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Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (date of earliest event reported) October 1, 1996
------------------
First Interstate BancSystem of Montana, Inc.
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(Exact name of registrant as specified in its charter)
Montana 333-3250 81-0331430
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(State or other jurisdiction (Commission IRS Employer
of incorporation or File No.) Identification No.
organization
P.O. Box 30918, 401 North 31st Street, Billings, MT 59116-0918
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 406/255-5300
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Not applicable
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(Former name or former address, if changed since last report)
1
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 1, 1996, First Interstate BancSystem of Montana, Inc.
completed the purchase of all of the outstanding stock of First
Interstate Bank of Montana, N.A. which has offices in the Montana
communities of Kalispell, Great Falls, and Cut Bank, and all of the
outstanding stock of First Interstate Bank of Wyoming, N.A. which has
offices in the Wyoming communities of Casper, Riverton, and Laramie.
Total assets of the banks acquired were approximately $550 million.
The banks were purchased from Wells Fargo & Company for a total cash
purchase price of $72,000,000, subject to adjustment, up or down, to
the extent the historical net book value of the banks acquired at
closing, excluding net income tax assets and seller's "push down"
purchase accounting adjustments are greater or less than $35,832,433.
Such purchase price adjustment is to be computed and settled between
the parties 30 days subsequent to the closing on October 1, 1996.
For accounting purposes, the acquisition will be accounted for as a
purchase. Adjustments to the fair value of the net assets acquired
will be "pushed down" to the respective banks acquired. Although
the acquisition will be accomplished through the purchase of stock,
the transaction will be treated as a purchase of assets and
assumption of liabilities for income tax purposes.
The purchase was funded through a combination of $20 million
perpetual preferred stock, $20 million subordinated debentures and
$31 million additional senior term debt. Additional financing and
acquisition costs of approximately $2,129,000 were funded from
working capital.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
As of the date hereof, it is impractical for the Company to provide
the required financial statements of the businesses acquired. The
Company will file the required financial statements of the acquired
businesses under cover of Form 8-K/A as soon as practicable, but not
later than 60 days after the date of filing hereof.
(b) Pro forma financial information
As of the date hereof, it is impractical for the Company to provide
the required pro forma financial information. The Company will file
the required pro forma financial information under cover of Form 8-K/A
as soon as practicable, but not later than 60 days after the date of
filing hereof.
2
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(c) Exhibits
2.1 Stock Purchase Agreement dated May 24, 1996 between First
Interstate BancSystem of Montana, Inc. and Wells Fargo &
Company.
3.1.1 Articles of Amendment to Restated Articles of Incorporation
dated September 19, 1996.
3.1.2 Articles of Amendment to Restated Articles of Incorporation
dated September 19, 1996.
4.4 Preferred Stock Purchase Agreement dated September 26, 1996
between First Interstate BancSystem of Montana, Inc. and
First Security Corporation.
10.3 Loan Agreement dated October 1, 1996 between First
Interstate BancSystem of Montana, Inc., as borrower, and
First Security Bank, NA, Colorado National Bank, NA and
Wells Fargo Bank, NA.
10-13 Note Purchase Agreement dated August 30, 1996 between First
Interstate BancSystem of Montana, Inc. and the Montana Board
of Investments.
27 As of the date hereof, it is impractical for the Company to
provide the required Financial Data Schedules of the
businesses acquired. The Company will file the required
Financial Data Schedules of the acquired businesses under
cover of Form 8-K/A as soon as practicable, but not later
than 60 days after the date of filing hereof.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on October 10, 1996.
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
By: /s/ Terrill R. Moore
---------------------------------
Terrill R. Moore
Senior Vice President and Chief Financial Officer
3
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________________________
STOCK PURCHASE AGREEMENT
________________________
dated as of the 24th day of May, 1996
by and between
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
AND
WELLS FARGO & COMPANY
for
the outstanding capital stock of
FIRST INTERSTATE BANK OF MONTANA, N.A.
and
FIRST INTERSTATE BANK OF WYOMING, N.A.
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TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A. BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B. SELLER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
C. BANKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
D. SALE AND PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
E. APPROVALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I - Sale and Purchase of Shares. . . . . . . . . . . . . . . . . . . 2
1.1 SALE AND PURCHASE OF SHARES. . . . . . . . . . . . . . . . . . . . 2
1.2 PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 EFFECTIVE TIME . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II - Representations and Warranties. . . . . . . . . . . . . . . . . 4
2.1 REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . 4
2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . . . 14
2.3 RIGHT TO CURE. . . . . . . . . . . . . . . . . . . . . . . . . . . .16
2.4 EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 17
2.5 NO OTHER REPRESENTATIONS OR WARRANTIES . . . . . . . . . . . . . . 17
ARTICLE III - Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.1 CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME . . . . . . . . . . 18
3.2 ACCESS TO INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 20
3.3 REASONABLE EFFORTS . . . . . . . . . . . . . . . . . . . . . . . . 21
3.4 NOTICE OF CERTAIN MATTERS. . . . . . . . . . . . . . . . . . . . . 21
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3.5 NO SOLICITATION. . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.6 USE OF BANK INFORMATION. . . . . . . . . . . . . . . . . . . . . . .22
3.7 PUBLICITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.8 BENEFIT PLANS. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.9 TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.10 RIGHT TO CURE. . . . . . . . . . . . . . . . . . . . . . . . . . . .26
ARTICLE IV - Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE SALE . . . . . 26
4.2 CONDITIONS TO OBLIGATION OF SELLER . . . . . . . . . . . . . . . . 27
4.3 CONDITIONS TO OBLIGATION OF BUYER. . . . . . . . . . . . . . . . . 28
ARTICLE V - Termination, Amendment and Waiver. . . . . . . . . . . . . . . . 29
5.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.2 EFFECT OF TERMINATION. . . . . . . . . . . . . . . . . . . . . . . 29
5.3 WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VI - Franchise Agreements and Name . . . . . . . . . . . . . . . . . 30
6.1 CONTINUED USE OF FIRST INTERSTATE NAME, LOGO AND TRADEMARK . . . . 30
6.2 MUTUAL RELEASE OF ALL CLAIMS . . . . . . . . . . . . . . . . . . . 30
6.3 SEPARATE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . 30
6.4 NON-COMPETITION. . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.5 RESOLUTIONS OF CERTAIN RELATIONSHIPS . . . . . . . . . . . . . . . 31
ARTICLE VII - Post-Effective Time Provisions . . . . . . . . . . . . . . . . 32
7.1 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.2 LIMIT ON INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 32
ii
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7.3 NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.4 SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.5 CONTROL DISBURSEMENT ACCOUNTS. . . . . . . . . . . . . . . . . . . .32
7.6 DATA PROCESSING SERVICES . . . . . . . . . . . . . . . . . . . . . .33
7.7 TRANSFER OF BANK BOOKS, RECORDS AND INFORMATION. . . . . . . . . . .33
ARTICLE VIII - Transferred Employees . . . . . . . . . . . . . . . . . . . . .33
8.1 TRANSFERRED EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . . .33
ARTICLE IX - General Provisions. . . . . . . . . . . . . . . . . . . . . . . 36
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 36
9.2 INTERPRETATION OF CERTAIN TERMS. . . . . . . . . . . . . . . . . . 36
9.3 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.4 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.5 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.6 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.7 ENTIRE AGREEMENT; INTERPRETATION . . . . . . . . . . . . . . . . . 38
9.8 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.9 NO THIRD-PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . . . 38
9.10 AMENDMENT: WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . 38
9.11 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.12 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.13 TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
iii
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INDEX OF DEFINED TERMS
Defined Term Section
- ------------ -------
"Asset Classification" . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(i)
"Bank Common Stock". . . . . . . . . . . . . . . . . . . . . . . . . . Recital C
"Bank Property" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(r)(ii)
"Banks" . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital C; 9.2(a)
"BHC Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital A
"Book Value of Shareholder's Equity" . . . . . . . . . . . . . . . . . 1.2(b)(i)
"Business" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(r)(i)
"Buyer". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2(c)
"California State Section 338(h)(10) Election" . . . . . . . . . . . . 3.9(b)(i)
"Call Reports" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(h)(ii)
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4(a)
"Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(q)(ii)
"Compensation Plans" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(q)
"Confidentiality Agreement". . . . . . . . . . . . . . . . . . . . . . . .3.2(b)
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(g)(ii)
"Control Disbursement Accounts". . . . . . . . . . . . . . . . . . . . . . . 7.5
"Customer Information" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6
"Dividends". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2(c)
"Effective Time" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3
iv
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"Employees" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(q)(i)
"Encumbrances" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(d)(ii)
"Environmental Law" . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(r)(i)
"ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(q)(i)
"ERISA Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(q)(i)
"Executive Officer". . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2(d)
"Fair Lending Laws" . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(l)(i)
"FDI Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(b)
"FDIC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
"Fed". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)(iii)
"Fed Application". . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)(ii)
"Final Settlement Payment" . . . . . . . . . . . . . . . . . . . . . .3.9(e)(ii)
"Financing". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)(i)
"Franchise Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2
"FRB Approval" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital E
"Governmental Entities". . . . . . . . . . . . . . . . . . . . . . . . . 2.1(f)
"Hazardous Substances" . . . . . . . . . . . . . . . . . . . . . . . . 2.1(r)(i)
"Insurance Policies" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(o)
"Intercompany Agreements". . . . . . . . . . . . . . . . . . . . . . 2.1(s)(iii)
"License Agreement". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3
"Losses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
"Material Adverse Effect" . . . . . . . . . . . . . . . . . . . . . . . .2.4(b)
"OCC". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2(c)
v
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"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(c)
"Plans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(q)(i)
"Post-Closing Tax Period". . . . . . . . . . . . . . . . . . . . . . . 3.9(c)(i)
"Pre-Closing Tax Period" . . . . . . . . . . . . . . . . . . . . . . 3.9(c)(ii)
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.2(a)
"Representatives" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(a)
"Sale" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
"Section 338(h)(10) Election". . . . . . . . . . . . . . . . . . . . . . 3.9(a)
"Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(e)
"Seller" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2(b)
"Service Contracts'. . . . . . . . . . . . . . . . . . . . . . . . . 2.1(s)(iv)
"Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital D
"State or Other Pre-Closing Tax Period". . . . . . . . . . . . . . . . 3.9(c)(i)
"Tax" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(n)(i)
"Tax Sharing Agreement". . . . . . . . . . . . . . . . . . . . . . . . . 3.9(g)
"Termination Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4(a)
"Transferred Employees". . . . . . . . . . . . . . . . . . . . . . . . . 8.1(a)
"Wyoming Commissioner" . . . . . . . . . . . . . . . . . . . . . . . Recital E
vi
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STOCK PURCHASE AGREEMENT, dated as of the 24th day of May, 1996, (this
"Agreement"), by and between FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
("Buyer") and WELLS FARGO & COMPANY ("Seller").
RECITALS
A. BUYER. Buyer has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Montana, with its
principal executive offices located in Billings, Montana. Buyer is a bank
holding company registered under the Bank Holding Company Act of 1956, as
amended (the "BHC Act").
B. SELLER. Seller has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware, with its
principal executive offices located in San Francisco, California. Seller is a
bank holding company registered under the BHC Act.
C. BANKS. First Interstate Bank of Montana, N.A. and First Interstate
Bank of Wyoming, N.A. ("Banks") are validly existing national banking
associations organized under the laws of the United States, with their principal
executive offices located in Kalispell, Montana and Casper, Wyoming,
respectively. The Montana Bank has 664,608 authorized shares of common stock,
par value $10.00 per share, and the Wyoming Bank has 11,751 authorized shares,
par value $100.00 per share ("Bank Common Stock") (no other class or series of
capital stock being authorized). Seller is the sole record and beneficial owner
of all of the issued and outstanding shares of Bank Common Stock.
D. SALE AND PURCHASE. At the Effective Time (as defined in Section 1.3),
Seller intends to sell to Buyer and Buyer intends to buy from Seller all of the
shares of Bank Common Stock then issued and outstanding (the "Shares").
E. APPROVALS. The Boards of Directors of Buyer and Seller (at meetings
duly called and held) have determined that this Agreement and the transactions
contemplated hereby are in the best interests of Buyer and Seller, respectively.
The sale and purchase of the Shares contemplated hereby are subject to the prior
approval of the Board of Governors of the Federal Reserve System under Section 3
of the BHC Act (the "FRB Approval") and the state banking commissioner of the
State of Wyoming (the "Wyoming Commissioner"), among other conditions specified
herein.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
1
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ARTICLE I
SALE AND PURCHASE OF SHARES
1.1 SALE AND PURCHASE OF SHARES. Subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to sell to Buyer, and Buyer hereby
agrees to purchase from Seller, at the Effective Time, the Shares, free and
clear of all Encumbrances (as defined in Section 2.1 (d)) (the "Sale").
1.2 PURCHASE PRICE.
(a) AGGREGATE PURCHASE PRICE. Subject to adjustments required
under (b) below, the purchase price for the Shares (the "Purchase
Price") shall be $72,000,000.00.
(b) TECHNICAL ADJUSTMENTS. The Purchase Price shall be increased
or decreased, as appropriate, on or before the 30th calendar day
following the Effective Time by an amount equal to the amount by which
the Book Value of Shareholder's Equity (as defined below) differs from
the amount of such item required by Section 3.1(b)(i) of this
Agreement. Any adjustments made pursuant to this subsection 1.2(b)
shall be either (1) normal recurring accounting adjustments
customarily made by the Banks following the end of an applicable
accounting period; or (2) adjustments necessary for the correction of
variances from generally accepted accounting principles or errors in
the preparation of financial statements prepared or used for purposes
of consummating the transactions contemplated by this Agreement; or
(3) subject to 1.2(c) below, adjustments caused by a deficiency or
overage in the Dividends (as later defined).
(i) Seller shall, on or before the 20th calendar day following
the Effective Time, provide to Buyer such financial statements
and information prepared by Seller or Banks and used or useful in
the calculation of the Book Value of Shareholder's Equity of the
Banks as of the Effective Time. As used in this Agreement, the
term "Book Value of Shareholder's Equity" shall mean the total of
capital stock, surplus and undivided profits together with the
tax-effected valuation reserve under FASB 115, determined in
accordance with generally accepted accounting principles;
PROVIDED, HOWEVER, (A) in calculating the Book Value of
Shareholder's Equity, no effect shall be given to purchase
accounting adjustments made by Seller after March 31, 1996, and
(B) accounts related to current taxes payable and deferred tax
liabilities shall be added and any balances in accounts relating
to current taxes receivable or deferred tax assets shall be
subtracted.
(ii) Either Buyer or Seller may request an adjustment to
Purchase Price by providing a written notice to the other party
setting forth the amount of any proposed adjustment and the
reasons for such adjustment.
2
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(c) DIVIDENDS. Seller shall cause Banks to declare and pay prior to
the Effective Time dividends, reasonably estimated to reduce the Book
Value of Shareholder's Equity at the Effective Time to the amount
identified in Section 3.1(b)(i) (the "Dividends"). If the Dividends
are subject to the approval of the Comptroller of the Currency (the
"OCC") and the OCC declines to authorize the Dividends, in whole or in
part, then the Purchase Price will be increased by an amount equal to
the unpaid Dividends; PROVIDED, HOWEVER, the increase in Purchase
Price shall not exceed $1,000,000.00.
(d) DISPUTE RESOLUTION. Any disputes as to adjustments made
pursuant to this Section 1.2 shall be resolved by KPMG Peat Marwick
LLP ("PEAT"). The parties acknowledge that PEAT is the principal
accountant for both Buyer and Seller. The parties jointly and
severally waive any claim of conflict of interest as to the
involvement of PEAT in the dispute resolution process and agree that
PEAT's determination shall be final and binding upon the parties.
1.3 EFFECTIVE TIME. Buyer and Seller each will use reasonable efforts
to cause the Sale to become effective at 11:59 p.m. Mountain time on the last
day of the month in which occurs satisfaction or waiver of the last of the
conditions specified in Section 4.1. Notwithstanding the foregoing, Buyer and
Seller may cause the Sale to become effective on such earlier or later day or
time following the satisfaction or waiver of such conditions as they may agree
in writing. The date and time when the Sale shall become effective are herein
referred to as the "Effective Time".
1.4 CLOSING.
(a) TIME AND PLACE. The closing of the Sale (the "Closing") shall
take place at the offices of Seller or such other place as the parties
may agree upon at 10:00 a.m., Pacific time, on the next business day
following the date on which the Effective Time occurs.
(b) DELIVERIES BY SELLER. At the Closing, Seller shall deliver, or
cause to be delivered, to Buyer the following:
(i) Certificates evidencing the Shares, duly endorsed in blank
or accompanied by stock powers duly executed in blank in proper
form for transfer; and
(ii) The certificates to be delivered pursuant to Section 4.3(a)
and (b); and
(iii) The opinion of counsel to be delivered pursuant to Section
4.3(c);
(iv) Evidence of the removal or resignations of directors
pursuant to Section 4.3(d).
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(c) DELIVERY BY BUYER. At the Closing, Buyer shall deliver, or cause
to be delivered, to Seller the following:
(i) The Purchase Price by wire transfer in immediately
available funds to an account designated by Seller; and
(ii) The certificates to be delivered pursuant to Section 4.2(a)
and (b); and
(iii) The opinion of counsel to be delivered pursuant to Section
4.2(c).
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Subject to Section 2.3 and
except as set forth in the relevant Schedules, Seller hereby represents and
warrants to Buyer as of the date of this Agreement and as of the Effective Time:
(a) RECITALS TRUE. The statements of fact set forth in Recitals B, C
and E of this Agreement with respect to Seller are true.
(b) ORGANIZATION AND QUALIFICATION OF BANKS. Banks have the
requisite corporate power and authority to own or lease their
properties and assets and to carry on their business as it is now
being conducted and are duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction where the
properties owned, leased or operated or the business conducted by it
require such qualification. Banks are an "insured depository
institution" as defined in the Federal Depository Insurance Act, as
amended (the "FDI Act"), and applicable regulations thereunder, having
its deposits insured by the Federal Deposit Insurance Corporation (the
"FDIC"), subject to applicable FDIC coverage limitations. Seller has
made available to Buyer a complete and correct copy of the articles of
association and bylaws of Banks and each of Banks' respective
subsidiaries, each as amended to date and currently in full force and
effect.
(c) SUBSIDIARIES. Schedule 2.1(c) lists all of the subsidiaries of
Banks and the amount and percent of Seller's stock ownership, thereof;
except as so listed, neither Banks nor any of their subsidiaries own
any stock, partnership, joint venture or limited liability company
interest or any other equity security issued by any other corporation,
organization or other entity (collectively, together with any
individual, a "Person") other than in a bona fide fiduciary capacity
or in satisfaction of a debt previously contracted in good faith.
Each of Banks' subsidiaries is a corporation in good standing under
the laws of the jurisdiction in which such subsidiary is incorporated
and is duly qualified to do business and in
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good standing in each jurisdiction where the properties owned, leased
or operated, or the business conducted, by such subsidiary require
such qualification. Each of Banks' subsidiaries has the requisite
corporate power and authority to own or lease its properties and
assets and to carry on its business as it is now being conducted.
(d) CAPITAL STOCK.
(i) All of the issued and outstanding shares of capital stock of
Banks and each subsidiary of Banks have been duly authorized and
are validly issued, fully paid and nonassessable.
(ii) Seller has good and marketable title to the Shares, free and
clear of all liens, pledges, security interests, claims, proxies,
subscriptive rights or other encumbrances or restrictions of any
kind (collectively, "Encumbrances"). Banks or a subsidiary of
Banks are the sole record and beneficial owners of the shares of
capital stock of each subsidiary of Banks, free and clear of all
Encumbrances. There are no outstanding subscriptions, options,
warrants, rights, convertible securities or other agreements or
commitments of Seller, Banks or any of their subsidiaries of any
character relating to the issued or unissued capital stock or
other securities of Banks or any of their subsidiaries
(including, without limitation, those relating to the issuance,
sale, purchase, redemption, conversion, exchange, redemption,
voting or transfer thereof), nor are there any stock
appreciation, phantom or similar rights based upon the book value
or other attribute of Banks' capital stock.
(e) CORPORATE AUTHORITY. Seller has the requisite corporate power
and authority and has taken all corporate action necessary in order to
execute and deliver this Agreement, and this Agreement is a valid and
legally binding agreement of it enforceable in accordance with the
terms hereof.
(f) GOVERNMENTAL FILINGS. Except as disclosed in Schedule 2.1(f),
other than the FRB Approval, the approval of the Wyoming Commissioner
as may be required under Wyoming law, and the OCC, no notices, reports
or other filings are required to be made by Seller with, nor are any
consents, registrations, approvals, permits or authorizations required
to be obtained by Seller from, any domestic or foreign governmental or
regulatory authority, agency, court, commission or other entity
(collectively, "Governmental Entities"), in connection with the
execution, delivery or performance of this Agreement by Seller and the
consummation by it of the transactions contemplated hereby.
(g) NO CONFLICTS. The execution, delivery and performance of this
Agreement by Seller do not and will not, and (upon receipt of the FRB
Approval and the expiration of any related waiting period) the
consummation by it of any of the
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transactions contemplated hereby will not, with or without the giving
of notice, the lapse of time or both:
(i) Conflict with or violate Seller's certificate of
incorporation or bylaws, Banks' articles of association or bylaws
or the comparable governing instruments of any of Banks'
subsidiaries;
(ii) Except as set forth on Schedule 2.1(g)(ii), violate or
breach, or constitute or result in a default under, any
agreement, lease, contract, note, mortgage, indenture,
arrangement or other obligation (collectively, "Contracts") of
Seller, Banks or any of Banks' subsidiaries;
(iii) Except as disclosed in Schedule 2.1(g)(iii), conflict with,
violate or breach any law, rule, ordinance or regulation or
judgment, decree, order, award or governmental or
non-governmental permit or license to which Seller, Banks or any
of Banks' subsidiaries are subject; or
(iv) Except as set forth on Schedule 2.1(g)(iv), result in any
acceleration of, or change in, the rights or obligations of any
party under any Contracts of Seller, Banks or any of Banks'
subsidiaries.
(h) REPORTS AND FINANCIAL STATEMENTS.
(i) With respect to periods since December 31, 1994, Banks and
each of their subsidiaries have filed all reports and statements,
together with any amendments required to be filed with respect
thereto, that they were required to file with (A) the OCC, (B)
the FDIC and (C) any other applicable federal or state banking,
insurance or other regulatory authorities, and, as of their
respective dates (and, in the case of reports or statements filed
prior to the date hereof, without giving effect to any amendments
or modifications filed after the date of this Agreement), such
reports and statements, including the financial statements and
exhibits thereto, complied (or will comply, in the case of
reports or statements filed after the date of this Agreement)
with all applicable statutes, rules and regulations.
(ii) Seller has delivered to Buyer each Consolidated Report of
Condition (including Domestic and Foreign Subsidiaries) filed by
Banks with the OCC with respect to periods since January 1, 1996,
and will promptly deliver each such report filed after the date
hereof (collectively, the "Call Reports").
(iii) Except as disclosed in Schedule 2.1(h)(iii), each of Banks'
consolidated balance sheets included in their Call Reports fairly
presents (or, in the case of Call Reports prepared after the date
of this Agreement,
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will fairly present) the consolidated financial position of Banks
and their subsidiaries as of the date of such balance sheet and
each of the consolidated income statements and statement of
changes in equity capital included in their Call Reports fairly
presents (or, in the case of Call Reports prepared after the date
of this Agreement, will fairly present) the consolidated results
of operations and retained earnings, as the case may be, of Banks
and their subsidiaries for the periods set forth therein in each
case in accordance with the regulatory accounting principles
consistently applied during the periods involved, except as may
be noted therein and except for normal adjustments made at year
end only.
(iv) The financial information provided to Buyer by Seller and
identified on Schedule 2.1(h)(iv) was true and correct (A) as of
the date stated with respect to such financial information, or
(B) if no date is stated, then as of the date the information was
provided to Buyer.
(v) Except as set forth on Schedule 2.1(h)(v), Banks have no
liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, and whether or not required to
be shown on a balance sheet prepared in accordance with
regulatory accounting principles, except as are shown or
reflected in the Call Reports.
(vi) The aggregate Banks' allowance for loan and lease losses of
the Banks shall, as of the Effective Time, be the amount set
forth on Schedule 2.1(h)(vi).
(i) ASSET CLASSIFICATION. Schedule 2.1(i) sets forth a list,
accurate and complete in all respects, of the aggregate amounts of
loans, extensions of credit and individual loans or extensions of
credit and other assets of the respective Bank and its subsidiaries
with a principal balance in excess of $250,000.00 that have been
criticized or classified as of March 31, 1996, by the respective Bank,
separated by category of classification or criticism (the "Asset
Classification"); and no amounts of loans, extensions of credit or
other assets that have been classified or criticized as of the date
hereof by a representative of any Governmental Entity as "Other Loans
Especially Mentioned", "Substandard", "Doubtful", "Loss" or words of
similar import are excluded from the amounts disclosed in the Asset
Classification, other than amounts of loans, extensions of credit or
other assets that were charged off by it or its subsidiaries prior to
the date hereof.
