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 MARCH 27, 1995
C U BANCORP
(Exact name of registrant as specific in its charter)
CALIFORNIA 0-11008 95-3657044
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
16030 VENTURA BOULEVARD, ENCINO, CALIFORNIA 91436
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (818) 907-9122
(Former name of former address, if changed since last report)
<PAGE> 1
Item 5: Other
CU Bancorp, the holding company of California
United Bank, N.A., announced that it has signed a definitive
agreement to acquire Santa Ana-based Corporated Bank in a stock
transaction. It is expected that the purchase price at closing
will be approximately equal to the book value of Corporate Bank.
Completion of the transaction, anticipated in the third quarter
of this year, is subject to Corporate Bank shareholder approval
and regulatory approvals.
Item 7: Financial Statements and Exhibits
(c) Exhibit 10- Agreement and Plan of Reorganization PAGE 3
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
C U BANCORP
/Patrick Hartman/
BY
PATRICK HARTMAN, CFO
<page 2>
Exhibit 10 AGREEMENT
AND
PLAN OF REORGANIZATION
By and Among
CU BANCORP;
California United Bank, National Association;
and
Corporate Bank
MARCH 27, 1995
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") is
made and entered into as of ____________, 1995 by and among CU
Bancorp, a California corporation ("Bancorp"); California United
Bank, National Association, a national banking association and a
wholly-owned subsidiary of Bancorp ("CUB"); and Corporate Bank ,
a California state chartered bank ("CorpBank").
R E C I T A L S
This Agreement provides for the acquisition of CorpBank by
Bancorp by means of a merger ("Merger") of CorpBank with and into
CUB, all in accordance with the terms of this Agreement and an
agreement of merger to be entered into by and among Bancorp,
CorpBank and CUB substantially in the form of Exhibit A hereto
("Agreement of Merger").
In consideration of the mutual covenants, agreements and
representations contained herein, the parties hereto agree as
follows:
THE MERGER AND RELATED MATTERS
The Merger. The Merger shall become effective upon the
filing of the Agreement of Merger with the Office of the
Comptroller of the Currency ("OCC") and the Secretary of State of
the State of California, in accordance with the provisions of the
National Banking Act, the California Corporations Code and the
California Financial Code. The date and time of the filing with
the OCC is referred to herein as the "Effective Time of the
Merger." At the Effective Time of the Merger the following
transactions will be deemed to have occurred simultaneously:
Merger of CorpBank Into CUB. CorpBank shall be merged
with and into CUB, and the separate corporate existence of
CorpBank shall cease. CUB as the entity surviving the Merger is
sometimes referred to herein as the "Surviving Association."
Purchase Price / Conversion of Shares. At the
Effective Time of the Merger:
Purchase Price. The Purchase Price shall be Seven
Million Eight Hundred Thousand Dollars ($7,800,000) plus
CorpBank's Net Income [Loss] (after taxes) for the period from
the execution of this Agreement ("Execution Date") to the
Calculation Date (as defined below). Such Purchase Price
shall be subject to adjustment as set forth below.
The Purchase Price shall be adjusted as set forth in
Section 1.1 (b)(v) below.
Subject to Sections 1.2, 1.4 and clause (ii)
<PAGE> 3
of this Section 1.1(b), outstanding shares of CorpBank Stock
(as defined in Section 3.2) will be converted into the right
to receive a number of shares of outstanding shares of
Bancorp common stock, without par value ("Bancorp Stock"),
equal to the "Conversion Ratio." The Conversion Ratio shall
be a fraction of which the numerator shall be the Purchase
Price Per Share and the denominator ("Denominator") shall be
$7.3125 ("Bancorp Stock Value") .
Purchase Price Per Share shall be a fraction of
which the numerator is the Purchase Price and the Denominator
is the number of outstanding shares of CorpBank on the
Calculation Date on a fully diluted basis.
Adjustments to Purchase Price. Net Income [Loss]
shall reflect the following items (calculated as of the
Calculation Date):
additional allocation to loan loss reserve,
if required, determined by application of the CUB loan loss
reserve methodology and risk grading system (as set forth in
its commercial loan policy manual) to CorpBank and
application of migration analysis to CorpBank loans made
subsequent to Execution Date ;
adjustments to bring accounting and
financial statements into compliance with GAAP (as defined
in Section 3.5 herein) and RAP ("regulatory accounting
principles") for events (periods) subsequent to Execution
Date;
mark to market of securities portfolio;
the necessary tax effect of all adjustments.
allocation to loan loss reserve of not less
than the amounts set forth in CorpBank's budget dated March
2, 1995 (attached hereto as Schedule 1.1 (b)(v)(E) and such
additional amounts which are necessary to maintain the loan
loss reserve at an appropriate level at all times.
appropriate reserves and/or accruals for
contingencies and costs/expenses (including all costs and
expenses related to the transactions contemplated herein
calculated through the Closing);
appropriate reserves for potential
penalties to the Internal Revenue Service related to
employee W-4's and related matters.
The Calculation Date shall be the last day of the
month preceding the Closing Date or such other date as
<PAGE> 4
may be mutually agreed upon, but which shall not be more than
ten days after the end of any calendar month. The
Calculation Date shall not be more than ten (10) days prior to
the Closing Date, except pursuant to the mutual agreement of
the parties hereto.
Dispute Resolution. In the event that the parties
are unable to agree on CorpBank's Net Income [Loss] for the
period from the Execution Date to the Calculation Date, then
Bancorp and CorpBank shall each prepare and in good faith
execute and deliver to the other a certificate setting forth its
calculation and noting, to the extent possible, the items of
dispute (the "Disputed Matters"). Notwithstanding any other
provisions herein to the contrary, the Closing Date shall be
postponed to the seventh day next following the Closing specified
herein in Paragraph 2 , subject to the terms and conditions of
this Agreement. Immediately thereafter, and during such
postponement, KMPG Peat, Marwick ("Independent Accountants") or,
if they should decline to act, such other accounting firm as may
be agreed upon between Bancorp and CorpBank, shall determine
("Independent Determination") in accordance with provisions of
this Agreement and GAAP, the appropriate treatment of the
Disputed Matters. Bancorp and CorpBank shall provide to the
Independent Accountant access to the books, records and affairs
of each party in the same manner as specified in Section 5.1
hereof, in connection with the Independent Determination. The
Independent Accountants shall, on the day next preceding the
Closing, as postponed above, deliver to Bancorp and CorpBank a
report stating the Independent Accountant's determination of the
Disputed Matters and of CorpBank Net Income [Loss]. The
Independent Determination shall be final, binding and conclusive
on Bancorp and CorpBank. The party whose determination of the
Disputed Matters is not determined by the Independent Accountant
to be in compliance with this Agreement and such other factors as
may be applicable (or, if no party's determination prevails in
total, whose determination is closest to the Independent
Determination), will bear the entire costs and expenses of the
Independent Accountant relating to the Independent Determination
and their services performed in connection therewith. If
CorpBank is the party which is responsible for the costs and
expenses as provided herein, CorpBank's Net Income [Loss] shall
be amended to reflect such costs and expenses as if they were
incurred prior to the Calculation Date.
Exception for Shares Held by Bancorp or CorpBank.
Each share of CorpBank Stock which immediately prior to the
Effective Time of the Merger is owned by CorpBank or Bancorp or
their wholly-owned subsidiaries (other than shares held in a
fiduciary capacity) shall, at the Effective Time of the Merger,
be cancelled and retired and cease to
exist, without the payment of any consideration therefor or any
conversion thereof into Bancorp Stock. For purposes of this
Agreement, a Bank shall be deemed wholly-owned by CorpBank or
Bancorp if all of such Bank's stock is owned directly by CorpBank
or Bancorp (as applicable) or indirectly through one or more
<PAGE> 5
other wholly-owned subsidiaries.
Effect on CorpBank Stock Options. In accordance with
Section 5.12 and prior to the Closing Date (as defined in Section
2.1), CorpBank shall make arrangements satisfactory to Bancorp
and CUB for the exercise, surrender or cancellation of all
outstanding options to purchase CorpBank Stock, such cancellation
to become effective at the Effective Time of the Merger. Any
exercise of options must take place prior to the Calculation
Date.
Effect on CorpBank Fixed Rate, Non-Convertible 8.5%
Subordinated Capital Notes Maturing June 30, 1997. In accordance
with the provisions of the capital notes (the "Capital Notes"),
CUB will assume the Capital Notes.
No Fractional Shares. No fractional shares of Bancorp
Stock shall be issued. Bancorp will pay or cause to be paid cash
in lieu of fractional shares of Bancorp Stock which would
otherwise be issuable pursuant to Section 1.1.
Exchange of Certificates.
Each holder of a certificate or certificates
representing shares of CorpBank Stock issued and outstanding
immediately prior to the Effective Time of the Merger shall
surrender such certificate or certificates, duly endorsed as
Bancorp may require, to the exchange agent selected by Bancorp
for such purpose ("Exchange Agent"), and shall receive in
exchange therefor (i) a certificate or certificates representing
the number of whole shares of Bancorp Stock into which the
CorpBank Stock theretofore represented by the certificate or
certificates so surrendered shall have been converted and
exchanged as aforesaid and; (ii) a check representing any cash to
be paid to holders of CorpBank Stock pursuant to Section 1.2. No
holder of any certificate which prior to the Effective Time of
the Merger represented shares of CorpBank Stock shall have any
rights as a holder of Bancorp Stock until such certificate is
surrendered for exchange as provided herein. The holder of a
certificate or certificates representing shares of CorpBank Stock
issued and outstanding immediately prior to the Effective Time of
the Merger shall have no rights with respect to such shares other
than to surrender such certificate or certificates pursuant to
this Section 1.3 or to perfect the right of appraisal which such
holder may have pursuant to Section 1300 et. seq. of the
California Corporations Code ("Section 1300") and 12 U.S.C.
Section 215a ("Section 215a").
Unless and until any such outstanding certificate
representing shares of CorpBank Stock shall be so surrendered, no
dividend or other distribution payable to the holders of record
of Bancorp Stock as of any time subsequent to the Effective Time
of the Merger shall be paid to the holder of any such outstanding
certificate, but upon such surrender of any such outstanding
certificate there shall be paid to the first record holder of the
certificate or certificates for CorpBank
<PAGE> 6
Stock issued in
exchange therefor the amount of dividends or other distributions
which theretofore became payable with respect to the number of
shares of Bancorp Stock represented by the certificate or
certificates so issued in exchange.
<PAGE> 7
After the Effective Time of the Merger, Bancorp will
(i) promptly deliver to the Exchange Agent certificates,
registered in the name of the Exchange Agent in its capacity as
exchange agent, representing the Bancorp Stock and cause the
Exchange Agent to distribute shares of Bancorp Stock in
accordance with paragraph (a) of this Section 1.3, (ii) provide
to the Exchange Agent on a timely basis funds necessary to pay
any cash payable in lieu of fractional shares of Bancorp Stock as
provided in Section 1.2 and cause the Exchange Agent to
distribute such funds in accordance with paragraph (a) of this
Section 1.3 and (iii) cause the Exchange Agent to distribute
funds on account of dividends and other distributions in
accordance with paragraph (b) of this Section 1.3. Bancorp and
the Exchange Agent shall agree that the Exchange Agent shall,
with respect to any matter on which the holders of record of
Bancorp Stock determined as of a record date after the day on
which the Effective Time of the Merger occurred shall be entitled
to vote or consent, (A) request instructions from the holders of
record immediately prior to the Effective Time of the Merger of
certificates which immediately prior to the Effective Time of the
Merger represented shares of CorpBank Stock and which have not
yet been surrendered to the Exchange Agent in exchange for
Bancorp Stock as to how or whether to vote or consent with
respect to the shares of Bancorp Stock to which such holders are
entitled and which are then held by the Exchange Agent and (B)
vote or express consent in writing with respect to any shares of
Bancorp Stock held by it from time to time hereunder only in
accordance with such instructions. Bancorp and the Exchange
Agent shall further agree that the Exchange Agent shall receive
and hold all dividends and other distributions paid with respect
to such shares for the account of the persons entitled thereto.
Dissenting Shares. Notwithstanding anything to the
contrary contained in this Agreement, shares of CorpBank Stock
which are issued and outstanding immediately prior to the
Effective Time of the Merger and which are held by shareholders
who have not voted such shares in favor of adoption and approval
of this Agreement and the Agreement to Merge and have properly
exercised their dissenters' rights under Section 1300 and Section
215a ("Dissenting Shares") shall not be converted into or be
exchangeable for the right to receive shares of Bancorp Stock or
cash in lieu of fractional shares provided for in Section 1.2
herein, but shall be entitled to receive such consideration as
shall be determined pursuant to Section 1300 and 215a; provided,
however, that if any holder of such shares shall have failed to
perfect or shall have effectively withdrawn or lost the holder's
right to dissent and receive payment under Section 1300 and 215a,
such holder's shares shall thereupon be deemed to have been
converted into and to have become exchangeable for, at the
Effective Time of the Merger, the right to receive shares of
Bancorp Stock and cash in lieu of fractional shares pursuant to
Section 1.2 herein, without any interest thereon.
Effect of the Merger. By virtue of the Merger
<PAGE> 8
and at the Effective Time of the Merger, all of the rights,
privileges, powers and franchises and all property and assets of
every kind and description of CorpBank shall be vested in and be
held and enjoyed by the Surviving Association, without further
act or deed, and all the estates and interests of every kind of
CorpBank, including all debts due to it, shall be as effectively
the property of the Surviving Association as they were of
CorpBank, and the title to any real estate vested by deed or
otherwise in CorpBank 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 CorpBank shall be preserved unimpaired and
all debts, liabilities and duties of CorpBank shall be debts,
liabilities and duties of the Surviving Association and may be
enforced against it to the same extent as if such debts, liabili
ties 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.
Name of Surviving Association. The name of the Surviving
Association shall be "California United Bank, National
Association".
Articles of Association and Bylaws of Surviving
Association. The Articles of Association and Bylaws of CUB as in
effect immediately prior to the Effective Time of the Merger
shall continue to be the Articles of Association and Bylaws of
the Surviving Association.
Directors and Officers of Surviving Association. The
directors of CUB immediately prior to the Effective Time of the
Merger shall be the directors of the Surviving Association until
their successors have been chosen and qualified in accordance
with the Certificate of Incorporation and Bylaws of the Surviving
Association. The officers of CUB immediately prior to the
Effective Time of the Merger shall be the officers of the
Surviving Association until they resign or are replaced or
terminated by the Board of Directors of the Surviving Association
or otherwise in accordance with the Surviving Association's
Articles of Association or Bylaws.
Special Agreements. Pursuant to Section 6.2(i), not later
than five (5) business days after the Execution Date, as a
condition subsequent to Bancorp and CUB entering into this
Agreement and as a material inducement for Bancorp and CUB to
enter into this Agreement, all directors of CorpBank, and all
Shareholders of CorpBank holding more than 5% of the outstanding
shares of CorpBank Stock (the "Shareholders") shall each enter
into separate agreements with Bancorp and CUB substantially in
the form attached hereto as Exhibit B pursuant to which each of
the Shareholders shall agree to vote or cause to be voted all
such shares of CorpBank Stock with respect to which each such
Shareholder has voting power on the date hereof or hereafter to
approve the transactions contemplated hereby and all requisite
matters related thereto and pursuant to which each of the
Shareholders shall make certain representations and warranties to
Bancorp and CUB. Additionally, each director of CorpBank shall
<PAGE> 9
agree not to sell Bancorp stock received pursuant to the
transactions contemplated in the Agreement for a period of one
year following the Closing.
. THE CLOSING
Closing Date; Transactions Contemplated by this Agreement.
Date of Closing. Consummation of the transactions
contemplated by this Agreement ("Closing") shall, unless another
date or place is agreed in writing by the parties hereto, take
place at the offices of CUB, 16030 Ventura Boulevard, Encino,
California 91436, on the first Friday of the month following the
calendar month in which the following occurred: the last to occur
of (i) the receipt of all approvals and consents and expiration
of all waiting periods specified in Sections 6.1(a) and (c)
hereof and (ii) satisfaction of the conditions precedent set
forth in Section 6.2(t) or written waiver of such conditions by
Bancorp and CUB in their sole discretion (the "Closing Date").
Transactions Contemplated. The transactions
contemplated by this Agreement include, without limitation, the
Bank Merger (as defined in Section 5.14).
Execution of Agreement of Merger. Prior to the Closing
Date, and as soon as practicable after adoption and approval of
this Agreement by the shareholders of CorpBank and the
shareholder of CUB, the Agreement of Merger (as amended, if neces
sary, to conform to any requirements of any regulatory authority
having authority over the Merger) shall be executed by Bancorp,
CUB and CorpBank. On the Closing Date, the Agreement of Merger,
together with all requisite certificates, shall be duly filed
with the OCC in accordance with applicable laws and regulations
and with the California Secretary of State.
Documents to be Delivered. At the Closing, the parties
shall deliver, or cause to be delivered, such documents or
certificates as may be necessary, in the reasonable opinion of
counsel for any of the parties, to effectuate the transactions
called for in this Agreement. If, at any time after the
Effective Time of the Merger, Bancorp or the Surviving
Association or its successors or assigns shall determine that any
further conveyance, assignment or other documents or any further
action is necessary or desirable to further effectuate the
transactions set forth herein or contemplated hereby, the
officers and directors of the parties hereto shall execute and
deliver, or cause to be executed and delivered, all such
documents as may be reasonably required to effectuate such
transactions.
. REPRESENTATIONS AND WARRANTIES OF CORPBANK AND CORPBANK
SUBSIDIARIES
<PAGE> 10
CorpBank and CorpBank Subsidiaries (as defined in Section 3.3)
represent and warrant to Bancorp and CUB as follows:
Organization, Standing and Power. CorpBank is a California
corporation, duly chartered as a California state chartered bank,
duly organized, validly existing and in good standing under the
laws of the state of California. CorpBank has all requisite
corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently
conducted. CorpBank is duly qualified and in good standing as a
foreign corporation, and is authorized to do business, in all
states or other jurisdictions (all of which are listed in
Schedule 3.1(a)) in which such qualification or authorization is
necessary, and there has not been any claim by any other state or
jurisdiction to the effect that CorpBank is required to qualify
or otherwise be authorized to do business as a foreign
corporation therein. Schedule 3.1(b) contains true and correct
copies of CorpBank's Articles of Incorporation and Bylaws, as
amended and in effect as of the date hereof.
Capitalization. As of the date of this Agreement, the
authorized capitalization of CorpBank consists solely of Five
Million (5,000,000) shares of common stock, without par value
("CorpBank Stock"), of which Five Hundred Thousand (500,000)
shares are issued and outstanding and One Million Dollars
($1,000,000) in principal amount of capital notes due June 30,
1997 ("Capital Notes"). All outstanding shares of capital stock
of CorpBank are duly authorized and validly issued and are fully
paid and nonassessable except, as provided for in Section 662 of
the California Financial Code. The capital notes are validly
issued and are held by eleven (11) holders. Except for stock
options covering not more than 92,500 shares of CorpBank Stock
granted pursuant to CorpBank's 1991 Employee Stock Option Plan,
there are no outstanding options, warrants, commitments,
agreements or other rights in or with respect to the unissued
shares of CorpBank Stock, CorpBank Preferred Stock, or stock of
any CorpBank Subsidiary or any other securities convertible into
CorpBank Stock, CorpBank Preferred Stock, or
stock of any CorpBank Subsidiary. 92,500 shares of CorpBank
Stock are reserved for exercise of outstanding stock options
under the 1991 Employee Stock Option Plan. Schedule 3.2(b) sets
forth the name of each holder of a CorpBank Stock option, the
number of shares of CorpBank Stock covered by each such holder's
option, the exercise price per share and the expiration date of
each such holder's option. Immediately prior to the Effective
Time of the Merger, all issued and outstanding CorpBank Stock
will have been either outstanding on the date of this Agreement,
or issued upon exercise of stock options outstanding pursuant to
the 1991 Employee Stock Option Plan.
Subsidiaries. CorpBank does not own, directly or
indirectly (except as pledgee pursuant to loans which are not in
default), any equity position or other voting interest in any
<PAGE> 11
corporation, partnership, joint venture or other entity,
except as set forth on Schedule 3.3. Schedule 3.3 correctly
lists each Subsidiary of CorpBank ( individually "CorpBank
Subsidiary" or collectively "CorpBank Subsidiaries"). Each
CorpBank Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation as stated in Schedule 3.3 and has the corporate
power and authority to carry on its business as it is now
conducted and to own, lease and operate its properties. Each
CorpBank Subsidiary is duly qualified and in good standing as a
foreign corporation, and is authorized to do business, in all
states or other jurisdictions (all of which are listed in
Schedule 3.3) in which such qualification or authorization is
necessary, and there has not been any claim by any other state or
jurisdiction to the effect that an CorpBank Subsidiary is
required to qualify or otherwise be authorized to do business as
a foreign corporation therein. Except as set forth in Schedule
3.3, CorpBank owns of record and beneficially 100% of each class
of the outstanding capital stock of each CorpBank Subsidiary free
and clear of any lien, encumbrance or security interest and of
any adverse claim of any kind.
