2.7.
"Exchange Offer" shall mean the commencement (as such term is defined
in Rule 14d-2 under the Exchange Act) of an exchange offer or the filing by any
Person of a registration statement under the Securities Act with respect to an
exchange offer to purchase any shares of MARINERS Common Stock such that, upon
consummation of such offer, such Person would own or control 15% or more of the
then outstanding shares of MARINERS Common Stock.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System.
"Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles.
"Governmental Entity" shall mean any court, federal, state, local or
foreign government or any administrative agency or commission or other
governmental authority or instrumentality whatsoever.
"Hazardous Substances" shall have the meaning given such term in
Section 3.24.4.
"Intellectual Property" shall have the meaning given such term in
Section 3.23.
"IRC" shall mean the Internal Revenue Code of 1986, as amended.
"Interest Rate Management Arrangements" shall have the meaning given
to such term in Section 3.26.
"Knowledge" shall mean, with respect to any representation or warranty
contained in this Agreement: (1) as to ELDORADO or EB, the actual knowledge,
after reasonable inquiry, of any executive officer of ELDORADO listed on
Schedule 1A hereto; and (2) as to MARINERS, the actual knowledge, after
reasonable inquiry, of any director or executive officer of MARINERS or MB that
is listed by name on Schedule 1B hereto.
"Last Regulatory Approval" shall mean the final Requisite Regulatory
Approval required, from any Governmental Entity under applicable federal laws
of the United States and laws of any state having jurisdiction over the Merger
or Bank Merger, to permit the parties to consummate the Merger and Bank Merger.
"Loan-in-Foreclosure" shall have the meaning given to such term in
Section 5.9.2.
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"Material Adverse Effect" shall mean a material adverse effect: (i)
on the business, assets, results of operations, financial condition or
prospects of a Person and its subsidiaries, if any, taken as a whole (unless
specifically indicated otherwise); or (ii) on the ability of a Person that is a
party to this Agreement to perform its obligations under this Agreement or to
consummate the transactions contemplated by this Agreement.
"Material Adverse Event" shall have the meaning given to such term in
Section 8.1.13.
"Merger" shall have the meaning set forth in Section 2.1.
"MARINERS" shall have the meaning set forth in the preamble of this
Agreement.
"MARINERS Certificates" shall have the meaning given such term in
Section 2.7.1.
"MARINERS Common Stock" shall mean the common stock, no par value, of
MARINERS and any Common Stock of MARINERS created pursuant to any
recapitalization, reorganization, or similar event or any subdivision or
combination of shares of common stock or similar event.
"MARINERS Consolidated Tangible Net Worth" shall mean the difference
between:
(A) The total shareholders' equity of MARINERS as of the
Determination Date, determined in accordance with Generally
Accepted Accounting Principles applied consistently with prior
periods (but not including (i) any equity raised by MARINERS
subsequent to the date of this Agreement from the capital or
private markets or otherwise; or (ii) any amount attributable
to the actual exercise of any MARINERS Stock Options between
the date of this Agreement and the Closing Date or (iii) any
reduction in MB's loan loss, OREO or other contingency
reserves);
and
(B) Reserves for loan or other credit losses and reserves
for losses on OREO and for other contingencies (if and to the
extent not already deducted in the determination of MARINERS'
shareholders equity); excess mortgage servicing rights; the
fees and costs incurred by MARINERS or MB attributable to the
negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby including
the amounts required to be expended to reacquire outstanding
stock options as provided in Section 2.6 (if and to the extent
not already deducted in the determination of MARINERS'
shareholders equity); the amounts of goodwill, if any, core
deposit intangibles and any other intangible assets on the
books of MARINERS; and the following amounts attributable to
the period from January 1, 1995 to the Determination Date:
(1) gains on securities transactions, including mark-to-market
gains; (2) gains and income attributable to real
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estate development activities, including sales of OREO; (3)
gains from the sale or other disposition of assets not in the
ordinary course of business; and (4) gains attributable to
non-recurring extraordinary items or to changes related to new
accounting principles and changes in application of existing
accounting principles; it being understood and agreed that the
items in clauses (1) to (4) of this paragraph (B) shall be
determined net of any related tax benefits.
"MARINERS' Fairness Opinion" shall have the meaning given to such term
in Section 7.3.7.
"MARINERS Filings" shall have the meaning given such term in Section
3.6.1.
"MARINERS Financial Statements" shall have the meaning given to such
term in Section 3.7.3.
"MARINERS Stock Options" shall mean any options to purchase any
MARINERS Common Stock or any other Equity Securities of MARINERS granted on or
prior to the Effective Time, whether pursuant to the MARINERS Stock Option Plan
or otherwise.
"MARINERS Stock Option Plan" shall mean MARINERS' written Stock Option
Plan as described in Schedule 3.25 hereto.
"MB" shall have the meaning given to such term in the preamble to this
Agreement.
"MB FDIC Documents" shall have the meaning given to such term in
Section 3.6.2.
"New Certificates" shall have the meaning given to such term in
Section 2.7.1.
"Perfected Dissenting Shares" shall mean Dissenting Shares as to which
the recordholder has made demand on MARINERS in accordance with Paragraph (b)
of Section 1301 of the California Corporations Code and has not withdrawn such
demand prior to the Effective Time.
"Per Share Merger Consideration" shall have the meaning given to such
term in Section 2.5.
"Persons" or "persons" shall mean an individual, corporation,
partnership, limited liability company, joint venture, trust or unincorporated
organization, Governmental Entity or any other legal entity whatsoever.
"Properties" shall have the meaning given to such term in Section
3.24.1.
"Proxy Statement" shall have the meaning given to such term in Section
3.7.2.
"Registration Statement" shall have the meaning given to such term in
Section 3.7.2.
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"Regulatory Authority" shall mean any Governmental Entity, the
approval of which is legally required for consummation of the Merger or the
Bank Merger.
"Requisite Regulatory Approvals" shall have the meaning set forth in
Section 7.1.2.
"Returns" shall mean all returns, declarations, reports, statements,
and other documents required to be filed with respect to federal, state, local
and foreign Taxes, and the term "Return" means any one of the foregoing
Returns.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Site Assessment" shall have the meaning given to such term in Section
5.7.1.
"Stock Component" shall have the meaning given to such term in Section
2.5.
"Subsidiary" shall mean, with respect to any corporation (the
"parent"), any other corporation, association or other business entity of which
more than 50% of the shares of the Voting Stock are owned or controlled,
directly or indirectly, by the parent or by one or more Subsidiaries of the
parent, or by the parent and one or more of its Subsidiaries.
"Subsidiary Merger Agreement" shall have the meaning given to such
term in Section 2.1.
"Superior Proposal" shall have the meaning given to such term in
Section 6.2.5.
"Surviving Bank" shall have the meaning given to such term in Section
2.8.
"Surviving Corporation" shall have the meaning given to such term in
Section 2.1.
"Taxes" shall mean all federal, state, local and foreign net income,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, lease, service, service use, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties, or other taxes, together with any interest and any
penalties, additions to tax, or additional amounts with respect thereto, and
the term "Tax" means any one of the foregoing Taxes.
"Tax Filings" shall mean any applications, reports, statements or
other Returns required to be filed with any local, state of federal
Governmental Entity before the Merger or the Bank Merger may become effective,
including, but not limited to, any filing required to be made with the
California Franchise Tax Board to obtain Tax Clearance Certificates for the
Merger and Bank Merger.
"Tender Offer" shall mean the commencement (as such term is defined in
Rule 14d-2 under the Exchange Act) of a tender offer or the filing by any
person of a registration statement under the Securities Act with respect to, a
tender offer to purchase any shares of MARINERS
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Common Stock such that, upon consummation of such offer, such person would own
or control 15% or more of the then outstanding voting securities of MARINERS.
"Understanding" shall have the meaning set forth in Section 6.1.5.
"Voting Securities" or "Voting Stock" shall mean the stock or other
securities or any other interest entitling the holders thereof to vote in the
election of the directors, trustees or Persons performing similar functions of
the Person in question, including, without limitation, non-voting securities
that are convertible or exchangeable into voting securities, but shall not
include any stock or other interest so entitling the holders thereof to vote
only upon the happening of a contingency (other than a conversion or exchange
thereof into voting securities), whether or not such contingency has occurred.
ARTICLE 2. THE MERGERS
Section 2.1 The Merger. Subject to the terms and conditions of
this Agreement, as promptly as practicable following the receipt of the Last
Regulatory Approval and the expiration of all applicable waiting periods,
MARINERS shall be merged with and into EB, EB shall be the Surviving
Corporation in such merger, and each of the then outstanding shares of MARINERS
Common Stock shall be automatically converted into a right to receive the Per
Share Merger Consideration, all pursuant to the Agreement of Merger attached to
this Agreement as Exhibit 2.1 (the "Subsidiary Merger Agreement") and in
accordance with the applicable provisions of the California Financial Code and
the California Corporations Code (the "Merger"). The closing of the Merger
(the "Closing") shall take place at a location and time and Business Day to be
designated by ELDORADO and reasonably concurred in by MARINERS (the "Closing
Date") which shall not, however, be later than forty-five (45) days after
receipt of the last Regulatory Approval and expiration of all applicable
waiting periods. The Merger shall be effective when the Subsidiary Merger
Agreement (together with any other documents required by law to effectuate the
Merger) shall have been approved by the Superintendent of Banks and filed with
the Secretary of State of the State of California. When used in this
Agreement, the term "Effective Time" shall mean the time of filing of the
Subsidiary Merger Agreement with the Secretary of State, and "Surviving
Corporation" shall mean EB.
Section 2.2 Effect of Merger. By virtue of the Merger and at the
Effective Time, all of the rights, privileges, powers and franchises and all
property and assets of every kind and description of MARINERS and EB shall be
vested in and be held and enjoyed by the Surviving Corporation, without further
act or deed, and all the estates and interests of every kind of MARINERS and
EB, including all debts due to either of them, shall be as effectively the
property of the Surviving Corporation as they were of MARINERS and EB
immediately prior to the Effective Time, and the title to any real estate
vested by deed or otherwise in either MARINERS or EB shall not revert or be in
any way impaired by reason of the Merger; and all rights of creditors and liens
upon any property of MARINERS and EB shall be preserved unimpaired and all
debts, liabilities and duties of MARINERS and EB shall be debts, liabilities
and duties of the Surviving Corporation and may be enforced against it to the
same extent as if such debts, liabilities and duties had been incurred or
contracted by it, and none of such debts, liabilities or duties shall be
expanded, increased, broadened or enlarged by reason of the Merger.
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Section 2.3 Articles of Incorporation. The articles of
incorporation of EB in effect immediately prior to the Effective Time shall be
the articles of incorporation of the Surviving Corporation until amended in
accordance with the provisions thereof and the name of the Surviving
Corporation shall be "Eldorado Bank."
Section 2.4 EB Stock. The authorized and issued capital stock of
EB, all of the shares of which are owned by ELDORADO, shall not be affected by
the Merger and shall continue to be outstanding at and after the Effective
Time.
Section 2.5 Conversion of MARINERS Common Stock.
2.5.1 Each share of MARINERS Common Stock outstanding
immediately prior to the Effective Time shall be converted at the Effective
Time into and become the right to receive the Per Share Merger Consideration;
provided, however, that any Perfected Dissenting Shares shall not be so
converted and in lieu of such conversion shall be treated in accordance with
the applicable provisions of Section 1300 et. seq. of the California
Corporations Code.
2.5.2 The Per Share Merger Consideration into which each
outstanding share of MARINERS Common Stock (other than Dissenting Shares) shall
be converted at the Effective Time shall consist of one (1) share of ELDORADO
Common Stock (the "Stock Component") and cash in the amount of $7.30 (the "Cash
Component"), plus any increases and minus any decreases in the Cash Component
of the Per Share Merger Consideration as provided in Subsections 2.5.2.1 and
2.5.2.2 hereof.
2.5.2.1 Stock Price Cash Adjustment. If the
average of the closing prices of ELDORADO Common Stock for all of the
trading days in the calendar month immediately prior to the month in
which the Effective Time occurs ("Average ELDORADO Closing Price") is
less than $12.00, then the Cash Component of the Per Share Merger
Consideration shall be increased by an amount equal to the difference
between $12.00 and the Average ELDORADO Closing Price, provided,
however, that the maximum amount of such increase shall not exceed
$1.50. If, on the other hand, the Average ELDORADO Closing Price is
greater than $13.00, then the Cash Component of the Per Share Merger
Consideration shall be decreased in an amount equal to the difference
between the Average ELDORADO Closing Price and $13.00, provided,
however, that the maximum amount of such decrease shall not exceed
$1.00.
2.5.2.2 MARINERS Consolidated Tangible Net Worth
Adjustment. If the sum of $7,400,000 exceeds MARINERS Consolidated
Tangible Net Worth at the Determination Date, then the Cash Component
of the Merger Consideration, as the same may have been adjusted
pursuant to Subsection 2.5.2.1 hereof, shall be reduced by an amount
equal to the quotient resulting from dividing such excess by the total
number of shares of MARINERS Common Stock outstanding immediately
prior to the Effective Time. If MARINERS Consolidated Tangible Net
Worth exceeds $7,600,000, then the Cash Component of the Per Share
Merger Consideration, as the same may have been adjusted pursuant to
Subsection 2.5.2.1 hereof, shall be increased by an amount equal to
the quotient resulting from dividing such excess by the total number
of shares of MARINERS Common Stock outstanding immediately prior to
the Effective Time.
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2.5.3 The Per Share Merger Consideration shall be further
appropriately adjusted to reflect any recapitalization, reorganization,
reclassification, split-up, merger, consolidation, exchange, stock or other
dividend or distribution (other than cash dividends), made, declared or
effective with respect to the ELDORADO Common Stock between the date of this
Agreement and the Effective Time.
Section 2.6 Cancellation of MARINERS Stock Options. Prior to the
Effective Time, all outstanding rights with respect to MARINERS Common Stock or
any other Equity Securities of MARINERS pursuant to stock options, whether
under the MARINERS Stock Option Plan or otherwise, shall be cancelled on the
terms set forth in Schedule 2.6.
Section 2.7 Exchange Procedures. On or as soon as practicable
after the Effective Time, (i) ELDORADO will deliver to the Exchange Agent
certificates representing the number of shares of ELDORADO Common Stock
issuable in the Merger; and (ii) EB will deliver to the Exchange Agent the cash
payable as part of the Merger Consideration pursuant to Section 2.5 hereto
(after giving effect to the adjustments called for by Subsections 2.5.2.1 and
2.5.2.2 hereof).
2.7.1 Upon surrender to the Exchange Agent for cancellation
of one or more certificates for shares of MARINERS Common Stock ("MARINERS
Certificates"), accompanied by a duly executed letter of transmittal in proper
form, the Exchange Agent shall, as promptly as practicable thereafter, deliver
to each holder of such surrendered MARINERS Certificates, certificates
representing the appropriate number of shares of ELDORADO Common Stock ("New
Certificates") and a check for payment of the Cash Component payable in respect
of the shares of the MARINERS Common Stock represented by MARINERS Certificates
surrendered by such holder. In no event shall the holders of MARINERS
Certificates be entitled to receive interest on cash amounts due them hereunder
in respect of their MARINERS Common Stock.
2.7.2 Until a MARINERS Certificate has been surrendered and
exchanged as herein provided, each share of MARINERS Common Stock represented
by such MARINERS Certificate shall represent, on and after the Effective Time,
the right to receive the Per Share Merger Consideration into which each such
share of MARINERS Common Stock shown thereon has been converted as provided by
Section 2.5. No dividends or other distributions that are declared on any
shares of ELDORADO Common Stock into which any shares of MARINERS Common Stock
have been converted at the Effective Time shall be paid to the holder of such
MARINERS' shares until the MARINERS Certificates evidencing such MARINERS'
shares have been surrendered in exchange for New Certificates in the manner
herein provided, but upon such surrender, such dividends or other
distributions, from and after the Effective Time, will be paid to such holders
in accordance with the terms of such ELDORADO Common Stock. In no event shall
the holders entitled to receive such dividends or other distributions be
entitled to receive interest on such dividends or other distributions.
2.7.3 No transfer taxes shall be payable by any shareholder
in respect of the issuance of New Certificates, except that if any New
Certificate is to be issued in a name other than that in which the MARINERS
Certificates surrendered shall have been registered, it shall be a condition of
such issuance that the holder requesting such issuance shall properly endorse
the certificate or certificates and shall pay to ELDORADO or the Exchange Agent
any transfer taxes payable by reason thereof, or of any prior transfer of such
surrendered certificate, or establish to
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the satisfaction of ELDORADO or the Exchange Agent that such taxes have been
paid or are not payable.
2.7.4 Any ELDORADO Common Stock or cash delivered to the
Exchange Agent and not distributed pursuant to this Section 2.7 at the end of
nine months from the Effective Time, shall be returned to ELDORADO, in which
event the Persons entitled thereto shall look only to ELDORADO for payment
thereof.
2.7.5 Notwithstanding anything to the contrary set forth in
Sections 2.7.2 and 2.7.3 hereof, if any holder of MARINERS Common Stock shall
be unable to surrender such holder's MARINERS Certificates because such
certificates have been lost or destroyed, such holder may deliver in lieu
thereof an affidavit and indemnity bond in form and substance and with surety
satisfactory to Exchange Agent and ELDORADO.
2.7.6 The Exchange Agent shall not be entitled to vote or
exercise any rights of ownership with respect to the shares of ELDORADO Common
Stock held by it from time to time hereunder, except that it shall receive and
hold all dividends or other distributions paid or distributed with respect to
such shares of ELDORADO Common Stock for the account of the Persons entitled
thereto.
2.7.7 After the Effective Time, there shall be no further
registration of transfers of the shares of MARINERS Common Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, certificates representing such shares are presented to the Surviving
Corporation, they shall be cancelled and exchanged for ELDORADO Common Stock as
provided in this Article 2.
Section 2.8 Bank Merger. Concurrently herewith, MB and EB shall
enter into a merger agreement in the form of Exhibit 2.8 hereto (the "Bank
Merger Agreement"), pursuant to which, immediately following the consummation
of the Merger, MB shall be merged with and into EB (the "Bank Merger"). EB
shall be the Surviving Bank in the Bank Merger, the shares of EB Common Stock
outstanding immediately prior to the consummation of the Bank Merger will be
unaffected by the Bank Merger and shall continue to be outstanding at the time
of and after consummation of the Bank Merger, and all of the shares of common
stock of MB outstanding immediately prior to the effectiveness of the Bank
Merger shall be automatically cancelled and no consideration shall be issued
therefor, all as provided in the Bank Merger Agreement. The Bank Merger shall
be effective when, and the term "Bank Merger Effective Time" shall mean the
time that, a copy of the Bank Merger Agreement (together with any other
documents required by law to effectuate the Bank Merger) that has been approved
by the Superintendent of Banks and filed with the Secretary of State of the
State of California, is filed with the California Superintendent of Banks
pursuant to the applicable requirements of the California Financial Code. The
filing of the Bank Merger Agreement with the California Secretary of State
shall occur immediately after the Effective Time of the Merger. When used in
this Agreement, the term "Surviving Bank" shall mean EB.
Section 2.9 Effect of Bank Merger. By virtue of the Bank Merger
and at the Bank Merger Effective Time, all of the rights, privileges, powers
and franchises and all property and assets of every kind and description of MB
and EB shall be vested in and be held and enjoyed by the Surviving Bank,
without further act or deed, and all the estates and interests of every kind of
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MB and EB, including all debts due to either of them, shall be as effectively
the property of the Surviving Bank as they were of MB and EB immediately prior
to the Bank Merger Effective Time, and the title to any real estate vested by
deed or otherwise in either MB or EB shall not revert or be in any way impaired
by reason of the Bank Merger; and all rights of creditors and liens upon the
property of MB and EB shall be preserved unimpaired and all debts, liabilities
and duties of MB and EB shall be debts, liabilities and duties of the Surviving
Bank and may be enforced against it to the same extent as if such debts,
liabilities and duties had been incurred or contracted by it, and none of such
debts, liabilities or duties shall be expanded, increased, broadened or
enlarged by reason of the Bank Merger.
Section 2.10 Boards of Directors of ELDORADO and EB following the
Effective Time. At the Effective Time the two directors of MARINERS named on
Schedule 2.10 shall be appointed as directors of ELDORADO and EB to serve until
the next annual meeting of shareholders of ELDORADO and EB and until their
successors are elected and qualify.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF MARINERS.
MARINERS and MB represent and warrant to ELDORADO as follows:
Section 3.1 Organization; Corporate Power; Etc. MARINERS is a
corporation duly organized, validly existing and in good standing under the
laws of the State of California and has all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
substantially as they are being conducted on the date of this Agreement.
MARINERS also is a bank holding company registered under the BHCA. MARINERS
has all requisite corporate power and authority to enter into this Agreement
and, subject to its obtaining the approval of its shareholders and the
obtaining of all Requisite Regulatory Approvals to consummate the transactions
contemplated hereby. MB is a California state chartered bank duly organized,
validly existing and in good standing under the laws of the State of
California. MB, and each other Subsidiary of MARINERS or MB, has all requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business substantially as it is being conducted on
the date of this Agreement. MB is authorized by the California Superintendent
of Banking to conduct a general banking business. MB is not a member of the
Federal Reserve System. MB's deposits are insured by the FDIC in the manner
and to the full extent provided by law. MB maintains and operates branch
offices only in the State of California. Neither the scope of the business of
MARINERS or of MB, or any other Subsidiary of MARINERS or MB, nor the location
of any of their respective properties, requires that MARINERS or MB or any of
their Subsidiaries be licensed or qualified to conduct business in any
jurisdiction other than the State of California.
Section 3.2 Licenses and Permits. Except as disclosed on
Schedule 3.2, MARINERS and MB, and each of their respective Subsidiaries, have
all material licenses, certificates, franchises, rights and permits that are
necessary for the conduct of their respective businesses, and such licenses are
in full force and effect, except for any failure to be in full force and effect
that would not, individually or in the aggregate, have a Material Adverse
Effect on MARINERS or MB or on the ability of MARINERS or MB to consummate the
transactions contemplated by this Agreement. The properties, assets,
operations and businesses of MARINERS and MB, and those of their respective
Subsidiaries, are and have been maintained and conducted, in all
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material respects, in compliance with all applicable licenses, certificates,
franchises, rights and permits.
Section 3.3 Subsidiaries. Other than as set forth on Schedule
3.3, there is no corporation, partnership, joint venture or other entity in
which MARINERS or MB owns, directly or indirectly (except as pledgee pursuant
to loans or stock or other interest held as the result of or in lieu of
foreclosure pursuant to pledge or other security arrangement) any equity or
other voting interest or position.
Section 3.4 Authorization of Agreement; No Conflicts.
3.4.1 The execution and delivery of this Agreement and the
Subsidiary Merger Agreement by MARINERS, and the execution and delivery of the
Bank Merger Agreement by MB, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate action on the part of MARINERS and MB, subject only to the approval
of this Agreement, the Subsidiary Merger Agreement and the Merger by MARINERS'
shareholders. This Agreement has been duly executed and delivered by MARINERS
and MB and constitutes a valid and binding obligation of MARINERS and MB,
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors generally, by general equitable principles.
The Subsidiary Merger Agreement upon due execution thereof by MARINERS, and the
Bank Merger Agreement, upon its due execution by MB, when filed in accordance
with the applicable provisions of the California Corporations Code and the
California Financial Code, will constitute valid and binding obligations of
MARINERS and MB, respectively, each enforceable in accordance with its
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting the rights
of creditors generally and by general equitable principles.
3.4.2 Except as disclosed on Schedule 3.4, the execution
and delivery of this Agreement and the Subsidiary Merger Agreement, and the
execution and delivery of the Bank Merger Agreement, and the consummation of
the transactions contemplated hereby and thereby, do not and will not conflict
with, or result in any violation of or default or loss of a material benefit
under, any provision of the respective Articles of Incorporation or Bylaws of
MARINERS or MB or, except for the necessity of obtaining Requisite Regulatory
Approvals and approval of the shareholders of MARINERS, any material mortgage,
indenture, lease, agreement or other material instrument or any permit,
concession, grant, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to MARINERS or MB or any of their
respective assets or properties, other than any such conflict, violation,
default or loss which (i) will not have a Material Adverse Effect on MARINERS
or MB, or on ELDORADO or EB following consummation of the Merger and Bank
Merger, or (ii) will be cured or waived prior to the Effective Time. No
material consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required in connection
with the execution and delivery of this Agreement or the Subsidiary Merger
Agreement by MARINERS and MB or the Bank Merger Agreement by MB or the
consummation by MARINERS or MB of the transactions contemplated hereby or
thereby, except for (a) filings required in order to obtain the Requisite
Regulatory Approvals; (b) the filing of the Subsidiary Merger Agreement and the
Bank Merger Agreement with the Superintendent of Banks of the State of
California and the Secretary of State of California; and (c) Tax Filings.
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Section 3.5 Capital Structure.