(j) ABSENCE OF CERTAIN EVENTS AND CHANGES. Since the date of the
most recent Call Report filed by Banks before the date of this
Agreement, Banks and their subsidiaries have conducted their
respective businesses only in the ordinary and usual course of such
businesses and, without giving effect to Section 2.4(a)(i) or to
Section 2.4(b), there has not been any change or development affecting
the business of the Banks.
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(k) PROPERTIES. Except as disclosed or reserved against in its Call
Reports or as disclosed in Schedule 2.1(k), Banks and their
subsidiaries have good and marketable title, free and clear of all
Encumbrances (other than Encumbrances for current taxes not yet
delinquent or pledges to secure deposits) to all of the properties and
assets, tangible or intangible, reflected in their Call Reports as
being owned by them or their subsidiaries as of the dates thereof.
All buildings and all fixtures, equipment and other property and
assets that relate to Banks' business on a consolidated basis are
held under leases or subleases by them or their subsidiaries are held
under valid leases or subleases enforceable in accordance with their
respective terms (except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally or by general equity principles).
(l) COMPLIANCE WITH LAWS. Banks and each of their subsidiaries:
(i) Except as disclosed in Schedule 2.1(l)(i), are in
compliance, in the conduct of their business, with all applicable
federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable
thereto or to the employees conducting such businesses,
including, without limitation, the National Bank Act, the Equal
Credit Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act, the Home Mortgage Disclosure Act and all other
applicable fair lending laws or other laws relating to
discrimination (collectively, the "Fair Lending Laws");
(ii) Except as disclosed in Schedule 2.1(l)(ii) have all
permits, licenses, certificates of authority, orders and
approvals of, and have made all filings, applications and
registrations with, Governmental Entities, that are required in
order to permit them or such subsidiary to carry on their
business as it is presently conducted;
(iii) Have not received notification or communication from any
Governmental Entity (including the OCC and any other bank,
insurance and securities regulatory authorities) or the staff
thereof, which remains in effect (A) asserting that it or any of
its subsidiaries is not in compliance with any of the statutes,
regulations or ordinances that such Governmental Entity enforces;
(B) threatening to revoke any license, franchise, permit or
governmental authorization; or (C) threatening or contemplating
revocation or limitation of, or which would have the effect of
revoking or limiting, FDIC deposit insurance;
(iv) Are not required to give prior notice to any federal
banking agency of the proposed addition of any individual to its
board of directors or the employment of an individual as a senior
executive;
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(v) Are not subject to the limitations on acceptance of deposits
set forth in Section 29 of the FDI Act; and
(vi) With respect to Banks, have been assigned a rating of
"satisfactory record of meeting community credit needs" or higher
in its most recent examination under Section 4 of the Community
Reinvestment Act (no subsidiary of Banks being an "insured
depository" as defined in the FDI Act).
(m) LITIGATION. Except as set forth on Schedule 2.1(m), there are no
criminal or administrative investigations or hearings of, before or by
any Governmental Entity, or civil, criminal or administrative actions,
suits, claims or proceedings of, before or by any Person (including
any Governmental Entity) pending or, to the knowledge of Seller's
Executive Officers, threatened, against Banks or any of their
subsidiaries (including, without limitation, under any of the Fair
Lending Laws) and neither Seller nor any of its subsidiaries (nor any
officer, director, controlling person or property of it or any of its
subsidiaries) is a party to or is subject to any order, decree,
agreement, memorandum of understanding or similar arrangement with, or
a commitment letter or similar submission to, any Governmental Entity
charged with the supervision or regulation of depository institutions
or engaged in the insurance of deposits (including, without
limitation, the OCC and the FDIC) or the supervision or regulation of
Banks or any of their subsidiaries and neither Seller nor any of its
subsidiaries has been advised by any such Governmental Entity that
such Governmental Entity is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such
order, decree, agreement, memorandum of understanding, commitment
letter or similar submission.
(n) TAXES.
(i) The term "Tax" includes any tax or similar governmental
charge, impost or levy (including, without limitation, income
taxes, franchise taxes, transfer taxes or fees, stamp taxes,
sales taxes, use taxes, excise taxes, ad valorem taxes,
withholding taxes, employee withholding taxes, worker's
compensation, payroll taxes, unemployment insurance, social
security, minimum taxes or windfall profits taxes), together with
any related liabilities, penalties, fines, additions to tax or
interest, imposed by the United States or any state, county,
provincial, local or foreign government or subdivisions or agency
thereof.
(ii) Each Bank has timely filed or will file (or, where
appropriate, its respective parent has timely filed or will file)
all required tax returns and has paid all Taxes due, payable or
owed for all periods for which returns are required to be filed,
other than Taxes contested in good faith. Schedule 2.1(n)
attached hereto lists the date or dates through which the
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Internal Revenue Service and any other governmental entity have
examined the United States federal income tax returns and state
or local income or franchise tax returns of each Bank. Except as
set forth on Schedule 2.1(n)(ii) attached hereto, (a) no
governmental entity has, during the past three years, examined or
is in the process of examining any Tax returns of either Bank,
(b) no governmental entity has proposed any deficiency,
assessment, or claim for Taxes against either Bank; and (c)
neither Seller nor either Bank has requested nor been granted any
extension of the time for filing any tax return.
(o) INSURANCE. Schedule 2.1(o) lists each insurance policy
maintained by Banks, their respective subsidiaries or by Seller or a
Seller affiliate with respect to Banks or their subsidiaries (the
"Insurance Policies"). All such policies are in full force and effect
and none of Banks, their subsidiaries or Seller are in default with
respect to their obligations under the Insurance Policies.
(p) LABOR MATTERS. Neither Banks nor any of their subsidiaries are a
party to, or are bound by, any collective bargaining agreement,
contract or other agreement or understanding with a labor union or
labor organization, nor are Banks or any of their subsidiaries the
subject of any proceeding asserting that they or any such subsidiary
have committed an unfair labor practice or seeking to compel it or
such subsidiary to bargain with any labor organization as to wages or
conditions of employment, nor is there any strike involving Banks or
any of their subsidiaries pending or, to the knowledge of Seller's or
Banks' Executive Officers, threatened, nor are Seller's or Banks'
Executive Officers aware of any activity involving Banks' or any of
their subsidiaries' employees seeking to certify a collective
bargaining unit or engaging in any other organizational activity.
(q) EMPLOYEE BENEFITS.
(i) Schedule 2.1(q) sets forth, as of the date of this
Agreement, a true and complete list of each employee benefit
plan, arrangement or agreement (the "Plans") that covers
employees or former employees (the "Employees") of Banks and
their subsidiaries or any trade or business, whether or not
incorporated (an "ERISA Affiliate"), all of which together with
the Banks would be deemed a "single employer" within the meaning
of Section 4001 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). True and complete copies of the
Plans have been made available to Buyer.
(ii) All of Banks' and their ERISA Affiliates' employee benefit
Plans, within the meaning of Section 3(3) of ERISA, covering
Employees have been operated and administered in all respects in
accordance with applicable laws, including but not limited to
ERISA and the Internal Revenue Code (the "Code") and each of the
Plans which is an "employee
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pension benefit plan" within the meaning of Section 3(2) of ERISA
and which is intended to be "qualified" under Section 401(a) of
the Code is so qualified. There are no pending, threatened or
anticipated claims (other than routine claims for benefits) by,
or on behalf of or against any of the Plans or any trusts related
thereto. Since January 1, 1994, neither Banks nor an ERISA
Affiliate have engaged in a transaction in connection with which
Banks or an ERISA Affiliate could be subject to either a civil
penalty assessed pursuant to Section 409 or 502(i) of ERISA or a
tax imposed pursuant to Section 4975 or 4976 of the Code.
(iii) All required contributions which are due from Banks have
either been made or properly accrued and no Plan has an
accumulated or waived funding deficiency within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA.
Neither the Seller or an ERISA Affiliate has incurred, directly
or indirectly, any liability (including material contingent
liability) to or on account of a Plan pursuant to Title IV of
ERISA. No proceedings have been instituted to terminate any Plan
that is subject to Title IV of ERISA. A "reportable event", as
such term is defined in Section 4043(b) of ERISA has occurred
with respect to each of the Plans that is subject to Title IV of
ERISA which, due to the merger of First Interstate Bancorp with
and into Seller, are now sponsored by the Seller's controlled
group. No condition exists which would result in any liability
to Seller with respect to any Plan. The current value of the
assets of each of the Plans that is subject to Title IV of ERISA,
based upon the actuarial assumptions (to the extent reasonable)
presently used by such Plan, exceeds the present value of the
accrued benefits under such Plan. Neither Banks or any of their
subsidiaries has any actual or potential liability for any
complete or partial withdrawal within the meaning of Sections
4201, 4203 or 4205 of ERISA (and there would be no such liability
assuming a complete or partial withdrawal from all the Plans at
the Effective Time) with respect to any Plan.
(iv) With respect to each Plan which is subject to Title IV of
ERISA, the present value of accrued benefits under such Plan,
based upon the actuarial assumptions used for funding purposes in
the most recent actuarial report prepared by such Plan's actuary
with respect to such Plan, did not, as of its latest valuation
date, exceed the then current value of the assets of such Plan
allocable to such accrued benefits. No liability under Title IV
of ERISA has been incurred by Banks or an ERISA Affiliate that
has not been satisfied in full, and no condition exists that
presents a risk to Banks or any ERISA Affiliate of incurring a
liability thereunder. A "reportable event," as such term is
defined in Section 4043(b) of ERISA has occurred with respect to
each of the Plans that is subject to Title IV of ERISA which, due
to the merger of First Interstate Bancorp with and into Seller,
are now sponsored by the Seller's controlled group. No Plan is a
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"multi-employer pension plan," as such term is defined in Section
3(37) of ERISA. All contributions or other amounts payable by
Banks as of the Effective Time with respect to each Plan in
respect of current or prior plan years have been paid or accrued
in accordance with generally accepted accounting practices and
Section 412 of the Code.
(v) Neither Banks or their subsidiaries have any actual or
potential liability for benefits after separation from employment
of any employee other than (A) as provided for in Article VIII of
this Agreement or (B) health care continuation benefits described
in Section 4980B of the Internal Revenue Code or ERISA Title I,
Subtitle B, Part G.
(vi) No employee of Banks or their subsidiaries is absent due to
(A) a disability that currently entitles the employee to benefits
under any long-term disability policy provided by Seller or Banks
or (B) military service.
(r) ENVIRONMENTAL MATTERS.
(i) For purposes of this Section 2.1(r), the following terms
shall have the indicated meaning:
"BUSINESS" means the business conducted by Banks and their
subsidiaries.
"ENVIRONMENTAL LAW" means any law, regulation, order or decree
relating to Hazardous Substances or the protection of the
environment.
"HAZARDOUS SUBSTANCES" means substances which are listed or
classified pursuant to any Environmental Law, including any
petroleum products or byproducts, polychlorinated biphenyls
("PCBs"), radioactive materials or radon gas.
(ii) Except as disclosed in Schedule 2.1(r)(ii), Banks and each
of their subsidiaries, and each property owned by the Banks or
their subsidiaries (collectively, "Bank Property"), are in
compliance with applicable Environmental Laws.
(iii) There are no pending claims, actions, or proceedings
involving Banks or any of their subsidiaries relating to:
A. An asserted liability of Banks or any of their
subsidiaries under any Environmental Law or the terms and
conditions of any permit, license, authority, settlement,
agreement, decree or other obligation pursuant to any
Environmental Law;
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B. The handling, storage, use, transportation, removal or
disposal of Hazardous Substances;
C. The discharge, release or emission of Hazardous
Substances from, on or under or within Bank Property into
the air, water, surface water, ground water, land surface
or subsurface strata; or
D. Personal injuries or damage to property caused by a
release of Hazardous Substances.
(iv) Except as disclosed on Schedule 2.1(r)(iv), to the
knowledge of Sellers' and Banks' Executive Officers, no Hazardous
Substances have been used, handled, stored, released or emitted
by Banks or one of their subsidiaries at or on any Bank Property
except in compliance with applicable Environmental Laws and as
would not be reasonably expected to create conditions requiring
remediation under any Environmental Law.
(v) No part of any Bank Property is scheduled for investigation
or monitoring pursuant to any Environmental Law.
(s) MATERIAL AGREEMENTS.
(i) Except for this Agreement or as disclosed in Schedule
2.1(s)(i), neither Banks nor any of their subsidiaries (A) is a
party to any written or oral contract for the employment of any
officer, individual employee or other person on a full-time or
consulting basis, or relating to severance pay for any such
person, (B) is a party to any written or oral agreement or
understanding to repurchase assets previously sold (or to
indemnify or otherwise compensate the purchaser in respect of
such assets), except for securities sold under a repurchase
agreement that has been entered into in the ordinary course of
business for normal funding purposes and that provides a
repurchase date 30 days or less after the purchase date, (C) is a
party to any (1) contract or group related contracts with the
same party for the purchase or sale of products or services under
which the undelivered balance of such products and services has a
purchase price in excess of $50,000.00 for any individual
contract or $100,000.00 for any group of related contracts in the
aggregate, (2) other agreement that was not entered into in the
ordinary course of business or (D) has any commitments for
capital expenditures in excess of $100,000.00.
(ii) None of Banks nor any of their subsidiaries is in default
under any contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument.
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(iii) Schedule 2.1(s)(iii) sets forth each contract, agreement or
obligation by, between or among Banks, or either of them, and
Seller or any indirect or direct subsidiary of Seller; excluding,
however, (A) contracts, agreements or obligations by and between
Banks and their respective subsidiaries, (B) loan participations
purchased or sold and otherwise reflected on the Banks' books and
records, and (C) all Tax Sharing Agreements referred to in
Section 3.9(g) (collectively the "Intercompany Agreements").
(iv) Schedule 2.1(s)(iv) sets forth each contract, agreement or
other arrangement to which Banks are not a party but pursuant to
which Banks receive services necessary to the business of the
Banks or under which Banks are obligated to make payments (the
"Service Contracts").
(t) KNOWLEDGE AS TO CONDITIONS. Sellers' and Banks' Executive
Officers know of no reason why the FRB Approval and, to the extent
necessary, any other approvals, authorizations, filings, registrations
and notices should not be obtained without the imposition of any
condition or restriction described in the proviso to Section 4.1(a).
(u) BROKERS AND FINDERS. None of Seller, its subsidiaries or any of
their officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions
or finder's fees in connection with the transactions contemplated
herein.
(v) ADMINISTRATION OF FIDUCIARY OBLIGATIONS. Except as disclosed on
Schedule 2.1(v), Banks and their respective subsidiaries (i) have each
properly administered all accounts for which it acts as a fiduciary,
including, but not limited to, accounts for which it serves as
trustee, agent, custodian, personal representative, guardian,
conservator or investment advisor, in accordance with the terms of the
governing documents and applicable state and federal law and
regulation; and (ii) have maintained true and correct accountings
which properly and accurately reflect the assets of such fiduciary
accounts; and (iii) have not committed any breach of trust with
respect to any such fiduciary account.
2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Subject to Section 2.4, as
of the date of this Agreement and as of the Effective Time and except as set
forth in Buyer's Schedules, Buyer hereby represents and warrants to Seller that:
(a) RECITALS TRUE. The statements of fact set forth in Recitals A
and E of this Agreement with respect to Buyer are true.
(b) CORPORATE AUTHORITY. Buyer has the requisite corporate power and
authority and has taken all corporate action necessary in order to
execute and deliver this
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Agreement, and this Agreement is a valid and legally binding agreement
of it enforceable in accordance with the terms hereof.
(c) GOVERNMENTAL FINDINGS. Other than the FRB Approval and approval
by the Wyoming Commissioner, no notices, reports or other filings are
required to be made by Buyer with, nor are any consents,
registrations, approvals, permits or authorizations required to be
obtained by Buyer from any Governmental Entity in connection with the
execution, delivery or performance of this Agreement by Buyer and the
consummation by it of the transactions contemplated hereby.
(d) NO CONFLICTS. The execution, delivery and performance of this
Agreement by Buyer do not and will not, and (upon receipt of the FRB
Approval and approval of the Wyoming Commissioner, the expiration of
any related waiting period) the consummation by it of any of the
transactions contemplated hereby will not, with or without the giving
of notice, the lapse of time or both:
(i) Conflict with or violate Buyer's certificate of
incorporation or bylaws;
(ii) Violate or breach, or constitute or result in a default
under, any Contracts of Buyer;
(iii) Conflict with, violate or breach any law, rule, ordinance
or regulation or judgment, decree, order, award or governmental
or non-governmental permit or license to which Buyer is subject;
or
(iv) Result in any acceleration of, change in the rights or
obligations of any party under any Contracts of Buyer.
(e) SECURITIES ACT. Buyer is acquiring the Shares for its own
account and not with a view to their distribution within the
meaning of Section 2.11 of the Securities Act of 1933, as amended
(the "Securities Act") or in any manner that would be in
violation of the Securities Act. Buyer has not, directly or
indirectly, offered the Shares to anyone or solicited any offer
to buy the Shares from anyone, so as to bring such offer and sale
of the Shares by Buyer within the registration requirements of
the Securities Act. Buyer will not sell, convey, transfer or
offer for sale any of the Shares except upon compliance with the
Securities Act and any applicable state securities laws or
pursuant to any exemption therefrom.
(f) FINANCING. Prior to September 1, 1996 (and without regard to the
provisions of Section 2.3), Buyer will have obtained commitments for
debt and/or equity financing sufficient to pay the Purchase Price and
to purchase the Shares on the terms and conditions of this Agreement,
which commitments shall be subject only to conditions reasonably
acceptable to Seller.
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(g) LITIGATION. There are no criminal or administrative
investigations or hearings of, before or by any Governmental Entity,
or civil, criminal or administrative actions, suits, claims or
proceedings of, before or by any Person (including any Governmental
Entity) pending or, to the knowledge of its Executive Officers,
threatened against Buyer or any of its subsidiaries (including,
without limitation, under any of the Fair Lending Laws); and neither
Buyer nor any of its subsidiaries (nor any officer, director,
controlling person or property of it or any of its subsidiaries) is a
party to or is subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment letter or
similar submission to, any Governmental Entity charged with the
supervision or regulation of depository institutions or engaged in the
insurance of deposits (including, without limitation, the OCC and the
FDIC) or the supervision or regulation of it or any of its
subsidiaries, and neither Buyer nor any of its subsidiaries has been
advised by any such Governmental Entity that such Governmental Entity
is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, commitment letter or similar
submission.
(h) BROKERS AND FINDERS. None of Buyer, its subsidiaries or any of
their offices, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions
or finder's fees in connection with the transactions contemplated
herein.
(i) KNOWLEDGE AS TO CONDITIONS. Buyer's Executive Officers know of
no reason why the FRB Approval and the approval of the Wyoming
Commissioner and, to the extent necessary, any other approvals,
authorizations, filings, registrations and notices should not be
obtained without the imposition of any condition or restriction
described in the proviso to Section 4.1(a).
(j) CRA RATING. Buyer and each of Buyer's subsidiary banks have been
assigned a rating of "satisfactory record meeting community credit
needs" in its most recent examination under Section 4 of the Community
Reinvestment Act.
2.3 RIGHT TO CURE. Seller and Buyer shall each have the right, but not
the obligation, to cure a breach of any representation or warranty contained in
this Article II. Any breach must be cured within 30 days from the date the
curing party learns of the breach or is advised in writing by the other party
that a breach of a representation or warranty has occurred. Any breach which
cannot be cured within 30 days may nonetheless be cured after the expiration of
the 30-day period; PROVIDED, HOWEVER, that reasonable efforts to cure the breach
have been commenced within the 30-day period and, PROVIDED further, that the
breach has been cured prior to December 2, 1996. Neither party shall have the
right to terminate this Agreement pursuant to the provisions of Article V on
account of a breach of any representation or warranty which has been cured in
accordance with the provisions of this Section 2.3.
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2.4 EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES.
(a) On or prior to the date hereof, Buyer has delivered to Seller and
Seller has delivered to Buyer the Schedules setting forth, among other
things, exceptions to any or all of its representations and warranties
in this Article II; PROVIDED, that (i) no such exception is required
to be set forth in a Schedule if its absence would not result in the
related representation or warranty being deemed untrue or incorrect
under the standard established by Section 2.4(b) and (ii) the mere
inclusion of any exception in a Schedule shall not be deemed an
admission by a party that such exception represents a material fact,
event or circumstance or would result in a Material Adverse Effect and
(iii) the delivery by either party of a corrected or amended Schedule
after the date of this Agreement shall not have the effect of curing
or correcting any prior breach or other failure of any representation
or warranty made by such party.
(b) No representation or warranty of Buyer or Seller contained in
this Article II shall be deemed untrue or incorrect, and no party
hereto shall be deemed to have breached a representation or warranty,
as a consequence of the existence of any fact, circumstance or event
if such fact, circumstance or event, individually or taken together
with all similar facts, circumstances or events, would not have a
Material Adverse Effect. As used in this Agreement, the term
"Material Adverse Effect" means an effect which (i) is materially
adverse to the business, financial condition, results of operations or
prospects of Buyer, Seller or the Banks or the respective individual
Bank and its subsidiaries as the context may dictate, (ii)
significantly and adversely affects the ability of Buyer or Seller, as
the context may dictate, to consummate the transactions contemplated
hereby or to perform its material obligations hereunder, or (iii)
enables any Person to prevent the consummation of the transactions
contemplated hereby; PROVIDED, HOWEVER, that any effect resulting from
(A) actions or omissions of Buyer or Seller taken with the prior
consent of the other party in contemplation of the transactions
provided for herein or (B) circumstances affecting the banking
industry in Montana and Wyoming generally shall be deemed not to be a
Material Adverse Effect.
2.5 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Article II, none of Buyer,
Seller or any other Person makes any other express or implied representation or
warranty on behalf of or with respect to Buyer or Seller, and Buyer and Seller
hereby disclaim any such representation or warranty, whether by Buyer, Seller or
any other Person, with respect to the execution and delivery of this Agreement,
the consummation of the transactions contemplated herein, Buyer or Seller
(notwithstanding the delivery of disclosure to the other party hereto or any
other Person of any documentation or other information by Buyer, Seller or any
other Person with respect to any one or more of the foregoing).
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ARTICLE III
COVENANTS
3.1 CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME. Seller agrees that,
from and after the date hereof until the Effective Time, except insofar as Buyer
shall otherwise consent in writing (such consent not to be unreasonably
withheld) or except as otherwise expressly contemplated by this Agreement or set
forth in Schedules provided to Buyer:
(a) It shall cause Banks to use all reasonable efforts to (i) in all
material respects, operate their business only in the ordinary course;
(ii) preserve intact their business organization; (iii) maintain their
properties in sufficient operating condition and repair to enable them
to operate in all material respects their business in the manner in
which they are currently operated; and (iv) keep and maintain the
Insurance Policies in full force and effect.
(b) Banks shall not:
(i) Declare, set aside or pay any dividends payable in cash,
property or otherwise with respect to the Shares which have the
effect of reducing at the Effective Time the Book Value of
Shareholder's Equity (as defined in Section 1.2(b)(i) below
$19,272,886.00 for First Interstate Bank of Montana, N.A. and
below $16,559,547.00 for First Interstate Bank of Wyoming, N.A.;
(ii) Take any action the effect of which is to reduce the
aggregate Banks' allowance for loan and lease losses to an
amount, as of the Effective Time, less than the amount set forth
on Schedule 2.1(h)(vi) or to reduce the Montana Bank loan loss
reserve below $2,000,000.00;
(iii) Issue, sell or deliver any shares of their capital stock or
issue or sell any securities convertible into, or options with
respect to, or warrants to purchase or other rights to subscribe
to or acquire, any shares of their capital stock;
(iv) Effect any recapitalization, reclassification, stock
dividend, stock split or like exchange in capitalization;
(v) Amend their articles of association or bylaws;
(vi) Merge or consolidate with or, except as a result of
foreclosure or repossession in the ordinary course of banking
business, acquire substantially all of the assets or make any
material investment in the stock or securities of any other
Person or close any banking offices existing as of the date of
this Agreement;
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(vii) Sell, transfer, lease or encumber a material amount of
assets except in the ordinary course of business other than (A)
the sale and transfer of student loans held by Banks to Seller or
an affiliate of Seller prior to the Effective Time at a
reasonable arm's-length value, and (B) transfer of Control
Disbursement Accounts (as defined in and contemplated by Section
7.5);
(viii) Grant to any director, officer, employee or consultant any
material increase in compensation or benefits;
(ix) Grant any severance or termination pay to, or enter into
or amend any employment or severance agreement with, any Person,
other than termination pay paid in the ordinary course of
business to officers or employees;
(x) Adopt any new or amend any existing Compensation Plans
(including, without limitation, profit sharing, bonus, director
and officer incentive compensation, retirement, medical,
hospitalization, life or other insurance plans, agreements and
commitments), except for amendments or modifications necessary to
comply with applicable law;
(xi) Incur any material amount of indebtedness other than in
the ordinary course of business consistent with past practice;
PROVIDED, HOWEVER, Banks shall not engage in any hedging
practices, derivatives speculation or other similar activities);
(xii) Make any change in accounting principles, charge-off
policies, loan loss reserve policies, or methods from those
currently employed, except as required by generally accepted
accounting principles or applicable regulatory requirements or
fail to take any action appropriate under such policies,
including, without limitation, to charge-off loans or make
provisions to the loan loss reserves;
(xiii) Grant any mortgage or security interest in, or make any
pledge of, or permit any Encumbrance to be placed on, any
material amount of its assets or properties other than in the
ordinary course of business;
(xiv) Take any action that is intended or may reasonably be
expected to result in a breach or violation of any of the
representations and warranties contained in this Agreement or
would cause any condition to the transactions contemplated hereby
not to be satisfied, except, in every case, as may be required by
law;
(xv) Accelerate, terminate or cancel any material contract,
lease or license other than in the ordinary course of business;
or
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(xvi) Agree or commit to do any of the foregoing.
