SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
June 24, 1996
SUNRISE BANCORP
(exact name of registrant as specified in its charter)
California 0-10773 94-2819328
(State or other jurisdiction of (Commission File (I.R.S. Employer
Incorporation) Number) Identification No.)
5 Sierragate Plaza, Roseville, CA 95678
(Address of principal executive offices) (Zip code)
(916) 783-2800
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE>
Item 5. Other Events
On June 24, 1996, Sunrise Bancorp (the "Company") and First Banks
America, Inc. ("FBA") jointly announced they had signed a definitive
Agreement and Plan of Merger (the "Agreement") providing for the
acquisition of the Company by FBA, on the terms described in the
Agreement a copy of which is filed herewith as Exhibit 99.2 and
which is incorporated herein by reference. The Agreement provides
for the shareholders of the Company to receive $4.00 per share in
cash for each share of common stock upon completion of the merger.
The transaction, which is subject to regulatory approvals and the
approval of the Company's shareholders, is expected to be completed
during the fourth quarter of 1996.
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 - Press Release dated June 24, 1996
99.2 - Agreement and Plan of Merger dated June 24, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SUNRISE BANCORP
Date: June 28, 1996 /s/ Harold G. Giomi
Harold G. Giomi
President and Chief Executive Officer
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SUNRISE BANCORP
Date: June 28, 1996
HAROLD G. GIOMI
Harold G. Giomi
President and Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibits
99.1 Press Release dated June 24, 1996
99.2 Agreement and Plan of Merger dated June 24, 1996
<PAGE>
PRESS RELEASE
FIRST BANKS AMERICA, INC. SUNRISE BANCORP
HOUSTON, TEXAS ROSEVILLE, CALIFORNIA
CONTACT: James F. Dierberg Hal Giomi
Chairman, President and President and Chief Executive
Chief Executive Officer Officer
(314) 854-4600 (916) 783-2800
TRADED: NYSE NASDAQ/NNM
SYMBOL: FBA SRBC
FOR IMMEDIATE RELEASE June 24, 1996
FIRST BANKS AMERICA, INC. AND
SUNRISE BANCORP ANNOUNCE
ACQUISITION AGREEMENT
HOUSTON, TEXAS, June 24, 1996. James F. Dierberg, Chairman, President and
Chief Executive Officer of First Banks America, Inc., and Sean McCarthy,
Chairman and Hal Giomi, President and Chief Executive Officer of Sunrise
Bancorp, Roseville, California, jointly announced the signing of a definitive
Agreement and Plan of Merger providing for the acquisition of Sunrise Bancorp
by First Banks America, Inc. As a result, Sunrise Bank of California will
become a wholly owned subsidiary of First Banks America, Inc. The agreement
provides for the shareholders of Sunrise Bancorp to receive $4.00 per share
in cash for their stock, an aggregate of approximately $18.1 million (which
includes the purchase price of outstanding stock options). The transaction,
which is subject to regulatory approvals and the approval of the shareholders
of Sunrise Bancorp, is expected to be completed during the fourth quarter of
1996.
<PAGE>
Sunrise Bancorp had total assets of $115.3 million as of March 31, 1996.
Through its wholly owned subsidiary, Sunrise Bank of California, it operates two
banking locations in Roseville and Citrus Heights, California, and one loan
production office in San Francisco, California. First Banks America, Inc., had
total assets of $293.9 million as of March 31, 1996. Through its wholly
owned subsidiary, BankTEXAS N.A., it operates six banking locations in
McKinney, Irving, Dallas and Houston, Texas. Approximately 66% of the
outstanding common stock of First Banks America, Inc., is owned by First
Banks, Inc., St. Louis, Missouri, a $3.6 billion bank holding company
operating 125 banking locations in Missouri, Illinois, Texas and California.
In December 1995, First Banks, Inc., completed its acquisition of majority
control of First Commercial Bancorp, Inc., which operates banking
locations in Roseville and nearby Sacramento, California, as well as the San
Francisco Bay area.
"Sunrise Bancorp is an excellent organization with strong management and a fine
reputation in its community. The Bank has developed both strong retail and
commercial customer bases in a very attractive market," James Dierberg
observed. He added that "We are pleased to become affiliated with Sunrise
Bancorp and believe that together we can build Sunrise's presence in their
marketplace."
Sean McCarthy stated that "We are enthusiastic about the future of the northern
California economy and the opportunities which this affiliation offers to both
First Banks America and Sunrise Bancorp. Being a part of a larger organization
will provide us with the opportunity to more aggressively market our services
and expand our Bank within the community." He added that "Banking today in all
of California, including Roseville, is dominated by a few megabanks. However,
the existence of smaller, separate banks indicates a localized demand for an
alternative source of more responsive, community-oriented banking. We believe
that this transaction will enable Sunrise Bank to better meet the local
financial needs of our community."
(# # #)
EXHIBIT 99.1
<PAGE>
AGREEMENT AND PLAN OF MERGER
by and between
SUNRISE BANCORP
a California corporation
and
FIRST BANKS AMERICA, INC.
a Delaware corporation
June 24, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE - TERMS OF THE MERGER & CLOSING
Section 1.01. The Merger . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Effect of the Merger . . . . . . . . . . . . . . . . 1
Section 1.03. Conversion of Shares.. . . . . . . . . . . . . . . . 1
Section 1.04. The Closing. . . . . . . . . . . . . . . . . . . . . 2
Section 1.05. Closing Date.. . . . . . . . . . . . . . . . . . . . 2
Section 1.06. Actions At Closing.. . . . . . . . . . . . . . . . . 2
Section 1.07. Exchange Procedures; Surrender of Certificates.. . . 3
ARTICLE TWO - REPRESENTATIONS OF BANCORP
Section 2.01. Organization and Capital Stock.. . . . . . . . . . . 4
Section 2.02. Authorization; No Defaults . . . . . . . . . . . . . 5
Section 2.03. Subsidiaries . . . . . . . . . . . . . . . . . . . . 5
Section 2.04. Financial Information. . . . . . . . . . . . . . . . 6
Section 2.05. Absence of Changes . . . . . . . . . . . . . . . . . 6
Section 2.06. Regulatory Enforcement Matters . . . . . . . . . . 7
Section 2.07. Tax Matters. . . . . . . . . . . . . . . . . . . . . 7
Section 2.08. Litigation . . . . . . . . . . . . . . . . . . . . . 7
Section 2.09. Properties, Contracts, Employee Benefit Plans
and Other Agreements . . . . . . . . . . . . . . . . 7
Section 2.10. Reports. . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.11. Investment Portfolio . . . . . . . . . . . . . . . . 9
Section 2.12. Loan Portfolio . . . . . . . . . . . . . . . . . . . 9
Section 2.13. Employee Matters and ERISA . . . . . . . . . . . . . 9
Section 2.14. Title to Properties; Insurance . . . . . . . . . . . 11
Section 2.15. Environmental Matters. . . . . . . . . . . . . . . . 11
Section 2.16. Compliance with Law. . . . . . . . . . . . . . . . . 12
Section 2.17. Brokerage. . . . . . . . . . . . . . . . . . . . . . 12
Section 2.18. No Undisclosed Liabilities . . . . . . . . . . . . . 12
Section 2.19. Statements True and Correct. . . . . . . . . . . . . 12
Section 2.20. Commitments and Contracts. . . . . . . . . . . . . . 13
Section 2.21. Material Interest of Certain Persons . . . . . . . . 13
Section 2.22. Conduct to Date. . . . . . . . . . . . . . . . . . . 13
Section 2.23. Irrevocable Proxies. . . . . . . . . . . . . . . . . 14
Section 2.24. Disclosures in Disclosure Schedule . . . . . . . . . 14
<PAGE>
ARTICLE THREE - REPRESENTATIONS OF FBA
Section 3.01. Organization . . . . . . . . . . . . . . . . . . . . 15
Section 3.02. Authorization. . . . . . . . . . . . . . . . . . . . 15
Section 3.03. Absence of Changes . . . . . . . . . . . . . . . . . 15
Section 3.04. Litigation . . . . . . . . . . . . . . . . . . . . . 15
Section 3.05. Statements True and Correct. . . . . . . . . . . . . 15
Section 3.06. Availability of Cash Consideration . . . . . . . . . 16
ARTICLE FOUR - AGREEMENTS OF BANCORP
Section 4.01. Business in Ordinary Course. . . . . . . . . . . . . 16
Section 4.02. Breaches . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.03. Submission to Shareholders . . . . . . . . . . . . . 19
Section 4.04. Consummation of Agreement. . . . . . . . . . . . . . 19
Section 4.05. Environmental Reports. . . . . . . . . . . . . . . . 20
Section 4.06. Access to Information. . . . . . . . . . . . . . . . 20
Section 4.07. Consents to Contracts and Leases . . . . . . . . . . 20
Section 4.08. Subsequent Financial Statements. . . . . . . . . . . 21
Section 4.09. Reserve and Provisions for Loan Losses . . . . . . . 21
ARTICLE FIVE - AGREEMENTS OF FBA
Section 5.01. Regulatory Approvals . . . . . . . . . . . . . . . . 21
Section 5.02. Breaches . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.03. Consummation of Agreement. . . . . . . . . . . . . . 21
Section 5.04. Indemnification and Insurance. . . . . . . . . . . . 22
Section 5.05. Employee Benefits. . . . . . . . . . . . . . . . . . 22
Section 5.06. Payment for Stock Options and Warrants . . . . . . . 23
Section 5.07. Access to Information. . . . . . . . . . . . . . . . 23
Section 5.08. Proxy Statement. . . . . . . . . . . . . . . . . . . 23
ARTICLE SIX - CONDITIONS PRECEDENT TO MERGER
Section 6.01. Conditions to FBA's Obligations. . . . . . . . . . . 24
Section 6.02. Conditions to Bancorp's Obligations. . . . . . . . . 24
<PAGE>
ARTICLE SEVEN - TERMINATION OR ABANDONMENT
Section 7.01. Mutual Agreement . . . . . . . . . . . . . . . . . . 25
Section 7.02. Breach of Agreements . . . . . . . . . . . . . . . . 26
Section 7.03. Failure of Conditions. . . . . . . . . . . . . . . . 26
Section 7.04. Approval Denial. . . . . . . . . . . . . . . . . . . 26
Section 7.05. Environmental Reports. . . . . . . . . . . . . . . . 26
Section 7.06. Regulatory Enforcement Matters . . . . . . . . . . . 26
Section 7.07. Automatic Termination. . . . . . . . . . . . . . . . 26
ARTICLE EIGHT - LIABILITY ON TERMINATION
Section 8.01. Liquidated Damages . . . . . . . . . . . . . . . . . 27
Section 8.02. Liability on Termination . . . . . . . . . . . . . . 27
ARTICLE NINE - GENERAL
Section 9.01. Confidential Information . . . . . . . . . . . . . . 28
Section 9.02. Publicity. . . . . . . . . . . . . . . . . . . . . . 28
Section 9.03. Return of Documents. . . . . . . . . . . . . . . . . 28
Section 9.04. Notices. . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.05. Nonsurvival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . 29
Section 9.06. Costs and Expenses . . . . . . . . . . . . . . . . . 29
Section 9.07. Entire Agreement . . . . . . . . . . . . . . . . . . 29
Section 9.08. Headings and Captions. . . . . . . . . . . . . . . . 29
Section 9.09. Waiver, Amendment or Modification. . . . . . . . . . 30
Section 9.10. Rules of Construction. . . . . . . . . . . . . . . . 30
Section 9.11. Counterparts . . . . . . . . . . . . . . . . . . . . 30
Section 9.12. Successors and Assigns . . . . . . . . . . . . . . . 30
Section 9.13. Governing Law; Assignment. . . . . . . . . . . . . . 30
<PAGE>
AGREEMENT AND PLAN OF MERGER
This is an AGREEMENT AND PLAN OF MERGER (this "Agreement") made
June 24,
1996, by and between SUNRISE BANCORP, a California corporation ("Bancorp"),
and FIRST BANKS AMERICA, INC., a Delaware corporation ("FBA").