3.5.1 The authorized capital stock of MARINERS consists
solely of 1,500,000 shares of Common Stock, no par value per share. At the
close of business on the Business Day next preceding the date of this
Agreement, 630,276 shares of Common Stock were outstanding and no shares of
Common Stock were reserved for issuance for any purposes except that 7,200
shares of Common Stock were reserved for issuance pursuant to the MARINERS
Stock Option Plan. All outstanding shares of MARINERS capital stock are
validly issued, fully paid and non-assessable. Such shares do not possess any
preemptive rights and were not issued in violation of any preemptive rights or
any similar rights of any Person. Except for the MARINERS Stock Options
described on Schedule 3.25 to this Agreement, there are not outstanding on the
date of this Agreement any Equity Securities, including, without limitation,
any options, warrants, calls, or rights or other securities, that are
convertible or exercisable into, or exchangeable for, or entitle any one to
purchase or otherwise acquire, any shares of Common Stock or other Equity
Securities of MARINERS and MARINERS is not a party to or bound by any agreement
obligating it to sell or issue any shares of Common Stock or other Equity
Securities of MARINERS or to grant to any Person any option, warrant, call or
right to purchase or acquire any shares of Common Stock or other Equity
Securities of MARINERS.
3.5.2 The authorized capital stock of MB consists solely of
320,000 shares of Common Stock, no par value. At the close of business on the
Business Day next preceding the date of this Agreement, 200,000 shares of
Common Stock were outstanding and no shares of Common Stock were reserved for
issuance for any purposes whatsoever. All outstanding shares of MB capital
stock are validly issued, fully paid and non-assessable (except for assessments
made pursuant to Section 662 of the California Financial Code) and do not
possess any preemptive rights and were not issued in violation of any
preemptive rights or any similar rights of any Person. There are not
outstanding on the date of this Agreement any Equity Securities, including,
without limitation, any options, warrants, calls, or rights, that are
convertible or exercisable into, or exchangeable for, or which entitle any one
to purchase or otherwise acquire, any authorized and unissued or issued and
outstanding shares of Common Stock or other Equity Securities of MB and neither
MARINERS nor MB is a party to or bound by any agreement obligating either of
them to sell or issue any authorized and unissued or issued and outstanding
shares of Common Stock or other Equity Securities of MB or to grant to any one
any option, warrant, call or right to purchase or acquire any authorized and
unissued or issued and outstanding shares of Common Stock or other Equity
Securities of MB.
3.5.3 MARINERS is the direct and sole owner, beneficially
and of record, of all of the issued and outstanding capital stock of MB, free
and clear of all liens, pledges, charges and other encumbrances of any nature
whatsoever.
Section 3.6 MARINERS Filings.
3.6.1 Since January 1, 1992, MARINERS and MB, and their
respective Subsidiaries, have filed all reports, registrations and statements,
together with any amendments required to be made with respect thereto, that
were required to be filed with (a) the Federal Reserve Board or any Federal
Reserve Bank; (b) the California Superintendent of Banks; (c) the Federal
Deposit Insurance Corporation; and (d) any other federal, state or local
governmental or regulatory authority. All such reports, registrations and
filings, and all reports sent to
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MARINERS' shareholders during the three-year period ended December 31, 1994
(whether or not filed with any Regulatory Authority), are collectively referred
to as the "MARINERS Filings." As of their respective filing or mailing dates,
each of the past MARINERS Filings (a) was true and complete in all material
respects (or was amended so as to be so promptly following discovery of any
discrepancy); and (b) complied in all material respects with all of the
statutes, rules and regulations enforced or promulgated by the governmental or
regulatory authority with which it was filed (or was amended so as to be so
promptly following discovery of any such non-compliance) and none contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
MARINERS Financial Statements have been prepared in accordance with Generally
Accepted Accounting Principles, or applicable regulatory accounting principles,
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present (subject, in the case of the
unaudited statements, to recurring adjustments normal in nature and amount) the
consolidated financial position of MARINERS as of the dates thereof and the
consolidated results of its operations, cash flows and changes in shareholders'
equity for the periods then ended. Copies of the MARINERS Filings have been
made available to ELDORADO (except to the extent prohibited by law).
3.6.2 MB has filed all reports, and any amendments required
to be made thereto, that since January 1, 1992 was required to be filed by MB
with the FDIC (the "MB FDIC Documents"), all of which have been made available
to ELDORADO. As of their respective dates, the MB FDIC Documents complied in
all material respects with the applicable requirements of the Federal Deposit
Insurance Act, as the case may be, and the rules and regulations of the FDIC
thereunder applicable to such MB FDIC Documents, and none of the MB FDIC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of MB included in the MB FDIC
Documents comply in all material respects with applicable regulatory accounting
requirements and with the published rules and regulations of the FDIC (as
applicable) with respect thereto, and, in the case of any financial statements,
have been prepared in accordance with Generally Accepted Accounting Principles,
or applicable regulatory accounting principles, applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto
or, in the case of the unaudited statements, as permitted by regulations of the
FDIC) and fairly present (subject, in the case of the unaudited statements, to
recurring adjustments normal in nature and amount) the financial position of MB
as of the dates thereof and the results of its operations and cash flows for
the periods then ended.
Section 3.7 Accuracy of Information Supplied.
3.7.1 No representation or warranty of MARINERS or MB
contained in this Agreement or any statement, schedule, exhibit or certificate
given or to be given by or on behalf of MARINERS or MB, or any of their
respective Subsidiaries, to ELDORADO in connection herewith and none of the
information supplied or to be supplied by MARINERS or MB or their Subsidiaries
to ELDORADO under this Agreement contains or will contain any untrue statement
of material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
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3.7.2 None of the information supplied or to be supplied by
MARINERS for inclusion or incorporation by reference in, or relating to
MARINERS and included or incorporated by reference in, (i) the Registration
Statement on Form S-4 to be filed with the SEC by ELDORADO in connection with
the issuance of shares of ELDORADO Common Stock in the Merger (including the
Proxy Statement and prospectus constituting a part thereof, the "Registration
Statement") will, at the time the Registration Statement becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; (ii) the Proxy Statement and any amendment or
supplement thereto will, at all times from the date of mailing to shareholders
of MARINERS through the date of the meeting of shareholders of MARINERS to be
held in connection with the Merger, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and (iii) the applications and forms to
be filed with securities or "blue sky" authorities, self regulatory
authorities, the AMEX or any Governmental Entity in connection with the Merger,
the issuance of any shares of ELDORADO Common Stock in connection with the
Merger, or any Requisite Regulatory Approvals will, at the time filed or at the
time they become effective, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The Proxy Statement (except for such portions
thereof that relate only to ELDORADO, EB and their Subsidiaries) will comply in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
3.7.3 MARINERS has or will deliver to ELDORADO copies of:
(a) the audited consolidated balance sheets of MARINERS and its consolidated
Subsidiaries as of December 31, 1994, 1993 and 1992 and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for the years then ended and the related notes to such consolidated
financial statements, all as audited by Dayton & Associates, independent public
accountants (the "MARINERS Financial Statements"), and MARINERS will hereafter
until the Closing Date deliver to ELDORADO copies of additional financial
statements of MARINERS as provided in Sections 5.1.1(iii) and 6.1.11(iii). The
MARINERS Financial Statements have been prepared (and all of said additional
financial statements will be prepared) in accordance with Generally Accepted
Accounting Principles, or applicable regulatory accounting principles, applied
on a consistent basis during the periods involved (except as may be indicated
in the notes thereto) consistently followed throughout the periods covered by
such statements, and present (and, when prepared, will present) fairly the
consolidated financial position of MARINERS and its consolidated Subsidiaries
as of the respective dates indicated and the consolidated results of their
operations, cash flows and changes in shareholders' equity at the respective
dates and for the respective periods covered by such financial statements
(subject, in the case of the unaudited statements, to recurring adjustments
normal in nature and amount). In addition, MARINERS has delivered to ELDORADO
copies of all management or other letters delivered to MARINERS by its
independent accountants in connection with any of the MARINERS Financial
Statements or by such accountants or any consultant regarding the internal
controls or internal compliance procedures and systems of MARINERS or MB issued
at any time since January 1, 1992, and will make available for inspection by
ELDORADO or its representatives, at such times and places as ELDORADO may
reasonably request, reports and working papers produced or developed by such
accountants or consultants.
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Section 3.8 Compliance with Applicable Laws. Except as disclosed
on Schedule 3.8, the businesses of MARINERS and MB, and their respective
Subsidiaries (including, without limitation, the offering of financial planning
services and non-deposit investment products to MB customers), are not being
conducted in violation of any law, ordinance or regulation, except for
violations which individually or in the aggregate would not have a Material
Adverse Effect on MARINERS or MB, or ELDORADO or EB at or following the
Effective Time. Except as set forth in Schedule 3.8, no investigation or
review by any Governmental Entity with respect to MARINERS or MB is pending or,
to the Knowledge of MARINERS or MB threatened, nor has any Governmental Entity
indicated to MARINERS or MB an intention to conduct the same.
Section 3.9 Litigation. Except as set forth in Schedule 3.9,
there is no suit, action or proceeding or investigation pending, or to the
Knowledge of MARINERS or MB threatened, against MARINERS or MB or any of their
respective Subsidiaries which, if adversely determined, would have a Material
Adverse Effect on MARINERS or MB or their Subsidiaries; nor is there any
judgment, decree, consent order, injunction or order of any Governmental Entity
or arbitrator outstanding against MARINERS or MB or any of their Subsidiaries
having, or which, insofar as reasonably can be foreseen, in the future would
have, any such Material Adverse Effect. Schedule 3.9 contains a true, correct
and complete list, including identification of the applicable insurance policy
covering such litigation, if any, subject to reservation of rights, if any, the
applicable deductible and the amount of any reserve therefor, of all pending
litigation in which MARINERS or MB or any of their Subsidiaries is a named
party, and except as disclosed on Schedule 3.9, all of the litigation shown on
such Schedule is adequately covered by insurance in force, except for
applicable deductibles, or have been adequately reserved for in accordance with
MARINERS' prior business practices.
Section 3.10 Agreements with Banking Authorities. Except as set
forth on Schedule 3.10, none of MARINERS or any Subsidiary is a party to any
written agreement or memorandum of understanding with or order or directive
from any Governmental Entity.
Section 3.11 Insurance. MARINERS and MB and their Subsidiaries
have in full force and effect policies of insurance with respect to their
assets and businesses against such casualties and contingencies and in such
amounts, types and forms as are customarily appropriate for their businesses,
operations, properties and assets. Schedule 3.11 contains a list of all
policies of insurance and bonds carried and owned by MARINERS or MB or any
Subsidiary. None of MARINERS or MB or any of their Subsidiaries is in default
under any such policy of insurance or bond such that it can be cancelled and
all material claims thereunder have been filed in timely fashion. MARINERS and
MB and their Subsidiaries have filed claims with, or given notice of claim, to
their insurers or bonding companies in timely fashion with respect to all
material matters and occurrences for which they believe they have coverage.
Section 3.12 Title to Assets other than Real Property. MARINERS,
MB and their respective Subsidiaries have good and marketable title to all
their properties and assets (other than real property which is the subject to
Section 3.13), owned or leased by MARINERS, MB or any of their Subsidiaries,
free and clear of all mortgages, liens, encumbrances, pledges or charges of any
kind or nature except as disclosed on Schedule 3.12 and except for: (a)
encumbrances as set forth in the MARINERS Financial Statements; (b) liens for
current Taxes not yet due which have been fully reserved for and (c)
encumbrances, if any, that are not substantial in character, amount or extent
and do not detract materially from the value, or interfere with present use or
the sale or
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other disposition of the property subject thereto or affected thereby. All of
such properties and assets are, and require only routine maintenance to keep
them, in good working condition, normal wear and tear excepted.
Section 3.13 Real Property. Schedule 3.13 is an accurate list and
general description of all real property owned or leased by MARINERS, MB or any
of their Subsidiaries, including Other Real Estate Owned ("OREO"). Each of
MARINERS, MB and their respective Subsidiaries has good and marketable title to
the real properties that it owns, as described in such Schedule, free and clear
of all mortgages, covenants, conditions, restrictions, easements, liens,
security interests, charges, claims, assessments and encumbrances, except for
(a) rights of lessors, lessees or sublessees in such matters that are reflected
in a written lease; (b) current taxes (including assessments collected with
taxes) not yet due and payable; (c) encumbrances, if any, that are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with present use, or the ability of MARINERS or MB to
dispose, of the property subject thereto or affected thereby; and (d) other
matters as described in Schedule 3.13. MARINERS, MB and their Subsidiaries
have valid leasehold interests in the leaseholds they respectively hold, free
and clear of all mortgages, liens, security interest, charges, claims,
assessments and encumbrances, except for (a) claims of lessors, co-lessees or
sublessees in such matters as are reflected in a written lease; (b) title
exceptions affecting the fee estate of the lessor under such leases and (c)
other matters as described in Schedule 3.13. The activities of MARINERS, MB
and their Subsidiaries with respect to all real property owned or leased by
them for use in connection with their operations are in all material respects
permitted and authorized by applicable zoning laws, ordinances and regulations
and all laws and regulations of any Governmental Entity. Except as set forth
in Schedule 3.13, MARINERS, MB and their respective Subsidiaries enjoy quiet
possession under all material leases to which either is the lessee and all of
such leases are valid and in full force and effect. The buildings and
improvements on real properties owned or leased by MARINERS, MB or any of their
Subsidiaries are in good condition and repair, and do not require more than
normal and routine maintenance, to keep them in such condition, normal wear and
tear excepted.
Section 3.14 Taxes.
3.14.1 Filing of Returns. Except as set forth on Schedule
3.14(a), MARINERS, MB and their Subsidiaries have duly prepared and filed
federal, state, local and foreign Returns (for Tax or informational purposes)
which were required to be filed by or in respect of MARINERS, MB and their
Subsidiaries, or any of their properties, income and/or operations on or prior
to the Closing Date. As of the time they were filed, the foregoing Returns
accurately reflected the material facts regarding the income, business, asset,
operations, activities, status, and any other information required to be shown
thereon. No extension of time within which MARINERS, MB or any of their
Subsidiaries may file any Return is currently in force.
3.14.2 Payment of Taxes. Except as disclosed on Schedule
3.14(b) with respect to all amounts in respect of Taxes imposed on MARINERS, MB
or any Subsidiary or for which MARINERS, MB or any Subsidiary is or could be
liable, whether to taxing authorities (as, for example, under law) or to other
Persons (as, for example, under Tax allocation agreements), with respect to all
taxable periods or portions of periods ending on or before the Closing Date,
all applicable tax laws and agreements have been or will be fully complied with
in all material
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respects, and all such amounts required to be paid by or on behalf of MARINERS,
MB or any Subsidiary to taxing authorities or others on or before the date
hereof have been paid.
3.14.3 Audit History. Except as disclosed on Schedule
3.14(c), there is no review or audit by any taxing authority of any Tax
liability of MARINERS, MB or any Subsidiary currently in progress. Except as
disclosed on Schedule 3.14(c), MARINERS, MB and their Subsidiaries have not
received any written notices within the three years preceding the Closing Date
of any pending or threatened audit, by the Internal Revenue Service or any
state, local or foreign agency, any Returns or Tax liability of MARINERS, MB or
any Subsidiary for any period, where such pending or threatened audit has not
been resolved. MARINERS, MB and their Subsidiaries currently have no unpaid
deficiencies assessed by the Internal Revenue Service or any state, local or
foreign taxing authority arising out of any examination of any of the Returns
of MARINERS, MB or any Subsidiaries filed for fiscal years ended on or after
December 31, 1988 through the Closing Date, nor to the Knowledge of MARINERS is
there reason to believe that any material deficiency will be assessed.
3.14.4 Statute of Limitations. Except as disclosed on
Schedule 3.14(d), no agreements are in force or are currently being negotiated
by or on behalf of MARINERS, MB or any Subsidiaries for any waiver or for the
extension of any statute of limitations governing the time of assessments or
collection of any Tax. No closing agreements or compromises concerning Taxes
of MARINERS, MB or any Subsidiaries are currently pending.
3.14.5 Withholding Obligations. MARINERS, MB and their
Subsidiaries have withheld from each payment made to any of their respective
officers, directors and employees, the amount of all applicable Taxes,
including, but not limited to, income tax, social security contributions,
unemployment contributions, backup withholding and other deductions required to
be withheld therefrom by any Tax law and have paid the same to the proper
Taxing authorities within the time required under any applicable Tax law.
3.14.6 Tax Liens. There are no Tax liens, whether imposed
by any federal, state, local or foreign taxing authority, outstanding against
any assets owned by MARINERS, MB or their Subsidiaries, except for liens for
Taxes that are not yet due and payable.
3.14.7 Safe Harbor Lease Property. None of the assets owned
by MARINERS, MB or their Subsidiaries is property that is required to be
treated as being owned by any other Person pursuant to the so-called safe
harbor lease provisions of former Section 168(f)(8) of the IRC.
3.14.8 Security for Tax-Exempt Obligations. None of the
assets owned by MARINERS, MB or their Subsidiaries directly or indirectly
secures any debt, the interest on which is tax-exempt under Section 103(a) of
the IRC.
3.14.9 Tax-Exempt Use Property. None of the assets owned by
MARINERS, MB or their Subsidiaries is "tax-exempt use property" within the
meaning of Section 168(h) of the IRC.
3.14.10 Foreign Person. None of MARINERS, MB or their
Subsidiaries is a person other than a United States person within the meaning
of the IRC.
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3.14.11 No Withholding. The transaction contemplated herein
is not subject to the tax withholding provisions of Section 3406 of the IRC, or
of Subchapter A of Chapter 3 of the IRC.
3.14.12 Tax Reserves. MARINERS, MB and their Subsidiaries
have made full and adequate provision and reserve for all federal, state, local
or foreign Taxes for the current period for which Tax and information returns
are not yet required to be filed. The MARINERS Financial Statements contain
fair and sufficient accruals for the payment of all Taxes for the periods
covered by the MARINERS Financial Statements and all periods prior thereto.
3.14.13 Tax Elections. No new elections with respect to
Taxes or any changes in current elections with respect to Taxes affecting the
assets owned by MARINERS, MB or their Subsidiaries shall be made after the date
of this Agreement without the prior written consent of ELDORADO, which shall
not be unreasonably withheld. ELDORADO shall be deemed to have consented in
writing to any election MARINERS, MB or their Subsidiaries shall desire to make
if: (i) the electing Person shall have notified the Chief Financial Officer of
ELDORADO in writing of its desire to make such election, including in such
notice a reasonably complete summary of the election it desires to make and the
reasons it desires to make such election at least 20 Business Days prior to the
due date (including extensions thereof) for filing such election, and (ii)
ELDORADO shall not have responded in writing to such notice by the fifth
Business Day prior to the due date (including extensions thereof) for filing
such election.
3.14.14 IRC Section 382 Applicability. None of MARINERS, MB
or any of their Subsidiaries, including any party joining in any consolidated
return to which MARINERS is a member, underwent an "ownership change" as
defined in IRC Section 382(g) within the "testing period" (as defined in IRC
Section 382) ending immediately before the Effective Time, and not taking into
account any transactions contemplated by this Agreement.
3.14.15 Disclosure Information. Within 45 days of the date
of this Agreement, MARINERS will deliver to ELDORADO a schedule setting forth
the following information with respect to MARINERS and as of the most recent
practicable date (as well as on an estimated pro forma basis as of the Closing
giving effect to the consummation of the transactions contemplated hereby):
(a) MARINERS' basis in its assets; (b) the amount of any net operating loss,
net capital loss, unused investment or other credit, unused foreign tax, or
excess charitable contribution allocable to MARINERS; and (c) the amount of any
deferred gain or loss allocable to MARINERS and arising out of any deferred
intercompany transactions.
Section 3.15 Performance of Obligations. MARINERS, MB and their
Subsidiaries have performed all material obligations required to be performed
by them to date and none of MARINERS, MB nor any Subsidiary is in default under
or in breach of any term or provision of any covenant, contract, lease,
indenture or any other agreement, written or oral, to which any is a party, is
subject or is otherwise bound, and no event has occurred that, with the giving
of notice or the passage of time or both, would constitute such a default or
breach, where such default or breach or failure to perform would have a
Material Adverse Effect on MARINERS or MB or their Subsidiaries. To MARINERS'
Knowledge, and except as disclosed on Schedule 3.15 or in the portion of
Schedule 3.16 that identifies 90-day past due or classified or non-accrual
loans, no party with whom MARINERS, MB or any of their Subsidiaries has an
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agreement that is of material importance to the businesses of MARINERS or MB or
their Subsidiaries is in default thereunder.
Section 3.16 Loans and Investments. Except as set forth on
Schedule 3.16, all loans, leases and other extensions of credit, and
guaranties, security agreements or other agreements supporting any loans or
extensions of credit, and investments of MARINERS, MB or their Subsidiaries
are, and constitute, in all material respects, the legal, valid and binding
obligations of the parties thereto and are enforceable against such parties in
accordance with their terms, except as the enforceability thereof may be
limited by applicable law and otherwise by bankruptcy, insolvency, moratorium
or other similar laws affecting the rights of creditors generally and by
general equitable principles. Except as described in Schedule 3.16, as of
April 30, 1995, no loans or investments held by MARINERS, MB or any Subsidiary
are (i) more than ninety days past due with respect to any scheduled payment of
principal or interest, other than loans on a non-accrual status; (ii)
classified as "loss," "doubtful," "substandard" or "specially mentioned" by
MARINERS, MB or any federal or state banking regulators; or (iii) on a non-
accrual status in accordance with MB's loan review procedures. Except as set
forth on Schedule 3.16, none of such investments (other than loans) are subject
to any restrictions, contractual, statutory or other, that would materially
impair the ability of the entity holding such investment to dispose freely of
any such investment at any time, except restrictions on the public distribution
or transfer of any such investments under the Securities Act and the
regulations thereunder or state securities laws and pledges or security
interests given in connection with government deposits. All loans, leases or
other extensions of credit outstanding, or commitments to make any loans,
leases or other extensions of credit to any Affiliates of MARINERS or MB are
disclosed on Schedule 3.16. For outstanding loans or extensions of credit or
commitments to make loans or extensions of credit where the original principal
amounts are in excess of $25,000 and which by their terms are either secured by
collateral or supported by a guaranty or similar obligation the security
interests have been duly perfected in all material respects and have the
priority they purport to have in all material respects, other than by operation
of law, and, in the case of each guaranty or similar obligation, each has been
duly executed and delivered to MARINERS, MB or any Subsidiary, and to MARINERS'
and MB's Knowledge, is still in full force and effect.
Section 3.17 Brokers and Finders. Except as set forth on Schedule
3.17, none of MARINERS, MB or any of their Subsidiaries is a party to or
obligated under any agreement with any broker or finder relating to the
transactions contemplated hereby, and neither the execution of this Agreement,
the Subsidiary Merger Agreement or the Bank Merger Agreement, nor the
consummation of the transactions provided for herein or therein, will result in
any liability to any broker or finder. MARINERS agrees to indemnify and hold
harmless ELDORADO and EB and their respective affiliates, and to defend with
counsel selected by ELDORADO and EB and reasonably satisfactory to MARINERS
from and against any liability, cost or expense, including attorneys' fees,
incurred in connection with a breach of this Section 3.17.
Section 3.18 Material Contracts. Schedule 3.18 to this Agreement
contains a complete and accurate written list of all material agreements,
obligations or understandings, written and oral, to which MARINERS, MB or any
Subsidiary is a party as of the date of this Agreement, except for loans and
other extensions of credit made by MB in the ordinary course of its business
and those items specifically disclosed in the MARINERS Financial Statements.
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Section 3.19 Absence of Material Adverse Effect. Since January 1,
1995, the respective businesses of MARINERS, MB and their Subsidiaries have
been conducted only in the ordinary course, in the same manner as theretofore
conducted, and no event or circumstance has occurred or is expected to occur
which has had or which, with the passage of time or otherwise, could
reasonably be expected to have a Material Adverse Effect on MARINERS or MB.
Section 3.20 Undisclosed Liabilities. Except as disclosed on
Schedule 3.20, none of MARINERS, MB or any of their Subsidiaries has any
liabilities or obligations, either accrued, contingent or otherwise, that are
material to MARINERS and its Subsidiaries (including MB) taken as a whole and
that have not been reflected or disclosed in the MARINERS Financial Statements.
Neither MARINERS nor MB has any Knowledge of any basis for the assertion
against either of them, or any of their Subsidiaries, of any liability,
obligation or claim (including, without limitation, that of any Governmental
Entity) that will have or cause, or could reasonably be expected to have or
cause, a Material Adverse Effect as to MARINERS or MB that is not fully and
fairly reflected and disclosed in the MARINERS Financial Statements or in
Schedule 3.20.
Section 3.21 Employees; Employee Benefit Plans; ERISA.