Corporate Bank. CorpBank is authorized by the California
Superintendent of Banks (the "Superintendent") to conduct a
general banking business. CorpBank is not a member of the
Federal Reserve System. CorpBank's deposits are insured by the
Federal Deposit Insurance Corporation ("FDIC") in the manner and
to the full extent provided by law.
Reports and Financial Statements. CorpBank has previously
furnished to CUB true and complete copies of its (i) Annual
Report to Shareholders for the years ended December 31, 1993 and
1992, (ii) Quarterly Call Reports for the calendar quarters ended
March 31, June 30, September 30, and December 31, 1994 (iii)
proxy statements relating to all meetings of shareholders
(whether special or annual) during 1994, 1993 and 1992, and (iv)
all other reports, registration statements or filings made by
CorpBank with the Superintendent, the FDIC or the Securities and
Exchange Commission ("SEC") since January 1, 1992 (collectively
the "CorpBank Filings"). As of their respective dates, the
CorpBank Filings and any other materials distributed to
shareholders, including but not limited to proxy statements for
annual shareholder meetings in 1992, 1993 and 1994, were in
compliance, in all material respects, with the requirements of
their respective forms and were true and complete in all material
respects and did not 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.
CorpBank has also furnished to CUB its audited consolidated
financial statements for the years ended December 31, 1992 and
1993, certified by Grant Thornton ("GT") and will provide to CUB
its audited consolidated financial statements for the year ended
December 31, 1994, certified by Deloitte and Touche ("DT")
within three (3) days of receipt thereof. The audited
consolidated financial statements of CorpBank provided to CUB or
<PAGE> 12
to be provided in the future and the unaudited
consolidated interim financial statements previously furnished to
CUB or included in the CorpBank Filings
(collectively the "CorpBank Financial Statements") were (or will
be) prepared in accordance with generally accepted accounting
principles applied on a consistent basis ("GAAP") and except as
disclosed in the CorpBank Financial Statements or the notes
thereto and present fairly the consolidated financial position of
CorpBank and the CorpBank Subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flow
for the periods then ended, subject, in the case of the unaudited
consolidated interim financial statements, to normal recurring
adjustments. Neither the financial statements referred to above
nor any report (including, without limitation, annual reports to
shareholders, prospectus or definitive proxy statement), or any
amendment or supplement thereto, filed, or to be filed, prior to
the Effective Time of the Merger with the Superintendent, FDIC,
OCC, or SEC by or on behalf of CorpBank contains (or will
contain when furnished or filed) any untrue statement of a
material fact or omits (or will omit when furnished or filed) to
state a material fact necessary in order to make the statements
contained therein not misleading.
CorpBank's and CorpBank Subsidiaries' Authority. The
execution and delivery by CorpBank and CorpBank Subsidiaries of
this Agreement and the Agreement of Merger and, subject to the
requisite approval of the shareholders of CorpBank, the
consummation of the transactions contemplated hereunder or
thereunder have been duly and validly authorized by all necessary
corporate action on the part of CorpBank and CorpBank
Subsidiaries, and this Agreement is, and the Agreement of Merger
will be upon due certification, execution, acknowledgment and
filing thereof in accordance with applicable law, a valid and
binding obligation of CorpBank and CorpBank Subsidiaries,
enforceable in accordance with their terms, except as the enforce
ability hereof or thereof may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the rights
of creditors generally and by general equitable principles.
Except as set forth in Schedule 3.6, neither the execution and
delivery by CorpBank and CorpBank Subsidiaries of this Agreement
or the Agreement of Merger, nor the consummation of the
transactions contemplated herein or therein, nor compliance by
CorpBank and CorpBank Subsidiaries with the provisions hereof or
thereof, will (i) conflict with or result in a breach of any
provision of their respective Articles of Incorporation or
Bylaws; (ii) constitute a breach of, or result in a default (or
give rise to any rights of termination, cancellation or accelera
tion, or any right to acquire any securities or assets) under,
any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, franchise, license, permit, agreement or
other instrument or obligation to which CorpBank or any CorpBank
Subsidiary is a party, or by which CorpBank or any CorpBank
Subsidiary or any of their respective properties or assets are
bound, except where such breach or default would not have a
<PAGE> 13
material adverse effect on the consolidated financial
condition, results of operations or prospects of CorpBank; (iii)
constitute a breach of, or result in a default (or give rise to
any rights of termination, acceleration or cancellation, or any
right to acquire any securities or assets) under any material
agreement to which CorpBank or any CorpBank Subsidiary or any of
their respective properties or assets are bound; or (iv) violate
any order, writ, injunction, decree, statute, rule or regulation
applicable to CorpBank or any CorpBank Subsidiary. No consent or
approval of, notice to or filing with any governmental authority
having jurisdiction over any aspect of the business or assets of
CorpBank or any CorpBank Subsidiary, and except as set forth in
Schedule 3.6 no consent or approval of or notice to or filing
with any other person or entity, is required in connection with
the execution and delivery by CorpBank and CorpBank Subsidiaries
of this Agreement or the Agreement of Merger or the consummation
by CorpBank and CorpBank Subsidiaries of the transactions
contemplated hereunder or thereunder, except approval of the
Merger by the shareholders of CorpBank, and such approvals as may
be required by the OCC pursuant to Sections 215a and 1828(c) of
Title 12 of
the United States Code or any successor statutes ("Merger
Statutes") or the Superintendent pursuant to California Financial
Code Section 2071 or otherwise with respect to the Merger, or
other applicable law; and the declaration by the SEC and state
securities law regulatory authorities that the Registration
Statement (as defined in Section 5.11) is effective and that
Bancorp Stock to be issued in connection with the Merger is
qualified under applicable state securities laws.
Insurance. Except as set forth in Schedule 3.7, CorpBank
and the CorpBank Subsidiaries have, and at all times within five
years of the date of this Agreement have had, in full force and
effect policies of insurance and bonds (including, without
limitation, bankers' blanket bond, fidelity coverage, director
and officer liability, fire, third party liability, use and
occupancy) with respect to their respective assets and businesses
and against casualties and contingencies which in the judgment of
CorpBank and the CorpBank Subsidiaries are adequate and
appropriate to cover their respective assets and businesses and
are in amounts and coverages customarily provided for by similar
institutions. Set forth in Schedule 3.7 is a schedule of all
policies of insurance and bonds (other than title or credit
insurance) carried and owned by CorpBank and the CorpBank
Subsidiaries, showing the name of the insurance or bonding
company, a summary of the coverage, the amounts, the deductible
feature, the annual premiums and the expiration dates. If any
such policy or bond is changed, terminated or modified following
the date of this Agreement, such termination, change or
modification shall be promptly disclosed to Bancorp and CUB in
writing. Neither CorpBank nor any CorpBank Subsidiary is in
default under any such policy of insurance or bond such that it
could be cancelled and all material claims thereunder have been
filed in timely fashion. CorpBank and each CorpBank Subsidiary
<PAGE> 14
have filed claims with or given notice of claim to their
respective insurers or bonding companies with respect to all
material matters and occurrences for which they believe they have
coverage.
Proxy Statement. The Proxy Statement required pursuant to
Section 5.11 and any other documents to be filed with the
Superintendent, OCC, FDIC, the SEC or any regulatory authority in
connection with the transactions contemplated by this Agreement
with respect to all information set forth therein relating to
CorpBank and the CorpBank Subsidiaries, the Merger and in respect
to this Agreement and the Agreement of Merger will, at the
respective times such documents are filed or become effective,
and with respect to the Proxy Statement, at the time of mailing
to shareholders, and at the time of the shareholders' meeting:
comply in all material respects with the provisions of
all applicable regulations issued by the SEC or the OCC pursuant
to the Securities Exchange Act of 1934, as amended ("1934 Act"),
and all other applicable laws and regulations; and
not contain any statement which, at the time and in
light of the circumstances under which it is made, is false or
misleading with respect to any material fact or omit any material
fact necessary in order to make the statements therein not false
or misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of a proxy
for the same meeting or subject matter which have become false or
misleading.
Books and Records.
The minute books of CorpBank and the CorpBank
Subsidiaries contain (i) true, accurate and complete records of
all meetings and actions taken by the respective Boards of
Directors, Board committees and shareholders of CorpBank and the
CorpBank Subsidiaries and (ii) true and complete copies of their
respective charter documents and bylaws and all amendments
thereto. The books and records of CorpBank and the CorpBank
Subsidiaries accurately reflect in all material aspects their
respective businesses and affairs.
CorpBank and each of the CorpBank Subsidiaries have
records which accurately and validly reflect, in all material
respects, their respective transactions and accounting controls
sufficient to insure that such transactions are (i) in all
material respects, executed in accordance with management's
general or specific authorization, and (ii) recorded in
conformity with GAAP; such records, to the extent they contain
important information pertaining to CorpBank or any CorpBank
Subsidiary which is not easily and readily available elsewhere,
have been duplicated, and such duplicates are stored safely and
securely pursuant to procedures and techniques reasonably
adequate for companies of the sizes of CorpBank and the CorpBank
Subsidiaries and in the respective businesses in which CorpBank
and the CorpBank Subsidiaries are engaged; and the data
<PAGE>15
processing equipment, data transmission equipment, related
peripheral equipment and software used by CorpBank and the
CorpBank Subsidiaries in the operations of their respective
businesses (including any disaster recovery facility) to generate
and retrieve such records are reasonably adequate for companies
of the sizes of CorpBank and the CorpBank Subsidiaries and in the
respective businesses in which CorpBank and the CorpBank
Subsidiaries are engaged.
Title to Assets. CorpBank and the CorpBank Subsidiaries
have good and marketable title to all material properties and
assets, other than real property, owned or purported to be owned
by CorpBank and CorpBank Subsidiaries free and clear of all
mortgages, liens, encumbrances, pledges or charges of any kind or
nature, except for (i) liens for current taxes not yet due and
payable; (ii) liens incurred in the ordinary course of business
and which do not materially impair the business of CorpBank or
any CorpBank Subsidiary or materially detract from the usefulness
of the properties subject thereto; or (iii) such liens as are
disclosed in the CorpBank Financial Statements of December 31,
1994 or in Schedule 3.10.
Real Estate.
Schedule 3.11(a) contains a list of all real property,
including leaseholds, owned by CorpBank and CorpBank Subsidi
aries. True, correct and complete copies of all such leases are
included in Schedule 3.11(a). Schedule 3.11(b) contains, among
other things, an accurate summary of all material commitments
which CorpBank or any CorpBank Subsidiary has to improve real
estate owned by it. Schedule 3.11(c) contains a list of other
real estate owned ("OREO") by CorpBank and CorpBank Subsidiaries.
CorpBank and CorpBank Subsidiaries have good and marketable title
to all the real property and valid leasehold interests in the
leaseholds described in Schedules 3.11(a), (b) and (c), free and
clear of all mortgages, covenants, conditions, restrictions,
easements, liens, security interests, charges, claims,
assessments and encumbrances, except for (i) rights of lessors,
co-lessees or sublessees in such matters which are reflected in
the leases; (ii) current taxes not yet due and payable;
(iii) such as are described in any title policies delivered
pursuant to this Section 3.11; (iv) such imperfec detract from
the value of or materially and adversely interfere with the
present use of such property; and (v) as described in Schedule
3.11(d). True, correct and complete copies of title policies for
properties described in Schedules 3.11(a) and (c) as owned by
CorpBank or any CorpBank Subsidiary are included therein. To the
best knowledge of CorpBank and CorpBank Subsidiaries, the
activities of CorpBank and CorpBank Subsidiaries with respect to
all real property and leaseholds owned by any of them for use in
connection with their respective operations are in all material
respects permitted and authorized by applicable zoning laws,
ordinances and regulations and all laws and regulations of any
governmental department or agency relative to environmental
matters affecting such properties, except as otherwise disclosed
in Schedule 3.11(e). CorpBank and
<PAGE> 16
CorpBank Subsidiaries
enjoy peaceful and undisturbed possession under all material
leases to which they are parties, and all of such leases are
valid and in full force and effect. Except as set forth in
Schedule 3.11 (g) neither CorpBank or any CorpBank Subsidiary are
engaged in real estate development or in any business other than
commercial banking, and have not been so engaged since August 1,
1991.
Except as set forth in Schedule 3.11(f), there has not
been any generation, use, handling, transportation, treatment,
storage, release or disposal of any Hazardous Substance in
connection with the conduct of the business of CorpBank or any
CorpBank Subsidiary that has or might result in any liability
under any Environmental Law and there has never been a use of any
of the real property owned by CorpBank or any CorpBank
Subsidiary, that has or might result in any liability under any
Environmental Law; no underground storage tanks or surface
impoundments are on or in the real property owned by CorpBank or
any CorpBank Subsidiary; and no asbestos or polychlorinated
biphenyls are contained or located on any of the real property
owned by CorpBank or any Corp Bank Subsidiary.
The term "Hazardous Substances" as used herein shall mean
(i) substances that are defined or listed in, or otherwise
classified pursuant to, or the use or disposal of which are
regulated by, any Environmental Law as "hazardous substances,"
"hazardous materials," "hazardous wastes," "toxic substances," or
any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, or "EP toxicity;" (ii) oil, petroleum or
petroleum derived from substances and drilling fluids, produced
waters, and other wastes associated with the exploration,
development, or production of crude oil, natural gas, or
geothermal resources; (iii) any flammable substances or
explosives, any radioactive materials, any hazardous wastes or
substances, any
toxic wastes or substances or any other materials or pollutants
which pose a hazard to any property or to Persons on or about
such property; and (iv) asbestos in any form or electrical
equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of 50 parts per
million.
The term "Environmental Law" as used herein shall mean any
federal, state, provincial or local statute, law, ordinance,
rule, regulation, order, consent, decree, judicial or
administrative decision or directive of the United States or
other jurisdiction whether now existing or as hereinafter
promulgated, issued or enacted relating to: (A) pollution or
protection of the environment, including natural resources;
(B) exposure of persons, including employees, to Hazardous
Substances or other products, materials or chemicals;
(C) protection of the public health or welfare from the effects
of products, by-products, wastes, emissions, discharges or
<PAGE> 17
releases of chemical or other substances from industrial or
commercial activities; or (D) regulation of the manufacture, use
or introduction into commerce of substances, including, without
limitation, their manufacture, formulation, packaging, labeling,
distribution, transportation, handling, storage and disposal.
For the purposes of this definition the term "Environmental Law"
shall include, without limiting the foregoing, the following
statutes, as amended from time to time: (1) the Clean Air Act,
as amended, 42 U.S.C. 7401 et seq.; (2) the Federal Water
Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.;
(3) the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. 6901 et seq., (4) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended (including the Superfund Amendments and
Reauthorization Act of 1986), 42 U.S.C. 2601 et seq.; (5) the
Toxic Substances Control Act, as amended, 15 U.S.C. 2601 et
seq.; (6) the Occupational Safety and Health Act, as amended, 29
U.S.C. 651; (7) the Emergency Planning and Community Right-To-
Know Act of 1986, 42 U.S.C. 1101 et seq.; (8) the Mine Safety
and Health Act of 1977, as amended, 30 U.S.C. 801 et seq.;
(9) the Safe Drinking Water Act, 42 U.S.C. 300f et seq.; and
(10) all comparable state and local laws, laws of other
jurisdictions or orders and regulations including, but not
limited to, the Carpenter-Presley-Tanner Hazardous Substance
Account Act, Cal. Health & Safety Code 25300 et seq.
Legal Proceedings; Agreements with Banking Authorities.
Except as set forth on Schedule 3.12(a), there is no
private or governmental suit, claim, action, arbitration or
proceeding pending, nor any private or governmental suit, claim,
action, arbitration or proceeding to CorpBank's or any CorpBank
Subsidiary's knowledge threatened, nor does CorpBank or any
CorpBank Subsidiary know of
any facts or circumstances which would form a basis for any such
suit, claim, action, arbitration or proceeding against CorpBank
or any CorpBank Subsidiary or against any of their respective
directors, officers or employees relating to the performance of
their duties in such capacities or against or affecting any
properties of CorpBank or any CorpBank Subsidiary. Also, except
as provided on Schedule 3.12(a), there are no judgments,
decrees, stipulations or orders against CorpBank or any CorpBank
Subsidiary enjoining it or any of its respective directors,
officers or employees in respect of, or the effect of which is to
prohibit, any business practice or the acquisition of any
property or the conduct of business in any area. Schedule
3.12(b) contains summary reports of CorpBank's and CorpBank
Subsidiaries' attorneys on all pending litigation to which
CorpBank or any CorpBank Subsidiary is a party and which names
CorpBank or any CorpBank Subsidiary as a defendant or cross-
defendant. Schedule 3.12(c) contains a true, correct and
complete list of all pending litigation in which CorpBank or any
CorpBank Subsidiary is a named party.
<PAGE> 18
Except as set forth on Schedule 3.12(d), neither
CorpBank nor any CorpBank Subsidiary is a party to any agreement
or memorandum of understanding with any federal, state or foreign
governmental or regulatory authority charged with the supervision
or regulation of banks or bank holding companies or engaged in
the insurance of bank deposits that restricts the conduct of its
business, or in any manner relates to its capital adequacy, its
credit or investment policies or its management.
Taxes. Except as set forth on Schedule 3.13, (i) all
federal income tax returns, all state tax returns, and all real
and personal property, sales, use and other tax returns and
reports that are required by law to be filed by or on behalf of
CorpBank or any CorpBank Subsidiary have been duly prepared and
filed; (ii) all taxes shown to be due and payable by CorpBank or
any CorpBank Subsidiary on those returns, or which are otherwise
due and payable, whether disputed or not, have been paid or the
liability therefor is reflected in the CorpBank Financial
Statements; (iii) CorpBank and CorpBank Subsidiaries have paid or
deposited all taxes, tax penalties or interest owed by them or
which they are obligated to withhold and deposit from amounts
paid to any employee, creditor, depositor or third party; and
(iv) CorpBank and CorpBank Subsidiaries have complied with all
reporting requirements of the Internal Revenue Code of 1986 or
its predecessor statutes as applicable (the "Code") including,
but not limited to, obtaining taxpayer identification numbers.
The current status of any audits of those returns by the Internal
Revenue Service or other applicable agencies is as set forth in
Schedule 3.13. There are no agreements by CorpBank or any
CorpBank Subsidiary waiving a statute of limitations or extending
the time for assessment or payment of any taxes payable by any of
them.
Compliance with Laws and Regulations.
Except as set forth on Schedule 3.14, neither CorpBank
nor any CorpBank Subsidiary is in default under or in breach of
any law, ordinance, rule, regulation, order, judgment or decree
applicable to it promulgated by any governmental agency having
authority over it, where such default or breach would have the
lesser of: (i)a material adverse effect on the consolidated
financial condition, results of operations, business or prospects
of CorpBank; or (ii) a $15,000 cost or penalty.
CorpBank and each of the CorpBank Subsidiaries have
conducted their businesses in accordance with all applicable
federal, foreign, state and local laws, regulations and orders
including, without limitation, disclosure, usury, equal credit
opportunity, truth in lending, equal employment, fair credit
reporting, antitrust, licensing and other laws, regulations and
orders, and the forms, procedures and practices used by CorpBank
and each of the CorpBank Subsidiaries are in compliance with such
laws, regulations and orders except for such violations or non-
compliance as will not have a material adverse effect on the
consolidated financial condition, results
<PAGE> 19
of operations, business or prospects of CorpBank.
Performance of Obligations. Except as set forth on
Schedule 3.15, CorpBank and CorpBank Subsidiaries have performed
in all respects all of the obligations required to be performed
by them to date and are not in default under or in breach of any
term or provision of any covenant, contract, lease, indenture or
any other covenant to which CorpBank or any CorpBank Subsidiary
is a party or is subject or is otherwise bound, and no event has
occurred which, 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 the
consolidated financial condition, results of operations, business
or prospects of CorpBank. No party with whom CorpBank or any
CorpBank Subsidiary has an agreement which is material to the
consolidated financial condition, results of operations or
prospects of CorpBank is in default thereunder, except for
certain loans made by the Bank which have been identified to
Bancorp and CUB.