3.2 ACCESS TO INFORMATION.
(a) From the date hereof until a date 75 days following the Closing,
upon reasonable notice, Seller shall, and shall cause its employees,
auditors and agents (collectively, its "Representatives") and the
Representatives of the Banks to, (i) afford Representatives of the
Buyer reasonable access, during normal business hours, to the offices,
properties of the Banks and books and records of Banks and of Seller
(to the extent such books and records relate to Banks), and (ii)
furnish to Representatives of Buyer such additional financial and
operating data and other information regarding the assets, properties,
goodwill and business of the Banks as Buyer may from time to time
reasonably request; PROVIDED, HOWEVER, that such investigation shall
not unreasonably interfere with any of the businesses or operations of
Seller, Banks or any of their subsidiaries.
(b) Without limiting or modifying any of the terms, provisions, and
conditions of a Confidentiality Agreement between the parties dated
April 18, 1996 and amended May 2, 1996 ("Confidentiality Agreement"),
the terms of which are incorporated herein by reference, each of
Buyer and Seller agree that it will not, and will cause its
Representatives and the Representatives of its subsidiaries not to,
use any nonpublic information obtained from the other party in
connection with or relating to this Agreement, the investigation
leading up to its execution or the transactions contemplated hereby
(including, without limitation, by Buyer pursuant to Section 3.2(a))
for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. Pending consummation of the
transactions herein contemplated, each of Buyer and Seller agrees that
it will keep confidential, and will cause its and its subsidiaries'
Representatives to keep confidential, all nonpublic information and
documents so obtained from the other party; PROVIDED, that the
obligation to keep such information or documents confidential shall
not apply to (i) any information or document that (A) was already in
Buyer's or Seller's possession prior to the disclosure thereof by the
other party, (B) was then generally known to the public, (C) became
known to the public through no fault of Buyer or Seller, as the case
may be, or (D) was disclosed to Buyer or Seller, as the case may be,
by a third party not bound by an obligation of confidentiality or (ii)
disclosure (A) required by law, governmental or regulatory authority,
(B) reasonably necessary for seeking and obtaining regulatory approval
of the transactions contemplated by this Agreement, and (C) subject to
the reasonable consent of Seller, disclosure by Buyer in connection
with solicitation and issuance of debt or equity instruments in
furtherance of the transactions contemplated by this Agreement. Upon
any termination of this Agreement, each party will collect and deliver
to the other party all nonpublic documents obtained by it or any of
its or its subsidiaries' Representatives then in their possession
(other than documents of the type described in the proviso to the
preceding sentence) and any copies thereof and destroy or cause to be
destroyed
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all notes, memoranda or other documents in the possession of it or its
subsidiaries' Representatives containing or reflecting any nonpublic
information obtained from the other party (other than information of
the type described in the proviso to the preceding sentence), except
to the extent that any such information may be embodied in minutes of
the meetings of such party's Board of Directors or in filings, reports
or submissions to or with any Governmental Entity. Promptly after any
such termination, each of Buyer and Seller shall deliver to the other
a certificate signed on its behalf by a senior officer to the effect
of its compliance with the agreements of it set forth in the preceding
sentence. Any information received by either party under, or prior to
the execution of, this Agreement and accorded confidentiality shall
not be used by such party to the competitive detriment of the party
providing such information. The provisions of this Section 3.2(b) and
the Confidentiality Agreement shall survive the termination of this
Agreement.
(c) Seller acknowledges Buyer is required to cause an audit of the
Banks to be conducted pursuant to Regulation SX Section 210.3-05 and
agrees to accommodate Buyer and Buyer's agents in the provision of
information, books and records for the conduct of the required audit.
3.3 REASONABLE EFFORTS. Subject to the terms and conditions of this
Agreement and applicable law, each of the parties shall use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement as soon as practicable,
including such actions or things as any other party may reasonably request in
order to cause any of the conditions to such other party's obligation to
consummate such transactions specified in Article IV of this Agreement to be
fully satisfied. Without limiting the foregoing, the parties shall (and shall
cause their respective officers, employees, agents, attorneys, accountants and
representatives to) consult and fully cooperate with and provide assistance to
each other in (i) promptly obtaining all necessary consents, approvals, waivers,
licenses, permits, authorizations, registrations, qualifications or other
permission or action by, and giving all necessary notices to and making all
necessary filings with and applications and submissions to, any Governmental
Entity or other Person as soon as reasonably practicable; (ii) providing all
such information about such party, its subsidiaries and its officers, directors,
partners and affiliates and making all applications and filings as may be
necessary or reasonably required in connection with any of the foregoing; and
(iii) in general, consummating and making effective the transactions
contemplated hereby; PROVIDED, HOWEVER, Buyer shall be solely responsible for
the preparation and filing of applications seeking regulatory approval for the
transaction contemplated by this Agreement, and Seller shall be solely
responsible for obtaining OCC approval of the Dividends.
3.4 NOTICE OF CERTAIN MATTERS. Each of Buyer and Seller will give prompt
notice to the other of the occurrence or failure to occur of any fact, event or
circumstance that would or is reasonably likely to result in (i) a Material
Adverse Effect, (ii) any of the representations or warranties of such party
contained herein being untrue or inaccurate when made (subject to Section 2.4),
(iii) a material breach of any of the covenants or agreements of such party
contained
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herein, (iv) the failure of a condition to consummation set forth in Article IV,
or (v) any Schedule or amended Schedule being or becoming inaccurate or
incorrect.
3.5 NO SOLICITATION. The Seller shall not, and shall not authorize or
permit Banks or any of their respective Representatives to, directly or
indirectly, (a) encourage or solicit (including by way of furnishing nonpublic
information), or take any other action to facilitate, any inquiry or proposal
from any Person (other than Buyer) concerning any merger, consolidation, sale of
substantial assets, sale of shares of capital stock or subsidiaries, or (b)
entertain, agree to, endorse or participate in any discussions or negotiations
or provide third parties with nonpublic information relating to any such inquiry
or proposal. Seller agrees to notify Buyer promptly upon receipt of any such
inquiry or proposal.
3.6 USE OF BANK INFORMATION. From and after the date of this Agreement,
Seller shall not use, or allow any affiliate of Seller or any officer, employee
or agent of Seller or a Seller affiliate to use, in any manner, Banks' customer
lists or customer information maintained in or generated or derived from Banks'
books and records (the "Customer Information") in the solicitation of Banks'
customers, including, without limitation, in the creation or maintenance of
advertising lists, customer profiles or direct mailings. Nothing in this
Section 3.6 shall be construed to prohibit the use of Customer Information prior
to the Effective Time by Seller, Seller affiliates or Banks for the purpose of
retaining or soliciting by or for Banks the business and relationships between
the respective Bank and its customers.
3.7 PUBLICITY. Buyer and Seller shall consult with each other prior to
issuing any press releases or otherwise making public statements with respect to
the transactions contemplated hereby and prior to making any filings with any
Governmental Entity with respect thereto.
3.8 BENEFIT PLANS. Seller shall maintain all employee benefit plans,
policies, procedures, and programs, including the Plans, for the benefit of the
Banks' employees until the Effective Time consistent and in accordance with
Seller's past practices and all applicable contractual, statutory, and
regulatory requirements. To the extent required, Seller shall continue to make
all employer contributions under any employee benefit plan, including the Plans,
so that at the Effective Time there will be no monetary deficiency,
underfunding, penalty, or other assessment against Seller, Buyer, Banks and/or
such employee benefit plans.
3.9 TAX MATTERS.
(a) I.R.C. Section 338(h)(10) ELECTION. Seller agrees, if requested
by Buyer, to join with Buyer in making an election under Section
338(h)(10) of the Internal Revenue Code (and, except as provided in
Section 3.9(b) below, any corresponding elections under state, local
or foreign tax laws) (collectively a "Section 338(h)(10) Election")
with respect to the purchase and sale of the stock of the Banks under
this Agreement.
(i) Seller will pay any Tax attributable to the making of the
Section 338(h)(10) Election and will indemnify Buyer against any
loss, cost or expense arising out or related to the failure to
pay such Tax.
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(ii) Buyer shall be responsible for preparing all forms as may
be necessary or appropriate to make a Section 338(h)(10)
Election. Seller agrees to take, in a timely manner, all
reasonable actions necessary or appropriate to effect a Section
338(h)(10) Election;
(iii) For purposes of making a Section 338(h)(10) Election,
Buyer shall allocate the purchase price to the assets of each of
the Banks, which allocation shall be made by Buyer subject to the
approval of Seller, which approval shall not be unreasonably
withheld, in accordance with the requirements of applicable
federal or state law. Seller and Buyer shall be bound by such
allocation for purposes of any Section 338(h)(10) Election.
(b) CALIFORNIA STATE Section 338 ELECTIONS.
(i) At the request of Seller, Buyer agrees to join with Seller
in making elections for the sales of the Shares of each Bank to
Buyer to be treated as sales of assets for California franchise
tax purposes, under the provisions of California Revenue and
Taxation Code Sections which correspond to Sections 338(g) and
338(h)(10) of the Code (collectively a "California State Section
338(h)(10) Election") with respect to the sale and purchase of
the Shares.
(ii) Seller shall be responsible for preparing all forms as may
be necessary or appropriate to make the California State Section
338(h)(10) Elections. Buyer agrees to take, in a timely manner,
all reasonable actions necessary or appropriate to effect such
election.
(iii) For purpose of making the California State Section
338(h)(10) Election, the purchase price shall be allocated in
accordance with Section 3.9(a)(iii) above (regardless of whether
a Section 338(h)(10) Election is made pursuant to Section
3.9(a)). Seller and Buyer shall be bound by such allocation for
purposes of any California State Section 338(h)(10) Election.
(iv) Seller and Buyer agree that the California State Section
338(h)(10) Elections shall apply only to the tax consequences of
the transactions described in this Agreement for purposes of the
laws of the State of California. Such election shall in no way
govern the tax treatment of the transactions described in this
Agreement for Federal or state (other than California) income tax
purposes.
(c) FILING OF TAX RETURNS AND PAYMENT OF TAXES.
(i) Buyer shall prepare and timely file, or cause to be
prepared and timely filed, with the appropriate authorities all
tax returns, reports, and forms required to be filed with respect
to the Banks for any taxable period ending after the Effective
Time (a "Post-Closing Tax Period"), and for all
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tax returns, reports and forms required to be filed subsequent to
the Effective Time with respect to any taxable period of the
Banks ending on or before the Effective Time other than for
federal income taxes and state income, license or franchise taxes
(a "State or Other Pre-Closing Tax Period"), and Buyer will pay,
and indemnify Seller for, all Taxes, losses, costs or expenses
related to or due with respect to such returns, reports, and
forms described above.
(ii) Seller shall prepare and timely file, or cause to be
prepared and timely filed, with the Internal Revenue Service the
consolidated federal income tax returns (which include the
operations of the Banks), and with the appropriate state income
tax authorities, the state income, license or franchise tax
returns of the Banks with respect to any taxable period ending on
or before the Effective Time (a "Pre-Closing Tax Period"), and
Seller will pay, and indemnify Buyer for, all Taxes, losses,
costs and expenses related to or due with respect to such returns
unless otherwise provided for in this Agreement. Buyer shall
permit, and shall cause its subsidiaries to permit, Seller
reasonable access to any of the books and records of each Bank
(or any successor thereto) which Seller may require in order to
timely prepare the foregoing returns as well as reasonable access
to and the services of each Bank's (or any successors thereto)
employees for such purpose.
(iii) Buyer will cause the Banks to close their permanent books
and records (including work papers) as of the end of the day of
the Effective Time according to Treasury Regulation Section
1.1502-76(b)(1)(ii)(A) or other applicable or reasonable rules so
that the portion of each Bank's Taxes attributable to a Pre-
Closing Tax Period, a State or Other Pre-Closing Tax Period, or a
Post-Closing Tax Period may be determined.
(iv) Seller, each Bank, and Buyer (and any of its subsidiaries)
shall reasonably cooperate in preparing and filing all returns,
reports, and forms relating to Taxes, and in resolving all
disputes and audits with respect to all taxable period relating
to Taxes. Seller, each Bank, and Buyer (and any of its
subsidiaries) shall each maintain and preserve all information
relating to Taxes of each Bank for so long as it may be needed by
Seller, each Bank, or Buyer.
(d) REFUNDS OF TAXES.
(i) Any refund of Taxes with respect to a Bank that is
received with respect to any Pre-Closing Tax Period, any State or
Other Pre-Closing Tax Period, or to the portion of any Post-
Closing Tax Period ending at or before the Effective Time shall
be for the account of Seller. If Buyer, either of the Banks, or
any affiliate thereof receives any such refund after
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the Effective Time, the Buyer shall pay to Seller or cause the
Bank or affiliate to pay to Seller, the amount of such refund
received within 15 calendar days after the receipt thereof.
Seller, Buyer, and Banks shall assist one another in preparing,
filing, obtaining and defending any refund payable pursuant to
this Section 3.9(d)(i).
(ii) If Seller receives any refund of Taxes with respect to
either Bank attributable to any Post-Closing Tax Period (or
portion thereof) which begins after the Effective Time, then
Seller shall pay to the Bank the amount of such refund received
within 15 calendar days after the receipt thereof. Seller,
Buyer, and Banks shall assist one another preparing, filing,
obtaining and defending any refund payable pursuant to this
Section 3.9(d)(ii).
(e) CONTROL OF AUDITS. Each of Seller and the Buyer shall have the
right, at its own expense, to control any audit or determination by
any governmental entity, and to contest, resolve and defend against
any assessment, notice of deficiency, or other adjustment or proposed
adjustment of Taxes for any taxable period for which it may be
obligated to indemnify the other party under this Agreement; provided,
however, that no party shall have the right to agree to any
assessment, deficiency, settlement, or other adjustment or proposed
adjustment of Taxes that would adversely affect another party without
such other party's written consent, which consent shall not be
unreasonably withheld. With respect to any taxable period for which
Seller and Buyer may both have liability for Taxes, Buyer shall be
responsible for handling any audit or determination with respect to
such tax liability; PROVIDED, HOWEVER, that Buyer shall not agree to
any assessment, deficiency, settlement, or other adjustment or
proposed adjustment of such Taxes without the consent of Seller, which
consent shall not be unreasonably withheld.
(f) RESOLUTION OF DISAGREEMENTS AMONG PARTIES ON TAX MATTERS. If
Seller or the Buyer disagree as to any matter governed by this Section
3.9 the parties shall promptly consult with each other in an effort to
resolve such dispute. Any amounts not in dispute shall be paid
promptly, and any amounts payable upon the resolution of a dispute
shall be made to a bank account designated by the payee no later than
10 business days after such resolution. If any such disagreement
cannot be resolved within 30 days after Seller or Buyer asserts in
writing that such dispute cannot be resolved, Seller and the Buyer
shall jointly select a national accounting firm with no material
relationship to either party to act as an arbitrator to resolve the
disagreement. The accounting firm's determination shall be final and
binding upon the parties, and any fees and expenses relating to the
engagement of the accounting firm shall be shared equally by Seller
and the Buyer. Upon the resolution of such dispute by the accounting
firm, any amounts payable by Seller or the Buyer, as the case may be,
shall be made to a bank account designated by the payee no later than
10 business days after such resolution. Simple interest will be paid
with respect to any such amounts at the
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federal funds rate from the date of the assertion in writing that the
dispute cannot be resolved to the date of payment.
(g) TAX SHARING AGREEMENTS. Any tax sharing agreements,
arrangements, policies, or guidelines, formal or informal, express or
implied, that may exist between Seller and a Bank (a "Tax Sharing
Agreement") shall terminate, and, except as described in this Section
3.9, any obligations to make payments under any Tax Sharing Agreement
shall be canceled as of the Effective Time.
(h) PREDECESSORS AND SUCCESSORS. For purposes of this Section 3.9,
all references to the Seller shall include any entity merged with and
into the Seller and all references to a Bank shall include any
successor of such entity and shall include all subsidiaries of such
Bank or successor entity.
3.10 RIGHT TO CURE. Seller and Buyer shall have the right, but not the
obligation, to cure a breach of any covenant as contained in this Article III.
Any such breach must be cured within 30 days from the date the curing party
learns of the breach or is advised in writing by the other party that a breach
has occurred. Breaches which cannot be cured within 30 days may nonetheless be
cured after the expiration of the 30-day period; PROVIDED, HOWEVER, that
reasonable efforts to cure the breach have been commenced within the 30-day
period, and PROVIDED further, that the breach has been cured prior to
December 2, 1996.
ARTICLE IV
CONDITIONS
4.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE SALE. The
respective obligation of each of Buyer and Seller to consummate the Sale is
subject to the fulfillment or written waiver by Buyer and Seller prior to the
Effective Time of each of the following conditions:
(a) GOVERNMENTAL AND REGULATORY CONSENTS. The FRB Approval and the
Wyoming Commissioner's approval shall have been obtained and shall be
in full force and effect and all related waiting periods shall have
expired; and all other material approvals and authorizations of,
filings and registrations with, and notifications to, all Governmental
Entities required for the consummation of the Sale and for the
prevention of any termination of any right, privilege, license or
agreement of Banks or their subsidiaries shall have been obtained or
made and shall be in full force and effect (unless such termination
would not have a Material Adverse Effect) and all waiting periods
required by law shall have expired; PROVIDED, HOWEVER, that none of
the preceding shall be deemed obtained or made if it shall be
conditioned or restricted in a manner that would result in a Material
Adverse Effect which is unduly burdensome or onerous. Without
limiting the foregoing, examples of burdensome or onerous conditions
include limitations on
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the time, manner or amount of payment of dividends by Buyer or a Buyer
subsidiary or requiring changes in the directorship of Buyer.
(b) THIRD PARTY CONSENTS. All consents or approvals of all Persons
(other than Governmental Entities) required for or in connection with
the execution, delivery and performance of this Agreement and the
consummation of the Sale shall have been obtained and shall be in full
force and effect, unless the failure to obtain any such consent or
approval would not have a Material Adverse Effect.
(c) LITIGATION. No United States or state court or other
Governmental Entity of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by this Agreement.
(d) EXECUTION OF LICENSE AGREEMENT. The parties have executed the
License Agreement more particularly described in Section 6.6.
(e) OCC APPROVAL. Subject to the provisions of 1.2(c), the OCC shall
have approved, to the extent necessary under governing law, the
Dividends.
4.2 CONDITIONS TO OBLIGATION OF SELLER. The obligation of Seller to
consummate the Sale is also subject to the fulfillment or written waiver by
Seller prior to the Effective Time of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer set forth in this Agreement shall be true and
correct (subject to Section 2.4) as of the date of this Agreement and
as of the Effective Time as though made on and as of the Effective
Time (except that representations and warranties that by their terms
speak as of the date of this Agreement or some other date shall be
true and correct as of such date), and Seller shall have received a
certificate, dated the date of the Effective Time, signed on behalf of
Buyer by an Executive Officer of Buyer to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF BUYER. Buyer shall have performed
in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time, including
but not limited to the tender and payment of the Purchase Price, and
Seller shall have received a certificate, dated the date of the
Effective Time, signed on behalf of Buyer by an Executive Officer of
Buyer to such effect.
(c) OPINION OF COUNSEL. Buyer shall have delivered to Seller an
opinion of counsel, dated the date of the Effective Time, in form and
substance reasonably satisfactory to the Seller, with respect to the
matters addressed in Section 2.2(a), (b), (c) and (d).
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4.3 CONDITIONS TO OBLIGATION OF BUYER. The obligation of Buyer to
consummate the sale is also subject to the fulfillment or written waiver by
Buyer prior to the Effective Time of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller set forth in this Agreement shall be true and
correct (subject to Section 2.4) as of the date of this Agreement and
as of the Effective Time as though made on and as of the Effective
Time (except that representations and warranties that by their terms
speak as of the date of this Agreement or some other date shall be
true and correct as of such date), and Buyer shall have received a
certificate, dated the date of the Effective Time, signed on behalf of
Seller by an Executive Officer of Seller to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF SELLER. Seller shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Effective
Time, and Buyer shall have received a certificate, dated the date of
the Effective Time, signed on behalf of Seller by an Executive Officer
of Seller to such effect.
(c) OPINION OF COUNSEL. Seller shall have delivered to Buyer an
opinion of outside counsel, dated the date of the Effective Time, in
form and substance reasonably satisfactory to Buyer, with respect to
the matter addressed in Sections 2.1(a), (b), (c), (d), (e), (f), (g)
and (m).
(d) RESIGNATION OF DIRECTORS. Banks' directors shall have resigned
or been removed effective as of the Effective Time without further
obligation or liability of Banks or Buyer.
(e) TERMINATION OF INTERCOMPANY AGREEMENTS. Seller shall have caused
the Banks to terminate the Intercompany Agreements without further
liability or obligation of the Banks or Buyer. All sums due to or
owed by the Banks pursuant to terminated Intercompany Agreements,
other than the Tax Sharing Agreements referred to in Section 3.9(g),
shall be settled prior to the Effective Time for the account and
benefit of the Seller.
(f) SERVICE CONTRACTS. Banks' rights or obligations under the
Service Contracts shall have been terminated or, with the consent of
Buyer and Seller, the Service Contracts shall have been assigned in
whole or in part to Banks or Buyer.
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ARTICLE V
TERMINATION, AMENDMENT AND WAIVER
5.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time:
(a) By the mutual written consent of Seller and Buyer;
(b) By either Seller or Buyer, if (i) the Effective Time shall not
have occurred on or prior to December 2, 1996, or (ii) any approval or
authorization of any Governmental Entity, the lack of which would
result in the failure to satisfy the closing condition set forth in
Section 4.1(a), shall have been denied by such Governmental Entity or
such Governmental Entity shall have requested the withdrawal of any
application therefor or indicated an intention to deny, or impose a
condition of a type referred to in the proviso to Section 4.1(a) with
respect to such approval or authorization; PROVIDED, HOWEVER, that the
right to terminate this Agreement under this Section 5.1(b) shall not
be available to any party whose failure to fulfill any obligation
under this Agreement shall have been the cause of, or shall have
resulted in, either the failure of the Effective Time to occur on or
prior to such date or such action by such Governmental Entity, as the
case may be;
(c) By Seller, if Buyer shall have breached any representation,
warranty, covenant or agreement contained herein that would result in
the failure to satisfy the closing condition set forth in Section
4.1(a) or 4.2(b) and such breach cannot be or has not been cured
within 30 days after the giving of a written notice to Buyer of such
breach; or
(d) By Buyer, if Seller shall have breached any representation,
warranty, covenant or agreement contained herein that would result in
the failure to satisfy the closing condition set forth in Section
4.3(a) or 4.3(b) and such breach cannot be or has not been cured
within 30 days after the giving of a written notice to Seller of such
breach.
5.2 EFFECT OF TERMINATION. In the event of termination of this Agreement
as provided in Section 5.1, this Agreement shall forthwith become void and there
shall be no liability on the part of any party hereto.
5.3 WAIVER. Subject to Section 9.10, at any time prior to the Effective
Time, either party hereto may (a) extend the time for the performance of any of
the obligations or other acts of the other party hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto or (c) waive compliance with any of the
agreements or conditions contained herein.
