<PAGE>
FORM 8-K
Securities and Exchange Commission
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): September 28, 1995
Surety Capital Corporation
- --------------------------------------------------------------------------------
(exact name of registrant as specified in its charter)
Delaware 33-1983 75-2065607
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
1845 Precinct Line Road, Suite 100, Hurst, Texas 76054
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(address of principal executive offices)
Registrant's telephone number, including area code: (817) 498-2749
Not applicable
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
Surety Capital Corporation (the "Registrant") is a bank holding company
which owns over ninety-nine percent of the outstanding stock of Surety Bank,
National Association, a national banking association ("Surety Bank"). On June
16, 1995 Surety Bank entered into an Office Purchase and Assumption Agreement
(the "Agreement") with Bank One, Texas, National Association ("Bank One"), a
copy of which is attached hereto as EXHIBIT A. The Agreement provides for the
acquisition of certain assets and the assumption of certain liabilities by
Surety Bank (the "Acquisition") relating to the branch of Bank One located in
Waxahachie, Texas (the "Waxahachie Branch").
The Acquisition was consummated on September 28, 1995. Surety Bank financed
the Acquisition through the use of internally-generated funds.
At the closing, Surety Bank assumed deposits and other liabilities totaling
approximately $16,463,000. In addition, Surety Bank acquired certain small
business and consumer loans totaling approximately $933,000, certain real
property, furniture and equipment related to the Waxahachie Branch totaling
approximately $271,000, and cash and other assets totaling approximately
$15,259,000. After paying a deposit premium of two percent (2%) on the deposits
assumed totaling approximately $329,000, Surety Bank received approximately
$14,982,000 in cash from Bank One as consideration for the net deposit
liabilities assumed.
The Waxahachie Branch and deposits acquired in the Acquisition will be
incorporated into Surety Bank's existing branch network.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SURETY CAPITAL CORPORATION
DATE: October 13, 1995 /s/ Bobby W. Hackler
-----------------------------
Bobby W. Hackler
Vice President, Secretary and
Chief Financial Officer
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<PAGE>
EXHIBIT A
OFFICE PURCHASE AND ASSUMPTION AGREEMENT
by and between
SURETY BANK, NATIONAL ASSOCIATION
and
BANK ONE, TEXAS, NATIONAL ASSOCIATION
6/15/95
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TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE 1 - PURCHASE AND ASSUMPTION.......................................... 1
1.01 Purchase and Sale of Asset................................... 1
1.02 Transfer of Assets........................................... 1
1.03 Acceptance and Assumption.................................... 2
1.04 Payment of Funds............................................. 4
ARTICLE 2 - CONDUCT OF THE PARTIES PRIOR TO CLOSING.......................... 5
2.01 Covenants of BANK ONE........................................ 5
2.02 Covenants of SURETY.......................................... 9
2.03 Covenants of All Parties.....................................10
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES...................................10
3.01 Representations and Warranties of BANK ONE...................10
3.02 Representations and Warranties of SURETY.....................14
ARTICLE 4 - ACTIONS RESPECTING EMPLOYEES AND PENSION AND
EMPLOYEE BENEFIT PLANS.......................................14
4.01 Employment of Employees......................................14
4.02 Terms and Conditions of Employment...........................15
4.03 Compliance with Law..........................................15
4.04 Actions to be Taken by BANK ONE..............................15
ARTICLE 5 - CONDITIONS PRECEDENT TO CLOSING..................................16
5.01 Conditions to BANK ONE's Obligations.........................16
5.02 Conditions to SURETY's Obligations...........................17
5.03 Non-Satisfaction of Conditions Precedent.....................18
5.04 Waiver of Conditions Precedent...............................18
ARTICLE 6 - CLOSING..........................................................18
6.01 Closing and Closing Date.....................................18
6.02 BANK ONE's Actions at Closing................................18
6.03 SURETY's Actions at Closing..................................20
6.04 Methods of Payment...........................................20
6.05 Availability of Closing Documents............................21
6.06 Effectiveness of Closing.....................................21
ARTICLE 7 - CERTAIN TRANSITIONAL MATTERS.....................................21
7.01 Transitional Action by SURETY................................21
7.02 Transitional Action by BANK ONE..............................23
7.03 Overdrafts and Transitional Action...........................25
7.04 Effect of Transitional Action................................25
ARTICLE 8 - GENERAL COVENANTS AND INDEMNIFICATION............................25
8.01 Confidentiality Obligations of SURETY........................25
8.02 Confidentiality Obligations of BANK ONE......................26
8.03 Indemnification by BANK ONE..................................26
8.04 Indemnification by SURETY....................................27
8.05 Solicitation of Customers by SURETY Prior to Closing.........27
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
8.06 Solicitation of Customers by BANK ONE After the Closing......27
8.07 Further Assurances...........................................28
8.08 Operation of Office..........................................28
8.09 Covenant Not to Compete......................................28
8.10 Survival of Covenants........................................29
8.11 Individual Retirement Accounts...............................29
ARTICLE 9 - TERMINATION......................................................29
9.01 Termination by Mutual Agreement..............................29
9.02 Termination by BANK ONE......................................29
9.03 Termination by SURETY........................................29
9.04 Effect of Termination........................................30
ARTICLE 10 - MISCELLANEOUS PROVISIONS........................................30
10.01 Expenses.....................................................30
10.02 Certificates.................................................30
10.03 Termination of Representations and Warranties................30
10.04 Waivers......................................................30
10.05 Notices......................................................31
10.06 Parties in Interest: Assignment; Amendment...................31
10.07 Headings.....................................................32
10.08 Terminology..................................................32
10.09 Flexible Structure...........................................32
10.10 Press Release................................................33
10.11 Entire Agreement.............................................33
10.12 Governing Law................................................33
10.13 Counterparts.................................................33
10.14 Tax Matters..................................................33
</TABLE>
<TABLE>
<CAPTION>
SCHEDULES:
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<S> <C>
Schedule A - Description of Owned Real Estate
Schedule B - Furniture, Fixtures and Equipment
Schedule C - Assumed Contracts
Schedule D - List of Leases, Safekeeping Items and Agreements
Schedule E - Individual Retirement Custodial Account Agreement and Amended and
Restated Individual Retirement Account Disclosure Statement
Schedule F - Deposit Accounts
Schedule G - Office Loans
Schedule H - Certification of SURETY
Schedule I - Form of Opinion of Counsel for SURETY
Schedule J - Certification of BANK ONE
Schedule K - Form of Opinion of Counsel for BANK ONE
Schedule L - Assignment, Transfer and Appointment of Successor Custodian for
IRAs
Schedule M - Form of Assignment of Office Loans, Notes, Agreements and Pledge
Schedule N - Form of Instrument of Assumption
Schedule O - Special Warrenty Deed
</TABLE>
<PAGE>
OFFICE PURCHASE AND ASSUMPTION AGREEMENT
----------------------------------------
This Agreement ("Agreement"), made this 16th day of June, 1995, by and between
Surety Bank, National Association with its principal office at 1845 Precinct
Line Road, Suite 100, Hurst, Texas 76054-3107 (hereinafter called "SURETY") and
Bank One, Texas, National Association, a national banking association with its
principal office at 1717 Main Street, Dallas, Texas 75201 (hereinafter called
"BANK ONE").
WHEREAS, SURETY desires to purchase and assume from BANK ONE, and BANK ONE
desires to sell and assign to SURETY certain assets and liabilities associated
with an office of BANK ONE in Waxahachie, Texas, as hereinafter described;
NOW, THEREFORE, in consideration of the premises hereinafter set forth and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, SURETY and BANK ONE hereby agree as follows:
1. PURCHASE AND ASSUMPTION.
-----------------------
1.01 Purchase and Sale of Assets. At the Closing, as defined in Section
---------------------------
6.01 hereof (the "Closing"), SURETY shall purchase and acquire and
BANK ONE shall sell and assign the real estate and other assets
described in Section 1.02 hereof (collectively, the "Assets") all of
which are used in and/or relate to business conducted by BANK ONE at
its branch office located at 104 N. Elm, Waxahachie, Texas (the
"Office").
1.02 Transfer of Assets. Subject to the terms and conditions of this
------------------
Agreement, BANK ONE shall assign, transfer, convey and deliver to
SURETY, on and as of the Closing on the Closing Date, as defined in
Section 6.01 hereof, the Assets, which shall include the following:
(a) Owned Real Estate. All of BANK ONE's right, title and interest
-----------------
in and to the real estate described in attached Schedule A on
----------
which the Office is situated, together with all of BANK ONE's
rights in and to all improvements thereon; and all easements
rights, privileges and appurtenances associated therewith (the
"Owned Real Estate");
(b) Furniture and Equipment. All of BANK ONE's right, title and
-----------------------
interest in and to the furniture, fixtures and equipment,
excluding the calculators, CRTs, controller and printer and
signs, printed supplies and documents bearing the BANK ONE name
and/or logo, cameras and other photographic equipment, owned by
BANK ONE and located at the Office, but specifically including
that listed on Schedule B attached hereto (the "Fixed Assets");
----------
(c) Safe Deposit Business. All right, title and interest of BANK
---------------------
ONE in and to the safe deposit business, if any, (subject to the
allocation of safe deposit rental payments as provided in
Section 1.03(c)(ii) hereof) located at the Office as of the
close of business on the Closing Date;
(d) Cash on Hand. All cash on hand at the Office as of the close of
------------
business on the Closing Date including vault cash, petty cash,
ATM cash, if any, and tellers' cash;
(e) Prepaid Expenses. All prepaid expenses recorded or otherwise
----------------
reflected on the books of BANK ONE as of May 31, 1995, or
incurred in the ordinary course of business thereafter, as being
attributable to the Office as of the close of business on the
day
<PAGE>
immediately preceding the Closing Date, but only to the extent
attributable to the Assets sold, assigned or transferred to
SURETY by BANK ONE pursuant to this Agreement and only to the
extent arising by reason of SURETY's use or ownership of such
Assets after the close of business on the Closing Date. Any and
all prepaid expenses not incurred in the ordinary course of
business by BANK ONE with respect to the Office subsequent to
May 31, 1995, shall be subject to the prior written consent of
SURETY;
(f) Office Loans. All right, title and interest in and to all those
------------
loans which, as of the close of business on the Closing Date,
are (i) secured, in whole or in part, by Deposit Accounts (as
hereinafter defined) attributable to the Office and being
assumed by SURETY pursuant to this Agreement (the "Deposit
Account Loans") or (ii) automatically created as the result of
an overdraft of a Deposit Account pursuant to a pre-approved
overdraft protection program offered by BANK ONE (the "Overdraft
Loans") or (iii) any other loans reflected on the books of BANK
ONE as attributable to the Office as of the Closing Date and, if
those other loans are secured by Deposit Accounts, such Deposit
Accounts shall be maintained at the Office (the "Other Loans").
The Deposit Account Loans, Overdraft Loans and Other Loans are
hereinafter referred to collectively as the "Office Loans." BANK
ONE shall not make any material change to its customary policies
for making Office Loans at the Office or extend Office Loans
which are materially different than loans offered by BANK ONE's
offices in Dallas County, Texas. The transfer of the Office
Loans will be made without any reserve for loan losses. At any
time during the thirty (30) day period immediately following the
Closing Date, SURETY may put any Office Loan that has not been
amended or renewed by SURETY back to BANK ONE in consideration
for the price paid by SURETY for such loan plus interest accrued
since the Closing Date less any principal and interest payments
received by SURETY after the Closing Date. For the purposes of
this paragraph, the price paid by SURETY for any Office Loan
shall be the book value thereof together with accrued and unpaid
interest thereon as of the Closing Date as calculated pursuant
to Section 1.04(a)(vi). This provision shall the survive the
Closing.
(g) Records of the Offices. All original records and documents
----------------------
related to the Assets transferred or liabilities assumed by
SURETY including, but not limited to the deposit accounts
maintained by BANK ONE at the Office. With respect to records
not physically located and maintained at the Office, BANK ONE
and SURETY will execute a mutually acceptable records agreement
at the Closing; and
(h) Contracts or Agreements. All of BANK ONE's right, title and
-----------------------
interest in and to the maintenance and service agreements
related to the Office, as listed on Schedule C annexed hereto
----------
and made a part hereof (the "Assumed Contracts"), provided the
same are assignable.
1.03 Acceptance and Assumption. Subject to the terms and conditions of
-------------------------
this Agreement, on and as of the Closing on the Closing Date, SURETY
shall:
(a) Assets. Receive and accept all of the Assets assigned,
------
transferred, conveyed and delivered to SURETY by BANK ONE
pursuant to this Agreement, including those identified in
Section 1.02 above.