Employees. Except as set forth in Schedule 3.16(a), there
are no understandings for the employment of any officer or
employee of CorpBank or any CorpBank Subsidiary which are not
terminable by CorpBank or any CorpBank Subsidiary without
liability on not more than 30 days' notice. Except as set forth
in Schedule 3.16(b), there are no material controversies pending
or threatened between (i) CorpBank or any CorpBank Subsidiary and
(ii) any of their respective current or former employees. Except
as disclosed in the CorpBank Financial Statements at December 31,
1993 or 1994 or on Schedule 3.16(c), all material sums due for
employee compensation and benefits (including vacation and sick
leave ) have been duly and adequately paid or provided for and
all deferred compensation obligations are fully funded. Neither
CorpBank nor any CorpBank Subsidiary is a party to any collective
bargaining agreement with respect to any of their respective
employees or any labor organization to which their employees or
any of them belong. Except as set forth on Schedule 3.16(c), no
director, officer or employee of CorpBank or any CorpBank
Subsidiary is entitled to receive any payment of any amount under
any existing employment agreement, severance plan or other
benefit plan as a result of the consummation of any transaction
contemplated by this Agreement.
Brokers and Finders. Neither CorpBank nor any CorpBank
Subsidiary is a party to any agreement with any investment
banker, broker or finder relating to the transactions
contemplated hereby, and neither the execution of this Agreement
nor the consummation of the transactions provided for or
contemplated herein will result in any liability to any such
investment banker, broker or finder. CorpBank agrees to
indemnify and hold Bancorp and CUB harmless from and against any
and all claims, liabilities or obligations with respect to any
fees, commissions or expenses asserted by any person on the basis
of any act, statement, agreement or commitment alleged to have
been made by CorpBank or any CorpBank
<PAGE> 20
Subsidiaries or affiliates relating to the employment of any such
investment broker, broker or finder relating to the execution of
this Agreement or the consummation of the transactions
contemplated hereby.
Material Contracts. Except as set forth on Schedule 3.18
or excepted below, neither CorpBank nor any CorpBank Subsidiary
is a party to any material contract, agreement, understanding,
commitment or offer, whether written or oral, which may become a
binding obligation if accepted by another person (collectively
referred to as an "Understanding") including the following:
Any loan, letter of credit, pledge, security
agreement, lease (excluding leases of real property listed on
Schedule 3.11(a)), guarantee, commitment or subordination
agreement or other similar or related type of Understanding as to
which CorpBank or any CorpBank Subsidiary is a debtor, pledgor,
lessee or obligor;
Any Understanding dealing with advertising, brokerage,
licensing, dealership, representative or agency relationships
providing for an aggregate annual payment in excess of $5,000;
Any profit-sharing, group insurance, bonus, deferred
compensation, stock option, severance pay, pension, retirement or
other employee benefit plan;
Any written correspondent banking contracts;
Any Understanding (other than this Agreement) for the
sale of their respective assets other than in the ordinary course
of business or for the grant of any preferential right to
purchase any of their respective assets, properties or rights, or
any Understanding which requires the consent of any third party
to the transfer and assignment of any assets, properties or
rights;
Any Understanding which provides for an annual payment
in excess of $5,000 in the aggregate to purchase, sell or provide
services, materials, supplies, merchandise, facilities or
equipment and which is not terminable without penalty on not more
than 30 days' notice;
Any Understanding for any one capital expenditure or
series of capital expenditures which is in excess of $5,000
individually or $10,000 in the aggregate;
Any Understanding to make, renew or extend the term of
a loan (not fully disbursed or funded as of December 31, 1994) to
any person or to any affiliate of such person, which undisbursed
or unfunded amounts, when aggregated with all outstanding
indebtedness of such person or any affiliate of such person to
CorpBank or any CorpBank Subsidiary, would exceed
<PAGE> 21
$25,000. The term "person" as used herein and throughout this
Agreement shall mean any individual, corporation, association,
partnership, joint venture or other entity or any government or
governmental department or agency. The term "affiliate of" or a
person "affiliated with" a specific person as used herein and
throughout this Agreement shall mean a person that directly or
indirectly through one or more intermediaries controls or is
controlled by or under common control with the persons specified;
Any Understanding of any kind, except for deposit
relationships, with any director or officer of CorpBank or any
CorpBank Subsidiary or with any affiliate or any member of the
immediate family of any such director or officer. Such
understandings shall include, but not be limited to, any director
or officer indemnification agreements. The term "immediate
family" as used herein and throughout this Agreement shall mean a
person's spouse, parents, in-laws, children and siblings;
Any Understanding which would be terminable other than
by CorpBank or any CorpBank Subsidiary as a result of the
consummation of the transactions contemplated by this Agreement;
Any contract of participation with any other bank in
any loan entered into by CorpBank or any CorpBank Subsidiary
subsequent to December 31, 1994 in excess of $100,000 or any
sales of assets of CorpBank or any CorpBank Subsidiary with
recourse of any kind to CorpBank or any CorpBank Subsidiary
except the sale of mortgage loans, servicing rights, repurchase
or reverse repurchase agreements, securities or other financial
transactions in the ordinary course of business;
Any Understanding of any kind that binds CorpBank or
any CorpBank Subsidiary and contains a covenant not to compete or
restricts in any other manner the ability of CorpBank to engage
in or conduct any activity; or
Any Understanding not otherwise disclosed or excepted
pursuant to this Section 3.18 which is material to the
consolidated financial condition, results of operations, assets
or business of CorpBank.
True and correct copies of all documents relating to the
foregoing Understandings are attached as Schedule 3.18.
Absence of Certain Changes. Except as set forth on
Schedule 3.19, since December 31, 1994 the businesses of CorpBank
and CorpBank Subsidiaries have been conducted diligently and only
in the ordinary course, in the same manner as theretofore
conducted, and there has not been any:
Material adverse change in, or development which is
likely to result in a material adverse change in or
<PAGE> 22
affect, the business, prospects, financial position,
management, shareholders' equity or results of operations of
CorpBank on a consolidated basis;
Damage, destruction or loss to property (whether or
not covered by insurance) individually or in the aggregate that
materially and adversely affects the financial condition,
property, business or prospects of CorpBank on a consolidated
basis;
Material contract, agreement, license or understanding
which CorpBank or any CorpBank Subsidiary has entered into or to
which CorpBank or any CorpBank Subsidiary is a party which has
been terminated or amended other than in the ordinary course of
business;
Capital expenditure exceeding $5,000 individually or
$25,000 in the aggregate;
Labor trouble, dispute or problem of any character
involving employees having a material adverse effect upon the
financial condition, property, business or prospects of CorpBank
on a consolidated basis;
Change in accounting policies or practices;
Material revaluation by CorpBank on a consolidated
basis of any of its assets except as required by GAAP;
Increase in the salary schedule, compensation, rate,
fees or commissions, or the declaration, payment, commitment or
obligation of any kind directly or indirectly through the payment
by CorpBank or any CorpBank Subsidiary of a bonus or other
additional salary, compensation, fee or commission to any person,
except for additional sums for increases paid in accordance with
employment contracts disclosed in Schedule 3.18 or paid in a
manner consistent with past practice in accordance with policies
of CorpBank and CorpBank Subsidiaries disclosed to Bancorp and
CUB in writing prior to the date hereof;
Sale, assignment or transfer of any asset of CorpBank
or any CorpBank Subsidiary except in the usual and ordinary
course of business;
Mortgage, pledge or encumbrance of any asset of
CorpBank or any CorpBank Subsidiary other than liens for taxes
not yet due, pledges or security interests given in connection
with the acceptance of repurchase agreements or government
deposits, and as set forth in Sections 3.10 and 3.11;
Declaration, setting aside or payment of any interest
or dividend with respect to any CorpBank security;
Waiver or release of any right or claim of CorpBank or
any CorpBank Subsidiary except in the usual and
<PAGE> 23
ordinary course of business; or
Declaration, setting aside or payment of any dividend
or distribution with respect to CorpBank Stock, or the stock of
any CorpBank Subsidiary or the issuance of any shares of, or
options to purchase, CorpBank Stock, or any other securities of
CorpBank or any securities of any CorpBank Subsidiary, or the
direct or indirect redemption, acquisitions, repurchase or other
acquisition of securities of CorpBank or any CorpBank subsidiary
by CorpBank or any CorpBank subsidiary.
Licenses and Permits. CorpBank and CorpBank Subsidiaries
have all licenses and permits which are necessary for the conduct
of their respective businesses and such licenses are in full
force and effect. The properties and operations of CorpBank and
CorpBank Subsidiaries are and have been maintained and conducted,
in all material respects, in compliance with all applicable laws
and regulations.
Undisclosed Liabilities. Neither CorpBank nor any CorpBank
Subsidiaries have any liabilities or obligations, either accrued
or contingent, which are material to CorpBank on a consolidated
basis and which have not been either (i) reflected or disclosed
in the CorpBank Financial Statements as of December 31, 1994;
(ii) incurred subsequent to December 31, 1994 in the ordinary
course of business; or (iii) disclosed in Schedule 3.21.
CorpBank knows of no basis for the assertion against it or any
CorpBank Subsidiary of any liability, obligation or claim
(including, without limitation, that of any regulatory authority
or Environmental Law or Hazardous Substance) that might result in
or cause material adverse change in the consolidated financial
condition, results of operations or prospects of CorpBank which
is not fairly reflected in the CorpBank Financial Statements or
otherwise disclosed in the Schedules to this Agreement.
Loans and Investments. All loans and investments of
CorpBank and CorpBank Subsidiaries are in all material respects
legal, enforceable and authorized under applicable federal and
state laws and regulations 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. Except as set forth in
Schedule 3.22, no loans or investments held by CorpBank or
CorpBank Subsidiaries are, at February 28, 1995 (i) more than 60
days past due with respect to any scheduled payment of principal
or interest; (ii) classified as "loss," "doubtful,"
"substandard," "special mention" or "criticized" by federal or
state banking regulators; or (iii) on a non-accrual status in
accordance with CorpBank and CorpBank Subsidiaries' loan review
procedures. None of such investments are subject to any
restriction,
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 such investments under the
Securities Act of 1933, as amended ("Securities Act"), and the
regulations thereunder, or state securities laws.
As to the loans made by CorpBank and each of them, except
as set forth on Schedule 3.22(a):
CorpBank is the sole owner and holder of each such
loan and the documents related thereto;
CorpBank has full right and authority to sell, assign
and transfer such Loan, in the event such a sale is desired;
No participation has been sold in such loan;
Such loan complied, as of its date of origination
with, or is exempt from, applicable state or federal laws,
regulations and other requirements pertaining to usury, any
and all other requirements of any federal, state or local
laws, including, without limitation, truth in lending, real
estate settlement procedures, equal credit opportunity or
disclosure laws, all laws applicable to such loans have been
complied with since the date of origin of such loan;
The origination, servicing and collection practices
used by CorpBank with respect to each Loan have been in all
respects legal, proper and prudent and have met customary
standards utilized by lenders in their relevant lending
business;
Each of the related note and other agreements executed
in connection therewith with regard to any loan, is the legal,
valid and binding obligation of the maker thereof, enforceable
in accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting he enforcement of creditors' rights
generally, and by general principles of equity, and there is
no offset, defense, counterclaim or right to rescission with
respect to the note, any guaranty, pledge or other
agreements;
The loan or any of the terms or conditions thereof
have not been waived, modified, altered, satisfied, cancelled
or subordinated in any respect or rescinded and no collateral
for the loan has been released in whole or in any part, except
as set forth in the written loan records of CorpBank;
There is no default, breach, violation or event of
acceleration existing under the Loan or the related documents
or note, and no event (other than payments due but not yet
delinquent) has occurred which, with the passage of
<PAGE> 24time or with notice and the expiration of any grace
or cure period, would, constitute a default, breach, violation or
event of acceleration which is not set forth in the books and
records of CorpBank; CorpBank has not waived any material
default, breach, violation or event of acceleration of any of
the foregoing, except as set forth in the books and records of
CorpBank; and
The related note and other agreements contain
customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the
realization of the benefits of any security or collateral.
Employee Benefit Plans.
Neither CorpBank nor any CorpBank Subsidiary has, or
contributes to, any pension, profit-sharing, option, other
incentive plan, or any other type of Employee Benefit Plan (as
defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA"), or has any obligation or
customary arrangement with employees for bonuses, incentive
compensation, vacations, severance pay, insurance, or other
benefits, except as set forth in Schedule 3.23(a). Attached as
Schedule 3.23(b) are true and correct copies signed by the Chief
Executive Officer and Chief Financial Officer of CorpBank of all
documents evidencing plans, obligations or arrangements referred
to in Schedule 3.23(a) (or true and correct written summaries as
initialled of such plans, obligations or arrangements to the
extent not evidenced by documents) and true and correct copies of
all documents evidencing trusts related to any such plans. The
documents attached to Schedule 3.23(a) shall include: (i) the
Form 5500 which was filed in each of the three most recent plan
years or such shorter period of time during which each of the
plans was in existence, including without limitation all
schedules thereto; (ii) the most recent determination letter from
the Internal Revenue Service; (iii) the statement of assets and
liabilities as of the most recent valuation date for each of the
defined benefit pension plans; (iv) the most recent plan
document, together with all amendments; (v) the most recent
summary plan description for each plan, to the extent it is
required by law, and (vi) the most recent trust agreement for
each plan, to the extent required by law, together with all
amendments.
If any Employee Benefit Plan of CorpBank or any
CorpBank Subsidiary were to be terminated not later than the day
prior to the date of the Closing, (i) no liability under Title IV
of ERISA would be incurred by CorpBank or any CorpBank Subsidiary
and (ii) all benefits accrued to such day prior to the Closing
Date (whether or not vested) under any defined benefit plan would
be fully funded in accordance with the assumptions contained in
the regulations of the Pension Benefit Guaranty Corporation
governing the funding of terminated defined benefit plans. All
accrued liabilities (for contributions or otherwise) of CorpBank
or any CorpBank Subsidiary as of the Closing Date to each
Employee Benefit Plan and with respect to each obligation to
<PAGE> 25
or customary arrangement with employees for bonuses,
incentive compensation, vacations, severance pay, insurance or
other benefits have been paid and no payment to any such Employee
Benefit Plan or with respect to any such obligation or arrange
ment since December 31, 1994 has been disproportionately large
compared to prior payments. For purposes of the preceding
sentence, accrued liabilities shall include a pro rata contri
bution to each Employee Benefit Plan or with respect to each such
obligation or arrangement for that portion of a plan year or
other applicable period which precedes the Closing Date, and
accrued liabilities for any portion of a plan year or other
applicable period shall be determined by multiplying the
liability for the entire such year or period by a fraction, the
numerator of which is the number of days preceding the date of
the Closing Date in such year or period and the denominator of
which is the number of days in such year or period, as the case
may be.
There has been no violation of the reporting and
disclosure requirements imposed either under ERISA or the Code
for which a penalty has been or may be imposed with respect to
any such Employee Benefit Plan of CorpBank or any CorpBank
Subsidiary. No such Employee Benefit Plan or related trust has
any liability of any nature, accrued or contingent, including
without limitation liabilities for federal, state, local or
foreign taxes, other than for routine payments to be made in due
course to participants and beneficiaries, except as set forth in
Schedule 3.23(c). There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal) or
investigation pending, or to the knowledge of CorpBank or any
CorpBank Subsidiary, threatened (or any basis therefor known to
CorpBank or any CorpBank Subsidiary) with respect to any such
Employee Benefit Plan or related trust or with respect to any
fiduciary, or to the knowledge of CorpBank or any CorpBank
Subsidiary, administrator or sponsor (in its capacity as such) of
any such Employee Benefit Plan. No such Employee Benefit Plan or
related trust and no obligation or arrangement is in violation
of, or in default with respect to, any law, rule, regulation,
order, judgment or decree nor is CorpBank or any CorpBank
Subsidiary or any such Employee Benefit Plan or any related trust
required to take any action in order to avoid violation or
default. No event has occurred or (to the knowledge of CorpBank
and CorpBank Subsidiaries) is threatened or about to occur which
would constitute a prohibited transaction under Section 406 of
ERISA.
The Internal Revenue Service has issued determinative
letters to the effect that each Pension Plan (as defined in
Section 3(2) of ERISA) maintained for the employees of CorpBank
or any CorpBank Subsidiary that is intended by CorpBank to be a
qualified plan under Section 401(a) of the Code and any related
trust is an exempt trust under Section 501 of the Code. and
nothing has occurred that would jeopardize the tax qualified
status of such Pension Plan or the tax exempt status of its
associated trust. No event has occurred that will subject any
such Pension Plan to a material amount of tax under Section 511
of the code. Any such Pension Plan which has engaged in a
<PAGE> 26merger, consolidation with any other plan or transfer
of assets
or liabilities from any other plan, has done so incompliance with
applicable law in all material respects. Each such Pension Plan
has been operated in accordance with its terms. To the best
knowledge of CorpBank and CorpBank Subsidiaries, no investigation
or review by the Internal Revenue Service is currently pending or
is contemplated in which the Internal Revenue Service has
asserted or may assert that any such Pension Plan which is
intended by CorpBank to be qualified is not qualified under
Section 401(a) of the Code or that any related trust is not
exempt under Section 501 of the Code. No assessment of any
federal income taxes has been made or (to the knowledge of
CorpBank and CorpBank Subsidiaries) is contemplated against any
CorpBank- or any CorpBank Subsidiary-related trust or any Pension
Plan or the basis of a failure of such qualification or
exemption. Form 5500's have been timely filed with respect to
all such Pension Plans to the extent required under applicable
law. No event has occurred or (to the knowledge of CorpBank and
CorpBank Subsidiaries) is threatened or about to occur which
would constitute a reportable event within the meaning of Section
4043(b) of ERISA. No notice of termination has been filed by the
plan administrator pursuant to Section 4041 of ERISA or issued by
the Pension Benefit Guaranty Corporation pursuant to Section 4042
of ERISA with respect to any such Pension Plan.
Neither CorpBank nor any CorpBank Subsidiary
contributes to any multi-employer Pension Plan within the meaning
of Section 3(37) of ERISA.
Each Pension Plan maintained by CorpBank or to which
CorpBank contributes has been amended to comply with the
requirements of the Tax Reform Act of 1986 and later legislation
on a timely basis and has been submitted or will be submitted to
the Internal Revenue Service for a determination on such Pension
Plan's qualifies status prior to the expiration of the remedial
amendment period set forth under Section 401(b) of the Code.
Neither CorpBank nor any CorpBank subsidiary sponsor
or participate in, and has not sponsored or participated in, any
employee benefit pension plan to which Section 4021 of ERISA
applies that would create a material amount of liability to
CorpBank or any CorpBank Subsidiary under Title IV of ERISA.
All group health plans of CorpBank have been operated
in compliance with the group health plan continuation coverage
requirements of Section 4980B of the Code in all material
respects, to the extent such requirements are applicable.
Except as referred to on Schedule 3.23(a) CorpBank
does not maintain any employee benefit plan or employment
agreement pursuant to which any material benefit or other payment
will be required to be made by CorpBank or pursuant to which any
other material benefit will accrue on or
<PAGE> 27
vest in any
director, officer or employee of CorpBank, in either case solely
as a result of consummation of the transactions contemplated in
this Agreement.
Loan Servicing Portfolio. Except as set forth on Schedule
3.24, neither CorpBank nor any CorpBank Subsidiary services loans
owned in whole or in part by other persons.
Filings. Since January 1, 1994, CorpBank and each CorpBank
Subsidiary 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
Superintendent (b) the Federal Reserve Bank of San Francisco
("Fed") or any Federal Reserve Bank, (c) the FDIC, and (d) any
other applicable federal, foreign, state or local governmental or
regulatory authorities. Since January 1, 1990, CorpBank and each
CorpBank Subsidiary have filed all required call reports of
condition and income with all appropriate bank regulatory
agencies. All such reports, registrations and filings are
collectively referred to as the "CorpBank Regulatory Filings."
Upon request by CUB and subject to applicable legal restrictions,
CorpBank will promptly provide to CUB all CorpBank Regulatory
Filings filed by CorpBank or any CorpBank Subsidiary since
January 1, 1990 together with copies of any orders or other
administrative actions taken in connection with such CorpBank
Regulatory Filings. As of their respective dates, each of the
past CorpBank Regulatory 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. Any financial
statement contained in any of such Filings that was intended to
present the financial position of the entities or entity to which
it related fairly presented the financial position of such
entities or entity and was prepared in accordance with GAAP or
applicable banking regulations consistently applied except as
stated therein during the periods involved.
Powers of Attorney. No material power of attorney or
similar authorization given by CorpBank or any CorpBank
Subsidiary is presently in effect or outstanding other than
powers of attorney given in the ordinary course of business with
respect to routine matters.
Accuracy and Current Status of Information Furnished. The
representations and warranties made by CorpBank and CorpBank
Subsidiaries hereby or in the Schedules attached hereto contain
no statements of fact which are untrue or misleading, or omit any
material fact which is necessary under the circumstances to
prevent the statements contained herein or
<PAGE> 28
in such Schedules from being misleading. CorpBank and CorpBank
Subsidiaries hereby covenant that they shall, not later than the
15th day of each calendar month between the date hereof and the
Closing Date, amend or supplement the Schedules prepared and
delivered pursuant to this Article 3 to ensure that the
information set forth in such Schedules accurately reflects the
then-current status of CorpBank and all CorpBank Subsidiaries.