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ARTICLE VI
FRANCHISE AGREEMENTS AND NAME
6.1 CONTINUED USE OF FIRST INTERSTATE NAME, LOGO AND TRADEMARK.
(a) Effective as of the Effective Time, Seller shall grant Buyer an
exclusive and perpetual license to use the name "First Interstate
Bank" and the logo and trademark in the States of Montana, Wyoming,
North Dakota, South Dakota and Nebraska.
(b) Effective as of the fifth anniversary of the Effective Time,
Seller shall grant Buyer an exclusive and perpetual license to use the
name "First Interstate Bank" and the logo and trademark in the State
of Colorado.
(c) Effective as of the sixth anniversary of the Effective Time,
Seller shall grant Buyer an exclusive and perpetual license to use the
name "First Interstate Bank" and the logo and trademark in the States
of Idaho and Utah.
6.2 MUTUAL RELEASE OF ALL CLAIMS. As of the date of this Agreement, Buyer
and Seller, on behalf of themselves and their successors in interest,
transferees, and assigns, shall release one another from any and all claims,
causes of action or suit which each may have against the other and arising out
of or related to the Franchise Agreement dated as of September 26, 1983, as
amended from time to time (the "Franchise Agreement"). Except as provided in
Section 6.5, after the date of this Agreement, neither Buyer nor Seller shall
have any continuing obligation or responsibility to the other on account of the
Franchise Agreement, and the ongoing relationship between the parties shall be
governed by the provisions of this Agreement and the License Agreement described
in Section 6.3. This Section 6.2 shall survive termination of this Agreement.
6.3 SEPARATE AGREEMENT. Concurrent with the execution of this Agreement,
Seller and Buyer shall execute and deliver a licensing agreement in form and
substance reasonably satisfactory to each party and incorporating the terms of
this Article VI (the "License Agreement"). The License Agreement shall survive
termination of this Agreement.
6.4 NON-COMPETITION. Seller, on behalf of itself, its affiliates and
subsidiaries, shall refrain from conducting a depository institution business
through an office or offices located in the states of Montana or Wyoming for a
period of six years following the Effective Time. Subject to Section 3.6,
nothing contained in this Section 6.7 shall prohibit Seller from contacting or
soliciting potential customers in Montana and Wyoming in conjunction with a
nationwide or regional general solicitation which does not specifically target
Buyer's customers in Montana and Wyoming. Seller may conduct a depository
institution business through an office or offices in the States of Montana or
Wyoming before the expiration of six years following the Effective Time if a
presence in these states is the result of an acquisition of or merger with
another bank, bank holding company, savings association, savings bank, savings
association holding company, or other company or entity which has its principal
place of business outside the States of Montana
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and Wyoming and which owns and operates banks, branches, loan or deposit
production offices in these states.
6.5 RESOLUTION OF CERTAIN RELATIONSHIPS.
(a) The parties agree to resolve, extend or terminate, as the case
may be, the following relationships arising out of or related to the
Franchise Agreement in the following manner:
(i) Teller services: Terminate the service at a time mutually
agreed upon, but no later than August 1, 1996.
(ii) Automated Teller Machine gateway: Seller will continue to
provide ATM gateway services and ATM interchange on terms and
conditions applicable as of the date of this Termination Agreement.
Either Buyer or Seller may terminate the ATM gateway and ATM
interchange upon 180 days' written notice to the other party. Seller
may alter the terms and conditions of the service to reasonable new
terms and conditions upon 60 days' written notice to Buyer.
(iii) ACTION: either party may terminate the ACTION service
upon 60 days written notice to the other party.
(iv) Mortgage servicing: the Wyoming Bank currently provides
mortgage servicing. At any time following termination of this
Agreement, Seller will cause the Wyoming Bank to continue mortgage
servicing obligations on the terms and conditions currently in effect.
Either Seller or Buyer may terminate mortgage servicing upon 60 days
written notice to the other party.
(v) Merchant processing: Seller will continue to provide
merchant processing on terms and conditions in effect as of the date
of this Agreement. Either Seller or Buyer may terminate merchant
processing upon 120 days' written notice to the other party. Seller
may alter the terms and conditions of the service to reasonable new
terms and conditions upon 60 days' written notice to Buyer.
(vi) Purchase discounts: terminated as of the date of this
Agreement.
(vii) Technical support: terminated as of the date of this
Agreement.
(viii) Advertising: terminated as of the date of this Agreement.
(b) Franchise fees under the Franchise Agreement terminate effective
as of the date of this Agreement.
(c) The parties shall execute and deliver such instruments and
agreements necessary or convenient to evidence the service provisions
of this Section 6.5.
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ARTICLE VII
POST-EFFECTIVE TIME PROVISIONS
7.1 INDEMNIFICATION. From and after the Effective Time, subject to the
terms and conditions of this Agreement, Seller shall indemnify, defend and hold
harmless Buyer and each of its subsidiaries (including Banks following the
Effective Time) from and against any and all losses, claims, damages or
liabilities (collectively "Losses") that any of them actually suffer, incur or
sustain arising out of or attributable to (whether or not arising out of
third-party claims):
(a) Any breach of any representation or warranty made by Seller as
expressed in Sections 2.1(n) and 2.1(q);
(b) Any breach of any of Seller's covenants set forth in Section
3.1(b)(xiv) to the extent that such breach relates to Seller's
warranties set forth in Sections 2.1(n) and 2.1(q); or
(c) Fiduciary accounts or relationships transferred by Banks to
Seller, or a subsidiary or affiliate of Seller, at or prior to the
Effective Time.
7.2 LIMIT ON INDEMNIFICATION. Buyer's right of indemnification under this
Article VII is subject to the following conditions and limitations:
(a) Notice for any claim of indemnification must be given before the
third anniversary of the Effective Time;
(b) Indemnification shall only be available to the extent the Losses
of Buyer and its subsidiaries, collectively, exceed, in the aggregate
for Banks, $500,000.00.
7.3 NOTICE. Buyer shall promptly notify Seller of the discovery by it of,
or the assertion against it or any of its subsidiaries of, any claim or
potential liability for which indemnification is provided under this Agreement
or the commencement of any action or proceeding in respect of which indemnity
may be sought under this Agreement.
7.4 SETTLEMENT. Seller shall have the right to settle or compromise any
claim or liability subject to indemnification under this Agreement that is
susceptible to being settled or compromised through the payment of money,
provided that any such settlement shall require the consent of Buyer, which
consent shall not be unreasonably withheld; and provided, further, that the
consent of Buyer shall not be required if (i) the terms of the settlement
require only the payment of damages, and (ii) the indemnified party is not
otherwise materially and adversely affected by the terms of the settlement.
7.5 CONTROL DISBURSEMENT ACCOUNTS. Schedule 7.5 identifies certain
customer account relationships (the "Control Disbursement Accounts") currently
maintained by or through the
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Wyoming Bank. Buyer and Seller acknowledge and agree that Seller has caused or
will cause the Control Disbursement Accounts to be transferred to a Seller
affiliate on or after the date of this Agreement and prior to the first
anniversary of the Effective Time. Buyer shall cause Banks to cooperate with
Seller on and after the Effective Time in the management, operation and transfer
of the Control Disbursement Accounts as Seller may reasonably request. Seller
shall pay Buyer or the Wyoming Bank a reasonable service fee for Buyer's or
Wyoming Bank's management and servicing of the Control Disbursement Accounts.
Seller shall not be obligated to pay Buyer or Wyoming Bank any further
consideration in connection with the transfer of the Control Disbursement
Accounts.
7.6 DATA PROCESSING SERVICES. Seller shall make available to Buyer and
Banks data processing services for the business of the Banks for a period not to
exceed three calendar months following the Effective Time. Buyer or Banks shall
pay Seller for such data processing services on terms and at pricing consistent
with industry practices and comparable arm's-length data processing services
contracts.
7.7 TRANSFER OF BANK BOOKS, RECORDS AND INFORMATION. At or within a
reasonable time following the Effective Time, Seller shall transfer and deliver
to Buyer at the Banks' respective premises all Bank books, records and
information, however maintained or stored, which then is or later comes within
Seller's possession or control.
ARTICLE VIII
TRANSFERRED EMPLOYEES
8.1 TRANSFERRED EMPLOYEES.
(a) As soon as reasonably practicable and in any event within
fourteen (14) days of the date hereof, Seller shall deliver to Buyer a
true and complete list of all Employees by name, date of hire and
position, as of the date hereof, together with their most recent
performance evaluations, current salaries and other compensation
arrangements; provided that Seller shall not release a performance
evaluation without having first obtained the written consent of the
respective Employee. Seller shall promptly notify Buyer of the hiring
and identity of additional employees by Banks. Buyer shall
communicate to Seller those Employees whom Buyer wishes Banks to
retain at least 30 business days prior to the Effective Time. Those
Employees of Banks who remain employed by Banks as of the Effective
Time shall be referred to as "Transferred Employees." Subject to the
provisions of this Article VIII, Transferred Employees will be subject
to the employment terms, conditions and rules applicable to other
employees of Buyer. Nothing contained in this Agreement shall be
construed as an employment contract between Buyer and any Transferred
Employees.
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(b) To the extent permitted under Buyer's 401(k) plan, Seller and
Buyer shall cooperate in arranging for the transfer to Buyer's 401(k)
plan, as soon as practicable after the Effective Time and in a manner
that satisfies Sections 414(l) and 414(d)(6) of the Internal Revenue
Code, of those accounts held under Seller's 401(k) plan on behalf of
Transferred Employees.
(c) Seller shall have the right to continue to employ after the
Effective Time any employee who is not a Transferred Employee, or to
release any such employee in its sole discretion.
(d) Each Transferred Employee shall be provided continued employment
by Buyer, Banks or a subsidiary or affiliate of either subject to the
following terms and conditions:
(i) Except as specifically provided herein, Transferred
Employees shall be provided employee benefits that are no less
favorable in the aggregate than those provided to similarly
situated employees of Buyer. Buyer shall provide such
Transferred Employee with credit for the Transferred Employee's
period of service with Seller or Banks (including service
credited from First Interstate Bancorp towards the calculation of
eligibility for such purposes as vacation, severance and other
benefits and participation and vesting in Buyer's qualified
pension or profit sharing plan, as such plans may exist, but,
except as set forth in (iv) below and for vacation, not for
purpose of benefit accruals, including, without limitation,
funding of accrued pension or profit sharing plans for such
Transferred Employee with respect to any period prior to the
Effective Time).
(ii) Each Transferred Employee shall be eligible to participate
in the medical, dental or other welfare plans of Buyer, as such
plans may exist, effective as of the Effective Time and any
pre-existing conditions provisions of such plans shall be waived
with respect to such Transferred Employee, provided that if
Buyer's relevant health or disability insurance policy or plan
has a pre-existing condition limitation and an Employee's
condition is being excluded (as a pre-existing condition) under
Seller's plan as of the Effective Time, Buyer may treat such
condition as a pre-existing condition for the period such
condition would have been treated as a pre-existing condition
under Seller's plan under which such employee would have been
covered.
(iii) With respect to any Transferred Employee on a short-term
disability or temporary leave of absence, upon conclusion of his
or her short-term disability or temporary leave of absence,
subject to the terms and conditions of the Buyer's plans and
policies and applicable law, each Transferred Employee on such
leave shall receive the salary and vacation benefit in effect
when he or she went on leave, shall otherwise be treated
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as a Transferred Employee and, to the extent practicable, may be
offered by Buyer the same or a substantially equivalent position
to his or her position with Seller prior to leave.
(iv) Until April 1, 1998, each Transferred Employee shall be
eligible for benefits under the severance plans referred to in
Schedule 2.1(q). Buyer shall be responsible for all payments and
benefits due to Transferred Employees under the severance plans
referred to in Schedule 2.1(q) with the exception of payments and
benefits arising out of claims that Buyer's benefit plans,
programs, policies, and practices do not provide participants in
the severance plans with compensation and benefits at least
substantially similar in the aggregate to those provided under
the plans in effect with respect to the Transferred Employees on
April 1, 1996. Seller shall have the right, but not the
obligation, to compensate the Buyer for the cost of obtaining
comparable benefits so as to avoid the occurrence of a
"triggering event" under applicable severance plans. Buyer
agrees to cooperate with any action taken by Seller to identify
and implement any supplements to the compensation and benefits
with respect to the Transferred Employees. After April 1, 1998,
each Transferred Employee who is continuously employed by Buyer
as of the Effective Time, shall be eligible for benefits under
any severance or similar plans maintained by Buyer with credit
for the period of years of credited service with Seller towards
the calculation of benefits.
(e) Except as provided herein, Seller shall pay, discharge and be
responsible for (i) all salary and wages arising out of or relating to
the employment of the Employees before the Effective Time, and (ii)
any employee benefits (including, but not limited to, accrued
vacation) arising under Seller's employee benefit plans and employee
programs prior to the Effective Time (but not including any future
retiree medical benefits), including benefits with respect to claims
incurred prior to the Effective Time but reported after the Effective
Time, consistent and in accordance with Seller's past practices and
all applicable contractual, statutory, and regulatory requirements.
From and after the Effective Time, Buyer shall pay, discharge and be
responsible for all salary, wages and benefits arising out of or
relating to the employment of the Transferred Employees by Buyer on
and after the Effective Time, including all claims for welfare benefit
plans incurred on or after the Effective Time. Seller shall promptly
inform Buyer of any Employee who resigns prior to the Effective Time.
Claims are incurred as of the date of injury or illness
notwithstanding when the services are provided or disability benefits
paid.
(f) Buyer agrees to cooperate with any action taken by Seller to
identify and implement (at an agreed-upon cost to Buyer) supplements
to the compensation and benefits of the Transferred Employees to
reduce where possible Seller's obligations under the assumed severance
obligations referred to in Schedule 2.1(q)
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to provide Transferred Employees with compensation and benefits at
least substantially similar in the aggregate (in terms of benefit
levels and/or reward opportunities) to those provided for under
employee benefit plans, programs, policies and practices of Seller on
April 1, 1996 (the effective date of its merger with First Interstate
Bancorp).
ARTICLE IX
GENERAL PROVISIONS
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Article II hereof shall be deemed to have been relied
upon by the party to whom they are made and shall not survive the Closing.
9.2 INTERPRETATION OF CERTAIN TERMS. Unless otherwise specifically
provided in this Agreement or clearly required by the context, the following
defined terms shall be interpreted as follows:
(a) "Banks" shall be interpreted to mean the Banks collectively and
each individually, together with their respective subsidiaries.
(b) "Seller" shall be interpreted to mean the Seller, together with
its affiliates and subsidiaries, excluding, however the Banks.
(c) "Buyer" shall be interpreted to mean the Buyer together with its
affiliates and subsidiaries.
(d) "Executive Officer" shall be interpreted to include:
(i) For Seller, chief executive officer, president and chief
financial officer;
(ii) For Banks, chief executive officer, president and
executive vice presidents; and
(iii) For Buyer, chief executive officer, president and chief
financial officer.
9.3 EXPENSES. All costs and expenses, including, without limitation, fees
and disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred.
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9.4 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party to the other shall be in writing and shall be
deemed to have been duly given (i) on the date of delivery if delivered
personally or by telefacsimile upon confirmation of receipt, (ii) on the first
business day following the date of mailing if delivered by registered next-day
courier service, or (iii) on the third business day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices, requests, instructions or other documents to be
given hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice, request, instruction or document:
(a) If to Seller:
WELLS FARGO & COMPANY
420 Montgomery Street
San Francisco, California 94163
Facsimile: 415-975-7151
Attention: Guy Rounsaville, Jr.
with a copy to:
Mr. Stephen J. Smith
Schwabe, Williamson and Wyatt, P.C.
431 First Avenue West
Kalispell, Montana 59901
Facsimile: 406-752-5108
or
1121 Southwest Fifth Avenue
Suite 1600-1800
Portland, Oregon 97204
Facsimile: 503-796-2900
(b) If to Buyer:
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
401 N. 31st Street
Billings, Montana 59101-1200
Facsimile: 406-255-5069
Attention: Thomas W. Scott
Terrill R. Moore
9.5 HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
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9.6 SEVERABILITY. If any provision of this Agreement or the application
thereof to any Person or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to Persons or circumstances other
than those as to which it has been held invalid or unenforceable, shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination, the parties shall negotiate in
good faith in an effort to agree upon a suitable and equitable substitute
provision to effect the original intent of the parties.
9.7 ENTIRE AGREEMENT; INTERPRETATION. This Agreement, including the
Schedules, constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral. It is the intention of the parties that
this Agreement shall not be construed more strictly with regard to one party
than with regard to any other party.
9.8 ASSIGNMENT. Without the written consent of the other parties hereto,
this Agreement shall not be assigned by operation of law or otherwise (any
attempted assignment in contravention hereof being null and void).
9.9 NO THIRD-PARTY BENEFICIARIES. This Agreement is for the sole benefit
of the parties hereto and their permitted assigns and nothing herein, express or
implied, is intended to or shall confer upon any other person or entity any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
9.10 AMENDMENT; WAIVER. This Agreement may not be amended or modified
except by written agreement executed and delivered by duly authorized officers
of the parties. Waiver of any term or condition of this Agreement (including
any extension of time required for performance) shall only be effective if in
writing, executed and delivered by a duly authorized officer of the waiving
party, and shall not be construed as a waiver of any subsequent breach of the
same term or condition or as a waiver of any other term or condition of this
Agreement. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof.
9.11 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California applicable to agreements
made and to be performed wholly within such State.
9.12 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
9.13 TIME. Time is of the essence.
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IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be duly
executed as of the date first written above by their respective officers
thereunto duly authorized.
FIRST INTERSTATE BANCSYSTEM OF
MONTANA, INC.
By:
---------------------------------------------------
Thomas W. Scott
Chairman, President & Chief Executive Officer
WELLS FARGO & COMPANY
By:
---------------------------------------------------
Guy Rounsaville, Jr.
Executive Vice President, Chief Counsel
and Secretary
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ARTICLES OF AMENDMENT
1. The name of the corporation is: FIRST INTERSTATE BANCSYSTEM OF
MONTANA, INC. (the "Corporation").
2. The text of the amendment to the Corporation's Restated Articles of
Incorporation is as set forth on EXHIBIT A attached hereto and incorporated
herein by this reference (the "Amendment").
3. The Amendment was duly adopted by the Corporation's Board of Directors
on September 19, 1996 without shareholders' action, and shareholders' action was
not required pursuant to Section 35-1-619(4) of the Montana Business Corporation
Act.
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
By:__________________________________________
Name of Officer:_____________________________
Office held:_________________________________
<PAGE>
EXHIBIT A
CERTIFICATE OF DESIGNATION OF
PREFERENCE AND RIGHTS OF NONCUMULATIVE PERPETUAL
PREFERRED STOCK OF
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
A. The Third Series of Preferred Stock to be issued by the Corporation shall
be designated "Noncumulative Perpetual Preferred Stock," (the "Noncumulative
Perpetual Preferred Stock") and the number of shares constituting such
Noncumulative Perpetual Preferred Stock shall be Twenty Thousand (20,000)
shares, no par value.
B. The rights, preferences, privileges and restrictions of, and other matters
relating to, the Noncumulative Perpetual Preferred Stock are as follows:
1. CERTAIN DEFINITIONS. Unless the context otherwise requires, the terms
defined in this Section 1 shall have, for all purposes of this resolution, the
meanings herein specified:
"Common Stock" shall mean all shares now or hereafter authorized of any class of
common stock of the Corporation and any other stock of the Corporation,
howsoever designated, authorized after the Issue Date, which has the right
(subject always to the prior rights of any class or series of Preferred Stock)
to participate in the distribution of the assets and earnings of the Corporation
without limit as to per share amount.
"Issue Date" shall mean the date that shares of Noncumulative Perpetual
Preferred Stock are issued by the Corporation, which shall be a single date.
"Junior Stock" shall mean, for purposes of Section 2 below, the Common Stock and
any other class or series of stock of the Corporation issued after the Issue
Date not entitled to receive any dividends unless all dividends required to have
been paid or declared and set apart for payment on the Noncumulative Perpetual
Preferred Stock shall have been so paid or declared and set apart for payment
and, shall mean, for purposes of Section 2 below, any class or series of stock
of the Corporation issued after the Issue Date not entitled to receive any
assets upon the liquidation, dissolution, or winding up of the affairs of the
Corporation until the Noncumulative Perpetual Preferred Stock shall have
received the entire amount to which such stock is entitled upon such
liquidation, dissolution or winding up.
"Noncumulative Perpetual Preferred Stock" shall have the meaning set forth in
paragraph A, above.
"Parity Stock" shall mean, for purposes of Section 4 below, any other class or
series of stock of the Corporation entitled to
<PAGE>
receive payment of dividends on a parity with the Noncumulative Perpetual
Preferred Stock and, shall mean, for purposes of Section 2 below, any other
class or series of stock of the Corporation entitled to receive assets upon the
liquidation, dissolution or winding up of the affairs of the Corporation on a
parity with the Noncumulative Perpetual Preferred Stock.
"Preferred Stock" shall mean the Noncumulative Perpetual Preferred Stock and the
Parity Stock.
"Senior Stock" shall mean any class or series of stock of the Corporation issued
after the Issue Date entitled to receive payment of dividends and assets upon
the liquidation, winding up or dissolution of the Corporation in preference and
priority to the Preferred Stock.
2. LIQUIDATION RIGHTS. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
assets of the Corporation available for distribution to stockholders after the
payment or provision for the payment of all claims against the Corporation has
been made in accordance with applicable law ("Net Assets"), shall be distributed
as follows: the holders of the Senior Stock shall first be entitled to receive
an amount equal to their liquidation preference, plus any declared and unpaid
dividends; the holders of the Noncumulative Perpetual Preferred Stock shall be
entitled to receive $1,000 per share, plus any declared but unpaid dividends and
the holders of the Parity Stock shall concurrently be entitled to receive their
respective liquidation preferences, plus any declared but unpaid dividends;
thereafter, the holders of the Junior Stock (other than the Common Stock) shall
then be entitled to receive an amount equal to their respective liquidation
preferences, plus any declared but unpaid dividends; and finally, the holders of
the Common Stock shall then be entitled to receive all remaining Net Assets
ratably in accordance with their liquidation preferences.
If the assets or surplus funds to be distributed to the holders of the
Noncumulative Perpetual Preferred Stock are insufficient to permit the payment
to such holders and to the holders of any Parity Stock of their full
preferential amount after paying the holders of the Senior Stock, the assets and
surplus funds legally available for distribution shall be distributed ratably
among the holders of the Noncumulative Perpetual Preferred Stock and the holders
of any other Parity Stock in proportion to the full preferential amount each
such holder is otherwise entitled to receive.
The Corporation shall mail written notice of such liquidation, dissolution
or winding up, not less than 30 days prior to the payment date stated therein,
to each record holder of Noncumulative Perpetual Preferred Stock.
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<PAGE>
Neither the merger nor the consolidation of the Corporation into or with
any other entity or entities, nor a sale, transfer, lease or exchange (for cash,
securities or other consideration of all or part of the assets of the
Corporation shall be deemed to be a liquidation, dissolution or winding up of
the Corporation, unless such sale, transfer, lease or exchange shall be in
connection with and intended to be a plan of complete liquidation, dissolution
or winding up of the Corporation).
3. VOTING RIGHTS. Except as otherwise required by law, the holders of
Noncumulative Perpetual Preferred Stock shall be entitled to notice of any
shareholders' meeting and to vote upon the following matters submitted to
shareholders for a vote, on the following basis:
a. Holders of Noncumulative Perpetual Preferred Stock shall have one
vote per share on the matters set forth in Section 3(b).
b. Except as otherwise required by law, the holders of the
Noncumulative Perpetual Preferred Stock shall be entitled to vote on the
issuance of any Senior Stock and any amendment to the Articles of Incorporation
or this Certificate of Designation that would adversely affect or otherwise
impair the rights or relative priority of the holders of the Noncumulative
Perpetual Preferred Stock.
c. The Corporation shall not issue any Senior Stock without the
approval of holders of at least two-thirds of the outstanding Noncumulative
Perpetual Preferred Stock.
d. The Corporation shall not, without first obtaining the
affirmative vote or written consent of at least 66 2/3% of such outstanding
shares of Noncumulative Perpetual Preferred Stock, amend, alter or repeal (by
merger or otherwise) this Certificate or the Articles of Incorporation of the
Corporation, if such actions would result in any adverse change in the rights,
preferences, or privileges of the Noncumulative Perpetual Preferred Stock, or
the restrictions provided for the benefit of, the Noncumulative Perpetual
Preferred Stock.
e. So long as any Noncumulative Perpetual Preferred Stock remains
outstanding, if the Corporation fails to pay six full quarterly dividends to the
holders of Noncumulative Perpetual Preferred Stock as provided in Section 4
hereof, and until the Corporation pays full dividends for four consecutive
quarters, the holders of the Preferred Stock as a class shall have the right to
select two representatives to be elected to the Corporation's board of
directors, and the Corporation shall nominate such representatives for election
to the board of directors. The Corporation shall use its best efforts to cause
such representatives to be elected to the board of directors and
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<PAGE>
shall not take any action which would diminish the prospects of such
representatives being elected to the Corporation's board of directors.