3.21.1 All obligations of MARINERS, MB or their Subsidiaries
for payment to trusts or other funds or to any Governmental Entity or to any
individual, director, officer, employee or agent (or his or her heirs, legatees
or legal representatives) with respect to unemployment compensation benefits,
profit-sharing, pension or retirement benefits or social security benefits,
whether arising by operation of law, by contract or by past custom, have been
properly accrued for the periods covered thereby on the MARINERS Financial
Statements and paid when due. All obligations of MARINERS, MB or their
Subsidiaries, whether arising by operation of law, by contract or by past
custom for vacation or holiday pay, bonuses and other forms of compensation
which are payable to their respective directors, officers, employees or agents
have been properly accrued on the MARINERS Financial Statements for the periods
covered thereby and paid when due. Except as set forth on Schedule 3.21(a),
there are no unfair labor practice complaints, strikes, slowdowns, stoppages or
other controversies pending or, to the Knowledge of MARINERS and MB, attempts
to unionize or controversies threatened between MARINERS, MB or any Subsidiary
or Affiliate and, or relating to, any of their employees that are likely to
have a Material Adverse Effect on MARINERS and its Subsidiaries, including MB,
taken as a whole. None of MARINERS, MB or any Subsidiary is a party to any
collective bargaining agreement with respect to any of their employees and,
except as set forth on Schedule 3.21(a), none of MARINERS, MB or any Subsidiary
is a party to a written employment contract with any of their employees and
there are no understandings with respect to the employment of any officer or
employee of MARINERS, MB or any Subsidiary which are not terminable by
MARINERS, MB or such Subsidiary without liability on not more than thirty (30)
days' notice. Except as disclosed in the MARINERS Financial Statements for the
periods covered thereby, all sums due for employee compensation have been paid
and all employer contributions for employee benefits, including deferred
compensation obligations, and any benefits under any Employee Plan (as defined
in Section 3.21.3 hereof) or any Benefit Arrangement (as defined in Section
3.21.4 hereof) have been duly and adequately paid or provided for in accordance
with plan documents. Except as set forth on Schedule 3.21(a), no director,
officer or employee of MARINERS, MB or any Subsidiary is entitled to receive
any payment of any amount under any existing agreement, severance plan or other
benefit plan as a
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result of the consummation of any transaction contemplated by this Agreement,
the Subsidiary Merger Agreement or the Bank Merger Agreement. MARINERS, MB and
their Subsidiaries have complied with all applicable federal and state statutes
and regulations which govern workers' compensation, equal employment
opportunity and equal pay, including, but not limited to, all civil rights
laws, Presidential Executive Order 1124, and the Fair Labor Standards Act of
1938, as amended and the Americans with Disabilities Act.
3.21.2 MARINERS has delivered as Schedule 3.21(b) a complete
list of:
(a) All current employees of MARINERS, MB or any
of their Subsidiaries together with each employee's age, tenure with
MARINERS, MB or such Subsidiary, title or job classification, and the
current annual rate of compensation anticipated to be paid to each
such employee; and
(b) All Employee Plans and Benefit Arrangements,
including all plans or practices providing for current compensation or
accruals for active Employees, including, but not limited to, all
employee benefit plans, all pension, profit-sharing, retirement,
bonus, stock option, incentive, deferred compensation, severance,
long-term disability, medical, dental, health, hospitalization, life
insurance or other insurance plans or related benefits.
3.21.3 Except as disclosed on Schedule 3.21(b), none of
MARINERS, MB or any of their Subsidiaries maintains, administers or otherwise
contributes to any "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which is
subject to any provisions of ERISA and covers any employee, whether active or
retired, of MARINERS, MB or any of their Subsidiaries (any such plan being
herein referred to as an "Employee Plan"). True and complete copies of each
such Employee Plan, including amendments thereto, have been previously
delivered to ELDORADO, together with (i) all agreements regarding plan assets
with respect to such Employee Plans, (ii) a true and complete copy of the
annual reports for the most recent three years (Form 5500 Series including, if
applicable, Schedules A and B thereto) prepared in connection with any such
Employee Plan, (iii) a true and complete copy of the actuarial valuation
reports for the most recent three years, if any, prepared in connection with
any such Employee Plan covering any active employee of MARINERS, MB or their
Subsidiaries, (iv) a copy of the most recent summary plan description of each
such Employee Plan, together with any modifications thereto, and (v) a copy of
the most recent favorable determination letter (if applicable) from the
Internal Revenue Service for each Employee Plan. None of the Employee Plans is
a "multiemployer plan" as defined in Section 3(37) of ERISA or a "multiple
employer plan" as covered in Section 412(c) of the IRC, and none of MARINERS,
MB or any of their Subsidiaries has been obligated to make a contribution to
any such multiemployer or multiple employer plan within the past five years.
None of the Employee Plans of MARINERS, MB or any of their Subsidiaries is, or
for the last five years has been, subject to Title IV of ERISA. Each Employee
Plan which is intended to be qualified under Section 401(a) of the IRC is so
qualified and each trust maintained pursuant thereto is exempt from income tax
under Section 501(a) of the IRC, and none of MARINERS, MB or any of their
Subsidiaries is aware of any fact which has occurred which would cause the loss
of such qualification or exemption.
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3.21.4 Except as disclosed in Schedule 3.21(b), none of
MARINERS, MB or any of their Subsidiaries maintains (other than base-salary
and base wages) any form of current or deferred compensation, bonus, stock
option, stock appreciation right, severance pay, salary continuation,
retirement or incentive plan or arrangement for the benefit of any director,
officer or employee, whether active or retired, of MARINERS, MB or any of their
Subsidiaries or for any class or classes of such directors, officers or
employees. Except as disclosed in Schedule 3.21(b), none of MARINERS, MB or
any of their Subsidiaries maintains any group or individual health or
insurance, welfare or similar plan or arrangement for the benefit of any
director, officer or employee of MARINERS, MB or any of their Subsidiaries,
whether active or retired, or for any class or classes of such directors,
officers or employees. Any such plan or arrangement described in this Section
3.21.4, copies of which have been delivered to ELDORADO, shall be herein
referred to as a "Benefit Arrangement."
3.21.5 All Employee Plans and Benefit Arrangements are
operated in material compliance with the requirements prescribed by any and all
statutes, governmental or court orders, or governmental rules or regulations
currently in effect, including but not limited to ERISA and the IRC, applicable
to such plans or arrangements, and plan documents relating to any such plans or
arrangements, comply with or will be amended to comply with applicable legal
requirements. None of MARINERS, MB or any of their Subsidiaries, nor any
Employee Plan, nor any trusts created thereunder, nor any trustee,
administrator nor any other fiduciary thereof, has engaged in a "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the IRC,
that could subject MARINERS, MB or any of their Subsidiaries or ELDORADO or EB
to liability under Section 409 or 502(i) of ERISA or Section 4975 of the IRC or
that would adversely affect the qualified status of such plans; each "plan
official" within the meaning of Section 412 of ERISA of each Employee Plan is
bonded to the extent required by such Section 412; with respect to each
Employee Plan, to MARINERS' and MB's Knowledge, no employee of MARINERS, MB or
any Subsidiary, nor any fiduciary of any Employee Plan, has engaged in any
breach of fiduciary duty as defined in Part 4 of Subtitle B of Title I of ERISA
which could subject MARINERS, MB or any of their Subsidiaries to liability if
MARINERS, MB or any such Subsidiary is obligated to indemnify such Person
against liability. Except as disclosed in Schedule 3.21(c), MARINERS, MB and
their Subsidiaries have not failed to make any contribution or pay any amount
due and owing as required by law or the terms of any Employee Plan or Benefit
Arrangement.
3.21.6 Except as set forth on Schedule 3.21(d), no Employee
Plan or Benefit Arrangement has any liability of any nature, accrued or
contingent, including, without limitation, liabilities for federal, state,
local or foreign taxes, interest or penalty other than liability for claims
arising in the course of the administration of each such plan. Except as set
forth on Schedule 3.21(d), there is no pending, or to MARINERS' and MB's
Knowledge threatened, legal action, proceeding or investigation against any
Employee Plan which could result in liability to such Plans, other than routine
claims for benefits, and there is no basis for any such legal action,
proceeding or investigation.
3.21.7 Each Benefit Arrangement which is a group health plan
(within the meaning of such term under IRC Section 4980B(g)(2)) complies and
has complied with the requirements of Section 601 through 608 of ERISA or
Section 4980B of the IRC governing continuation coverage requirements for
employee-provided group health plans.
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3.21.8 Except as disclosed in Schedule 3.21(e), none of
MARINERS, MB or any of their Subsidiaries maintains any Employee Plan or
Benefit Arrangement pursuant to which any benefit or other payment will be
required to be made by MARINERS, MB or any of their Subsidiaries or Affiliates
or pursuant to which any other benefit will accrue or vest in any director,
officer or employee of MARINERS, MB or any Subsidiary or Affiliate thereof, in
either case as a result of the consummation of the transactions contemplated by
this Agreement, the Subsidiary Merger Agreement or the Bank Merger Agreement.
Section 3.22 Powers of Attorney. No power of attorney or similar
authorization given by MARINERS, MB or any Subsidiary thereof is presently in
effect or outstanding other than powers of attorney given in the ordinary
course of business with respect to routine matters.
Section 3.23 Intellectual Property Rights. Schedule 3.23 is a
complete and accurate list of all United States and foreign patents,
trademarks, service marks, copyrights and all pending applications therefor,
whether or not issued (the "Intellectual Property"), that relate to or are used
in the operation of any of the respective businesses of MARINERS, MB or any of
their Subsidiaries or the rights of MARINERS, MB or their Subsidiaries
thereunder.
Section 3.24 Hazardous Materials. Except as set forth on Schedule
3.24:
3.24.1 Except for ordinary and necessary quantities of
cleaning, pest control and office supplies, and other small quantities of
Hazardous Substances that are used in the ordinary course of the respective
businesses of MARINERS, MB and their Subsidiaries and in compliance with
applicable Environmental Laws, or ordinary rubbish, debris and nonhazardous
solid waste stored in garbage cans or bins for regular disposal off-site, or
petroleum contained in and de minimus quantities discharged from motor vehicles
in their ordinary operation on any of the Properties (as defined below),
MARINERS, MB and their Subsidiaries have not engaged in the generation, use,
manufacture, treatment, transportation, storage (in tanks or otherwise), or the
disposal, of Hazardous Substances other than as permitted by and only in
compliance with applicable law. No Hazardous Substances have been released,
emitted or disposed of, or otherwise deposited, on, in or from any real
property which is now or has been previously owned since January 1, 1990, or
which is currently or during the past three years was leased, by MARINERS, MB
or any of their Subsidiaries, including Other Real Estate Owned (collectively,
the "Properties"), or to MARINERS' or MB's Knowledge, on or in any real
property in which MARINERS, MB or any of their Subsidiaries now holds any
security interest, mortgage or other lien or interest with an underlying
obligation in excess of $25,000 ("Collateralizing Real Estate"), except for (i)
Disclosed Matters; (ii) ordinary and necessary quantities of cleaning, pest
control and office supplies used and stored in compliance with applicable
Environmental Laws, or ordinary rubbish, debris and nonhazardous solid waste
stored in garbage cans or bins for regular disposal off-site, or petroleum
contained in and de minimus quantities discharged from motor vehicles in their
ordinary operation on such real properties; and (iii) such releases, emissions,
disposals or deposits which constituted a violation of an Environmental Law but
did not have a Material Adverse Effect on the real property involved and would
not result in the incurrence or imposition of any liability, expense, penalty
or fine against MARINERS, MB or any of their Subsidiaries in excess of $25,000
individually or in the aggregate. No activity has been undertaken on any of
the Properties since January 1, 1990, and to the Knowledge of MARINERS and MB
no activities have been or are being undertaken on any of the Collateralizing
Real Estate, that would cause or contribute to:
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(a) any of the Properties or Collateralizing Real
Estate becoming a treatment, storage or disposal facility within the
meaning of RCRA or any similar state law or local ordinance;
(b) a release or threatened release of any
Hazardous Substances under circumstances which would violate any
Environmental Laws; or
(c) the discharge of Hazardous Substances into
any soil, subsurface water or ground water or into the air, or the
dredging or filling of any waters, that would require a permit or any
other approval under the Federal Water Pollution Control Act, 33
U.S.C. Section 1251et seq., the Clean Air Act, as amended, 42 U.S.C.
Section 7401 et seq., or any similar federal or state law or local
ordinance;
the cumulative effect of which would have a material adverse effect on the
Property or Collateralizing Real Estate involved.
3.24.2 To the Knowledge of MARINERS and MB, there are not,
and never have been, any underground storage tanks located in or under any of
the Properties or the Collateralizing Real Estate.
3.24.3 None of MARINERS, MB or any of their Subsidiaries has
received any written notice of, and to the Knowledge of MARINERS or MB none has
received any verbal notice of, any pending or threatened claims,
investigations, administrative proceedings, litigation, regulatory hearings or
requests or demands for remedial or responsive actions or for compensation,
with respect to any of the Properties or Collateralizing Real Estate, alleging
noncompliance with or violation of any Environmental Law or seeking relief
under any Environmental Law and none of the Properties or Collateralizing Real
Estate is listed on the United States Environmental Protection Agency's
National Priorities List of Hazardous Waste Sites, or, to the Knowledge of
MARINERS or MB, any other list, schedule, log, inventory or record of hazardous
waste sites maintained by any federal, state or local agency.
3.24.4 "Hazardous Substances" shall mean any hazardous,
toxic or infectious substance, material, gas or waste which is regulated by any
local, state or federal Governmental Entity, or any of their agencies.
Section 3.25 Stock Options. There are no stock appreciation
rights outstanding or available under the MARINERS Stock Option Plan. Schedule
3.25 to this Agreement contains a description of the MARINERS Stock Option Plan
and list of all MARINERS Stock Options outstanding, indicating for each: (a)
the grant date; (b) whether vested or unvested; (c) exercise price; and (d) a
vesting schedule by optionee.
Section 3.26 Interest Rate Risk Management Instruments. All
interest rate swaps, floors and option agreements and similar interest rate
risk management arrangements to which MARINERS, MB or any of their Subsidiaries
is a party, or by which any of their properties or assets may be bound, are
listed or described on Schedule 3.26 hereto ("Interest Rate Management
Arrangements"). All such Interest Rate Management Arrangements were entered
into in the ordinary course of their respective businesses, in accordance with
commercially reasonable banking practices and applicable rules, regulations and
policies of the California Superintendent
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of Banks and are legal, valid and binding obligations enforceable in accordance
with their terms against MARINERS, MB or their Subsidiaries that are parties
thereto and, to the Knowledge of MARINERS and MB, against all other parties
thereto (except as may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors generally and
by general equitable principles). All counterparties to such Interest Rate
Management Arrangements are financially responsible and are able to adequately
perform their obligations under such Arrangements. MARINERS, MB and their
Subsidiaries that are parties to such Arrangements have duly performed their
obligations under such Arrangements to the extent that such obligations to
perform have accrued and, to MARINERS' and MB's Knowledge, there are no
material breaches, violations or defaults or allegations or assertions of such
by any other party to any such Interest Rate Management Arrangements.
Section 3.27 Effective Date of Representations, Warranties,
Covenants and Agreements. Each representation, warranty, covenant and
agreement of MARINERS and MB set forth in this Agreement shall be deemed to be
made on and as of the date hereof and as of the Effective Time.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF ELDORADO
ELDORADO and EB represent and warrant to MARINERS that:
Section 4.1 Organization; Corporate Power; Etc. ELDORADO and EB
are each corporations duly organized, validly existing and in good standing
under the laws of the State of California and each of them has all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business substantially as they are being conducted on the date of
this Agreement. ELDORADO is a bank holding company registered under the BHCA.
EB is a state chartered bank authorized to conduct a general banking business
in the State of California. Each of ELDORADO's other Subsidiaries has all
requisite corporate power and authority to own, operate and lease its
properties and to carry on its business substantially as they are being
conducted on the date of this Agreement, except where the failure to have such
power or authority would not have a Material Adverse Effect on ELDORADO and EB
taken as a whole or the ability of either of them to consummate the
transactions contemplated by this Agreement. Each of ELDORADO and EB has all
requisite corporate power and authority to enter into this Agreement and,
subject to and on obtaining the approval of ELDORADO's shareholders and all
Requisite Regulatory Approvals, each of ELDORADO and EB will have the requisite
corporate power and authority to perform its respective obligations hereunder
with respect to the consummation of the transactions contemplated hereby. EB
is authorized by the California Superintendent of Banks to conduct a general
banking business in California. EB is not a member of the Federal Reserve
System. EB's deposits are insured by the FDIC in the manner and to the full
extent provided by law. Neither the scope of business of ELDORADO or any
Subsidiary, including EB, nor the location of any of their respective
properties requires that ELDORADO, EB or any of their respective Subsidiaries
be licensed to conduct business in any jurisdiction other than those
jurisdictions in which they are licensed or qualified to do business as a
foreign corporation where the failure to be so licensed or qualified would,
individually or in the aggregate, have a Material Adverse Effect on ELDORADO
and EB taken as a whole.
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Section 4.2 Licenses and Permits. ELDORADO, EB and their
respective Subsidiaries have all material licenses, certificates, franchises,
rights and permits that are necessary for the conduct of their respective
businesses, and such licenses are in full force and effect, except for any
failure to be in full force and effect that would not, individually or in the
aggregate, have a Material Adverse Effect on ELDORADO and EB taken as a whole.
The properties, assets, operations and businesses of ELDORADO and its
Subsidiaries, including EB, are and have been maintained and conducted, in all
material respects, in compliance with all applicable licenses, certificates,
franchises and permits.
Section 4.3 Authorization of Agreement; No Conflicts.
4.3.1 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and thereby, have been
duly authorized by all necessary corporate action on the part of ELDORADO and
EB. This Agreement has been duly executed and delivered by ELDORADO and EB and
constitutes a legal, valid and binding obligation of ELDORADO and EB
enforceable against each of them in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the rights of creditors generally and by general
equitable principles, and the Subsidiary Merger Agreement and the Bank Merger
Agreement, upon approval of this Agreement and the transactions contemplated
hereby by ELDORADO's shareholders, the receipt of all Requisite Regulatory
Approvals and the due execution and filing of such Agreements in accordance
with the applicable provisions of the California Corporations Code and
California Financial Code, will constitute a valid and binding obligations of
EB enforceable in accordance with their terms.
4.3.2 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby does not and will not
conflict with, or result in any violation of or default or loss of a material
benefit under, any provision of the respective Articles of Incorporation or
Bylaws of ELDORADO or EB or, except for the necessity of obtaining the approval
of ELDORADO's shareholders and Requisite Regulatory Approvals, any material
mortgage, indenture, lease, agreement or other material instrument, or any
permit, concession, grant, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to ELDORADO or EB, their
respective properties or any of their respective Subsidiaries, other than any
such conflict, violation, default or loss which (i) will not have a Material
Adverse Effect on ELDORADO and EB taken as a whole; or (ii) will be cured or
waived prior to the Effective Time. No material consent, approval, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required in connection with the execution and delivery of this
Agreement by ELDORADO and EB or the performance by ELDORADO and EB of their
respective obligations hereunder, except for (a) filings required in order to
obtain Requisite Regulatory Approvals and the approval of ELDORADO's
shareholders, (b) the filing of the Registration Statement (including the Proxy
Statement and Prospectus of ELDORADO constituting a part thereof) with the SEC
relating to the Merger and the declaration of effectiveness of the Registration
Statement by the SEC and any applicable State securities law regulatory
authorities, (c) the filing and approval of the Subsidiary Merger Agreement and
the Bank Merger Agreement with the California Superintendent of Banks and the
Secretary of the State of California; (d) any approvals required to be obtained
pursuant to the BHCA or the Federal Deposit Insurance Act or any other required
governmental approval for the execution and delivery of this Agreement by
ELDORADO and EB or the consummation of the Merger or Bank
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Merger; (e) any consents, authorizations, approvals, filings or exemptions
required to be made or obtained under the securities or "blue sky" laws of
various jurisdictions in connection with the issuance of shares of ELDORADO
Common Stock contemplated by this Agreement; and (f) any consents,
authorizations, approvals, filings or exemptions in connection with compliance
with the rules of the AMEX.
Section 4.4 Capital Structure of ELDORADO. On the date of this
Agreement, the authorized capital stock of ELDORADO consists of 12,500,000
shares of ELDORADO Common Stock, without par value, and 5,000,000 shares of
Preferred Stock without par value. At the close of business on May 19, 1995,
2,756,888 shares of ELDORADO Common Stock were outstanding, 313,140 shares of
ELDORADO Common Stock were reserved for issuance pursuant to employee stock
option and other employee stock plans (the "ELDORADO Stock Plans"), and no
shares of ELDORADO Preferred Stock were outstanding or were reserved for
issuance by ELDORADO. Subject to the receipt of the approval of this Agreement
and the Merger by ELDORADO's shareholders, the issuance of the shares of
ELDORADO Common Stock proposed to be issued pursuant to this Agreement at the
Effective Time will have been duly authorized by all requisite corporate action
of ELDORADO, and such shares, when issued as contemplated by this Agreement,
will constitute duly authorized, validly issued, fully paid and non-assessable
shares of ELDORADO Common Stock, and will not have been issued in violation of
the preemptive or similar rights of any Person. As of the date of this
Agreement, and except for this Agreement and the ELDORADO Stock Plans, ELDORADO
does not have outstanding any options, warrants, calls, rights, commitments,
securities or agreements of any character to which ELDORADO is a party or by
which it is bound obligating ELDORADO to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock of ELDORADO or
obligating ELDORADO to grant, extend or enter into any such option, warrant,
call, right, commitment or agreement.
Section 4.5 ELDORADO Filings.
4.5.1 Since January 1, 1992, ELDORADO and its Subsidiaries,
including EB, have filed all reports, registrations and statements, together
with any amendments required to be made with respect thereto, that were
required to be filed with (a) the Federal Reserve Board or any Federal Reserve
Bank; (b) the Federal Deposit Insurance Corporation; (c) the California
Superintendent of Banks; (d) the SEC; and (f) any other applicable federal,
state or local governmental or regulatory authority. All such reports,
registrations and filings are collectively referred to as the "ELDORADO
Filings". Except to the extent prohibited by law, copies of the ELDORADO
Filings have been made available to MARINERS. As of their respective filing
dates, each of the past ELDORADO Filings (a) was true and complete in all
material respects (or was amended so as to be so promptly following discovery
of any discrepancy); and (b) complied in all material respects with all of the
statutes, rules and regulations enforced or promulgated by the governmental or
regulatory authority with which it was filed (or was amended so as to be so
promptly following discovery of any such noncompliance) and none contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
ELDORADO Financial Statements, together with the financial statements contained
in the ELDORADO Filings, have been prepared in accordance with Generally
Accepted Accounting Principles, or applicable regulatory accounting principles,
consistently followed throughout the periods covered by such statements (except
as may be
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indicated in the notes thereto) and fairly present (subject, in the case of the
unaudited statements, to recurring adjustments normal in nature and amount) the
consolidated financial position of ELDORADO as of the respective dates
indicated and the consolidated results of its operations and changes in cash
flows at the respective dates and for the respective periods covered by such
financial statements.
4.5.2 ELDORADO has filed each report, schedule,
registration statement and definitive proxy statement and amendments to each of
the foregoing since January 1, 1992 that ELDORADO was required to file with the
SEC since such date (the "ELDORADO SEC Documents"), all of which have been made
available to MARINERS. As of their respective dates, the ELDORADO SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such ELDORADO SEC Documents,
and none of the ELDORADO SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of
ELDORADO included in the ELDORADO SEC Documents comply in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with Generally Accepted Accounting Principles, or applicable regulatory
accounting principles, applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto, or in the case of
the unaudited statements, as permitted by Form 10-Q of the SEC) and fairly
present (subject, in the case of the unaudited statements, to recurring audit
adjustments normal in nature and amount) the consolidated financial position of
ELDORADO as at the dates thereof and the consolidated results of its operations
and cash flows or changes in financial position for the periods then ended.
Section 4.6 Accuracy of Information Supplied.
4.6.1 No representation or warranty of ELDORADO or EB
contained in this Agreement or any statement, schedule, exhibit or certificate
given or to be given by or on behalf of ELDORADO to MARINERS in connection
herewith and none of the information supplied or to be supplied by ELDORADO to
MARINERS under this Agreement contains or will contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
4.6.2 None of the information supplied or to be supplied by
ELDORADO or relating to ELDORADO or EB which is included or incorporated by
reference in (i) the Registration Statement on Form S-4 to be filed with the
SEC by ELDORADO in connection with the issuance of shares of ELDORADO Common
Stock in the Merger (including the Proxy Statement and prospectus constituting
a part thereof, the "Registration Statement") will, at the time the
Registration Statement becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; (ii) the Proxy
Statement and any amendment or supplement thereto will, at all times from the
date of mailing to respective shareholders of ELDORADO and MARINERS through the
date of the meeting of shareholders of MARINERS to be held in connection with
the Merger, contain any untrue statement of a material fact or omit to state a
material fact required to
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be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and (iii)
applications and forms to be filed with securities or "blue sky" authorities,
self regulatory authorities, the AMEX or any Governmental Entity in connection
with the Merger, the issuance of any shares of ELDORADO Common Stock in
connection with the Merger, or any Requisite Regulatory Approvals will, at the
time filed or at the time they become effective, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Registration
Statement (except for such portions thereof that relate only to MARINERS, MB
and their Subsidiaries) will comply in all material respects with the
applicable provisions of the Securities Act and the Exchange Act and the rules
and regulations thereunder.
Section 4.7 Compliance With Applicable Laws. Except as disclosed
in the ELDORADO SEC Documents filed prior to the date of this Agreement, the
respective businesses of ELDORADO, EB and their Subsidiaries are not being
conducted in violation of any law, ordinance or regulation, except for
violations which individually or in the aggregate would not, have a Material
Adverse Effect on ELDORADO and its Subsidiaries (including EB) taken as a
whole. No investigation or review by any Governmental Entity with respect to
ELDORADO or EB is pending or, to the Knowledge of ELDORADO and EB, threatened,
nor has any Governmental Entity indicated to ELDORADO or EB an intention to
conduct the same, other than those the outcome of which, as far as can be
reasonably foreseen, will not have a Material Adverse Effect on ELDORADO and
its Subsidiaries (including EB) taken as a whole.