CorpBank and CorpBank Subsidiaries shall further amend or
supplement the Schedules as of the Closing Date if necessary to
reflect any additional changes in the status of CorpBank or any
CorpBank Subsidiary.
Effective Date of Representations, Warranties, Covenants
and Agreements. Each representation, warranty, covenant and
agreement of CorpBank and CorpBank Subsidiaries set forth in this
Agreement shall be deemed to be made on and as of the date hereof
(unless otherwise set forth in the Schedules hereto) and as of
the Closing Date.
Sale of Real Estate Development Subsidiary. The sale of
Corporate Investment Company by CorpBank was a sale of all the
outstanding shares and interests held by CorpBank in such entity.
Such sale was without recourse and all representations or
warranties made by CorpBank in connection with such transaction
have been terminated. CorpBank has no indemnity obligations to
any party for breaches of representations, warranties, covenants
or any agreements in connection with such sale.
Information furnished by CorpBank and CorpBank
Subsidiaries. No information relating to CorpBank or CorpBank
Subsidiaries furnished to CUB or Bancorp for the Registration
Statement referred to in Section 5.11, including al amendments
and supplements thereto, 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 contained
therein not misleading. In the event of any occurrence prior to
the effective date of the Registration Statement which would
cause any material information relating to CorpBank or CorpBank
subsidiaries to be untrue or misleading, CorpBank shall so notify
CUB and Bancorp and shall furnish CUB and Bancorp with such
information as may be necessary to correct any such deficiencies.
. REPRESENTATIONS AND WARRANTIES OF BANCORP AND CUB
Bancorp and CUB represent and warrant to CorpBank as follows:
Organization, Standing and Power. Bancorp 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, lease and operate its properties and
assets and to carry on its business as presently conducted. CUB
is a national banking association, duly organized and validly
existing and in good standing under the laws of the United States
of America and has all requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on
its business as presently conducted.
Bancorp Capital Stock. The authorized capital stock
of Bancorp at December 31, 1994 consisted of 20,000,000 shares
of Bancorp Stock, without par value ("Bancorp Common Stock"), of
which there were 4,467,318 issued and outstanding, and
10,000,000 shares of preferred stock, without par value ("Bancorp
Preferred Stock"), of which there were none issued and
outstanding. All of the outstanding shares of Bancorp Stock are
duly authorized, validly issued and are fully paid and
nonassessable. When issued, Bancorp Stock to be issued pursuant
to the Merger will have been duly and validly authorized, issued
and outstanding and will be fully paid and nonassessable.
Subsidiaries. With the exception of CUB, Bancorp does not
own, directly or indirectly (except as pledgee pursuant to loans
which are not in default), any equity position or other voting
interest in any corporation, partnership, joint venture or other
entity. Bancorp owns of record and beneficially 100% of each
class of the outstanding capital stock of CUB free and clear of
any lien, encumbrance or security interest and of any adverse
claim of any kind.
California United Bank, National Association. CUB is
authorized by the OCC to conduct a general banking business. CUB
is a member of the Federal Reserve System. CUB's deposits are
insured by the Federal Deposit Insurance Corporation ("FDIC") in
the manner and to the full extent provided by law. The
authorized capital stock of CUB at December 31, 1994, consisted
of 540,000 shares of CUB Common Stock, $5.00 par value, of which
there were 472,973 issued and outstanding. All of the
outstanding shares of CUB Stock are validly issued, fully paid
and nonassessable, except as provided for in Section 55 of Title
12 of the United States Code.
Bancorp Reports. Bancorp has previously furnished to
CorpBank true and complete copies of its (i) Annual Report on
Form 10-K for the years ended December 31, 1993 and 1992, (ii)
Quarterly Reports on Form 10-Q for the calendar quarters ended
March 31, June 30, and September 30, 1994, (iii) proxy statements
relating to all meetings of shareholders (whether special or
annual) during 1993 and 1994, and (iv) all other reports,
registration statements or filings made by Bancorp with the SEC
since January 1, 1993. Bancorp will deliver to CUB true and
complete copies of its Annual Report on Form 10-K for the year
ended December 31, 1994 within five days of filing the same with
the SEC. Such reports, registration statements and other
filings, together with any amendments thereof, are collectively
referred to as the "Bancorp SEC Filings". As of their respective
dates, the Bancorp SEC Filings were (or will be when filed) in
compliance, in all material respects, with the
<PAGE> 29
require ments of their respective forms and were (or will be when filed)
true and complete in all material respects and did not (or will
not when filed) 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. The
audited financial statements and the unaudited interim financial
statements included in the Bancorp SEC Filings were (or will be)
prepared in accordance with GAAP and present (or will present)
fairly the consolidated financial position of Bancorp and its
subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flow for the periods then ended,
subject, in the case of the unaudited interim financial
statements, to normal recurring adjustments. Neither the
financial statements referred to above nor any report (including,
without limitation, Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q or Current Reports on Form 8-K), prospectus,
or any amendment or supplement thereto, filed, or to be filed,
prior to the Effective Time of the Merger with the SEC by or on
behalf of Bancorp contained (or will contain when furnished or
filed) any untrue statement of a material fact or omitted (or
will omit when furnished or filed) to state a material fact
necessary in order to make the statements contained therein not
misleading.
<PAGE> 30
Bancorp's and Bancorp Subsidiaries' Authority. The
execution and delivery by Bancorp and CUB of this Agreement and
the Agreement of Merger and, subject to the requisite approval of
the shareholder of CUB, the consummation of the transactions
contemplated hereunder or thereunder, have been duly and validly
authorized by all necessary corporate action on the part of
Bancorp and CUB, and this Agreement is, and the Agreement of
Merger will be upon due certification, execution, acknowledgment
and filing thereof in accordance with applicable law, a valid and
binding obligation of Bancorp and CUB, enforceable in accordance
with their terms, except as the enforceability hereof or thereof
may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally and by
general equitable principles. Except as set forth in
Schedule 4.6, neither the execution and delivery by Bancorp and
CUB of this Agreement or the Agreement of Merger, nor the
consummation of the transactions contemplated herein or therein,
nor compliance by Bancorp and CUB with the provisions hereof or
thereof, will (i) conflict with or result in a breach of any
provision of their respective Articles of Incorporation, Articles
of Association or Bylaws; (ii) constitute a breach of, or result
in a default (or give rise to any rights of termination,
cancellation or acceleration, or any right to acquire any
securities or assets) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, franchise,
license, permit, agreement or other instrument or obligation to
which Bancorp CUB is a party, or by which Bancorp or CUB or any
of their respective properties or assets are bound, except where
such breach or default would not have a material adverse effect
on the consolidated financial condition, results of operations or
prospects of Bancorp; (iii) constitute a breach of, or result in
a default (or give rise to any rights of termination,
acceleration or cancellation, or any right to acquire any
securities or assets) under any material agreement to which
Bancorp or CUB or any of their respective properties or assets
are bound; or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Bancorp or CUB. No
consent or approval of, notice to or filing with any governmental
authority having jurisdiction over any aspect of the business or
assets of Bancorp or CUB, and except as set forth in Schedule 4.6
no consent or approval of or notice to or filing with any other
person or entity, is required in connection with the execution
and delivery by Bancorp and CUB of this Agreement or the
Agreement of Merger or the consummation by Bancorp and CUB of the
transactions contemplated hereunder or thereunder, except
approval of the Merger by the shareholder of CUB, and such
approvals as may be required by the OCC pursuant to Sections
215a and 1828(c) of Title 12 of the United States Code or any
successor statutes ("Merger Statutes") with respect to the Bank
Merger; such approvals as may be required by the Federal Reserve
Board with respect to the transactions contemplated herein and in
the Merger Agreement, such approvals by the Superintendent as may
be required and the declaration by the SEC and state securities
law regulatory authorities that the Registration Statement (as
<PAGE> 31
defined in Section 5.11) is effective and that Bancorp
Stock to be issued in connection with the Merger is qualified
under applicable state securities laws.
Insurance. Except as set forth in Schedule 4.7, Bancorp
and CUB have, and at all times within two years of the date of
this Agreement have had, in full force and effect policies of
insurance and bonds (including, without limitation, bankers'
blanket bond, fidelity coverage, director and officer liability,
fire, third party liability, use and occupancy) with respect to
their respective assets and businesses and against casualties and
contingencies which in the judgment of Bancorp and CUB are
adequate and appropriate to cover their respective assets and
businesses and are in amounts and coverages customarily provided
for by similar institutions. Set forth in Schedule 4.7 is a
schedule of all policies of insurance and bonds (other than title
or credit insurance) carried and owned by Bancorp and CUB,
showing the name of the insurance or bonding company, a summary
of the coverage, the amounts, the deductible feature, the annual
premiums and the expiration dates. Neither Bancorp nor CUB is in
default under any such policy of insurance or bond such that it
could be cancelled and all material claims thereunder have been
filed in timely fashion. Bancorp and CUB have filed claims with
or given notice of claim to their respective insurers or bonding
companies with respect to all material matters and occurrences
for which they believe they have coverage.
Registration Statement. The Registration Statement
required pursuant to Section 5.11 and any other documents to be
filed with the OCC, the SEC or any regulatory authority in
connection with the transactions contemplated by this Agreement
with respect to all information set forth therein relating to
Bancorp and CUB, the Merger and in respect to this Agreement and
the Agreement of Merger will, at the respective times such docu
ments are filed or become effective, and with respect to the
Proxy Statement, at the time of mailing to shareholders, and at
the time of the shareholders' meeting:
comply in all material respects with the provisions of
all applicable regulations issued by the SEC or the OCC pursuant
to the Securities Exchange Act of 1934, as amended ("1934 Act"),
and all other applicable laws and regulations; and
do not contain any statement which, at the time and in
light of the circumstances under which it is made, is false or
misleading with respect to any material fact or omit any material
fact necessary in order to make the statements therein not false
or misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of a proxy
for the same meeting or subject matter which have become false or
misleading.
Books and Records.
The minute books of Bancorp and CUB contain (i) true,
accurate and complete records of all meetings and
<PAGE> 32
actions taken by the respective Boards of Directors, Board
committees and shareholders of Bancorp and CUB and (ii) true and
complete copies of their respective charter documents and bylaws
and all amendments thereto. The books and records of Bancorp and
CUB accurately reflect in all material aspects their respective
businesses and affairs.
Bancorp and CUB have records which accurately and
validly reflect, in all material respects, their respective
transactions and accounting controls sufficient to insure that
such transactions are (i) in all material respects, executed in
accordance with management's general or specific authorization,
and (ii) recorded in conformity with GAAP; such records, to the
extent they contain important information pertaining to Bancorp
or CUB which is not easily and readily available elsewhere, have
been duplicated, and such duplicates are stored safely and
securely pursuant to procedures and techniques reasonably
adequate for companies of the sizes of Bancorp and CUB and in the
respective businesses in which Bancorp and CUB are engaged; and
the data processing equipment, data transmission equipment,
related peripheral equipment and software used by Bancorp and CUB
in the operations of their respective businesses (including any
disaster recovery facility) to generate and retrieve such records
are reasonably adequate for companies of the sizes of Bancorp and
CUB and in the respective businesses in which Bancorp and CUB are
engaged.
Title to Assets. Bancorp and CUB have good and marketable
title to all material properties and assets, other than real
property, owned or purported to be owned by Bancorp and CUB free
and clear of all mortgages, liens, encumbrances, pledges or
charges of any kind or nature, except for (i) liens for current
taxes not yet due and payable; (ii) liens incurred in the
ordinary course of business and which do not materially impair
the business of Bancorp or CUB or materially detract from the
usefulness of the properties subject thereto; or (iii) such liens
as are disclosed in the Bancorp Financial Statements of December
31, 1994 or in Schedule 4.10.
Real Estate. Schedule 4.11(a) contains a list of all real
property, including leaseholds, owned by Bancorp and CUB. True,
correct and complete copies of all such leases are included in
Schedule 4.11(a). Schedule 4.11(b) contains, among other things,
an accurate summary of all material commitments which Bancorp or
CUB has to improve real estate owned by it. Schedule 4.11(c)
contains a list of other real estate owned ("OREO") by Bancorp
and CUB. Bancorp and CUB have good and marketable title to all
the real property and valid leasehold interests in the leaseholds
described in Schedules 4.11(a), (b) and (c), free and clear of
all mortgages, covenants, conditions, restrictions, easements,
liens, security interests, charges, claims, assessments and encum
brances, except for (i) rights of lessors, co-lessees or
sublessees in such matters which are reflected in the leases;
(ii) current taxes not yet due and payable; (iii) such as are
described in any title policies delivered pursuant to this
Section 4.11; (iv) such imperfections
<PAGE> 33
of title and
encumbrances, if any, as do not in the aggregate materially and
adversely detract from the value of or materially and adversely
interfere with the present use of such property; and (v) as
described in Schedule 4.11(d). True, correct and complete copies
of title policies for properties described in Schedules 4.11(a)
and (c) as owned by Bancorp or any Bancorp Subsidiary are
included therein. To the best knowledge of Bancorp and CUB, the
activities of Bancorp and CUB with respect to all real property
and leaseholds owned by any of them for use in connection with
their respective operations are in all material respects
permitted and authorized by applicable zoning laws, ordinances
and regulations and all laws and regulations of any governmental
department or agency relative to environmental matters affecting
such properties, except as otherwise disclosed in
Schedule 4.11(e). Bancorp and CUB enjoy peaceful and undisturbed
possession under all material leases to which they are parties,
and all of such leases are valid and in full force and effect.
Legal Proceedings; Agreements with Banking Authorities.
Except as set forth on Schedule 4.12(a), there is no
private or governmental suit, claim, action, arbitration or
proceeding pending, nor any private or governmental suit, claim,
action, arbitration or proceeding to Bancorp's or CUB's knowledge
threatened, nor does Bancorp or CUB know of any facts or
circumstances which would form a basis for any such suit, claim,
action, arbitration or proceeding against Bancorp or CUB or
against any of their respective directors, officers or employees
relating to the performance of their duties in such capacities or
against or affecting any properties of Bancorp or CUB which
individually, or in the aggregate, could have a material adverse
effect upon the consolidated financial condition, business or
results of operations of Bancorp or the transactions contemplated
hereunder. Also, except as provided on Schedule 4.12(a), there
are no judgments, decrees, stipulations or orders against
Bancorp or CUB enjoining it or any of its respective directors,
officers or employees in respect of, or the effect of which is to
prohibit, any business practice or the acquisition of any
property or the conduct of business in any area. Schedule
4.12(b) contains summary reports of Bancorp's and CUB' attorneys
on all pending litigation to which Bancorp or CUB is a party and
which names Bancorp or CUB as a defendant or cross-defendant.
Schedule 4.12(c) contains a true, correct and complete list of
all pending litigation in which Bancorp or CUB is a named party.
Neither Bancorp nor CUB is a party to any agreement or
memorandum of understanding with any federal, state or foreign
governmental or regulatory authority charged with the supervision
or regulation of banks or bank holding companies or engaged in
the insurance of bank deposits that restricts the conduct of its
business, or in any manner relates to its capital adequacy, its
credit or investment policies or its management.
<PAGE> 34
Taxes. Except as set forth on Schedule 4.13, (i) all
federal income tax returns, all state tax returns, and all real
and personal property, sales, use and other tax returns and
reports that are required by law to be filed by or on behalf of
Bancorp or CUB have been duly prepared and filed; (ii) all taxes
shown to be due and payable by Bancorp or CUB on those returns,
or which are otherwise due and payable, whether disputed or not,
have been paid or the liability therefor is reflected in the
Bancorp Financial Statements; (iii) Bancorp and CUB have paid or
deposited all taxes, tax penalties or interest owed by them or
which they are obligated to withhold and deposit from amounts
paid to any employee, creditor, depositor or third party; and
(iv) Bancorp and CUB have complied with all reporting
requirements of the Internal Revenue Code of 1986 or its
predecessor statutes as applicable (the "Code") including, but
not limited to, obtaining taxpayer identification numbers. The
current status of any audits of those returns by the Internal
Revenue Service or other applicable agencies is as set forth in
Schedule 4.13. There are no agreements by Bancorp or CUB waiving
a statute of limitations or extending the time for assessment or
payment of any taxes payable by any of them.
Compliance with Laws and Regulations.
Except as set forth on Schedule 4.14, neither Bancorp
nor CUB is in default under or in breach of any law, ordinance,
rule, regulation, order, judgment or decree applicable to it
promulgated by any governmental agency having authority over it,
where such default or breach would have a material adverse effect
on the consolidated financial condition, results of operations,
business or prospects of Bancorp.
Bancorp and CUB have conducted their businesses in
accordance with all applicable federal, foreign, state and local
laws, regulations and orders including, without limitation,
disclosure, usury, equal credit opportunity, equal employment,
fair credit reporting, antitrust, licensing and other laws,
regulations and orders, and the forms, procedures and practices
used by Bancorp and CUB are in compliance with such laws,
regulations and orders except for such violations or non-
compliance as will not have a material adverse effect on the
consolidated financial condition, results of operations, business
or prospects of Bancorp.
Performance of Obligations. Except as set forth on
Schedule 4.15, Bancorp and CUB have performed in all respects all
of the obligations required to be performed by them to date and
are not in default under or in breach of any term or provision of
any covenant, contract, lease, indenture or any other covenant to
which Bancorp or CUB is a party or is subject or is otherwise
bound, and no event has occurred which, 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 the consolidated financial condition, results
of operations, business or prospects of Bancorp. No
<PAGE> 35party with whom Bancorp or CUB has an agreement which is
material to the consolidated financial condition, results of
operations or prospects of Bancorp is in default thereunder,
except for certain loans made by the Bank which have been
identified to Bancorp and CUB.
Employees. Except as set forth in Schedule 4.16(a), there
are no understandings for the employment of any officer or
employee of Bancorp or CUB which are not terminable by Bancorp or
CUB without liability on not more than 30 days' notice. Except
as set forth in Schedule 4.16(b), there are no material
controversies pending or threatened between (i) Bancorp or CUB
and (ii) any of their respective employees. Except as disclosed
in the Bancorp Financial Statements at December 31, 1994 or on
Schedule 4.16(c), all material sums due for employee compensation
and benefits have been duly and adequately paid or provided for
and all deferred compensation obligations are fully funded.
Neither Bancorp nor CUB is a party to any collective bargaining
agreement with respect to any of their respective employees or
any labor organization to which their employees or any of them
belong. Except as set forth on Schedule 4.16(c), no director,
officer or employee of Bancorp or CUB is entitled to receive any
payment of any amount under any existing employment agreement,
severance plan or other benefit plan as a result of the
consummation of any transaction contemplated by this Agreement.
Brokers and Finders. Neither Bancorp nor CUB is a party to
any agreement with any investment banker, broker or finder
relating to the transactions contemplated hereby, and neither the
execution of this Agreement nor the consummation of the
transactions provided for or contemplated herein will result in
any liability to any such investment banker, broker or finder.
Bancorp agrees to indemnify and hold CorpBank harmless from and
against any and all claims, liabilities or obligations with
respect to any fees, commissions or expenses asserted by any
person on the basis of any act, statement, agreement or
commitment alleged to have been made by Bancorp or CUB relating
to the employment of any such investment broker, broker or finder
relating to the execution of this Agreement or the consummation
of the transactions contemplated hereby.