4. DIVIDEND RIGHTS. (a) The holders of outstanding Noncumulative
Perpetual Preferred Stock shall be entitled to receive in any fiscal year, when
and if declared by the Board of Directors, out of any assets at the time legally
available therefor, dividends in cash at the rate of Eighty-Five Dollars and
Thirty Cents ($85.30) per share of Noncumulative Perpetual Preferred Stock,
accruing on a daily basis, per annum, from and including the Issue Date, to but
not including the seventh anniversary of the Issue Date. From and after the
seventh anniversary of the Issue Date, the holders of outstanding Noncumulative
Perpetual Preferred Stock shall be entitled to receive in any fiscal year, when
and if declared by the Board of Directors, out of any assets at the time legally
available therefor, dividends in cash at a variable rate equal to Two Hundred
and Fifty (250) basis points over the yield, on the seventh anniversary of the
Issue Date, on U.S. Treasury Bills having a maturity of (i) 30 days, (ii) 10
years, or (iii) 30 years, whichever of (i), (ii), or (iii) has a higher yield as
of 10:00 a.m. Mountain Time on such date, payable in preference and priority to
any dividend on any shares of any Junior Stock and payable in preference and
priority on parity with any dividend on any shares of Parity Stock.
Notwithstanding the foregoing, dividends on the Noncumulative Perpetual
Preferred Stock shall not be cumulative. In the event that such dividends
accrue, they shall be payable in arrears, when declared by the Board of
Directors, on March 31, June 30, September 30 and December 31 of the year in
which such dividends are declared. Each such dividend shall be paid to the
holders of the record of the Noncumulative Perpetual Preferred Stock as their
names appear on the share register of the Corporation on the corresponding
record date.
If one or more amendments to the Internal Revenue Code of 1986, as amended
(the "Code"), are enacted that change the percentage of the dividends received
deduction (currently 70%) as specified in Section 243(a)(1) of the Code or any
successor provision (the "Dividends Received Percentage"), the amount of each
dividend payable per share of the Noncumulative Perpetual Preferred Stock for
dividend payments made on or after the date of enactment of such change shall be
adjusted by multiplying the amount of the dividend payable determined as
described above (before adjustment) by a factor, which shall be the number
determined in accordance with the following formula (the "DRD Formula"), and
rounding the result to the nearest cent:
1-.35 (1-.70)
--------------
1-.35 (1-DRP)
5
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For the purposes of the DRD Formula, "DRP" means the Dividends Received
Percentage applicable to the dividend in question. No amendment to the Code,
other than a change in the percentage of the dividends received deduction set
forth in Section 243(a)(1) of the Code or any successor provision, will give
rise to an adjustment. Notwithstanding the foregoing provisions, in the event
that, with respect to any such amendment, the Corporation shall receive either
an unqualified opinion of nationally recognized independent tax counsel selected
by the Corporation or a private letter ruling or similar form of authorization
from the Internal Revenue Service to the effect that such an amendment would not
apply to dividends payable on the Noncumulative Perpetual Preferred Stock, then
any such amendment shall not result in the adjustment provided for pursuant to
the DRD Formula. The opinion referenced in the previous sentence shall be based
upon a specific exception in the legislation amending the DRP or upon a
published pronouncement of the Internal Revenue Service addressing such
legislation. Unless the context otherwise requires, references to dividends in
this Certificate of Designation shall mean dividends as adjusted by the DRD
Formula. The Corporation's calculation of the dividends payable as so adjusted
and as certified accurate as to calculation and reasonable as to method by the
independent certified public accountants then regularly engaged by the
Corporation, shall be final and not subject to review.
If any amendment to the Code which reduces the Dividends Received
Percentage is enacted after a dividend has been declared, the amount of such
dividend payable on the payment date for such dividend ("Dividend Payment Date")
will not be increased; but instead, an amount, equal to the excess of (x) the
product of the dividends paid by the Corporation on such Dividend Payment Date
and the DRD Formula (where the DRP used in the DRD Formula would be equal to the
reduced Dividends Received Percentage) and (y) the dividends paid by the
Corporation on such Dividend Payment Date, will be payable to holders of record
on the next succeeding Dividend Payment Date in addition to any other amounts
payable on such date.
In addition, if an amendment to the Code is enacted that reduces the
Dividends Received Percentage and such reduction retroactively applies to a
Dividend Payment Date as to which the Corporation previously paid dividends on
the Noncumulative Perpetual Preferred Stock (each an "Affected Dividend Payment
Date"), the Corporation will pay (if declared) additional dividends (the
"Additional Dividends") on the next succeeding Dividend Payment Date (or if such
amendment is enacted after the dividend payable on such Dividend Payment Date
has been declared, on the second succeeding Dividend Payment Date following the
date of enactment) to holders of record on such succeeding Dividend Payment Date
in an amount equal to the excess of (x) the product of the dividends paid by the
Corporation on each Affected
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<PAGE>
Dividend Payment Date and the DRD Formula (where the DRP used in the DRD
Formula would be equal to the Dividends Received Percentage applied to each
Affected Dividend Payment Date) and (y) the dividends paid by the Corporation on
each Affected Dividend Payment Date.
In the event that the amount of dividend payable per share of the
Noncumulative Perpetual Preferred Stock shall be adjusted pursuant to the DRD
Formula and/or Additional Dividends are to be paid, the Corporation will cause
notice of each such adjustment and, if applicable, any Additional Dividends, to
be sent to the holders of the Noncumulative Perpetual Preferred Stock.
5. REDEMPTION. The Noncumulative Perpetual Preferred Stock shall not be
redeemable by the Corporation prior to the seventh anniversary of the Issue
Date. The Corporation may, at its option, redeem all or any part of the
Noncumulative Perpetual Preferred Stock at any time on or after the seventh
anniversary of the Issue Date, subject to the prior written approval of the
Federal Reserve Bank of Minneapolis, at a price of $1,000 per share, plus
accrued but unpaid dividends to the date fixed for redemption, including any
changes in dividends payable due to changes in the Dividends Received Percentage
and Additional Dividends, if any. The election of the Corporation to redeem any
shares of Noncumulative Perpetual Preferred Stock shall be evidenced by or
pursuant to a resolution of the Corporation's Board of Directors. In case of
any redemption by the Corporation of the Noncumulative Perpetual Preferred
Stock, the Corporation shall, at least 60 days prior to the redemption date
fixed by the Corporation, notify the holders of the Noncumulative Perpetual
Preferred Stock of such redemption date and of the number of shares to be
redeemed. If less than all of the shares are redeemed, the number of shares
redeemed from each holder shall be in the same proportion as the number of
shares owned by such holder bears to the number of shares outstanding. Upon
surrender of any shares for redemption in accordance with such notice, the
Corporation shall pay the redemption price therefor. The Noncumulative
Perpetual Preferred Stock shall not be entitled to a sinking fund to be applied
the redemption of the Noncumulative Perpetual Preferred Stock.
Notwithstanding the preceding paragraph, if the Dividends Received
Percentage is equal to or less than 35% and, as a result, the amount of
dividends on the Noncumulative Perpetual Preferred Stock payable on any Dividend
Payment Date will be or is adjusted upwards as described in Section 4 hereof,
the Corporation, at its option, may redeem all, but not less than all, of the
outstanding shares of the Noncumulative Perpetual Preferred Stock, provided,
that within 60 days of the date on which an amendment to the Code is enacted
which reduces the Dividends Received Percentage to 35% or less, the Corporation
sends notice to holders of the Noncumulative Perpetual Preferred
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<PAGE>
Stock of such redemption. Any redemption of the Noncumulative
Perpetual Preferred Stock pursuant to this Section will take place on the
date specified in the notice, which shall not be less than 30 nor more than
60 days from the date such notice is sent to holders of the Noncumulative
Perpetual Preferred Stock. Any redemption of the Noncumulative Perpetual
Preferred Stock in accordance with this Section shall be on notice as
aforesaid at a price of $1,000 per share, plus accrued but unpaid dividends
to the date fixed for redemption., including any changes in dividends
payable due to changes in the Dividends Received Percentage and Additional
Dividends, if any. Any such redemption shall be subject to the prior
written approval of the Federal Reserve Bank of Minneapolis.
6. REGISTRATION OF TRANSFER. The Corporation shall keep at its principal
office a register for the registration of Noncumulative Perpetual Preferred
Stock. Upon the surrender of any certificate representing Noncumulative
Perpetual Preferred Stock at such place, the Corporation shall, at the request
of the record holder of such certificate, execute and deliver (at the
Corporation's expense) a new certificate or certificates in exchange therefor
representing in the aggregate the number of shares represented by the
surrendered certificate. Each such new certificate shall be registered in such
name and shall represent such number of share as is requested by the holder of
the surrendered certificate and shall be substantially identical in form to the
surrendered certificate, and dividends, to the extent they have accrued, shall
accrue on the Noncumulative Perpetual Preferred Stock represented by such new
certificate from the date to which dividends have been fully paid on such
Noncumulative Perpetual Preferred Stock represented by the surrendered
certificate.
7. REPLACEMENT. Upon receipt of evidence reasonably satisfactory to the
Corporation of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing shares of any class of Noncumulative Perpetual
Preferred Stock, and in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to the Corporation (provided that
if the holder is a financial institution or other institutional investor its own
agreement shall be satisfactory), or, in the case of any such mutilation upon
surrender of such certificate, the Corporation shall (at its expense) execute
and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of such class represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate, and dividends shall accrue on the
Noncumulative Perpetual Preferred Stock represented by such new certificate from
the date to which dividends have been fully paid on such lost, stolen, destroyed
or mutilated certificate.
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<PAGE>
8. NONCUMULATIVE PERPETUAL PREFERRED STOCK NOT CONVERTIBLE. Shares of
the Noncumulative Perpetual Preferred Stock shall not be convertible into shares
of any other class or classes or any other series of the Preferred Stock.
9. AMENDMENT AND WAIVER. No amendment, modification or waiver shall be
binding or effective with respect to any provisions hereof without the prior
written consent of the holders of at least a majority of the Noncumulative
Perpetual Preferred Stock outstanding at the time such action is taken.
10. NOTICES. All notices referred to herein shall be in writing and shall
be deemed to have been duly given (a) on the date of delivery if delivered
personally or by facsimile upon confirmation of receipt, (b) on the first
business day following the date of mailing if delivered by next-day courier
service, or (c) on the third business day following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage
prepaid. All notices to be given hereunder shall be delivered as follows, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice in accordance with this Section 10: (i) to the
Corporation, at its principal executive offices, and (ii) to any stockholder, at
such holder's address as it appears in the stock records of the Corporation.
11. HEADINGS OF SUBDIVISIONS. The headings of the various subdivisions
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
12. SEVERABILITY. If any right, preference or limitation of the
Noncumulative Perpetual Preferred Stock set forth in this resolution (as such
resolution may be amended from time to time is invalid, unlawful or incapable of
being enforced by reason of any rule of law or public policy, all other rights,
preferences and limitations set forth in this resolution (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
reference or limitation shall, nevertheless, remain in full force and effect,
and no right, preference or limitation herein set forth shall be deemed
dependent upon any other such right, preference or limitation unless so
expressed herein.
9
<PAGE>
ARTICLES OF AMENDMENT
1. The name of the corporation is: FIRST INTERSTATE BANCSYSTEM OF
MONTANA, INC.
2. The text of the amendment to the Restated Articles of Incorporation of
First Interstate BancSystem of Montana, Inc. is as set forth on EXHIBIT A
attached hereto and incorporated herein by this reference (the "Amendment").
3. The Amendment was duly adopted by the shareholders of First Interstate
BancSystem of Montana, Inc. (the "Corporation") on September 19, 1996.
4. There are 1,981,489 shares of the Corporation's common stock
outstanding, and there are no outstanding shares of the Corporation's preferred
stock. The shareholders owning the outstanding common stock of the Corporation
constitute one voting group and such voting group is the only voting group
entitled to vote on the Amendment. The number of votes entitled to be cast by
such voting group is 1,981,489 votes, and 1,502,538 votes of such voting group
were indisputably represented at the meeting of shareholders on September 19,
1996. The total number of votes cast for the Amendment by such voting group was
1,502,522 votes, and the total number of votes cast against the Amendment by
such voting group was 16 votes.
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
By:__________________________________________
Name of Officer:_____________________________
Office held:_________________________________
<PAGE>
EXHIBIT A
TO
ARTICLES OF AMENDMENT
Article IV, Subsection A., Subparagraphs (2) and (3) of the Restated Articles of
Incorporation of FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC. are amended in
their entirety to read as follows:
(2) Issuance in Series. The Preferred Shares may be issued from time
to time in one or more series, each of which series shall have such
designation and such relative rights, voting power, preferences and
restrictions as are hereinafter determined and stated by the Board of
Directors in the resolution or resolutions authorizing the creation of
shares of such series.
All Preferred Shares shall be of equal rank and shall be identical,
except in respect of the particulars that may be determined by the Board of
Directors as hereinafter provided, and, if the Board of Directors in the
resolution or resolutions authorizing the creation of shares of a series of
Preferred Shares states that dividends on such series shall be cumulative,
then each share of such series shall be identical in all respects to the
dates from which dividends thereon shall be cumulative. Preferred Shares
shall be issued only as fully paid and nonassessable shares.
Authority is hereby expressly granted to the Board of Directors,
subject to the provisions of this Article IV, to authorize the issuance of
Preferred Shares in one or more series, and to determine and state, by the
resolution or resolutions authorizing the creation of each series:
(a) The designation of the series and the number of shares which
shall constitute such series, which number may be altered from time to
time by like action of the Board of Directors in respect of shares
then unissued;
(b) Whether dividends on shares of such series shall be cumulative or
noncumulative;
(c) Unless such resolutions state that dividends on such series shall
be noncumulative, the annual rate of dividends payable on the shares
of such series;
(d) The price or prices per share at which the shares of such series
shall be redeemable;
(e) The amount payable on shares of such series in the event of any
dissolution, liquidation or winding up of the affairs of the
Corporation;
<PAGE>
(f) Whether or not the shares of such series shall be entitled to the
benefit of a sinking fund to be applied to the redemption of such
series and, if so entitled, the amount of such fund and the manner of
its application;
(g) Whether or not the shares of such series shall be convertible
into shares of any other class or classes or any other series of the
same class of the Corporation and, if made so convertible, the
conversion price or prices and the manner of making such conversion;
and
(h) Whether or not the shares of the series shall have voting rights,
in addition to the voting rights provided by law, and, if so, the
terms of such voting rights.
(3) Dividends. The payment and declaration of any dividends on
Common Shares shall be subject to any and all restrictions pertaining
thereto contained in the resolution or resolutions adopted by the Board of
Directors authorizing the creation of any series of the Preferred Shares
for which dividends are noncumulative, and, before any dividends on Common
Shares shall be paid or declared and set apart for payment (other than
dividends payable in Common Shares of the corporation), the holders of the
Preferred Shares of each series for which dividends thereon are cumulative
shall be entitled to receive, out of any funds legally available for such
purpose, cash dividends at the annual rate for such series theretofore
fixed by the Board of Directors as hereinbefore provided, and no more,
payable quarterly on such dates as may be fixed in the resolution or
resolutions adopted by the Board of Directors authorizing the creation of
such series. Unless the resolution or resolutions of the Board of
Directors authorizing the creation of a series of Preferred Shares specify
that dividends on such series shall be noncumulative, dividends on each
series of Preferred Shares shall be cumulative in the case of shares of
each particular series:
(a) If issued prior to the record date for the first dividend on
shares of such series, then from and including the date fixed for such
purpose by the Board of Directors in the resolution or resolutions
creating such series;
(b) If issued during the period commencing immediately after the
record date for a dividend on shares of such series and terminating at
the close of the payment date for such dividend, then from and
including such last mentioned dividend payment date;
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(c) Otherwise from and including the quarterly dividend payment date
next preceding the date of issue on such shares.
No dividend shall be paid or declared and set apart for payment upon any
Preferred Shares of any series for any series for any quarterly dividend
period unless at the same time a like proportionate dividend for the same
or comparable quarterly period, ratable in proportion to the annual
dividend rates fixed therefor, shall be paid or declared and set apart for
payment upon all Preferred Shares of all series then issued and outstanding
for which dividends thereon are cumulative.
In no event shall any dividend be paid or declared, nor shall any
distribution be made, on the Common Shares of the Corporation, nor shall
any Common Shares be purchased, redeemed or otherwise acquired by the
Corporation for value, nor shall any monies be paid to or set aside or made
available for a purchase fund or sinking fund for the purchase or
redemption of any Common Shares of the Corporation unless there has been
compliance with all restrictions and conditions thereon contained in the
resolution or resolutions adopted by the Board of Directors authorizing the
creation of any series of the Preferred Shares for which dividends are
noncumulative and unless all dividends on the Preferred Shares of all
series for which dividends thereon are cumulative for all past quarterly
dividend periods and for the then current quarterly dividend period shall
have been paid or declared and a sum sufficient for the payment thereof set
apart for payment, and unless all accrued sinking fund obligations, if any,
of the Corporation shall have been satisfied in respect of each series for
which a sinking fund has been provided for in the resolution or resolutions
authorizing the creation of such series.
In no event shall any Preferred Shares be purchased, redeemed or
otherwise acquired by the Corporation for value, nor shall any monies be
paid or set aside as a sinking fund for the benefit of any series of
Preferred Shares unless all dividends on the Preferred Shares of all series
for which dividends thereon are cumulative for all past quarterly dividend
periods and for the then current quarterly dividend period shall have been
paid or declared and a sum sufficient for the payment thereof set apart for
payment, and all dividends declared by the Board of Directors on the
Preferred Shares of all series for which dividends thereon are
noncumulative for all past quarterly dividend periods and for the then
current quarterly dividend period shall have been paid, except in the event
all of the Preferred Shares shall be called for redemption.
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<PAGE>
Subject to the provisions of this Article IV and not otherwise,
dividends may be declared by the Board of Directors and paid from time to
time, out of any funds legally available therefor, upon the then
outstanding Common Shares of the Corporation, and the holders of the
Preferred Shares shall not be entitled to participate in any such
dividends.
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<PAGE>
PREFERRED STOCK PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 26, 1996
BETWEEN
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
AND
FIRST SECURITY CORPORATION
$20,000,000 NONCUMULATIVE
PERPETUAL PREFERRED STOCK
<PAGE>
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
$20,000,000 NONCUMULATIVE
PERPETUAL PREFERRED STOCK
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is made as
of September 26, 1996, between FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC., a
Montana corporation (the "Company"), and the Persons listed on the Schedule of
Purchasers attached (collectively referred to as the "Purchasers" and
individually as a "Purchaser"). Except as otherwise indicated, capitalized
terms are defined in Section 7.
R E C I T A L S
A. The Company has entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement") dated as of May 24, 1996 by and among the Company and Wells
Fargo & Company ("Wells Fargo") pursuant to which Wells Fargo has agreed to
sell, and the Company has agreed to purchase, all of the issued and outstanding
capital stock of First Interstate Bank of Montana, N.A. (the "Montana Bank") and
First Interstate Bank of Wyoming, N.A. (the "Wyoming Bank") (the Montana Bank
and the Wyoming Bank are collectively referred to as the "Banks").
B. In order to finance a portion of the purchase price to be paid by the
Company for the acquisition of all of the issued and outstanding capital stock
of the Banks (the "Acquisition"), the Company has agreed to sell, and the
Purchasers have agreed to purchase, the Company's Noncumulative Perpetual
Preferred Stock, on the terms and conditions set forth herein.
AUTHORIZATION.
AUTHORIZATION OF THE PREFERRED STOCK. The Company shall authorize
the issuance and sale to the Purchasers of 20,000 shares of its Noncumulative
Perpetual Preferred Stock, no par value (the "Preferred Stock"), having the
rights and preferences set forth in the Certificate of Designation attached as
EXHIBIT A (the Certificate of Designation").
PURCHASE AND SALE OF THE PREFERRED STOCK. At the Closing the
Company shall sell to each Purchaser and, subject to the terms and conditions
set forth herein, each Purchaser shall purchase from the Company the number of
shares of Preferred Stock set forth opposite such Purchaser's name on the
Schedule of Purchasers at a price of $1,000 per share. The sale of Preferred
Stock to each Purchaser shall constitute a separate sale hereunder.
THE CLOSING. The closing of the separate purchases and sales of
the Preferred Stock (the "Closing") shall take place at the offices of Holland &
Hart, 401 North 31st Street, Suite 1500, Billings, Montana at 10:00 a.m. after
the date on which the conditions set forth in Section 2 of this Agreement have
been met and simultaneously with the closing of the transactions contemplated by
the Stock Purchase Agreement, or at such other place or on such other date as
may be mutually agreeable to the Company and each Purchaser (the "Closing
Date"), but in no event later than December 31, 1996 (the "Outside Closing
Date"). At the Closing, the Company shall deliver to each Purchaser stock
certificates evidencing the Preferred Stock to be
<PAGE>
purchased by each Purchaser, registered in such Purchaser's name, upon payment
of the purchase price therefor by a cashier's or certified check, or by wire
transfer of immediately available funds to the Company's account in accordance
with the following wire transfer instructions, in the amount set forth opposite
such Purchaser's name on the Schedule of Purchasers:
ABA No. 092901683
First Interstate Bank of Commerce, Billings, MT
Acct. No. 1101357554
Account Name: First Interstate BancSystem of Montana, Inc.
2. CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE.
2.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
PURCHASE AND SALE OF THE PREFERRED STOCK. The respective obligation of the
Company and each Purchaser to consummate the purchase and sale of the Preferred
Stock is subject to the fulfillment, or written waiver by the Company and each
Purchaser, of each of the following conditions:
2.1.1 GOVERNMENTAL AND REGULATORY CONSENTS. The approval
of (i) the Federal Reserve Board ("FRB") of the issuance of the Preferred Stock
on the terms and conditions set forth herein, (ii) the FRB of the inclusion of
the Preferred Stock in the Company's Tier 1 Capital, and (iii) the FRB and the
Wyoming state banking commissioner of the Acquisition, shall have been obtained
and shall be in full force and effect and all related waiting periods, if any,
shall have expired.
2.1.2 THIRD PARTY CONSENTS. All consents or approvals
of all Persons (other than those set forth in Section 2.1.1) required for or in
connection with the execution, delivery and performance of this Agreement and
the consummation of the purchase and sale of the Preferred Stock shall have been
obtained and shall be in full force and effect, unless the failure to obtain any
such consent or approval would not have a Material Adverse Effect.
2.1.3 PURCHASE PERMITTED BY APPLICABLE LAWS. No United
States or state court or other Governmental Entity of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and prohibits consummation of the
transactions contemplated by this Agreement.
____________________2.1.4 CONSUMMATION OF THE ACQUISITION. All conditions to
the Acquisition shall have been satisfied or waived on or prior to December 31,
1996.
2.2. CONDITIONS TO OBLIGATION OF EACH PURCHASER. The
obligation of each Purchaser to consummate the purchase of the Preferred Stock
is also subject to the fulfillment, or written waiver by such Purchaser, of each
of the following conditions:
2.2.1 REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company set forth in Section 3 of this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except that representations and warranties that by their terms
speak as of the date of this Agreement or some other date shall be true and
correct in all material respects
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as of such date), and the Purchasers shall have received a certificate, dated as
of the Closing Date, signed on behalf of the Company by an Executive Officer of
the Company to such effect.
2.2.2 CERTIFICATE OF DESIGNATION. The Company shall have
duly adopted, executed and filed with the Secretary of State of Montana Articles
of Amendment establishing the terms and the relative rights and preferences of
the Preferred Stock as set forth in the Certificate of Designation ("Articles of
Amendment"). The Articles of Amendment shall be in full force and effect on the
Closing Date and shall not have been amended or modified.
2.2.3 BLUE SKY CLEARANCES. The Company shall have made
all filings under applicable state securities laws necessary to consummate the
issuance of the Preferred Stock pursuant to this Agreement in compliance with
such laws.
2.2.4 CLOSING DOCUMENTS. The Company shall have
delivered to each Purchaser all of the following documents:
(i) an Officer's Certificate, dated the date of
the Closing, stating that the conditions specified in Sections 2.1 and
2.2.2 through 2.2.3, inclusive, have been fully satisfied;
(ii) certified copies of the resolutions duly
adopted by the Company's board of directors authorizing the execution,
delivery and performance of this Agreement and each of the other
agreements contemplated hereby, the filing of the Articles of
Amendment, the issuance and sale of the Preferred Stock, and the
consummation of all other transactions contemplated by this Agreement;
(iii) certified copies of the Articles of
Incorporation, the Articles of Amendment and the Company's bylaws,
each as in effect at the Closing;
(iv) copies of all third party and governmental
consents, approvals and filings required in connection with the
consummation of the transactions hereunder.