In consideration of the premises and the mutual terms and provisions set
forth in this Agreement, the parties agree as follows:
ARTICLE ONE
TERMS OF THE MERGER & CLOSING
Section 1.01. The Merger. Pursuant to the terms and provisions of this
Agreement and the applicable corporation laws governing the merger of Bancorp
with a subsidiary of FBA to be formed by FBA for the purpose of consummating
the transactions contemplated by this Agreement ("Corporate Laws"), Bancorp
shall merge with such subsidiary ("AcquisitionCo") in a transaction in which,
at the option of FBA, either Bancorp or AcquisitionCo will be the surviving
corporation (the"Merger"). It is further understood that, at FBA's option,
the Merger may be effected between Bancorp and a corporate affiliate of FBA
other than a subsidiary, in which case references herein to AcquisitionCo shall
refer to such affiliate.
Section 1.02. Effect of the Merger. The Merger shall have all of the
effects provided by the Corporate Laws and this Agreement, and the separate
corporate existence of Bancorp or AcquisitionCo shall cease on consummation of
the Merger and be combined in the surviving corporation of the Merger.
Section 1.03. Conversion of Shares.
(a) At the Effective Time (as defined in Section 1.05 below), each share
of common stock, no par value, of Bancorp ("Bancorp Common") issued and
outstanding immediately prior to the Effective Time shall be converted into
the right to receive cash from FBA in the amount of Four Dollars (the "Merger
Consideration").
(b) At the Effective Time, all of the shares of Bancorp Common, by
virtue of the Merger and without any action on the part of the holders thereof,
shall no longer be outstanding and shall be canceled and retired and shall
cease to exist, and each holder of any certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of
Bancorp Common (the "Certificate") shall cease to have any rights with respect
to such shares, except the right of the holder to receive, without interest,
the Merger Consideration upon the surrender of the Certificate in accordance
with Section 1.07(b) hereof.
<PAGE>
(c) At the Effective Time, each share of Bancorp Common, if any, held
in the treasury of Bancorp or by any direct or indirect subsidiary of Bancorp
(other than shares held in trust accounts for the benefit of others or in other
fiduciary, nominee or similar capacities) immediately prior to the Effective
Time shall be canceled.
(d) If holders of Bancorp Common are entitled to dissent from the
Agreement and Merger and demand payment of the fair market value of their
shares under applicable Corporate Law, issued and outstanding shares of
Bancorp held by a dissenting holder shall not be converted as described in
this Section 1.03, but from and after the Effective Time shall represent
only the right to receive such consideration as may be determined to be due
pursuant to applicable Corporate Law; provided, however, that each share of
Bancorp Common outstanding immediately prior to the Effective Time and held
by a dissenting holder who shall, after the Effective Time, withdraw his
demand for appraisal or lose his right of appraisal shall have only such
rights as are provided under applicable Corporate Law.
Section 1.04. The Closing. The closing of the Merger (the "Closing")
shall take place at the location mutually agreeable to the parties hereto at
10:00 A.M. local time on the Closing Date described in Section 1.05 of this
Agreement.
Section 1.05. Closing Date. At FBA's election, the Closing shall take
place on either (i) one of the last five (5) business days of the month, or
(ii) the first business day of the month following the month, in each case,
during which each of the conditions in Sections 6.01(d) and 6.02(d) is satis-
fied or waived by the appropriate party or on such other date as Bancorp and
FBA may agree (the "Closing Date"). The Merger shall be effective upon the
filing of a certificateof merger and any other documents required pursuant to
applicable Corporate Law with the Secretary of State of the appropriate state
(the "Effective Time"). The parties shall use their best efforts to cause
such filing to occur on the Closing Date.
Section 1.06. Actions At Closing.
(a) At the Closing, Bancorp shall deliver to FBA:
(i) a certified copy of the Articles of Incorporation and Bylaws of
Bancorp and each of its subsidiaries;
(ii) a Certificate signed by an appropriate officer of Bancorp
stating that (A) each of the representations and warranties contained
in Article Two is true and correct in all material respects at the time
of the Closing with the same force and effect as if such representations
and warranties had been made at the Closing, and (B) all of the condi-
tions set forth in Sections 6.01(b) and 6.01(g) have been satisfied or
waived as provided therein;
<PAGE>
(iii) certified copies of the resolutions of Bancorp's Board of
Directors and shareholders, establishing the requisite approvals under
applicable Corporate Law of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby;
(iv) A Certificate of the Secretary of State of the State of
California, dated a recent date, stating that Bancorp is in good
standing; and
(v) a legal opinion from counsel for Bancorp as to the matters set
forth on Exhibit 1.06(a) hereto, in form reasonably satisfactory to
FBA's counsel.
(b) At the Closing, FBA shall deliver to Bancorp:
(i) a Certificate signed by an appropriate officer of FBA stating
that (A) each of the representations and warranties contained in Article
Three is true and correct in all material respects at the time of
the Closing with the same force and effect as if such representations
and warranties had been made at the Closing, and (B) all of the condi-
tions set forth in Section 6.02(d) (but only with respect to approvals
other than by the Bancorp's shareholders) have been satisfied;
(ii) certified copies of the resolutions of FBA's Board of Directors
and of the Board of Directors and shareholder of AcquisitionCo estab-
lishing the requisite approvals under applicable Corporate Law of this
Agreement and the consummation of the Merger and the other transactions
contemplated hereby; and
(iii) a legal opinion from counsel for FBA as to the matters set
forth on Exhibit 1.06(b), in form reasonably satisfactory to Bancorp's
counsel.
Section 1.07. Exchange Procedures; Surrender of Certificates.
(a) Boatmen's Trust Company, St Louis, Missouri, shall act as Exchange
Agent in the Merger (the "Exchange Agent"). All fees and expenses of the
Exchange Agent shall be borne by FBA.
(b) The agreement between FBA and the Exchange Agent (the "Exchange
Agreement") shall require that, as soon as reasonably practicable and in any
event within ten (10) days after the Effective Time, the Exchange Agent shall
mail to each record holder of any Certificate or Certificates whose shares were
converted into the right to receive the Merger Consideration a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as the Exchange Agent may reasonably specify) (each such
letter, the "Letter of Transmittal") and instructions for use in effecting
the surrender of the Certificates in exchange for the Merger Consideration.
Upon surrender to the Exchange Agent of a Certificate, together with a Letter
of Transmittal duly
<PAGE>
executed and any other required documents, the holder of a Certificate shall
be entitled to receive in exchange therefor solely the Merger Consideration,
and the Exchange Agreement shall require that the Exchange Agent transmit the
Merger Consideration to each holder not later than five (5) business days after
the receipt of a Certificate and any other documents required by the Exchange
Agent. Such Merger Consideration shall be transmitted by wire at the request
of any shareholder of Bancorp if such consideration exceeds $25,000. No
interest on the Merger Consideration shall be paid or accrued for the benefit
of holders of Certificates. If the Merger Consideration is to be paid to a
person other than a person in whose name a surrendered Certificate is
registered, it shall be a condition of payment of the Merger Consideration
that the surrendered Certificate shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such payment shall pay
to the Exchange Agent any required transfer or other taxes or establish to the
satisfaction of the Exchange Agent that such taxes have been paid or are not
applicable.
(c) At any time following six months after the Effective Time, FBA shall
be entitled to terminate the Exchange Agent relationship, and thereafter
holders of Certificates shall be entitled to look only to FBA (subject to
abandoned property, escheat or other similar laws) with respect to the Merger
Consideration payable upon surrender of Certificates.
ARTICLE TWO
REPRESENTATIONS OF BANCORP
Bancorp hereby makes the following representations and warranties to FBA:
Section 2.01. Organization and Capital Stock.
(a) Bancorp is a corporation duly organized, validly existing and in good
standing under the laws of the State of California and has the corporate power
to own all of its property and assets, to incur all of its liabilities and to
carry on its business as now being conducted.
(b) As of the date hereof, the authorized capital stock of Bancorp
consists of 20,000,000 shares of Preferred Stock, no par value, none of which
is issued and outstanding, and 20,000,000 shares of Bancorp Common, of which
4,263,298 shares are outstanding, duly and validly issued, fully paid and
non-assessable. None of the outstanding shares of Bancorp Common has been
issued in violation of any preemptive rights of the current or past share-
holders of Bancorp. Bancorp has granted and outstanding (i) stock options
representing the right to acquire an aggregate of 269,629 shares of Bancorp
Common for the aggregate exercise price of $624,789 (the "Bancorp Stock
Options") and (ii) warrants representing the right to acquire an aggregate of
296,209 shares of Bancorp Common for the aggregate price of $1,341,827 (the
"Bancorp Warrants"). Except as disclosed in Section 2.01(b) of that certain
document delivered by Bancorp
<PAGE>
to FBA and executed by both Bancorp and FBA concurrently with the execution and
delivery of this Agreement (the "Disclosure Schedule"), each Certificate
representing shares of Bancorp Common issued by Bancorp in replacement of any
Certificate theretofore issued by it which was claimed by the record holder
thereof to have been lost, stolen or destroyed was issued by Bancorp only upon
receipt of an affidavit of lost stock certificate and a bond sufficient to
indemnify Bancorp against any claim that may be made against it on account of
the alleged loss, theft or destruction of any such Certificate or the issuance
of such replacement Certificate.
(c) Except as disclosed in Section 2.01(b), there are no shares of capital
stock or other equity securities of Bancorp issued or outstanding and no
outstanding options, warrants, rights to subscribe for, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of the capital stock of Bancorp or contracts,
commitments, understandings or arrangements by which Bancorp is or may be
obligated to issue additional shares of its capital stock or options, warrants
or rights to purchase or acquire any additional shares of its capital stock.
Section 2.02. Authorization; No Defaults. Bancorp's Board of Directors
has by all requisite action approved this Agreement and the Merger and author-
ized the execution hereof on its behalf by its duly authorized officers and the
performance by Bancorp of its obligations hereunder. Nothing in the Article
of Incorporation or Bylaws of Bancorp or any other agreement, instrument,
decree, proceeding, law or regulation (except as specifically referred to in or
contemplated by this Agreement) by or to which Bancorp or any of its subsidi-
aries is bound or subject would prohibit or inhibit Bancorp from entering
into and consummating this Agreement and the Merger on the terms and condi-
tions herein contained, nor will the execution, delivery and performance of
this Agreement by Bancorp result in the loss of any material benefit under
any of the foregoing documents, laws or regulations. This Agreement has been
duly and validly executed and delivered by Bancorp and constitutes a legal,
valid and binding obligation of Bancorp, enforceable against Bancorp in
accordance with its terms, except as such enforcement may be limited by bank-
ruptcy, insolvency, moratorium or similar laws affecting California corpora-
tions or bank holding companies generally or by general principles of equity.