Material Contracts. Except as set forth on Schedule 4.18
or excepted below, neither Bancorp nor CUB is a party to any
material contract, agreement, understanding, commitment or offer,
whether written or oral, which may become a binding obligation if
accepted by another person (collectively referred to as an
"Understanding") including the following:
Any loan, letter of credit, pledge, security
agreement, lease (excluding transactions in the ordinary course
of the banking business and leases of real property listed on
Schedule 4.11(a)), guarantee, commitment or subordination
agreement or other similar or related type of Understanding as to
<PAGE> 36
which Bancorp or CUB is a debtor, pledgor, lessee or obligor;
Any Understanding dealing with advertising, brokerage,
licensing, dealership, representative or agency relationships
providing for an aggregate annual payment in excess of $25,000;
Any profit-sharing, group insurance, bonus, deferred
compensation, stock option, severance pay, pension, retirement or
other employee benefit plan;
Any written correspondent banking contracts;
Any Understanding (other than this Agreement) for the
sale of their respective assets other than in the ordinary course
of business or for the grant of any preferential right to
purchase any of their respective assets, properties or rights, or
any Understanding which requires the consent of any third party
to the transfer and assignment of any assets, properties or
rights. For purposes of this provisions sales of CUB's mortgage
servicing portfolio shall be considered to be in the ordinary
course of business;
Any Understanding which provides for an annual payment
in excess of $250,000 in the aggregate to purchase, sell or
provide services, materials, supplies, merchandise, facilities or
equipment and which is not terminable without penalty on not more
than 30 days' notice;
Any Understanding for any one capital expenditure or
series of capital expenditures which is in excess of $200,000
individually or $500,000 in the aggregate;
Any Understanding to make, renew or extend the term of
a loan (not fully disbursed or funded as of December 31, 1994) to
any person or to any affiliate of such person, which undisbursed
or unfunded amounts, when aggregated with all outstanding
indebtedness of such person or any affiliate of such person to
Bancorp or CUB, would exceed $2,500,000. The term "person" as
used herein and throughout this Agreement shall mean any
individual, corporation, association, partnership, joint venture
or other entity or any government or governmental department or
agency. The term "affiliate of" or a person "affiliated with" a
specific person as used herein and throughout this Agreement
shall mean a person that directly or indirectly through one or
more intermediaries controls or is controlled by or under common
control with the persons specified;
Any Understanding of any kind, except for deposit
relationships, and overdraft lines of credit or credit cards not
exceeding $25,000 individually, with any director or officer of
Bancorp or CUB or with any affiliate or any member of the
immediate family of any such director or officer. The term
"immediate family" as used herein and throughout this Agreement
shall mean a person's spouse, parents, in-laws, children and
siblings;
<PAGE> 37
Any Understanding which would be terminable other than
by Bancorp or CUB as a result of the consummation of the
transactions contemplated by this Agreement;
Any contract of participation with any other bank in
any loan entered into by Bancorp or CUB subsequent to
December 31, 1994 in excess of $2,500,000 or any sales of assets
of Bancorp or CUB with recourse of any kind to Bancorp or CUB
except the sale of mortgage loans, servicing rights, repurchase
or reverse repurchase agreements, securities or other financial
transactions in the ordinary course of business;
Any Understanding of any kind that binds Bancorp or
CUB and contains a covenant not to compete; or
Any Understanding not otherwise disclosed or excepted
pursuant to this Section 4.18 which is material to the
consolidated financial condition, results of operations, assets
or business of Bancorp.
True and correct copies of all documents relating to the
foregoing Understandings are attached as Schedule 4.18.
Absence of Certain Changes. Except as set forth on
Schedule 4.19, since December 31, 1994 the businesses of Bancorp
and CUB have been conducted diligently and only in the ordinary
course, in the same manner as theretofore conducted, and there
has not been any:
Material adverse change in, or development which is
likely to result in a material adverse change in or affect, the
business, prospects, financial position, management,
shareholders' equity or results of operations of Bancorp on a
consolidated basis;
Damage, destruction or loss to property (whether or
not covered by insurance) individually or in the aggregate that
materially and adversely affects the financial condition,
property, business or prospects of Bancorp on a consolidated
basis;
Material contract, agreement, license or understanding
which Bancorp or CUB has entered into or to which Bancorp or CUB
is a party which has been terminated or amended other than in the
ordinary course of business;
Capital expenditure exceeding $200,000 individually or
$500,000 in the aggregate;
Labor trouble, dispute or problem of any character
involving employees having a material adverse effect upon the
financial condition, property, business or prospects of Bancorp
on a consolidated basis;
Change in accounting policies or practices;
<PAGE> 38
Material revaluation by Bancorp on a consolidated
basis of any of its assets except as required by GAAP;
Increase in the salary schedule, compensation, rate,
fees or commissions, or the declaration, payment, commitment or
obligation of any kind directly or indirectly through the payment
by Bancorp or CUB of a bonus or other additional salary, compen
sation, fee or commission to any person, except for additional
sums for increases paid in accordance with employment contracts
disclosed in Schedule 4.18 or paid in the ordinary course of
business in a manner consistent with past practice (which
provides for annual performance reviews during the first quarter
of each year and which may result in salary increases and/or
bonuses at such time);
Sale, assignment or transfer of any asset of Bancorp
or CUB except in the usual and ordinary course of business;
Mortgage, pledge or encumbrance of any asset of
Bancorp or CUB other than liens for taxes not yet due, pledges or
security interests given in connection with the acceptance of
repurchase agreements or government deposits;
Waiver or release of any right or claim of Bancorp or
CUB except in the usual and ordinary course of business; or
Declaration, setting aside or payment of any dividend
or distribution with respect to Bancorp Stock, or the stock of
Bancorp or the issuance of any shares of, or options to purchase,
Bancorp Stock, or any other securities of Bancorp or any
securities of Bancorp with the exception of a $.02 per share
dividend to Bancorp shareholders declared February 28, 1995, a
$90,000 dividend to the shareholder of CUB declared February 6,
1995 and the issuance of stock options to employees and directors
and set forth in respective stock option plans and in accordance
with the ordinary conduct of their respective businesses.
Licenses and Permits. Bancorp and CUB have all licenses
and permits which are necessary for the conduct of their
respective businesses and such licenses are in full force and
effect. The properties and operations of Bancorp and CUB are and
have been maintained and conducted, in all material respects, in
compliance with all applicable laws and regulations.
Undisclosed Liabilities. Neither Bancorp nor CUB have any
liabilities or obligations, either accrued or contingent, which
are material to Bancorp on a consolidated basis and which have
not been either (i) reflected or disclosed in the Bancorp
Financial Statements as of December 31, 1994; (ii) incurred sub
sequent to December 31, 1994 in the ordinary course of business;
or (iii) disclosed in Schedule 4.21. Bancorp knows of no basis
for the assertion against it or CUB of any liability, obligation
or claim (including, without limitation,
<PAGE> 39
that of any
regulatory authority) that might result in or cause material
adverse change in the consolidated financial condition, results
of operations or prospects of Bancorp which is not fairly
reflected in the Bancorp Financial Statements or otherwise
disclosed in the Schedules to this Agreement.
Loans and Investments. All loans and investments of
Bancorp and CUB are in all material respects legal, enforceable
and authorized under applicable federal and state laws and regula
tions 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. Except as set forth in Schedule 4.22, no
loans or investments held by Bancorp or CUB are, at December 31,
1994 (i) more than 90 days past due with respect to any scheduled
payment of principal or interest; (ii) classified as "loss,"
"doubtful," "substandard," "special mention" or "criticized" by
federal banking regulators; or (iii) on a non-accrual status in
accordance with Bancorp and CUB' loan review procedures. None of
such investments are subject to any restriction, 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 such investments under the Securities
Act of 1933, as amended ("Securities Act"), and the regulations
thereunder, or state securities laws.
Employee Benefit Plans.
Neither Bancorp nor CUB has, or contributes to, any
pension, profit-sharing, option, other incentive plan, or any
other type of Employee Benefit Plan (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974 ("ERISA"),
or has any obligation or customary arrangement with employees for
bonuses, incentive compensation, vacations, severance pay,
insurance, or other benefits, except as set forth in Schedule
4.23(a). Attached as Schedule 4.23(b) are true and correct
copies signed by the Chief Executive Officer and Chief Financial
Officer of Bancorp of all documents evidencing plans, obligations
or arrangements referred to in Schedule 4.23(a) (or true and
correct written summaries as initialled of such plans,
obligations or arrangements to the extent not evidenced by
documents) and true and correct copies of all documents
evidencing trusts related to any such plans.
There has been no material violation of the reporting
and disclosure requirements imposed either under ERISA or the
Code for which a material penalty has been or may be imposed with
respect to any such Employee Benefit Plan of Bancorp or CUB. No
such Employee Benefit Plan or related trust has any material
liability of any nature, accrued or contingent, including without
limitation liabilities for federal, state, local or foreign
taxes, other than for routine payments to be made in due course
to participants and beneficiaries, except as set forth in
Schedule 4.23(c). There is no litigation, arbitration, claim,
governmental or other proceeding (formal or
<PAGE> 40
informal) or
investigation pending, or to the knowledge of Bancorp or CUB,
threatened (or any basis therefor known to Bancorp or CUB) with
respect to any such Employee Benefit Plan or related trust or
with respect to any fiduciary, or to the knowledge of Bancorp or
CUB, administrator or sponsor (in its capacity as such) of any
such Employee Benefit Plan. No such Employee Benefit Plan or
related trust and no obligation or arrangement is in material
violation of, or in default with respect to, any law, rule,
regulation, order, judgment or decree nor is Bancorp or CUB or
any such Employee Benefit Plan or any related trust required to
take any action in order to avoid violation or default. No event
has occurred or (to the knowledge of Bancorp and CUB) is
threatened or about to occur which would constitute a prohibited
transaction under Section 406 of ERISA.
The Internal Revenue Service has issued determinative
letters to the effect that each Pension Plan (as defined in
Section 3(2) of ERISA) maintained for the employees of Bancorp or
CUB that is intended by Bancorp to be a qualified plan under
Section 401(a) of the Code and any related trust is an exempt
trust under Section 501 of the Code. Each such Pension Plan has
been operated materially in accordance with its terms. To the
best knowledge of Bancorp and CUB, no investigation or review by
the Internal Revenue Service is currently pending or is
contemplated in which the Internal Revenue Service has asserted
or may assert that any such Pension Plan which is intended by
Bancorp to be qualified is not qualified under Section 401(a) of
the Code or that any related trust is not exempt under Section
501 of the Code. No assessment of any federal income taxes has
been made or (to the knowledge of Bancorp and CUB) is
contemplated against any Bancorp- or CUB-related trust or any
Pension Plan or the basis of a failure of such qualification or
exemption. Form 5500's have been timely filed with respect to
all such Pension Plans to the extent required under applicable
law. No event has occurred or (to the knowledge of Bancorp and
CUB) is threatened or about to occur which would constitute a
reportable event within the meaning of Section 4043(b) of ERISA.
No notice of termination has been filed by the plan administrator
pursuant to Section 4041 of ERISA or issued by the Pension
Benefit Guaranty Corporation pursuant to Section 4042 of ERISA
with respect to any such Pension Plan.
Neither Bancorp nor CUB contributes to any multi-
employer Pension Plan within the meaning of Section 3(37) of
ERISA.
Loan Servicing Portfolio. Except as set forth on Schedule
4.24, neither Bancorp nor CUB services loans owned in
<PAGE> 41
whole or in part by other persons.
Filings. Since January 1, 1993, Bancorp and CUB 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 Office of the Comptroller
of the Currency (b) the Federal Reserve Bank of San Francisco
("Fed") or any Federal Reserve Bank, (c) the FDIC, (d) the
Securities and Exchange Commission and; (e) any other applicable
federal, foreign, state or local governmental or regulatory
authorities. Since January 1, 1990, Bancorp and each Bancorp
Subsidiary have filed all required call reports of condition and
income with all appropriate regulatory agencies. All such
reports, registrations and filings are collectively referred to
as the "Bancorp Regulatory Filings." Upon request by CorpBank
and subject to applicable legal restrictions, Bancorp will
promptly provide to CorpBank all Bancorp Regulatory Filings filed
by Bancorp or CUB since January 1, 1990 together with copies of
any orders or other administrative actions taken in connection
with such Bancorp Regulatory Filings. As of their respective
dates, each of the past Bancorp Regulatory 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. Any financial statement contained in any of such
Filings that was intended to present the financial position of
the entities or entity to which it related fairly presented the
financial position of such entities or entity and was prepared in
accordance with GAAP or applicable banking regulations
consistently applied except as stated therein during the periods
involved.
Powers of Attorney. No material power of attorney or
similar authorization given by Bancorp or CUB is presently in
effect or outstanding other than powers of attorney given in the
ordinary course of business with respect to routine matters.
Accuracy and Current Status of Information Furnished. The
representations and warranties made by Bancorp and CUB hereby or
in the Schedules attached hereto contain no statements of fact
which are untrue or misleading, or omit any material fact which
is necessary under the circumstances to prevent the statements
contained herein or in such Schedules from being misleading.
Bancorp and CUB hereby covenant that they shall, not later than
the 15th day of each calendar quarter between the date hereof and
the Closing Date, amend or supplement the Schedules prepared and
delivered pursuant to this Article 4 to ensure that the
information set forth in such Schedules
<PAGE> 42
accurately
reflects the then-current status of Bancorp and CUB. Bancorp and
CUB shall further amend or supplement the Schedules as of the
Closing Date if necessary to reflect any additional changes in
the status of Bancorp or CUB.
Effective Date of Representations, Warranties, Covenants
and Agreements. Each representation, warranty, covenant and
agreement of Bancorp and CUB set forth in this Agreement shall be
deemed to be made on and as of the date hereof (unless otherwise
set forth in the Schedules hereto) and as of the Closing Date.
Bancorp's and CUB's Authority. The execution and delivery
by Bancorp and CUB of this Agreement and the Agreement of Merger
and the consummation of the transactions contemplated hereunder
or thereunder have been duly and validly authorized by all
necessary corporate action on the part of Bancorp and CUB, and
this Agreement is, and the Agreement of Merger will be upon due
certification, execution, acknowledgment and filing thereof in
accordance with applicable provisions of the National Banking Act
and the Bank Merger Act, a valid and binding obligation of
Bancorp and CUB, enforceable in accordance with their terms,
except as the enforceability hereof or thereof may be limited by
bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and by general
equitable principles. Except as set forth in Schedule 4.29,
neither the execution and delivery by Bancorp and CUB of this
Agreement or the Agreement of Merger, nor the consummation of the
transactions contemplated herein or therein, nor compliance by
Bancorp and CUB with the provisions hereof or thereof, will
(i) conflict with or result in a breach of any provision of their
respective Certificates of Incorporation, Certificate of
Association or Bylaws; (ii) constitute a breach of, or result in
a default (or give rise to any rights of termination,
cancellation or acceleration, or any right to acquire any
securities or assets) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, franchise,
license, permit, agreement or other instrument or obligation to
which Bancorp or CUB is a party, or by which Bancorp or CUB or
any of their properties or assets is bound; or (iii) violate any
order, writ, injunction, decree, statute, rule or regulation
applicable to Bancorp or CUB. No consent or approval of, notice
to or filing with any governmental authority having jurisdiction
over any aspect of the business or assets of Bancorp or CUB, and
no consent or approval of or notice to any other person or
entity, is required in connection with the execution and delivery
by Bancorp and CUB of this Agreement or the Agreement of Merger
or the consummation by Bancorp and CUB of the transactions
contemplated hereunder or thereunder, except such approvals as
may be required by Bancorp as the sole shareholder of Bank; the
Fed pursuant to the applicable requirements of the BHCA; the OCC
pursuant to the Merger Statutes with respect to the Merger (as
defined in Section 5.11); the filing of the Agreement of Merger
with the OCC; and the declaration by the SEC and state securities
law regulatory authorities that the Registration Statement (as
<PAGE> 43
defined in Section 5.8) is effective and that Bancorp
Stock to be issued in connection with the Merger is qualified
under applicable state securities law.
No Material Change. There has been no material adverse
change in the financial condition, results of operation or
prospects of Bancorp since December 31, 1994. There are no facts
or circumstances that, individually or in the aggregate,
materially and adversely has affected or is so affecting, or, may
reasonably be expected in the future to affect the financial
condition or results of operations or prospects of Bancorp that
have not been disclosed in the Bancorp SEC Filings, excluding
changes in laws or regulations or economic conditions which
affect banking institutions generally.
Accuracy of Information Furnished. The representations and
warranties made by Bancorp and CUB hereunder or in the Schedules
hereto contain no material statements of fact which are untrue or
misleading, or omit any material fact which is necessary under
the circumstances to prevent the statements contained herein or
in such Schedules from being misleading.
Registration Statement. The Registration Statement
required pursuant to Section 5.8 and any other documents to be
filed with the SEC or any regulatory authority in connection with
the transactions contemplated by this Agreement with respect to
all information set forth therein relating to Bancorp, the Merger
and in respect to this Agreement and the Agreement of Merger
will, at the respective times such documents are filed or become
effective:
comply in all material respects with the provisions of
the Securities Act and the regulations thereunder, and all other
applicable laws and regulations; and
(except with regard to information furnished by
CorpBank) not contain any untrue statement of a material fact and
will not 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.
Information Furnished by Bancorp and CUB. No information
relating to Bancorp or CUB furnished to CorpBank by Bancorp and
CUB for inclusion in the Proxy Statement or the applications
referred to in Section 5.11, including all amendments and
supplements thereto, 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 contained
therein not misleading. In the event of any occurrence prior to
the CorpBank shareholders' meeting which would cause any material
information relating to Bancorp and CUB included in the Proxy
Statement to be untrue or misleading, Bancorp or CUB shall so
notify CorpBank and shall furnish CorpBank such information as
<PAGE> 44
may be necessary to correct any such deficiencies.
ARTICLE
CONDUCT AND TRANSACTIONS PRIOR TO
EFFECTIVE TIME OF MERGER
Access.
(a) Bancorp and CUB and CorpBank, respectively, shall
have the right, on reasonable notice and during ordinary business
hours, to examine through their agents, auditors or attorneys all
of the books, records and properties of the respective party,
including, but not limited to, all loan, investment, accounting,
property and legal records and files. Such examination shall be
made in a manner that will not unreasonably interfere with the
conduct of the business. CUB and CorpBank shall provide adequate
space and facilities, to the end that such examination shall be
completed expeditiously, completely and accurately. All parties
shall retain in strict confidence all information gained thereby,
and shall not reveal it to anyone except as may be necessary for
the accomplishment of the purposes of such examination and the
consummation of the transactions provided for hereby. In the
event the Merger provided for hereby is not consummated for any
reason, Bancorp and CUB and CorpBank, respectively, shall not,
directly or indirectly: (i) utilize for their own benefit any
Proprietary Information (as hereinafter defined) or (ii) disclose
to any person any Proprietary Information, except as such
disclosure may be required in connection with this Agreement or
by law. "Proprietary Information" shall mean all confidential
business information concerning the pricing, costs, profits and
plans for the future development of any party's business and the
identity, requirements, preferences, practices and methods of
doing business of specific customers of any party or otherwise
relating to the business and affairs of any party, other than
information which (i) was lawfully in the possession of a party
prior to January 1, 1994; (ii) is obtained by any party after the
date hereof from a source other than a party hereto not under an
obligation of confidentiality; or (iii) is in the public domain
when received or thereafter enters the public domain through no
action of the other party. In the event the Merger is not
consummated for any reason, each party shall return to the other
all copies, notes and records obtained in the course of such
examination.
(b) CorpBank agrees that on and after the date that all
requisite regulatory approvals are obtained, CUB, acting through
its agents, employees and representatives, may, at CUB's option
and at CUB's own expense, on notice to CorpBank and in a manner
reasonably calculated to avoid undue interruption of any
operations of CorpBank, have reasonable access to the premises of
<PAGE> 45
the Bank for the purposes of (i) training CorpBank's
employees in the procedures, techniques, methods or other banking
practices of CUB; (ii) (subject to CUB's obligation to bear the
expense of removal and restoration should this Agreement be
terminated) installing telecommunications equipment, lines and
facilities, including, without limitation, telephones, branch
terminal systems and telecopiers; and (iii) (subject to CUB's
obligation to bear the expense of removal and restoration should
this Agreement be terminated) installing automated teller
machines and comparable customer service equipment.