2.2.5 PROCEEDINGS. All corporate and other proceedings
taken or required to be taken in connection with the transactions contemplated
hereby to be consummated at or prior to the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to each
Purchaser.
2.2.6 EXPENSES. The Company shall have reimbursed the
Purchasers for the fees and expenses of their special counsel as provided in
Section 8.5.
2.2.7 COMPLIANCE WITH APPLICABLE LAWS. The purchase of
Preferred Stock by each Purchaser shall not be prohibited by any applicable law
or governmental regulation, shall not subject any Purchaser to any penalty,
liability or, in such Purchaser's reasonable judgment, other onerous condition
under or pursuant to any applicable law or governmental regulation, and shall be
permitted by laws and regulations of the jurisdictions to
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which such Purchaser is subject.
2.2.8 DELIVERY OF STOCK CERTIFICATES. The Company shall
have delivered to each Purchaser stock certificates for the number of shares of
Preferred Stock set forth opposite such Purchaser's name on the Schedule of
Purchasers.
2.2.9 NO MATERIAL ADVERSE CHANGE. Between the date of
this Agreement and the Closing, there shall not have been any material adverse
change in the business or financial condition of the Company.
2.2.10 PERFORMANCE OF OBLIGATIONS. The Company shall
have performed all other obligations required by this Agreement to be performed
by it prior to or at the Closing.
2.3. CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation
of the Company to consummate the sale of the Preferred Stock is also subject to
the fulfillment, or written waiver by the Company, of the following conditions:
2.3.1 PROOF EACH PURCHASER IS AN INSTITUTIONAL INVESTOR.
Each Purchaser shall have provided the Company with any documentation reasonably
requested by the Company establishing that such Purchaser is an Institutional
Investor.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a material
inducement to the Purchasers to enter into this Agreement and purchase the
Preferred Stock, the Company represents, warrants and covenants that:
3.1. ORGANIZATION; BANK HOLDING COMPANY REGISTRATION. The
Company has been duly organized and is a validly existing corporation in good
standing under the laws of the State of Montana, with its chief executive
offices located in Billings, Montana. The Company is a bank holding company
registered under the Bank Holding Company Act of 1956, as amended.
3.2. CORPORATE POWER; AUTHORIZATION. The Company has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement. The execution, delivery and performance of
this Agreement have been duly and validly authorized by the Company, and this
Agreement has been duly executed by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The issuance of the
Preferred Stock on the terms and conditions contained herein has been duly and
validly authorized by the Company.
3.3. NO CONFLICT. The execution, delivery and performance
of this Agreement does not and will not violate, conflict with or constitute a
default under any provision of the charter documents of the Company or any
regulation, order, arbitration award, judgment or decree or any contract to
which the Company is a party or by which its property or assets are bound.
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3.4. CAPITALIZATION. The Company's authorized capital stock
consists of 5,000,000 shares of common stock, no par value, approximately
1,981,489 shares of which are outstanding, and 100,000 shares of preferred
stock, none of which are outstanding prior to the issuance of the Preferred
Stock. All of the issued and outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
nonassessable. Except as set forth on Schedule 3.4, there are no options,
warrants, agreements, contracts or other rights in existence to purchase or
acquire from the Company any shares of the capital stock of the Company. There
are no preemptive rights to purchase securities of the Company.
3.5. DISCLOSURE. Neither this Stock Purchase Agreement, the
Offering Memorandum nor any of the schedules, attachments, written statements,
documents, certificates or other items prepared and supplied to any Purchaser by
or on behalf of the Company with respect to the transactions contemplated hereby
contain any untrue statement of a material fact or omit a material fact
necessary to make each statement contained herein or therein not misleading.
There is no fact which the Company has not disclosed to the Purchasers in
writing and of which any of its Executive Officers or directors is aware (other
than matters of a general economic nature) and which has had or would reasonably
be anticipated to have a Material Adverse Effect.
3.6. FINANCIAL STATEMENTS. The Company has furnished to the
Purchasers its consolidated financial statements for its three most recent
fiscal years. (Such financial statements are collectively referred to as the
"Reports".) The consolidated financial statements and related notes included in
the Reports present fairly the consolidated financial position of the Company
and its Subsidiaries at the dates of the balance sheets included therein and the
consolidated results of their operations for the periods covered and were
prepared in conformity with GAAP consistently applied, except as may be noted
therein. Since January 1, 1996, there has been no change in the financial
condition or business of the Company or its Subsidiaries, taken as a whole,
which would constitute a Material Adverse Effect.
3.7. COMPLIANCE WITH LAW. Except where the failure to comply
would not have a Material Adverse Effect, the Company and its Subsidiaries are
in compliance, in the conduct of their respective businesses, with all
applicable federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable thereto or to the
employees conducting such businesses, including, without limitation, the Fair
Lending Laws.
3.8. GOVERNMENTAL CONSENTS. Other than the consents
described in Section 2.1.1 and the filing of the Articles of Amendment with the
Montana Secretary of State, no notices, reports or other filings are required to
be made by the Company with, nor are any consents, registrations, approvals,
permits or authorizations required to be obtained by the Company from, any
governmental or regulatory authority, agency, court, commission or other entity
("Governmental Entities"), in connection with the execution, delivery or
performance of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby.
3.9. LITIGATION. There are no criminal or administrative
investigations or hearings of, before or by any Governmental Entity, or civil,
criminal or administrative actions, suits, claims or proceedings of, before or
by any person or entity (including any Governmental
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Entity) pending or, to the knowledge of the Company's Executive Officers,
threatened, against the Company or any of its Subsidiaries (including, without
limitation, under any of the Fair Lending Laws); and neither the Company nor any
of its Subsidiaries is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or similar submission
to, any Governmental Entity charged with the supervision or regulation of
depository institutions or engaged in the insurance of deposits (including,
without limitation, the Federal Deposit Insurance Corporation (the "FDIC") or
the supervision or regulation of it or any of its Subsidiaries, and neither the
Company nor any of its Subsidiaries has been advised by any such Governmental
Entity that such Governmental Entity is contemplating issuing or requesting (or
is considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, or similar submission.
3.10. TAXES. The Company has timely filed, for itself and on
behalf of its Subsidiaries, all tax returns reasonably deemed by the Company to
be required and has paid all Taxes due, payable or owed for all periods for
which returns are required to be filed, other than Taxes contested in good
faith. Except as set forth on Schedule 3.10, (a) no governmental entity has,
during the past three years, examined or is in the process of examining any tax
returns of either the Company or its Subsidiaries, and (b) no governmental
entity has proposed any deficiency, assessment, or claim for Taxes against
either the Company or its Subsidiaries.
3.11. TITLE TO ASSETS. Except as disclosed or reserved
against in the Call Reports and except for security interests in securities of
the Company's Subsidiaries which are banks granted by such Subsidiaries to
deposit customers of such Subsidiaries in connection with repurchase agreements
entered into by such Subsidiaries in the ordinary course of business with their
deposit customers, the Company and its Subsidiaries have good and marketable
title, free and clear of all liens, claims, security interests or other
encumbrances (except those encumbrances which do not interfere in any material
respect with the use of the property or the conduct of the business of the
Company and its Subsidiaries) to their properties and assets, tangible or
intangible, including all assets identified in the Latest Balance Sheet (except
to the extent such properties or assets have been disposed of in the ordinary
course of the business of the Company or its Subsidiaries).
3.12. REQUIRED LICENSES. Except where such failure would not
have a Material Adverse Effect, the Company and its Subsidiaries have all
permits, licenses, certificates of authority, orders and approvals of, and have
made all filings, applications and registrations with, Governmental Entities,
that are required in order to permit them to carry on their respective
businesses as presently conducted. Neither the Company nor any of its
Subsidiaries has received notification or communication from any Governmental
Entity (including any bank, insurance and securities regulatory authorities) or
the staff thereof, which remains in effect (a) asserting that the Company or any
of its Subsidiaries is not in compliance with any of the statutes, regulations
or ordinances that such Governmental Entity enforces; (b) threatening to revoke
any license, franchise, permit or governmental authorization of the Company or
any of its Subsidiaries; or (c) threatening or contemplating revocation or
limitation of, or which would have the effect of revoking or limiting, FDIC
deposit insurance of the Company's Subsidiaries which are banks.
3.13. EMPLOYEE BENEFITS. (a) The Company and each of its
Subsidiaries and each ERISA Affiliate have fulfilled all of their obligations in
all material respects under ERISA and the Code with respect to each Plan,
including but not limited to all minimum funding
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standards, all reporting and disclosure requirements and, where applicable, the
continuation coverage requirements in Part 6 of Title I of ERISA and Section
4980B of the Code; and they are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code; and they have not
incurred any liability to the PBGC (other than premiums due and not delinquent
under Section 4007 of ERISA) or a Plan under ERISA. The representations and
warranties set forth in this Section 3.13(a) (other than as to the incurrence of
any liability to a Plan under ERISA) are made to the best of the Company's
knowledge to the extent they apply to any Multiemployer Plan.
(b) Neither the Company nor any of its Subsidiaries nor any ERISA
Affiliate has incurred any withdrawal liability with respect to any
Multiemployer Plan under Title IV of ERISA, and no such liability is expected to
be incurred.
(c) Neither the Company nor any of its Subsidiaries nor any ERISA
Affiliate has incurred any unpaid liability with respect to any Multiemployer
Plan under Title IV of ERISA, and no such liability is expected to be incurred.
3.14. PRIVATE OFFERING BY THE COMPANY. Neither the Company
nor anyone acting on its behalf has or will take any action that would cause the
loss of exemption for the offer and sale of the Preferred Stock from the
registration requirements of the Securities Act.
3.15. USE OF PROCEEDS; MARGIN REGULATIONS. The Company shall
not, nor shall it permit any Subsidiary to, use any proceeds from the sale of
the Preferred Stock hereunder, directly or indirectly, for the purposes of
purchasing or carrying any "margin securities" within the meaning of Regulation
G or T promulgated by the Board of Governors of the Federal Reserve Board or for
the purpose of arranging for the extension of credit secured, indirectly or
indirectly, in whole or in part by collateral that includes any "margin
securities."
3.16. EXISTING INDEBTEDNESS. The Company and its Subsidiaries
do not have any material obligation or liability (whether accrued, absolute,
contingent, unliquidated or otherwise, whether or not known to the Company or
any Subsidiary, whether due or to become due and regardless of when asserted)
arising out of transactions entered into at or prior to the Closing, or any
state of facts or inaction at or prior to the Closing other than: (i)
liabilities set forth on the balance sheet (including any notes thereto) of the
Company at December 31, 1995 (the "Latest Balance Sheet"), (ii) liabilities and
obligations which have arisen after the date of the Latest Balance Sheet in the
ordinary course of business (none of which is a liability resulting from breach
of contract, breach of warranty, tort, infringement, claim or lawsuit), and
(iii) other liabilities and obligations expressly disclosed in the other
Schedules to this Agreement.
3.17. FOREIGN ASSETS CONTROL REGULATIONS. The Company
acknowledges that certain Purchasers may be foreign entities or have foreign
persons and entities as partners and that the Company may be required, and
hereby agrees, to file or cause to be filed in the future with the Internal
Revenue Service ("IRS") all statements with its United States income tax returns
required under Section 1.897-2(h) of the U.S. Treasury Regulations. To the
Company's knowledge, it is not presently a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code. The Company
shall use its reasonable efforts consistent with sound business practice to
avoid becoming a "United States real property holding corporation" within the
meaning of Section 897(c)(2) of the Code. In the event the
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Company in the future becomes aware that it is a "United States real property
holding corporation" within the meaning of Section 897(c)(2) of the Code, the
Company shall promptly notify each Purchaser in writing of such fact. Promptly
after receipt of a request from a Purchaser, the Company shall prepare and
deliver to such Purchaser the statement required under U.S. Treasury Regulation
Section 1.897-2(h)(1) under the Code. The Company shall provide a notice to the
IRS with respect to such requested statement as required by U.S. Treasury
Regulation Section 1.897(2)(h)(1) under the Code. Further, the Company shall
prepare and deliver to the IRS within thirty days after the receipt of a request
from a Purchaser either or both of the following documents: (i) an affidavit in
conformance with the requirements of Section 1445(b)(3) of the Code, or (ii) a
notarized statement, executed by an officer of the Company having actual
knowledge of the facts, that the shares of the Company stock held by such
Purchaser are of a class that is regularly traded on an established securities
market, within the meaning of Section 1445(b)(6) of the Code. If the Company is
unable to provide either of the documents described in (i) or (ii) above, if
requested, it shall promptly notify such Purchaser in writing of the reasons for
such inability. Finally, upon the request of a Purchaser and without regard to
whether either document described in (i) or (ii) above has been requested, the
Company shall cooperate fully with the efforts of such Purchaser to obtain a
"qualifying statement," within the meaning of Section 1445(b)(4) of the Code, or
such other documents as would excuse a transferee of a foreign investor's
interest from withholding of income tax imposed pursuant to Section 897(a) and
1445 of the Code.
3.18. ENVIRONMENTAL MATTERS. (a) For purposes of this Section
3.18, the following terms shall have the indicated meaning:
"BUSINESS" means the business conducted by the Company and its
Subsidiaries.
"ENVIRONMENTAL LAW: means any law, regulation, order or decree
relating to Hazardous Substances or the protection of the environment.
"HAZARDOUS SUBSTANCES" means substances which are listed or classified
pursuant to any Environmental Law, including any petroleum products or
byproducts, polychlorinated biphenyls ("PCBs"), radioactive materials
or radon gas.
(b) The Company and its Subsidiaries, and all real property owned by the
Company or its Subsidiaries (collectively, "Real Property"), are in material
compliance with applicable Environmental Laws.
(c) There are no pending claims, actions, or proceedings involving the
Company or any of its Subsidiaries relating to:
(i) an asserted liability of the Company or its
Subsidiaries under any Environmental Law or the terms and conditions of any
permit, license, authority, settlement, agreement, decree or other obligation
pursuant to any Environmental Law;
(ii) the handling, storage, use, transportation, removal or
disposal of Hazardous Substances;
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(iii) the discharge, release or emission of Hazardous
Substances from, on or under or within the Real Property into the air, water,
surface water, ground water, land surface or subsurface strata; or
(iv) personal injuries or damage to property caused by a
release of Hazardous Substances.
(d) To the knowledge of the Company's Executive Officers and the
Executive Officers of the Company's Subsidiaries, no Hazardous Substances have
been used, handled, stored, released or emitted by the Company or its
Subsidiaries at or on any Real Property except in compliance with applicable
Environmental Laws and as would not be reasonably expected to create conditions
requiring remediation under any Environmental Law.
3.19. SUBSIDIARIES. The Subsidiaries of the Company and the
percentage of issued and outstanding shares of stock of each such Subsidiary
owned of record and beneficially by the Company are as set forth in Schedule
3.19. All of the issued and outstanding shares of capital stock of the
Company's Subsidiaries have been duly and validly authorized and issued and are
fully paid and nonassessable. Except as set forth on Schedule 3.19, there are
no options, warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company any shares of the capital stock of any of
the Company's Subsidiaries. Each such Subsidiary has been duly incorporated and
is validly existing and in good standing under the laws of the state of its
incorporation. Each such Subsidiary has the corporate power and authority to
own its properties and conduct its business as presently conducted and is fully
qualified to do business as a foreign corporation in good standing in each
jurisdiction in which (a) its ownership or lease of real property or the conduct
of its business makes such qualification necessary and (b) the failure to so
qualify would have a Material Adverse Effect. Other than the Subsidiaries set
forth on Schedule 3.19, the Company owns no capital stock or other equity,
ownership or proprietary interest in any other entity. The deposit accounts of
each of the Company's Subsidiaries which are banks are insured by the Bank
Insurance Fund of the FDIC up to the maximum applicable amount in accordance
with the rules and regulations of the FDIC, and no proceedings for the
termination or revocation of such membership or insurance are pending, or, to
the knowledge of the Company, threatened.
3.20. MAINTENANCE OF INSURANCE BY SUBSIDIARIES. The Company
and the Company's Subsidiaries maintain (either in the Company's or the
Subsidiary's own name), with financially sound and reputable insurance
companies, insurance on their properties in at least such amounts and against
such risks as are usually insured against in the same general area by companies
of established repute engaged in the same or similar businesses.
3.21. SECURITIES LAWS. The Company (a) has not taken and
will not take any action that would cause the sale of the Preferred Stock to be
subject to the provisions of Section 5 of the Securities Act of 1933, as
amended, and (b) directly or indirectly, has not offered and will not offer any
interest in the Preferred Stock or any part thereof for sale to, or solicited
any such sale from, anyone other than the Purchasers and not more than 29 other
Persons.
3.22. BROKER'S FEES. No Person acting on behalf of the
Company is
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or will be entitled to any brokerage fee, commission, finder's fee or financial
advisory fee, directly or indirectly, from the Purchasers in connection with the
transactions contemplated by this Agreement.
3.23. USE OF PROCEEDS. The Company will use the proceeds of
the sale of the Preferred Stock to purchase the stock of the Banks.
4. AFFIRMATIVE COVENANTS.
The Company covenants and agrees that:
4.1. REPORTS AND NOTICES. The Company shall provide to each
Purchaser the following reports, information and notices:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
no event later than 120 days after the end of any fiscal year of the Company
occurring while the Preferred Stock is outstanding, annual financial statements
for the Company and its Subsidiaries on a consolidated basis, prepared in
accordance with GAAP consistently applied which shall: (i) be audited by
independent certified public accountants selected by the Company ; (ii) be
accompanied by a report of such accountants containing an opinion of such
accountants; and (iii) include a balance sheet, an income statement, a statement
of cash flow, a statement of stockholders' equity, and all notes and schedules
relating thereto.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but
in no event more than 60 days after the end of each of the first three quarters
in any fiscal year of the Company occurring while the Preferred Stock is
outstanding, the following financial statements of the Company and its
Subsidiaries on a consolidated basis, prepared in accordance with GAAP
consistently applied: (i) a balance sheet, (ii) an income statement, and (iii)
a statement of stockholders' equity, for such quarter and for the year to date.
4.2. MAINTENANCE OF PROPERTIES. The Company will cause its
properties and the properties of its Subsidiaries used or useful in the conduct
of the business of the Company and its Subsidiaries to be maintained and kept in
good condition, repair and working order and supplied with all necessary
facilities and equipment and will cause to be made all necessary repairs,
renewals, replacements and improvements thereof, all as in the judgment of the
Company may be necessary so that the business carried on in connection therewith
may be properly and advantageously conducted at all times; PROVIDED, HOWEVER,
that the foregoing shall not prevent the Company or a Subsidiary from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business and not disadvantageous in any material respect to the Purchasers.
4.3. INSURANCE. Subject to the right to sell, abandon or
otherwise dispose of any building or property whenever in the opinion of the
Company the retention thereof is inadvisable or not necessary to the business of
the Company and its Subsidiaries, the Company will at all times cause all
buildings, equipment and other insurable properties owned or operated by it or
any Subsidiary to be insured with responsible insurance carriers against loss or
damage by fire and other hazards, to the extent, and in such amounts, as is
customary among corporations owning or operating properties of a similar
character.
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4.3. COMPLIANCE WITH LAW. The Company and its Subsidiaries
shall comply with all statutes, rules, regulations and orders of and
restrictions imposed by Governmental Entities applicable to the Company and its
Subsidiaries.
4.5. MAINTENANCE OF CORPORATE EXISTENCE. The Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect the corporate existence of the Company and its Subsidiaries.
4.6. PAYMENT OF TAXES. The Company and the Company's
Subsidiaries will pay or discharge or cause to be paid or discharge, before the
same shall become delinquent, all Taxes levied or imposed upon the Company or
any of its Subsidiaries or upon the income, profits or property of the Company
or any of the Company's Subsidiaries; PROVIDED, HOWEVER, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
5. NEGATIVE COVENANTS. So long as any of the Preferred Stock
remains outstanding, the Company covenants and agrees:
5.1. NO CONFLICTING AGREEMENTS. The Company shall not become
subject to, or permit any of its Subsidiaries to become subject to, any
agreement or instrument which by its terms would (under any circumstances)
restrict the Company's right to perform the provisions of this Agreement, the
Articles of Amendment , the Articles of Incorporation or the Company's bylaws
(including, without limitation, provisions relating to payment of dividends on
the Preferred Stock).
5.2. RELATED PARTY TRANSACTIONS. The Company shall not enter
into, or permit any Subsidiary to enter into, any transaction with any of its or
any Subsidiary's officers, directors, employees or Affiliates, except for normal
employment arrangements and benefit programs on reasonable terms and except as
otherwise expressly contemplated by this Agreement.
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6. TRANSFER OF THE PREFERRED STOCK.
6.1. PERMITTED TRANSFERS. The Preferred Stock is
transferable (a) pursuant to public offerings registered under the Securities
Act, (b) to Institutional Investors, and (c) subject to the conditions specified
in Section 6.2, pursuant to any other legally available means of transfer.
6.2. RESTRICTIONS ON TRANSFER; RIGHT OF FIRST REFUSAL. In
connection with any proposed transfer of the Preferred Stock (other than a
transfer described in Section 6.1(a) or (b)), the holder thereof shall deliver
written notice to the Company describing in reasonable detail the terms of the
proposed transfer, including without limitation the identity of the proposed
purchaser, the consideration to be paid, and the proposed date of the transfer
(the "Sale Notice"). Upon receipt of a Sale Notice, the Company shall have the
right (but shall not be obligated to exercise the right) to purchase the
Preferred Stock proposed to be transferred on the same terms and conditions
contained in the Sale Notice. The Company shall notify the holder proposing to
transfer the Preferred Stock within 30 days after receipt of the Sale Notice
whether or not it elects to purchase the Preferred Stock. If the Company elects
to purchase such Preferred Stock, the holder proposing disposition shall be
bound to transfer such Preferred Stock, free and clear of all liens and
encumbrances, to the Company. If the Company does not elect to purchase such
Preferred Stock, the holder proposing disposition may proceed with the
disposition of the Preferred Stock, but only to the Persons and on the terms and
conditions set forth in the Sale Notice. The purchaser of the Preferred Stock
must agree in writing to be bound by the provisions of this Section 6.2 with
respect to future transfers of the Preferred Stock.
7. DEFINITIONS. For purposes of this Agreement:
"Affiliate" shall mean, with respect to the Company (or any other
specified Person), any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with the Company (or
such specified Person), and shall include (a) any officer or director or general
partner of the Company (or such specified Person) and (b) any Person of which
the Company (or such specified Person) or any Affiliate (as defined in clause
(a) above) of the Company (or such specified Person) shall, directly or
indirectly, beneficially own either (i) at least 10% of the outstanding equity
securities having the general power to vote or (ii) at least 10% of all equity
interests.
"Business Day" shall mean any day other than a Saturday or Sunday and
other than a day which is a Federal legal holiday or a legal holiday for banks
in the State of Montana or the State of New York.
"Call Reports" shall mean the Consolidated Reports of Condition filed
by the Company's Subsidiaries which are banks with respect to periods since
January 1, 1996.
"Code" shall mean the Internal Revenue Code of 1986, as amended, from
time to time, or any successor statute thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute.
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"ERISA Affiliate" shall mean any Person which would be deemed to be
under "common control" with the Company within the meaning of Section 4001(b)(1)
of ERISA.
"Executive Officer" shall mean (a) for the Company, the chief
executive officer, president and chief financial officer; and (b) for the
Company's Subsidiaries which are banks, the chief executive officer, president
and executive vice presidents.
"Fair Lending Laws" shall mean the National Bank Act, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home
Mortgage Disclosure Act and all other applicable fair lending laws or other laws
relating to discrimination.
"GAAP" shall mean generally accepted accounting principles as from
time to time defined by controlling pronouncements of the Financial Accounting
Standards Board or any successor organization, consistently applied.
"Institutional Investors" shall mean institutional accredited
investors as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act
or to Qualified Institutional Buyers, as defined in Rule 144A under the
Securities Act.
"Material Adverse Effect" shall mean an effect which (a) is materially
adverse to the business, financial condition, results of operations or prospects
of the Company and its Subsidiaries taken as a whole, (b) significantly and
adversely affects the ability of the Company to consummate the transactions
contemplated hereby or to perform its material obligations hereunder, or (c)
enables any person or entity to prevent the consummation of the transactions
contemplated hereby; PROVIDED, HOWEVER, that any effect resulting from (i)
actions or omissions of the Company taken with the prior consent of the
Purchasers in contemplation of the transactions provided for herein or (ii)
circumstances affecting the banking industry in Montana or Wyoming generally
shall be deemed not to be a Material Adverse Effect.