(b) Deposit Liabilities. Assume and thereafter discharge, pay in
-------------------
full and perform all of BANK ONE's obligations and duties
relating to the "Deposit Liabilities" (as hereinaf-
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<PAGE>
ter defined). The term "Deposit Liabilities" is defined herein
as all of BANK ONE's obligations, duties and liabilities of
every type and character relating to all deposit accounts, other
than (i) KEOGH accounts and (ii) deposit accounts securing any
loan of BANK ONE which is not an Office Loan, for which SURETY
assumes no liability, which, as reflected on the books of BANK
ONE as of the close of business on the Closing Date, are
attributable to the Office. The deposit accounts referred to in
the immediately preceding sentence (hereinafter the "Deposit
Accounts") include, without limitation, passbook accounts,
checking, Money Market and NOW accounts, Individual Retirement
Accounts for which BANK ONE has not received objection from an
account holder of the assignment and appointment of SURETY as
successor custodian of such accounts prior to the Closing Date
or which Individual Retirement Accounts have not been closed or
transferred to another office of Bank One at the request of the
account holder prior to the Closing Date (the "IRA's") and
certificates of deposit. The "obligations, duties and
liabilities" referred to in the second sentence hereof include,
without limitation, the obligation to pay and otherwise process
all Deposit Accounts in accordance with applicable law and their
respective contractual terms and the duty to supply all
applicable reporting forms for post-closing periods including,
without limitation, Form 1099's, relating to the Deposit
Accounts. With regard to each IRA included within the Deposit
Accounts, SURETY shall also assume the plan pertaining thereto
and the trustee or custodial arrangement in connection
therewith.
(c) Liabilities Under Leases/Safe Deposit Business. Assume and
----------------------------------------------
thereafter fully and timely perform and discharge, in accordance
with their respective terms, all of the liabilities and
obligations of BANK ONE arising after the Closing Date with
respect to:
(i) all leases listed on Schedule D to this Agreement
----------
(including safe deposit leases if any) and sold, assigned
or transferred to SURETY by BANK ONE pursuant to this
Agreement;
(ii) the safe deposit business of the Office including, but not
limited to, the maintenance of all necessary facilities
for the use of safe deposit boxes, if any, by the renters
thereof during the periods for which such persons have
paid rent therefor in advance to BANK ONE, subject to the
agreed allocation of such rents, which allocation shall be
satisfied in full by BANK ONE paying to SURETY, in the
manner specified in Section 6.04 hereof, the amount of
rental payment received by BANK ONE for each such safe
deposit box attributable to and prorated to reflect the
period from and after the Closing Date, subject to the
provisions of the applicable leases or other agreements
relating to such boxes; and
(iii) all safekeeping items and agreements listed on Schedule D
----------
to this Agreement and delivered to SURETY by BANK ONE
pursuant to this Agreement, including, but not limited to,
all applicable safekeeping agreements, memoranda, or
receipts so delivered to SURETY by BANK ONE hereunder.
(d) Other Liabilities. Fully and timely perform and discharge, as
-----------------
the same may be or become due, the Assumed Contracts and all
additional liabilities, obligations and deferred expenses of
BANK ONE as of the date of this Agreement, which are (i)
reflected on the books of BANK ONE as being attributable to the
Office as of the
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<PAGE>
close of business on the Closing Date, and (ii) disclosed, by
description and an estimate of the amount, to SURETY in writing
prior to the date of this Agreement, but only to the extent
attributable to the Assets sold, assigned or transferred to
SURETY by BANK ONE pursuant to this Agreement and only to the
extent arising by reason of SURETY's use or ownership of such
Assets after the close of business on the Closing Date. No
additional liabilities and obligations of BANK ONE incurred
subsequent to the date of this Agreement, except those incurred
in the ordinary course of business, shall be assumed by SURETY
unless the prior written consent of SURETY has been obtained
prior to the incursion of the liability or obligation by BANK
ONE.
(e) Other Obligations. Fully and timely perform its obligations
-----------------
relative to employees of the Office, if any, as set forth
hereinafter.
1.04 Payment of Funds. Subject to the terms and conditions hereof, at the
----------------
Closing:
(a) Consideration. In consideration of SURETY's assumption of the
-------------
Deposit Liabilities and its other agreements herein, BANK ONE
shall make available and transfer to SURETY, in the manner
specified in Section 6.04 hereof, funds equal to the aggregate
balance of all Deposit Accounts (including interest posted or
accrued to such accounts as of the close of business on the day
immediately preceding the Closing Date) plus the deferred
expenses identified in Section 1.03(d) hereof prorated as of the
close of business on the day preceding the Closing Date less an
amount equal to the sum of:
(i) the amount of cash on hand at the Office transferred to
SURETY as of the close of business on the Closing Date;
and
(ii) the sum of $148,500, representing the fair market value of
the Owned Real Estate being transferred to SURETY on the
Closing Date; and
(iii) the sum of $11,455.00 representing the purchase price (and
the present book value) of the furniture, fixtures and
equipment (the "FF & E") being transferred to SURETY on
the Closing Date; and
(iv) two percent (2%) of the aggregate balance of all Deposit
Liabilities of the Office (which aggregate balance shall
include interest posted to such accounts as of the close
of business on the Closing Date) less the values set forth
in (S)1.04(a)(ii) and (iii) above. The amount calculated
in this paragraph 1.04(a)(iv) is hereinafter called the
"Acquisition Consideration:" and
(v) the amount of prepaid expenses described in Section
1.02(e) of this Agreement, prorated as of the close of
business on the day immediately preceding the Closing
Date; and
(vi) the book value of the Office Loans together with accrued
and unpaid interest thereon computed as of the close of
business on the Closing Date.
In the event that the sum of items (i) through (vi) above should
be in excess of the aggregate amount to be transferred by BANK
ONE pursuant to the first paragraph of this Section 1.04(a), the
full amount of such excess shall constitute an amount due
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<PAGE>
from SURETY to BANK ONE, and shall be paid to BANK ONE at the
Closing in the manner specified in Section 6.04 hereof.
(b) Reimbursement and Proration of Certain Expenses. All other
-----------------------------------------------
expenses (i) due and payable at times after the Closing Date for
periods prior to the close of business on the Closing Date or
(ii) paid prior to the close of business on the Closing Date for
periods following the Closing Date, including the prepaid
expenses described in Section 1.02(e) hereof and deferred
expenses described in Section 1.03(d) hereof, including without
limitation, real estate taxes and assessments which are a lien
but not yet due and payable, utility payments, payments due on
leases assigned, payments due on assigned service and
maintenance contracts and similar expenses relating to the
Office shall be prorated between BANK ONE and SURETY as of the
close of business on the day immediately preceding the Closing
Date, provided, however, that all real estate taxes and
-------- -------
assessments shall be prorated at the Closing on the basis of the
most recently certified real estate taxes and assessments, and
all utility payments shall be prorated on the basis of the best
information available at Closing. With respect to premiums paid
to the FDIC for deposit insurance for the Deposit Liabilities it
shall be assumed that all the Deposit Liabilities are insured
under the Bank Insurance Fund; the proration of FDIC insurance
premiums will be based on the amount of the Deposit Liabilities
as of the close of business on the Closing Date and the number
of days during any period for which BANK ONE has prepaid
premiums to the FDIC but during which SURETY has held or will
hold the Deposit Liabilities. For prorations, if any, which
cannot be reasonably calculated as of the Closing, a post-
closing adjustment shall be made in the manner specified in
Section 6.04 hereof.
(c) Expenses Relating to Real Property. The transfer (or
----------------------------------
conveyance) fees relating to the Owned Real Estate and the
costs, fees and expenses of all title commitments, title
guaranties and title examinations relating to the procurement of
the Title Commit ments related to the Owned Real Estate referred
to in Sections 2.01(c) and 5.02(g) herein, shall be allocated
to, and shall be borne, solely and exclusively by BANK ONE. The
costs, fees and expenses relating to the premiums for all title
insurance policies (net of the costs of all title commitments,
guaranties and examinations), recording costs and other similar
costs, fees and expenses, if any, relating to the sale and
transfer of the Owned Real Estate shall be allocated to, and
shall be borne, solely and exclusively, by SURETY. BANK ONE
shall reimburse SURETY at the Closing for all the costs, fees
and expenses allocated to BANK ONE pursuant to this Section
1.04(c) but paid by SURETY, and SURETY shall reimburse BANK ONE
at the Closing for all of the costs, fees and expenses allocated
to SURETY pursuant to this Section 1.04(c) but paid by BANK ONE
in the manner specified in Section 6.04 herein. If this
transaction does not close by virtue of a breach of this
Agreement, the breaching party shall be responsible for and
shall, as appropriate, reimburse the other party for its
expenses as set forth herein. If this transaction does not close
for any other reason, each party shall reimburse the other party
upon termination of this Agreement for such party's share of
expenses so that each party shall pay the same share of expenses
as it would have paid at Closing.
2. CONDUCT OF THE PARTIES PRIOR TO CLOSING.
---------------------------------------
2.01 Covenants of BANK ONE. BANK ONE hereby covenants to SURETY that,
---------------------
from the date hereof until the Closing, it will do or cause the
following to occur:
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<PAGE>
(a) Operation of the Office. BANK ONE shall continue to operate the
-----------------------
Office in a manner equivalent to that manner and system of
operation employed immediately prior to the date of this
Agreement; provided, however, that it is contemplated by the
parties that, prior to Closing, BANK ONE will be terminating
certain programs which are currently in effect which allow
depositors to access Deposit Accounts through electronic means.
BANK ONE will use its best efforts to ensure that no harm or
damage to the reputation of the Office or material reduction in
the existing deposit liabilities of the Office occurs.
Notwithstanding the foregoing and except as may be required to
obtain the required authorizations referred to in Section 2.03
of this Agreement, between the date of this Agreement and the
Closing Date, and except as may be otherwise required by a
regulatory authority, BANK ONE shall not, without the prior
consent of SURETY, which consent shall not be unreasonably
withheld:
(i) cause the Office to engage or participate in any material
transaction or incur or sustain any obligation which, in
the aggregate, is material to its business, condition or
operations except in the ordinary course of business;
(ii) cause the Office to transfer to BANK ONE's other
operations any material amount of Assets, except for (a)
supplies, if any, which have unique function in BANK ONE's
business and ordinarily would not be useful to SURETY, (b)
cash and other normal intrabank transfers which may be
transferred in the ordinary course of business in
accordance with normal banking practices and (c) signs, or
those parts thereof, bearing the BANK ONE name and/or
logo;
(iii) cause the Office to transfer to BANK ONE's other
operations any deposits other than deposits securing loans
made by BANK ONE which are not Office Loans, except in the
ordinary course of business at the unsolicited request of
depositors or cause any of BANK ONE's other operations to
transfer to the Office any deposits, except in the
ordinary course of business at the unsolicited request of
depositors; provided, however, that BANK ONE shall be
permitted to make such transfers of any deposits to or
from the Office provided that neither (A) the net amount
of transfers to the Office minus the amount of transfers
from the Office nor (B) the net amount of transfers from
the Office minus transfers to the Office exceeds $100,000;
(iv) invest in any Fixed Assets on behalf of the Office, except
for commitments made on or before the date of this
Agreement which are disclosed to SURETY on Schedule B of
----------
this Agreement and for replacements of furniture,
furnishings and equipment and normal maintenance and
refurbish ing purchased or made in the ordinary course of
Office business;
(v) enter into or amend any continuing contract (other than
Deposit Liabilities and Office Loans) relating to the
Office, which cannot be terminated without cause and
without payment of any amounts as a penalty, bonus,
premium or other compensation for termination, unless it
is made in the ordinary course of Office business with
prior written notice to SURETY;
(vi) undertake any actions which are inconsistent with a
program to use all reasonable efforts to maintain good
relations with customers and with
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<PAGE>
employees employed at the Office, unless such actions are
required or permitted by this Agreement;
(vii) make any material change to its customary policies for
setting rates on deposits offered at the Office.
(b) Information Concerning the Office. Upon reasonable notice,
---------------------------------
BANK ONE shall permit officers and authorized representatives of
SURETY access to inspect the Office during normal business hours
or at such other time mutually agreed upon by both parties and
permit SURETY to make or cause to be made such reasonable
investigation of information and materials relating to the
financial condition of the Office, including, if any, general
and subsidiary ledgers, deposit records, audit reports and any
other information concerning the business, property, and legal
questions concerning the Office (and related to the physical
condition of the Office), as SURETY reasonably deems necessary
or advisable; provided, however, that such access and
-------- -------
investigation shall be reasonably related to the transactions
contemplated hereby and shall not interfere unnecessarily with
the normal operations of the Office or BANK ONE; and provided,
--------
further, that nothing in this Section 2.01(b) shall be deemed
-------
to require BANK ONE to breach any obligation of confidentiality
or to reveal any proprietary information, trade secrets,
marketing, strategic plans or information not related to the
transaction contemplated by this Agreement. The information and
materials related to the financial condition of the Office which
will be made available to SURETY from BANK ONE pursuant to this
subsection will be accurate in all material respects and will
accurately and completely reflect the Deposit Liabilities
attributable to the Office as of the date the information is
provided.