Bancorp and its subsidiaries are neither in default under nor in violation of
any provision of their respective articles of incorporation, bylaws, or any
promissory note, indenture or any evidence of indebtedness or security there-
for, lease, contract, purchase or other commitment or any other agreement
which is material to Bancorp and its subsidiaries taken as a whole.
Section 2.03. Subsidiaries. Each of Bancorp's direct and indirect
subsidiaries (hereinafter referred to collectively as the "Subsidiaries"), the
names and jurisdictions of incorporation of which are disclosed in Section 2.03
of the Disclosure Schedule, is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and each of
the Subsidiaries has the corporate power to own its properties and assets, to
incur its liabilities and to carry on its business as now being conducted.
The number of issued and outstanding shares of capital stock of each Subsidi-
ary is set forth in Section 2.03 of the Disclosure Schedule, and all of such
shares (except as may be otherwise there specified) are owned by Bancorp or a
Subsidiary, free and clear of all liens, encumbrances, rights of first refusal,
<PAGE>
options or other restrictions of any nature whatsoever, except as may be
disclosed in Section 2.03 of the Disclosure Schedule. There are no options,
warrants or rights outstanding to acquire any capital stock of any Subsid-
iary, and no person or entity has any other right to purchase or acquire any
unissued shares of stock of any Subsidiary, nor does any Subsidiary have any
obligation of any nature with respect to its unissued shares of stock. Except
as may be disclosed in Section 2.03 of the Disclosure Schedule, neither
Bancorp nor any Subsidiary is a party to any partnership or joint venture or
owns an equity interest in any other business or enterprise.
Section 2.04. Financial Information. The audited consolidated balance
sheets of Bancorp and the Subsidiaries as of December 31, 1995 and related
consolidated income statements and statements of changes in shareholders'
equity and of cash flows for the three years ended December 31, 1995,
together with the notes thereto, included in Bancorp's Annual Report on
Form 10-K for the year ended December 31, 1995, as currently on file with the
Securities and Exchange Commission (the "S.E.C."); the unaudited consoli-
dated balance sheets of Bancorp and the Subsidiaries as of March 31, 1996 and
related consolidated income statements and statements of changes in share-
holders' equity and of cash flows for the three months ended March 31, 1996,
together with the notes thereto, included in Bancorp's Quarterly Report on
Form 10-Q for the three months ended March 31, 1996 as currently on file with
the S.E.C.; and the year-end and quarter-end Reports of Condition and Reports
of Income of Bancorp's bank subsidiary, Sunrise Bank of California, a bank
chartered by the State of California ("Sunrise Bank") the deposits of which
are insured by the Federal Deposit Insurance Corporation (the "F.D.I.C.") for
1995 and for the three month period ending March 31, 1996, respectively, as
filed with the State Banking Department of the State of California (the
"State Banking Department") (such financial statements and notes collectively
referred to herein as the "Bancorp Financial Statements"), have been
prepared in accordance with generally accepted accounting principles applied
on a consistent basis (except as may be disclosed therein and except for
regulatory reporting differences required by Sunrise Bank's reports) and
fairly present the consolidated financial position and the consolidated
results of operations, changes in shareholders' equity and cash flows of the
respective entity and its respective consolidated subsidiaries as of the
dates and for the periods indicated.
Section 2.05. Absence of Changes. Except as reflected in Section 2.05 of
the Disclosure Schedule, since March 31, 1996 there has not been any material
adverse change in the financial condition, the results of operations or the
business or prospects of Bancorp and the Subsidiaries taken as a whole, nor
have there been any events or transactions having such a material adverse
effect which should be disclosed in order to make the Bancorp Financial State-
ments not misleading. Since September 30, 1995, the date of the most recent
examination of Sunrise Bank by the State Banking Department and/or the FDIC,
there has been no material adverse change in the financial condition, the
results of operations or the business of Sunrise Bank except for any such
changes as may be disclosed in Sunrise Bank's Reports of Condition and Income
filed with the F.D.I.C. since such date.
<PAGE>
Section 2.06. Regulatory Enforcement Matters. Except as reflected in
Section 2.06 of the Disclosure Schedule, neither Bancorp nor any of the
Subsidiaries is subject to, or has received any notice or advice that it may
become subject to, any order, agreement, memorandum of understanding or other
regulatory enforcement action or proceeding with or by any federal or state
agency charged with the supervision or regulation of banks or bank holding
companies or engaged in the insurance of bank deposits or any other
governmental agency having supervisory or regulatory authority with respect
to Bancorp or any of the Subsidiaries.
Section 2.07. Tax Matters. Except as reflected in Section 2.07 of the
Disclosure Schedule, Bancorp and the Subsidiaries have filed all federal, state
and local income, franchise, excise, sales, use, real and personal property and
other tax returns required to be filed. All such returns fairly reflect the
information required to be presented therein. All provisions for accrued but
unpaid taxes contained in the Bancorp Financial Statements were made in
accordance with generally accepted accounting principles and in the aggregate
do not materially fail to provide for potential tax liabilities.
Section 2.08. Litigation. Except as may be disclosed in Section 2.08 of
the Disclosure Schedule, there is no litigation, claim or other proceeding
pending or, to the knowledge of Bancorp, threatened, against Bancorp or any of
the Subsidiaries, or of which the property of Bancorp or any of the Subsidi-
aries is or would be subject.
Section 2.09. Properties, Contracts, Employee Benefit Plans and Other
Agreements. Section 2.09 of the Disclosure Schedule lists or describes the
following:
(a) All real property owned by Bancorp or the Subsidiaries and the
principal buildings and structures located thereon, together with a legal
description of such real estate, and each lease of real property to which
Bancorp or any of the Subsidiaries is a party, identifying the parties there-
to, the annual rental payable, the expiration date thereof and a brief
description of the property covered;
(b) All loan and credit agreements, conditional sales contracts or other
title retention agreements or security agreements relating to money borrowed by
Bancorp or the Subsidiaries, exclusive of deposit agreements with customers of
Sunrise Bank entered into in the ordinary course of business, agreements for
the purchase of federal funds and repurchase agreements;
(c) All agreements, loans, contracts, leases, guaranties, letters of
credit, lines of credit or commitments of Bancorp or the Subsidiaries not
referred to elsewhere in this Section 2.09 which:
(i) involve payment by Bancorp or the Subsidiaries (other than loans,
loan commitments or letters of credit) of more than $75,000;
(ii) involve payments based on profits of Bancorp or the Subsidiaries;
<PAGE>
(iii) relate to the future purchase of goods or services in excess
of the requirements of its respective business at current
levels or for normal operating purposes;
(iv) were not made in the ordinary course of business; or
(v) materially affect the business or financial condition of Bancorp
or the Subsidiaries.
(d) All contracts, agreements, plans and arrangements by which any profit
sharing, group insurance, hospitalization, stock option, pension, retirement,
bonus, deferred compensation, stock bonus, stock purchase, collective bar-
gaining agreements, contracts or arrangements under which pensions, deferred
compensation or other retirement benefits is being paid, or plans or arrange-
ments established or maintained, sponsored or undertaken by Bancorp or any
Subsidiary for the benefit of officers, directors or employees, including
each trust or other agreement with any custodian or any trustee for funds
held under any such agreement, plan or arrangement, and in respect to any of
them, the latest reports or forms, if any, filed with the Department of Labor
and Pension Benefit Guaranty corporation under ERISA (as defined below), any
current financial or actuarial reports and any currently effective IRS
private ruling or determination letters obtained by or for the benefit of
Bancorp or any Subsidiary;
(e) All leases or licenses with respect to personal property, whether as
lessee or licensee, with annual rental or other payments due thereunder in
excess of $5,000;
(f) All agreements for the employment, retention or engagement, or with
respect to the severance, of any officer, employee, agent, consultant or other
person or entity which by its terms is not terminable by Bancorp or such
Subsidiary on thirty (30) days written notice or less without any payment by
reason of such termination; and
(g) The name and annual salary as of January, 1, 1996 of each director or
employee of Bancorp or any Subsidiaries with a salary in excess of $80,000.
Copies of each document, plan or contract listed and described in Section
2.09 of the Disclosure Schedule are appended to such Schedule and constitute a
part of the Disclosure Schedule.
Section 2.10. Reports. Except as may be disclosed in Section 2.10 of the
Disclosure Schedule, Bancorp and each Subsidiary have filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with (i) the S.E.C.; (ii) the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"); (iii)
the F.D.I.C.; (iv) any state securities or banking authorities; and (v) any
other govermental authority with jurisdication over Bancorp or any Subsidiary.
<PAGE>
As of the dates indicated thereon, each of such reports and documents,
including any financial statements, exhibits and schedules thereto, complied
in all material respects with the relevant statutes, rules and regulations
enforced or promulgated by the regulatory authority with which they were filed,
<PAGE>
and did not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
Section 2.11. Investment Portfolio. All United States Treasury
securities, obligations of other United States Government agencies and cor-
porations, obligations of States and political subdivisions of the United
States and other investment securities held by Bancorp and the Subsidiaries,
as reflected in the latest consolidated balance sheet of Bancorp included in
the Bancorp Financial Statements, are carried in accordance with generally
accepted accounting principles.
Section 2.12. Loan Portfolio. Except as may be disclosed in Section 2.12
of the Disclosure Schedule, (i) all loans and discounts shown on the Bancorp
Financial Statements at March 31, 1996 or which were or will be entered into
after March 31, 1996 but before the Closing Date were and will be made in all
material respects for good, valuable and adequate consideration in the ordinary
course of the business of Bancorp and the Subsidiaries, in accordance in all
material respects with sound lending practices, and they are not subject to any
material known defenses, setoffs or counterclaims, including without limitation
any such as are afforded by usury or truth in lending laws, except as may be
provided by bankruptcy, insolvency or similar laws or by general principles of
equity; (ii) the notes and other evidences of indebtedness evidencing such
loans and all forms of pledges, mortgages and other collateral documents and
security agreements are and will be in all material respects enforceable
(except as may be limited by bankruptcy, insolvency or similar laws or by
general principles of equity), valid, true and genuine and what they purport
to be; and (iii) Bancorp and the Subsidiaries have complied and will prior to
the Closing Date comply with all laws and regulations relating to such loans,
or to the extent there has not been such compliance, such failure to comply
will not materially interfere with the collection of any loan. All loans and
loan commitments extended by Sunrise Bank and any extensions, renewals or
continuations of such loans and loan commitments were made in accordance with
its customary lending standards in the ordinary course of business. Such
loans are evidenced by appropriate and sufficient documentation based upon
customary and ordinary past practices of Sunrise Bank. The reserve for
possible loan and lease losses shown on the Report of Condition and Income of
Sunrise Bank as of March 31, 1996 is adequate in all material respects under
the requirements of generally accepted accounting principles to provide for
possible losses, net of recoveries relating to loans previously charged off,
on loans outstanding (including, without limitation, accrued interest receiv-
able) as of March 31, 1996.
Section 2.13. Employee Matters and ERISA.