"Offering Memorandum" shall mean the Private Placement Offering
Memorandum dated August 16, 1996 relating to the offering of the Preferred
Stock.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean a corporation, association, partnership, limited
liability company, joint venture, trust, organization, business, individual or
government or any governmental agency or political subdivision thereof.
"Plan" shall mean any employee welfare benefit plan or employee
pension benefit plan or any plan that is both an employee welfare benefit plan
and an employee pension benefit plan, as defined in Section 3 of ERISA that the
Company or any ERISA Affiliate maintains or is obligated to contribute to for
the benefit of employees or former employees of the Company of any ERISA
Affiliate.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
13
<PAGE>
"Subsidiary" shall mean any Person of which the Company shall,
directly or indirectly through one or more of its Subsidiaries, (a) own at least
50% of the issued and outstanding voting capital stock, (b) hold at least 50% of
the partnership, joint venture or similar interests, or (c) be a general
partner.
"Tax" shall mean any tax or similar governmental charge, assessment or
levy (including, without limitation, income taxes, franchise taxes, transfer
taxes or fees, stamp taxes, sales taxes, use taxes, excise taxes, ad valorem
taxes, withholding taxes, employee withholding taxes, worker's compensation,
payroll taxes, unemployment insurance, social security, or minimum taxes)
together with any related liabilities, penalties, fines, additions to tax or
interest, imposed by the United States or any state, county, provincial, local
or foreign government or subdivisions or agency thereof.
"Tier 1 Capital" shall have the meaning and characteristics ascribed
to such term in Appendix A to 12 C.F.R. Part 225.
The following terms are defined elsewhere in the Agreement:
"Acquisition" Recitals
"Agreement" Recitals
"Articles of Amendment Section 2.2.2
"Banks" Recitals
"Business" Section 3.16(a)
"Certificate of Designation" Section 1.1
"Closing" Section 1.3
"Closing Date" Section 1.3
"Company" Recitals
"Environmental Law" Section 3.16(a)
"FRB" Section 2.1.1
"FDIC" Section 3.7
"Governmental Entities" Section 3.6
"Hazardous Substances" Section 3.16(a)
"IRS" Section 3.15
"Latest Balance Sheet" Section 3.14
"Montana Bank" Recitals
"Outside Closing Date" Section 1.3
"PCBs" Section 3.16(a)
"Purchaser" Recitals
"Real Property" Section 3.16(b)
"Reports" Section 3.4
"Stock Purchase Agreement" Recitals
"Wells Fargo" Recitals
"Wyoming Bank" Recitals
8. MISCELLANEOUS.
8.1. COURSE OF DEALING. For the purposes of this Agreement
and all documents and instruments executed pursuant hereto, except as otherwise
specifically set forth
14
<PAGE>
herein or therein, no course of dealing between the Company and the Purchasers
and no delay on the part of any party hereto in exercising any rights hereunder
or thereunder shall operate as a waiver of the rights hereof and thereof.
8.2. NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party to the other shall be in writing and
shall be deemed to have been duly given (a) on the date of delivery if delivered
personally or by facsimile upon confirmation or receipt, (b) on the first
business day following the date of mailing if delivered by next-day courier
service, or (c) on the third business day following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage
prepaid. All notices, requests, instructions or other documents to be given
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice, request, instruction or document in accordance with this Section 8.2:
8.2. (a) If to the Company:
First Interstate BancSystem of
Montana, Inc.
401 N. 31st Street
Billings, Montana 59101-1200
Facsimile: 406-255-5069
Attention: Thomas W. Scott
Terrill R. Moore
with a copy to:
Holland & Hart LLP
401 North 31st Street
Suite 1500
Billings, Montana 59101-1200
Facsimile: 406-252-1669
Attention: David R. Chisholm, Esq.
(b) If to the Purchasers:
First Security Corporation
79 South Main
Salt Lake City, UT 84111
Facsimile: 801-359-6928
Attention: Scott C. Ulbrich
8.3. TREATMENT OF THE PREFERRED STOCK. The Company covenants
and agrees that so long as federal income tax laws prohibit a deduction for
distributions made by the Company with respect to preferred stock (a) it shall
treat all distributions paid by it on the Preferred Stock as non-deductible
dividends on all of its tax returns and (b) it shall treat the Preferred Stock
as preferred stock in all of its financial statements and other reports and
shall treat all distributions paid by it on the Preferred Stock as dividends on
preferred stock in such statements and reports.
15
<PAGE>
8.4. PURCHASER'S REPRESENTATIONS. Each Purchaser hereby
represents (a) that it is an Institutional Investor, (b) that it is acquiring
the Preferred Stock purchased hereunder for its own account with the present
intention of holding such securities for purposes of investment, and that it has
no intention of selling such securities in a public distribution in violation of
the federal securities laws or any applicable state securities laws; (c) that
the acquisition of the Preferred Stock will not constitute a "prohibited
transaction" (as such terms is defined under ERISA) under Section 406 of ERISA
or Section 4975 of the Code, and (d) that it has not, directly or indirectly,
incurred and will not directly or indirectly incur any obligation for any
finder's or broker's or similar fees or commissions in connection with this
Agreement, the issuance and delivery of the Preferred Stock, or the transactions
contemplated hereby. The acquisition of the Preferred Stock by each Purchaser
at Closing shall constitute confirmation by it of the accuracy of the foregoing
representations and warranties on and as of the time the Preferred Stock is
issued.
8.4. Each Purchaser acknowledges that the Preferred Stock has not been
registered under the Securities Act, or the securities laws of any state or
other jurisdiction. Each Purchaser agrees not to transfer the Preferred Stock
except in accordance with all applicable securities laws. Each certificate for
the Preferred Stock shall be imprinted with a legend in substantially the
following form:
"The securities represented by this certificate have not
been registered under the Securities Act of 1933, as
amended, or any state securities law and may be reoffered
and sold only if so registered or if an exemption from such
registration is available. The transfer of the securities
represented hereby is subject to the conditions specified in
the Preferred Stock Purchase Agreement, dated as of
September 26, 1996, between the issuer (the "Company") and
certain investors, and the Company reserves the right to
refuse the transfer of such securities until such conditions
have been fulfilled with respect to such transfer. A copy
of such conditions shall be furnished by the Company to the
holder hereof upon written request and without charge."
8.5. EXPENSES. The Company agrees to pay, and hold each
Purchaser harmless against liability for the payment of, (i) the reasonable fees
(not to exceed $25,000, provided that no material unforeseen issues or
conditions arise) and expenses of one special counsel representing all of the
Purchasers arising in connection with the negotiation and execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement which shall be payable at the Closing or, if the Closing does not
occur, upon demand, (ii) the reasonable fees and expenses incurred with respect
to any amendments or waivers (whether or not the same become effective) under or
in respect of this Agreement, the agreements contemplated hereby, the Articles
of Incorporation or the Articles of Amendment, provided that if such amendment
or waiver is initially requested by any holder, then each holder shall pay its
own fees and expenses, (iii) stamp and other taxes which may be payable in
respect of the execution and delivery of this Agreement or the issuance,
delivery or acquisition of any shares of Preferred Stock and, (iv) the
enforcement of the rights granted under this Agreement, the agreements
contemplated hereby, the Articles of Incorporation and the Articles of
Amendment.
16
<PAGE>
8.6. REMEDIES. Each holder of Preferred Stock shall have all
rights and remedies set forth in this Agreement, the Articles of Incorporation
and the Articles of Amendment and all rights and remedies which such holders
have been granted at any time under any other agreement or contract and all of
the rights which such holders have under any law. Any holder having any rights
under any provision of this Agreement shall be entitled to enforce such rights
specifically, to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law.
8.7. CONFIDENTIALITY. Each Purchaser will make no disclosure
of confidential information furnished to it by the Company or any of the
Company's Subsidiaries, unless such information shall have become public, except
(i) in connection with enforcement of this
Agreement to Persons who have a reasonable need to be furnished such
confidential information and who agree to comply with the restrictions
contained in this Section 8.7 with respect to such information;
(ii) pursuant to any statutory or regulatory
requirement or any mandatory court order, subpoena or other legal process;
(iii) to any parent or corporate Affiliate of such
Purchaser to any permitted transferee of the Preferred Stock; PROVIDED,
HOWEVER, that any such Person shall agree to comply with the restrictions
set forth in this Section 8.7 with respect to such information;
(iv) to its independent counsel, auditors and
other professional advisors, with an instruction to such Person to keep such
information confidential; and
(v) with the prior written consent of the
Company,to any other Person.
8.8. HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.9. SEVERABILITY. If any provision of this Agreement or the
application thereof to any Person or circumstances is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances, other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
8.10. ENTIRE AGREEMENT; INTERPRETATION. This Agreement,
including the Schedules and Exhibits hereto, constitutes the entire agreement of
the parties hereto with
17
<PAGE>
respect to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral. It is the intention of the parties that
this Agreement shall not be construed more strictly with regard to one party
than with regard to any other party.
8.11. ASSIGNMENT. Without the written consent of the other
parties hereto, this Agreement shall not be assigned by operation of law or
otherwise (any attempted assignment in contravention hereof being null and
void); PROVIDED, HOWEVER, that First Security Corporation may assign this
Agreement to an Affiliate of First Security Corporation upon prior written
notice to the Company.
8.12. CONSENT TO AMENDMENTS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the holders of 66-2/3% of the shares of Preferred Stock. No other
course of dealing between the Company and the holder of any Preferred Stock or
any delay in exercising any rights hereunder or under the Articles of
Incorporation or the Articles of Amendment shall operate as a waiver of any
rights of any such holders. For purposes of this Agreement, shares of Preferred
Stock held by the Company or any Subsidiaries shall not be deemed to be
outstanding.
8.13. GOVERNING LAW; CONSENT TO JURISDICTION; APPOINTMENT OF
AGENT FOR SERVICE OF PROCESS. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Utah. Each party hereto for such
party and such party's successors and assigns agrees that the State of Utah
shall be the exclusive venue (to the extent that subject matter jurisdiction
exists) for all causes of action arising out of this Agreement. This consent to
jurisdiction and venue shall not be deemed a waiver of any right of any party to
remove any litigation to a federal court located in the State of Utah. The
Company hereby irrevocably designates, appoints and empowers CT Corporation
System at its Salt Lake City, Utah, office, as its authorized agent for service
of process in the State of Utah in any suit or proceeding with respect to this
Agreement.
8.14. UNDERSTANDING AMONG THE PURCHASERS. The determination
of each Purchaser to purchase the Preferred Stock pursuant to this Agreement has
been made by such Purchaser independent of any statements or opinions as to the
advisability of such purchase or as to the properties, business, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries which may
have been made or given by any other Purchaser or by any agent or employee of
any other Purchaser.
8.15. COUNTERPARTS. This Agreement may be executed in any
number of separate counterparts, each of which when executed shall be deemed to
be an original but all of which taken together shall constitute one and the same
agreement.
8.16. JURY WAIVER. EACH OF THE COMPANY AND THE PURCHASERS
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, SUIT, OR COUNTERCLAIM ON
ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED HEREBY.
18
<PAGE>
8.17. TIME. Time is of the essence.
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be duly executed as of the date first written above by their
respective officers thereunto duly authorized.
FIRST INTERSTATE BANCSYSTEM OF
MONTANA, INC.
By:_________________________
Name: Thomas W. Scott
Title: President & Chief
Executive Officer
19
<PAGE>
PURCHASERS:
FIRST SECURITY CORPORATION
By:
----------------------
Name: Scott C. Ulbrich
Title: Executive Vice President Finance and Capital
Markets and Chief Financial Officer
<PAGE>
TABLE OF CONTENTS
1. Authorization .............................................................1
1.1. Authorization of the Preferred Stock ................................1
1.2. Purchase and Sale of the Preferred Stock ............................1
1.3. The Closing .........................................................1
2. Conditions Precedent to Obligations to Close ..............................2
2.1. Conditions to Each Party's Obligation to Effect the
Purchase and Sale of the Preferred Stock .......................2
2.1.1 Governmental and Regulatory Consents ...............................2
2.1.2 Third Party Consents ...............................................2
2.1.3 Purchase Permitted by Applicable Laws ..............................2
2.1.4 Consummation of the Acquisition ....................................2
2.2. Conditions to Obligation of Each Purchaser ..........................2
2.2.1 Representations and Warranties .....................................2
2.2.2 Certificate of Designation .........................................3
2.2.3 Blue Sky Clearances ................................................3
2.2.4 Closing Documents ..................................................3
2.2.5 Proceedings ........................................................3
2.2.6 Expenses ...........................................................3
2.2.7 Compliance with Applicable Laws ....................................3
2.2.8 Delivery of Stock Certificates .....................................4
2.2.9 No Material Adverse Change .........................................4
2.2.10 Performance of Obligations ........................................4
2.3. Conditions to Obligation of the Company .............................4
2.3.1 Proof Each Purchaser is An Institutional Investor ..................4
i
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3. Representations and Warranties of the Company .............................4
3.1. Organization; Bank Holding Company Registration .....................4
3.2. Corporate Power; Authorization ......................................4
3.3. No Conflict .........................................................4
3.4. Capitalization ......................................................5
3.5. Disclosure ..........................................................5
3.6. Financial Statements ................................................5
3.7. Compliance with Law .................................................5
3.8. Governmental Consents ...............................................5
3.9. Litigation ..........................................................5
3.10. Taxes ..............................................................6
3.11. Title to Assets ....................................................6
3.12. Required Licenses ..................................................6
3.13. Employee Benefits ..................................................6
3.14. Private Offering by the Company ....................................7
3.15. Use of Proceeds; Margin Regulations ................................7
3.16. Existing Indebtedness ..............................................7
3.17. Foreign Assets Control Regulations .................................7
3.18. Environmental Matters ..............................................8
3.19. Subsidiaries .......................................................9
3.20. Maintenance of Insurance by Subsidiaries ...........................9
3.21. Securities Laws ....................................................9
3.22. Broker's Fees ......................................................9
3.23. Use of Proceeds ...................................................10
4. Affirmative Covenants ....................................................10
ii
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4.1. Reports and Notices ................................................10
4.2. Maintenance of Properties ..........................................10
4.3. Insurance ..........................................................10
4.4. Compliance With Law ................................................11
4.5. Maintenance of Corporate Existence .................................11
4.6. Payment of Taxes ...................................................11
5. Negative Covenants .......................................................11
5.1. No Conflicting Agreements ..........................................11
5.2. Related Party Transactions .........................................11
6. Transfer of the Preferred Stock ..........................................11
6.1. Permitted Transfers ................................................11
6.2. Restrictions on Transfer; Right of First Refusal ...................11
7. Definitions ..............................................................12
8. Miscellaneous ............................................................14
8.1. Course of Dealing ..................................................14
8.2. Notices ............................................................14
8.3. Treatment of the Preferred Stock ...................................15
8.4. Purchaser's Representations ........................................15
8.5. Expenses ...........................................................16
8.6. Remedies ...........................................................16
8.7. Confidentiality ....................................................16
8.8. Headings ...........................................................17
8.9. Severability .......................................................17
8.10. Entire Agreement; Interpretation ..................................17
8.11. Assignment ........................................................17
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8.12. Consent to Amendments .............................................17
8.13. Governing Law; Consent to Jurisdiction; Appointment of Agent
for Service of Process .......................................18
8.14. Understanding Among the Purchasers ................................18
8.15. Counterparts ......................................................18
8.16. JURY WAIVER .......................................................18
8.17. Time ..............................................................18
iv
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SCHEDULES
Schedule of Purchasers i
Schedule 3.4 Options ii
Schedule 3.10 Taxes ii
Schedule 3.19 Subsidiaries vi
EXHIBITS
Exhibit A Certificate of Designation vii
v
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOAN AGREEMENT
Dated effective as of October 1, 1996
Between
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.,
THE LENDERS LISTED HEREIN
and
FIRST SECURITY BANK, N.A.
as Agent
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HTE&H Ref.: 16-179
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
SECTION 1. BINDING COVENANTS............................................... 1
SECTION 2. DEFINITIONS..................................................... 2
2.1 "Acquisitions".............................................. 2
2.2 "Adjusted LIBOR Rate"....................................... 2
2.3 "Advance"................................................... 2
2.4 "Agent"..................................................... 2
2.5 "Aggregate Commitment"...................................... 2
2.6 "Agreement"................................................. 2
2.7 "Applicable Margin"......................................... 2
2.8 "Amortization Expense"...................................... 3
2.9 "Banking Subsidiary"........................................ 3
2.10 "Bankruptcy Act"............................................ 3
2.11 "Borrower".................................................. 3
2.12 "Borrower's Books".......................................... 3
2.13 "Borrowing"................................................. 3
2.14 "Business Day".............................................. 4
2.15 "Capital"................................................... 4
2.16 "Capital Lease"............................................. 4
2.17 "Capital Stock"............................................. 4
2.18 "CERCLA".................................................... 4
2.19 "Closing Date".............................................. 4
2.20 "Code"...................................................... 4
2.21 "Collateral"................................................ 4
2.22 "Commitment"................................................ 4
2.23 "Commitment Fee"............................................ 4
2.24 "Consolidated".............................................. 4
2.25 "Consolidated Assets"....................................... 4
2.26 "Credit Facility"........................................... 5
2.27 "Current Maturities of Funded Debt"......................... 5
2.28 "Default"................................................... 5
2.29 "Default Rate".............................................. 5
2.30 "Depreciation Expense"...................................... 5
2.31 "DOL"....................................................... 5
2.32 "Dollars" or "$"............................................ 5
2.33 "ERISA"..................................................... 5
2.34 "ERISA Affiliate"........................................... 5
2.35 "Eurocurrency Reserve Requirement".......................... 5
2.36 "Event of Default".......................................... 5
2.37 "Exchange Act".............................................. 6
2.38 "FASB" ..................................................... 6
2.39 "First Borrowing"........................................... 6
2.40 "Fiscal Year................................................ 6
2.41 "Funded Debt"............................................... 6
2.42 "GAAP"...................................................... 6
2.43 "Governmental Authority".................................... 6
2.44 "Interest Expense".......................................... 6
i
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2.45 "Interest Rate Protection Agreements"....................... 6
2.46 "IRS"....................................................... 7
2.47 "Lender".................................................... 7
2.48 "Lending Office"............................................ 7
2.49 "LIBOR Business Day"........................................ 7
2.50 "LIBOR Advance"............................................. 7
2.51 "LIBOR Interest Period"..................................... 7
2.52 "LIBOR Rate"................................................ 7
2.53 "Lien"...................................................... 8
2.54 "Loan Documents"............................................ 8
2.55 "Majority Lenders".......................................... 8
2.56 "Margin Stock".............................................. 8
2.57 "Material Adverse Effect"................................... 8
2.58 "Multiemployer Plan"........................................ 9
2.59 "Net Income"................................................ 9
2.60 "Net Worth"................................................. 9
2.61 "Nonaccruing Loans"......................................... 9
2.62 "Non-Performing Loans....................................... 9
2.63 "Notes"..................................................... 9
2.64 "Notice of Borrowing"....................................... 9
2.65 "Obligations"............................................... 9
2.66 "OREO"...................................................... 9
2.67 "PBGC"...................................................... 10
2.68 "Person".................................................... 10
2.69 "Plan"...................................................... 10
2.70 "Pledge Agreement".......................................... 10
2.71 "Prime Rate"................................................ 10
2.72 "Prime Rate Advance"........................................ 10
2.73 "Principals and Related Parties"............................ 10
2.74 "Properties................................................. 10
2.75 "Regulation D".............................................. 11
2.76 "Regulation G".............................................. 11
2.77 "Regulation T".............................................. 11
2.78 "Regulation U".............................................. 11
2.79 "Regulation X".............................................. 11
2.80 "Renegotiated Loans"........................................ 11
2.81 "Reportable Event".......................................... 11
2.82 "Responsible Officer"....................................... 11
2.83 "Risk Weighted Assets" or "Risk
Adjusted Assets............................................. 11
2.84 "Subordinated Debt"......................................... 12
2.85 "Subsidiary" or "Subsidiaries".............................. 12
2.86 "Tangible Net Worth"........................................ 12
2.87 "Tangible Primary Assets"................................... 12
2.88 "Tangible Primary Capital".................................. 12
2.89 "Termination Date".......................................... 12
2.90 "Tier One Capital........................................... 12
2.91 "Tier Two Capital........................................... 12
2.92 "Unused Commitment.......................................... 13
2.93 Other Definitional Provisions............................... 13
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SECTION 3. CREDIT FACILITY............................................. 13
3.1 Commitments to Lend......................................... 13
3.2 Mandatory Reduction of Aggregate Commitment................. 14
3.3 Optional Termination or Reduction of Aggregate Commitment... 14
3.4 Method of Borrowing......................................... 14
3.5 LIBOR Advances Extensions and Conversions................... 16
3.6 Notes....................................................... 16
3.7 Maturity and Principal Payments of Advances................. 17
3.8 Interest Rates.............................................. 18
3.9 Determination of Applicable Margin.......................... 19
3.10 Illegality.................................................. 19
3.11 Increased Cost and Reduced Return........................... 20
3.12 Prime Rate Advances Substituted for
LIBOR Advances.............................................. 22
3.13 Compensation................................................ 22
3.14 LIBOR Indemnification....................................... 22
3.15 Commitment Fee.............................................. 23
3.16 Unused Commitment Fee....................................... 23
3.17 Reimbursement for Out-of-Pocket Costs....................... 23
3.18 Agent Fee................................................... 23
3.19 General Provisions as to Payments........................... 23
SECTION 4. CLOSING..................................................... 25
4.1 Closing..................................................... 25
SECTION 5. CLOSING UNDER THIS AGREEMENT;
PRECONDITIONS...................................................... 25
5.1 Closing Date................................................ 25
5.2 Preconditions to First Borrowing............................ 25
5.3 Conditions to all Borrowings................................ 28
SECTION 6. REPRESENTATIONS AND WARRANTIES.............................. 28
6.1 Existence and Power......................................... 28
6.2 Authorization; No Contravention............................. 29
6.3 Binding Effect.............................................. 29
6.4 Financial Information....................................... 29
6.5 No Litigation............................................... 29
6.6 Compliance with ERISA....................................... 30
6.7 Compliance with Laws; Payments of
Taxes....................................................... 30
6.8 Subsidiaries................................................ 30
6.9 Not an Investment Company................................... 31
6.10 Ownership of Property; Liens................................ 31
6.11 No Default.................................................. 31
6.12 Full Disclosure............................................. 31
6.13 Environmental Matters....................................... 31
6.14 Capital Stock............................................... 31
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6.15 Margin Stock................................................ 32
6.16 Insolvency.................................................. 32
SECTION 7. COVENANTS................................................... 32
7.1 Information................................................. 32
7.2 Inspection of Property, Books and
Records..................................................... 34
7.3 Financial Covenants......................................... 34
7.4 Subsidiaries' Cash Dividends................................ 35
7.5 Borrower's Dividends on Common Stock........................ 35
7.6 Maintenance of Ownership in
Acquisitions................................................ 35
7.7 No Subsidiary Stock Dividends, Stock
Splits, or Redemptions Without Consent...................... 35
7.8 Loans or Advances........................................... 35
7.9 Judgments and Claims........................................ 36
7.10 Funded Debt................................................. 36
7.11 No Amendment of Note Purchase
Agreement................................................... 36
7.12 Negative Pledge............................................. 36
7.13 Preparation of Financial Statements......................... 37
7.14 Maintenance of Existence.................................... 37
7.15 Dissolution................................................. 37
7.16 Consolidations, Mergers and Sales of
Assets...................................................... 37
7.17 Change in Control........................................... 37
7.18 Use of Proceeds............................................. 38
7.19 Compliance with Laws; Payment of Taxes...................... 38
7.20 Insurance................................................... 38
7.21 Change in Fiscal Year....................................... 38
7.22 Environmental Notices....................................... 38
7.23 Environmental Matters....................................... 39
7.24 Environmental Release....................................... 39
SECTION 8. SECURITY.................................................... 39
SECTION 9. ACCESS...................................................... 39
9.1 Access...................................................... 39
9.2 Examination................................................. 40
SECTION 10. DEFAULT..................................................... 40
10.1 Events of Default........................................... 40
10.2 Remedies.................................................... 42
10.3 Nonwaiver................................................... 42
SECTION 11. RIGHT OF SET-OFF............................................ 42
11.1 Set-off..................................................... 42
11.2 Sharing of Set-Offs......................................... 43
SECTION 12. THE AGENT................................................... 43
12.1 Appointment; Powers and Immunities.......................... 43
iv
<PAGE>
12.2 Reliance by Agent........................................... 44
12.3 Defaults.................................................... 44
12.4 Rights of Agent as a Lender................................. 45
12.5 Indemnification............................................. 45
12.6 CONSEQUENTIAL DAMAGES....................................... 46
12.7 Payee of Note Treated as Owner.............................. 46
12.8 Nonreliance on Agent and Other Lenders...................... 46
12.9 Failure to Act.............................................. 46
12.10 Resignation of Agent........................................ 47
SECTION 13. MISCELLANEOUS............................................... 47
13.1 Notices..................................................... 47
13.2 No Waivers.................................................. 47
13.3 Expenses; Documentary Taxes................................. 48
13.4 Indemnification............................................. 48
13.5 Amendments and Waivers...................................... 48
13.6 Successors and Assigns...................................... 49
13.7 Confidentiality............................................. 51
13.8 Representation by Lenders................................... 52
13.9 Obligations................................................. 52
13.10 Idaho Law................................................... 52
13.11 Interpretation.............................................. 52
13.12 Waiver of Jury Trial; Consent to Jurisdiction............... 52
13.13 Counterparts................................................ 53
13.14 Severability................................................ 53
13.15 Interest.................................................... 53
v
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EXHIBITS
"A" -- Promissory Notes
"B" -- Notice of Borrowing
"C" -- General Pledge & Security Agreement
"D" -- List of Guarantees
"E" -- Form of Opinion of Counsel
"F" -- List of Pending Lawsuits
"G" -- List of Existing Liens
6.8 -- List of Borrower's Subsidiaries
vi
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FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
LOAN AGREEMENT
THIS LOAN AGREEMENT dated effective as of October 1, 1996, among FIRST
INTERSTATE BANCSYSTEM OF MONTANA, INC., a Montana corporation, the LENDERS
listed on the signature pages hereof and FIRST SECURITY BANK, N.A., a national
banking association, as AGENT.