(c) Title Commitments for Real Estate. BANK ONE shall deliver to
---------------------------------
SURETY, at BANK ONE's expense, with respect to the Owned Real
Estate no later than thirty (30) days after the date of this
Agreement, a commitment or commitments (the "Title Commitments")
having an effective date as near as feasible to the date of
delivery of such Title Commitments from a title insurance
company authorized to do business in Texas designated by BANK
ONE and reasonably satisfactory to SURETY, to issue to SURETY as
soon as practicable after the Closing Date, as applicable, an
owner's title insurance policy in a form promulgated by the
Texas Department of Insurance in accordance with the Texas Title
Insurance Act having an effective date as of the Closing Date in
an amount satisfactory to SURETY (but not in excess of the
appraised value of such property) covering the Owned Real
Estate, subject to the Permitted Exceptions as defined in
Section 10.08 herein. Such commitments shall show title vested
in BANK ONE. If title to all or part of the Owned Real Estate is
subject to any defect, lien, encumbrance, easement, condition,
restriction, encroach ment, or other title matter to which
SURETY objects, then SURETY shall provide written notice thereof
to BANK ONE. Any title matters to which SURETY does not object
in writing within twenty (20) days after the date of delivery of
the title commitments shall be deemed to be Permitted
Exceptions. BANK ONE shall have thirty days after written notice
thereof from SURETY, to remedy or remove any such defect, lien,
encumbrance, easement, condition, restriction, encroachment, or
other title matter (collectively the "Title Objections"), but,
if BANK ONE does not (and BANK ONE shall be under no obligation
to do so) SURETY, at SURETY's sole cost and expense, may attempt
to cure or remove such Title Objections for a period of thirty
days thereafter. If any Title Objections are not cured, then, in
addition to any other rights which SURETY may have hereunder,
SURETY shall have the right (i) to declare this Agreement
terminated by written notice to BANK ONE, or (ii) to
-7-
<PAGE>
waive such Title Objections in which event such Title Objections
shall be deemed to be Permitted Exceptions. The Owned Real
Estate is being sold by BANK ONE to SURETY hereunder free and
clear of all liens, claims, encumbrances and rights of tenants
in possession except for the Permitted Exceptions. If SURETY
does not terminate this Agreement by written notice to BANK ONE
within sixty (60) days of SURETY's written notice of Title
Obligations, then SURETY Shall be deemed to have waived such
Title Objections in accordance with subsection (ii) above. The
conveyance by Special Warranty Deed to be delivered by BANK ONE
pursuant hereto shall be substantially in the form attached
hereto as Schedule O. BANK ONE also shall execute and deliver to
SURETY at the time of Closing such affidavits and other
instruments, if any, as in the mutual and reasonable opinion of
BANK ONE and SURETY are reasonably necessary to the proper
consummation of the transactions contemplated in this Section
2.01(c). BANK ONE also shall execute and deliver a so-called
FIRPTA affidavit at Closing. SURETY shall have the right to
obtain at its sole cost and expense duly certified surveys, and
BANK ONE hereby grants to SURETY and its surveyors, agents and
contractors right of access to the Owned Real Estate for the
purpose of performing the surveys.
(d) Required Authorizations. BANK ONE shall obtain and procure all
-----------------------
necessary corporate approvals and authorizations, if any,
required on its part to enable it to fully perform all
obligations imposed on it hereunder which must be performed by
it at or prior to the Closing.
(e) Creation of Liens and Encumbrances. With respect to the Owned
----------------------------------
Real Estate, BANK ONE shall not create or allow any liens,
imperfections in title, charges, easements, restrictions or
encumbrances by, through, or under BANK ONE other than the
Permitted Exceptions.
(f) Condemnation. If prior to Closing all or any portion of the
------------
Owned Real Estate is taken or is made subject to eminent domain
or other governmental acquisition proceedings, then BANK ONE
shall promptly notify SURETY thereof, and SURETY may either
complete the Closing and receive the proceeds paid or payable on
account of such acquisition proceedings, or terminate this
Agreement. If SURETY terminates this Agreement, both parties
shall thereupon be relieved from all further obligations
hereunder.
(g) Insurance Proceeds, Casualty and Condemnation Payments. BANK
------------------------------------------------------
ONE shall maintain adequate insurance on all the Assets
consisting of Owned Real Estate and Fixed Assets. In the event
of any damage, destruction or condemnation affecting such Assets
between the date hereof and the time of the Closing, BANK ONE
shall deliver to SURETY any insurance proceeds and other
payments, to the extent of the applicable amount set forth in
Section 1.04(a)(ii) or (iii) hereof with respect to Owned Real
Estate and the replacement cost with respect to the Fixed
Assets, as the case may be, received (or with respect to
insurance proceeds, which would be received assuming BANK ONE's
insurance policy had no deductible) by BANK ONE as a result
thereof unless, in the case of damage or destruction, BANK ONE
has repaired or replaced the damaged or destroyed property.
(h) Financial Information. BANK ONE shall provide to SURETY from
---------------------
and after the date of this Agreement up and to the Closing Date,
on a monthly basis, copies of its balance sheet, income
statement and any loan reports relating to the Office which are
-8-
<PAGE>
maintained by BANK ONE in the normal course of its business and
which can be reasonably provided to SURETY.
2.02 Covenants of SURETY. SURETY hereby covenants to BANK ONE that, from
-------------------
the date hereof until the Closing, it will do or cause the following
to occur:
(a) Regulatory Applications. SURETY shall prepare and submit for
-----------------------
filing, at no expense to BANK ONE, any and all applications,
filings, and registrations with, and notifica tions to, all
federal and state authorities required on the part of SURETY or
any shareholder or affiliate of SURETY for the Acquisition to be
consummated at the Closing as contemplated in Section 6.01
herein and for SURETY to operate the Office following the
Closing. SURETY shall provide BANK ONE with a draft copy of each
application for BANK ONE's approval prior to filing, which
approval by BANK ONE will not be unreasonably withheld or
delayed. Such applications will be submitted to BANK ONE in
draft form within thirty (30) days from the date of this
Agreement and filed by SURETY without delay following BANK ONE's
approval of such applications; provided, however, that in no
event will such applications be filed later than sixty (60) days
from the date of this Agreement. Thereafter, SURETY shall pursue
all such applications, filings, registrations, and notifications
diligently and in good faith, and shall file such supplements,
amendments, and additional information in connection therewith
as may be reasonably necessary for the Acquisition to be
consummated at such Closing and for SURETY to operate the Office
following the Closing. SURETY shall deliver to BANK ONE evidence
of the filing of each and all of such applications, filings,
registrations and notifications (except for any confidential
portions thereof), and any supplement, amendment or item of
additional information in connection therewith (except for any
confidential portions thereof). SURETY shall also deliver to
BANK ONE a copy of each material notice, order, opinion and
other item of correspondence received by SURETY from such
federal and state authorities (except for any confidential
portions thereof) and shall advise BANK ONE, at BANK ONE's
request, of developments and progress with respect to such
matters.
(b) Required Authorizations. SURETY shall obtain and procure all
-----------------------
necessary corporate approvals and authorizations, if any,
required on its part to enable it to fully perform all
obligations imposed on it hereunder which must be performed by
it at or prior to the Closing.
(c) Satisfaction of Conditions. SURETY shall not voluntarily
--------------------------
undertake any course of action inconsistent with the
satisfaction of the requirements or the conditions applicable to
it, or its agreements, undertakings, obligations, or covenants
set forth in this Agreement, and it shall promptly do all such
reasonable acts and take all such reasonable measures as may be
appropriate to enable it to perform as early as possible the
agreements, undertakings, obligations, and covenants herein
provided to be performed by it, and to enable the conditions
precedent to BANK ONE's obligations to consummate the Closing of
the Acquisition to be fully satisfied. Additionally, SURETY
shall not knowingly, directly or through any existing or future
subsidiary or affiliate, take any action that would be in
conflict with, or result in the denial, delay, termination, or
withdrawal of, any of the regulatory approvals referred to in
this Agreement.
(d) Books and Records. All books and records transferred to SURETY
-----------------
pursuant to Section 1.02(g) shall be open for inspection by BANK
ONE and its authorized agents
-9-
<PAGE>
and representatives for any proper purpose during regular
business hours after the Closing Date upon reasonable notice to
SURETY (which notice shall specify the purpose of such
inspection), and BANK ONE may, at its own expense, make such
copies of and excerpts from such books and records as it may
deem desirable; provided, however, that all information
-------- -------
including copies of books and records, obtained by BANK ONE from
SURETY pursuant to this Section 2.03(d) shall be and remain
confidential information known to BANK ONE or otherwise
contained in BANK ONE's books and records. All materials, books
and records relating to the Assets, the Liabilities and business
of the Office shall be maintained by SURETY for a period that is
not less than the greater of (i) the period required by
applicable law, rule or regulation or (ii) the normal retention
period under SURETY's record management program, unless the
parties shall agree upon a shorter period.
(h) IRA Accounts. No later than thirty days prior to the expected
------------
Closing Date, SURETY shall mail notice of the assignment,
effective upon Closing, of each Individual Retirement Account
maintained at the Office. The notice of assignment will contain
a written statement, approved in form by BANK ONE, describing
the assignment and appointment of SURETY as Successor Custodian
and requesting the account holder to notify BANK ONE of any
objection to the assignment of the trusteeship within thirty
(30) days after receipt of said notice or advising the account
holder that he or she may elect to close their account as
permitted by law and/or contract.
2.03 Covenants of All Parties. BANK ONE hereby covenants to SURETY, and
------------------------
SURETY hereby covenants to BANK ONE that, from the date hereof until
the Closing, such party shall cooperate fully with the other party in
attempting to obtain all consents, approvals, permits, or
authorizations which are required to be obtained pursuant to any
federal or state law, or any federal or state regulation thereunder,
for or in connection with the transactions described and contemplated
in this Agreement.
3. REPRESENTATIONS AND WARRANTIES.
------------------------------
3.01 Representations and Warranties of BANK ONE. BANK ONE represents and
------------------------------------------
warrants to SURETY as follows:
(a) Good Standing and Power of BANK ONE. BANK ONE is a national
-----------------------------------
banking association duly organized, validly existing, and in
good standing under the laws of the United States with corporate
power to own its properties and to carry on its business as
presently conducted. BANK ONE is an insured bank as defined in
the Federal Deposit Insurance Act and applicable regulations
thereunder.
(b) Authorization of Agreement. The execution and delivery of this
--------------------------
Agreement, and the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
BANK ONE, and this Agreement is a valid and binding obligation
of BANK ONE.
(c) Effective Agreement. Subject to the receipt of any and all
-------------------
necessary regulatory approvals and required consents, the
execution, delivery, and performance of this Agreement by BANK
ONE and the consummation of the transactions contemplated
hereby, will not conflict with, result in the breach of,
constitute a violation or default, result in the acceleration of
payment or other obligations, or create a lien, charge or
encumbrance, under any of the provisions of Articles of
Association or By-Laws of
-10-
<PAGE>
BANK ONE, under any judgment, decree or order, under any law,
rule, or regulation of any government or agency thereof, or
under any material contract, material agreement or material
instrument to which BANK ONE is subject, where such conflict,
breach, violation, default, acceleration or lien would have a
material adverse effect on the Assets or BANK ONE's ability to
perform its obligations hereunder.
(d) Title to Real Estate And Other Assets. Except for the Owned
-------------------------------------
Real Estate, BANK ONE is the sole owner of each of the Assets
free and clear of any mortgage, lien, encumbrance or
restrictions of any kind or nature. As to the Owned Real Estate,
BANK ONE is the sole owner of a fee simple interest in, and has
good and indefeasi ble title to, such Owned Real Estate, free
and clear of all liens, claims, encumbrances and rights of
tenants in possession except for the Permitted Exceptions and
shall convey such real estate to SURETY by delivery at the
Closing of a special warranty deed conveying such title subject
only to the Permitted Exceptions.
(e) Zoning Variations. As of the date of this Agreement, BANK ONE
-----------------
has neither received written notice of nor has it any notice of
any contemplation to provide BANK ONE with any written notice
from any governmental authority of any uncorrected violations of
zoning and/or building codes relating to the Owned Real Estate.
The Owned Real Estate is zoned to permit SURETY to use said
property as an office of a financial institution.
(f) IRA Account Documentation. The form of Individual Retirement
-------------------------
Custodial Account Agreement for individual retirement accounts,
and the related Amended and Restated Individual Retirement
Account Disclosure Statement annexed hereto as Schedule E,
constitute the form of the documents establishing the trustee or
custodial arrangement in connection with all IRA's maintained at
the Office.