Limitation on Conduct of CorpBank and CorpBank Subsidiaries
Prior to Closing. Between the date hereof and the Effective Time
of the Merger:
CorpBank agrees to conduct its business and to cause
the CorpBank Subsidiaries to conduct their respective businesses
only in the normal and customary manner and in accordance with
sound business practices and with respect to CorpBank, in
accordance with safe and sound banking practices;
CorpBank shall not, without the prior written consent
of CUB and Bancorp (which consent shall not be unreasonably
withheld and which consent shall be deemed granted if within five
(5) business days of receipt of notice by CUB written notice of
objection is not received by CorpBank) take any of the following
actions or allow any CorpBank Subsidiary to take any of the
following actions:
carry on its business except in substantially the
same manner as heretofore conducted or introduce any new
method of management or operation in respect of its business
and properties, except in a manner consistent with prior
practice and in the ordinary course of business;
amend, modify, or, except as they may be
terminated in accordance with their terms, terminate any
Understanding or materially default in the performance of any
of its obligations under any Understanding where such action
would have a material adverse effect on the consolidated
financial condition, results of operations or prospects of
CorpBank;
terminate or unilaterally fail to renew any
existing insurance or bonding coverage;
amend, modify, terminate or fail to renew or
preserve its business organization, material rights,
franchises, permits and licenses, or take any action which
would jeopardize the continuance of the goodwill of its
customers where such action would have a material adverse
effect on the consolidated financial condition, results of
operations or prospects of CorpBank;
enter into any Understanding, except (A) deposits
incurred, and short-term debt securities
<PAGE> 46
(obligations
maturing within one year) issued, in the ordinary course of
business 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 compliance with clauses (vii)
or (xii) of this subsection (b) and (C) loan sales in the
ordinary course of business, without any recourse except to a
reserve account funded by an interest rate spread otherwise
payable to the servicer of the loans sold, provided that no
commitment to sell loans shall extend beyond the Effective
Time of the Merger;
enter into any new leases (regardless of dollar
amount) or contracts requiring annual payments of more than
$1,000, or having a term in excess of six months without prior
approval of CUB, which approval shall not be unreasonably
withheld or enter into any leases or contracts requiring
annual payments of more than $10,000, which are not new,
without the prior approval of CUB, which approval shall not be
unreasonably withheld;
make any loan or other extension of credit, or
enter into any commitment to make any loan or other extension
of credit or enter into any agreement, with or to any CorpBank
or CorpBank Subsidiary director, officer or employee or 5%
shareholder, except in accordance with existing practice or
policy;
except as required by any existing contract,
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;
sell, transfer, mortgage, encumber or otherwise
dispose of any assets or any liabilities except in the
ordinary course of business and consistent with prior practice
or as required by any existing contract or for ordinary
repairs, renewals or replacements or as contemplated by this
Agreement;
except pursuant to the exercise of outstanding
stock options, issue, sell, redeem or acquire for value, or
agree to do so, any debt securities or any shares of the
capital stock or other ownership interests, or securities
convertible into or options, rights or warrants exercisable
for such shares or interests, of CorpBank or any CorpBank
Subsidiary or declare, issue or pay any dividend or other
distribution of assets, whether consisting of money, CorpBank
Stock, CorpBank Preferred Stock, other personal property, real
property or other things of value, to CorpBank's shareholders
or with respect to the Bank's stock or the stock of any other
CorpBank Subsidiary that is not directly or indirectly wholly
owned by CorpBank, or split, subdivide combine or reclassify
any shares of its stock or other equity security;
<PAGE> 47
change or amend its charter documents or bylaws;
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, less stringent than those in effect on
December 31, 1994;
make any capital expenditures, or commitments with
respect thereto, except those in the ordinary course of
business which do not exceed $5,000 individually or $10,000 in
aggregate;
make special or extraordinary payments to any person
or enter into any agreement which could result in such special
or extraordinary payments other than $10,000 payments to each
of the President and Chief Financial Officer of CorpBank as
of the Closing, or as contemplated, or as disclosed, in this
Agreement as of the date hereof;
except for transactions in the ordinary course of
business, make any material investments, by purchase of stock
or securities, contributions to capital, property transfers,
purchases of any property or assets or otherwise, in any other
individual, corporation or other entity;
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 CUB 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 GAAP or applicable law;
except as contemplated in this Agreement, terminate
any plan or enter into any new employment agreement or other
employee benefit arrangement, or modify any employment
agreement or other employee benefit arrangement in effect on
the date of this Agreement to which CorpBank or any CorpBank
Subsidiary is a party; or
agree to take or make any commitment to take any
actions prohibited by this Section 5.2.
Limitation on Conduct of Bancorp and CUB Prior to Closing.
Between the date hereof and the Effective Time of the Merger:
Bancorp agrees to conduct its business and to cause
the Bancorp Subsidiaries to conduct their respective businesses
only in the normal and customary manner and in accordance with
sound business practices and with respect to the CUB, in
accordance with safe and sound banking practices;
<PAGE> 48
Bancorp shall not, without the prior written consent
of CorpBank (which consent shall not be unreasonably withheld and
which consent shall be deemed granted if within five (5)
business days of receipt of notice by CorpBank written notice of
objection is not received by Bancorp) take any of the following
actions or allow any Bancorp Subsidiary to take any of the
following actions:
carry on its business except in substantially the
same manner as heretofore conducted or introduce any new
method of management or operation in respect of its business
and properties, except in a manner consistent with prior
practice and in the ordinary course of business.
Notwithstanding this provision, CUB has received OCC approval
to establish branch offices on the present site of its loan
production offices in Industry, Oxnard and Gardena, and CUB
will establish such branch offices or may relocate such
offices. Further, acquisition of additional banking offices
or banking assets shall be deemed to be in the ordinary course
of business;
amend, modify, or, except as they may be
terminated in accordance with their terms, terminate any
Understanding or materially default in the performance of any
of its obligations under any Understanding where such action
would have a material adverse effect on the consolidated
financial condition, results of operations or prospects of
Bancorp;
terminate or unilaterally fail to renew any
existing insurance or bonding coverage, providing however,
that CUB may change carriers and coverage relative to any
insurance or bonding coverage, and no notice need be given
unless the amount of coverage is materially less than that
held by CUB at the date of this Agreement;
amend, modify, terminate or fail to renew or
preserve its business organization, material rights,
franchises, permits and licenses, or take any action which
would jeopardize the continuance of the goodwill of its
customers where such action would have a material adverse
effect on the consolidated financial condition, results of
operations or prospects of Bancorp;
make any loan or other extension of credit, or
enter into any commitment to make any loan or other extension
of credit, to any Bancorp or CUB Subsidiary director, officer
or employee or 5% shareholder, except in accordance with
existing practice or policy;
except in the ordinary course of business and
consistent with prior practice or as required by any existing
contract, 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,
<PAGE> 49
employee or agent or pay any bonus to any person;
sell, transfer, mortgage, encumber or otherwise
dispose of any assets or any liabilities except in the
ordinary course of business and consistent with prior practice
or as required by any existing contract or for ordinary
repairs, renewals or replacements or as contemplated by this
Agreement;
make any capital expenditures, or commitments with
respect thereto, except those in the ordinary course of
business which do not exceed $200,000 individually or $500,000
in aggregate;
make special or extraordinary payments to any person
other than as contemplated, or as disclosed, in this Agreement
as of the date hereof, except that CUB may make payments in
connection with settlement of certain legal actions against
CUB related to Property Mortgage Co.;
compromise or otherwise settle or adjust any
material assertion or claim of a material 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 CorpBank 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 GAAP or applicable law; or
agree to take or make any commitment to take any
actions prohibited by this Section 5.3.
Certain Loans and Other Extensions of Credit.
CorpBank will promptly inform CUB of the amounts and
categories of any loans, leases or other extensions of credit
that have been classified by any bank regulatory authority or by
any unit of CorpBank as "Criticized," "Specially Mentioned,"
"Substandard," "Doubtful," "Loss" or any comparable
classification ("Classified Credits"). CorpBank will furnish to
CUB, as soon as practicable, and in any event within ten days
after the end of each calendar month, schedules including the
following: (a) Classified Credits (including with respect to
each credit in an amount equal to or greater than $25,000, its
classification category, its type, and the originating unit), and
by type and originating unit, the aggregate dollar amount of
classified credits of less than $25,000; (b) nonaccrual credits
(including, with respect to each credit in an amount equal to or
greater than $25,000, its type and the originating unit), and by
type and originating unit, the aggregate dollar amount of
nonaccrual credits of less than $25,000; (c) accrual exception
credits that are delinquent 90 or more days and have not been
placed on nonaccrual status (including with respect to each
accrual exception credit in an amount equal to or greater than
$25,000, its type and the originating unit), and by type and
originating unit, the aggregate dollar amount of such accrual
exception credits of less than $25,000; (d) delinquent credits
(including with respect to each delinquent credit in an amount
equal to or greater than $25,000, its type and the originating
unit), including an aging into 30-59, 60-89, 90-119, and 120+ day
categories, and by type and originating unit, the aggregate
dollar amount of delinquent credits of less than $25,000;
(e) participating loans and leases, stating, with respect to
each, whether it is purchased or sold, the loan or lease type,
and the originating unit; (f) loans or leases (including any
commitments) by CorpBank or any CorpBank Subsidiary to any
CorpBank or CorpBank Subsidiary director, officer, employee, or
shareholder holding 10% or more of the capital stock of CorpBank,
including with respect to each such loan or lease the identity
and, to the best knowledge of CorpBank, the relation of the
borrower to CorpBank or any CorpBank Subsidiary, the loan or
lease type and the outstanding and undrawn amounts; (g) letters
of credit (including with respect to each letter of credit in a
face amount equal to or greater than $25,000, the type and
originating unit), and by type and originating unit, the
aggregate dollar amount of all letters of credit of less than
$25,000; (h) loans or leases charged off during the previous
month (including with respect to each such loan or lease, its
type and the originating unit), and by type and originating unit,
the aggregate dollar amount of such loans or leases less than
$25,000; (i) loans or leases written down during the previous
month, including with respect to each the original amount, the
write off amount, its type and originating unit; and (j) other
real estate or assets owned, stating with respect to each its
type.
CUB will promptly inform CorpBank of the amounts and
categories of any loans, leases or other extensions of credit
that have been classified by any bank regulatory authority or by
CUB as "Criticized," "Specially Mentioned," "Substandard,"
"Doubtful," "Loss" or any comparable classification ("Classified
Credits"). CUB will furnish to CorpBank, as soon as practicable,
and in any event within fifteen days after the end of each
calendar month, schedules including the following:
(a) Classified Credits (including with respect to each credit in
an amount equal to or greater than $25,000, its classification
category), and the aggregate dollar amount of classified credits
of less than $25,000; (b) nonaccrual credits (including, with
respect to each credit in an amount equal to or greater than
$25,000, its classification category, and the aggregate dollar
amount of nonaccrual credits of less than $25,000); (c) accrual
exception credits that are delinquent 90 or more days and have
not been placed on nonaccrual status (including with respect to
each accrual exception credit in an amount equal to or greater
than $25,000, its classification category), and the aggregate
dollar amount of such accrual exception credits of less than
$25,000; (d) delinquent credits (including with respect to each
delinquent credit in an amount equal to or greater than $25,000,
its classification category ), including an aging into 30-59, 60-
89, 90-119, and 120+ day categories, and the aggregate dollar
amount of delinquent credits of less than $25,000;
(e) participating loans and leases,
<PAGE> 50
stating, with
respect to each, whether it is purchased or sold, the loan or
lease type, and the originating unit; (f) loans or leases
(including any commitments) by CUB to any Bancorp or CUB
Subsidiary director, officer, employee, or shareholder holding
10% or more of the capital stock of Bancorp, including with
respect to each such loan or lease the identity and, to the best
knowledge of CUB, the relation of the borrower to Bancorp or CUB,
the loan or lease type and the outstanding and undrawn amounts;
(g) letters of credit (including with respect to each letter of
credit in a face amount equal to or greater than $25,000, the
classification category), and by type classification category,
the aggregate dollar amount of all letters of credit of less than
$25,000; (h) loans or leases charged off during the previous
month (including with respect to each such loan or lease, its
classification category), and by classification category, the
aggregate dollar amount of such loans or leases less than
$25,000; (i) loans or leases written down during the previous
month, including with respect to each the original amount, the
write off amount, its classification category; and (j) other real
estate or assets owned, stating with respect to each its type.
Negotiations With Other Parties.
CorpBank shall not, nor shall it authorize or
knowingly permit any of its representatives or CorpBank
Subsidiaries, directly or indirectly, to, entertain, solicit or
encourage or participate in any discussions or negotiations with,
or provide any information to, any corporation, partnership,
person or other entity or group (other than Bancorp, CUB and
their representatives) concerning any Acquisition Proposal (as
hereinafter defined) other than the Acquisition Proposal set
forth in this Agreement. CorpBank shall notify CUB immediately
in the manner set forth in Section 9.3 if any such inquiry or
Acquisition Proposal is received by CorpBank or any CorpBank
Subsidiary, including the terms thereof. For purposes of this
Agreement, "Acquisition Proposal" means any (i) proposal pursuant
to which any corporation, partnership, person or other entity or
group, other than Bancorp or CUB, would acquire or participate in
a merger or other business combination involving CorpBank or any
CorpBank Subsidiary; (ii) proposal by which any corporation,
partnership, person or other entity or group, other than Bancorp
or CUB, would acquire the right to vote 5% or more of the capital
stock of CorpBank or any CorpBank Subsidiary entitled to vote
thereon for the election of directors, other than persons
designated as proxy holders by the Board of Directors of CorpBank
or any CorpBank Subsidiary; (iii) acquisition of the assets of
CorpBank or any CorpBank Subsidiary other than in the ordinary
course of business; or (iv) acquisition in excess of five percent
(5%) of the outstanding capital stock of CorpBank or any CorpBank
Subsidiary, other than as contemplated by this Agreement.
Affirmative Conduct of CorpBank Prior to Closing. Between
the date hereof and the Effective Time of the Merger, CorpBank
shall do the following and shall cause the CorpBank Subsidiaries
to do the following:
Use their respective commercially reasonable best
efforts, or cooperate with others, to expeditiously bring about
the satisfaction of the conditions specified in Article 6 hereof;
Use and devote their respective commercially
reasonable efforts consistent with this Agreement to maintain and
preserve intact their respective present business organizations
and to maintain and preserve their relationships and goodwill
with account holders, borrowers, employees and others having
business relationships with them;
Advise CUB promptly in writing of any material adverse
change known to CorpBank or any CorpBank Subsidiary in the
capital structure, financial condition or business prospects of
CorpBank or any CorpBank Subsidiary, or of any other materially
adverse change known to CorpBank respecting the business and
operations of CorpBank on a consolidated basis, 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 at
the Closing;
Keep in full force and effect all of the existing
permits and licenses of CorpBank and CorpBank Subsidiaries;
Use their respective commercially reasonable best
efforts to maintain insurance or bonding coverage on all
properties for which they are responsible and on their respective
business operations, and carry not less than the same coverage
for fidelity, director and officer liability, public liability,
personal injury, property damage and other risks equal to that
which is now in effect; and notify CUB in writing promptly of any
facts or circumstances which could affect CorpBank's or any
CorpBank Subsidiary's ability to maintain such insurance or
bonding coverage;
Perform their respective material contractual
obligations and not become in material default on any of such
obligations;
Duly observe and conform to all legal requirements
applicable to their respective businesses;
Duly and timely file all reports and returns required
to be filed with any federal, state or local governmental
authority, unless any extensions have been duly granted by such
authority;
Maintain their respective assets and properties in
good condition and repair, normal wear and tear excepted;
<PAGE> 51
Promptly advise CUB in writing of any event or any
other transaction within CorpBank's or any CorpBank Subsidiary's
knowledge whereby any person or related group of persons
acquires, directly or indirectly, record or beneficial ownership
(as defined in Rule 13d-3 promulgated by the SEC pursuant to the
1934 Act) or control of 5% or more of the outstanding shares of
CorpBank Stock prior to the record date fixed for the CorpBank
shareholders' meeting or any adjourned meeting thereof to approve
the transactions contemplated herein;
Promptly notify CUB of any event of which CorpBank
obtains knowledge which may materially and adversely affect the
financial condition, results of operations, or business prospects
of CorpBank or any CorpBank Subsidiary, or in the event it
determines that the Merger will not be consummated because of any
inability to meet the conditions to the performance of CUB set
forth in Sections 6.2;
Charge off all loans, receivables and other assets, or
portions thereof, deemed uncollectible in accordance with GAAP,
applicable law or regulation, or classified as "loss" or as
directed by any regulatory authority; and maintain the allowance
for credit losses of CorpBank at a level which is adequate to
provide for all known and reasonably expected losses on assets
outstanding and other inherent risks in CorpBank's loan
portfolio;
Furnish to CUB, as soon as practicable, and in any
event within ten days after it is prepared, (i) a copy of any
report submitted to the board of directors of CorpBank or any
CorpBank Subsidiary and access to the working papers related
thereto and copies of other operating or financial reports
prepared for management of any of their businesses and access to
the working papers thereto, provided, however, that CorpBank need
not furnish CUB communications of CorpBank's legal counsel
regarding CorpBank's rights against and obligations to CUB or its
affiliates under this Agreement, (ii) copies of all reports,
renewals, filings, certificates, statements and other documents
filed with or received from the Superintendent, SEC, Fed, any
Federal Reserve Bank, FDIC, or any other governmental or
regulatory body, (iii) separate consolidated monthly unaudited
statements of condition and statements of operations for
CorpBank, consolidated monthly statements of changes in
consolidated shareholders' equity for CorpBank, and separate
quarterly unaudited consolidated and consolidating statements of
condition and statements of operations for CorpBank and
statements of changes in consolidated shareholders' equity for
CorpBank, in each case prepared in a manner consistent with past
practice, and (iv) such other reports as CUB may reasonably
request relating to CorpBank. Each of the financial statements
delivered pursuant to this subsection (m), except as stated
therein, shall be prepared in accordance with GAAP, except that
such financial statements may omit statements of cash flow and
footnote disclosures required by GAAP. Each of the financial
statements of CorpBank or any CorpBank Subsidiary delivered
<PAGE> 52
pursuant to this subsection (m) shall be accompanied by
a certificate of each of the Chief Executive Officer and the
Chief Financial Officer of CorpBank to the effect that such
financial statements fairly present the financial condition and
results of operations of CorpBank or the CorpBank Subsidiary, as
appropriate, for the periods covered, and reflect all adjustments
(which consist only of normal recurring adjustments) necessary
for a fair presentation;
CorpBank agrees that through the Effective Time of the
Merger, as of their respective dates, (i) each of the CorpBank
Filings will be true and complete in all material respects; and
(ii) each of the CorpBank Filings will comply in all material
respects with all of the statutes, rules and regulations enforced
or promulgated by the governmental or regulatory authority 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
CorpBank Filings that is intended to present the financial
position of the entities or entity to which it relates will
fairly present the financial position of such entities or entity
and will be prepared in accordance with GAAP or applicable
banking regulations consistently applied, except as stated
therein, during the periods involved;
Maintain proper reserves for contingent liabilities in
accordance with GAAP;
Promptly notify CUB of the filing of any litigation,
governmental or regulatory action, or similar proceeding or
notice of any claims against CorpBank or any CorpBank Subsidiary
or any of their assets;
At any time within 60 days of the day on which the
Effective Time of the Merger is expected to occur, at the written
request of CUB and on CUB's certification that it knows of no
circumstance that would entitle it to terminate this Agreement,
(i) give, or cause to be given, any written notice to the
employees of CorpBank that CUB reasonably deems necessary or
appropriate under the Worker Adjustment and Retraining
Notification Act ("WARN") ; (ii) take such other actions, as CUB
shall reasonably deem necessary or appropriate, to comply with
WARN; and (iii) give notice to its data processing vendors of
termination of the data processing contract at the end of the
minimum notice period provided for therein.
Forward to CUB, not later than the 15th day of each
calendar quarter, CorpBank's list of holders of CorpBank Stock,
certified by CorpBank's transfer agent;
Cooperate with CUB to enable the transactions
contemplated by this Agreement to qualify for the accounting
treatment desired by CUB.
<PAGE> 53
Give three business days prior written notice to CUB
prior to approving any loans or leases in excess of $100,000,
subsequent to the Execution Date. Such notice must include
copies of the description of the loan utilized for consideration
of the loan by CorpBank and copies of relevant financial
statements and other financial documents utilized by CorpBank in
its review. Unless CUB affirmatively indicates that it does not
disapprove such loan, CUB reserves the right to provide for up to
a 100% reserve for such loan in adjustments to Purchase Price,
without explanation or other documentation therefor. To the
extent that CUB affirmatively indicates that it does not
disapprove such loan, it will be treated in a manner similar to
all other loans of CorpBank. Notwithstanding anything herein to
the contrary, CUB shall not have any power to direct CorpBank to
make particular loans or to refrain from making particular loans
and the effect of any comments on CorpBank loans in connection
with this provision shall be limited as set forth herein. CUB
agrees that it will review submitted loans promptly and will
advise CorpBank of its determination regarding any such loan
within 3 business days of receipt of request therefore.
Obtain written general releases, in form satisfactory
to counsel for CUB, from all employees terminated for any reason
subsequent to March 1, 1995, including release of federal, state
and common law causes of action.
Terminate that certain arbitration and other actions
with/against the former CEO Wrigley and obtain general release
from Wrigley, in form satisfactory to counsel for CUB.
Settle or otherwise conclude all litigation as to
which CorpBank or any agent is a defendant and obtain general
releases and dismissals with prejudice in form and content
satisfactory to counsel for CUB.
Obtain all necessary consents and opinions from GT and
DT to allow three years audited financial statements with
unqualified opinions to be included in the Registration
Statement, if determined to be necessary by Bancorp.