Section 4.8 Litigation. Except as disclosed in the ELDORADO SEC
Documents, there is no suit, action or proceeding pending or, to ELDORADO's or
EB's Knowledge, threatened against or affecting ELDORADO or any of its
Subsidiaries (including EB) which would have a Material Adverse Effect on
ELDORADO and its Subsidiaries (including EB) taken as a whole; nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against ELDORADO or any of its Subsidiaries, including
EB, that has or which, insofar as reasonably can be foreseen, in the future
would have, any such effect.
Section 4.9 Agreements with Banking Authorities. Except as set
forth on Schedule 4.9, neither ELDORADO nor any subsidiary of ELDORADO is a
party to any written agreement or memorandum of understanding with or order or
directive from any Governmental Entity.
Section 4.10 Performance of Obligations. ELDORADO and its
Subsidiaries (including EB) have performed in all material respects all of the
obligations required to be performed by them to date and none of ELDORADO or
any of its Subsidiaries, including EB, is in default under or in breach of any
term or provision of any covenant, contract, lease, indenture or any other
agreement to which it is a party, is subject or is otherwise bound, and no
event has occurred that, with the giving of notice or the passage of time or
both, would constitute such default or breach, where such default or breach
would have a Material Adverse Effect on ELDORADO and its Subsidiaries,
including EB, taken as a whole. To ELDORADO's and MB's Knowledge, no party
with whom ELDORADO or any of its Subsidiaries, including EB, has an agreement
that is of material importance to the business of ELDORADO and its Subsidiaries
(including EB) taken as a whole, is in default thereunder.
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Section 4.11 Brokers and Finders. Except as set forth on Schedule
4.11, neither ELDORADO nor EB is a party to or obligated under any agreement
with any broker or finder relating to the transactions contemplated hereby.
ELDORADO agrees to indemnify and hold harmless and defend MARINERS and its
affiliates, with counsel reasonably satisfactory to MARINERS' Chief Executive
Officer, from and against any liability, cost or expense, including attorneys'
fees, incurred in connection with a breach of this Section 4.11.
Section 4.12 Absence of Material Adverse Effect. Except as
disclosed in ELDORADO SEC Documents, since December 31, 1994, the respective
businesses of ELDORADO and its Subsidiaries (including EB) have been conducted
only in the ordinary course, in substantially the same manner as theretofore
conducted, and no event or circumstance has occurred or is expected to occur
which, with the passage of time or otherwise, has had or is likely to have a
Material Adverse Effect on ELDORADO and its Subsidiaries, including EB, taken
as a whole.
Section 4.13 Undisclosed Liabilities. ELDORADO and its
Subsidiaries, including EB, have no liabilities or obligations, either accrued,
contingent or otherwise, that are material to ELDORADO and its Subsidiaries
(including EB) taken as a whole and that have not been: (a) reflected or
disclosed in the ELDORADO Financial Statements; (b) incurred subsequent to
December 31, 1994 in the ordinary course of business; or (c) disclosed in
writing to MARINERS prior to the date of this Agreement or in ELDORADO's
quarterly report on Form 10-Q for the quarter ended March 31, 1995, a copy of
which has been furnished to MARINERS. ELDORADO knows of no basis for the
assertion against it or any of its Subsidiaries, including EB, of any
liability, obligation or claim (including without limitation that of any
Governmental Entity) that is likely to result in or cause a Material Adverse
Effect on ELDORADO and its Subsidiaries, including EB, taken as a whole, that
is not fairly reflected in the ELDORADO Financial Statements or in the ELDORADO
SEC Documents.
Section 4.14 Insurance. ELDORADO and EB and their Subsidiaries
have in full force and effect policies of insurance with respect to their
assets and businesses against such casualties and contingencies and in such
amounts, types and forms as are customarily appropriate for their businesses,
operations, properties and assets. None of ELDORADO or EB or any of their
Subsidiaries is in default under any such policy of insurance or bond such that
it can be cancelled and all material claims thereunder have been filed in
timely fashion.
Section 4.15 Taxes.
4.15.1 Filing of Returns. Except as set forth on Schedule
4.15(a), ELDORADO, EB and their Subsidiaries have duly prepared and filed
federal, state, local and foreign Returns (for Tax or informational purposes)
which were required to be filed by or in respect of ELDORADO, EB and their
Subsidiaries, or any of their properties, income and/or operations on or prior
to the Closing Date.
4.15.2 Payment of Taxes. Except as disclosed on Schedule
4.15(b) with respect to all amounts in respect of Taxes imposed on ELDORADO, EB
or any Subsidiary or for which MARINERS, EB or any Subsidiary is or could be
liable, whether to taxing authorities (as, for example, under law) or to other
Persons (as, for example, under Tax allocation agreements), with respect to all
taxable periods or portions of periods ending on or before the Closing Date,
all applicable tax laws and agreements have been or will be fully complied with
in all material
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respects, and all such amounts required to be paid by or on behalf of ELDORADO,
EB or any Subsidiary to taxing authorities or others on or before the date
hereof have been paid.
Section 4.16 Hazardous Materials. Except as set forth on Schedule
4.16:
4.16.1 To the Knowledge of ELDORADO and EB, except for
ordinary and necessary quantities of cleaning, pest control and office
supplies, and other small quantities of Hazardous Substances that are used in
the ordinary course of the respective businesses of ELDORADO, EB and their
Subsidiaries and in compliance with applicable Environmental Laws, or ordinary
rubbish, debris and nonhazardous solid waste stored in garbage cans or bins for
regular disposal off-site, or petroleum contained in and de minimus quantities
discharged from motor vehicles in their ordinary operation, ELDORADO, EB and
their Subsidiaries have not engaged in the generation, use, manufacture,
treatment, transportation, storage (in tanks or otherwise), or the disposal, of
Hazardous Substances on or from or into any of the real properties which are
owned and operated by ELDORADO or EB in the ordinary conduct of their
businesses, except for any instance of non-compliance that does not and is not
excepted to have a Material Adverse Effect on, or result in the imposition of a
liability that is material to, ELDORADO and its Subsidiaries (including EB
taken as a whole).
Section 4.17 Effective Date of Representations, Warranties,
Covenants and Agreements. Each representation, warranty, covenant and
agreement of ELDORADO or EB set forth in this Agreement shall be deemed to be
made on and as of the date hereof and as of the Effective Time.
ARTICLE 5. ADDITIONAL AGREEMENTS
Section 5.1 Access to Information, Due Diligence, etc.
5.1.1 Upon reasonable notice, MARINERS, MB and their
Subsidiaries shall permit ELDORADO and EB and their accountants, counsel and
other representatives reasonable access to their officers, employees,
properties, books, contracts, commitments and records and from the date hereof
through the Effective Time, shall furnish or provide access to ELDORADO as soon
as practicable, (i) a copy of each MARINERS Filing filed subsequent to the date
of this Agreement promptly after such document has been filed with the
appropriate Governmental Entity, provided, however, that copies of any Returns
relating to Taxes of any of MARINERS, MB or any of their Subsidiaries shall be
furnished to ELDORADO at least 15 Business Days prior to the proposed date of
filing thereof and shall not be filed without the prior approval of ELDORADO,
which approval shall not be unreasonably withheld or delayed; (ii) unless
otherwise prohibited by law, a copy of each report, schedule and other
documents filed or received by it during such period with any Regulatory
Authority or the Internal Revenue Service, as to documents other than related
to employees or customers and other than those distributed to banks generally;
(iii) as promptly as practicable following the end of each calendar month after
the date hereof, a consolidated balance sheet of MARINERS as of the end of such
month; and (iv) all other information concerning its business, properties,
assets, financial condition, results of operations, liabilities, personnel and
otherwise as ELDORADO or EB may reasonably request.
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5.1.2 Upon reasonable notice, ELDORADO and EB shall allow
to MARINERS and its accountants, counsel and other representatives such access
to their officers, employees, properties, books, contracts, commitments and
records as ELDORADO provides to financial analysts in the normal course of
business and, from the date hereof through the Effective Time at MARINERS'
request, shall furnish to MARINERS as soon as practicable, a copy of each
ELDORADO SEC Document filed since the date of this Agreement.
5.1.3 Until the Effective Time, a representative of EB
shall be entitled and shall be invited to attend meetings of the Boards of
Directors of MARINERS and MB, and of the Loan Committee of MB, and at least ten
(10) days' prior written notice of the dates, times and places of such meetings
shall be given to EB except that in the case of special meetings EB shall
receive the same number of days' prior notice as MB's directors receive for
such meetings; provided, however, that such representative shall excuse himself
or herself from any portion of any such meetings that (i) relate to approval
of, or the exercise of any rights under, this Agreement by MARINERS or MB, and
(ii) involve discussions between such Boards of Directors or such Loan
Committee and legal counsel for MARINERS or MB that are entitled to be
protected from disclosure under an attorney-client privilege which would be
lost due to the presence of such representative of EB.
5.1.4 MARINERS, MB, EB and ELDORADO each agrees to keep
confidential and not divulge to any other party or Person (other than to the
employees, attorneys accountants and consultants of each who have a need to
receive such information and other than as may be required by law or the rules
of the AMEX) any information received from the other, unless and until such
documents and other information otherwise becomes publicly available. In the
event of termination of this Agreement for any reason, the parties shall
promptly return, or at the election of the other party destroy, all non-public
documents obtained from the other and any copies or notes of such documents
(except as otherwise required by law) and, upon the request of the other party,
confirm such destruction to the other in writing.
Section 5.2 Shareholder Approval.
5.2.1 ELDORADO and MARINERS each shall promptly call a
meeting of its respective shareholders to be held at the earliest practicable
date after the date on which the initial Registration Statement is filed with
the SEC, but in no event later than December 31, 1995, for the purpose of
approving this Agreement and authorizing the Subsidiary Merger Agreement and
the Merger. The ELDORADO Board of Directors will recommend to the ELDORADO
shareholders, and the MARINERS' Board of Directors will recommend to the
MARINERS' shareholders, approval of this Agreement, the Subsidiary Merger
Agreement and the Merger; provided, however, that the ELDORADO Board of
Directors may withdraw such recommendation if its financial advisor modifies or
withdraws the Fairness Opinion referenced in Subsection 7.2.14 below; and that
the MARINERS Board of Directors may withdraw its recommendation if such Board
of Directors believes in good faith (based on a written opinion of a financial
advisor that is experienced in evaluating the fairness of Acquisition
Proposals) that a Superior Proposal (defined below) has been made and shall
have determined in good faith, after consultation with and based on written
advice of its outside legal counsel, that the withdrawal of such recommendation
is necessary for such Board of Directors to comply with its fiduciary duties
under applicable law.
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5.2.2 If the Merger is approved by vote of the shareholders
of MARINERS, then, within ten (10) days thereafter MARINERS shall send a
Dissenting Shareholder Notice to each recordholder of any Dissenting Shares.
5.2.3 Prior to the Effective Time of the Merger, ELDORADO,
as the sole shareholder of EB, shall take all action necessary for the
consummation of the Merger by EB, and MARINERS, as the sole shareholder of MB,
shall take all action necessary for the consummation by MB of the Bank Merger
subsequent to the approval of such action by ELDORADO and its counsel.
Section 5.3 Taking of Necessary Action.
5.3.1 Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees, subject to applicable laws and
the fiduciary duties of MARINERS', MB's, ELDORADO's or EB's Boards of
Directors, as advised in writing by their respective counsel, to use all
reasonable efforts promptly to take or cause to be taken all action and
promptly to do or cause to be done all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement and the Subsidiary Merger Agreement
and Bank Merger, including, without limitation, the delivery of any certificate
or other document reasonably requested by counsel to a party to this Agreement.
Without limiting the foregoing, ELDORADO and EB and MARINERS and MB will use
their reasonable efforts to obtain all consents of third parties and Government
Entities necessary or, in the reasonable opinion of ELDORADO or MARINERS
advisable for the consummation of the transactions contemplated by this
Agreement. Without limiting the foregoing, ELDORADO shall cause EB to take all
actions necessary to execute and file the Subsidiary Merger Agreement and to
effect all transactions contemplated of EB by this Agreement and MARINERS shall
cause MB to take all actions necessary to execute and file the Bank Merger
Agreement and to effect all transactions contemplated by this Agreement. In
case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the Subsidiary Merger
Agreement or the Bank Merger Agreement, or to vest the Surviving Corporation
with full title to all properties, assets, rights, approvals, immunities and
franchises of MARINERS or to vest the Surviving Bank with full title to all
properties, assets, rights, approvals, immunities and franchises of MB, the
proper officers or directors of ELDORADO and EB or MARINERS and MB, as the case
may be, shall take all such necessary action. Notwithstanding the foregoing,
nothing in this Agreement shall be construed to require MARINERS to take any
action (or omit to take any action) which may affect the Per Share Merger
Consideration, except as may be specifically provided for or required by this
Agreement.
5.3.2 The obligations of MARINERS contained in Section
6.2.5 of this Agreement shall continue to be in full force and effect despite
any Default thereof by reason of receipt of a Superior Proposal (defined below)
and any Default thereof by the defaulting party shall entitle ELDORADO to such
legal or equitable remedies as may be provided in this Agreement or by law
notwithstanding that any action or inaction of the board of directors or
officers of the defaulting party which is required to enable such party to
fulfill such obligations may be excused based on the continuing fiduciary
obligations of such party's board of directors and officers to its
shareholders. Notwithstanding the foregoing, however, in the event of a
termination of this Agreement by ELDORADO and the actual payment of the
liquidated damages to ELDORADO as provided for in Section 8.5 of this
Agreement, none of MARINERS, MB or
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their respective directors or officers shall have any obligations or
liabilities of any kind under this Agreement by reason of any such Default, and
ELDORADO and EB shall have no further obligations of any kind under this
Agreement.
5.3.3 MARINERS shall use its best efforts to cause each
director, executive officer and other Person who is an "affiliate" of MARINERS
(for purposes of Rule 145 under the Securities Act) to deliver to ELDORADO, on
the date of this Agreement, a written agreement in the form attached hereto as
Exhibit 7.2.11 (the "Affiliate Agreements").
Section 5.4 Registration Statement and Applications.
5.4.1 ELDORADO and EB and MARINERS and MB will cooperate
and jointly prepare and file as promptly as practicable the Registration
Statement, (in which the Proxy Statement will be included as a prospectus), the
statements, applications, correspondence or forms to be filed with appropriate
State securities law regulatory authorities, and the statements, correspondence
or applications to be filed to obtain the Requisite Regulatory Approvals to
consummate the transactions contemplated by this Agreement. ELDORADO will
print and distribute the Proxy/Prospectus and amendments thereto and, except as
otherwise provided in Subsection 5.6.4, ELDORADO shall pay the expenses
thereof. Each of ELDORADO and MARINERS shall use all reasonable efforts to
have the S-4 Registration Statement declared effective under the Securities Act
as promptly as practicable after such filing, and thereafter mail the Proxy
Statement to the respective shareholders of ELDORADO and MARINERS. ELDORADO
also shall prepare and file the listing application to be filed with the AMEX
with respect to the ELDORADO Common Stock to be issued in the Merger. Each
party will furnish all financial or other information, including accountant
comfort letters relating thereto, certificates, consents and opinions of
counsel concerning it and its Subsidiaries received by such party.
5.4.2 Each party shall provide to the other at the request
of the other party: (i) immediately prior to the filing thereof, copies of all
material statements, applications, correspondence or forms to be filed with
state securities law regulatory authorities, the SEC and other appropriate
regulatory authorities to obtain the Requisite Regulatory Approvals to
consummate the transactions contemplated by this Agreement; provided, however,
that no approval need be obtained from any party to which such materials are
provided; and (ii) promptly after delivery to, or receipt from, such regulatory
authorities all written communications, letters, reports or other documents
relating to the transactions contemplated by this Agreement.
Section 5.5 Expenses.
5.5.1 Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring the same, including,
without limitation, all costs associated with any resales of ELDORADO Common
Stock by Affiliates of MARINERS; provided, however, that ELDORADO will file on
a timely basis at its own expense the reports required by Rule 144(c) of the
Securities Act.
5.5.2 The fees and expenses incurred by MARINERS or MB in
connection with this Agreement and the transactions contemplated by this
Agreement, including attorneys,
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accountants, financial advisors, investment bankers and any other fees, and
payments made or to be made in connection with or to obtain the cancellation of
MARINERS' Stock Options, shall be deducted from MARINERS Consolidated Tangible
Net Worth as provided in the definition of MARINERS Consolidated Tangible Net
Worth. MARINERS shall use its best efforts to ensure that its attorneys,
accountants, financial advisors, investment bankers and other consultants
engaged by it or MB in connection with the transaction contemplated by this
Agreement submit full and final bills on or before the Determination Date and
that all such expenses are paid or properly accrued prior to the Determination
Date.
Section 5.6 Notification of Certain Events.
5.6.1 MARINERS shall provide to ELDORADO, as soon as
practicable, written notice (sent via facsimile and overnight mail or courier)
of the occurrence or failure to occur of any of the events, circumstances or
conditions that are the subject of Sections 6.1 and 6.2, which notice shall
provide reasonable detail as to the subject matter thereof.
5.6.2 ELDORADO shall provide to MARINERS, as soon as
practicable, written notice (sent via facsimile and overnight mail or courier)
of the occurrence or failure to occur of any of the events, circumstances or
conditions that are the subject of Section 6.3, which notice shall provide
reasonable detail as to the subject matter thereof.
5.6.3 Each party shall promptly advise the others in
writing of any change or event which could reasonably be expected to have a
Material Adverse Effect on the business, properties, assets, financial
condition, results of operations, liabilities or personnel of such party or on
its ability to consummate the transactions contemplated by this Agreement.
5.6.4 MARINERS and ELDORADO shall immediately notify the
other in writing in the event that such party becomes aware that the
Registration Statement or Proxy Statement at any time contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statement therein, in light of
the circumstances under which they were made, not misleading or that the
Registration Statement or the Proxy Statement otherwise is required to be
amended as supplemented, which notice shall specify, in reasonable detail, the
circumstances thereof. ELDORADO shall promptly amend and supplement such
materials and disseminate the new or modified information so as to fully comply
with the Securities Act and any applicable AMEX rules and regulations. If the
amendment or supplement so required relates to information concerning MARINERS
or MB, the out-of-pocket costs and expenses of preparing, filing and
disseminating such amendment or supplement shall be borne by MARINERS.
Section 5.7 Environmental Assessment.
5.7.1 ELDORADO and EB shall have the right to conduct
before the Closing Date, but to be commenced no later than 30 days and
completed no later than 90 days after the date of this Agreement, at their sole
expense, environmental site investigations and assessments ("Site Assessments")
covering any real property owned or leased by MARINERS or MB (including Other
Real Estate Owned currently owned by MARINERS or MB and, with the consent of
the owners thereof, which MARINERS or MB shall use their reasonable efforts to
obtain, Other Real Estate previously owned by MARINERS or MB) or held in trust
or otherwise
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managed by MARINERS or MB, for the purpose of determining whether there exists
on such real property any environmental condition which could result in any
liability, cost or expense to ELDORADO or EB or any other owner, user or
occupant of such property relating to Hazardous Substances or other adverse
environmental conditions. Such Site Assessments may include both above and
below the ground testing for environmental damage or the presence of Hazardous
Substances on such property as may be reasonably necessary to conduct the Site
Assessment in the opinion of the persons conducting such Site Assessment and
MARINERS and MB shall allow such persons access to such property during normal
business hours and upon reasonable prior notice in order to permit them to
conduct the Site Assessment and shall otherwise cooperate with such persons in
connection therewith. In exercising its rights hereunder, ELDORADO shall
coordinate with MARINERS to avoid unduly interfering with the conduct of
business by MARINERS and its Subsidiaries. For invasive testing (exclusive of
asbestos sampling) (e.g, soil and soil boring testing), ELDORADO will first
present to MARINERS the plan of testing that is contemplated by ELDORADO and
ELDORADO may not conduct such testing without MARINERS' prior written consent,
which shall not be unreasonably withheld or delayed. In connection with such
inspection and testing, ELDORADO shall obtain at its sole cost and expense all
permits and licenses required in connection with the performance of such work.
ELDORADO shall repair any damages caused by its tests or inspections. ELDORADO
hereby agree to defend and indemnify MARINERS and MB for all injuries and
damages to persons or property caused by such surveys and testing and for the
cost of removing all mechanics' or materialmen's liens on the inspected
property resulting from such surveys and testing ordered by ELDORADO. As used
herein, "Disclosed Matters" shall mean all information contained in the Site
Assessments obtained by ELDORADO.
5.7.2 If such Site Assessments disclose any environmental
conditions which would be reasonably likely to adversely affect the value of
any one or more such real properties in an amount that totals, individually or
in the aggregate, $100,000 or more, or would require expenditures for
remediation or could reasonably be expected to result in the incurrence of
liabilities or penalties or fines, in excess of $100,000 individually or in the
aggregate, ELDORADO and EB shall have the right and option to terminate this
Agreement and declare it null and void by delivering written notice of
termination to MARINERS within thirty (30) days after the receipt of the last
such Site Assessment and including with such notice a copy of each Site
Assessment that discloses any such environmental condition, unless ELDORADO is
satisfied that the environmental condition can be remediated and that no
liability will be incurred, as a result of such condition, to any third party
or governmental entity and MARINERS agrees to reduce the Cash Component of the
Per Share Merger Consideration by an amount equal to the result obtained by
dividing the aggregate costs of remediation by the number of shares of
MARINERS' Common Stock outstanding immediately prior to the Effective Time. In
the event of any termination of this Agreement pursuant to this Section 5.7.2,
neither party shall have any liability to the other pursuant to Section 8.5;
except that if it is determined that MARINERS or MB knew or had reason to know
of the existence of any such environmental condition or conditions prior to the
Site Assessments, the same shall constitute a breach of MARINERS'
representations and warranties hereunder and MARINERS and MB shall be liable to
ELDORADO for liquidated damages pursuant to Subsection 8.5.2.
5.7.3 ELDORADO and EB shall not provide any such Site
Assessment, or any non-public information contained therein, to any third
party, including any Governmental Entity, unless otherwise required to do so by
court order or order of a regulatory agency.
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Section 5.8 Closing Schedules. MARINERS has delivered to
ELDORADO and EB on or before the date of this Agreement all of the Schedules to
this Agreement which MARINERS or MB are required to deliver to ELDORADO
hereunder (the "MARINERS' Schedules"). Immediately prior to the Closing Date,
MARINERS shall have prepared updates of the MARINERS' Schedules provided for in
Articles 3 and 6 of this Agreement and shall deliver to ELDORADO revised
schedules containing the updated information (or a certificate signed by
MARINERS' Chief Executive Officer stating that there have been no changes on
the applicable schedules); and ELDORADO or EB shall prepare and deliver to
MARINERS an update of the Schedules that were delivered by ELDORADO or EB
pursuant to Section 4 hereof (the "ELDORADO Schedules") containing updated
information, or a certificate signed by ELDORADO's Vice President, Secretary or
Assistant Secretary stating that there has been no change on the ELDORADO
Schedules. (Such updated schedules shall sometimes be referred to
collectively, as the "Closing Schedules.") The Closing Schedules shall be
dated as of the day prior to the Closing Date and shall contain information as
of the day prior to the Closing Date or as of such earlier date as is
practicable in the circumstance. In the event the Closing Date Schedules
disclose an event, occurrence or circumstance that has had or could reasonably
be expected to have a Material Adverse Effect on MARINERS or MB, on the one
hand, or on ELDORADO or EB, on the other hand, or on consummation of the
transactions contemplated by this Agreement, that was not disclosed in the
previously delivered Schedules hereto, the party delivering such Closing Date
Schedules (the "Affected Party") shall so notify the other party in the letter
of transmittal for such Closing Date Schedules, the Closing Date shall be
delayed for seven (7) Business Days and such other party shall be entitled to
terminate this Agreement within five (5) Business Days after receiving such
Closing Date Schedules that disclose such event, occurrence or circumstance.
In the event of any such termination, the terminating party shall have no
liability for such termination. The Affected Party shall have no liability to
the terminating party in such an event unless (i) as a result of the existence
of such event, occurrence or circumstance so disclosed in the Closing Schedules
any of the representations or warranties of the Affected Party contained in
this Agreement are found to have been untrue in any material respect as of the
date of this Agreement, or (ii) the event, occurrence or circumstance could
have been prevented in the exercise of reasonable diligence by any officers or
directors of the Affected Party, in either of which cases the Affected Party
shall be liable to the terminating party for Liquidated Damages as provided in
Section 8.5 hereof. For purposes of this Section 5.8, ELDORADO and EB shall be
considered a single party and MARINERS and MB shall be considered a single
party.
Section 5.9 Additional Accruals/Appraisals.
5.9.1 Prior to the Determination Date, at ELDORADO's
request, MARINERS or MB shall, consistent with Generally Accepted Accounting
Principles and applicable banking regulations, establish such additional
accruals and reserves immediately prior to the Determination Date as may be
necessary to conform MARINERS' accounting and credit and OREO loss reserve
practices and methods to those of ELDORADO and EB, provided, however, that no
accrual or reserve made by MARINERS pursuant to this Section 5.9.1, or any
litigation or regulatory proceeding arising out of any such accrual or reserve,
or any other effect on MARINERS resulting from MARINERS' compliance with this
Section 5.9.1, shall constitute or be deemed to be a breach, violation of or
failure to satisfy any representation, warranty, covenant, condition or other
provision of this Agreement or otherwise be considered in determining whether
any such breach, violation or failure to satisfy shall have occurred.