(g) Condemnation Proceedings. BANK ONE has received no written
------------------------
notice of any pending or threatened, nor is it aware of any
contemplated, condemnation proceeding affecting or relating to
the Office.
(h) No Broker. No broker or finder, or other party or agent
---------
performing similar functions, has been retained by BANK ONE or
is entitled to be paid based upon any agree ments, arrangements,
or understandings made by BANK ONE in connection with the
transactions contemplated hereby, and no brokerage fee or other
commission has been agreed to be paid by BANK ONE on account of
the transactions contemplated hereby.
(i) Taxes. All federal, state and local payroll, withholding,
-----
property, sales, use and transfer taxes, if any, which are due
and payable by BANK ONE relating to the Office prior to the date
of Closing shall be paid in full as of the Closing Date or BANK
ONE shall have made appropriate provision for such payment in
accordance with ordinary business practices. Any claims for
refunds of taxes which have been paid by BANK ONE shall remain
the property of BANK ONE.
(j) Operations Lawful. The conduct of banking business at the
-----------------
Office is in compliance in all material respects with all
federal, state, county and municipal laws, ordinances and
regulations applicable to conduct of such business.
(k) Third-Party Claims. There are no actions, suits or proceedings,
------------------
pending or, to the best of BANK ONE's knowledge, threatened
against or affecting BANK ONE which
-11-
<PAGE>
could have a material adverse effect on the aggregate value of
the banking business and Assets of the Office.
(l) Insurance. BANK ONE maintains such insurance on the Office and
---------
the Fixed Assets to be purchased by or assigned to SURETY as may
be required by law or as is customary in the business of
banking.
(m) Labor Relations. No employee located at the Office is
---------------
represented, for purposes of collective bargaining, by a labor
organization of any type. BANK ONE is unaware of any efforts
during the past three years to unionize or organize any
employees at the Office, and no material claim related to
employees at the Office under the Fair Labor Standards Act,
National Labor Relations Act, Civil Rights of 1964, Walsh-Healy
Act, Davis Bacon Act, Civil Rights of Act of 1866, Age
Discrimination in Employment Act, Equal Pay Act of 1963,
Executive Order No. 11246, Federal Unemployment Tax Act, Vietnam
Era Veterans Readjustment Act, Occupational Safety and Health
Act, Americans with Disabilities Act or any state or local
employment related law, order, ordinance or regulation, no
unfair labor practice, discrimination or wage-and-hour claim is
pending or, to the best of BANK ONE's knowledge, threatened
against or with respect to BANK ONE.
(n) Governmental Notices. BANK ONE has not received notice from any
--------------------
federal or state governmental agency indicating that it would
oppose or not grant or issue its consent or approval, if
required, with respect to the transactions contemplated by this
Agreement.
(o) Environmental. To the actual knowledge of the executive
-------------
officers of BANK ONE, there are no actions, proceedings or
investigations pending before any environmental regulatory body,
federal or state court with respect to or threatened against or
affecting BANK ONE in respect of the Office under the
Comprehensive Environ mental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), or under any
federal, state, local or municipal environmental statute,
ordinance or regulation in respect thereof and in connection
with any release of any toxic or "hazardous substance,"
pollutant or contaminant into the "environment," nor, to the
best knowledge of the executive officers of BANK ONE, is there
any reasonable basis for the institution of any such actions or
proceedings or investigations which is probable of assertion,
nor are there any such actions or proceedings or investigations
in which BANK ONE is a plaintiff or complainant. To the actual
knowledge of the executive officers of BANK ONE, BANK ONE is not
responsible in any material respect under any applicable
environmental law for any release by BANK ONE or for any release
by an other "Person" at or in the vicinity of the Office of a
hazardous or toxic substance, contaminant or pollutant caused by
the spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing
of hazardous wastes or other chemical substances, pollutants or
contaminants into the environment, nor is BANK ONE responsible
for any material costs (as a result of the acts or omissions of
BANK ONE, or, to the actual knowledge of the executive officers
of BANK ONE, as a result of the acts or omissions of any other
"person") of any remedial action including, without limitation,
costs arising out of security fencing, alternative water
supplies, temporary evacuation and housing and other emergency
assistance undertaken by any environmental regulatory body
having jurisdiction over BANK ONE to prevent or minimize any
actual or threatened release by BANK ONE on the premises of any
hazardous wastes or other chemical substances, pollutants and
contaminants into the environment which would endanger the
-12-
<PAGE>
public health or the environment. All terms contained in
quotation marks in this paragraph and the paragraph immediately
following shall have the meaning ascribed to such terms as
defined in all federal, state and local statutes, regulations or
ordinances.
Except as previously disclosed to SURETY in writing, to the
actual knowledge of the executive officers of BANK ONE, the
Office is, in all material respects, in compliance with all
applicable Federal, state, local or municipal statutes,
ordinances, laws and regulations and all orders, rulings or
other decisions of any court, administrative agency or other
governmental authority relating to the protection of the
environment. For purposes of this section, the term "executive
officer" as used herein shall refer only to the Chairman,
President, Chief Executive Officer, and Chief Operating Officer
of BANK ONE and the Chief Executive Officer of BANK ONE's Mid-
Cities offices (which includes the Office).
(p) Access to Real Estate. No fact or condition exists which would
---------------------
result in the termination or impairment of access to the Owned
Real Estate from adjoining public or private streets or ways or
which could result in discontinuation of necessary sewer, water,
electric, gas, telephone, or other utilities or services. All
sewage, sanitation, plumbing, refuse disposal, and similar
facilities servicing the Owned Real Estate are in full
compliance with applicable governmental regulations.
(q) Mechanic's Liens. BANK ONE has paid or will pay in full all
----------------
bills and invoices for labor and material of any kind arising
from the ownership, operation, management, repair, maintenance,
or leasing of the Owned Real Estate, and no actual or potential
mechanic's lien or other claims are outstanding or available to
any party in connection with the ownership, operation,
management, repair, maintenance, or leasing said property.
(r) Deposit. Attached as Schedule F hereto is a true and accurate
------- ----------
schedule of all Deposit Accounts (including individual
retirement accounts) domiciled at the Office, prepared as of a
date within thirty (30) days prior to the date of this Agreement
and updated prior to the Closing Date, listing by category the
amount of all deposits and the interest rates and maturity dates
associated with such deposits.
(s) Office Loans. Attached hereto as Schedule G is a true and
------------ ----------
accurate schedule of all Office Loans, including accrued and
unpaid interest thereon, computed as of a date within thirty
(30) days prior to the date of this Agreement and updated prior
to the Closing Date. BANK ONE represents to SURETY that the
Office Loans have been made in the ordinary course of BANK ONE's
business.
(t) Personal Property. Schedule B is a true and accurate schedule
----------------- ----------
of the categories of Fixed Assets owned by BANK ONE at the
Office, which Schedule specifies the net book value of all of
the items in each such category as shown on the financial
records of BANK ONE, computed as of January 31, 1995 and
describing any security interest therein or lien thereon. BANK
ONE represents that the Fixed Assets are in good condition and
repair, ordinary wear and tear excepted.
(u) Assumed Contracts and Third Party Lease. Schedule C is a true
--------------------------------------- ----------
and accurate schedule of all Assumed Contracts related to the
Office. Each Assumed Contract is valid and subsisting in full
force and effect.
-13-
<PAGE>
(v) FIRPTA. BANK ONE is not a "foreign person" within the meaning
------
of the Internal Revenue Code (S) 1445.
3.02 Representations and Warranties of SURETY. SURETY represents and
----------------------------------------
warrants to BANK ONE as follows:
(a) Good Standing and Power of SURETY. SURETY is a national banking
---------------------------------
association duly organized, validly existing, and in good
standing under the laws of the United States with corporate
power to own its properties and to carry on its business as
presently conducted. SURETY is an insured bank, as defined in
the Federal Deposit Insurance Act and applicable regulations
thereunder.
(b) Authorization of Agreement. The execution and delivery of this
--------------------------
Agreement, and the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
SURETY, and this Agreement is a valid and binding obligation of
SURETY.
(c) Effective Agreement. Subject to the receipt of any and all
-------------------
necessary regulatory approvals, the execution, delivery, and
performance of this Agreement by SURETY, and the consummation of
the transactions contemplated hereby, will not conflict with,
result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or
create a lien, charge or encumbrance, under any of the
provisions of the Articles of Association or By-Laws of SURETY,
under any judgment, decree or order, under any law, rule or
regulation of any government or agency thereof, or under any
material agreement, material contract or material instrument to
which SURETY is subject, where such conflict, breach, violation,
default, acceleration or lien would have a material adverse
effect on SURETY's ability to perform its obligations hereunder.
(d) No Broker. Except as otherwise set forth below, no broker or
---------
finder, or other party or agent performing similar functions,
has been retained by SURETY or is entitled to be paid based upon
any agreements, arrangements, or understandings made by SURETY
in connection with the transactions contemplated hereby, and no
brokerage fee or other commission has been agreed to be paid by
SURETY on account of the transactions contemplated hereby.
SURETY shall pay a commission in the amount of $30,000.00 to
Service Asset Management Company and shall hold BANK ONE
harmless from and indemnify it against any claims. losses or
damages arising from or related to such brokerage service or
commission related to this Agreement.
4. ACTIONS RESPECTING EMPLOYEES AND PENSION AND EMPLOYEE BENEFIT PLANS.
-------------------------------------------------------------------
4.01 Employment of Employees
-----------------------
(a) SURETY may, but shall be under no obligation to, extend offers
of employment, as of the Closing Date to employees of the
Office.
(b) Not later than thirty (30) days prior to the Closing Date,
SURETY shall advise BANK ONE, in writing, of its election, at
its sole discretion, to offer employment to, as of the Closing
Date, any or all of the persons assigned to the Office as
employees of SURETY (such selected persons, who thereafter
accept such offer of employment, are hereinafter referred to as
"Transferred Employees"), but the language of this Agreement
shall not be construed as an offer of employment to any such
persons.
-14-
<PAGE>
Following the 30th day prior to the Closing Date, BANK ONE shall
be permitted to offer employment to any employees of the Office
who are not Transferred Employees.
(c) BANK ONE will cooperate with SURETY to the extent reasonably
requested and legally permissible to provide SURETY with
information about employees of the Office including, without
limitation, providing SURETY a means to meet with employees of
the Office for the purpose of selecting Transferred Employees;
provided, however, BANK ONE shall have no obligation under any
circumstances to provide personnel files regarding any Office
Employee to SURETY.
4.02 Terms and Conditions of Employment. Except as otherwise provided
----------------------------------
explicitly in this Agreement, the terms of employment for each
Transferred Employee shall be determined solely by SURETY's policies,
procedures, and programs; provided, however, that for purposes of
SURETY's various employee benefit plans at and following the Closing
Date, (i) time of service with BANK ONE will be credited to
Transferred Employees for purposes of determining and calculating
their eligibility for and vesting to the greatest extent permitted
under SURETY's plans and (ii) all pre-existing conditions of
Transferred Employees will be waived by SURETY to the greatest extent
permitted under SURETY's plans.
4.03 Compliance with Law. BANK ONE agrees that it shall comply with any
-------------------
applicable requirements, if any, for the Worker Adjustment and
Retraining Notification Act in connection with the transaction
contemplated by this Agreement.
4.04 Actions to be Taken by BANK ONE. BANK ONE covenants to SURETY that
-------------------------------
it will do or cause the following to occur:
(a) Solicitation of Transferred Employees. Except with the written
-------------------------------------
consent of SURETY, for one year following the Closing Date, BANK
ONE will not solicit Transferred Employees as prospective
officers or employees of BANK ONE.
(b) Employee Benefit Programs. BANK ONE's obligations to employees
-------------------------
of the Office, including Transferred Employees, will be as set
forth in established policies of BANC ONE CORPORATION and/or
BANK ONE and BANK ONE shall continue its employee benefit
programs in full force and effect as benefit programs for
Transferred Employees through the Closing Date. After the
Closing, BANK ONE shall retain the responsibility and liability
for the funding and payment of all claims incurred under such
employee benefit programs through the Closing Date. SURETY shall
have no obligation or liability to compensate Transferred
Employees for benefits of any kind earned, accrued, promised
and/or provided to Transferred Employees as employees of BANK
ONE, except with respect to eligibility and vesting as set forth
in Section 4.02, above.
(c) Employees of the Office. BANK ONE shall not, without SURETY's
-----------------------
prior written consent (i) increase the aggregate full-time
equivalent size of the work force at the Office above the
aggregate normal staffing levels designated by BANK ONE for the
Office at the date hereof, (ii) terminate any Transferred
Employee prior to the Closing Date, unless such person is
dismissed for cause and written notice of such dismissal is
provided to SURETY, (iii) transfer or assign any Transferred
Employee prior to the Closing Date to a position of permanent
employment with BANK ONE;
-15-
<PAGE>
or (iv) increase the compensation of any Transferred Employee
except pursuant to existing BANK ONE policies and procedures.