(a) Except as may be disclosed in Section 2.13 (a) of the Disclosure
Schedule, neither Bancorp nor any Subsidiary has entered into any collective
bargaining agreement with any labor organization with respect to any group of
employees of Bancorp or any Subsidiary, and to the knowledge of Bancorp there
is no present effort nor existing proposal to attempt to unionize any group of
employees of Bancorp or any Subsidiary.
<PAGE>
(b) Except may be disclosed in Section 2.13 (b) of the Disclosure
Schedule, (i) Bancorp and the Subsidiaries are and have been in material
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, including,
without limitation, any laws respecting employment discrimination and
occupational safety and health requirements, and neither Bancorp nor any of
the Subsidiaries is engaged in any unfair labor practice; (ii) there is no
material unfair labor practice complaint against Bancorp or any Subsidiary
pending or, to the knowledge of Bancorp, threatened before the National Labor
Relations Board; (iii) there is no labor dispute, strike, slowdown or stoppage
actually pending or, to the knowledge of Bancorp, threatened against or
directly affecting Bancorp or any Subsidiary; and (iv) neither Bancorp nor any
Subsidiary has experienced any material work stoppage or other material labor
difficulty during the past five years.
(c) Except as may be disclosed in Section 2.13(c) of the Disclosure
Schedule, neither Bancorp nor any Subsidiary maintains, contributes to or
participates in or has any liability under any employee benefit plans, as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or any nonqualified employee benefit plans or deferred
compensation, bonus, stock or incentive plans, or other employee benefit or
fringe benefit programs for the benefit of former or current employees of
Bancorp or any Subsidiary (collectively, the "Employee Plans"). To the
knowledge of Bancorp, no present or former employee of Bancorp or any
Subsidiary has been charged with breaching nor has breached a fiduciary duty
under any Employee Plan. Neither Bancorp nor any Subsidiary participates in,
nor has it in the past five years participated in, nor has it any present or
future obligation or liability under, any multiemployer plan (as defined at
Section 3(37) of ERISA). Except as may be separately disclosed in Section
2.13(c) of the Disclosure Schedule, neither Bancorp nor any Subsidiary
maintains, contributes to, or participates in any plan that provides health,
major medical, disability or life insurance benefits to former employees of
Bancorp or any Subsidiary.
(d) All liabilities of the Employee Plans have been funded on the basis
of consistent methods in accordance with sound actuarial assumptions and
practices, and no Employee Plan, at the end of any plan year, or at March 31,
1996, had an accumulated funding deficiency. No actuarial assumptions have
been changed since the last written report of actuaries on the Employee Plans.
All insurance premiums (including premiums to the Pension Benefit Guaranty
Corporation) have been paid in full, subject only to normal retrospective
adjustments in the ordinary course. Except as may be noted on the Bancorp
Financial Statements, Bancorp and the Subsidiaries have no contingent or actual
liabilities under Title IV of ERISA. No accumulated funding deficiency (within
the meaning of Section 302 of ERISA or Section 412 of the Internal Revenue Code
of 1986, as amended (the "Code")) has been incurred with respect to any
<PAGE>
Employee Plan, whether or not waived. No reportable event (as defined in
Section 4043 of ERISA) has occurred with respect to any Employee Plan as to
which a notice would be required to be filed with the Pension Benefit
Guaranty Corporation. No claim is pending, threatened or imminent with
respect to any Employee Plan (other than a routine claim for benefits for
which plan administrative review procedures have not been exhausted) for
which Bancorp or any Subsidiary would be liable, except as is reflected in
the Bancorp Financial Statements. After December 31, 1993, Bancorp and the
Subsidiaries have no liability for excise taxes under Sections 4971, 4975,
4976, 4977, 4979 or 4980B of the Code or for a fine under Section 502 of
ERISA with respect to any Employee Plan. All Employee Plans have in all
material respects been operated, administered and maintained in accordance
with the terms thereof and in compliance with the requirements of all applic-
able laws, including, without limitation, ERISA.
Section 2.14. Title to Properties; Insurance. Except as may be disclosed
in Section 2.14 of the Disclosure Schedule: (i) Bancorp and the Subsidiaries
have marketable title, insurable at standard rates, free and clear of all
liens, charges and encumbrances (except taxes which are a lien but not yet
payable and liens, charges or encumbrances reflected in the Bancorp Financial
Statements and easements, rights-of-way, and other restrictions which are not
material, and further excepting in the case of other Real Estate Owned
("OREO"), as such real estate is internally classified on the books of
Bancorp or any Subsidiary, rights of redemption under applicable law) to all
of their real properties; (ii) all leasehold interests for real property and
any material personal property used by Bancorp and the Subsidiaries in their
businesses are held pursuant to lease agreements which are valid and eforce-
able in accordance with their terms; (iii) all such properties comply in all
material respects with all applicable private agreements, zoning requirements
and other governmental laws and regulations relating thereto, and there are no
condemnation proceedings pending or, to the knowledge of Bancorp, threatened
with respect to any of such properties; (iv) Bancorp and the Subsidiaries
have valid title or other ownership rights under licenses to all material
intangible personal or intellectual property used by Bancorp or any
Subsidiary in its business, free and clear of any material claim, defense or
right of any other person or entity, subject only to rights of the licensors
pursuant to applicable license agreements, which rights do not materially and
adversely interfere with the use of such property; and (v) all material
insurable properties owned or held by Bancorp and the Subsidiaries are
adequately insured by financially sound and reputable insurers in such
amounts and against fire and other risks insured against by extended coverage
and public liability insurance, as is customary with bank holding companies of
similar size.
Section 2.15. Environmental Matters. As used in this Agreement,
"Environmental Laws" means all local, state and federal environmental, health
and safety laws and regulations in all jurisdictions in which Bancorp or any
Subsidiary has done business or owned, leased or operated property, including,
without limitation, the Federal Resource Conservation and Recovery Act, the
Federal Comprehensive Environmental Response, Compensation and Liability Act,
the Federal Clean Water Act, the Federal Clean Air Act, and the Federal
Occupational Safety and Health Act.
Except as may be disclosed in Section 2.15 of the Disclosure Schedule,
neither the conduct nor operation of Bancorp or any Subsidiary nor any condi-
tion of any property presently or previously owned, leased or operated by
any of them on their own behalf or in a fiduciary capacity violates or violated
any Environmental Law in any respect material to the business of Bancorp and
the Subsidiaries taken as a whole, and no condition or event has occurred with
respect to any of them or any property that, with notice or the passage of time,
<PAGE>
or both, would constitute a violation material to the business of Bancorp and
the Subsidiaries taken as a whole of any Environmental Law or obligate (or
potentially obligate) Bancorp or any Subsidiary to remedy, stabilize,
neutralize or otherwise alter the environmental condition of any property,
where the aggregate cost of such actions would be material to Bancorp and the
Subsidiaries taken as a whole. Except as may be disclosed in Section 2.15 of
the Disclosure Schedule, neither Bancorp nor any Subsidiary has received
notice from any person or entity that Bancorp or any Subsidiary, or the oper-
ation or condition of any property ever owned, leased or operated by any of
them on their own behalf or in a fiduciary capacity, are or were in violation
of any Environmental Law, or that Bancorp or any Subsidiary is responsible
(or potentially responsible) for remedying, or the cleanup of, any pollu-
tants, contaminants, or hazardous or toxic wastes, substances or materials at,
on or beneath any such property.
Section 2.16. Compliance with Law. Bancorp and the Subsidiaries have all
licenses, franchises, permits and other governmental authorizations that are
legally required to enable them to conduct their respective businesses in all
material respects and are in compliance in all material respects with all
applicable laws and regulations.
Section 2.17. Brokerage. Except for fees payable by Bancorp to Smith &
Crowley, Inc., there are no existing claims or agreements for brokerage
commissions, finders' fees, or similar compensation in connection with the
transactions contemplated by this Agreement payable by Bancorp or any Sub-
sidiary.
Section 2.18. No Undisclosed Liabilities. Bancorp and the Subsidiaries
do not have any material liability, whether known or unknown, asserted or
unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, and whether due or to become due (and there is no past or
present fact, situation, circumstance, condition or other basis for any
present or future action, suit or proceeding, hearing, charge, complaint,
claim or demand against Bancorp or any Subsidiary giving rise to any such
liability), except (i) for liabilities set forth in the Bancorp Financial
Statements, and (ii) for liabilities of the same type incurred in the ordinary
course of business of Bancorp and the Subsidiaries since March 31, 1996, and
(iii) as may be disclosed in Section 2.18 of the Disclosure Schedule.
Section 2.19. Statements True and Correct. None of the information
supplied or to be supplied by Bancorp for inclusion in any document to be filed
with the S.E.C. or any banking or other regulatory authority in connection with
the transactions contemplated hereby will, at the respective times such docu-
ments are filed, and, in the case of Bancorp's proxy statement, when first
mailed to the shareholders of Bancorp and at the time of the Shareholders'
Meeting (as defined in Section 4.03 hereof), be false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, or omit to state any material fact
required to be stated, in the light of the circumstances under which a state-
ment is made, in order to correct such statement in any earlier communication
with respect to the solicitation of any proxy for the Shareholders' Meeting.
All documents that Bancorp is responsible for filing with the S.E.C. or any
other regulatory authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with the provisions of
applicable law and the applicable rules and regulations thereunder.
<PAGE>
Section 2.20. Commitments and Contracts.
(a) Except as set forth in Section 2.20 of the Disclosure Schedule (and
with a true and correct copy of the document or other item in question having
been made available to FBA for inspection), neither Bancorp nor any of the
Subsidiaries is a party or subject to any of the following (whether written or
oral, express or implied):
(i) any agreement, arrangement or commitment not made in the ordinary
course of business;
(ii) any agreement, indenture or other instrument not reflected in the
Bancorp Financial Statements relating to the borrowing of money by Bancorp or
any of the Subsidiaries or the guarantee by Bancorp or any of the Subsidiaries
of any obligation (other than trade payables or instruments related to
transactions entered into in the ordinary course of business by Bancorp or any
of the Subsidiaries, such as deposits, Fed Funds borrowings and repurchase
agreements), other than such agreements, indentures or instruments providing
for annual payments of less than $10,000;
(iii) any contract containing covenants which limit the ability of
Bancorp to compete in any line of business or with any person or containing any
restriction of the geographical area in which, or method by which, Bancorp or
any of the Subsidiaries may carry on its business (other than as may be
required by law or any applicable regulatory authority); or
(iv) any lease with annual rental payments aggregating $25,000 or more.
Section 2.21. Material Interest of Certain Persons. Except as set
forth in Section 2.21 of the Disclosure Schedule:
(a) No officer or director of Bancorp or any "associate" (as such term is
defined in Rule 14a-1 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of any such officer or director, has any material
interest in any material contract or property (real or personal, tangible or
intangible), used in or pertaining to the business of Bancorp and any
Subsidiary.
(b) All outstanding loans from Sunrise Bank to any present officer,
director, employee or any associate or related interest of any such person
which was or would be required under any rule or regulation to be approved by
or reported to Sunrise Bank's Board of Directors ("Insider Loans") were
approved by or reported to the Board of Directors in accordance with all
applicable laws and regulations.