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Additionally, no such accrual or reserve made by MARINERS or MB pursuant to
this Section 5.9.1 shall be used by the parties in the calculation of MARINERS
Consolidated Tangible Net Worth and the Per Share Merger Consideration, it
being understood and agreed, however, that accruals, additions to reserves and
charge-offs or write-downs of assets required by any other provisions of this
Agreement, including, but not limited to those required by Section 5.9.2, shall
be used by the parties in making such calculations of MARINERS' Consolidated
Tangible Net Worth and the Per Share Merger Consideration.
5.9.2 Within ninety (90) days prior to the anticipated
Effective Time, MARINERS shall cause appraisals to be conducted of (i) all of
MB's OREO properties and (ii) all real properties securing loans of MB as to
which foreclose proceedings have been initiated either by MB or any other
holder of a deed of trust or other lien on such properties or as to which the
borrower has initiated bankruptcy proceedings that preclude the initiation of
foreclosure proceedings ("Loans-in-Foreclosure"); provided, however, that if MB
had obtained an appraisal for any such properties which was issued as of a date
that will be no more than 180 days prior to the Effective Time, MB may satisfy
the foregoing requirement, with respect to such properties only, with an update
of such appraisal in lieu of a full appraisal thereof. Such appraisals, or
updates (as the case may be), shall be conducted in accordance with all
applicable banking regulations and the expenses thereof shall be borne by MB.
If any such appraisal or update reveals that the fair market value of any OREO
property or any real property securing a Loan-in- Foreclosure is less than the
amount at which such property, or Loan-in-Foreclosure (as the case may be), is
being carried on the books of MB (the "Book Value"), then, MB shall record a
write-down, by means of a charge against earnings, in such Book Value to an
amount equal to the fair market value of the OREO property or the property
securing the Loan-in-Foreclosure, as shown in such appraisal or update, less
the anticipated costs of disposing of such property.
5.9.3 MARINERS shall continue to accrue bonuses, incentive
compensation payments, 401(k) amounts and other employee benefits in a manner
consistent with MARINERS' prior practice, as set forth on Schedule 5.9.3, and
in accordance with Generally Accepted Accounting Principles.
ARTICLE 6. CONDUCT OF BUSINESS
Section 6.1 Affirmative Conduct of MARINERS and MB. During the
period from the date of execution of this Agreement through the Effective Time,
each of MARINERS and MB shall carry on its businesses, and shall cause each of
its respective Subsidiaries to carry on its business, in the ordinary course in
substantially the manner in which heretofore conducted, subject to changes in
law applicable to all California banks and directives from regulators, and use
all commercially reasonable efforts to preserve intact its business
organization, keep available the services of its officers and employees, (other
than terminations in the ordinary course of business) and preserve its
relationship with customers, depositors, suppliers and others having business
dealings with it; and, to these ends, shall fulfill each of the following:
6.1.1 Use its commercially reasonable efforts, or cooperate
with others, to expeditiously bring about the satisfaction of the conditions
specified in Article 7 hereof.
6.1.2 Advise ELDORADO promptly in writing of any change
that would have a Material Adverse Effect on its capital structure, financial
condition, assets, results of operations,
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business or prospects or of any matter which would make the representations and
warranties set forth in Article 3 hereof not true and correct in any material
respect as of the effective date of the Registration Statement and at the
Effective Time.
6.1.3 Keep in full force and effect all of its existing
material permits and licenses and those of its Subsidiaries.
6.1.4 Use its commercially reasonable efforts to maintain
insurance or bonding coverage on all material properties for which it is
responsible and on its business operations, and carry not less than the same
coverage for fidelity, public liability, personal injury, property damage and
other risks equal to that which is in effect as of the date of this Agreement;
and notify ELDORADO in writing promptly of any facts or circumstances which
could affect its ability, or that of any of its Subsidiaries, to maintain such
insurance or bonding coverage.
6.1.5 Perform its contractual obligations and not breach or
come into default on any of such obligations, and not amend, modify, or, except
as they may be terminated in accordance with their terms, terminate any
material contract, agreement, understanding, commitment, or offer, whether
written or oral, (collectively referred to as an "Understanding") or materially
default in the performance of any of its obligations under any Understanding
where such default would have a Material Adverse Effect on MARINERS or MB.
6.1.6 Duly observe and conform to all legal requirements
applicable to its business, except for any failure to so observe and conform
that would not, individually or in the aggregate, and, in the future will not,
have a Material Adverse Effect on MARINERS or MB.
6.1.7 Duly and timely file as and when due all reports and
Returns required to be filed with any Governmental Entity.
6.1.8 Maintain its assets and properties in good condition
and repair, normal wear and tear excepted.
6.1.9 Promptly advise ELDORADO in writing of any event or
any other transaction within the Knowledge of MARINERS or MB, whereby any
Person or related group of Persons acquires, after the date of this Agreement,
directly or indirectly, record or beneficial ownership (as defined in Rule
13d-3 promulgated by the SEC pursuant to the Exchange Act) or control of 5% or
more of the outstanding shares of MARINERS Common Stock either prior to or
after the record date fixed for the MARINERS shareholders' meeting or any
adjourned meeting thereof to approve the transactions contemplated herein.
6.1.10 (a) Maintain a reserve for loan and lease
losses ("Loan Loss Reserve") at a level which is adequate to provide for all
known and reasonably expected losses on loans, leases and other extensions of
credit outstanding and other inherent risks in MB's portfolio of loans and
leases, in accordance with Generally Accepted Accounting Principles and
applicable regulatory accounting principles and banking laws and regulations
and continue MB's current policy of adding to the Loan Loss Reserve (by making
a provision for loan losses in) the amounts set forth in Schedule 6.1.10,
provided that (i) such provision shall be increased, on the same principle that
was used in establishing the current provision policy in the event of an
increase in non-performing or classified loans or leases and/or a material
increase in the size of
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MB's loan or lease portfolio, and (ii) in no event shall the Loan Loss Reserve
be permitted to fall below an amount that is equal to 1.27% of the average of
MB's total outstanding gross loans, leases and other extensions of credit,
measured as of the last business day of each month;
(b) Continue its current practice of charging a
provision of $10,000 per month in respect of the OREO properties owned by
MARINERS or MB on the date hereof and increasing that provision, on the same
principle, if and to the extent MARINERS or MB came to acquire additional OREO
properties between the date hereof and the Effective Time; and
(c) Charge off all loans, receivables and other
assets, or portions thereof, deemed uncollectible in accordance with Generally
Accepted Accounting Principles, regulatory accounting principles, and
applicable law or regulation, or which have been classified as "loss" or as
directed by any regulatory authority, unless such classification or direction
has been disregarded in good faith by MARINERS or MB, MARINERS or MB has
submitted in writing to such regulatory authority the basis upon which it has
so disregarded such classification or direction and such regulatory authority
retracts its direction requiring such charge-off.
6.1.11 Furnish to ELDORADO, as soon as practicable, and in
any event within fifteen days after it is prepared: (i) a copy of any report
submitted to the board of directors of MARINERS or MB and access to the working
papers related thereto, provided, however, that MARINERS need not furnish
ELDORADO any materials relating to deliberations of such boards of directors
with respect to their approval of this Agreement, communications of MARINER's
legal counsel with the Board of Directors or officers of MARINERS or MB
regarding MARINER's or MB's rights against or obligations to ELDORADO or its
Affiliates under this Agreement, or books, records and documents covered by the
attorney- client privilege or which are attorneys' work product; (ii) copies of
all material reports, renewals, filings, certificates, statements,
correspondence and other documents specific to MARINERS or MB or filed with or
received from the SEC, Federal Reserve Board, any Federal Reserve Bank, the
FDIC, the California State Banking Department or any Governmental Entity; (iii)
monthly unaudited balance sheets, statements of income and changes in
shareholders' equity for MARINERS and its Subsidiaries and quarterly unaudited
consolidated and consolidating balance sheets, statements of income and changes
in shareholders' equity for MARINERS, in each case prepared on a basis
consistent with past practice, and (iv) such other reports as ELDORADO may
reasonably request (which are otherwise deliverable under this Section 6.1.11)
relating to MARINERS or MB. Each of the financial statements of MARINERS or MB
and delivered pursuant to this subsection 6.1.11 shall be accompanied by a
certificate of the Chief Financial Officer of MARINERS to the effect that such
financial statements fairly present the financial information presented therein
of MARINERS or MB (as the case may be), for the periods covered, subject to
recurring adjustments normal in nature and amount, necessary for a fair
presentation and are prepared on a basis consistent with past practice.
6.1.12 MARINERS agrees that through the Effective Time, as
of their respect dates, (i) each MARINERS Filing will be true and complete in
all material respects; and (ii) each MARINERS Filing will comply in all
material respects with all of the statutes, rules and regulations enforced or
promulgated by the governmental Entity with which it will be filed and none
will contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they will be made, not
misleading. Any financial statement contained in any of such
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MARINERS Filings that is intended to present the financial position of the
entities or entity during the periods involved to which it relates will fairly
present in all material respects the financial position of such entities or
entity and will be prepared in accordance with Generally Accepted Accounting
Principles or consistent with applicable banking regulations, except as stated
therein.
6.1.13 Maintain reserves for contingent liabilities in
accordance with Generally Accepted Account Principles and consistent with past
practices.
6.1.14 Promptly notify ELDORADO of the filing, or threatened
filing, of any litigation, or the filing or threatened filing of any government
or regulatory action, including an investigation or notice of investigation, or
similar proceeding or notice of any material claims against MARINERS or MB or
any of their assets.
6.1.15 Inform ELDORADO of the amounts and categories of any
loans, leases or other extensions of credit, or other assets, that have been
classified by any bank regulatory authority or by any unit of MARINERS or MB as
"Specially Mentioned," "Renegotiated," "Substandard," "Doubtful," "Loss" or any
comparable classification ("Classified Assets"). MARINERS will furnish to
ELDORADO, as soon as practicable, and in any event within fifteen days after
the end of each calendar month, schedules including the following: (i)
Classified Assets by type (including each credit or other asset in an amount
equal to or greater than $25,000), and its classification category; (ii)
nonaccrual credits by type (including each credit in an amount equal to or
greater than $25,000), (iii) renegotiated loans (loans on which interest has
been renegotiated to lower than market rates because of the financial condition
of the borrowers) by type, (iv) delinquent credits by type (including each
delinquent credit in an amount equal to or greater than $25,000), including an
aging into 30-89 and 90+ day categories; (v) loans or leases or other assets
charged off, in whole or in part, during the previous month by type (including
each such loan or lease or other asset in an amount equal to or greater than
$25,000); and (vi) other real estate or assets owned stating with respect to
each its type.
6.1.16 Furnish to ELDORADO, upon ELDORADO's request,
schedules with respect to the following: (i) participating loans and leases,
stating, with respect to each, whether it is purchased or sold, the loan or
lease type; (ii) loans or leases (including any commitments) by MARINERS or MB
to any director or officer (at or above the Vice President level) of MARINERS
or MB or any of their Subsidiaries, or to any Person holding 5% or more of the
capital stock of MARINERS, including, with respect to each such loan or lease,
the identity and, to the best Knowledge of MARINERS, the relation of the
borrower to MARINERS or MB, the loan or lease type and the outstanding and
undrawn amounts; and (iii) standby letters of credit, by type, (including each
letter of credit in a face amount equal to or greater than $25,000); and
6.1.17 Furnish to ELDORADO copies of each credit
authorization package, consisting of all applications for and financial
information regarding loans, renewals of loans or other extensions of credit of
$100,000 or more (on a non-cumulative basis) for secured loans or secured
extensions of credit and $25,000 in the case of unsecured loans or unsecured
extensions of credit, which are approved by MARINERS or MB after the date of
this Agreement, within ten Business Days of preparation of such packages.
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6.1.18 On or before the date hereof, one or more agreements
shall have been executed and delivered by MB and its Chief Executive Officer,
in form and substance satisfactory to ELDORADO, which shall (i) amend or
terminate his Employment Agreement and Executive Salary Continuation Agreement
with MARINERS and/or MB in the manner and to the extent set forth in Schedule
6.1.18 hereto automatically at the Effective Time and without the necessity of
any further action on the part of either of the parties thereto, and (ii)
provide for his employment by EB effective as of the Effective Time on the
terms provided in Schedule 6.1.18.
Section 6.2 Negative Covenants of MARINERS and MB. During the
period from the date of execution of this Agreement through the Effective Time,
each of MARINERS and MB agrees that, without ELDORADO's prior written consent,
it shall not:
6.2.1 (a) Declare or pay any dividend on or make any other
distribution in respect of any of its capital stock, other than the declaration
of one (1) cash dividend on the outstanding shares of MARINERS' Common Stock of
five cents ($0.05) per share in the quarter ending June 30, 1995 which shall be
payable not later than 60 days after such declaration; (b) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock; or (c) repurchase or otherwise acquire any shares of its capital
stock.
6.2.2 Take any action that would result in any of the
representations and warranties set forth in the Agreement becoming untrue in
any material respect or in any of the conditions to the Merger set forth in
Article 7 not being satisfied, except to the extent such actions are required
to be undertaken by applicable law, regulation or at the direction of any
Regulatory Authority.
6.2.3 Issue, deliver or sell, or grant, or authorize the
issuance, delivery or sale or grant of, or purchase, any shares of the capital
stock of MARINERS or MB or any securities convertible or exercisable into or
are exchangeable for such capital stock, or any rights, warrants or options,
including options under any stock option plans or enter into any agreements to
do any of the foregoing.
6.2.4 Amend its Articles of Incorporation or Bylaws, except
as required by applicable law or by the terms of this Agreement.
6.2.5 Authorize or knowingly permit any of its
representatives, directly or indirectly, to solicit or encourage any
Acquisition Proposal (as hereinafter defined) or participate in any discussions
or negotiations with, or provide any nonpublic information to, any Person or
group of persons (other than ELDORADO, EB and their representatives) concerning
any such solicited Acquisition Proposal. MARINERS shall notify ELDORADO
immediately if any inquiry regarding an Acquisition Proposal is received by
MARINERS or MB, including the terms thereof. For purposes of this Section
6.2.5, "Acquisition Proposal" shall mean any (a) proposal pursuant to which any
Person other than ELDORADO or EB would acquire or participate in a merger or
other business combination or reorganization involving MARINERS or MB; (b)
proposal by which any Person or group, other than ELDORADO or EB, would acquire
the right to vote ten percent (10%) or more of the capital stock of MARINERS or
MB entitled to vote for the election of directors; (c) acquisition of the
assets of MARINERS or MB other than in the ordinary course of business; or (d)
acquisition in excess of ten percent (10%) of the
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outstanding capital stock of MARINERS or MB, other than as contemplated by this
Agreement. Notwithstanding the foregoing, nothing contained in this Agreement
shall prevent MARINERS or its Board of Directors from (i) furnishing nonpublic
information to, or entering into discussions or negotiations with, any person
or entity in connection with an unsolicited bona fide written Acquisition
Proposal by such person or entity, or recommending an unsolicited bona fide
written Acquisition Proposal to the shareholders of MARINERS, if and only to
the extent that (A) the Board of Directors of MARINERS has determined and
believes in good faith (after consultation with and the concurrence of its
financial advisor) that such Acquisition Proposal would, if consummated, result
in a transaction materially more favorable, from a financial point of view, to
MARINERS' shareholders than the transaction contemplated by this Agreement (any
such more favorable Acquisition Proposal being referred to in this Agreement as
a "Superior Proposal") and the MARINERS' Board of Directors has determined in
good faith, after consultation with and based on written advice from its
outside legal counsel, that such action is necessary for MARINERS to comply
with its fiduciary duties to shareholders under applicable law, and (B) prior
to furnishing such nonpublic information to, or entering into discussions or
negotiations with, such person or entity, the MARINERS Board of Directors
received from such person or entity an executed confidentiality agreement, with
terms no more favorable to such party than those contained in the
Confidentiality Agreement between MARINERS and ELDORADO, or (ii) complying with
Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal, if such Rule is applicable thereto.
6.2.6 Acquire or agree to acquire by merging, consolidating
with, or by purchasing all or a substantial portion of the assets of, or in any
other manner, any business or any Person or otherwise acquire or agree to
acquire any assets which are material, on a consolidated basis, to MARINERS or
MB, other than in the ordinary course of business consistent with prior
practice.
6.2.7 Sell, lease or otherwise dispose of any of its assets
which are material, individually or in the aggregate, to MARINERS or MB, except
in the ordinary course of business consistent with prior practice.
6.2.8 Incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities of
MARINERS or MB or any of their subsidiaries or guarantee any debt securities of
others other than in the ordinary course of business consistent with prior
practice.
6.2.9 Enter into any Understanding, except (a) deposits
incurred, and short-term debt securities (obligations maturing within one year)
issued, in the ordinary course of business of MB and consistent with prior
practice, and liabilities arising out of, incurred in connection with, or
related to the consummation of this Agreement, (b) commitments to make loans or
other extensions of credit in the ordinary course of MB's business and
consistent with prior practice; and (c) commitments to act as trustee or agent
in the ordinary course of MB's business and consistent with prior practice; and
(d) loan sales in the ordinary course of MB's business, without any recourse,
provided that no commitment to sell loans shall extend beyond the Effective
Time.
6.2.10 Make or enter into a commitment to make any loan or
other extension of credit, or enter into any commitment to make any loan or
other extension of credit, to any director, officer or employee of MARINERS, MB
or any of their Subsidiaries, except in
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accordance with practice or policy in existence on the date of this Agreement
and in compliance with all applicable laws and all applicable regulations and
directives of any Governmental Entity.
6.2.11 Except in the ordinary course of business and
consistent with prior practice or as required by an existing contract, and
provided prior disclosure thereof has been made in Schedule 6.2.11, grant any
general or uniform increase in the rates of pay of employees or employee
benefits or any increase in salary or employee benefits of any officer,
employee or agent or pay any bonus to any Person.
6.2.12 Sell, transfer, mortgage, encumber or otherwise
dispose of any assets or other liabilities except in the ordinary course of
business and consistent with prior practice or as required by any existing
contract.
6.2.13 Make its credit underwriting policies, standards or
practices relating to the making of loans and other extensions of credit, or
commitments to make loans and other extensions of credit, or its Loan Loss
reserve policies, less stringent than those in effect on April 30, 1995 or
reduce the amount of its Loan Loss reserves or any other reserves for potential
losses or contingencies.
6.2.14 Make any capital expenditures, or commitments with
respect thereto, except those in the ordinary course of business which do not
exceed $15,000 individually or $50,000 in the aggregate.
6.2.15 Except as provided in Schedule 6.1.18 or Schedule
6.2.15, renew, extend or amend any existing employment contract or agreement,
enter into any new employment contract or agreement or make any bonus or any
special or extraordinary payments to any Person without the prior written
consent of ELDORADO.
6.2.16 Except in the ordinary course of business consistent
with prior practice, and in compliance with applicable laws and regulations,
make any material investments, by purchase of stock or securities,
contributions of capital, property transfers, purchases of any property or
assets or otherwise, in any other individual, corporation or other entity.
6.2.17 Except as otherwise required to correct a prior
filing, compromise or otherwise settle or adjust any assertion or claim of a
deficiency in taxes (or interest thereon or penalties in connection therewith)
or file any appeal from an asserted deficiency except in a form previously
approved by ELDORADO, in writing, or file or amend any federal, foreign or
state tax return or report or make any tax election or change any method or
period of accounting unless required by generally accepted accounting
principles or applicable law and, then, only after submitting such return or
report or proposed tax election or change in any method or period of
accounting, to ELDORADO for its approval, which it shall not unreasonably
withhold or delay.
6.2.18 Except as contemplated in this Agreement, terminate
any Employee Plan or Benefit Arrangement.
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6.2.19 Change its fiscal year or methods of accounting in
effect at December 31, 1994, except as required by changes in Generally
Accepted Accounting Principles or regulatory accounting principles as concurred
in by MARINERS' independent public accountants.
6.2.20 Take or cause to be taken any action which would
disqualify the Merger as a "reorganization" within the meaning of Section
368(a) of the IRC.
6.2.21 Take or cause to be taken into OREO any property
without (a) an environmental report reporting no adverse environmental
condition on such property, with a copy of such report delivered to ELDORADO
and EB prior to taking such property into OREO; and (b) the written consent of
ELDORADO or EB, which shall not be unreasonably withheld.
Section 6.3 Conduct of ELDORADO. During the period from the date
of execution of this Agreement through the Effective Time, ELDORADO agrees
(except to the extent MARINERS shall otherwise consents in writing) to do the
following:
6.3.1 Use its commercially reasonable efforts, or cooperate
with others, to expeditiously bring about the satisfaction of the conditions
specified in Article 7 hereof;
6.3.2 Not take any action that would or might result in any
of the representations and warranties of ELDORADO or EB set forth in the
Agreement becoming untrue or any of the conditions to the Merger set forth in
Article 7 not being satisfied, except to the extent such actions are undertaken
pursuant to the requirements of any applicable law, or the regulations or the
direction of any Regulatory Authority; and
6.3.3 Not take or cause to be taken any action which would
disqualify the Merger as a "reorganization" within the meaning of Section
368(a) of the IRC as a tax-free reorganization.
6.3.4 Advise MARINERS promptly in writing of any change
that would have a Material Adverse Effect on its capital structure,
consolidated financial condition, consolidated assets, consolidated results of
operations, business or prospects or of any matter which would make the
representations and warranties set forth in Article 4 hereof not true and
correct in any material respect as of the effective date of the Registration
Statement and at the Effective Time.
6.3.5 ELDORADO agrees that through the Effective Time, as
of their respect dates, (i) each ELDORADO Filing will be true and complete in
all material respects; and (ii) each ELDORADO Filing will comply in all
material respects with all of the statutes, rules and regulations enforced or
promulgated by the governmental Entity with which it will be filed and none
will contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they will be made, not
misleading. Any financial statement contained in any of such ELDORADO Filings
that is intended to present the financial position of the entities or entity
during the periods involved to which it relates will fairly present in all
material respects the financial position of such entities or entity and will be
prepared in accordance with Generally Accepted Accounting Principles or
consistent with applicable banking regulations, except as stated therein.
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6.3.6 Promptly notify MARINERS of the filing, or threatened
filing, of any litigation, or the filing or threatened filing of any government
or regulatory action, including an investigation or notice of investigation, or
similar proceeding against ELDORADO or EB or any of their assets, which is
expected to have a Material Adverse Effect on ELDORADO and its Subsidiaries
(including EB) taken as a whole.
ARTICLE 7. CONDITIONS PRECEDENT TO CLOSING
Section 7.1 Conditions to the Parties' Obligations. The
obligations of all the parties to this Agreement to effect the Merger shall be
subject to the fulfillment of the following conditions:
7.1.1 This Agreement, the Subsidiary Merger Agreement and
the Merger shall have been validly approved by the holders of a majority of the
outstanding shares of MARINERS' Common Stock entitled to vote and by the
holders of a majority of the outstanding shares of ELDORADO's Common Stock
entitled to vote.
7.1.2 All permits, approvals and consents required to be
obtained, and all waiting periods required to expire, prior to the consummation
of the Merger and the Bank Merger under applicable federal laws of the United
States or applicable laws of any state having jurisdiction over the
transactions contemplated by this Agreement, the Subsidiary Merger or the Bank
Merger Agreement shall have been obtained or expired, as the case may be (all
such permits, approvals and consents and the lapse of all such waiting periods
being referred to as the "Requisite Regulatory Approvals"), without the
imposition of any condition which in the reasonable judgment of any party to be
affected by such condition is materially burdensome upon such party or its
respective Affiliates or the Surviving Corporation or the Surviving Bank.
7.1.3 There shall not be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to
the Merger, by any Government Entity which: (i) makes the consummation of the
Merger or Bank Merger illegal; (ii) requires the divestiture by ELDORADO or EB
of any material Subsidiary or of a material portion of the business of ELDORADO
or EB; or (iii) imposes any condition upon ELDORADO, EB or their Subsidiaries
(other than general provisions of law applicable to all banks and bank holding
companies) which in the judgment of ELDORADO or EB would be materially
burdensome.
7.1.4 The Registration Statement shall have become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and shall
remain in effect. No legal, administrative, arbitration, investigatory or
other proceeding by any Governmental Entity or any other Person shall have been
instituted and, at what otherwise would have been the Effective Time, remain
pending by or before any Governmental Entity to restrain or prohibit the
transactions contemplated hereby.
7.1.5 The shares of ELDORADO Common Stock deliverable
pursuant to this Agreement shall have been duly authorized for listing, subject
to notice of issuance, on the AMEX.
7.1.6 ELDORADO and MARINERS shall have received an opinion
from the firm designated in Schedule 7.1.6 hereto, dated the Effective Time,
subject to assumptions and
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exceptions normally included, and in form and substance reasonably satisfactory
to ELDORADO and MARINERS, to the effect that the Merger will be treated for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the IRC and that ELDORADO and MARINERS will each be a party to that
reorganization within the meaning of Section 368(b) of the IRC.
7.1.7 ELDORADO and MARINERS shall have received from each
of KMPG Peat Marwick and Dayton & Associates, who are the independent public
accountants of, respectively, ELDORADO and MARINERS, letters, dated at the
effective date of the Registration Statement and at the Effective Time, in form
and substance satisfactory to ELDORADO, EB and MARINERS and customary in scope
and substance for letters delivered by independent public accountants in
connection with registration statement similar to the Registration Statement.
7.1.8 ELDORADO and MARINERS shall have received opinions of
counsel for the other party in substantially the forms previously agreed to by
the parties as set forth in Schedules 7.1.8A and 7.1.8B, respectively, on the
dates set forth in such Schedules.