The obligations of BANK ONE pursuant to this Section 4.04 shall
survive the Closing.
5. CONDITIONS PRECEDENT TO CLOSING.
-------------------------------
5.01 Conditions to BANK ONE's Obligations. The obligations of BANK ONE to
------------------------------------
consummate the Acquisition are subject to the satisfaction, or the
waiver in writing by BANK ONE to the extent permitted by applicable
law, of the following conditions at or prior to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with,
-------------------------
and notifications to, all federal and state authorities required
for consummation of the Acquisition shall have been made, all
approvals and authorizations of all federal and state
authorities required for consummation of the Acquisition shall
have been received and shall be in full force and effect, and
all applicable waiting periods shall have passed.
(b) Corporate Action. The Board of Directors of SURETY shall have
----------------
taken all corporate action necessary by it to effectuate this
Agreement and the Acquisition and SURETY shall have furnished
BANK ONE with a certified copy of each such resolution adopted
by the Board of Directors of SURETY evidencing the same.
(c) Representations and Warranties. The representations and
------------------------------
warranties of SURETY set forth in this Agreement shall be true
and correct in all material respects on the Closing Date with
the same effect as though all such representations and
warranties had been made on and as of such date, and SURETY
shall have delivered to BANK ONE a Certificate to that effect,
dated as of the Closing Date to the effect specified in Schedule
--------
H to this Agreement.
-
(d) Covenants. Each and all of the covenants and agreements of
---------
SURETY to be performed or complied with at or prior to Closing
pursuant to this Agreement shall have been duly performed or
complied with in all material respects by SURETY, or waived by
BANK ONE, and SURETY shall have delivered to BANK ONE a
Certificate to that effect, dated as of the Closing Date to the
effect specified in Schedule H to this Agreement.
----------
(e) No Proceeding or Prohibition. At the time of the Closing, there
----------------------------
shall not be any litigation, investigation, inquiry, or
proceeding pending or threatened in or by any court or agency of
any government or by any third party which in the judgment of
the executive officers of BANK ONE, with the advice of counsel,
presents a bona fide claim to restrain, enjoin, or prohibit
consummation of the transaction contemplated by this Agreement
or which might result in rescission in connection with such
transactions; and BANK ONE shall have been furnished with a
Certificate, substantially in the form as specified in Schedule
--------
H to this Agreement, dated as of the Closing Date and signed by
-
the Chairman, President, or an Executive Vice President and
Secretary or Assistant Secretary of SURETY, to the effect that
no such litigation, investigation, inquiry, or proceeding is
pending or, to the best of their knowledge, threatened.
(f) Opinion of Counsel. SURETY shall have delivered to BANK ONE an
------------------
opinion, dated as of the Closing Date, of legal counsel
reasonably satisfactory to BANK ONE
-16-
<PAGE>
and its counsel, in form and substance reasonably satisfactory
to BANK ONE and its counsel, to the effect specified in Schedule
--------
I to this Agreement.
-
5.02 Conditions to SURETY's Obligations. The obligations of SURETY to
----------------------------------
consummate the Acquisition are subject to the satisfaction, or the
waiver in writing by SURETY to the extent permitted by applicable
law, of the following conditions at or prior to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with,
-------------------------
and notifications to, all federal and state authorities required
for consummation of the Acquisition and operation of the Office
by SURETY shall have been made, all approvals and authorizations
of all federal and state authorities required for consummation
of the Acquisition and operation of the Office by SURETY shall
have been received and shall be in full force and effect, and
all applicable waiting periods shall have passed.
(b) Corporate Action. The Board of Directors of BANK ONE shall have
----------------
taken all corporate action necessary to effectuate this
Agreement and the Acquisition; and BANK ONE shall have furnished
SURETY with a certified copy of each such resolution adopted by
the Board of Directors of BANK ONE evidencing the same.
(c) Representations and Warranties. The representations and
------------------------------
warranties of BANK ONE set forth in this Agreement shall be true
and correct in all material respects on the Closing Date with
the same effect as though all such representations and
warranties had been made on and as of such date (unless a
different date is specifically indicated in such representations
and warranties), and BANK ONE shall have delivered to SURETY a
Certificate to that effect, dated as of the Closing Date to the
effect specified in Schedule J to this Agreement.
----------
(d) Covenants. Each and all of the covenants and agreements of BANK
---------
ONE to be performed or complied with pursuant to this Agreement
shall have been duly performed or complied with in all material
respects by BANK ONE, or waived by SURETY, and BANK ONE shall
have delivered to SURETY a Certificate to that effect, dated as
of the Closing Date to the effect specified in Schedule J to
----------
this Agreement.
(e) No Proceedings or Prohibitions. At the time of the Closing,
------------------------------
there shall not be any litigation, investigation, inquiry, or
proceeding pending or threatened in or by any court or agency of
any government or by any third party which in the judgment of
the executive officers of SURETY, with the advice of counsel,
presents a bona fide claim to restrain, enjoin, or prohibit
consummation of the transactions contemplated by this Agreement
or which might result in rescission in connection with such
transactions; and SURETY shall have been furnished with a
Certificate, in substantially the form specified in Schedule J
----------
to this Agreement, dated as of the Closing Date and signed by
the Chairman, President, or Vice President, and the Secretary or
Assistant Secretary of BANK ONE, to the effect that no such
litigation, investigation, inquiry, or proceeding is pending or
threatened to the best of their knowledge.
(f) Opinion of Counsel. BANK ONE shall have delivered to SURETY an
------------------
opinion, dated as of the Closing Date, of legal counsel
reasonably satisfactory to SURETY and its counsel, in form and
substance reasonably satisfactory to SURETY and its counsel, to
the effect specified in Schedule K to this Agreement.
----------
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<PAGE>
(g) Real Property. The Title Commitment (as defined in Section
-------------
2.01(c) herein) shall have been delivered to SURETY, and updated
to or as close as practicable to (but in no event more than five
(5) business days prior to) the Closing Date, in accordance with
the terms of such Section, and such updated Title Commitment
shall not include any special exceptions other than the
Permitted Exceptions.
(h) Fixed Assets. There shall have been no material alteration in
------------
or adjustment to the Fixed Assets. For purposes of this
subsection (h), it will not be considered to be a material
alteration or adjustment to the Fixed Assets if (i) there is
damage or destruction to the Fixed Assets as contemplated by
Section 2.01(g) herein and BANK ONE complies with said Section
2.01(g), (ii) BANK ONE makes additions to the Fixed Assets with
the prior written consent of SURETY or (iii) BANK ONE makes
additions to the Fixed Assets without SURETY's consent in order
to correct emergency situations which are threatening to impair
BANK ONE's operations at the Office.
(i) Deposit Accounts. The aggregate balance of the Deposit
----------------
Accounts as defined in (S)1.03(b) shall, as of the day before the Closing Date,
be in an amount equal to or greater than Fifteen Million Dollars ($15,000,000)
5.03 Non-Satisfaction of Conditions Precedent. The non-occurrence or
----------------------------------------
delay of the Closing of the Acquisition by reason of the failure of
timely satisfaction of all conditions precedent to the obligations of
any party hereto to consummate the Acquisition shall in no way
relieve such party of any liability to the other party hereto, nor be
deemed a release or waiver of any claims the other party hereto may
have against such party, if and to the extent the failure of timely
satisfaction of such conditions precedent is attributable to the
actions or inactions of such party.
5.04 Waiver of Conditions Precedent. The conditions specified in Sections
------------------------------
5.01 and 5.02 herein shall be deemed satisfied or, to the extent not
satisfied, waived if the Closing occurs unless such failure of
satisfaction is reserved in a writing executed by SURETY and BANK ONE
at or prior to the Closing.
6. CLOSING.
-------
6.01 Closing and Closing Date. The Acquisition contemplated by this
------------------------
Agreement shall be consummated and closed (the "Closing") at such
location as shall be mutually agreed upon by SURETY and BANK ONE, on
a date to be mutually agreed upon by SURETY and BANK ONE which date
is after all required regulatory approvals have been obtained and all
applicable regulatory waiting periods associated therewith have
expired. The precise date on which the Closing shall occur (the
"Closing Date") shall be confirmed by the parties in writing not less
than five (5) days after receiving all required regulatory approvals;
but in no event, shall the Closing be held later than fifteen (15)
days following SURETY's receipt of all regulatory approvals and the
expiration of any applicable comment or waiting periods.
6.02 BANK ONE's Actions at Closing. At the Closing (unless another time
-----------------------------
is specifically stated in Section 6.04 hereof), BANK ONE shall, with
respect to the Office:
(a) deliver to SURETY at the Office such of the Assets purchased
hereunder as shall be capable of physical delivery, including,
without limitation, all assets comprising the safe deposit box
business, if any, of the Office; and
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<PAGE>
(b) execute, acknowledge and deliver to SURETY all such special
warranty deeds (qualified, as necessary, to reflect all
Permitted Exceptions), endorsements, assignments, bills of
sale, and other instruments of conveyance, assignment, and
transfer as shall reasonably be necessary or advisable to
consummate the sale, assignment, and transfer of the Assets sold
or assigned to SURETY hereunder and such other documents as the
title company may reasonably require; the originals of all
blueprints, construction plans, specifications and plat relating
to the Owned Real Estate, which are now in BANK ONE's possession
or which BANK ONE has reasonable access to; and such other
documents or instruments as may be reasonably required by
SURETY, required by other provisions of this Agreement, or
reasonably necessary to effectuate the Closing. All of the
documents and instruments to be delivered by BANK ONE hereunder
shall be in form and substance reasonably satisfactory to
counsel for SURETY; and
(c) assign, transfer, and deliver to SURETY such of the following
records (in whatever form or medium then maintained by BANK ONE)
pertaining to the Deposit Liabilities and accrued interest
thereon of the Office assumed by SURETY hereunder as are
maintained by BANK ONE at the Office:
(i) signature cards, orders and contracts between BANK ONE
and depositors of the Office, and records of similar
character; and
(ii) canceled checks and/or negotiable orders of withdrawal
representing charges to depositors; and
(iii) a trial balance listing of records of account; and
(iv) all other miscellaneous records, statements and other
data and materials maintained by BANK ONE at the Office
relative to any Deposit Liabilities being assumed by
SURETY, provided however, with respect to the records,
statements, other data and materials not maintained at
the Office, BANK ONE shall execute and deliver the
mutually acceptable records agreement described in
Section 1.02(g) of this Agreement; and
(e) assign, transfer, and deliver to SURETY such safe deposit and
safekeeping files and records as are maintained by BANK ONE at
the Office pertaining to the safe deposit business of the Office
transferred to SURETY hereunder as exist and are available,
together with the contents of the safe deposit boxes maintained
at the Office, as the same exist as of the close of business on
the day immediately preceding the Closing Date (subject to the
terms and conditions of the leases or other agreements relating
to the same) and all securities and other records, if any, held
by the Office for their customers as of the close of business on
the day immediately preceding the Closing Date (subject to the
terms and conditions of the agreements or receipts relating to
the same); and
(f) make available and transfer to SURETY on the Closing Date and
prior to the conclusion of the Closing any funds required to be
paid to SURETY pursuant to the terms of this Agreement; and
(g) execute, acknowledge and deliver to SURETY all Certificates and
other documents required to be delivered to SURETY by BANK ONE
at the Closing pursuant to the terms hereof; and
-19-
<PAGE>
(h) assign, by transfer and appointment in a form substantially as
provided in Schedule L attached hereto, the IRAs pertaining to
the Office; and
(i) assign by endorsement substantially in a form as provided in
Schedule M attached hereto, transfer and deliver to SURETY each
----------
contract, promissory note or other evidence of indebtedness
related to the Office Loans together with the loan files and
records (in whatever form or medium then maintained by BANK ONE)
pertaining to such Office Loans; and
(j) assign to SURETY all BANK ONE's rights in and to the Assumed
Contracts which are assignable and which constitute part of the
Assets.