<PAGE>
Section 2.22. Conduct to Date. Except as set forth in Section 2.22 of
the Disclosure Schedule, from and after March 31, 1996 through the date of this
Agreement, neither Bancorp nor any Subsidiary has (i) failed to conduct its
business in the ordinary and usual course consistent with past practices; (ii)
issued, sold, granted, conferred or awarded any common or other stock, or any
corporate debt securities which would be classified under generally accepted
accounting principles applied on a consistent basis as long-term debt on the
balance sheets of Bancorp or any Subsidiary; (iii) effected any stock split or
adjusted, combined, reclassified or otherwise changed its capitalization; (iv)
declared, set aside or paid any dividend or other distribution in respect of
its capital stock, or purchased, redeemed, retired, repurchased, or
exchanged, or otherwise directly or indirectly acquired or disposed of any of
its capital stock; (v) incurred any material obligation or liability
(absolute or contingent), except normal trade or business obligations or
liabilities incurred in the ordinary course of business, or subjected to lien
any of its assets or properties other than in the ordinary course of business
consistent with past practice; (vi) discharged or satisfied any material lien
or paid any material obligation or liability (absolute or contingent), other
than in the ordinary course of business; (vii) sold, assigned, transferred,
leased, exchanged, or otherwise disposed of any of its properties or assets
other than for a fair consideration in the ordinary course of business;
(viii) except as required by contract or law, (A) increased the rate of
compensation of, or paid any bonus to, any of its directors, officers, or
other employees, except merit or promotion increases in accordance with
existing policy, (B) entered into any new, or amended or supplemented any
existing, employment, management, consulting, deferred compensation,
severance, or other similar contract, (C) entered into, terminated or
substantially modified any of the Employee Plans, or (D) agreed to do any
of the foregoing; (ix) suffered any material damage, destruction, or loss,
whether as the result of fire, explosion, earthquake, accident, casualty, labor
trouble, requisition, or taking of property by any regulatory authority, flood,
windstorm, embargo, riot, act of God or the enemy, or other casualty or event,
and whether or not covered by insurance; (x) canceled or compromised any debt,
except for debts charged off or compromised in accordance with past practice;
(xi) entered into any material transaction, contract or commitment outside the
ordinary course of its business or (xii) made or guaranteed any loan to any of
the Employee Plans.
Section 2.23. Irrevocable Proxies. Bancorp has delivered to FBA
concurrently with the execution of this Agreement the valid and binding
irrevocable proxies of all of its directors (the "Proxies"), in the form of
Exhibit 2.23.
Section 2.24. Disclosures in Disclosure Schedule. Any information which
is set forth or specifically referred to in a section of the Disclosure
Schedule shall be deemed to be disclosed to FBA for the purpose of the
representations and warranties of Bancorp set forth in the section of this
Agreement to which such section of the Disclosure Schedule relates.
<PAGE>
ARTICLE THREE
REPRESENTATIONS OF FBA
FBA hereby makes the following representations and warranties to Bancorp:
Section 3.01. Organization. FBA is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware and has
the corporate power to carry on its business as it is now being conducted.
Section 3.02. Authorization. The execution and delivery of this Agreement
and the consummation of the Merger have been duly authorized by all necessary
action on the part of FBA. Nothing in the Certificate of Incorporation or By
laws of FBA or any other agreement, instrument, decree, proceeding, law or
regulation (except as specifically referred to in or contemplated by this
Agreement) by or to which FBA or any of its subsidiaries is bound or subject
would prohibit or inhibit FBA from entering into and consummating this
Agreement and the Merger on the terms and conditions herein contained, nor
will the execution, delivery and performance of this Agreement by FBA result
in the loss of any material benefit under any of the foregoing documents,
laws or regulations. This Agreement has been duly and validly executed and
delivered by FBA and constitutes a legal, valid and binding obligation of
FBA, enforceable against FBA in accordance with its terms except as may be
limited by bankruptcy, insolvency or similar laws or by general principles of
equity, and no other corporate acts or proceedings are required to be taken
by FBA to authorize the execution, delivery and performance of this Agreement.
Except for the requisite approval of the Federal Reserve Board and the State
Banking Department, no notice to, filing with, authorization by, or consent
or approval of, any federal or state regulatory authority is necessary for the
execution and delivery of this Agreement or consummation of the Merger by
FBA. To the best of FBA's knowledge, the regulatory approvals required for
the consummation of the Merger by FBA will be received prior to the Effective
Time. The approval of the Merger by the stockholders of FBA is not legally
required in order to permit FBA to execute and deliver this Agreement or to
consummate the Merger.
Section 3.03. Absence of Changes. Since March 31, 1996 there has not
been any material adverse change in the financial condition or the business
of FBA that would prevent FBA from consummating this Agreement and the Merger.
Section 3.04. Litigation. There is no litigation, claim or other
proceeding pending, or, to the knowledge of FBA threatened, against FBA or
any of its subsidiaries which would prohibit FBA from consummating the Merger.
Section 3.05. Statements True and Correct. None of the information
supplied or to be supplied by FBA for inclusion in any documents to be filed
with the S.E.C. or any banking or other regulatory authority in connection
with the transactions contemplated hereby will, at the respective times such
documents are filed, and, in the case of bancorp's proxy statement, when first
<PAGE>
mailed to the shareholders of Bancorp and at the time of the Shareholders'
Meeting, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein, in the
light of the circumstances under which they are made, not misleading, or omit
to state any material fact required to be stated, in the light of the circum-
stances under which a statement is made, in order to correct such statement
in any earlier communication with respect to the solicitation of any proxy
for the Shareholders' Meeting. All documents that FBA is responsible
for filing with any regulatory authority in connection with the transactions
contemplated by this Agreement will comply as to form in all material respects
with the provisions of applicable law and the applicable rules and regulations
thereunder.
<PAGE>
Section 3.06. Availability of Cash Consideration. FBA has available cash
or cash equivalents in amounts necessary to fund its obligations under Section
1.03(a) hereof. First Banks, Inc., a Missouri corporation which owns 2,500,000
shares of Class B Common Stock of FBA, has provided to Bancorp a written
guarantee
(the "Guarantee") in the form of Exhibit 3.06.
ARTICLE FOUR
AGREEMENTS OF BANCORP
Section 4.01. Business in Ordinary Course.
(a) Bancorp shall, and shall cause each Subsidiary to, continue to carry
on after the date hereof its respective business and the discharge or incur-
rence of obligations and liabilities only in the usual, regular and ordinary
course of business, as heretofore conducted, and by way of amplification and
not limitation, Bancorp and each Subsidiary will not:
(i) declare or pay any dividend or make any other distribution to share-
holders, whether in cash, stock or other property; or
(ii) issue any common stock or other capital stock or any options,
warrants, or other rights to subscribe for or purchase common stock or
any other capital stock or any securities convertible into or exchange-
able for any capital stock (except for the issuance of common stock
pursuant to the valid exercise of Bancorp Stock Options and Bancorp
Warrants described in Section 2.01(b) hereof); or
(iii) directly or indirectly redeem, purchase or otherwise acquire any
common stock or any other capital stock of Bancorp or any Subsidiary; or
(iv) effect a reclassification, recapitalization, splitup, exchange of
shares, readjustment or other similar change in or to any capital stock,
or otherwise reorganize or recapitalize; or
(v) change its articles of incorporation or bylaws nor, subject to the
fiduciary duties of the directors of Bancorp under the California
Corporations Code, enter into any agreement to merge or consolidate
with, or sell a significant portion of its assets to, any person or entity.
<PAGE>
(b) Bancorp and each Subsidiary will not, without the prior written
consent of FBA (which shall not be unreasonably withheld):
(i) grant any increase (other than ordinary and normal increases
consistent with past practices) in the compensation payable or to become
payable to officers or salaried employees, grant any stock options or,
except as required by law, adopt or make any change in any bonus,
insurance, pension, or other Employee Plan, agreement, payment or
arrangement made to, for or with any of such officers or employees;
provided, however, that FBA has given its approval for Bancorp to adopt a
compensation program to encourage officers and employees designated by
Bancorp to continue their employment through the date which is sixty
(60) days after the Effective Time, provided that Bancorp will consult
with FBA regarding the structure of such program and the aggregate cost
thereof does not exceed $150,000; or
(ii) borrow or agree to borrow any amount of funds except in the
ordinary course of business, or directly or indirectly guarantee or
agree to guarantee any obligations of others; or
(iii) make or commit to make any new loan or letter of credit or any
new or additional discretionary advance under any existing line of
credit, in principal amounts in excess of $200,000 or that would
increase the aggregate credit outstanding to any one borrower (or group
of affiliated borrowers) to more than $400,000 (excluding for this
purpose any accrued interest or overdrafts), without the prior written
consent of FBA; or
(iv) purchase or otherwise acquire any investment security for its own
account having an average remaining life to maturity greater than five
years or any asset-backed securities other than those issued or
guaranteed by the Government National Mortgage Association, the Federal
National Mortgage Association or the Federal Home Loan Mortgage
Corporation; or
(v) enter into any agreement, contract or commitment having a term in
excess of three (3) months other than letters of credit, loan agree-
ments, deposit agreements, and other lending, credit and deposit
agreements and documents made in the ordinary course of business; or
(vi) except in the ordinary course of business, place on any of its
assets or properties any mortgage, pledge, lien, charge, or other
encumbrance; or
<PAGE>
(vii) except in the ordinary course of business, cancel or accelerate any
material indebtedness owing to Bancorp or any Subsidiary or any claims
which Bancorp or any Subsidiary may possess, or waive any material
rights of substantial value; or
(viii) sell or otherwise dispose of any real property or any material
amount of any tangible or intangible personal property, other than
properties acquired in foreclosure or otherwise in the ordinary
collection of indebtedness to Bancorp and the Subsidiaries; or
(ix) foreclose upon or otherwise take title to or possession or control
of any real property without first obtaining a phase one environmental
report thereon which indicates that the property is free of pollutants,
contaminants or hazardous or toxic waste materials; provided, however,
that neither Bancorp nor a Subsidiary shall be required to obtain such a
report with respect to single family, nonagricultural residential
property of one acre or less to be foreclosed upon unless it has reason
to believe that such property might contain any such waste materials
or otherwise might be contaminated; or
(x) commit any act or fail to do any act which will cause a breach of any
agreement, contract or commitment and which will have a material adverse
effect on the business, financial condition or earnings of Bancorp and
the Subsidiaries, taken as a whole; or
(xi) violate any law, statute, rule, governmental regulation or order,
which violation might have a material adverse effect on the business,
financial condition, or earnings of Bancorp or a Subsidiary; or
(xii) purchase any real or personal property or make any other capital
expenditure where the amount paid or committed therefor is in excess of
$25,000;
or
(xiii) increase or decrease the rate of interest paid on time deposits or
on certificates of deposit, except in a manner consistent with past
practices.
Bancorp and FBA shall promptly devise a procedure to assure that, if
Bancorp makes a request for FBA's written consent to take one or more of
such actions, the request will be promptly reviewed and a response
promptly given by FBA.
(c) Bancorp and the Subsidiaries shall not, without the prior written
consent of FBA, engage in any transaction or take any action that would render
untrue in any material respect any of the representations and warranties of
Bancorp contained in Article Two hereof, if such representations and warranties
were given as of the date of such transaction or action.
(d) Bancorp shall promptly notify FBA of the occurrence of any matter or
event known to and directly involving Bancorp that is materially adverse to the
business, operations, properties, assets, or condition (financial or otherwise)
of Bancorp and the Subsidiaries taken as a whole.