7.1.9 No action, suit or proceeding shall have been
instituted or threatened before any court or governmental body seeking to
challenge or restrain the transactions contemplated by this Agreement, the
Subsidiary Merger Agreement or the Bank Merger Agreement which presents a
substantial risk that such transactions will be restrained or that either party
hereto may suffer material damages or other relief as a result of consummating
such transactions.
Section 7.2 Conditions to ELDORADO's and EB's Obligations. The
obligations of ELDORADO and EB to effect the Merger shall be subject to the
fulfillment (or waiver, in writing, by ELDORADO and EB) of the following
conditions:
7.2.1 Except as otherwise provided in this Section 7.2, (a)
the respective representations and warranties of MARINERS and MB contained in
Article 3 shall be true in all material respects as of the Effective Time as
though made at the Effective Time, except to the extent they expressly refer to
an earlier time and except where the failure to be true, individually or in the
aggregate, would not have or would not be reasonably likely to have, a Material
Adverse Effect on MARINERS or MB or the Surviving Corporation or the Surviving
Bank, or upon the consummation of the transactions contemplated hereby; (b)
MARINERS and MB shall have duly performed and complied in all material respects
with all agreements and covenants required by this Agreement to be performed or
complied with by them prior to or at the Effective Time, except where the
failure to so perform and comply, individually or in the aggregate, would not
have or would not be reasonably likely to have a Material Adverse Effect on
MARINERS or MB or the Surviving Corporation or the Surviving Bank, or upon the
consummation of the transactions contemplated hereby; (c) none of the events or
conditions entitling ELDORADO to terminate this Agreement under Article 8 shall
have occurred and be continuing; and (d) MARINERS and MB shall have delivered
to ELDORADO certificates dated the date of the Effective Time and signed by
their Chief Executive Officer to the effect set forth in Subsections 7.2.1(a),
(b) and (c).
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7.2.2 There shall have been obtained, without the
imposition of any material burden or restriction on any of the parties hereto
not in existence on the date hereof, each consent to the consummation of the
Merger or the Bank Merger required to be obtained from any Person under any
agreement, contract or license to which MARINERS or MB is a party or by or
under which it is bound or licensed, the withholding of which might have a
Material Adverse Effect on MARINERS or MB, or on ELDORADO or EB at or following
the Effective Time, or on the transactions contemplated by this Agreement.
7.2.3 MARINERS shall have delivered the Closing Schedules
to ELDORADO on the day immediately preceding the Closing Date and none of such
Closing Schedules shall reflect any item that was not on the Schedules
delivered on the date of execution of this Agreement that would have, or could
be reasonably likely to have, a Material Adverse Effect on MARINERS or MB, or
on ELDORADO or EB at or after the Effective Time, or on the consummation of the
transactions contemplated hereby.
7.2.4 MB's Loan Loss Reserve on the Determination Date
shall be an amount that is at least equal to one and twenty-seven hundredths
percent (1.27%) of the average of MB's total outstanding gross loans, leases
and other extensions of credit for the month ending on that date (the
"Determination Date Loan Loss Reserve") after giving effect to MB's compliance
with the provisions of Section 6.1.10; and MB shall have complied with (i) its
other obligations under Section 6.1.10 and (ii) its obligations under Section
5.9.2 hereof with respect to OREO properties.
7.2.5 Between the date of this Agreement and the Effective
Time, no event or circumstance shall have occurred which had or could
reasonably be expected to have a Material Adverse Effect on MARINERS or MB, or
their Subsidiaries, and ELDORADO shall have received a certificate signed on
behalf of MARINERS by the President and Chief Executive Officer of MARINERS and
MB to such effect.
7.2.6 ELDORADO shall have received from Dayton &
Associates, independent public accountants, letters dated as of the Effective
Time, after customary review but without audit, in form and substance
satisfactory to ELDORADO, (i) certifying that the conditions set forth in
Subsection 7.2.4 have been satisfied, and (ii) setting forth, as of the
Determination Date, (A) MARINERS' Consolidated Net Worth; (B) MB's Loan Loss
Reserve; (C) the amount of MB's OREO and OREO Valuation Reserves; and (D) the
amount of expenses incurred by MARINERS or MB in connection with this Agreement
and the transactions contemplated hereby, either paid or accrued through the
Business Day immediately prior to the Closing Date.
7.2.7 ELDORADO shall have received, on or before the date
hereof, copies of the fully executed and delivered agreements by which all
outstanding MARINERS' Stock Options have been cancelled.
7.2.8 ELDORADO shall have received from its legal counsel
an opinion regarding securities matters in form and substance customary for
transactions of the type contemplated by this Agreement and reasonably
satisfactory to ELDORADO.
7.2.9 Counsel for ELDORADO shall have approved, in the
exercise of counsel's reasonable discretion, the validity of all transactions
herein contemplated, as well as the form and
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substance of all opinions, certificates, instruments of transfer and other
documents to be delivered to ELDORADO hereunder or that are reasonably
requested by such counsel.
7.2.10 The sale of the ELDORADO Common Stock resulting from
the Merger shall have been qualified or registered with the appropriate State
securities law or "blue sky" regulatory authorities of all States in which
qualification or registration is required under the State securities laws, and
such qualifications or registration shall not have been suspended or revoked.
7.2.11 MARINERS shall have delivered to ELDORADO not later
than the date of this Agreement all of the executed Affiliate Agreements in the
form attached hereto as Exhibit 7.2.11.
7.2.12 None of MARINERS, MB or any of their Subsidiaries
shall be subject to any memorandum of understanding, cease and desist order, or
other agreement with any Governmental Entity restricting the conduct of any of
their respective businesses, prospects and operations, so as to have a Material
Adverse Effect.
7.2.13 The Findley Group shall not have revoked, at any time
prior to the Effective Time, its opinion, rendered to the Board of Directors of
ELDORADO on May 22, 1995 (the "ELDORADO Fairness Opinion"), to the effect that
the terms of the Merger, from a financial standpoint, are fair to the
shareholders of ELDORADO.
7.2.14 The Average ELDORADO Closing Price is less than
$15.00.
7.2.15 All of MARINERS' director-shareholders shall have
delivered to ELDORADO on the date of this Agreement the Director- Shareholder
Agreements in the form attached hereto as Exhibit 7.2.15.
7.2.16 ELDORADO shall have received on the date hereof fully
executed non-competition agreements, in substantially the form attached as
Exhibit 7.2.16 to this Agreement, from the Persons listed on Schedule 7.2.16.
Section 7.3 Conditions to MARINER's and MB's Obligations. The
obligation of MARINERS and MB to effect the Merger shall be subject to the
fulfillment of the following conditions:
7.3.1 Except as otherwise provided in this Section 7.3, (a)
the representations and warranties of ELDORADO and EB contained in Article 4
shall be true in all material respects as of the Effective Time as though made
at the Effective Time, except to the extent they expressly refer to an earlier
time and except where the failure to be true, individually or in the aggregate,
would not have or would not be reasonably likely to have, a Material Adverse
Effect on ELDORADO and EB, taken as a whole, or upon consummation of the
transactions contemplated by this Agreement; (b) ELDORADO and EB shall have
duly performed and complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with them
prior to or at the Effective Time, except where the failure to so perform and
comply, individually or in the aggregate, would not have or would not be
reasonably likely to have a Material Adverse Effect on ELDORADO and EB, taken
as a whole, or upon the consummation of the transactions contemplated by this
Agreement; (c) none of the
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<PAGE> 57
events or conditions entitling MARINERS to terminate this Agreement under
Article 8 shall have occurred and be continuing; and (d) ELDORADO and EB shall
each have delivered to MARINERS certificates dated the date of the Effective
Time and signed by a duly authorized officer to the effect set forth in
Subsections 7.3.1(a), (b) and (c).
7.3.2 Counsel for MARINERS shall have approved, in the
exercise of counsel's reasonable discretion, the validity of all transactions
herein contemplated, as well as the form and substance of all opinions,
certificates, instruments of transfer and other documents to be delivered to
MARINERS hereunder or reasonably requested by such counsel.
7.3.3 There shall not have been any change in the
consolidated financial condition, aggregate consolidated net assets,
shareholders' equity, business, or consolidated operating results of ELDORADO
and its Subsidiaries (including EB) taken as a whole, from December 31, 1994 to
the Effective Time that results in a Material Adverse Effect as to ELDORADO and
its Subsidiaries (including EB) taken as a whole.
7.3.4 The Average ELDORADO Closing Price shall be greater
than $9.50 per share.
7.3.5 Prior to the Closing Date ELDORADO and EB shall have
taken all corporate action required to effectuate the appointment of the two
individuals named on Schedule 2.10 hereto to their respective Boards of
Directors effective immediately after the Effective Time of the Merger.
7.3.6 ELDORADO shall have delivered its Closing Schedules
to MARINERS on the day immediately preceding the Closing Date and none of such
Closing Schedules shall reflect any item that was not on the ELDORADO Schedules
(or in the ELDORADO Financial Statements) delivered on the date of execution of
this Agreement by ELDORADO or EB that has had or would have a Material Adverse
Effect on ELDORADO and its Subsidiaries (including EB) taken as a whole at or
after the Effective Time, or on the consummation of the transactions
contemplated hereby.
7.3.7 James R. Miller shall not have revoked, at any time
prior to the meeting of MARINERS' shareholders at which the Merger is to be
voted on, its opinion, rendered to the Board of Directors of MARINERS on May
22, 1995 (the "MARINERS' Fairness Opinion"), to the effect that the terms of
the Merger, from a financial standpoint, are fair to the shareholders of
MARINERS.
ARTICLE 8. TERMINATION, AMENDMENTS AND WAIVERS
Section 8.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval by the
shareholders of MARINERS and the shareholders of ELDORADO:
8.1.1 By mutual consent of the Boards of Directors of
MARINERS and ELDORADO;
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8.1.2 By ELDORADO or MARINERS upon the failure to satisfy
any conditions specified in Section 7.1 if such failure is not caused by any
action or inaction of the party requesting termination of this Agreement;
8.1.3 By ELDORADO if an Acquisition Event shall have
occurred;
8.1.4 By MARINERS if there shall have been a material
breach of any of the representations or warranties of ELDORADO or EB set forth
in this Agreement, which breach, in the reasonable opinion of MARINERS, by its
nature cannot be cured or is not cured prior to the Closing and which breach
would, in the reasonable opinion of MARINERS, individually or in the aggregate,
have, or be reasonably likely to have, a Material Adverse Effect on ELDORADO
and its Subsidiaries, taken as a whole, or upon the consummation of the
transactions contemplated hereby;
8.1.5 By ELDORADO if there shall have been a material
breach of any of the representations or warranties of MARINERS or MB set forth
in this Agreement, which breach, in the reasonable opinion of ELDORADO, by its
nature cannot be cured or is not cured prior to the Closing and which breach
would, in the reasonable opinion of ELDORADO, individually or in the aggregate,
have, or be reasonably likely to have, a Material Adverse Effect on MARINERS or
MB or upon the consummation of the transactions contemplated hereby;
8.1.6 By MARINERS or ELDORADO if this Agreement, the
Subsidiary Merger Agreement and the Merger are not approved by MARINERS'
shareholders;
8.1.7 By MARINERS or ELDORADO if this Agreement, the
Subsidiary Merger Agreement and the Merger are not approved by ELDORADO's
shareholders;
8.1.8 By MARINERS after the occurrence of a Default by
ELDORADO or EB and the continuance of such Default for a period of 20 Business
Days after written notice of such Default, if such Default, in the reasonable
opinion of MARINERS, cannot be cured prior to the Closing or, even though
curable by the Closing, it is not cured prior to the Closing.
8.1.9 By ELDORADO after the occurrence of a Default by
MARINERS and the continuance of such Default for a period of 20 Business Days
after written notice of such Default, if such Default, in the reasonable
opinion of ELDORADO, cannot be cured prior to the Closing or, even though
curable by the Closing, it is not cured prior to the Closing.
8.1.10 By ELDORADO in accordance with the provisions of
5.7.2 of this Agreement;
8.1.11 By ELDORADO if the MARINERS Board of Directors does
not publicly recommend in the Proxy Statement that MARINERS' shareholders
approve this Agreement and the transactions contemplated hereby, or if, prior
to the vote of the MARINERS' shareholders, the MARINERS Board of Directors
shall have withdrawn such recommendation or modified or amended such
recommendation in any respect materially adverse to ELDORADO, or if the
MARINERS Board of Directors does not call and hold the shareholders' meeting as
provided in Section 5.2.1;
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8.1.12 By MARINERS if the ELDORADO Board of Directors does
not publicly recommend in the Proxy Statement that ELDORADO's shareholders
approve this Agreement and the transactions contemplated hereby, or if, prior
to the vote of its shareholders, the ELDORADO Board of Directors shall have
withdrawn such recommendation or modified or amended such recommendation in
any respect materially adverse to MARINERS, or if the ELDORADO Board of
Directors does not call and hold the shareholders' meeting as provided in
Section 5.2.1;
8.1.13 By ELDORADO if the Closing Date Schedules disclose
the occurrence of an event or the existence of any facts or circumstances, not
disclosed in the Schedules or the MARINERS Financial Statements delivered to
ELDORADO on or before the date hereof, that has had or could reasonably be
expected to have a Material Adverse Effect on MARINERS or MB or, after the
Effective Time, on ELDORADO or EB, or on the consummation of the transactions
contemplated hereby (a "Material Adverse Event");
8.1.14 By MARINERS upon the failure of any of the conditions
specified in Section 7.3 to have been satisfied prior to March 31, 1996;
8.1.15 By ELDORADO upon the failure of any of the conditions
specified in Section 7.2 to have been satisfied prior to March 31, 1996;
8.1.16 By MARINERS if the Closing Date Schedules delivered
by ELDORADO with respect to ELDORADO and its Subsidiaries disclose the
occurrence of an event or the existence of any facts or circumstances, not
disclosed in the Schedules or the ELDORADO Financial Statements delivered to
MARINERS on or before the date hereof, that has had or could reasonably be
expected to have a Material Adverse Effect on ELDORADO and its Subsidiaries
(including EB) taken as a whole, or on the consummation of the transactions
contemplated hereby (an "ELDORADO Material Adverse Event");
Section 8.2 Effect of Termination; Survival. Except as provided
in Section 8.5, no termination of this Agreement as provided in Section 8.1 for
any reason or in any manner shall release, or be construed as so releasing, any
party hereto from its obligations pursuant to Sections 5.1.4, 5.5, 5.7, 8.5 or
9.5 hereof or from any liability or damage to any other party hereto arising
out of, in connection with or otherwise relating to, directly or indirectly,
said party's material breach, Default or failure in performance of any of its
covenants, agreements, duties or obligations arising hereunder, or any breaches
of any representation or warranty contained herein arising prior to the date of
termination of this Agreement.
Section 8.3 Amendment. This Agreement may be amended by the
parties hereto, by action taken by MARINERS' board of directors or the duly
authorized committees thereof, and by the duly authorized officers or board of
directors of ELDORADO at any time before or after approval hereof by the
shareholders of MARINERS and the shareholders of ELDORADO; provided, however,
that after any such approval by such shareholders, no amendments shall be made
which by law requires further approval by such shareholders without such
further approval.
Section 8.4 Waiver. Any term or provision of this Agreement may
be waived in writing at any time by the party which is, or whose shareholders
are, entitled to the benefits thereof.
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Section 8.5 Liquidated Damages; Cancellation Fee.
8.5.1 In the event of the occurrence of an Acquisition
Event (as defined in Article 1 of this Agreement), then MARINERS shall pay to
ELDORADO the sum of One Million Five Hundred Thousand Dollars ($1,500,000) in
cash;
8.5.2 In the event of termination of this Agreement by
MARINERS pursuant to Section 8.1.14 as a result of the revocation of the
MARINERS Fairness Opinion; or a termination of this Agreement by ELDORADO
pursuant to (i) Section 8.1.6 (no approval by MARINERS shareholders), or (ii)
8.1.11 (no favorable MARINERS Board recommendation or the withdrawal,
modification or amendment of such recommendation in a manner materially adverse
to ELDORADO, whether or not it is the result of a revocation or modification of
the MARINERS Fairness Opinion, except where the absence, or the withdrawal or
modification or amendment, of such Board recommendation is due to a failure of
any conditions precedent contained in Section 7.1 or in Subsections 7.3.1
through 7.3.6 which entitles MARINERS to terminate this Agreement), or (iii)
pursuant to Section 8.1.5 (breach of representations or warranties of MARINERS
or MB) or Section 8.1.9 (Default) or Section 8.1.13 (disclosure in the Closing
Schedules of a Material Adverse Event), where such breach of representation or
warranty, Default or Material Adverse Event shall have been caused in whole or
in material part by any action or inaction within the control of MARINERS or
MB, or any of their Subsidiaries, or any of their directors or executive
officers (it being understood that any breach or Default or Material Adverse
Event that occurred after the date of this Agreement and was outside of the
control of MARINERS, MB their Subsidiaries, and the directors and executive
officers thereof, such as, by way of example only, the filing of a lawsuit
against MARINERS or MB, shall not come within clause (iii) of this Subsection
8.5.2), then, MARINERS shall pay to ELDORADO the sum of Seven Hundred Fifty
Thousand Dollars ($750,000), in cash; provided, however, that if an Acquisition
Event occurs within two hundred seventy (270) days following any termination by
ELDORADO to which this Subsection 8.5.2 applies, MARINERS shall pay to ELDORADO
an additional Seven Hundred Fifty Thousand Dollars ($750,000) in cash.
8.5.3 In the event of the termination of this Agreement by
MARINERS pursuant to (i) Section 8.1.7 (no approval by ELDORADO shareholders),
or (ii) 8.1.12 (no favorable ELDORADO board recommendation or the withdrawal or
revocation, or, modification or amendment of such recommendation in a manner
materially adverse to MARINERS that is not the result of either a revocation,
withdrawal or amendment or modification of the ELDORADO Fairness Opinion, or a
failure of any of the conditions precedent set forth in Section 7.1 or Section
7.2 which entitles ELDORADO to terminate this Agreement), or (iii) Section
8.1.4 (breach of representations and warranties of ELDORADO or EB) or Section
8.1.8 (Default), or Section 8.1.16 (disclosure in Closing Schedules of an
ELDORADO Material Adverse Event), where such breach of representation or
warranty or such Default or ELDORADO Material Adverse Event shall have been
caused in whole or in material part by any action or inaction within the
control of ELDORADO, EB or any of their Subsidiaries, or any of their directors
or executive officers (it being understood that any action or inaction outside
of the control of ELDORADO, EB, their Subsidiaries and their directors and
executive officers, such as, by way of example only, the filing of a lawsuit
against ELDORADO or EB, shall not come within this Section 8.5.3), then,
ELDORADO shall pay to MARINERS the sum of Seven Hundred Fifty Thousand Dollars
($750,000), in cash.
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8.5.4 The parties have determined that the occurrence of
any of events or circumstances set forth in Subsections 8.5.1, 8.5.2 and 8.5.3
would cause a substantial damage and loss and lost business opportunities to
the party terminating this Agreement as a result thereof and that the payments
contemplated by Subsections 8.5.1, 8.5.2 and 8.5.3 above provide reasonable and
fair compensation for such damage, loss and lost business opportunities and are
not intended to be and do not constitute a penalty or forfeiture. Such
payments will be made within 10 Business Days following a termination of the
Agreement that gives rise to the payment of such liquidated damages pursuant to
Subsections 8.5.1, 8.5.2 or 8.5.3, as applicable. Upon the making and receipt
of payments due under this Section 8.5, neither party, nor any affiliates of
any party, shall have any further obligation or liability of any kind under
this Agreement to the other party, except pursuant to Section 5.1.4, 5.5, 5.7
and 9.5.
8.5.5 In the event of the termination of this Agreement by
ELDORADO or MARINERS and for any reason other than as specified in Subsections
8.5.1, 8.5.2 or 8.5.3 above, none of the parties hereto, nor any affiliates of
any such parties, shall have any further obligation or liability of any kind to
the other party, except pursuant to Sections 5.1.4, 5.5, 5.7 and 9.5.
ARTICLE 9. GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties. None
of the representations, warranties, covenants and agreements in this Agreement
or in any instrument delivered pursuant to this Agreement shall survive the
Effective Time, except for those covenants and agreements contained herein and
therein which by their terms apply in whole or in part after the Effective Time
or to a termination of this Agreement.
Section 9.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, mailed by registered or certified mail (return receipt requested),
sent by confirmed overnight courier or telecopied (with electronic conformation
and verbal confirmation for the person to whom such telecopy is addressed), on
the date such notice is so delivered, mailed or sent, as the case may be, to
the parties at the following addresses (or any such other address for a party
as shall be specified by like notice):
If to MARINERS at:
Mariners Bancorp
115 Calle de Industrias
San Clemente, California 92672-3897
Fax No. (714) 248-1500
Attention: Richard Korsgaard
with a copy to:
Robert F. Nichols, Jr., Esq.
22992 Mill Creek Road, Suite B
Laguna Hills, California 92653
Fax No. (714) 458-2820
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If to ELDORADO or EB at:
Eldorado Bancorp
c/o Eldorado Bank Administration
19100 Von Karman Avenue, Suite 550
Irvine, California 92713
Fax No. (714) 798-1174
Attention: J.B. Crowell
with a copy to:
Stradling, Yocca, Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Fax No. (714) 725-4100
Attention: Ben A. Frydman, Esq.
Section 9.3 Counterparts. This Agreement may be executed in one
or more counter parts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
Section 9.4 Entire Agreement/No Third Party Rights/Assignment.
This Agreement (including the documents and instruments referred to herein):
(a) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof; (b) except as expressly set forth herein, is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder; (c) shall not be assigned by a party, by operation of law
or otherwise, without the consent of the other parties; and (d) subject to the
foregoing, shall be binding upon and shall inure to the benefit of the parties
hereto and their permitted successors and assigns.
Section 9.5 Non-disclosure of Agreement. ELDORADO, MARINERS and
EB agree, except as required by law or the rules of the AMEX, so long as this
Agreement is in effect, not to issue any public notice, disclosure or press
release with respect to the transactions contemplated by this Agreement without
seeking the consent of the other party, which consent shall not be unreasonably
withheld.
Section 9.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of California, without
regard to any applicable conflicts of law.
Section 9.7 Headings/Table of Contents. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Section 9.8 Enforcement of Agreement. The parties hereto agree
that irreparable damage will occur in the event that any of the provisions of
this Agreement or the Subsidiary
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Merger Agreement is not performed in accordance with its specific terms or is
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provision hereof in any court of the
United States or any state having jurisdiction, this begin in addition to any
remedy to which they are entitled at law or in equity.
Section 9.9 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
IN WITNESS WHEREOF, MARINERS and MB and ELDORADO and EB have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first above written.
<TABLE>
<CAPTION>
MARINERS BANCORP ELDORADO BANCORP
<S> <C>
By:/s/ Richard Korsgaard By:/s/ J.B. Crowell
---------------------------------------- ------------------------------------------------
Name: Richard Korsgaard Name: J.B. Crowell
Its: President and Chief Executive Its: President and Chief Executive
Officer Officer
MARINERS BANK ELDORADO BANK
By:/s/ Richard Korsgaard By:/s/ J.B. Crowell
---------------------------------------- ------------------------------------------------
Name: Richard Korsgaard Name: J.B. Crowell
Its: President and Chief Executive Its: Chairman and Chief Executive
Officer Officer
</TABLE>
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INDEX OF EXHIBITS AND SCHEDULES
PREVIOUSLY DELIVERED BY THE PARTIES
EXHIBITS
<TABLE>
<S> <C>
Exhibit 2.1 Form of Subsidiary Merger Agreement
Exhibit 2.8 Form of Bank Merger Agreement
Exhibit 7.2.11 Form of Affiliate Agreements
Exhibit 7.2.15 Form of Director-Shareholder Agreements
Exhibit 7.2.16 Form of Non-Competition Agreement
SCHEDULES
Schedule 1A ELDORADO Officers
Schedule 1B MARINERS and MB Officers
Schedule 2.6 Option Cancellation Terms
Schedule 2.10 Persons to be Appointed to Boards of Directors of Eldorado and EB
Schedule 3.2 Licenses and Permits
Schedule 3.3 Subsidiaries
Schedule 3.4 Required Consents and Conflicts
Schedule 3.8 Compliance with Laws
Schedule 3.9 Litigation
Schedule 3.10 MARINERS Agreements with Banking Authorities
Schedule 3.11 Insurance Policies
Schedule 3.12 Title Exceptions
Schedule 3.13 Real Property
Schedule 3.14 Tax Matters
Schedule 3.15 Performance of Obligations
Schedule 3.16 Loans and Investments
Schedule 3.17 MARINERS' Brokers and Finders
Schedule 3.18 Material Contracts
Schedule 3.20 Undisclosed Liabilities
Schedule 3.21 Employees; Employee Benefit Plans
Schedule 3.23 Intellectual Property Matters
Schedule 3.24 Potential Environmental Liabilities
Schedule 3.25 Stock Options
Schedule 3.26 Interest Rate Management Arrangements
Schedule 4.9 ELDORADO Agreements with Banking Authorities
Schedule 4.11 ELDORADO's Brokers and Finders
Schedule 4.15 Tax Matters
Schedule 4.17 Certain Environmental Matters
Schedule 5.9.3 Compensation Accrual Policy
Schedule 6.1.10 MB Loan Loss Provision Policy
Schedule 6.1.18 Amendments to CEO Employment Agreements
Schedule 6.2.11 Employee Pay Increases
Schedule 6.2.15 Employee Contract Amendments and Renewals
Schedule 7.1.6 Firm Rendering Tax Opinion
Schedule 7.1.8A Form of Opinion of Mariners Counsel
Schedule 7.1.8 Form of Opinion of Eldorado Counsel
Schedule 7.2.16 Parties to Non-Competition Agreements
</TABLE>
<PAGE> 65
EXHIBIT 2.1
MERGER AGREEMENT
This MERGER AGREEMENT (the "Merger Agreement") is made and entered
into as of this ____ day of _______ , 1995, by and between ELDORADO BANK, a
California state chartered bank ("EB"), MARINERS BANCORP, a California
corporation ("MARINERS") and ELDORADO BANCORP, a California corporation
("ELDORADO").