6.03 SURETY's Actions at the Closing. At the Closing (unless another time
-------------------------------
is specifically stated in Section 6.04 hereof), SURETY shall, with
respect to the Office:
(a) execute, acknowledge, and deliver to BANK ONE, to evidence the
assumption of the liabilities and obligations of BANK ONE by
SURETY hereunder, an instrument of assumption in the form set
forth in Schedule N to this Agreement, and BANK ONE shall then
----------
accept, execute, and acknowledge such instrument. Copies of such
instrument may be recorded in the public records at the option
of either party hereto. The execution and acknowledgement of
such instrument shall not be deemed to be a waiver of any rights
or obligations of any party to this Agreement;
(b) receive, accept and acknowledge delivery of all Assets, and all
records and documenta tion relating thereto, sold, assigned,
transferred, conveyed or delivered to SURETY by BANK ONE
hereunder; and
(c) execute and deliver to BANK ONE such written receipts for the
Assets, properties, records, and other materials assigned,
transferred, conveyed, or delivered to SURETY hereunder as BANK
ONE may reasonably have requested at or before the Closing;
(d) pay to BANK ONE on the Closing Date and prior to the conclusion
of the Closing any funds required to be paid to BANK ONE at the
Closing pursuant to the terms of this Agreement;
(e) execute, acknowledge and deliver to BANK ONE all Certificates
and other documents including, without limitation, the records
agreement described in (S)1.02(g) required to be delivered to
BANK ONE by SURETY at the Closing pursuant to the terms hereof;
and
(f) execute, acknowledge and deliver to BANK ONE an agreement
wherein SURETY assumes obligations with respect to the Assumed
Contracts for all periods following the Closing Date with
respect thereto.
6.04 Methods of Payment. Subject to the adjustment procedures set forth
------------------
in this Section 6.04, the transfer of the funds, if any, due to
SURETY or to BANK ONE, as the case may be, as set forth pursuant to
the terms of Section 1.04(a) hereof, shall be made on the Closing
Date in immediately available United States Federal Funds. At least
two business days prior to the Closing, BANK ONE and SURETY shall
provide written notice to one another indicating the account and bank
to which such funds shall be wire transferred. In order to facilitate
the Closing, the parties agree: (i) that the amount of funds
transferred on the Closing Date, pursuant to Section 1.04(a) hereof,
shall be computed based upon (a) the
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<PAGE>
aggregate book value plus accrued interest of the Office Loans as of
the close of business on the day immediately preceding the Closing
Date, (b) cash on hand at the Office as of the close of business on
the day immediately preceding the Closing Date, and (c) the aggregate
balance of all Deposit Accounts (including interest posted or accrued
to such accounts and Individual Retirement Accounts which are
assigned hereunder SURETY as the successor custodian in accordance
with Sections 1.03(b) and 2.01(h) of this Agreement) as of the close
of business on the day immediately preceding the Closing Date; and
(ii) that within ten (10) business days after the Closing, the
parties shall make appropriate post-closing adjustments, consistent
with the provisions of Section 1.04 hereof, based upon actual Deposit
Accounts, Office Loans and cash transactions which took place on the
Closing Date or which took place prior to the Closing Date but which
were not reflected as of the close of business on the day immediately
preceding the Closing Date.
6.05 Availability of Closing Documents. The documents proposed to be used
---------------------------------
and delivered at the Closing shall be made available for examination
by the respective parties not later than 12:00 noon, Texas time, on
the third Business Day prior to the Closing Date.
6.06 Effectiveness of Closing. Upon the satisfactory completion of the
------------------------
Closing, which does not include and shall not require completion of
the adjustment and proration arrangements set forth in Section 6.04,
the Acquisition shall be deemed to be effective and the Closing shall
be deemed to have occurred.
7. CERTAIN TRANSITIONAL MATTERS.
----------------------------
7.01 Transitional Action by SURETY. After the Closing, unless another
-----------------------------
time is otherwise indicated:
(a) SURETY shall: (i) pay in accordance with the law and customary
banking practices and applicable Deposit Account contract terms,
all properly drawn and presented checks, negotiable orders of
withdrawal, drafts, debits, and withdrawal orders presented to
SURETY by mail, over the counter, through electronic media, or
through the check clearing system of the banking industry, by
depositors of the Deposit Accounts assumed by SURETY hereunder,
whether drawn on checks, negotiable orders of withdrawal,
drafts, or withdrawal order forms provided by SURETY or BANK
ONE; and (ii) in all other respects discharge, in the usual
course of the banking business, the duties and obligations of
BANK ONE with respect to the balances due and owing to the
depositors whose Deposit Accounts are assumed by SURETY
hereunder; provided, however, that any obligations of SURETY
-------- -------
pursuant to this Section 7.01 to honor checks, negotiable orders
of withdrawal, drafts, and withdrawal orders on forms provided
by BANK ONE and carrying its imprint (including its name and
transit routing number) shall not apply to any checks, draft, or
withdrawal order (i) presented to SURETY more than one hundred
twenty (120) days following the Closing Date, (ii) with a date
more than one hundred twenty (120) days prior to (a) the Closing
Date or (b) the date of SURETY's receipt thereof, or (iii) on
which a stop payment has been requested by the deposit customer.
The provisions of this subsection 7.01(a) shall in no way limit
SURETY's duties or obligations arising under Section 1.03(b)
hereof.
(b) SURETY shall, not earlier than the time of procurement of all
regulatory approvals required for consummation of the
transaction contemplated by this Agreement nor later than thirty
(30) days prior to the Closing Date, notify all depositors of
the Office by letter, acceptable to BANK ONE, produced in, if
appropriate, several similar, but
-21-
<PAGE>
different forms calculated to provide necessary and specific
information to the owners of particular types of accounts, of
SURETY's pending assumption of the Deposit Liabilities
hereunder, and, in appropriate instances, notify depositors that
on and after the Closing Date certain BANK ONE deposit-related
services will be terminated. As an enclosure to such notices,
SURETY may furnish appropriate depositors with brochures, forms
and other written materials related or necessary to the
assumption of the Deposit Accounts by SURETY and the conversion
of said accounts to SURETY accounts, including the provision of
checks to appropriate depositors using the forms of SURETY with
instructions to such depositors to utilize such SURETY checks on
and after the Closing Date and thereafter to destroy any unused
checks on BANK ONE's forms. The expenses of the printing,
processing and mailing of such letter notices and providing new
SURETY checks and other forms and written materials to
appropriate customers shall be borne by SURETY. Before Closing,
except as provided in this paragraph, SURETY will not contact
BANK ONE's customers except as may occur in connection with
advertising or solicitations directed to the public generally or
in the course of obtaining the requisite regulatory approvals of
the transaction.
(c) SURETY shall promptly pay to BANK ONE an amount equivalent to
the amount of any checks, negotiable orders of withdrawal,
drafts, or withdrawal orders credited as of the close of
business on the Closing Date to a Deposit Account assumed by
SURETY hereunder which are returned uncollected to BANK ONE
after the Closing Date and which shall include an amount
equivalent to holds placed upon such deposit account for items
cashed by BANK ONE as of the close of business on the Closing
Date which items are subsequently dishonored.
(d) All tasks and obligations concerning the provision of data
processing services to or for the Office after the Closing,
other than those specifically set forth in, and to the extent
assumed by BANK ONE pursuant to, Section 7.02(b) herein, are the
sole and exclusive responsibility of, and shall be performed
solely and exclusively by, SURETY.
(e) SURETY shall, not later than the close of business on the
business day immediately following the Closing Date, supply
suitable government-backed securities as security for any
deposits of governmental units included among the Deposit
Liabilities for which BANK ONE had provided similar security.
(f) SURETY shall, as soon as practicable after the Closing Date,
prepare and transmit at SURETY's expense to each of the obligors
on Office Loans transferred to SURETY pursuant to this Agreement
a notice to the effect that the loan has been transferred and
directing that payment be made to SURETY at the address
specified by SURETY, with SURETY's name as payee on any checks
or other instruments used to make payments, and, with respect to
such loan on which a payment notice or coupon book has been
issued, to issue a new notice or coupon book reflecting the name
and an address of SURETY as the person to whom and place at
which payments are to be made.
(g) If the balance due on any Office Loan transferred to SURETY
pursuant to this Agreement has been reduced by BANK ONE as a
result of a payment by check or draft received prior to the
close of business on the Closing Date, which item is returned
unpaid to BANK ONE after the day immediately preceding the
Closing Date, the asset value represented by the loan
transferred shall be correspondingly
-22-
<PAGE>
increased and an amount in cash equal to such increase shall be
promptly paid by SURETY to BANK ONE.
(h) SURETY shall use its best efforts to cooperate with BANK ONE in
assuring an orderly transition of ownership of the Assets and
responsibility for the liabilities, including the Deposit
Liabilities, assumed by SURETY hereunder.
7.02 Transitional Actions by BANK ONE. After the Closing, unless another
--------------------------------
time is otherwise indicated:
(a) BANK ONE shall use its best efforts to cooperate with SURETY in
assuring an orderly transition of ownership of the Assets and
responsibility for the liabilities, including the Deposit
Liabilities, assumed by SURETY hereunder.
(b) BANK ONE's sole and exclusive responsibilities concerning the
provision of data processing services to or for the Deposit
Accounts of the Office after the Closing Date shall be as set
forth in this Section 7.02(b). As soon as practicable following
the date of this Agreement, BANK ONE shall provide SURETY with
applicable product functions and specifications relating to the
data processing support required for the Deposit Accounts,
Office Loans, and safe deposit business (if such data processing
support currently is provided with respect to such business)
maintained at the Office (such Deposit Accounts, Office Loans
and safe deposit business, if applicable, hereinafter called the
"Accounts"). As soon as practicable following the date of this
Agreement, BANK ONE shall provide to SURETY file formats
relating to the Accounts and test tapes related to the Accounts
in generic form which are machine readable on IBM (or IBM
compatible) equipment or which shall be on eighteen track 3480
cartridges (non-compressed data) or on nine channel 6250 B.P.I.
EBC1DIC formatted tape. By not later than 2:00 P.M. local
Dallas, Texas time of the day immediately following the Closing
Date, BANK ONE shall make available for SURETY's pick-up at 1810
Commerce Street, Dallas, Texas, tapes containing all pertinent
data and descriptive information relating to the Accounts which
is then available to BANK ONE, which tapes shall constitute BANK
ONE's records maintained as of and current to the close of
business on the Closing Date with respect to the Accounts. BANK
ONE shall bear all costs and expenses relating to the
performance of its obligations pursuant to this Section 7.02(b).
(c) Prior to the Closing Date, and upon SURETY's request therefor,
BANK ONE shall reasonably cooperate with SURETY, at SURETY's
expense and at no expense to BANK ONE, in making Transferred
Employees available at reasonable times for whatever program of
training SURETY deems advisable; provided, however, that SURETY
-------- -------
shall conduct such training program in a manner that does not
materially interfere with or prevent the performance of the
normal duties and activities of such Transferred Employees. Such
requests, which shall specify the time, duration and place of
such training, must be approved by BANK ONE. Such approvals will
not be unreasonably withheld by BANK ONE.
(d) BANK ONE shall cooperate with and permit SURETY, at SURETY's
option and expense and at no expense to BANK ONE, to make
provision for the installation of teller equipment in the
Office; provided, however, that SURETY shall arrange for the
-------- -------
installation and placement of such equipment at such times and
in a manner that does not significantly interfere with the
normal business activities and operation of BANK ONE or the
Office.
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<PAGE>
(e) BANK ONE shall assign to SURETY the IRA accounts maintained at
the Office as of the Closing Date.
(f) Not sooner than one (1) business day prior to the Closing nor
later than the close of business on the Closing Date, BANK ONE
shall terminate its debit card service and convert and change
over its direct deposit or payroll and retirement payments
service for the Deposit Accounts from BANK ONE to SURETY. Such
terminations will be preceded by the notice described in Section
7.01(b) herein.
(g) As of the opening of business on the first business day after
the Closing Date, BANK ONE and SURETY shall provide the Federal
Reserve Bank of Dallas with all information necessary in order
to expedite the clearing and sorting of all checks, drafts,
instruments and other commercial paper relative to the Deposit
Liabilities and/or the Office Loans (hereinafter collectively
referred to as "Paper Items"). SURETY shall bear all charges and
costs imposed by the Federal Reserve in connection with the
reassignment of account number ranges for sorting the Paper
Items.
In the event the Federal Reserve and/or any other regional or
local clearinghouse for negotiable instruments fails, refuses or
is unable to direct sort such Paper Items for delivery to SURETY
with the result that such Paper Items are presented to BANK ONE,
by not later than 7:00 p.m. local time of each business day
following the Closing and continuing for sixty (60) days after
the Closing, BANK ONE will make available to SURETY for pick up
from BANK ONE's offices or the offices of BANK ONE's agent
and/or processor at 1900 L. Don Dodson Road, Bedford, Texas, all
of the Paper Items which are received by BANK ONE from the
Federal Reserve Bank of Dallas and/or any regional or local
clearinghouse during the morning of each such business day on an
"as-received basis." At the same time BANK ONE shall also make
available to SURETY information and records, including but not
limited to systems printouts, concerning such Paper Items and
concerning incoming Automated Clearing House items ("ACH
items"). Such information and records, including but not limited
to systems printouts, will utilize the most recent account
number designated by BANK ONE for each of the Deposit Accounts
and/or the Office Loans. Each business day BANK ONE will
endeavor to see that the sum of (a) the actual Paper Items
provided to SURETY plus (b) all ACH items captured by BANK ONE
in its information and records balance with the sum of (c) the
information and records, including but not limited to systems
printouts, provided by BANK ONE relative to the Paper Items plus
(d) the information and records, including but not limited to
systems printouts, provided relative to the ACH items affecting
the Deposit Accounts and/or the Office Loans.