Affirmative Conduct of Bancorp Prior to Closing. Between
the date hereof and the Effective Time of the Merger, Bancorp
shall do the following and shall cause CUB to do the following:
Use their respective commercially reasonable best
efforts, or cooperate with others, to expeditiously bring about
the satisfaction of the conditions specified in Article 6 hereof;
Use and devote their respective commercially
reasonable efforts consistent with this Agreement to maintain and
preserve intact their respective present business organizations
<PAGE> 54
and to maintain and preserve their relationships and
goodwill with account holders, borrowers, employees and others
having business relationships with them;
Advise CorpBank promptly in writing of any material
adverse change known to Bancorp or CUB in the capital structure,
financial condition or business prospects of Bancorp or CUB, or
of any other materially adverse change known to Bancorp
respecting the business and operations of Bancorp on a
consolidated basis, 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 at the Closing;
Keep in full force and effect all of the existing
permits and licenses of Bancorp and CUB;
Use their respective commercially reasonable best
efforts to maintain insurance or bonding coverage on all
properties for which they are responsible and on their respective
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 now in effect; and notify
CorpBank in writing promptly of any facts or circumstances which
could affect Bancorp's or CUB's ability to maintain such
insurance or bonding coverage;
Perform their respective material contractual
obligations and not become in material default on any of such
obligations;
Duly observe and conform to all legal requirements
applicable to their respective businesses;
Duly and timely file all reports and returns required
to be filed with any federal, state or local governmental
authority, unless any extensions have been duly granted by such
authority;
Maintain their respective assets and properties in
good condition and repair, normal wear and tear excepted;
Promptly advise CorpBank in writing of any event or
any other transaction within Bancorp or CUB's knowledge whereby
any person or related group of persons acquires, directly or
indirectly, record or beneficial ownership (as defined in
Rule 13d-3 promulgated by the SEC pursuant to the 1934 Act) or
control of 5% or more of the outstanding shares of Bancorp Stock
prior to the record date fixed for the CUB shareholders' meeting
or any adjourned meeting thereof to approve the transactions
contemplated herein;
Promptly notify CorpBank of any event of which Bancorp
obtains knowledge which may materially and adversely affect the
financial condition, results of operations, or business prospects
of Bancorp or CUB, or in the event it
<PAGE> 55
determines that
the Merger will not be consummated because of any inability to
meet the conditions to the performance of CorpBank set forth in
Sections 6.2(d), (g) and (l);
Charge off all loans, receivables and other assets, or
portions thereof, deemed uncollectible in accordance with GAAP,
applicable law or regulation, or classified as "loss" or as
directed by any regulatory authority; and maintain the allowance
for credit losses of CUB at a level which is adequate to provide
for all known and reasonably expected losses on assets
outstanding and other inherent risks in the Bancorp and CUB's
loan portfolio;
Furnish to CorpBank, as soon as practicable, and in
any event within ten days after it is prepared, (i) a copy of any
report submitted to the board of directors of Bancorp or CUB,
provided, however, that CUB need not furnish communications of
CUB's legal counsel regarding CUB's rights against and
obligations to CorpBank or its affiliates under this Agreement,
(ii) copies of all reports, renewals, filings, certificates,
statements and other documents filed with or received from the
SEC, OCC, Fed, any Federal Reserve Bank, FDIC, or any other
governmental or regulatory body, (iii) copies of monthly
financial statements provided to Bancorp and CUB's Boards of
Directors, and (iv) such other reports as CorpBank may reasonably
request relating to Bancorp. Each of the financial statements
delivered pursuant to this subsection (m), except as stated
therein, shall be prepared in accordance with GAAP, except that
such financial statements may omit statements of cash flow and
footnote disclosures required by GAAP. Each of the financial
statements of Bancorp or CUB delivered pursuant to this
subsection (m) shall be accompanied by a certificate of each of
the Chief Executive Officer and the Chief Financial Officer of
Bancorp to the effect that such financial statements fairly
present the financial condition and results of operations of
Bancorp or CUB, as appropriate, for the periods covered;
Bancorp agrees that through the Effective Time of the
Merger, as of their respective dates, (i) each of the Bancorp
Filings will be true and complete in all material respects; and
(ii) each of the Bancorp Filings will comply in all material
respects with all of the statutes, rules and regulations enforced
or promulgated by the governmental or regulatory authority 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
Bancorp Filings that is intended to present the financial
position of the entities or entity to which it relates will
fairly present the financial position of such entities or entity
and will be prepared in accordance with GAAP or applicable
banking regulations consistently applied, except as stated
therein, during the periods involved;
<PAGE> 56
Maintain proper reserves for contingent liabilities in
accordance with GAAP; and
Promptly notify CorpBank of the filing of any
material litigation, governmental or regulatory action, or
similar proceeding or notice of any claims against Bancorp or CUB
or any of their assets;
Registration Statement and Applications. Bancorp and
CUB will use commercially reasonable efforts to prepare and file
or cause to be prepared and filed: (i) with the SEC, the
Registration Statement; (ii) with the Fed, an application for
approval of the Merger or related aspects thereof; (iii) with the
OCC, the required documents for approval of, and to effect, the
change in control of CorpBank and the Bank; and (iv) with the
OCC, applications for approval of the Bank Merger, except that
Bancorp shall have no obligation to file a new registration
statement or a post-effective amendment to the Registration
Statement covering any reoffering of Bancorp Stock by CorpBank
Affiliates. Bancorp and CUB will cooperate with CorpBank in the
preparation of the Proxy Statement and covenant and agree that
all information furnished by Bancorp and CUB for inclusion in the
Proxy Statement, all applications to appropriate regulatory
agencies for approval of or consent to the Merger , and all
information furnished by Bancorp and CUB to CorpBank pursuant to
this Agreement, will comply in all material respects with the
provisions of applicable law, including the Securities Act and
the 1934 Act and the rules and regulations of the SEC thereunder,
and will not contain any untrue statement of a material fact and
will not omit to state any material fact required to be stated
therein or necessary to make the statements contained therein, in
light of the circumstances under which they were made, not
misleading;
Blue Sky. Bancorp covenants and agrees to use its
commercially reasonable best efforts to have the shares of
Bancorp Stock qualified or registered for offering and sale under
the securities or Blue Sky laws of each jurisdiction in which
shareholders of CorpBank reside.
Action of Sole Shareholder. Prior to the Effective
Time of the Merger, Bancorp, as sole shareholder of CUB, will
take all action necessary or advisable for the consummation of
the Merger by CUB and the carrying out by CUB of the transactions
contemplated hereby;
Stock Exchange Listing. Bancorp will use its
commercially reasonable best efforts to have the shares of
Bancorp Stock to be issued pursuant to the Merger duly listed,
subject to official notice of issuance, on the Nasdaq Stock
Exchange.
CorpBank Accountants. Promptly upon request of CUB,
CorpBank will request its independent accountants to permit CUB
or its representatives to review and examine the work papers
<PAGE> 57
relating to CorpBank and CorpBank's audited financial
statements for the years ended December 31, 1992 and 1993, 1994
and permit such independent accountants to discuss with CUB any
matter relating to the audits of CorpBank. In addition, CorpBank
will make available to CUB copies of each management letter or
other letter delivered to CorpBank, or any CorpBank Subsidiary by
Grant Thornton or by Deloitte & Touche in connection with such
financial statements or relating to any review of the internal
controls of CorpBank, or any CorpBank Subsidiary since January 1,
1992, and has instructed each of them to make available to CUB
for inspection by CUB or its representatives all reports and
working papers produced or developed by in connection with their
examination of such financial statements, as well as all such
reports and working papers for any periods for which any tax of
CorpBank, or CorpBank Subsidiary has not been finally determined
or barred by applicable statutes of limitation.
Bancorp Accountants. Bancorp will make available to
CorpBank copies of each management letter or other letter
delivered to Bancorp by Arthur Andersen & Co. ("AA") in
connection with such financial statements or relating to any
review by AA of the internal controls of Bancorp or CUB since
January 1, 1992.
Submission to Shareholders. Subject to satisfaction of
applicable federal and state securities laws, not later than
August 30, 1995, unless extended with the mutual written consent
of the parties, CorpBank shall take all such actions as may be
required to submit the transactions contemplated hereby and all
requisite matters incident thereto for the approval of its
shareholders. CorpBank hereby agrees that it shall recommend
that its shareholders vote in favor of approval of the
transactions contemplated hereby.
Preparation of Registration Statement, Proxy Statement,
Application for Approval by Regulatory Authorities and Redemption
Materials.
CorpBank will cooperate with Bancorp in the
preparation of a registration statement (the "Registration
Statement") to be filed with the SEC under the Securities Act for
the registration of the Bancorp Stock to be issued in connection
with the Merger, in connection with any listing application to be
filed with the Nasdaq Stock Exchange with respect to the Bancorp
Stock, in the preparation of a proxy statement to be filed with
the SEC that will be used by CorpBank to solicit proxies of its
shareholders in connection with the approval and adoption of the
Agreement and the Agreement of Merger (the "Proxy Statement") and
in connection with any statements or applications to any
governmental body in connection with the transactions
contemplated by this Agreement. In connection therewith,
CorpBank will furnish all financial or other information,
including accountant comfort letters relating thereto,
certificates, consents, and opinions of counsel concerning
CorpBank and CorpBank Subsidiaries reasonably deemed necessary by
Bancorp for the filing or preparation for filing of the
<PAGE> 58
Registration Statement and related matters.
CorpBank will cooperate with Bancorp and provide such
information as may be necessary or advisable for Bancorp or CUB
to make its applications required for regulatory approvals and
for any other consents or approvals or to take any other action
necessary or, in the reasonable judgment of Bancorp, advisable to
consummate the Merger and the Bank Merger.
CorpBank covenants and agrees that all information
furnished by CorpBank or any CorpBank Subsidiary for inclusion in
the Registration Statement, the Proxy Statement, all applications
to appropriate regulatory agencies for approval of or consent to
the Merger and the Bank Merger, and all information furnished by
CorpBank or any CorpBank Subsidiary to Bancorp or CUB pursuant to
this Agreement, will comply in all material respects with the
provisions of applicable law, including the Securities Act and
the 1934 Act and the rules and regulations of the SEC thereunder,
and will not contain any untrue statement of a material fact and
will not omit to state any material fact required to be stated
therein or necessary to make the statements contained therein, in
light of the circumstances under which they were made, not
misleading.
Bancorp will cooperate with CorpBank in the
preparation of a proxy statement to be filed with the
Superintendent and the FDIC that will be used by CorpBank to
solicit proxies of its shareholders in connection with the
approval and adoption of the Agreement and the Agreement of
Merger (the "Proxy Statement") and in connection with any
statements or applications to any governmental body in connection
with the transactions contemplated by this Agreement. In
connection therewith, Bancorp will furnish all financial or other
information, including accountant comfort letters relating
thereto, certificates, consents, and opinions of counsel
concerning Bancorp and CUB reasonably deemed necessary by
CorpBank for the filing or preparation for filing of the Proxy
Statement and related matters.
Bancorp covenants and agrees that all information
furnished by Bancorp or CUB for inclusion in the Registration
Statement, the Proxy Statement, all applications to appropriate
regulatory agencies for approval of or consent to the Merger and
the Bank Merger, and all information furnished by Bancorp or CUB
to CorpBank pursuant to this Agreement, will comply in all
material respects with the provisions of applicable law,
including the Securities Act and the 1934 Act and the rules and
regulations of the SEC thereunder, and will not contain any
untrue statement of a material fact and will not omit to state
any material fact required to be stated therein or necessary to
make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
Termination of CorpBank Employee Stock Option Plans.
CorpBank will take all steps necessary to cause its stock
<PAGE> 59option plans to be terminated as of or prior to the
Effective Time of the Merger, will grant no additional options under said
plans prior to the Effective Time of the Merger, and will cause
any options outstanding thereunder (irrespective of their
exercise price and whether or not then presently exercisable or
fully vested) to be exercised prior to the Calculation Date or
cancelled prior to the Calculation Date together with a release
of all claims against CorpBank or Surviving Association related
to such options.
Agreement of CorpBank Affiliates. CorpBank agrees to use
its best efforts to cause each person who is a CorpBank
"affiliate" as defined pursuant to Rule 145 promulgated by the
SEC under the Securities Act ("CorpBank Affiliate"), at least 30
days prior to the Effective Time of the Merger, to enter into an
Affiliate Agreement, in the form attached hereto as Exhibit E,
which provides that, among other things: (i) the CorpBank Stock
owned by the CorpBank affiliate may not be sold or transferred
for a period of not less than 30 days prior to the Effective Time
of the Merger; (ii) the Bancorp Stock to be acquired by an
CorpBank Affiliate upon consummation of the Merger (such shares
of Bancorp Stock being sometimes referred to for purposes of this
Section 5.13 as "Acquired Shares") will not be acquired with a
view to the sale or distribution thereof except as permitted by
Rule 145 promulgated by the SEC under the Securities Act ("Rule
145"); (iii) the Acquired Shares will not be disposed of in such
a manner as to violate the Securities Act or the Affiliate
Agreement and without Bancorp having first received an opinion of
counsel reasonably satisfactory to Bancorp to the foregoing
effect or other evidence of compliance with Rule 145 and the
Affiliate Agreement, in each case reasonably satisfactory to
Bancorp; (iv) none of the shares of CUB Common Stock received by
the CorpBank Affiliate pursuant to the Merger will be sold,
transferred or otherwise disposed of and the CorpBank Affiliate
will not in any other way reduce their risk of ownership or
investment in any of the shares of CUB Common Stock so received
until the later of: (i) financial results covering a period of at
least thirty (30) days of combined operations of CUB and CorpBank
following the Effective Time of the Merger have been published by
CUB (provided that the CorpBank Affiliate may make bona fide
gifts or distributions without consideration so long as the
recipients thereof agree not to sell, transfer or otherwise
dispose of the CUB Common Stock except as provided in the
Affiliate Agreement);(v) the certificates representing the
Acquired Shares may bear a legend referring to the foregoing
restrictions on disposition, and Bancorp may issue to its
transfer agent appropriate stop transfer instructions with
respect to the Acquired Shares; and (vi) each CorpBank Affiliate
will obtain an agreement, and deliver a copy of such to Bancorp,
from each transferee of Acquired Shares which is substantially
similar to an Affiliate Agreement, unless such transferee may
under the Securities Act dispose of the Acquired Shares
transferred to him without registration under the Securities Act.
Notwithstanding anything in this Section 5.13 to the contrary, in
the event that such affiliate is also a director of CorpBank,
they shall enter into an agreement in the form
<PAGE> 60
attached
hereto as Exhibit E1, which shall provide, inter alia, that such
person will not sell or transfer the Bancorp Stock to be acquired
upon consummation of the Merger for a period of not less than one
(1) year from the Closing.
Bank Merger. At CUB's request, CorpBank and each CorpBank
Subsidiary shall take all necessary corporate and other action
including publication required under the Merger Statutes to
approve and to permit the consummation of a merger of CUB with
CorpBank ) on the Closing Date. CorpBank agrees that it will
execute, deliver and, when appropriate, file, and will cause each
CorpBank Subsidiary to execute, deliver and, when appropriate,
file, any and all agreements, applications and instruments
necessary or desirable to permit the consummation of the Merger
on the Closing Date, including, but not limited to, agreements of
merger relating to the Merger, and will take, and will cause each
CorpBank Subsidiary to take, such other action as CUB may
reasonably request to permit the consummation of any transactions
contemplated in connection with the Merger. CorpBank shall not
take any action or allow any CorpBank Subsidiary to take any
action which would prevent performance of agreements of merger or
any transactions contemplated in connection with the Merger.
Resignations. CorpBank shall obtain the resignations, to
be effective as of the Effective Time of the Merger, of the
directors and officers of CorpBank and the directors of all
CorpBank Subsidiaries. Not less than ten (10) days prior to the
Closing, CUB shall provide CorpBank with a list of CorpBank
officers whose resignations will not be required.
Corporate Action. The parties shall each take or cause to
be taken all necessary corporate action required to carry out the
transactions contemplated in this Agreement and the Agreement of
Merger.
Regulatory Approvals. Promptly following execution of this
Agreement, the parties hereto shall prepare, submit and file, or
cause to be prepared, submitted and filed, all applications for
approvals and consents as may be required of any of them, respec
tively, by applicable law and regulations with respect to the
transactions contemplated by this Agreement and by the Agreement
of Merger, including without limitation any and all applications
required to be filed with the OCC, the Fed and such other
governmental or regulatory authorities as Bancorp may reasonably
believe necessary. Each party shall cooperate with the others in
the preparation of all of those applications and will furnish
promptly upon request all documents, information, financial
statements or other materials as may be required in order to
complete said applications. Each party hereto shall afford the
others a reasonable opportunity to review all such applications
(except confidential portions thereof) and all amendments and
supplements thereto before filing.
Necessary Consents. In addition to the regulatory
approvals referred to in Section 5.17, the parties hereto shall
each apply for and diligently seek to obtain all
<PAGE> 61
other
third party consents or approvals which may be necessary for the
consummation of the Merger, including, without limitation, the
written consent of any lessors of real and personal property
which property cannot be assigned without the written consent of
the other such lessors.
Further Assurances. The parties agree that from time to
time, whether prior to, at or after the Effective Time of the
Merger, they will execute and deliver such further instruments of
conveyance and transfer and take such other action as may
reasonably be expected to consummate the transactions
contemplated hereby. Bancorp, CUB, CorpBank and CorpBank
Subsidiaries each agree to take such further action as may
reasonably be requested by any other party in order to consummate
the transactions contemplated by this Agreement and that are not
inconsistent with the other provisions hereof.
ARTICLE
CONDITIONS PRECEDENT TO CONTEMPLATED TRANSACTIONS
General Conditions. The obligations of each of the parties
hereto to consummate the transactions contemplated herein are
further subject to the satisfaction, on or before the Closing
Date, of the following conditions precedent:
Shareholder Approval. The transactions contemplated
hereby shall have received all requisite approvals of the
shareholders of CorpBank.
No Proceedings. No legal, administrative,
arbitration, investigatory or other proceeding by any
governmental authority shall have been instituted and, at what
would otherwise have been the Effective Time of the Merger,
remain pending by or before a court or any governmental authority
to restrain or prohibit the transactions contemplated hereby.
Regulatory Approvals. To the extent required by
applicable law or regulation, all approvals or consents of any
governmental authority, including without limitation, those of
the OCC, Fed and Superintendent shall have been obtained or made
for the transactions contemplated hereby, and the applicable
waiting period under the BHCA and the Bank Merger Act shall have
expired. All other statutory or regulatory requirements for the
valid completion of the transactions contemplated hereby shall
have been satisfied.
Stock Exchange Listing. The shares of Bancorp Stock
deliverable pursuant to this Agreement shall have been duly
authorized for listing, subject to official notice of issuance,
on the Nasdaq Stock Exchange.
Registration Statement and Proxy Statement. The
Registration Statement shall have become effective under the
Securities Act and copies of the Proxy Statement shall have been
<PAGE> 62
mailed to every shareholder of record of CorpBank on the
record date not less than 20 days prior to the date of the
shareholders' meeting called to act upon the Merger.
Conditions to Obligations of Bancorp and CUB. The
obligations of Bancorp and CUB to effect the transactions
contemplated hereby shall be subject to the following conditions,
any of which may be waived in writing by Bancorp and CUB:
Representations and Warranties; Performance of
Covenants. Each of the representations and warranties of
CorpBank and CorpBank Subsidiaries set forth herein shall be true
and correct as of the Effective Time of the Merger in all
material respects, as if made on such date; and CorpBank and
CorpBank Subsidiaries shall have performed in all material
respects all of the covenants to be performed by them on or prior
to the Effective Time of the Merger.
Opinion of Counsel for CorpBank. Bancorp and CUB
shall have received from Knecht & Hansen, counsel to CorpBank, an
opinion dated the Effective Time of the Merger in substantially
the form attached hereto as Exhibit F.
Authorization of Merger. All action necessary to
authorize the execution, delivery and performance of this
Agreement by CorpBank and the CorpBank Subsidiaries and the
consummation of the transactions contemplated hereunder shall
have been duly and validly taken by the Boards of Directors and
shareholders of CorpBank, and the CorpBank Subsidiaries including
without limitation approval by a vote of the holders of at least
two thirds of the outstanding shares of CorpBank Stock pursuant
to the National Bank Act and the California Corporations Code,
and CorpBank shall have full power and right to merge pursuant to
the Agreement of Merger.
Dissenters' Rights. Not more than 5% of the
outstanding shares of CorpBank Stock shall have been determined
to be "dissenting shares" as defined in the California
Corporations Code and other applicable law and regulation.
Regulatory Approvals and Related Conditions. Any
governmental and regulatory approvals and consents referred to in
Sections 6.1(c) and any other section of this Agreement shall
have been granted without the imposition of conditions that are
or would have become applicable to Bancorp, or the Surviving
Association and that Bancorp reasonably and in good faith
concludes would adversely affect the financial condition or
operations of Bancorp, or the Surviving Association, or otherwise
would be burdensome.
Third Party Consents. CorpBank shall have obtained
all consents of other parties to their material mortgages, notes,
leases, franchises, agreements, licenses and permits as may be
necessary to permit the transactions contemplated herein to be
consummated, without default, acceleration, breach or loss of
rights or benefits thereunder.
<PAGE> 63
Absence of Certain Changes. As of the Closing Date
there shall not exist any of the following: (i) any change(s) in
the consolidated financial condition, results of operation or
prospects of CorpBank since December 31, 1994 which individually
is or in the aggregate are materially adverse to CorpBank on a
consolidated basis; or (ii) any damage, destruction, loss or
event materially and adversely affecting the properties, business
or prospects of CorpBank on a consolidated basis.