R E C I T A L S :
A. EB is a banking corporation duly organized, validly existing
and in good standing under the laws of the State of California and has full
corporate powers and authority to carry on its business as presently conducted
and to enter into this Merger Agreement.
B. MARINERS is a corporation duly organized, validly existing and
in good standing under the laws of the State of California and has full
corporate power and authority to carry on its business as presently conducted
and to enter into this Merger Agreement.
C. ELDORADO is a corporation duly organized, validly existing and
in good standing under the laws of the State of California and has full
corporate power and authority to carry on its business as presently conducted
and to enter into this Merger Agreement. ELDORADO owns all of the outstanding
shares of capital stock of EB.
D. The respective boards of directors of EB and MARINERS deem it
advisable and in the best interests of EB and MARINERS, and their respective
shareholders, that MARINERS be merged with and into EB as authorized by the
provisions of this Merger Agreement and the laws of the State of California and
the United States (the "Merger"), and each such board of directors has duly
approved this Merger Agreement. EB, as the corporation surviving the Merger,
is hereinafter sometimes referred to as the "Surviving Corporation."
E. The respective stockholders of MARINERS, ELDORADO and EB have
duly approved, in accordance with the applicable laws of the State of
California, the principal terms and provisions of (i) the Agreement and Plan of
Reorganization and Merger dated May 22, 1995 (the "Reorganization Agreement"),
by and among EB, ELDORADO, MARINERS and MARINERS BANK, a California state
chartered bank, providing for certain representations, warranties, covenants
and conditions in connection with the Merger and (ii) this Merger Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants and agreements herein set forth and for the purpose of prescribing
the terms and conditions of the Merger, the parties hereto agree as follows:
<PAGE> 66
1. MERGER
MARINERS shall be merged into EB (the wholly-owned banking
subsidiary of ELDORADO), and the separate existence of MARINERS shall cease
upon consummation of the Merger at the effective time thereof (as defined in
Section 2 hereof).
2. EFFECTIVE TIME
The Merger shall become effective (the "Effective Time") at
the time of the filing, in the office of the Secretary of State of the state of
California, of an executed copy of this Merger Agreement and all requisite
accompanying certificates.
3. NAME OF SURVIVING CORPORATION
At the Effective Time, the name of the Surviving Corporation
in the Merger shall be Eldorado Bank.
4. ARTICLES OF INCORPORATION
The Articles of Incorporation of EB (wholly-owned banking
subsidiary of ELDORADO), as in effect immediately prior to the Effective Time
of the Merger, shall continue in effect as the Articles of Incorporation of EB
following the Merger.
5. BYLAWS
The Bylaws of EB (wholly-owned banking subsidiary of
ELDORADO), as in effect immediately prior to the Effective Time of the Merger,
shall continue in effect as the Bylaws of EB after the Merger.
6. OFFICERS AND DIRECTORS
(a) The officers and employees of EB and MARINERS in
employment immediately prior to the effectiveness of the Merger shall, at the
Effective Time, be employees of EB, with appropriate changes in title as
determined by EB.
(b) At the Effective Time, the directors of EB, prior to
the Merger, shall continue in their respective positions as directors of EB and
the two individuals named on Schedule 2.10 to the Reorganization Agreement
shall become directors of EB to serve until the next annual meeting of
shareholders of EB or until their successors are elected and qualify, whichever
first occurs. Any vacancy existing on the board of directors of EB after the
Effective Time of the Merger, shall be filled in the manner provided by the
Bylaws of EB.
7. CONVERSION OF SHARES
(a) Each share of MARINERS Common Stock outstanding
immediately prior to the Effective Time of the Merger, and all rights with
respect thereto, shall, by virtue of the Merger and without any action on the
part of the holder thereof or any other person, be cancelled and cease to exist
as a share of Common Stock of MARINERS, and, except for dissenting
2
<PAGE> 67
shares, shall be exchanged for and converted into the right to receive one (1)
fully paid and nonassessable share of Common Stock of ELDORADO, without par
value and cash in the amount of $_________ (the "Per Share Merger
Consideration").
(b) Each holder of a certificate representing shares of
MARINERS Common Stock (a "MARINERS Certificate"), upon presentation of such
MARINERS Certificate for surrender to ELDORADO, or its designated agent
("Exchange Agent"), shall be entitled to receive in exchange therefor, a
certificate or certificates representing the number of shares of ELDORADO
Common Stock issuable by ELDORADO and a check for the amount of cash payable in
respect of the shares of the MARINERS Common Stock represented by the MARINERS
Certificates surrendered by such holder, determined as provided in Paragraph
7(a) hereof. Until a MARINERS Certificate is so surrendered, each outstanding
share of MARINERS Common Stock evidenced thereby (except dissenting shares)
shall be deemed, for all corporate purposes, to evidence the right to receive
the Per Share Merger Consideration into which such share of MARINERS Common
Stock has been converted as provided in paragraph 7(a) above, except that the
holder thereof shall not be entitled to exercise any rights of a shareholder of
ELDORADO until such MARINERS Certificate shall be surrendered. No dividends
declared with respect to such ELDORADO shares shall be paid to the holder of
any unsurrendered MARINERS Certificate until such holder shall surrender such
MARINERS Certificate as aforesaid, at which time the holder shall be paid the
amount of dividends, if any, without interest, which theretofore became payable
with respect to the shares of ELDORADO Common Stock into which the shares of
MARINERS Common Stock evidenced by such MARINERS Certificate were converted at
the Effective Time of the Merger. Shares of ELDORADO Common Stock shall be
issued to the holders of shares of MARINERS Common Stock evidenced by lost or
destroyed MARINERS Certificate only upon presentation to ELDORADO or the
Exchange Agent of such evidence of ownership and agreement of indemnity as
ELDORADO or the Exchange Agent may reasonably require.
(c) The stock transfer books of MARINERS pertaining to
MARINERS Common Stock outstanding at the Effective Time of the Merger shall be
closed at the Effective Time of the Merger and thereafter no transfer of any
shares of MARINERS Common Stock shall be recorded thereon. In the event a
transfer of ownership of shares of MARINERS Common Stock is not recorded on the
stock transfer books of MARINERS, a certificate or certificates representing
the number of whole shares of ELDORADO Common Stock into which such shares of
MARINERS Common Stock shall have been converted at the Effective Time of the
Merger may be issued to the transferee of such shares of MARINERS Common Stock
if, on surrender thereof, such certificate is accompanied by all documents
deemed necessary by ELDORADO or its Exchange Agent to evidence and effect such
transfer of ownership of such shares of MARINERS Common Stock and by the
payment of any applicable stock transfer tax with respect to such transfer.
(d) The shares of EB Common Stock outstanding immediately
prior to the Effective Time of the Merger shall remain outstanding and shall
not be affected by the consummation of the Merger.
3
<PAGE> 68
8. TRANSFER OF ASSETS
(a) Under the provisions of this Merger Agreement, EB
(wholly-owned banking subsidiary of ELDORADO), as the Surviving Corporation,
shall continue in existence and shall succeed, without the necessity of any
other transfer, to all the rights, privileges, powers and franchises of
MARINERS and the properties of MARINERS, real, personal and mixed, and shall be
subject to all of the debts and liabilities of MARINERS in the same manner as
if EB had itself incurred them. All rights of creditors and all liens upon the
property of MARINERS shall be preserved unimpaired, provided that such liens
upon property of MARINERS shall be limited to the property affected thereby
immediately prior to the time the Merger is effective.
(b) If at any time after the Effective Time of the Merger
EB shall consider or be advised that any further assignment or assurance in law
or other action is necessary or desirable to vest, perfect or confirm, of
record or otherwise, in EB the title to any property or rights of MARINERS
acquired or to be acquired as a result of the Merger, the proper officers and
directors of MARINERS immediately prior to the Effective Time of the Merger
shall be, and they hereby are, severally and fully authorized to execute and
deliver such deeds, assignments and assurances in law and to take such other
actions as may be necessary or proper in the name of MARINERS to vest, perfect
or confirm title to such property or rights in EB, the Surviving Corporation,
and otherwise to carry out the purposes of this Merger Agreement.
9. TERMINATION
This Agreement shall automatically terminate and the Merger
shall be abandoned prior to the Effective Time, if the Reorganization Agreement
is terminated in accordance with its terms prior to the Effective Time.
10. OTHER PROVISIONS WITH RESPECT TO THE MERGER
(a) EB, ELDORADO and MARINERS, by mutual consent of their
respective boards of directors, to the extent permitted by law, may amend,
modify, supplement and interpret this Merger Agreement in such manner as may be
mutually agreed upon by them in writing at any time and, in the case of an
interpretation, the actions of such boards of directors shall be binding;
provided, however, that no amendment, modification or supplement shall affect
the rights of the shareholders of MARINERS, ELDORADO or EB in any manner which
is materially adverse to such shareholders in the judgment of such respective
boards of directors.
(b) The captions of this Merger Agreement are for
convenience of reference only and shall not restrict or modify the meaning of
any terms or provisions hereof.
(c) Whenever the context of this Merger Agreement
requires, the gender of all words used herein shall include the masculine,
feminine and neuter, and the number of all words shall include the singular and
plural.
(d) Unless otherwise provided in the Reorganization
Agreement or this Merger Agreement, the terms and provisions of this Merger
Agreement shall govern in the event of any conflict between the terms and
provisions of the Reorganization Agreement and this Merger Agreement.
4
<PAGE> 69
(e) This Merger Agreement may be executed in
counterparts, each of which when so executed shall be deemed an original and
such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, MARINERS, EB and ELDORADO, pursuant to
approval and authority duly given by resolutions adopted by their respective
boards of directors, have each caused this Merger Agreement to be signed by
their respective officers duly authorized, all as of the date first written
above.
<TABLE>
<CAPTION>
ELDORADO BANCORP, a California MARINERS BANCORP, a California
corporation corporation
<S> <C>
By: By:
---------------------------------------- ---------------------------------------------
Name: J.B. Crowell Name: Richard Korsgaard
Its: President and Chief Executive Officer Its: President and Chief Executive Officer
By: By:
---------------------------------------- --------------------------------------------
Name: Elaine Crouch Name: Eric R. Smith
Its: Secretary Its: Secretary
ELDORADO BANK, a California State chartered bank
By:
---------------------------------------
Name: J.B. Crowell
Its: Chairman and Chief Executive Officer
By:
---------------------------------------
Name: Elaine Crouch
Its: Secretary
</TABLE>
5
<PAGE> 70
OFFICERS' CERTIFICATE
J. B. CROWELL and ELAINE CROUCH certify that:
1. They are the Chairman and Chief Executive Officer and the
Secretary, respectively, of Eldorado Bank, a corporation organized under the
laws of the State of California (the "Corporation").
2. The Merger Agreement in the form attached was duly approved by
the Board of Directors of the Corporation.
3. The principal terms of the Merger Agreement in the form
attached was duly approved by the holder of all of the outstanding shares of
common stock of the Corporation (the only class of stock outstanding). The
percentage vote required was more than 50%.
4. The total number of shares of common stock of the Corporation
entitled to vote on the Merger Agreement was ___ .
5. The principal terms of the Merger Agreement in the form
attached was duly approved by the vote of the holders of not less than a
majority of the outstanding shares of the common stock of Eldorado Bancorp, a
California corporation that is the parent corporation of the Corporation and is
issuing shares of its common stock in the Merger. The shares of common of
Eldorado Bancorp is the only class of its shares that is outstanding and the
percentage vote required was more than 50%.
6. The total number of shares of common stock of Eldorado Bancorp
outstanding is _____________ .
____________________________________
J. B. Crowell, President
____________________________________
Elaine Crouch, Secretary
6
<PAGE> 71
Verification by Written Declaration
J. B. CROWELL declares under penalty of perjury under the laws of the
State of California that he has read the foregoing certificate and knows the
contents thereof and that the same is true of his own knowledge.
Dated ________ __ , 199_
____________________________________
J. B. Crowell
Verification by Written Declaration
ELAINE CROUCH declares under penalty of perjury under the laws of the
State of California that she has read the foregoing certificate and knows the
contents thereof and that the same is true of her own knowledge.
Dated _______ _, 199_
____________________________________
Elaine Crouch
7
<PAGE> 72
OFFICERS' CERTIFICATE
RICHARD KORSGAARD and ERIC R. SMITH certify that:
1. They are the President and the Secretary, respectively, of
Mariners Bancorp, a corporation organized under the laws of the State of
California (the "Corporation").
2. The Corporation has only one class of shares outstanding and
the total number of such shares that are outstanding is 630,276.
3. The principal terms of the Merger Agreement in the form
attached were approved by the vote of the holders of not less than the number
of shares of such class outstanding that equaled or exceeded the vote required.
4. The percentage vote required of such class of shares is more
than 50%.
____________________________________
Richard Korsgaard, President
____________________________________
Eric R. Smith, Secretary
8
<PAGE> 73
Verification by Written Declaration
RICHARD KORSGAARD declares under penalty of perjury under the laws of
the State of California that he has read the foregoing certificate and knows
the contents thereof and that the same is true of his own knowledge.
Dated: _______ __ , 199_
____________________________________
Richard Korsgaard
Verification by Written Declaration
ERIC R. SMITH declares under penalty of perjury under the laws of the
State of California that he has read the foregoing certificate and knows the
contents thereof and that the same is true of her own knowledge.
Dated: _______ __, 199_
____________________________________
Eric R. Smith
9
<PAGE> 74
EXHIBIT 2.8
BANK MERGER AGREEMENT
THIS BANK MERGER AGREEMENT (the "Bank Merger Agreement") is entered
into as of this _____ day of June, 1995, between ELDORADO BANK, a California
State chartered bank (herein "EB"), and MARINERS BANK, a California State
chartered bank ("MB").
EB and MB agree as follows:
1. EB is a California State chartered bank and has ______________
(__) shares of its Common Stock outstanding.
2. MB is a California State chartered bank and has
_______________ (_______) shares of its Common Stock outstanding.
3. MB shall be merged into EB and the separate existence of MB
shall cease (the "Bank Merger") at time that there is filed with the California
Superintendent of Banks, in accordance with Section 2072 of the California
Financial Code, a duly executed and delivered counterpart of this Bank Merger
Agreement that was (i) approved by the California Superintendent of Banks and
(ii) filed with and certified by the California Secretary of State in
accordance with Section 1103 of the California Corporations Code (the
"Effective Time of the Bank Merger").
4. At the Effective Time of the Bank Merger, the outstanding
shares of MB will be cancelled and no shares of EB or other securities or
consideration shall be issued in exchange therefor.
5. At the Effective Time of the Bank Merger, the outstanding
shares of EB shall remain outstanding and shall not be affected by the Bank
Merger.
6. The Articles of Incorporation of EB are not amended by the
Bank Merger.
7. At the Effective Time of the Bank Merger, the separate
existence of MB ceases and EB shall be the surviving corporation in the Bank
Merger and, as such, shall continue in existence and shall succeed, without the
necessity of any other transfer, to all of the rights, privileges, powers and
franchises of, and all of the properties of MB, real, personal and mixed and
shall be subject to all the debts and liabilities of MB in the same manner as
if EB had itself incurred them. All rights of creditors and all liens upon the
property of each corporation shall be preserved unimpaired, provided that such
liens upon property of MB shall be limited to the property affected thereby
immediately prior to the time the Bank Merger is effective.
8. After the Bank Merger becomes effective, MB, through the
persons who were its officers immediately prior to the Bank Merger, shall
execute, or cause to be executed, such
<PAGE> 75
further assignments, assurances, or other documents as EB deems to be necessary
or desirable to confirm title to properties, assets and rights in EB and to
carry out the purposes of this Agreement.
IN WITNESS WHEREOF, MB and EB, pursuant to approval and authority duly
given by resolutions adopted by their respective boards of directors, have each
caused this Bank Merger Agreement to be signed by their respective officers
duly authorized, all as of the date first written above.
ELDORADO BANK, a
California State chartered bank
By: ________________________________
Name: J. B. Crowell
Its: Chairman and Chief Executive
Officer
By: ________________________________
Name: Elaine Crouch
Its: Secretary
MARINERS BANK, a California State
chartered bank
By: ________________________________
Name: Richard Korsgaard
Its: President
By: ________________________________
Name: Jamie Davis
Its: Assistant Secretary
2
<PAGE> 76
OFFICERS' CERTIFICATE
J. B. CROWELL and ELAINE CROUCH certify that:
1. They are the Chairman and Chief Executive Officer and the
Secretary, respectively, of Eldorado Bank, a corporation organized under the
laws of the State of California.
2. The Merger Agreement in the form attached was approved on
behalf of the corporation by its Board of Directors. The merger was entitled
to be approved by the Board of Directors alone under the provisions of Section
1201 of the California Corporations Code.
____________________________________
J. B. Crowell, Chairman and Chief
Executive Officer
____________________________________
Elaine Crouch, Secretary
3
<PAGE> 77
Verification by Written Declaration
J. B. CROWELL declares under penalty of perjury under the laws of the
State of California that he has read the foregoing certificate and knows the
contents thereof and that the same is true of his own knowledge.
Dated: _________ __ , 199_
____________________________________
J. B. Crowell
Verification by Written Declaration
ELAINE CROUCH declares under penalty of perjury under the laws of the
State of California that she has read the foregoing certificate and knows the
contents thereof and that the same is true of her own knowledge.
Dated: __________ __, 199_
____________________________________
Elaine Crouch
4
<PAGE> 78
OFFICERS' CERTIFICATE
RICHARD KORSGAARD and JAMIE DAVIS certify that:
1. They are the President and the Assistant Secretary,
respectively, of Mariners Bank, a corporation organized under the laws of the
State of California.
2. The corporation has only one class of shares outstanding and
the total number of outstanding shares is __________ .
3. The principal terms of the Merger Agreement in the form
attached were approved by the corporation by the vote of a number of shares of
such class which equaled or exceeded the vote required.
4. The percentage vote required of such class is 100%.
____________________________________
Richard Korsgaard, President
____________________________________
Jamie Davis, Assistant Secretary
5
<PAGE> 79
Verification by Written Declaration
RICHARD KORSGAARD declares under penalty of perjury under the laws of
the State of California that he has read the foregoing certificate and knows
the contents thereof and that the same is true of his own knowledge.
Dated: _________ __, 199_
____________________________________
Richard Korsgaard
Verification by Written Declaration
JAMIE DAVIS declares under penalty of perjury under the laws of the
State of California that she has read the foregoing certificate and knows the
contents thereof and that the same is true of her own knowledge.
Dated: _________ __, 199_
____________________________________
Jamie Davis
6
<PAGE> 80
EXHIBIT 7.2.11
AFFILIATE AGREEMENT
May ___, 1995
Eldorado Bancorp
c/o Eldorado Bank Administration
19100 Von Karman Avenue, Suite 550
Irvine, California 92713
Gentlemen:
Reference is hereby made to that certain Agreement and Plan of
Reorganization and Merger, dated as of May __, 1995 (the "Merger Agreement"),
by and among Eldorado Bancorp ("Eldorado"), Eldorado Bank ("EB") and Mariners
Bancorp ("Mariners") and Mariners Bank ("MB"). The Merger Agreement provides
for the merger of Mariners with and into EB, upon consummation of which, among
other things, the outstanding shares of the common stock of Mariners ("Mariners
Common Stock") will be converted into the right to receive Merger Consideration
consisting of a combination of shares of common stock, no par value, of
Eldorado ("Eldorado Common Stock") and cash that shall be payable to the
shareholders of Mariners, all as more fully provided in the Merger Agreement.
The undersigned, who is a shareholder and a director or executive
officer of Mariners (the "Shareholder"), has been informed that the Merger
constitutes a transaction covered by Rule 145 under the Securities Act of 1933,
as amended (the "Securities Act"); that the undersigned may be deemed to be an
"affiliate" of Mariners within the meaning of Rule 145; and that, accordingly,
the shares of Eldorado Common Stock which the undersigned may acquire in
connection with the Merger will be subject to certain restrictions on
transferability under Rule 145 under the Securities Act ("Rule 145") and as
hereinafter provided.
Each of the capitalized terms used and not defined herein shall have
the meaning given to such term in the Merger Agreement.
1. The undersigned represents warrants and agrees as follows:
(a) The undersigned has full power to execute this
Affiliate Agreement and to make the representations, warranties and agreements
herein, and to perform his, her or its obligations hereunder.
(b) Except as otherwise set forth on Schedule 1 hereto,
the undersigned is currently the record and beneficial owner of the number of
shares of Mariners Common Stock set forth in Schedule 1 hereto (the "Mariners
Shares"). For purposes hereof, "beneficial ownership"
<PAGE> 81
shall have the same meaning as is given to such term in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended.
(c) The undersigned currently owns no shares of Eldorado
Common Stock and has not owned any shares of Eldorado Common Stock since
January 1, 1995, except as otherwise disclosed on Schedule 1 of this Agreement.
(d) The undersigned will not sell, transfer or dispose of
any shares of Eldorado Common Stock which the undersigned may acquire in
connection with the Merger or any securities which may be paid as a dividend or
otherwise distributed thereon or with respect thereto or issued or delivered in
exchange or substitution therefor (all such shares and other securities are
sometimes collectively referred to herein as "Restricted Securities"), or any
option, right or other interest with respect to any Restricted Securities,
unless such sale, transfer or disposition is effected (i) pursuant to an
exemption from the registration requirements of the Securities Act as provided
in Section 3 hereof, or (ii) pursuant to an effective registration statement
under, and in compliance with, the Securities Act; provided, however, that the
undersigned may make bona-fide gifts without consideration so long as the
recipients thereof agree not to sell, transfer or otherwise dispose of the
Eldorado Common Stock except as provided herein.
(e) The undersigned has no present plan or intent to
engage in a sale, exchange, transfer, redemption or reduction in any way of the
undersigned's risk of ownership by short sale or otherwise, or other
disposition, directly or indirectly (such actions being collectively referred
to as a "Sale") of the Mariners Shares or any of the shares of Eldorado Common
Stock to be received by the undersigned pursuant to the Merger.
(f) The undersigned has not engaged in any Sale of any
shares of Mariners Common Stock at any time since March 31, 1995 unless
otherwise set forth in Schedule 1.
(g) The undersigned is not aware of or participating in
any plan or intention on the part of the Mariners shareholders (a "Plan") to
engage in a Sale of Eldorado Common Stock to be received by such Mariners
shareholders pursuant to the Merger that will reduce such Mariners
shareholders' ownership of Eldorado Common Stock to a number of shares having,
in the aggregate, a value at the Effective Time of less than 50% of the total
fair market value of the Mariners Shares/or Common Stock outstanding
immediately prior to the Merger. For purposes of this representation, shares
of the Mariners Stock disposed of in a Sale (including through the exercise of
dissenters' rights) will be considered to be outstanding stock of Mariners
immediately prior to the Merger that was exchanged for Eldorado Common Stock in
the Merger, and then disposed of pursuant to a Plan.
(h) The undersigned has no present plan or intent (i) to
engage in a Sale of the Mariners Shares (other than in exchange for Eldorado
Common Stock pursuant to the Merger), or (ii) to exercise dissenters' rights in
connection with the Merger.
(i) The representations contained herein shall be true
and correct at all times from the date hereof through the Effective Time.
2
<PAGE> 82
(j) The undersigned has consulted such legal and
financial counsel as the undersigned deems appropriate in connection with the
execution and delivery of this Agreement.
2. Eldorado agrees to use its reasonable efforts to file all
reports and data with the Securities and Exchange Commission ("SEC") necessary
to permit the undersigned to sell Restricted Securities pursuant to and
otherwise in conformity with Rule 145(d) under the Securities Act.
3. Eldorado acknowledges that the provisions of Section 1(d) of
this Affiliate Agreement will be satisfied as to any sale by the undersigned of
Restricted Securities pursuant to Rule 145(d) under the Securities Act, as
evidenced by a broker's letter and a certificate of the undersigned stating
that the requirements of Rule 145 have been met; provided, however, that if
counsel for Eldorado reasonably believes that the provisions of Rule 145 have
not been complied with, or if requested by Eldorado in connection with a
proposed disposition, the undersigned shall furnish to Eldorado a copy of a "no
action" letter or other communication from the staff of the SEC or an opinion
of counsel in form and substance reasonably satisfactory to Eldorado and its
counsel, to the effect that the applicable provisions of Paragraphs (c), (e),
(f) and (g) of Rule 144 under the Securities Act have been complied with or
that the disposition may be otherwise effected in the manner requested in
compliance with the Securities Act.
4. The undersigned also understands that stop transfer
instructions will be given to Eldorado's transfer agent with respect to the
Restricted Securities and that there will be placed on the certificates
evidencing the Restricted Securities, or any substitutions therefor, a legend
stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN ACCORDANCE WITH
RULE 145(D) UNDER THE SECURITIES ACT OF 1933 AND THE TERMS OF
AN AGREEMENT BETWEEN THE HOLDER HEREOF AND THE ISSUER, A COPY
OF WHICH AGREEMENT CAN BE OBTAINED FROM THE ISSUER."