BANK ONE shall provide the foregoing at no charge to SURETY
except that SURETY shall pay any charges assessed to BANK ONE by
the Federal Reserve Bank of Dallas or any national or local
clearinghouse and/or BANK ONE's agent and/or processor to the
extent such assessments relate to the Deposit Accounts. SURETY
shall be responsible for pick up of the data to be provided by
BANK ONE.
BANK ONE and SURETY shall arrange for appropriate daily
settlement with one another in order that the transmission of
all monies associated with the matters set forth in this Section
7.02(g) might be effected promptly.
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<PAGE>
BANK ONE shall not be liable to SURETY for any failure to
provide the data required by this Section 7.02(g) to the extent
any such failure results from causes beyond BANK ONE's control
including war, strike or other labor disputes, acts of God,
errors or failures of the Federal Reserve Bank of Dallas and/or
a participating regional or local clearinghouse, or equipment
failure or other emergency wherein BANK ONE and/or its agent
processor has been unable to process inclearings from the
Federal Reserve Bank of Dallas or such clearinghouse.
(h) For a period of sixty (60) days after the Closing Date, BANK ONE
will forward to SURETY, within two (2) business days of receipt,
loan payments received by BANK ONE with respect to the Office
Loans. SURETY will forward, within two (2) business days of
receipt payments received by SURETY with respect to any loans
not assigned to SURETY under this Agreement. SURETY and BANK ONE
further agree to refer customers to the offices of the other
when such customers present payments over the counter to the
party not holding their respective loan.
(i) Upon the request of SURETY, BANK ONE shall provide SURETY with
BANK ONE's data processing services until SURETY shall have
converted all of the data processing activities at the Office to
its system. SURETY shall use its best efforts to cause such
conversion to occur as soon as possible. For a period of forty-
five (45) days after the Closing Date, BANK ONE shall provide
such data processing services to SURETY without charge.
Thereafter BANK ONE shall be entitled to charge SURETY a fee of
$2,000 per business day for each business day between the end of
the forty-five (45) day period and the completion of the
conversion.
7.03 Overdrafts and Transitional Action. Overdrafts paid on the Deposit
----------------------------------
Accounts with respect to ledger dates after the Closing Date will be
the responsibility and risk of SURETY. Overdrafts approved with
respect to ledger dates more than four (4) business days prior to the
Closing Date will be the responsibility and risk of BANK ONE.
Overdrafts approved with respect to ledger dates during the period
beginning four (4) business days prior to the Closing Date through
the Closing Date, inclusive, will initially be the responsibility and
risk of SURETY (other than overdrafts of customers who are
specifically identified in writing by SURETY to BANK ONE not less
than four (4) business days prior to the Closing Date); provided,
however, that SURETY shall have the right to retransfer any such
overdrafts back to BANK ONE for BANK ONE's responsibility and at its
risk within six (6) days following the Closing Date, and BANK ONE
will repurchase all rights in respect of such overdrafts from SURETY
for the amount of each such overdraft outstanding at the time it is
retransferred back to BANK ONE; provided, however, that SURETY shall
have closed all accounts on which each such overdraft exists not
later than the date of such retransfer. It shall be a condition
precedent to BANK ONE's repurchase obligation with respect to any
overdraft hereunder that SURETY provide to BANK ONE proof of loss
respecting such overdraft.
7.04 Effect of Transitional Action. Except as and to the extent expressly
-----------------------------
set forth in this Article 7, nothing contained in this Article 7
shall be construed to be an abridgment or nullification of the
rights, customs and established practices under applicable banking
laws and regulations as they affect any of the matters addressed in
this Article 7.
8. GENERAL COVENANTS AND INDEMNIFICATION.
-------------------------------------
8.01 Confidentiality Obligations of SURETY. From and after the date
-------------------------------------
hereof, SURETY and its affiliates and parent company shall treat all
information received from BANK ONE
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<PAGE>
concerning the business, assets, operations, and financial condition
of BANK ONE (including without limitation the Office), as
confidential, unless and to the extent that SURETY can demonstrate
that such information was already known to SURETY and its affiliates,
if any, or in the public domain or received from a third person not
known by SURETY to be under any obligation to BANK ONE; and SURETY
shall not use any such information (so required to be treated as
confidential) for any purpose except in furtherance of the
transactions contemplated hereby. Upon the termination of this
Agreement, SURETY shall, and shall cause its affiliates, if any, to,
promptly return all documents and workpapers containing, and all
copies of, any such information (so required to be treated as
confidential) received from or on behalf of BANK ONE in connection
with the transactions contemplated hereby. The covenants of SURETY
contained in this Section 8.01 are of the essence and shall survive
any termination of this Agreement, but shall terminate at the
Closing, if it occurs, with respect to any information that is
limited solely to the activities and transactions of the Office;
provided, however, that neither SURETY nor any of its affiliates
-------- -------
shall be deemed to have violated the covenants set forth in this
Section 8.01 if SURETY shall in good faith disclose any of such
confidential information in compliance with any legal process, order
or decree issued by any court or agency of government of competent
jurisdiction. It is expressly acknowledged by BANK ONE that all
information provided to SURETY related to this purchase and
assumption transaction may be provided to Surety Capital Corporation
and SURETY's affiliates for the purpose of consummating the
transaction which is the subject of this Agreement.
8.02 Confidentiality Obligations of BANK ONE. From and after the date
---------------------------------------
hereof, BANK ONE, its affiliates and its parent corporation shall
treat all information received from SURETY concerning SURETY's
business, assets, operations, and financial condition as
confidential, unless and to the extent BANK ONE can demonstrate that
such information was already known to BANK ONE or its affiliates or
in the public domain or received from a third person not known by
BANK ONE to be under any obligation to SURETY, and BANK ONE shall not
use any such information (so required to be treated as confidential)
for any purpose except in furtherance of the transactions
contemplated hereby. Upon the termination of this Agreement, BANK ONE
shall promptly return all documents and workpapers containing, and
all copies of, any such information (so required to be treated as
confidential) received from or on behalf of SURETY in connection with
the transactions contemplated hereby. The covenants of BANK ONE
contained in this Section 8.02 are of the essence and shall survive
any termination of this Agreement; provided, however, that neither
-------- -------
BANK ONE nor any of its affiliates shall be deemed to have violated
the covenants set forth in this Section 8.02 if BANK ONE shall in
good faith disclose any of such confidential information in
compliance with any legal process, order or decree issued by any
court or agency of government of competent jurisdiction. It is
expressly acknowledged by SURETY that all information provided to
BANK ONE related to this purchase and assumption transaction may be
provided to Banc One Corporation and BANK ONE's affiliates for the
purpose of consummating the transaction which is the subject of this
Agreement.
8.03 Indemnification by BANK ONE. From and after the Closing Date, BANK
---------------------------
ONE shall indemnify, hold harmless, and defend SURETY from and
against all losses and liabilities, including reasonable attorneys'
fees and expenses, arising out of any actions, suits, or proceedings
commenced prior to the Closing (other than proceedings to prevent or
limit the consummation of the Acquisition) relating to operations at
the Office and/or the Deposit Liabilities or Office Loans of the
Office; and BANK ONE shall further indemnify, hold harmless, and
defend SURETY from and against all losses and liabilities, including
reasonable attorneys' fees and expenses, arising out of any actions,
suits, or proceedings
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<PAGE>
commenced on or after the Closing to the extent the same relate to
operations at the Office and/or the Deposit Liabilities or Office
Loans prior to the Closing. The obligations of BANK ONE under this
Section 8.03 shall be contingent upon SURETY giving BANK ONE written
notice (i) of receipt by SURETY of any process and/or pleadings in or
relating to any actions, suits, or proceedings of the kinds described
in this Section 8.03, including copies thereof, and (ii) of the
assertion of any claim or demand relating to the operation of the
Office and/or the Deposit Liabilities or Office Loans prior to the
Closing, including, to the extent known to SURETY, the identity of
the person(s) or entity(ies) asserting such claim or making such
demand and the nature thereof, and including copies of any
correspondence or other writings relating thereto. All notices
required by the preceding sentence shall be given within fifteen days
of the receipt by SURETY of any such process or pleadings or any oral
or written notice of the assertion of any such claims or demands.
BANK ONE shall have the right to take over SURETY's defense in any
such actions, suits, or proceedings through counsel selected by BANK
ONE, to compromise and/or settle the same and to prosecute any
available appeals or reviews of any adverse judgment or ruling that
may be entered therein. The obligations of BANK ONE pursuant to this
Section 8.03 shall survive the Closing.
8.04 Indemnification by SURETY. From and after the Closing Date, SURETY
-------------------------
shall indemnify, hold harmless and defend BANK ONE from and against
all claims, losses, liabilities, demands and obligations, including
without limitation reasonable attorneys' fees and operating expenses
which BANK ONE may receive, suffer, or incur in connection with
operations and transactions occurring after the Closing and which
involve the Assets transferred, the Deposit Liabilities or Office
Loans and the other obligations and liabilities assumed pursuant to
this Agreement. The obligations of SURETY under this Section 8.04
shall be contingent upon BANK ONE giving SURETY written notice (i) of
the receipt by BANK ONE of any process and/or pleadings in or
relating to any actions, suits or proceedings of the kinds described
in this Section 8.04, including copies thereof, and (ii) of the
assertion of any claim or demand relating to the Assets transferred
to and/or the Deposit Liabilities or Office Loans and the other
obligations and liabilities assumed by SURETY on or after the
Closing, including, to the extent known to BANK ONE, the identity of
the person(s) or entity(ies) asserting such claim or making such
demand and the nature thereof, and including copies of any
correspondence or other writings relating thereto. All notices
required by the preceding sentence shall be given within fifteen (15)
days of the receipt by BANK ONE of any such process or pleadings or
any oral or written notice of the assertion of any such claims or
demands. SURETY shall have the right to take over BANK ONE's defense
in any such actions, suits, or proceedings through counsel selected
by SURETY, to compromise and/or settle the same and to prosecute any
available appeals or review of any adverse judgment or ruling that
may be entered therein. The obligations of SURETY pursuant to this
Section 8.04 shall survive the Closing.
8.05 Solicitation of Customers by SURETY Prior to Closing. At any time
----------------------------------------------------
prior to the Closing Date, SURETY will not, and will not permit any
of its affiliates, if any, to conduct any marketing, media or
customer solicitation campaign which is specifically targeted to
induce customers whose Deposit Account liabilities are to be assumed
or Office Loans are to be acquired by SURETY pursuant to this
Agreement to discontinue their account relationships with BANK ONE,
except as may occur in connection with advertising or solicitations
directed to the public generally.
8.06 Solicitation of Customers by BANK ONE After the Closing. From the
-------------------------------------------------------
date of this Agreement and for one (1) year following the Closing
Date, BANK ONE will not, and BANK ONE will not permit any of its
affiliates, including the directors, officers, employees
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<PAGE>
or principal shareholders of BANK ONE, to directly compete for or
solicit deposit accounts from customers whose Deposit Liabilities
and/or Office Loans are assumed or acquired by SURETY pursuant to
this Agreement, except as may occur in connection with (i)
advertising or solicitations directed to the public generally, (ii)
solicitations outside Ellis County, Texas and (iii) BANK ONE
customers with a banking relationship with BANK ONE at offices other
than the Office as of the Closing Date.
8.07 Further Assurances. From and after the date hereof, each party
------------------
hereto agrees to execute and deliver such instruments and to take
such other actions as the other party hereto may reasonably request
in order to carry out and implement this Agreement. Without limiting
the foregoing, BANK ONE agrees to execute and deliver such deeds,
bills of sale, acknowledgements, and other instruments of conveyance
and transfer as, in the reasonable judgment of SURETY, shall be
necessary and appropriate to vest in SURETY the legal and equitable
title to the Assets of BANK ONE being conveyed to SURETY hereunder.
The covenants of each of the parties hereto pursuant to this Section
8.07 shall survive the Closing.