Termination of Stock Option Plans. CorpBank shall
have caused its stock option plans to be terminated as of the
Calculation Date and shall have obtained the consents or
agreements specified in, and otherwise shall have complied with
the terms of, Section 5.9.
Shareholders' Agreements. All directors of CorpBank
and all Shareholders specified in Section 1.9 shall have entered
into agreements in substantially the form attached hereto as
Exhibit B concurrently with the execution of this Agreement, and
each of the persons executing such agreement shall have performed
in all material respects the obligations to be performed by him
under the agreement.
Officers' Certificate. There shall have been
delivered to Bancorp on the Closing Date a certificate executed
by the Chairman of the Board, Vice Chairman of the Board, Chief
Executive Officer and the Chief Financial Officer of CorpBank
certifying, to the best of their knowledge, compliance with all
of the provisions of Sections 6.2(a), (c), (d), (f), (g), (h) and
(l).
Validity of Transactions. The validity of all
transactions herein contemplated, as well as the form and sub
stance of all opinions, certificates, instruments of transfer and
other documents to be delivered to Bancorp and CUB hereunder,
shall be subject to the approval, to be reasonably exercised, of
counsel for Bancorp and CUB.
Accountants' Letters.
Bancorp shall have received from Deloitte, Touche,
letters, dated the date of mailing of the Proxy Statement and
the Effective Time of the Merger, in form and substance
satisfactory to Bancorp: (i) confirming that they are
independent public accountants with respect to CorpBank and
CorpBank Subsidiaries within the meaning of the Securities Act
and the published rules and regulations thereunder;
(ii) stating that, in their opinion, the audited consolidated
financial statements of CorpBank and CorpBank Subsidiaries,
examined by them and included or incorporated by reference in
the Proxy Statement and Registration Statement and reported
therein by them, comply as to form in all material respects
with the applicable accounting requirements of the 1934 Act,
the Securities Act and the applicable published rules and
regulations thereunder, as appropriate; (iii) stating in
<PAGE> 64
effect that they have made a review of the unaudited
consolidated interim financial statements included or
incorporated by reference in the proxy statement or
registration statement for periods subsequent to the most
recent audited consolidated financial statements included or
incorporated by reference in the Proxy Statement and the
Registration Statement in accordance with standards
established by the American Institute of Certified Public
Accountants and nothing came to their attention that caused
them to believe that such unaudited consolidated financial
statements do not comply as to form in all material respects
with the applicable accounting requirements of the 1934 Act
and the Securities Act, as appropriate, or are not presented
in conformity with generally accepted accounting principles
applied on a basis consistent in all material respects with
that of the most recent audited consolidated financial
statements included or incorporated by reference in the Proxy
Statement and the Registration Statement; (iv) stating in
effect that, on the basis of certain procedures and inquiries
including a reading of the latest available unaudited
consolidated interim financial statements of CorpBank and
CorpBank Subsidiaries, inquiries of officials of CorpBank and
CorpBank Subsidiaries responsible for financial and
accounting matters, and a reading of the minutes of the
meetings of the Boards of Directors and shareholders of
CorpBank and CorpBank Subsidiaries (which procedures and
inquiries do not constitute an examination made in accordance
with generally accepted auditing standards and would not
necessarily reveal material adverse changes in the
consolidated financial position or results of operations of
CorpBank and CorpBank Subsidiaries ), nothing came to their
attention that caused them to believe that (A) the unaudited
consolidated financial statements of CorpBank and the CorpBank
Subsidiaries incorporated by reference in the Proxy Statement
and the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements
of the 1934 Act and the Securities Act, as appropriate, or
that the unaudited consolidated financial statements are not
in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited consolidated financial statements or that at a
specified date not more than five days prior to the date of
mailing of the Proxy Statement or Effective Date of the
Registration Statement and the Effective Time of the Merger,
as applicable, there has been any material change in the
capital stock, other equity securities or other ownership
interests of CorpBank or any of the CorpBank Subsidiaries , or
any increase in consolidated long-term debt of CorpBank or any
of the CorpBank Subsidiaries, or any reduction in
consolidated shareholders' equity (excluding unrealized gain
or loss on marketable equity securities) or other ownership
interests as compared with the amounts of those items set out
in the audited consolidated statement of condition at
December 31, 1994 and with any subsequent unaudited
consolidated statement of condition included or incorporated
by reference in the Proxy Statement and Registration
<PAGE> 65
Statement, except for changes and the amount of such
reduction, if any, which are described in such letter or are
set forth in the Proxy Statement and Registration Statement,
or (B) since December 31, 1994 any dividends were paid on the
CorpBank Stock except as described in such letter; and (v) in
addition to the review referred to in clause (iii) above and
the limited procedures referred to in clause (iv) above, they
have carried out certain specified procedures, if any, not
constituting an audit, with respect to certain amounts or
percentages and financial information which appear in the
Proxy Statement and Registration Statement and which have been
reasonably specified by Bancorp or CorpBank, as described in
such letter.
Covenants Not to Compete. Each director of CorpBank
who is a shareholder of CorpBank shall have entered into an
"Agreement Not to Compete" in substantially the form attached
hereto as Exhibits G(1), and G(2)(Stanley Pawlowski).
Registration Statement. The Registration Statement
shall have been declared effective, no stop-order with respect to
the Registration Statement shall have been received by Bancorp
and no proceeding for such purpose shall be pending or threatened
before the SEC.
Blue Sky Qualification. The sale of the Bancorp Stock
referred to herein shall have been qualified or registered with
the appropriate authorities of all states in which qualification
or registration is required under the state securities or Blue
Sky laws, and such qualifications or registrations shall not have
been suspended or revoked.
Rule 145 Affiliate Agreements. CorpBank shall have
delivered to Bancorp not later than 30 days prior to the
Effective Date, all of the executed Affiliate Agreements
specified in Section 5.10.
Resignations. CorpBank shall have delivered the
resignations required by Section 5.12.
Regulatory Approvals for Bank Merger. All approvals
or consents of any governmental authority shall have been
obtained or made for the Bank Merger and all applicable waiting
periods shall have expired. All other statutory or regulatory
requirements for the valid completion of the Bank Merger shall
have been satisfied.
General Releases. The general releases and dismissals
of litigation set forth in Section 5.6 shall have been received
and are acceptable to CUB.
Pawlowski. Stanley Pawlowski shall agree that at the
Closing he will become an employee of CUB, on terms and
conditions to be agreed upon by CUB and Pawlowski. He will
further agree that in the event CUB or Bancorp offers him a
position as a director of either or both companies, he will
<PAGE> 66
accept such appointment.
Richard Brown. Richard Brown shall agree that at the
Closing he will accept a position with CUB for up to one year,
on terms and conditions to be agreed upon by CUB and Brown.
Brown shall agree that during such period he will not compete
with CUB in any manner, as more fully set out in an agreement to
be entered into between them.
Conditions to Obligations of CorpBank. The obligations of
CorpBank to effect the transactions contemplated hereunder shall
be subject to the following conditions, any of which may be
waived in writing by CorpBank:
Representations and Warranties; Performance of
Covenants. Each of the representations and warranties of Bancorp
and CUB set forth herein shall be true and correct as of the
Effective Time of the Merger in all material respects, as if made
on such date; and Bancorp and CUB shall have performed in all
material respects all of the covenants to be performed by them on
or prior to the Effective Time of the Merger.
Authorization of Merger. All actions necessary to
authorize the execution, delivery and performance of this
Agreement by Bancorp and CUB and the consummation of the trans
actions contemplated hereby shall have been duly and validly
taken by the Board of Directors of each of Bancorp and CUB, and
CUB shall have full power and right to merge pursuant to the
Agreement of Merger.
Officers' Certificate. There shall have been
delivered to CorpBank on the Closing Date a certificate executed
by the Chief Executive Officer and the Chief Financial Officer of
each of Bancorp and CUB certifying, to the best of their
knowledge, compliance with all of the provisions of
Sections 6.3(a) and (c).
Third Party Consents. Bancorp and CorpBank shall have
obtained all consents of other parties to their material
mortgages, notes, leases, franchises, agreements, licenses and
permits as may be necessary to permit the transactions
contemplated herein to be consummated, without default,
acceleration, breach or loss of rights or benefits thereunder.
Absence of Certain Changes. As of the Closing Date
there shall not exist any of the following: (i) any change(s) in
the consolidated financial condition, results of operation or
prospects of Bancorp since December 31, 1994 which individually
is or in the aggregate are materially adverse to Bancorp on a
consolidated basis; or (ii) any damage, destruction, loss or
event materially and adversely affecting the properties, business
or prospects of Bancorp on a consolidated basis.
Fairness Opinion. Prior to the execution of this
Agreement, CorpBank shall have received a letter from Gerry
<PAGE> 67
Findley & Associates or such other party as may be
acceptable to the parties, substantially in the form attached
hereto as Schedule 6.3(g), to the effect that the transactions
contemplated by this Agreement are fair from a financial point of
view to the shareholders of CorpBank.
Validity of Transactions. 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 CorpBank hereunder, shall
be subject to the approval, to be reasonably exercised, of
counsel for CorpBank.
ARTICLE
EMPLOYEE BENEFITS PLANS
Termination of CorpBank Employee Benefit Plans. Prior to
the Effective Time of the Merger, CorpBank will take, and will
cause all CorpBank Subsidiaries to take, all actions necessary to
terminate their respective employee benefit plans and pension
plans as of the Effective Time of the Merger. Contributions
under the employee benefit plans and pension plans will be made
at the rate provided in those respective plans through the
Effective Time of the Merger. Except for amendments that are
required by the Tax Reform Act of 1986 and later legislation, no
amendments to the employee benefit plans and pension plans shall
be made which increase the obligations of employers under any of
the plans. Distributions from the plans will be made to the
participants as soon as practicable after the termination of the
plans in accordance with requirements of ERISA and the Code.
ARTICLE
TERMINATION
Termination of this Agreement.
This Agreement may be terminated:
By mutual agreement of the parties, in writing;
By (A) Bancorp immediately upon the expiration of
30 days from the date that Bancorp has given notice to
CorpBank of a material breach or default by CorpBank or any
CorpBank Subsidiary in the performance of any covenant,
agreement, representation, warranty, duty or obligation
hereunder or (B) CorpBank immediately upon the expiration of
30 days from the date that CorpBank has given notice to
Bancorp of a material breach or default by Bancorp or CUB in
the performance of any covenant, agreement, representation,
warranty, duty or obligation hereunder; provided, however,
that no such termination shall be effective if, within such
<PAGE> 68
30-day period, the breaching or defaulting party
shall have substantially corrected and cured the grounds for
the termination as set forth in said notice of termination.
By Bancorp or CUB if any governmental or
regulatory authority denies or refuses to grant the approvals,
consents or authorizations required to be obtained in order to
consummate the transactions covered and contemplated by this
Agreement, or if any such approval contains conditions which,
in the reasonable opinion of Bancorp or CUB, are materially
burdensome to its ongoing operations.
By CorpBank if any governmental or regulatory
authority denies or refuses to grant the approvals, consents
or authorizations required to be obtained in order to
consummate the transactions covered and contemplated by this
Agreement other than the Merger.
By Bancorp or CUB at any time prior to the
Effective Time of the Merger, if (A) the Board of Directors of
CorpBank approves a transaction (or CorpBank executes a letter
of intent or other document) pursuant to which any person or
entity or related group of persons or entities acquires,
directly or indirectly, record or beneficial ownership (as
defined in Rule 13d-3 promulgated by the SEC pursuant to the
1934 Act) or control of 5% or more of the outstanding shares
of CorpBank Stock; (B) any person or entity or related group
of persons or entities seeks to acquire 5% or more of the
outstanding shares of CorpBank Stock by tender offer or
otherwise, and the Board of Directors of CorpBank does not
advise CorpBank's shareholders that the Board does not support
such tender offer or acquisition and that it does support the
Merger; (C) if CorpBank violates its covenant pursuant to
Section 5.7(j); or (D) the Merger does not receive the
requisite approval of CorpBank shareholders.
This Agreement shall be terminated if any conditions
specified in Article VI have not been satisfied or waived in
writing by the party authorized to waive such conditions by
September 30, 1995 unless mutually extended by the parties
hereto.
This Agreement may be terminated by Bancorp or CUB if
Schedules provided by CorpBank disclose material contracts,
liabilities or potential liabilities not previously disclosed
orally or in writing by CorpBank to CUB or fail to disclose
material contracts, liabilities or potential liabilities which
come to CUB's attention in any other manner.
Effect of Termination; Survival. No termination of this
Agreement under this Article VIII 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, 9.1 or 9.2 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
<PAGE> 69
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.
ARTICLE
GENERAL PROVISIONS
Indemnification.
CorpBank agrees to defend, indemnify and hold harmless
Bancorp and CUB, their officers and directors, their attorneys,
and each person who controls Bancorp within the meaning of the
Securities Act from and against any costs, damages, liability and
expenses of any nature, insofar as such costs, damages,
liabilities and expenses arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Proxy Statement or in the Registration Statement
or any amendments or supplements thereto, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that
CorpBank shall be liable in any such case only to the extent that
any such cost, damage, liability or expense arises out of or is
based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in said Proxy Statement or
Registration Statement or amendments or supplements thereto, in
reliance upon and in conformity with information with respect to
CorpBank or CorpBank Subsidiaries furnished to Bancorp by or on
behalf of CorpBank specifically for use therein.
Bancorp and CUB agree to defend, indemnify and hold
harmless CorpBank, its officers and directors, its attorneys,
accountants and each person who controls CorpBank within the
meaning of the Securities Act from and against any costs,
damages, liabilities and expenses of any nature, insofar as any
such costs, damages, liabilities or expenses arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in the Proxy Statement or in the
Registration Statement or any amendments or supplements thereto,
or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make statements therein not misleading;
provided, however, that neither Bancorp nor Bank will be liable
in any such case to the extent that any such cost, damage,
liability or expense arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged
omission made in said Proxy Statement or Registration Statement,
or amendments or supplements thereto, in reliance upon and in
conformity with information with respect to CorpBank or CorpBank
Subsidiaries furnished to Bancorp by or on behalf of CorpBank
specifically for use therein.
<PAGE> 70
Expenses. Each party hereto shall pay its own costs and
expenses, including, but not limited to, those of its attorneys
and accountants, in connection with this Agreement and the
transactions covered and contemplated hereunder.
<PAGE> 71
Notices. All notices, demands or other communications
hereunder shall be in writing or by telex or facsimile
transmission and shall be deemed to have been duly given on the
date of service if delivered (i) in person or by telex or
facsimile transmission (provided that telexed or telecopied
notices are also mailed by first class, certified or registered
mail, postage prepaid); or (ii) 72 hours after mailing by United
States mail, first-class, certified or registered, with return
receipt requested and postage prepaid, and properly addressed as
follows:
If to CorpBank:
Corporate Bank
2740 North Grand Avenue
Santa Ana, California 94105
Attention:
Allan Stokke, Chairman
Stanley Pawlowski, Vice Chairman
With copies to:
Richard Knecht, Esq.
Knecht & Hansen
1301 Dove Street, Suite 900
Newport Beach, California 92660
fax: (714) 851 1732
page length adjusted for this page only (b) If to Bancorp
and CUB:
CU Bancorp and California United Bank, National
Association
16030 Ventura Boulevard
Encino, California 90071
Attention: Stephen G. Carpenter.
Chief Executive Officer
Telecopier Number (818) 907-5024
With copies to:
Anita Y. Wolman, Esq.
General Counsel
California United Bank, N.A.
16030 Ventura Boulevard
Encino, California 91436
Telecopier No. (818) 907-5024
The persons or addresses to which mailings or deliveries shall be
made may change from time to time by notice given pursuant to the
provisions of this Section 9.3.
<PAGE> 72
Successors and Assigns. All terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective transferees, successors and
assigns; provided, however, that, except as otherwise contem
plated herein, this Agreement and all rights, privileges, duties
and obligations of the parties hereto may not be assigned or
delegated by any party hereto without the prior written consent
of the other parties to this Agreement and any purported
assignment in violation of this Section 9.4 shall be null and
void.
Third Party Beneficiaries. Each party hereto 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
hereto. As used in this Agreement, the term "party" or "parties"
shall refer only to Bancorp, CUB, CorpBank, CorpBank
Subsidiaries, the Surviving Association or any of them.
Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute
one instrument.
Governing Law. This Agreement is made and entered into in
the State of California and, except to the extent that the
provisions of the National Banking Act are mandatorily
applicable, the laws of the State of California shall govern the
validity and interpretation hereof and the performance of the
parties hereto of their respective duties and obligations
hereunder. The parties hereto agree to venue in the city of Los
Angeles, State of California.
Captions. The captions contained in this Agreement are for
convenience of reference only and do not form a part of this
Agreement.
Waiver and Modification. No waiver of any term, provision
or condition of this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be or construed
as a further or continuing waiver of any such term, provision or
condition of this Agreement. This Agreement and the Agreement of
Merger, when executed and delivered, may be modified or amended
by action of the Boards of Directors of Bancorp, CUB, CorpBank or
CorpBank Subsidiaries without action by their respective
shareholders. This Agreement may be modified or amended only by
an instrument of equal formality signed by the parties or their
duly authorized agents.
Attorneys' Fees. In the event any of the parties to this
Agreement brings an action or suit against any other party by
reason of any breach of any covenant, agreement, representation,
warranty or other provision hereof, or any breach of any duty or
obligation created hereunder by such other party, the prevailing
party, as determined by the court or other body having
jurisdiction, shall be entitled to have and recover of and from
the losing party, as determined by the court or other body
<PAGE> 73
having jurisdiction, all reasonable costs and expenses incurred
or sustained by such prevailing party in connection with such
suit or action, including, without limitation, legal fees and
court costs (whether or not taxable as such).
Jury Waiver. THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY
MATTER ARISING OUT OF THIS AGREEMENT OR RELATED TO THIS AGREEMENT
OR IN CONNECTION WITH ANY TRANSACTION OR MATTER CONTEMPLATED IN
THIS AGREEMENT.
Entire Agreement. The making, execution and delivery of
this Agreement by the parties hereto have not been induced by any
representations, statements, warranties or agreements other than
those herein expressed. This Agreement embodies the entire under
standing of the parties and there are no further or other agree
ments or understandings, written or oral, in effect between the
parties relating to the subject matter hereof, unless expressly
referred to by reference herein.
Severability. Whenever possible, each provision of this
Agreement and every related document shall be interpreted in such
manner as to be valid under applicable law. However, if any
provision of any of the foregoing shall be invalid or prohibited
under said applicable law, it shall be construed, interpreted and
limited to effectuate its purpose to the maximum legally permis
sible extent. If it cannot be so construed and interpreted 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
thereof.
Effect of Disclosure. Any list, statement, document,
writing or other information set forth in, referenced to or
attached to any Schedule or Exhibit delivered pursuant to any
provision of this Agreement shall be deemed to constitute dis
closure for purposes of any other Schedule or Exhibit required to
be delivered pursuant to any other provision of this Agreement.
Publicity. The parties hereto agree that they will
coordinate on any publicity concerning this Agreement, and the
transactions contemplated hereby. Except as may be required by
law, no party shall issue any press release, publicity statement
or other public notice relating in any way to this Agreement or
any of the transactions contemplated hereby without obtaining the
prior consent of the others, which consent shall not be
unreasonably withheld.
Knowledge. Whenever any statement herein or in any
schedule, exhibit, certificate or other documents delivered to
any party pursuant to this Agreement is made "to the
<PAGE>74
knowledge" or "to the best knowledge" of any party or other
person, such party or other person shall make such statement only
after conducting an investigation reasonable under the
circumstances of the subject matter thereof, and each such
statement shall constitute a representation that such
investigation has been conducted.
Schedules. Notwithstanding anything to the contrary herein,
Schedules to this Reorganization Agreement may be submitted not
more than ten (10) business days following execution of this
Reorganization Agreement. If a party does not object to any
Schedule within 3 business days of receipt thereof, it shall be
deemed acceptable.
<PAGE> 75
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.
Bancorp: CU BANCORP
By:____________S/S____________
Name: STEPHEN G. CARPENTER
Title: PRESIDENT
By:___________S/S_____________
Name: PATRICK HARTMAN
Title: CHIEF FINANCIAL OFFICER
CUB: CALIFORNIA UNITED BANK, NATIONAL
ASSOCIATION
By:_________S/S_______________
Name: STEPHEN G. CARPENTER
Title: CHIEF EXECUTIVE OFFICER
By:_________S/S_______________
Name: DAVID I. RAINER
Title: PRESIDENT
CorpBank: CORPORATE BANK
By:_________S/S__________________
Name: WENDY ROPPA
Title: CORPORATE SECRETARY
By:_____S/S______________________
Name: ALLAN H. STOKKE
Title:CHAIRMAN OF THE BOARD
DATED: APRIL 7, 1995
<PAGE> 76