Eldorado agrees that such stop transfer instructions and legend will be
promptly removed if the provisions of Section 3 are complied with.
5. This Affiliate's Agreement shall be binding upon and
unenforceable against administrators, executors, representatives, heirs,
legatees and devisees of the undersigned and any pledgee holding the Restricted
Securities of the undersigned as collateral.
6. This Agreement shall terminate on the earlier of (i) the
termination of the Merger Agreement in accordance with its terms if such
termination occurs prior to and without consummation of the Merger, or (ii) the
expiration, in accordance with the terms of Rule 145
3
<PAGE> 83
under the Securities Act, of the restrictions imposed by Paragraph (d) of Rule
145 on the Shareholder's Restricted Securities.
IN WITNESS WHEREOF, the undersigned has executed the foregoing
Affiliate's Agreement as of the date first above written.
Very truly yours
By: ________________________________
AGREED TO AND ACCEPTED:
ELDORADO BANCORP
By: __________________________________
Name:
Title:
4
<PAGE> 84
SCHEDULE 1
Name of Shareholder: ______________________________________________________
Number of Mariners' Shares
Owned of Record by the Shareholder: _________________
As to which Shareholder has the right to vote: _________________
Which Shareholder has power to sell or transfer: _________________
Other Persons, if any, who share the power to vote
or to sell or transfer of the Shareholder's Shares:
__________________________________________
__________________________________________
__________________________________________
__________________________________________
Number of Mariners Shares sold or transferred
by Shareholder since March 31, 1995: _________________
Number of shares of Eldorado Common Stock owned
by Shareholder: _________________
<PAGE> 85
EXHIBIT 7.2.15
SHAREHOLDER AGREEMENT
This SHAREHOLDER AGREEMENT ("Agreement") is made as of May __, 1995,
by and between ELDORADO BANCORP, a California corporation ("Eldorado") and the
other persons executing the last page of this Agreement, who are shareholders
of Mariners Bancorp (the "Shareholders"). All terms not otherwise defined in
this Agreement shall have the meanings ascribed to them in the Merger Agreement
(as that term is defined below).
A. Eldorado and Mariners, a California corporation ("Mariners"),
are planning to enter into an Agreement and Plan of Reorganization and Merger
(the "Merger Agreement"), to be dated as of the date hereof. The Merger
Agreement provides for a statutory merger (the "Merger") pursuant to which
Mariners will be merged with and into Eldorado Bank, which is a wholly-owned
subsidiary of Eldorado, the separate existence of Mariners will terminate and
the shareholders of Mariners will receive, in exchange for their shares of
Mariners Common Stock, a combination of shares of common stock of Eldorado and
cash, all as more fully set forth in the Merger Agreement.
B. In order to induce Eldorado and Eldorado Bank ("EB") to enter
into the Merger Agreement, and as consideration therefor, the Shareholders,
solely in their capacity as shareholders, desires to take certain actions and
to refrain from taking other actions in connection with the Merger.
NOW, THEREFORE, in consideration of these premises and of the
representations, warranties, covenants, and agreements contained in this
Agreement and in the Merger Agreement, the parties agree as follows:
1. Agreements of the Shareholders.
1.1 Agreement to Vote. At any meeting of shareholders of
Mariners to be held to vote on approval of, or in connection with any
solicitation of Mariners shareholders for written consents to, the
Merger or any of the transactions contemplated thereby, the
Shareholders agree, jointly and severally, that they will vote or
cause to be voted (or, in the case of a solicitation of written
consents, to give their written consents with respect to) all shares
of common stock of Mariners ("Mariners Stock") that the Shareholders
own, either individually or jointly, or hereafter acquire, or over
which either or both of the Shareholders exercise or hereafter acquire
the right to exercise voting power (the "Shareholders' Mariners
Stock"), in favor of and to approve the Merger, on the terms provided
in the Merger Agreement, the consummation of the transactions
contemplated thereby and any other matters provided in the Merger
Agreement that require the approval of the shareholders of Mariners.
1.2 Restrictions on Dispositions. The Shareholders agree
that until the earliest of (i) the adjournment of the meeting of
shareholders called to vote on approval of the Merger, (ii) the
termination of the Merger Agreement in accordance with the terms
thereof and prior to and without the consummation of the Merger, or
(iii) March 31, 1996, the Shareholders shall not sell, assign or
otherwise dispose of any shares of the Shareholders' Mariners Stock
(except pursuant to the Merger or as provided below) or relinquish,
assign or otherwise transfer any of their rights to vote, or grant
consents with respect to, such shares of Shareholder's Mariners Stock,
or enter into any agreement to do any of the foregoing other than with
Eldorado or an affiliate of Eldorado or with the
<PAGE> 86
prior written consent of Eldorado, unless (i) notwithstanding the sale
of other transfer or disposition of any such shares, the Shareholders
shall have retained full voting power with respect to such shares,
including the sole right to vote and grant consents with respect to
such shares in accordance with Subsection 1.1 hereof, or (ii) the
person to whom such shares shall have been sold, assigned or otherwise
transferred or disposed of shall have agreed, in writing, to be bound
by the provisions of this Agreement, or (iii) the transfer is
involuntary, such as a transfer on death or by one of the Shareholders
to the other Shareholder; and except that the Shareholders may grant a
written proxy to vote any or all of such shares to a proxyholder under
irrevocable instructions requiring such proxyholder to vote all of
such shares at any meeting held or pursuant to any written consent
solicited to vote on approval of the Merger and the transactions
contemplated thereby in accordance with the requirements of Subsection
1.1 hereof.
1.3 Cooperation. At all times during which the
Shareholders' agreements contained in Subsections 1.1 or 1.2 above are
in effect, the Shareholders agree not to directly or indirectly
solicit or initiate any inquiries, proposals or offers from any person
or entity (other than from Eldorado or any affiliate of Eldorado)
relating to, any proposal or transaction for disposition of the
business or assets of Mariners or any of its Subsidiaries, the
acquisition or sale of securities of Mariners or any Subsidiary of
Mariners, or any other transaction or proposal that comes within the
definition of "Acquisition Transaction" or the definition of
"Acquisition Proposal" as such terms are defined in the Merger
Agreement. The Shareholders shall recommend to other shareholders of
Mariners that they vote in favor of and to approve the Merger, on the
terms provided in the Merger Agreement, the consummation of the
transactions contemplated thereby and any other matters provided in
the Merger Agreement that require the approval of the shareholders of
Mariners, and the Shareholders shall not revoke such recommendation.
2. Representations and Warranties of the Shareholders.
Each of the Shareholders represents and warrants to Eldorado as
follows:
2.1 Capacity. Such Shareholder has the requisite
capacity and authority to enter into and perform such Shareholder's
obligations under this Agreement.
2.2 Binding Agreement. This Agreement constitutes the
valid and legally binding obligation of such Shareholder which is
enforceable against such Shareholder in accordance with its terms and
shall be binding on his or her heirs, representatives, executors and
successors and assigns and shall inure to Eldorado and its successors
and assigns.
2.3 Noncontravention. The execution and delivery of this
Agreement by such Shareholder does not, and the performance by such
Shareholder of the Shareholder's obligations under this Agreement and
the consummation by such Shareholder of the transactions contemplated
by this Agreement will not in any material respect violate or conflict
with, nor shall such execution and delivery or performance constitute
a material default under, any agreement, instrument, contract or other
obligation, or any order, arbitration award, judgment or decree to
which such Shareholder is a party or by which such Shareholder or any
of his or her shares of Mariners Stock is bound or subject, or any
statute, rule or regulation to which such Shareholder or any of the
Shareholder's property, including his or her shares of Mariners Stock,
is subject. Attached hereto are copies of any voting trust or other
agreements governing the transferability or other disposition, or the
voting, of any of the shares of the Shareholders' Mariners Stock.
2
<PAGE> 87
2.4 Ownership of and Voting Power of Shares. Schedule A
to this Agreement correctly set forth (i) the number of shares of
Mariners Stock owned by the Shareholders with respect to which the
Shareholders, either individually or jointly, have sole voting and
dispositive power, (ii) the number of shares of Mariners Stock, if
any, owned by others over which either of the Shareholders holds the
full power to vote. Schedule A also sets the number of shares of
Mariners Stock, if any, that is owned by either or both of the
Shareholders but as to which voting power is held by or shared with
any third person or entity and the identity of such person and shares
of Mariners Stock held by either Shareholder in a representative or
fiduciary capacity (that is, for example, as a trustee, executor, or
corporate officer or agent or as a partner of a partnership that is
the beneficial owner of the shares).
3. Enforcement.
3.1 Damages Inadequate; Specific Performance. In the
event of a threatened or actual breach of this Agreement by either of
the Shareholders, it is agreed that damages would not be an adequate
remedy to compensate Eldorado. Accordingly, each party agrees that
each Shareholder's obligations will be enforceable by court order
requiring specific performance without proof of damages or posting of
any bond. In the event of a threatened or actual breach of this
Agreement by the Shareholder, Eldorado will be entitled to a temporary
restraining order and to temporary and permanent injunctive relief to
prevent or terminate such threatened or actual breach, provided that
nothing in this Agreement shall be construed to limit the damages
otherwise recoverable by Eldorado in any such event.
3.2 Notice to Third Parties. Within __ days of the date
hereof, the Shareholders shall cause to be delivered to Mariners all
stock certificates evidencing the Shareholders' shares of Mariners
Stock and Mariners shall cause the following legend to be endorsed
thereon:
"THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A
SHAREHOLDER AGREEMENT DATED MAY __ , 1995, BETWEEN THE
HOLDER(S) HEREOF AND ELDORADO BANCORP WHICH RESTRICTS IN
CERTAIN RESPECTS THE VOTING OF SUCH SHARES AND SALES,
TRANSFERS OR OTHER DISPOSITIONS OF SUCH SHARES IN THE ABSENCE
OF AN AGREEMENT, IN WRITING, BY THE TRANSFEREE TO COMPLY WITH
SUCH SHAREHOLDER AGREEMENT."
In addition, after notice to the Shareholders, Eldorado will have the
right to inform any person or entity that Eldorado reasonably believes
to be, or to be contemplating, participating with either Shareholder
(or receiving assistance from either Shareholder) in violation of this
Agreement, that any participation with either Shareholder in
activities in violation of this Agreement may give rise to claims by
Eldorado against such entity or person.
4. Miscellaneous.
4.1 Expenses. Each party will pay that party's costs and
expenses, including attorneys and accounting fees, in connection with
this Agreement and the transactions contemplated by this Agreement.
4.2 Notices. All notices and other communications
hereunder shall be in writing and, if delivered personally, mailed by
registered or certified mail (return receipt
3
<PAGE> 88
requested), sent by confirmed overnight courier or telecopied (with
electronic confirmation and verbal confirmation of the person to whom
such telecopy is addressed), shall be deemed to have been given on the
date actually delivered or three days following the date mailed, as
the case may be, to the parties at the following addresses:
If to Eldorado:
Eldorado Bancorp
c/o Eldorado Bank Administration
19100 Von Karman Avenue, Suite 550
Irvine, California 92713
Attention: Chief Executive Officer
If to the Shareholders:
To their address as maintained on the books and records of
Mariners;
or to such other address as a party may have furnished to the other in
writing in accordance with this paragraph, except that notices of
change of address shall only be effective upon receipt.
4.3 Assignment; Third Party Beneficiaries. This
Agreement is not assignable by any party hereto, except with the prior
consent of the other parties. Each party intends that this Agreement
shall not benefit, or create any right or cause of action in or on
behalf of, any person other than the parties, except for EB, which is
an intended third party beneficiary of the agreements and
representations and warranties of the Shareholders contained in this
Agreement. As used in this Agreement, the term party or parties shall
refer only to Eldorado and the Shareholders.
4.4 Counterparts. This Agreement may be executed in one
or more counterparts, all of which taken together shall constitute one
instrument. An executed counterpart received by telecopy shall have
the same effect as an originally-executed counterpart.
4.5 Governing Law. This Agreement will be governed by
California law, without regard to any applicable principles of
conflicts of law.
4.6 Captions. The captions contained in this Agreement
are for convenience of reference only and do not form a part of this
Agreement.
4.7 Waiver and Modification. No waiver of any term,
provision or condition of this Agreement, whether by conduct or
otherwise, shall be deemed to be a further or continuing waiver of any
such term, provision or condition. This Agreement may be modified or
amended only by an instrument signed by the parties.
4.8 Attorney Fees. If any party brings an action or
suit, at law or in equity, against any other party by reason of such
party's breach of any covenant, representation, warranty or other
provision of this Agreement, the prevailing party in whose favor final
judgment is entered shall be entitled to recover from the losing party
all reasonable costs and expenses incurred by the prevailing party in
connection with such suit or action, including legal fees and court
costs (whether or not taxable as such).
4
<PAGE> 89
4.9 Entire Agreement. This Agreement embodies the entire
understanding of the parties with respect to its subject matter, and
there are no other agreements or understandings, written or oral, in
effect between the parties relating to the subject matter of this
Agreement, unless expressly referred to in this Agreement.
4.10 Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be valid
under applicable law. However, if any provision shall be invalid or
unenforceable, it shall be construed and limited to effectuate its
purpose to the maximum legally permissible extent. If it cannot be so
construed so as to be valid under such law, such provision shall be
ineffective to the extent of such invalidity or prohibition without
invalidating the remainder of such provision or the remaining
provisions of this Agreement, and this Agreement shall be construed to
the maximum extent possible to carry out its terms without such
invalid or unenforceable provision or portion.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
SHAREHOLDERS: ELDORADO BANCORP
______________________ By:_________________________________
Its:___________________________
______________________
MARINERS BANCORP*
By:_________________________________
Its:________________________________
* Mariners is executing this
Agreement only with respect to
Section 3.2 of this Agreement.
5
<PAGE> 90
SCHEDULE A
Names of Shareholders: ___________________
___________________
Number of Shares of Mariners Stock:
(1) which are owned by Shareholders
and as to which they have the sole
right to exercise voting power: _________________
(2) which are NOT owned by either Shareholder,
but as to which either of them has the
sole right to exercise voting power: _________________
(3) which are owned by Shareholders, but as
to which another Person has the right to
exercise voting power _________________
(4) as to which the voting power
is shared with another Person _________________
Identities of Persons who hold or share voting power with respect to any shares
of Mariners Stock that are owned by Shareholder:
<TABLE>
<CAPTION>
Name Number of Shares
----------------- -----------------------------
<S> <C>
</TABLE>
List of Agreements to which any of the Shareholder's shares of Mariners Stock
are subject or bound, true and correct copies of which are attached:
<PAGE> 91
EXHIBIT 7.2.16
NON-COMPETITION AGREEMENT
This NON-COMPETITION AGREEMENT (the "Agreement") is made as of
________, 1995, by and among __________________ (the "Shareholder"), ELDORADO
BANCORP, a California corporation ("Eldorado"), and ELDORADO BANK, a California
corporation ("EB"), which is a wholly-owned subsidiary of Eldorado, with
reference to the following:
A. Concurrently herewith, Eldorado and EB and Mariners Bancorp
("Mariners"), and its wholly-owned subsidiary, Mariners Bank ("MB"), both of
which are California corporations, are entering into an Agreement and Plan of
Reorganization and Merger (the "Merger Agreement"), pursuant to which (i)
Mariners and Mariners Bank will both be merged with and into EB, (ii) EB shall
be the surviving corporation and (iii) the outstanding shares of Common Stock
of Mariners will be converted into a combination of shares of Common Stock of
Eldorado and cash (the "Mergers"), all as more fully set forth in the Merger
Agreement.
B. Each of MB and EB conducts a commercial banking business from
a number of banking offices in Southern California. Mariners and Eldorado are
bank holding companies that own all of the outstanding shares of capital stock
of and manage MB and EB, respectively.
C. The Shareholder is the record and beneficial owner of ____% of
the outstanding capital stock of Mariners (the "Shares") and is a Director
and/or Executive Officer of Mariners. The Shareholder, who has been involved
directly in the management of Mariners and MB, will be selling and transferring
all of his Shares in the Merger in exchange for shares of Common Stock of
Eldorado and cash, as provided in the Merger Agreement.
D. Shareholder understands that Eldorado and EB will not enter
into the Merger Agreement unless Shareholder enters into this Agreement which
is intended to protect the goodwill of the businesses of Mariners and MB to be
acquired by Eldorado and EB in the Merger. Shareholder desires to enter into
this Agreement in order to induce Eldorado and EB to enter into this Agreement,
and as consideration therefor, and the Shareholder understands and acknowledges
that this Agreement is a material inducement to Eldorado and EB upon which they
are relying in entering into the Merger Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, warranties
and representations contained herein, the parties hereby agree as follows:
1. For a period of two (2) years from the Effective Time (as
defined in the Merger Agreement), the Shareholder shall not, anywhere within or
from or into the counties of Orange, Riverside or San Bernardino, California
(the "Territory"), other than for or for the benefit of
<PAGE> 92
Eldorado or EB, directly, or indirectly through one or more other persons or
entities, engage in, or have any financial or other interests (whether as a
principal, partner, shareholder, director, officer, agent, employee, consultant
or otherwise) in, or provide assistance to any person, firm, corporation or
business that engages in the commercial banking or savings and loan business,
or which accepts deposits or makes commercial or real estate loans to the
public anywhere in the Territory, or in any activity, which is the same as,
similar to, or competitive with, any activity that was engaged in by the
Mariners or MB during the 12 months immediately preceding the date hereof.
Nothing contained in this Agreement shall prevent the Shareholder from owning
shares of Common Stock or other securities of Eldorado or holding, for
investment purposes only, no more than one percent (1%) of any class of equity
securities of a company engaged in a business similar to the businesses that
have been engaged in by Mariners or MB during the past twelve months if such
class of equity securities is traded on a national securities exchange or on
the NASDAQ National Market System.
2. For a period of Two (2) years from the date hereof, neither
the Shareholder nor any of the Shareholders's affiliates, shall use for [his or
her] or their benefit, or disclose, communicate or divulge to, or use for the
direct or indirect benefit of any person, firm, association or company, other
than Eldorado or EB, any confidential information regarding the business
methods, business policies, procedures, techniques, trade secrets, software,
products, customer or client lists or other knowledge or processes used or
developed, prior to the Effective Time, by Mariners or MB or other proprietary
or confidential information concerning or used in the respective businesses of
Mariners or MB of which the Shareholder became aware prior to the Effective
Time and in his capacity as a director or officer of Mariners or MB. The
foregoing restrictions shall not apply to (i) information which is or becomes,
other than as a result of a breach of this Agreement, generally available to
the public or (ii) the disclosure of information required pursuant to a
subpoena or other legal process; provided, that the party required to disclose
such information shall notify Eldorado, in writing, of the receipt of any such
subpoena or other legal process requiring such disclosure immediately after
receipt thereof and Eldorado shall have a reasonable opportunity to quash such
subpoena or other legal process prior to any disclosure by the Shareholder. In
addition, without limiting the foregoing, the Shareholder agrees that [he or
she] shall not use or employ in any manner, whether directly or indirectly, and
[he or she] shall not license or grant to any person the right, or permit any
person to use, the name "Mariners" or any variants thereof.
3. The Shareholder acknowledges that the restrictions contained
in the foregoing Paragraphs 1 and 2, in view of the nature of, and the
Shareholder's ownership and involvement in, the businesses of Mariners and MB,
are reasonable and necessary in order to protect the legitimate interests of
Eldorado and EB, which are the intended beneficiaries of the agreements of the
Shareholder contained herein, and that any violation thereof would result in
irreparable injuries to the Eldorado and EB for which no fully adequate remedy
is available at law. Therefore, the Shareholder acknowledges and agrees that,
in the event of a violation by the Shareholder of any of the restrictions
contained in Paragraphs 1 or 2 above, Eldorado and EB shall be entitled,
individually or jointly, to obtain from any court of competent jurisdiction
temporary, preliminary and permanent injunctive relief, in addition to any
other rights or
2
<PAGE> 93
remedies to which they or any of them may be entitled, without proof of damage
and without any requirement that they, or either of them, post any bond in
connection therewith.
4. The Shareholder agrees that if, in any judicial proceeding,
the geographic coverage of the covenant contained in Paragraph 1 hereof or
either of the respective periods of time specified in Paragraphs 1 and 2 hereof
should be adjudged unreasonable, then such geographic coverage or such period
or periods of time, as the case may be, shall be reduced to the extent
necessary to enable the court to enforce the restrictions in Paragraphs 1 and 2
to the fullest extent permitted under applicable law.
5. The rights of the parties hereto shall inure to, and the
obligations of the parties hereto shall be binding on, their respective
successors and assigns.
6. This Agreement shall be governed by and construed in
accordance with the laws of the State of California. This Agreement may be
executed by facsimile and in counterparts, each of which shall be deemed an
original and all of which when taken together shall constitute one and the same
instrument.
7. This Agreement is being entered into by the Shareholder as an
inducement for Eldorado and EB to enter into the Merger Agreement and as
consideration therefor and Shareholder acknowledges that the execution and
delivery of this Agreement by Shareholder is a material inducement on which
Eldorado and EB are relying in entering into the Merger Agreement.
8. Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified, except by means of a written
instrument duly executed by the parties to be charged therewith. No waiver of
any provision, performance or default hereunder in any instance shall be
construed as a continuing waiver of such provision, performance or default or a
waiver of any other provision, performance or default or a waiver of any future
performance or default. In the event that the Merger Agreement is terminated
in accordance with its terms and prior to and without the consummation of the
Merger, then, this Agreement shall automatically terminate concurrently with
such termination of the Merger Agreement.
9. In the event of a controversy, claim or dispute between any of
the parties hereto arising out of or relating to this Agreement, or the breach
thereof, the prevailing party shall be entitled to recover its reasonable
attorneys' fees, expenses and costs.
10. This Agreement contains all of the agreements of the parties
with respect to, and supersedes all other agreements, written or oral, between
the parties relating to, the subject matter of this Agreement.
3
<PAGE> 94
11. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them as set forth in the Merger Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date and year first above written.
SHAREHOLDER:
____________________________________
ELDORADO:
ELDORADO BANCORP,
a California corporation
By: ________________________________
EB:
ELDORADO BANK,
a California corporation
By: ________________________________
5
<PAGE> 1
Exhibit 99.0
[ELDORADO BANCORP LETTERHEAD]
FOR ADDITIONAL INFORMATION CONTACT:
DAVID R. BROWN, EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
FOR IMMEDIATE RELEASE ELDORADO BANCORP (714) 798-1100
ELDORADO BANK TO ACQUIRE MARINERS BANK
TUSTIN, California, May 22, 1995 -- Eldorado Bancorp (ASE/ELB) today announced
the execution of a definitive merger agreement whereby its wholly-owned
subsidiary, Eldorado Bank, will acquire, by merger, all the outstanding shares
of Mariners Bancorp and Mariners Bancorp's wholly-owned subsidiary, Mariners
Bank, would be merged with and become a part of Eldorado Bank.
Mariners Bancorp shareholders will receive in the merger one share of Eldorado
Bancorp common stock and $7.30 cash, subject to certain adjustments, for each
of their Mariners Bancorp shares. The transaction is valued at approximately
$12.2 million or 1.63 times Mariners' March 31, 1995 book value. Completion of
the transaction is subject to approvals of the shareholders of both Eldorado
Bancorp and Mariners Bancorp and applicable regulatory agencies. The
acquisition is expected to be completed in the fourth quarter of 1995.
Mariners Bancorp, through its principal subsidiary, Mariners Bank, conducts
banking business in three banking offices in the south Orange County cities of
San Clemente, San Juan Capistrano and Monarch Beach (Dana Point). Total assets
on March 31, 1995 were $79 million. Mariners Bancorp had net earnings of $158
thousand for the first three months of 1995.
J.B. Crowell, President and Chief Executive Officer of Eldorado Bancorp and
Chairman of Eldorado Bank, said, "This acquisition enhances shareholder value
in several important areas. Mariners' earnings, combined with economies from
branch and departmental consolidation, are expected, beginning in the first
<PAGE> 2
quarter 1996, to contribute to earnings per share. Additionally, the Company's
strong capital position is being deployed for growth. Further, Eldorado Bank
will be the largest independent bank in the growing southern portion of Orange
County, enhancing its franchise value."
Richard Korsgaard, President and Chief Executive Officer of Mariners Bancorp
and Mariners Bank, said, "This merger creates a unique opportunity for
Mariners' shareholders, customers and staff to join Orange County's leading
independent bank. With an expanded branch network, we will be better able to
meet the needs of the consumer, business and professional communities in south
Orange County, while maintaining the personal service that only an independent
bank can offer." Crowell added, "We expect to expand the custom home
construction lending niche throughout the offices of the combined bank. This
has been an important part of Mariners' success. The two banks are especially
compatible - both very strong and well-managed - and the combination creates a
well-balanced institution."
The combined bank will maintain the name of Eldorado Bank. Eldorado Bank has
expanded by acquiring other banks in the past. The most recent was the 1991
acquisition of Bank of San Clemente.
Tustin-based Eldorado Bancorp, through its Eldorado Bank subsidiary, operates
ten banking offices in Orange, Riverside and San Bernardino counties. Total
assets on March 31, 1995 were $308 million. Eldorado Bancorp reported net
income of $882 thousand, or $0.32 per share, for the three months ended March
31, 1995. For 1994, net income was $2.6 million, or $0.93 per share.
************
2