<PAGE>
(e) Subject to the fiduciary duties of the directors of Bancorp under the
California Corporations Code, Bancorp shall not solicit or encourage, or hold
discussions or negotiations with or provide information to, any person or enti-
ty in connection with any proposal for the acquisition of all or any substan-
tial portion of the business, assets, shares of Bancorp Common or other
securities or assets of Bancorp or any Subsidiary. Bancorp shall promptly
advise FBA of its receipt of any such proposal or inquiry concerning any
possible such proposal and the substance of such proposal or inquiry.
Section 4.02. Breaches. Bancorp shall, in the event it has knowledge
of the occurrence, or impending or threatened occurrence, of any event or
condition which would cause or constitute a breach (or would have caused or
constituted a breach had such event occurred or been known prior to the date
hereof) of any of its representations or agreements contained or referred to
herein, give prompt written notice thereof to FBA and use its best efforts
to prevent or promptly remedy the same.
Section 4.03. Submission to Shareholders. Bancorp shall cause to be duly
called and held, as soon as practicable, a meeting of its shareholders (such
meeting together with any adjournments thereof referred to as the "Share-
holders' Meeting") for submission of this Agreement and the Merger for
approval of such shareholders as required by applicable Corporate Law.
In connection with the Shareholders' Meeting, Bancorp shall prepare and
file with the S.E.C., no more than sixty (60) days after the date of this
Agreement, at its sole cost and expense, a Proxy Statement (the "Proxy
Statement"), and Bancorp shall thereafter take all actions reasonably
required in order to permit the Proxy Statement to be mailed to the
shareholders of Bancorp. The Board of Directors of Bancorp shall unanimously
recommend to its shareholders the approval of the Agreement and the Merger,
mail the Proxy Statement to its shareholders, and use its best efforts to
obtain such shareholder approval; provided, however, that the Board of
Directors of Bancorp shall not be obligated to make such recommendation or
use its best efforts to obtain shareholder approval if, having consulted and
considered the advice of outside legal counsel, the Board has reasonably
determined in good faith that the making of such recommendation would
constitute a breach of the fiduciary duties of the members of the Board of
Directors under applicable law.
Section 4.04. Consummation of Agreement. Bancorp shall use its best
efforts to perform and fulfill all conditions and obligations on its part to
be performed or fulfilled under this Agreement and to effect the Merger in
accordance with the terms and provisions hereof. Bancorp shall furnish to
FBA in a timely manner all information, data and documents in the possession
of Bancorp requested by FBA as may be required to obtain any necessary
regulatory or other approvals of the Merger and shall otherwise cooperate f
ully with FBA to carry out the purpose and intent of this Agreement.
<PAGE>
Section 4.05. Environmental Reports. Bancorp shall provide to FBA, as
soon as reasonably practical, but not later than sixty (60) days after the
date hereof, a report of a phase one environmental investigation on all real
property owned, leased or operated by Bancorp or any Subsidiary as of the
date hereof (other than the loan production office of Sunrise Bank located
at 220 Sansome Street, San Francisco, California, single-family non-
agricultural residential property of one acre or less with respect to which
Bancorp has not received any notice of the type referred to in Section 2.15
hereof, and space in retail and similar establishments leased by Bancorp for
automatic teller machines) and within ten days after the acquisition or lease
of any real property acquired or leased by Bancorp or any Subsidiary after the
date hereof (other than the loan production office of Sunrise Bank referred to
above, single-family non-agricultural residential property of one acre or
less, and space in retail and similar establishments leased or operated by
the Bancorp for automatic teller machines), except as otherwise provided in
Section 4.01(b)(ix). If required by the phase one investigation in FBA's
reasonable opinion Bancorp shall provide to FBA a report of a phase two
investigation on properties requiring such additional study. FBA shall have
15 business days from the receipt of any such phase two investigation report
to notify Bancorp of any objection to the contents of such report. Should
the cost of taking all remedial and corrective actions and measures (i)
required by applicable law, or (ii) recommended or suggested by such report
or reports or prudent in light of serious life, health or safety concerns,
in the aggregate, exceed the sum of Four Hundred Thousand Dollars ($400,000)
as reasonably estimated by an environmental expert retained for such purpose
by FBA and reasonably acceptable to Bancorp,or if the cost of such actions and
measures cannot be so reasonably estimated by such expert to be $400,000 or
less with a reasonable degree of certainty, then FBA shall have the right
pursuant to Section 7.05 hereof, for a period of 10 business days following
receipt of such estimate or indication that the cost of such actions and
measures can not be so reasonably estimated, to terminate this Agreement,
which shall be FBA's sole remedy in such event.
Section 4.06. Access to Information. Bancorp shall permit FBA reasonable
access in a manner which will avoid undue disruption or interference with
Bancorp's normal operations to its properties and shall disclose and make
available to FBA all books, documents, papers and records relating to its
assets, stock ownership, properties, operations, obligations and liabilities,
including, but not limited to, all books of account (including the general
ledger), tax records, minute books of directors' and shareholders' meetings,
organizational documents, material contracts and agreements, loan files,
filings with any regulatory authority, accountants' workpapers (if available
and subject to the respective independent accountants' consent), litigation
files, plans affecting employees, and any other business activities or
prospects in which FBA may have a reasonable and legitimate interest in
furtherance of the transactions contemplated by this Agreement. FBA will
hold any such information which is nonpublic in confidence in accordance
with the provisions of Section 9.01 hereof.
Section 4.07. Consents to Contracts and Leases. Bancorp shall use
its best efforts to obtain all necessary consents with respect to all interests
of Bancorp and the Subsidiaries in any material leases, licenses, contracts,
instruments and rights which require the consent of another person for the
Merger.
<PAGE>
Section 4.08. Subsequent Financial Statements. As soon as available
after the date hereof, Bancorp shall deliver to FBA the monthly unaudited
consolidated balance sheets and profit and loss statements of Bancorp prepared
for its internal use, the Report of Condition and Income of Sunrise Bank for
each quarterly period completed prior to the Closing, and all other financial
reports or statements submitted to regulatory authorities after the date
hereof, to the extent permitted by law (collectively, the "Subsequent Company
Financial Statements"). The Subsequent Company Financial Statements shall be
prepared on a basis consistent with past accounting practices and shall
fairly present the financial condition and results of operations for the
dates and periods presented. The Subsequent Company Financial Statements
will not include any material assets or omit to state any material liabil-
ities, absolute or contingent, or other facts, which inclusion or omission
would render such financial statements misleading in any material respect.
Section 4.09. Reserve and Provisions for Loan Losses. Bancorp will
provide to FBA each month, beginning in June, 1996 a copy of the internal
review and analysis of its reserve for possible loan and lease losses and the
appropriate amount to be included in its provision for loan and lease
losses, and Bancorp will consider in good faith FBA's reasonable analysis of
the reserve and provision and any reasonable suggestions made by FBA with
respect to the appropriate level of the provision to be made each month.
ARTICLE FIVE
AGREEMENTS OF FBA
Section 5.01. Regulatory Approvals. FBA shall as soon as reasonably
practicable and no more than sixty (60) days after the date of this Agreement
file all regulatory applications required in order to consummate the Merger,
including but not limited to the necessary application for the prior approval
of the Federal Reserve Board. FBA shall keep Bancorp reasonably informed as
to the status of such applications and make available to Bancorp, upon
reasonable request by Bancorp from time to time, copies of such applications
and any supplementally filed materials.
Section 5.02. Breaches. FBA shall, in the event it has knowledge of the
occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused or constituted
a breach had such event occurred or been known prior to the date hereof) of
any of its representations or agreements contained or referred to herein,
give prompt written notice thereof to Bancorp and use its best efforts to
prevent or promptly remedy the same.
Section 5.03. Consummation of Agreement. FBA shall use its best
efforts to perform and fulfill all conditions and obligations on its part to
be performed or fulfilled under this Agreement and to effect the Merger in
accordance with the terms and conditions of this Agreement.
<PAGE>
Section 5.04. Indemnification and Insurance.
(a) For six years after the Effective Time, FBA shall (i) cause the
surviving corporation of the Merger of Bancorp and AcquisitionCo (the
"Surviving Corporation") to indemnify, defend and hold harmless the present
and former officers, directors, employees and agents of Bancorp and the
Subsidiaries (each, an "Indemnified Party") against all losses, expenses,
claims, damages or liabilities arising out of actions or omissions occurring
on or prior to the Effective Time (including, without limitation, the trans-
actions contemplated by this Agreement) to the full extent then permitted under
applicable Corporate Law and by the Articles of Incorporation and Bylaws of
Bancorp and Sunrise Bank as in effect on the date hereof; and (ii) purchase and
maintain in effect for a three year period insurance in the form of an
extension of coverage under Bancorp's existing insurance policy Number 04 DO
00227-3 issued by California Bankers Assurance Company insuring the
Indemnified Parties against such losses, expenses, claims, damages or
liabilities; provided, however, that FBA shall not be obligated to purchase
or maintain such insurance if the total cost thereof for the three year
period exceeds $75,000.
(b) If after the Effective Time Sunrise Bank, the Surviving Corporation
or any of their respective successors or assigns (i) shall consolidate with
or merge into any other corporation or entity and shall not be the continuing
or surviving corporation or entity of such consolidation or merger or (ii)
shall transfer all or substantially all of its properties and assets to any
individual, corporation or other entity, then and in each such case, proper
provision shall be made so that the successors and assigns of Sunrise Bank or
the Surviving Corporation, as the case may be, shall assume any remaining
obligations set forth in this Section 5.04. If Sunrise Bank or the Surviving
Corporation shall liquidate, dissolve or otherwise wind up its business, then
FBA shall indemnify, defend and hold harmless each Indemnified Party to the
same extent and on the same terms that Sunrise Bank or the Surviving
Corporation, as the case may be, was so obligated.
Section 5.05. Employee Benefits. FBA shall, with respect to each person
who remains an employee of Bancorp or any Subsidiary following the Closing Date
(each a "Continued Employee"), provide the benefits described in this Section
5.05. Subject to the right of subsequent amendment, modification or termina-
tion in FBA's sole discretion, each Continued Employee shall be entitled, as
a new employee of a subsidiary of FBA, to participate in such employee
benefit plans, as defined in Section 3(3) of ERISA, or any non-qualified
employee benefit plans or deferred compensation, stock option, bonus or
incentive plans, or other employee benefit or fringe benefit programs that
may be in effect generally for employees of all of FBA's subsidiaries (the
"FBA Plans"), if and as a Continued Employee shall be eligible and, if
required, selected for participation therein under the terms thereof and
otherwise shall not be participating in a similar plan which is maintained
by the Bancorp or a Subsidiary after the Effective Time. Bancorp employees
shall participate therein on the same basis as similarly situated employees
of other subsidiaries of FBA. All such participation shall be subject
to the terms of such plans as may be in effect from time to time, and this
Section 5.05 is not intended to give Continued Employees any rights or
privileges superior to those of other employees of subsidiaries of FBA.
FBA may terminate or modify all Employee Plans, and FBA's obligation under
<PAGE>
this Section 5.05 shall not be deemed or construed so as to provide duplication
of similar benefits but, subject to that qualification, FBA shall, for purposes
of vesting and any age or period of service requirements for commencement of
participation with respect to any FBA Plans in which Continued Employees may
participate, credit each Continued Employee with his or her term of service
with Bancorp and the Subsidiaries.