8.08 Operation of the Office. Except as otherwise provided in this
-----------------------
Agreement, neither BANK ONE, its subsidiaries, affiliates or parent
corporation shall be obligated to provide for any managerial,
financial, business, or other services to the Office, including
without limitation any personnel, employee benefit, data processing,
accounting, risk management, or other services or assistance that may
have been provided to the Office prior to the close of business on
the Closing Date, and SURETY shall take such action as may in its
judgment appear to be necessary or advisable to provide for the
ongoing operation and management of, and the provision of services
and assistance to, the Office after the Closing Date. On the Closing
Date, SURETY shall change the legal name of the Office and, except
for any documents or materials in possession of the customers of the
Office (including but not limited to deposit tickets and checks),
shall not use and shall cause the Office to cease using any signs,
stationery, advertising, documents, or printed or written materials
that refer to the Office by any name that includes the words "BANK
ONE" or "BANC ONE." Preceding the Closing, BANK ONE shall cooperate
with any reasonable requests of SURETY directed to obtaining
specifications for the procurement of new signs of SURETY's choosing
so that SURETY is in a position to install new signs immediately
following the close of business on the Closing Date; provided,
--------
however, that SURETY's receipt of all sign specifications shall be
-------
obtained by SURETY in a manner that does not significantly interfere
with the normal business activities and operations of the Office, and
further provided that the procurement of all new signs shall be at
the sole and exclusive expense of SURETY. As indicated in Section
1.02(b), BANK ONE will retain its signs located at the Office. If
removed by SURETY in conjunction with its installation of new signs,
SURETY shall obtain BANK ONE's approval for such removal and shall
insure that said signs are removed without damaging them. It is
understood by the parties hereto that, with the exception of the
signs themselves, all mounting facilities for the signs shall be
considered as fixtures or as part of the Fixed Assets.
8.09 Covenant Not to Compete. From and after the Closing and for a
-----------------------
period of one (1) year following the Closing Date, BANK ONE shall
not, and shall not enter into any agreement to, acquire, lease,
purchase, own, operate or use any building, office or other facility
or premises located within the corporate limits of the City of
Waxahachie, Texas, for the purpose of making loans, accepting
deposits or cashing checks; provided, however, that BANK ONE's
performance of any of the foregoing activities within the corporate
limits of the City of Waxahachie as a result of its merger with or
acquisition of a bank or thrift
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<PAGE>
institution engaging in such activities within the City of Waxahachie
shall not be deemed a breach of the foregoing covenant.
8.10 Survival of Covenants. The obligations and covenants of the parties
---------------------
under this Section 8 shall survive the Closing.
8.11 Individual Retirement Accounts. All Individual Retirement Accounts
------------------------------
related to the Office that shall not have become IRAs by the close of
business on the day immediately preceding the Closing Date shall not
be assigned by BANK ONE to SURETY or assumed by SURETY. BANK ONE may
thereafter, at its option, elect to retain such Individual Retirement
Accounts, or advise the account holders that it will not assign such
Individual Retirement Accounts to SURETY at the Closing.
9. TERMINATION.
-----------
9.01 Termination by Mutual Agreement. This Agreement may be terminated
-------------------------------
and the transactions contemplated hereby may be abandoned by mutual
consent of the parties authorized by a vote of a majority of the
Board of Directors (or by the vote of the Executive Commit tee of
such Board, if so empowered) of each of BANK ONE and SURETY.
9.02 Termination by BANK ONE. This Agreement may be terminated and the
-----------------------
transactions contemplated hereby abandoned by a vote of a majority of
the Board of Directors (or by the vote of the Executive Committee of
such Board, if so empowered) of BANK ONE:
(a) in the event of a material breach by SURETY of this Agreement;
or
(b) in the event any of the conditions precedent specified in
Section 5.01 of this Agreement has not been met as of the date
required by this Agreement and, if not so met, has not been
waived by BANK ONE; or
(c) in the event any regulatory approval required for consummation
of the Acquisition is denied by the applicable regulatory
authority or in the event that at any time prior to the Closing
Date it shall become reasonably certain to BANK ONE, with the
advice of counsel, that a regulatory approval required for
consummation of the Acquisition will not be obtained; or
(d) on or after December 31, 1995 if the Closing has not then
occurred.
9.03 Termination by SURETY. This Agreement may be terminated and the
---------------------
transactions contemplated hereby abandoned by a vote of a majority of
the Board of Directors (or by the vote of the Executive Committee of
such Board, if so empowered) of SURETY:
(a) in the event of a material breach by BANK ONE of this Agreement;
or
(b) in the event any of the conditions precedent specified in
Section 5.02 of this Agreement has not been met as of the date
required by this Agreement and, if not so met, has not been
waived by SURETY; or
(c) in the event any regulatory approval required for consummation
of the Acquisition is denied by the applicable regulatory
authority or in the event that at any time prior to the Closing
Date it shall become reasonably certain to SURETY, with the
advice
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<PAGE>
of counsel, that a regulatory approval required for consummation
of the Acquisition will not be obtained; or
(e) on or after December 31, 1995 if the Closing has not then
occurred.
9.04 Effect of Termination. The termination of this Agreement pursuant to
---------------------
Sections 9.02 or 9.03 of this Article 9 shall not release any party
hereto from any liability or obligation to the other party hereto
arising from (i) a breach of any provision of this Agreement
occurring prior to the termination hereof or (ii) the failure of
timely satisfaction of conditions precedent to the obligations of a
party to the extent that such failure of timely satisfaction is
attributable to the actions or inactions of such party.
10. MISCELLANEOUS PROVISIONS.
------------------------
10.01 Expenses. Except as and to the extent specifically allocated
--------
otherwise herein, each of the parties hereto shall bear its own
expenses, whether or not the transactions contemplated hereby are
consummated.
10.02 Certificates. All statements contained in any certificate
------------
("Certificate") delivered by or on behalf of BANK ONE or SURETY
pursuant to this Agreement or in connection with the transactions
contemplated hereby shall be deemed to be representations and
warranties of the party delivering the Certificate hereunder. Each
such Certificate shall be executed on behalf of the party delivering
the Certificate by duly authorized officers of such party.
10.03 Termination of Representations and Warranties. The respective
---------------------------------------------
representations and warranties of BANK ONE and SURETY contained or
referred to in this Agreement or in any Certificate, schedule, or
other instrument delivered or to be delivered pursuant to this
Agreement shall terminate at the Closing, except for:
(a) those representations and warranties contained in any warranty
deeds delivered by BANK ONE to SURETY at the Closing;
(b) those representations and warranties contained in any bill of
sale relating to the Assets delivered by BANK ONE to SURETY at
Closing;
(c) those representations and warranties contained in any instrument
of assumption or in any Certificate in the forms of Schedule H
----------
and Schedule N, respectively, attached hereto and delivered by
----------
SURETY to BANK ONE at the Closing;
(d) those representations and warranties contained in any
Certificate in the form of Schedule J attached hereto, delivered
----------
by BANK ONE to SURETY at the Closing; and
(e) those representations and warranties of BANK ONE contained in
Section 3.01(o) of this Agreement.
10.04 Waivers. Each party hereto, by written instrument signed by duly
-------
authorized officers of such party, may extend the time for the
performance of any of the obligations or other acts of the other
party hereto and may waive, but only as affects the party signing
such instrument:
(a) any inaccuracies in the representations or warranties of the
other party contained or referred to in this Agreement or in any
document delivered pursuant hereto;
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<PAGE>
(b) compliance with any of the covenants or agreements of the other
party contained in this Agreement;
(c) the performance (including performance to the satisfaction of a
party or its counsel) by the other party of such of its
obligations set out herein; and
(d) satisfaction of any condition to the obligations of the waiving
party pursuant to this Agreement.
10.05 Notices. All notices and other communications hereunder may be made
-------
by mail, hand-delivery or by courier service and notice shall be
deemed to have been given when received; provided, however, if
notices and other communications are made by nationally recognized
overnight courier service for overnight delivery, such notice shall
be deemed to have been given one business day after being forwarded
to such a nationally recognized overnight courier service for
overnight delivery.
If to BANK ONE:
Bank One, Texas, National Association
Attention: Ronald G. Steinhart, Chairman/President/CEO
1717 Main Street
Dallas, Texas 75201
With a copy to:
BANC ONE CORPORATION
Attention: Steven A. Bennett
Senior Vice President
100 East Broad Street
Columbus, Ohio 43271-0158
If to SURETY:
Surety Bank, National Association
Attention: Bob Hackler
1845 Precint Line Road, Suite 100
Hurst, Texas 76054
With a copy to:
Margaret E. Holland, Esq.
Tracy &. Holland
306 W. Seventh Street, Suite 500
Fort Worth, Texas 76102-4982
or such other person or address as any such party may designate by
notice to the other parties, and shall be deemed to have been given
as of the date received.
10.06 Parties in Interest: Assignment; Amendment. This Agreement is
-------------------------------------------
binding upon and is for the benefit of the parties hereto and their
respective successors, legal representatives, and assigns, and no
person who is not a party hereto (or a successor or assignee of such
party) shall have any rights or benefits under this Agreement, either
as a third party beneficiary or
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<PAGE>
otherwise. This Agreement cannot be assigned, and this Agreement
cannot be amended or modified, except by a written agreement executed
by the parties hereto or their respective successors and assigns.
10.07 Headings. The headings, table of contents, and index to defined
--------
terms (if any) used in this Agreement are inserted for convenience of
reference only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement.
10.08 Terminology. The specific terms of art that are defined in various
-----------
provisions of this Agreement shall apply throughout this Agreement
(including without limitation each Schedule hereto), unless expressly
indicated otherwise. In addition, the following terms and phrases
shall have the meanings set forth for purposes of this Agreement
(including such Schedule):
(a) The term "business day" shall mean any day other than a
Saturday, Sunday, or a day on which SURETY is closed in
accordance with the laws of the State of Texas or the United
States of America. Any action, notice, or right which is to be
taken or given or which is to be exercised or lapse on or by a
given date which is not a business day may be taken, given, or
exercised, and shall not lapse, until the next business day
following.
(b) The term "affiliate" shall mean, with respect to any person, any
other person directly or indirectly controlling, controlled by
or under common control with such person.
(c) The term "Permitted Exceptions" shall mean, with respect to the
Owned Real Estate, (i) any defect, lien, encumbrance, easement,
condition, restriction, encroachment, or other title matter
deemed to be a Permitted Exception in accordance with Section
2.01(c), and (ii) such other exceptions as are approved by
SURETY in writing.
(d) The term "person" shall mean any individual, corporation
partnership, limited liability company, association, trust, or
other entity, whether business, personal, or otherwise.
(e) Unless expressly indicated otherwise in a particular context,
the terms "herein," "hereunder," "hereto," "hereof," and similar
references refer to this Agreement in its entirety and not to
specific articles, sections, schedules, or subsections of this
Agreement. Unless expressly indicated otherwise in a particular
context, references in this Agreement to enumerated articles,
sections, and subsections refer to designated portions of this
Agreement (but do not refer to portions of any Schedule unless
such Schedule is specifically referenced) and do not refer to
any other document.
(f) The term "subsidiary" shall mean a corporation, partnership,
limited liability company, joint venture, or other business
organization more than 50% of the voting securities or interests
in which are beneficially owned or controlled by the indicated
parent of such entity.
10.09 Flexible Structure. References in this Agreement to federal or state
------------------
laws or regulations, jurisdictions, or chartering or regulatory
authorities shall be interpreted broadly to allow maximum flexibility
in consummating the transactions contemplated hereby in light of
changing business, economic, and regulatory conditions. Without
limiting the foregoing, in the event BANK ONE and SURETY agree in
writing to alter the legal structure of the Acquisition contemplated
by this Agreement references in this Agreement to such laws,
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<PAGE>
regulations, jurisdictions, and authorities shall be deemed to be
altered to reflect the laws, regulations, jurisdictions, and
authorities that are applicable in light of such change.
10.10 Press Releases. BANK ONE and SURETY shall approve the form and
--------------
substance of any press release of any matters relating to this
Agreement issued by the other.
10.11 Entire Agreement. This Agreement supersedes any and all oral or
----------------
written agreements and understandings heretofore made relating to the
subject matter hereof and contains the entire agreement of the
parties relating to the subject matter hereof. All schedules,
exhibits, and appendices to this Agreement are incorporated into this
Agreement by reference and made a part hereof.
10.12 Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the State of Texas and the National
Banking Laws of the United States.
10.13 Counterparts. This Agreement may be executed in several counter-
------------
parts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.14 Tax Matters. SURETY and BANK ONE agree that they will file
-----------
applicable tax returns and other related schedules and documents
based on the allocations in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized, all as of the
date first above written.
ATTEST: Bank One, Texas, National Association
/s/ Chris T. Klimko By: /s/ Terry Kelly
- ---------------------------------- -------------------------------------
Chris T. Klimko Terry Kelly, Chief Operating Officer
ATTEST: Surety Bank, National Association
/s/ Bobby W. Hackler By: /s/ C. Jack Bean
- ---------------------------------- -------------------------------------
Bobby W. Hackler C. Jack Bean, Chairman
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