Section 5.06. Payment for Stock Options and Warrants. (a) Any Bancorp
Stock Options and Bancorp Warrants outstanding immediately prior to the
Effective Time may be exercised and surrendered to Bancorp at the Closing,
and FBA shall permit Bancorp to pay the holder of each such option and
warrant having an exercise price of less than $4.00 per share of Bancorp
Common an amount equal to the difference between $4.00 per share and the
applicable per share exercise price of such Stock Option (without the
necessity of the tender of the exercise price of such Stock Option by such
holder thereof).
(b) Bancorp and FBA shall cooperate in arranging for the disposition of
all Bancorp Warrants having an exercise price of $4.00 or more per share of
Bancorp Common. FBA will agree to pay or permit Bancorp to pay up to twenty-
five cents ($0.25) per share, or fifty cents ($0.50) per warrant, to redeem
such outstanding warrants from any holders who desire to dispose of same.
Section 5.07. Access to Information. FBA shall permit Bancorp reasonable
access in a manner which will avoid undue disruption or interference with FBA's
normal operations to its properties and shall disclose and make available to
Bancorp all books, documents, papers and records relating to its operations,
obligations and liabilities, including, but not limited to, minute books of
directors' and stockholders' meetings, organizational documents, material con-
tracts and agreements, filings with any regulatory authority, plans affecting
employees, and any other business activities or prospects in which Bancorp may
have a reasonable and legitimate interest in furtherance of the transactions
contemplated by this Agreement. Bancorp will hold any such information which
is nonpublic in confidence in accordance with the provisions of Section 9.01
hereof.
Section 5.08. Proxy Statement. FBA will cooperate with Bancorp in the
preparation and filing of the Proxy Statement and furnish to Bancorp all
financial and other information concerning FBA and its affiliates which is
required for the preparation and filing of the Proxy Statement.
<PAGE>
ARTICLE SIX
CONDITIONS PRECEDENT TO MERGER
Section 6.01. Conditions to FBA's Obligations. The obligations of FBA to
effect the Merger and the other transactions contemplated by this Agreement
shall be subject to the satisfaction (or waiver by FBA) prior to or on the
Closing Date of the following conditions:
(a) The representations and warranties made by Bancorp in this Agreement
shall be true in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made or
given on and as of the Closing Date;
(b) Bancorp shall have performed and complied in all material respects
with all of its obligations and agreements required to be performed prior to
the Closing Date under this Agreement;
(c) No temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger shall be in
effect, nor shall any proceeding by any regulatory authority or other person
seeking any of the foregoing be pending. There shall not be any action taken,
or any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger which makes the consummation of the Merger illegal;
(d) All necessary approvals, consents and authorizations required by
law for consummation of the Merger, including the requisite approval of the
shareholders of Bancorp and all required regulatory approvals, shall have been
obtained, and all waiting periods required by law shall have expired;
(e) FBA shall have received the environmental reports required by
Section 4.05 hereof and shall not have elected pursuant to Section 7.05 hereof
to terminate this Agreement;
(f) FBA shall have received all documents required to be received from
Bancorp on or prior to the Closing Date, all in form and substance reasonably
satisfactory to FBA;
(g) Shareholders of Bancorp Common owning no more than twenty percent
(20%) of the outstanding Bancorp Common shall have perfected the right to
dissent from the Merger; and
(h) The Bancorp Financial Statements shall not be inaccurate in any
material respect.
Section 6.02. Conditions to Bancorp's Obligations. Bancorp's
obligation to effect the Merger and the other transactions contemplated by
this Agreement shall be subject to the satisfaction (or waiver by Bancorp)
prior to or on the Closing Date of the following conditions:
<PAGE>
(a) The representations and warranties made by FBA in this Agreement
shall be true in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made or
given on the Closing Date;
(b) FBA shall have performed and complied in all material respects with
all of its obligations and agreements hereunder required to be performed prior
to the Closing Date under this Agreement;
(c) No temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger shall be
in effect, nor shall any proceeding by any bank regulatory authority or other
person seeking any of the foregoing be pending. There shall not be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the Merger which makes the consummation of the Merger or
the other transactions contemplated hereby illegal;
(d) All necessary approvals, consents and authorizations required by law
for consummation of the Merger, including the requisite approval of the
shareholders of Bancorp and all required regulatory approvals, shall have been
obtained, and all waiting periods required by law shall have expired;
(e) Bancorp shall have received all documents required to be received
from FBA on or prior to the Closing Date, all in form and substance reasonably
satisfactory to Bancorp;
(f) Bancorp shall have obtained within thirty (30) days after the date of
this Agreement a fairness opinion of Bancorp's financial advisor to the effect
that the Merger is fair to the shareholders of Bancorp from a financial point
of view, and such fairness opinion shall not have been withdrawn by such
financial advisor on or before the date of mailing of the Proxy Statement to
the shareholders of Bancorp; and
(g) All documents relating to the procedures for surrender and exchange
of certificates representing shares of Bancorp Common, including the Exchange
Agreement, shall be reasonably satisfactory to Bancorp.
ARTICLE SEVEN
TERMINATION OR ABANDONMENT
Section 7.01. Mutual Agreement. This Agreement may be terminated by the
mutual written agreement of the parties at any time prior to the Closing Date,
regardless of whether shareholder approval of this Agreement and the Merger by
the shareholders of Bancorp shall have been previously obtained.
<PAGE>
Section 7.02. Breach of Agreements. In the event that there is a material
breach in any of the representations and warranties or agreements of FBA or
Bancorp, which breach is not cured within twenty (20) days after notice to
cure such breach is given to the breaching party by the non-breaching party,
then the non-breaching party, regardless of whether shareholder approval of
this Agreement and the Merger shall have been previously obtained, may
terminate and cancel this Agreement by providing written notice of such
action to the other party hereto.
Section 7.03. Failure of Conditions. In the event that any of the cond-
itions to the obligations of either party are not satisfied or waived on or
prior to the Closing Date, and if any applicable cure period provided in
Section 7.02 hereof has lapsed, then such party may, regardless of whether
shareholder approval of the transactions contemplated by this Agreement shall
have been previously obtained, terminate and cancel this Agreement by
delivery of written notice of such action to the other party.
Section 7.04. Approval Denial. If any regulatory application filed
pursuant to Section 5.01 hereof should be finally denied or disapproved by a
regulatory authority, then this Agreement thereupon shall be deemed terminated
and canceled; provided, however, that a request for additional information or
undertaking by FBA, as a condition for approval, shall not be deemed to be a
denial or disapproval so long as FBA diligently provides the requested
information or undertaking. In the event an application is denied pending an
appeal, petition for review, or similar such act on the part of FBA (herein-
after referred to as the "Appeal") then the application will be deemed denied
unless FBA prepares and timely files an Appeal and continues the appellate
process for purposes of obtaining the necessary approval.
Section 7.05. Environmental Reports. FBA may terminate this Agreement
to the extent provided in Section 4.05 and this Section 7.05 by giving
written notice to Bancorp.
Section 7.06. Regulatory Enforcement Matters. In the event that
Bancorp or any Subsidiary shall become a party or subject to any new or
amended written agreement, memorandum of understanding, cease and desist
order, order seeking or imposing civil money penalties or other written
regulatory enforcement action or formal legal proceeding of any federal or
state agency charged with the supervision or regulation of banks or bank
holding companies after the date of this Agreement, then FBA may terminate
this Agreement.
Section 7.07. Automatic Termination. If the Closing Date does not
occur on or prior to February 28, 1997, then this Agreement may be terminated
by either party by giving written notice to the other.
<PAGE>
ARTICLE EIGHT
LIABILITY ON TERMINATION
Section 8.01. Liquidated Damages. (a)(1) In the event that the condi-
tions set forth in Section 6.02 have been satisfied and (i) Bancorp fails to
consummate the Merger following the receipt of notice from FBA that FBA has
obtained all required regulatory approvals and is prepared to consummate the
Merger in accordance with the terms of this Agreement; (ii) the Board of
Directors of Bancorp fails to make the recommendation contemplated by Section
4.03 or withdraws or modifies such recommendation in a manner adverse to FBA
(whether or not such failure, withdrawal or modification is excused by the
last clause of Section 4.03); or (iii) Bancorp takes any action in breach of
any provision of this Agreement which prevents the consummation of the
Merger, then Bancorp shall, within two (2) business days following the
receipt of a written demand from FBA, pay to FBA in immediately available
funds the sum of one million dollars ($1,000,000) as liquidated damages.
Payment under this Section 8.01(a)(1) shall discharge any obligation under
Section 8.01(a)(2).
(2) In the event that Section 8.01(a)(1) is inapplicable solely because
the approval of the Merger by Bancorp's shareholders has not been obtained
(but the other conditions in Section 6.02 have been satisfied), and a
Triggering Event (as defined in the following sentence) has occurred, then
Bancorp shall, within two (2) business days following the receipt of a
written demand from FBA, pay to FBA in immediately available funds the sum of
one million dollars ($1,000,000) as liquidated damages. As used herein, the
term "Triggering Event" means the consummation of any transaction announced
before or within one (1) year following the termination of this Agreement and
consummated within two (2) years after such termination, whereby a third
party has acquired, merged or consolidated with Bancorp, purchased all or a
substantial part of the assets of Bancorp or directly or indirectly acquired
beneficial ownership of forty percent (40%) or more of the outstanding shares
of voting stock of Bancorp. Payment under this Section 8.01(a)(2) shall
discharge any obligation under Section 8.01(a)(1).
(b) In the event that the conditions set forth Section 6.01 have been
satisfied and (i) FBA fails to consummate the Merger following the receipt of
notice from Bancorp that Bancorp is prepared to do so in accordance with the
terms of this Agreement; or (ii) FBA takes any action in breach of any
provision of this Agreement which prevents the consummation of the Merger,
then FBA shall, within two (2) business days following the receipt of a written
demand from Bancorp, pay to Bancorp in immediately available funds the sum of
one million dollars ($1,000,000) as liquidated damages.
Section 8.02. Liability on Termination. In the event that this Agreement
is terminated or the Merger is abandoned pursuant to Section 7.02 and Section
8.01 is inapplicable, then the non-breaching party shall be entitled to
institute an action for appropriate damages against the breaching party.
<PAGE>
ARTICLE NINE
GENERAL
Section 9.01. Confidential Information. The parties acknowledge the
confidential and proprietary nature of the "Information" (as herein described)
which has heretofore been exchanged and which will be received from each other
hereunder and agree to hold and keep the same confidential. Such Information
will include any and all financial, technical, commercial, marketing,
customer or other information concerning the business, operations and affairs
of a party that may be provided to the other, irrespective of the form of the
communications, by such party's employees or agents. Such Information shall
not include information which is or becomes generally available to the public
other than as a result of a disclosure by a party or its representatives in
violation of this Agreement. The parties agree that the Information will be
used solely for the purposes contemplated by this Agreement and that such
Information will not be disclosed to any person other than employees and
agents of a party who are directly involved in evaluating the transaction.
The Information shall not be used in any way detrimental to a party,
including use directly or indirectly in the conduct of the other party's
business or any business or enterprise in which such party may have an
interest, now or in the future, and whether or not now in competition with
such other party.
Section 9.02. Publicity. FBA and Bancorp shall cooperate with each
other in the development and distribution of all news releases and other
public disclosures concerning this Agreement and the Merger. Neither party
shall issue any news release or make any other public disclosure without the
prior consent of the other party, unless such is required by law upon the
written advice of counsel or is in response to published newspaper or other
mass media reports regarding the transaction contemplated hereby, in which
latter event the parties shall consult with each other to the extent
practicable regarding such responsive public disclosure.
Section 9.03. Return of Documents. Upon termination of this Agreement
without the Merger becoming effective, each party shall deliver to the other
originals and all copies of all Information made available to such party and
will not retain any copies, extracts or other reproductions, in whole or in
part, of such Information.
Section 9.04. Notices. Any notice or other communication shall be in
writing and shall be deemed to have been given or made on the date of
delivery, in the case of hand delivery, or three (3) business days after
deposit in the United States Registered Mail, postage prepaid, or upon
receipt if transmitted by facsimile telecopy or any other means, addressed
(in any case) as follows:
(a) if to FBA: First Banks America, Inc. c/o First Banks, Inc.
11901 Olive Boulevard
Creve Coeur, MO 63141
Attention: Mr. Allen H. Blake
Facsimile: (314) 567-3490
<PAGE>
with a copy to: John S. Daniels
Attorney at Law
8117 Preston Road, Suite 800
Dallas, Texas 75225
Facsimile: (214) 692-0508
(b) if to Bancorp: Harold G. Giomi, President and CEO
Sunrise Bancorp
Five SierraGate Plaza
Roseville, California 95678
Facsimile: (916) 783-2650
with a copy to: Victor J. Bacigalupi, Esquire
Bronson, Bronson & McKinnon LLP
505 Montgomery Street
San Francisco, California 94111
Facsimile: (415) 982-1394
or to such other address as any party may from time to time designate by notice
to the others.
Section 9.05. Nonsurvival of Representations, Warranties and Agreements.
Except for and as provided in this Section 9.05, no representation, warranty
or agreement contained in this Agreement shall survive the Closing Date or the
earlier termination of this Agreement. The agreements set forth in Sections
5.04, 5.05 and 5.06 shall survive the Closing Date and the agreements set forth
in Sections 8.01, 8.02, 9.01, 9.03 and 9.13 shall survive the Closing Date
or the earlier termination of this Agreement.
Section 9.06. Costs and Expenses. Except as may be otherwise provided
herein, each party shall pay its own costs and expenses incurred in connection
with this Agreement and the matters contemplated hereby, including without
limitation all fees and expenses of attorneys, accountants, brokers, financial
advisors and other professionals.
Section 9.07. Entire Agreement. This Agreement, the Guarantee and the
Proxies together constitute the entire agreement among the parties and super-
sede and cancel any and all prior discussions, negotiations, undertakings,
agreements in principle and other agreements between the parties relating to
the subject matter hereof.
Section 9.08. Headings and Captions. The captions of Articles and
Sections hereof are for convenience only and shall not control or affect the
meaning or construction of any of the provisions of this Agreement.
<PAGE>
Section 9.09. Waiver, Amendment or Modification. The conditions of this
Agreement which may be waived may only be waived by written notice to the other
party waiving such condition. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. This Agreement may not be amended or modi-
fied except by a written document duly executed by the parties hereto;
provided, however, that after approval of this Agreement and the Merger by
the shareholders of Bancorp, no amendment shall be made which is required by
law to be approved by such shareholders without such further approval.
Section 9.10. Rules of Construction. Unless the context otherwise
requires: (a) a term has the meaning assigned to it; (b) an accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles; (c) "or" is not exclusive; and (d) words in the
singular may include the plural and in the plural include the singular.
Section 9.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
shall be deemed one and the same instrument.
Section 9.12. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Except following the consummation of the Merger as
provided in Sections 5.04, 5.05 and 5.06, there shall be no third party
beneficiaries hereof. Except as provided in Section 1.01, this Agreement
shall not be assigned by either party, by operation of law or otherwise,
without the prior written consent of the other party.
Section 9.13. Governing Law; Assignment. This Agreement shall be
governed by the laws of the State of Delaware and any applicable federal
laws and regulations.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
SUNRISE BANCORP
By: /s/ Harold G. Giomi
Harold G. Giomi
President and CEO
By: /s/ Sean E. McCarthy
Sean E. McCarthy
Chairman of the Board of Directors
FIRST BANKS AMERICA, INC.
By: /s/ Allen H. Blake
Allen H. Blake
Vice President
<PAGE>
June , 1996
First Banks America, Inc.
c/o First Banks America, Inc.
11901 Olive Boulevard
Creve Coeur, Missouri 63141
Attention.: Mr. Allen H. Blake
Gentlemen:
This letter sets forth the agreement between the undersigned, a member of
the Board of Directors of Sunrise Bancorp, Inc., a California corporation
("Bancorp"), First Banks America, Inc., a Delaware corporation ("FBA") and
Bancorp. This agreement (the "Agreement") is entered into concurrently with
the Agreement and Plan of Merger of even date herewith by and between Bancorp
and FBA (the "Merger Agreement"). Capitalized terms which are used but
not defined herein shall have the meanings assigned to such terms in the
Merger Agreement, unless the context otherwise requires.
FBA desires to obtain the proxies of all of the directors of Bancorp in
consideration of the time, effort, money and resources which FBA has expended
and will expend in furtherance of the Merger. The undersigned director
acknowledges that FBA's agreement to the terms and provisions of the Merger
Agreement is conditioned on the execution of this Agreement by all of
the directors of Bancorp including the undersigned and that, in the absence
of this Agreement, FBA would not execute the Merger Agreement. The undersigned
is executing this Agreement in order to induce FBA to enter into the Merger
Agreement and to obtain as a shareholder of Bancorp the benefits of the Merger.
Section 4.03 of the Merger Agreement provides in part that "[t]he Board of
Directors of Bancorp shall unanimously recommend to its shareholders the
approval of the Agreement and the Merger, mail the Proxy Statement to its
shareholders, and use its best efforts to obtain such shareholder approval;
provided, however, that the Board of Directors of Bancorp shall not be
obligated to make such recommendation or use its best efforts to obtain
shareholder approval if, having consulted and considered the advice of
outside legal counsel, the Board has reasonably determined in good faith
that the making of such recommendation would constitute a breach of the
fiduciary duties of the members of the Board of Directors under applicable
law." The undersigned agrees that, subject to the final clause of such
Section 4.03, he will join in unanimously recommending the approval of the
Merger Agreement and the Merger and use his best efforts to cause Bancorp to
comply with the provisions of such Section which are applicable to Bancorp.
<PAGE>
The undersigned represents and warrants to FBA that (1) he has the power
to vote the number of shares of Bancorp Common identified on Exhibit A to this
Agreement, and (2) this Agreement is a legal, valid and binding obligation of
such director, enforceable against him in accordance with its terms (except as
may be limited by bankruptcy, insolvency or similar laws or by general
principles of equity). In order to secure the performance of the duties
undertaken herein, the undersigned hereby appoints ,
and ,
and each of them individually, as proxies, attorneys and agents of the under-
signed, with full power of substitution, to vote in the name and on behalf of
the undersigned for the approval of the Merger, and against any other proposal
relating to the acquisition or change in control of Bancorp, at all meetings of
shareholders of Bancorp (including all adjournments thereof) and to exercise,
in the name of the undersigned, the power to consent to actions of the
shareholders in approving the Merger and against any other proposal relating to
the acquisition or change in control of Bancorp with respect to all the shares
of Bancorp Common which the undersigned would be entitled to vote or consent
if personally present (including all of the shares identified on Exhibit A),
with all the powers the undersigned would possess if he were voting such shares.
The proxy granted herein is irrevocable during the term of this Agreement,
which shall commence on the date hereof and end on the earlier to occur of the
Effective Time or February 28, 1997. For so long as this Agreement is in
effect, the undersigned agrees that he will not sell, transfer, assign or
otherwise dispose of any of the shares of Bancorp Common to which this
Agreement applies, nor will he grant any other proxy to any person other
than FBA.
Bancorp represents to FBA that it has no reason to believe that any
provision of this Agreement is unenforceable or that any person other than
the undersigned director has any right to vote the shares of Bancorp Common
identified on Exhibit A, and Bancorp joins in this Agreement for the purpose
of evidencing (1) its knowledge of the terms hereof and (2) its agreement
that it will recognize the validity of the proxies granted herein at any
meeting of the shareholders held during the term hereof.
This Agreement may not be amended except by a written instrument
executed by all of the parties hereto. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original and all of
which shall be deemed one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
-------------------------------
[Director]
FIRST BANKS AMERICA, INC.
By: ----------------------------
Allen H. Blake
Vice President
SUNRISE BANCORP, INC.
By: ---------------------------
Harold G. Giomi
President and CEO
<PAGE>
EXHIBIT A
CERTIFICATE NUMBER NUMBER OF SHARES
<PAGE>
EXHIBIT 3.06
FIRST BANKS, INC.
135 North Meramec
Clayton, Missouri 63105
June , 1996
Sunrise Bancorp
Five SierraGate Plaza
Roseville, California 95678
Gentlemen:
This letter is delivered to Sunrise Bancorp concurrently with the
execution and delivery by First Banks America, Inc., a Delaware corporation
("FBA"), of the Agreement and Plan of Merger of even date herewith by and
between Sunrise Bancorp, a California corporation ("Bancorp"), and FBA (the
"Agreement"). Capitalized terms which are used but not defined herein are
intended to have the meanings assigned to them in the Agreement, unless
otherwise stated herein.
Bancorp has requested that the undersigned, First Banks, Inc., a Missouri
corporation ("First Banks"), provide for the benefit of Bancorp and its share-
holders a guaranty of the obligation of FBA described in the following sentence.
In order to induce Bancorp to execute and deliver the Agreement, First Banks
hereby unconditionally guarantees to Bancorp, for the benefit of Bancorp and
its shareholders, that if FBA becomes obligated to pay the Merger Consideration
pursuant to Section 1.03 of the Agreement, FBA will do so. If FBA is obligated
to pay the Merger Consideration and fails to do so, First Banks will pay the
Merger Consideration to the shareholders of Bancorp.
First Banks further guarantees that, in the event that the consent or
approval of First Banks or a subsidiary of First Banks (in either case in its
capacity as the shareholder of the corporation with which Bancorp is to be
merged pursuant to Section 1.01 of the Agreement) is required in order to
approve the Merger, First Banks will either give the consent or approval or
cause the appropriate subsidiary to do so.
First Banks represents and warrants to Bancorp that (1) this letter has
been duly and validly executed and delivered by First Banks and constitutes
the legal, valid and binding obligation of First Banks, enforceable in
accordance with its terms except as the enforcement hereof may be limited by
bankruptcy, insolvency or similar laws or by general principles of equity,
and no other corporate acts or proceedings are required to be taken by First
Banks to authorize the execution, delivery and performance hereof; and (2)
First Banks is the legal and beneficial owner of a majority of the out-
standing voting stock of FBA and has a material interest in FBA and in the
consummation of the Merger.
Sincerely,
James F. Dierberg
Chairman of the Board and Chief
Eecutive Officer
EXHIBIT 99.2