WITNESSETH:
WHEREAS, First Interstate BancSystem of Montana, Inc. desires to
obtain up to a Forty-Five Million Dollar ($45,000,000) reducing revolving credit
facility from the Lenders; and
WHEREAS, the reducing revolving credit facility is to be used by First
Interstate BancSystem of Montana, Inc. for the following purposes:
(a) To acquire all of the stock of First Interstate Bank of
Montana, N.A. and First Interstate Bank of Wyoming, N.A.;
(b) To refinance approximately Nine Million Dollars
($9,000,000) in existing term debt;
(c) To replace an existing Three Million Dollars ($3,000,000)
revolving line of credit commitment; and
(d) To pay the Commitment Fee and all out-of-pocket costs
reasonably incurred by Agent incident to or in connection with the making of the
reducing revolving credit facility, including, without limitation, reasonable
attorney fees and the cost of lien and security interest searches.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, Lenders are willing and hereby commit to make available
the reducing revolving credit facility desired by First Interstate BancSystem of
Montana, Inc.
SECTION 1. BINDING COVENANTS.
The foregoing are binding covenants of this Loan Agreement, not mere
recitals, and represent considerations, promises, conditions and warranties
binding upon the parties hereto.
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SECTION 2. DEFINITIONS.
As used in this Loan Agreement, the following terms shall have the
following definitions:
2.1 "Acquisitions" means collectively First Interstate Bank of
Montana, N.A. and First Interstate Bank of Wyoming, N.A.
2.2 "Adjusted LIBOR Rate" means a rate per annum equal to the
quotient obtained by dividing (i) the LIBOR Rate for such LIBOR Interest Period
by (ii) one (1) minus the Eurocurrency Reserve Requirement for the applicable
LIBOR Interest Period, rounded upward, if necessary, to the nearest
one-sixteenth of one percent. The Adjusted LIBOR Rate shall be adjusted on and
as of the effective date of any change in the Eurocurrency Reserve Requirement.
2.3 "Advance" means either a Prime Rate Advance or a LIBOR Advance
under this Agreement, and "Advances" means either Prime Rate Advances or LIBOR
Advances or both under this Agreement.
2.4 "Agent" means First Security Bank, N.A., a national banking
association organized under the laws of the United States of America, in its
capacity as agent for the Lenders hereunder, and its successors and permitted
assigns in such capacity.
2.5 "Aggregate Commitment" means the sum of all of the Commitments.
2.6 "Agreement" means this Loan Agreement, any subsequent rider to
this Loan Agreement, and any extensions, supplements, notes, amendments, or
modifications to or in connection with this Loan Agreement.
2.7 "Applicable Margin" means (a) with respect to LIBOR Advances:
(i) If the Borrower's Consolidated Tier One Risk Based
Capital Ratio is greater than or equal to 10.0%, 125 basis points; and
(ii) If the Borrower's Consolidated Tier One Risk Based
Capital Ratio is less than 10.0% but greater than or equal to 8.0%,
150 basis points; and
(iii) If the Borrower's Consolidated Tier One Risk Based
Capital Ratio is less than 8.0% but greater than or equal to 6.0%, 175
basis points; and
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(iv) If the Borrower's Consolidated Tier One Risk Based
Capital Ratio is less than 6.0%, 200 basis points; and
(b) with respect to Prime Rate Advances:
(i) If the Borrower's Consolidated Tier One Risk Based
Capital Ratio is equal to or greater than 6.0%, 0 basis points; and
(ii) If the Borrower's Consolidated Tier One Risk Based
Capital Ratio is less than 6.0%, 25 basis points.
The determination of the Applicable Margin from time-to-time shall be made in
accordance with Section 3.8 and the calculation of the Borrower's Consolidated
Tier One Risk Based Capital Ratio shall be made in accordance with Section
7.3(a)(ii).
2.8 "Amortization Expense" means for any period in time, the
reduction in book value of intangible assets of the Borrower and its
Subsidiaries for such period, as determined in accordance with GAAP.
2.9 "Banking Subsidiary" means a Subsidiary of Borrower engaged in
the business of a depository institution, the deposits of which are insured by
the Federal Deposit Insurance Corporation.
2.10 "Bankruptcy Act" means the Bankruptcy Reform Act of 1978, as
amended.
2.11 "Borrower" means First Interstate BancSystem of Montana, Inc., a
bank holding company organized and existing under the laws of the state of
Montana.
2.12 "Borrower's Books" means all of Borrower's books and records,
including but not limited to minute books; ledgers; records indicating,
summarizing, or evidencing Borrower's assets, liabilities, and accounts; all
information relating to Borrower's business operations or financial condition;
and all computer programs, disc or tape files, printouts, runs, and other
computer prepared information and the equipment containing such information.
2.13 "Borrowing" means a borrowing hereunder consisting of Advances
made to Borrower by the Lenders pursuant to Section 3. A Borrowing is a "Prime
Rate Borrowing" if such Advances are Prime Rate Advances or a "LIBOR Borrowing"
if such Advances are LIBOR Advances.
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2.14 "Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in Idaho are authorized by law to close.
2.15 "Capital" means Tier One Capital plus Tier Two Capital.
2.16 "Capital Lease" means any lease or other agreement for the use
of property which is required to be capitalized on a balance sheet of the lessee
or other user of property in accordance with GAAP.
2.17 "Capital Stock" means any nonredeemable capital stock of the
Borrower or any of Borrower's Subsidiaries, whether common or preferred.
2.18 "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
2.19 "Closing Date" means October 1, 1996, or such other date as may
be mutually agreed to by each Lender and Borrower.
2.20 "Code" means the Internal Revenue Code of 1986, as amended, or
any successor federal tax code.
2.21 "Collateral" means the property in which a security interest is
granted or is to be granted to the Agent for the benefit of the Lenders pursuant
to this Agreement.
2.22 "Commitment" means, with respect to each Lender, the amount set
forth opposite the name of such Lender on the signature pages hereof, as such
amount may be proratably reduced based upon each Lender's share of the Aggregate
Commitment from time to time pursuant to Section 3.
2.23 "Commitment Fee" has the meaning specified in Section 3.
2.24 "Consolidated" means, when used with reference to Funded Debt,
Interest Expense, Depreciation Expense and Amortization Expense, as the case may
be, Funded Debt, Interest Expense and Depreciation Expense and Amortization
Expense of the Borrower and its Subsidiaries, determined on a consolidated
basis, after eliminating all offsetting debits and credits between the Borrower
and its Subsidiaries and other items to be eliminated in accordance with GAAP.
2.25 "Consolidated Assets" means, as of the date of determination
thereof, the aggregate of all assets of the Borrower and its Subsidiaries in
accordance with GAAP.
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2.26 "Credit Facility" means at any time Borrower's credit facility
pursuant to Section 3 hereof.
2.27 "Current Maturities of Funded Debt" means any principal portion
of Funded Debt due within one (1) year, as accounted for in accordance with
GAAP.
2.28 "Default" means any Event of Default or the occurrence and
continuance of an event which, with the giving of notice or the passage of time,
or both, if required, would constitute any Event of Default.
2.29 "Default Rate" means with respect to any Advance, on any day,
the Prime Rate plus 2.0%.
2.30 "Depreciation Expense" means for any period the decline in value
of fixed assets, allocating purchase cost of the asset over its useful economic
life for such period, as determined in accordance with GAAP.
2.31 "DOL" means the United States Department of Labor.
2.32 "Dollars" or "$" means dollars in lawful currency of the United
States of America.
2.33 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute.
2.34 "ERISA Affiliate" means any Person which would be deemed to be
under "common control" with the Borrower within the meaning of
Section 4001(b)(1) of ERISA.
2.35 "Eurocurrency Reserve Requirement" means, for any LIBOR Advance
for any LIBOR Interest Period thereof, the daily average of the stated maximum
rate (expressed as a decimal) at which reserves (including any marginal,
supplemental, or emergency reserves) are required to be maintained during such
LIBOR Interest Period under Regulation D by Lenders against "Eurocurrency
Liabilities" (as such term is used in Regulation D). Without limiting the
effect of the foregoing, the Eurocurrency Reserve Requirement shall reflect any
other reserves required to be maintained by Lenders against (1) any category of
liabilities that includes deposits by reference to which the Adjusted LIBOR Rate
for LIBOR Advances is to be determined; or (2) any category of extension of
credit or other assets that include LIBOR Advances.
2.36 "Event of Default" means the occurrence of any one of the events
set forth in Section 10 of this Agreement.
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2.37 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.38 "FASB" means the Financial Accounting Standards Board.
2.39 "First Borrowing" means the occurrence of the initial borrowing
of funds by the Borrower as set forth in Section 5.2 of this Agreement.
2.40 "Fiscal Year" means that twelve (12) month period beginning on
January 1 of any year and ending on December 31 of such year.
2.41 "Funded Debt" means any and all indebtedness for money borrowed
with respect to any Person including Capitalized Leases, Subordinated Debt and
money borrowed evidenced by a promissory note, debentures or like written
obligation to pay.
2.42 "GAAP" means the generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board that are applicable
to the circumstances as of the date of determination consistently applied.
2.43 "Governmental Authority" means any federal, state, county,
municipal, regional or other governmental entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
2.44 "Interest Expense" means, with respect to any indebtedness of
any Person, for any period, the aggregate amount (determined in accordance with
GAAP) of cash interest paid or accrued during such period by such Person in
respect of all such indebtedness of any Person and including the interest
component of all Capital Lease rents, provided that (a) there shall be added to
Interest Expense any fees or commissions or net losses amortized during such
period under Interest Rate Protection Agreements and any fees or commissions
payable in connection with any letters of credit during such period and (b)
there shall be subtracted from Interest Expense any net gains under Interest
Rate Protection Agreements during such period.
2.45 "Interest Rate Protection Agreements" means any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or cross-
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currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or dollar protection agreements, forward rate
currency or interest rate options, puts and warranties.
2.46 "IRS" means the United States Internal Revenue Service.
2.47 "Lender" means each Lender listed on the signature pages hereof
as having a Commitment, and its successors and assigns, and "Lenders" mean all
such Lenders.
2.48 "Lending Office" shall mean with respect to any Lender any
office or offices of such Lender or affiliate or affiliates of such Lender
through which such Lender shall fund or shall have funded any portion of the
Commitment.
2.49 "LIBOR Business Day" means any Business Day on which dealings in
dollar deposits are carried out in the London interbank market.
2.50 "LIBOR Advance" means any advance under this Agreement bearing
interest at a rate based upon the Adjusted LIBOR Rate.
2.51 "LIBOR Interest Period" means, with respect to any LIBOR
Advance, the period commencing on the date such Advance is made and ending, as
the Borrower may select, pursuant to this Agreement, on the numerically
corresponding day in the first, second, third, sixth or twelfth, calendar month
thereafter, except that each such LIBOR Interest Period that commences on the
last Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month;
provided that if a LIBOR Interest Period would end on a day that is not a
Business Day, such LIBOR Interest Period shall be extended to the next Business
Day unless such Business Day would fall in the next calendar month, in which
event such LIBOR Interest Period shall end on the immediately preceding Business
Day. No LIBOR Interest Period may be elected which would extend past the
Termination Date.
2.52 "LIBOR Rate" means for any LIBOR Interest Period for a LIBOR
Advance the rate per annum quoted at approximately 11:00 a.m. London time by
Reuters 2 Business Days prior to the first day of such LIBOR Interest Period for
the offering to leading banks in the London interbank market of dollar deposits
for a period and an amount comparable to the LIBOR Interest Period and principal
amount of the LIBOR Advance that shall be made by the Lender and outstanding
during the LIBOR Interest
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Period. The LIBOR Rate determined by Agent with respect to a particular LIBOR
Advance shall be fixed at such rate for the duration of the associated LIBOR
Interest Period. No election of a LIBOR Advance shall be effective if, prior to
the commencement of the LIBOR Interest Period, the Agent determines that by
reason of circumstances affecting the interbank market generally, adequate and
reasonable methods do not exist for ascertaining the interest rate applicable to
such deposits for the proposed LIBOR Interest Period.
2.53 "Lien" means with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement, which has the practical effect of constituting
a security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a debt or a guarantee,
whether by consensual agreement or by operation of statute or other law, or any
agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, the Borrower or any Banking Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
Capital Lease or other title retention agreement relating to such asset.
2.54 "Loan Documents" means this Agreement, the Notes, any other
document evidencing, relating to or securing the Advances including, without
limitation, the Pledge Agreement, and any other document or instrument delivered
from time to time in connection with this Agreement, the Notes, or the Advances,
as such documents and instruments may be amended or modified from time to time.
2.55 "Majority Lenders" means at any time Lenders having at least
66-2/3% of the Aggregate Commitment or, if the Commitments are no longer in
effect, Lenders holding at least 66-2/3% of the aggregate outstanding principal
amount (or net discounted proceeds, as applicable) of the Notes.
2.56 "Margin Stock" means "margin stock" as defined in Regulations G,
T, U or X.
2.57 "Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
current or future financial condition, operations, business, or properties of
the
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Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform its obligations under the Loan Documents or (c) the legality,
validity or enforceability (including the rights and remedies of the Agent and
the Lenders) of any Loan Document.
2.58 "Multiemployer Plan" means a Plan described in Section
4001(a)(3) of ERISA.
2.59 "Net Income" means, as applied to any Person for any period, the
aggregate amounts of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
2.60 "Net Worth" means, as applied to any Person as of the date of
any determination thereof, (i) the assets of such Person, less (ii) all
outstanding liabilities and deferred credits of such Person calculated in
accordance with GAAP.
2.61 "Nonaccruing Loans" means loans on which interest is not being
accrued for income statement purposes.
2.62 "Non-Performing Loans" means Nonaccruing Loans plus Renegotiated
Loans plus OREO plus loans 90 days past the payment due date.
2.63 "Notes" means collectively the Promissory Notes of the Borrower
in the form of EXHIBIT "A" hereto and "Note" shall mean any individual
Promissory Note of the Borrower given to any of the Lenders hereunder.
2.64 "Notice of Borrowing" means a notice delivered by Borrower to
Agent pursuant to Section 3.2 substantially in the form of EXHIBIT "B".
2.65 "Obligations" means the obligation of Borrower to repay the
Advances under the Aggregate Commitment made herein, as evidenced by the Notes,
together with all other obligations and liabilities owed to any Lender by
Borrower or its Banking Subsidiaries, whether now or hereafter incurred,
excluding Federal Funds Lines and Repurchase Agreements, including, without
limitation, the Agent's, if any, and each Lender's reasonable attorney fees and
costs of suit in the event of Default under this Agreement, or under the Loan
Documents or under any other document or instrument given to any Lender by the
Borrower or its Banking Subsidiaries and any advance (whether optional by any
Lender or otherwise), which any Lender may make for or on behalf of the Borrower
or in connection with this Agreement.
2.66 "OREO" means real estate owned and foreclosed assets.
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2.67 "PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
2.68 "Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
2.69 "Plan" means any employee welfare benefit plan or employee
pension benefit plan or any plan that is both an employee welfare benefit plan
and an employee pension benefit plan, as defined in Section 3 of ERISA that the
Borrower or any ERISA Affiliate maintains or is obligated to contribute to for
the benefit of employees or former employees of the Borrower or any ERISA
Affiliate.
2.70 "Pledge Agreement" means the General Security and Pledge
Agreement in the form attached as EXHIBIT "C" granting to the Lenders a security
interest in the Collateral.
2.71 "Prime Rate" means First Security Bank, N.A.'s publicly
announced in Boise, Idaho prime rate of interest used as a reference point from
which the cost of credit to customers of the First Security Bank, N.A. may be
calculated, and is subject to change from time to time. First Security Bank,
N.A. may make loans bearing interest above, at or below its prime rate.
2.72 "Prime Rate Advance" means any advance hereunder bearing
interest at a rate based upon the Prime Rate.
2.73 "Principals and Related Parties" means the following
individuals, any trusts for their benefit, and their executors or heirs and any
limited partnerships fully owned by any of the following: James R. Scott; Homer
Scott, Jr.; Dan S. Scott; Thomas W. Scott; Susan Scott Heyneman; John M.
Heyneman; Thomas Scott Heyneman; James R. Heyneman; Charles Matthew Heyneman;
Alexander Paul Heyneman; Randall Isham Scott; Ronald Noel Scott; Riki Rae Scott
Davidson; Risa Kae Scott; Rae Ann Scott; Sarah E. Scott Suzor; Samuel Moise
Suzor; Jonathan R. Scott; Julie Anne Scott; Jeanne I. Scott; Susan Elizabeth
Scott; James Marshall Scott; Homer Rollins Scott; Sandra Arlene Scott; Janet E.
Scott; James R. Scott, Jr.; Courtney L. Scott; Dana A. Scott; and Joan Scott.
2.74 "Properties" means all real property owned, leased or otherwise
used or acquired by either Borrower or any Subsidiary, wherever located.
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2.75 "Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
2.76 "Regulation G" means Regulation G of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
2.77 "Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
2.78 "Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
2.79 "Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
2.80 "Renegotiated Loans" means loans where modifications of the
terms of the loans have been made, making the terms of the loans more favorable
than might be otherwise offered the debtor.
2.81 "Reportable Event" means any of the events set forth in Section
4043 of ERISA, other than an event for which notice or penalty for noncompliance
has been waived by regulation or otherwise.
2.82 "Responsible Officer" means, at any particular time, the
President, any Senior Vice-President, any Executive Vice-President, any
Vice-President, the Treasurer or the Chief Financial Officer of the Borrower or
any of its Subsidiaries.
2.83 "Risk Weighted Assets" or "Risk Adjusted Assets" shall have the
meaning set forth on the date hereof under applicable regulations of any
regulatory agency having authority on the date hereof as such regulations are
applicable to the Borrower, or if such regulations are amended hereafter to
define Risk Weighted Assets or Risk Adjusted Assets more restrictively, as set
forth in such later definition; provided, that if such regulations are amended
hereafter to define Risk Weighted Assets or Risk Adjusted Assets less
restrictively than the regulations existing on the Closing Date, then the
meaning of Risk Weighted
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Assets or Risk Adjusted Assets shall not be changed to reflect such later
modification.
2.84 "Subordinated Debt" means, on any date, all indebtedness of the
Borrower, as reflected on its financial statements, which it now or hereafter
owes or may owe to any creditor which is specifically and completely
subordinated in a manner satisfactory to Lenders, to the repayment of the
Obligations.
2.85 "Subsidiary" or "Subsidiaries" means any corporation,
partnerships or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by Borrower.
2.86 "Tangible Net Worth" means Net Worth less goodwill and other
intangible assets.
2.87 "Tangible Primary Assets" means the sum of consolidated assets
and reserve for loan losses less goodwill or other intangible assets.
2.88 "Tangible Primary Capital" means the sum of common equity,
reserve for loan losses and perpetual preferred stock, less goodwill and other
intangible assets.
2.89 "Termination Date" means the earlier to occur of (i) December
31, 2003, or (ii) the occurrence of an Event of Default as defined in Section
10.1 hereof, or (iii) the date the Commitments shall be reduced to zero, or (iv)
such later date agreed to by all Lenders or, if in any case such day is not a
Business Day, the next succeeding Business Day.
2.90 "Tier One Capital" shall have the meaning set forth on the date
hereof under applicable regulations of any regulatory agency having authority on
the date hereof as such regulations are applicable to the Borrower, or if such
regulations are amended hereafter to define Tier One Capital more restrictively,
as set forth in such later definition; provided, that if such regulations are
amended hereafter to define Tier One Capital less restrictively than the
regulations existing on the Closing Date, then the meaning of Tier One Capital
shall not be changed to reflect such later modification.
2.91 "Tier Two Capital" shall have the meaning set forth on the date
hereof under applicable regulations of any regulatory agency having authority on
the date hereof as such regulations are applicable to the Borrower, or if such
regulations are amended hereafter to define Tier Two Capital more
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restrictively, as set forth in such later definition; PROVIDED, that if such
regulations are amended hereafter to define Tier Two Capital less restrictively
than the regulations existing on the Closing Date, then the meaning of Tier Two
Capital shall not be changed to reflect such later modification.
2.92 "Unused Commitment" means at any date, with respect to any
Lender, an amount equal to its Commitment less the aggregate outstanding
principal amount of its Advances hereunder.
2.93 Other Definitional Provisions. All terms defined in this
Agreement shall have the defined meanings when used herein and in the Loan
Documents or in any other document made or delivered pursuant hereto. The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and section, subsection, schedule and exhibit
references are to this Agreement unless otherwise specified. Except as
otherwise specifically provided in this Agreement, the use of any term shall be
equally applicable to any gender, "or" shall not be exclusive, and "including"
shall not be limiting.
SECTION 3. CREDIT FACILITY.
3.1 COMMITMENTS TO LEND. Subject to the terms and conditions
herein, each Lender severally agrees to make Advances to the Borrower from time
to time before the Termination Date; provided that, (i) immediately after each
such Advance, the aggregate principal amount of Advances by such Lender shall
not exceed the amount of its Commitment, and (ii) at no time shall the aggregate
outstanding principal amount of all Advances to Borrower exceed the Aggregate
Commitment. All Advances to Borrower shall be considered in determining whether
the Aggregate Commitment has been exceeded in calculating the amount available
for Borrowing by Borrower hereunder and in determining the amount of any
mandatory payments required by Section 3.7(b), and for calculation of fees
pursuant to Section 3.19. Each Prime Rate Borrowing under this Section 3.1
shall be in an aggregate principal amount of Two Hundred Fifty Thousand Dollars
($250,000) or more and each LIBOR Rate Borrowing under this Section 3.1 shall be
in an aggregate principal amount of One Million Dollars ($1,000,000) or more
(except that any such Borrowing may be in the aggregate amount of the Unused
Commitment). Each Advance by a Lender shall not exceed such Lender's prorata
share of the requested Advance and the Aggregate Commitment. Within the
foregoing limits, the Borrower may borrow under this Section 3.1, repay or, to
the extent permitted by Section 3.7(c), prepay Advances and reborrow under this
Section up to the then-remaining Unused Commitment at any time before the
Termination Date.
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3.2 MANDATORY REDUCTION OF AGGREGATE COMMITMENT. The Aggregate
Commitment shall be reduced semiannually by Two Million Dollars ($2,000,000)
beginning on June 30, 1997, and on December 31, 1997, and continuing on June
30th and December 31st of each and every year thereafter until the Termination
Date.
3.3 OPTIONAL TERMINATION OR REDUCTION OF AGGREGATE COMMITMENT. The
Borrower may, upon at least 10 Business Days' notice to the Agent (which notice
the Agent shall promptly forward to the Lenders), terminate at any time, or
proportionately reduce the Aggregate Commitment over and above the mandatory
reductions required in Section 3.2 from time to time by an aggregate amount of
at least One Million Dollars ($1,000,000), or multiple thereof. Any such
termination or reduction in the Aggregate Commitment shall be a permanent
termination and/or reduction. If the Aggregate Commitment is terminated in its
entirety, all accrued fees (as provided herein) shall be due and payable on the
Termination Date.
3.4 METHOD OF BORROWING. (a) The Borrower with respect to all
Advances shall give the Agent a Notice of Borrowing, at least 1 Business Day
prior to each Prime Rate Borrowing, and at least 3 LIBOR Business Days prior to
each LIBOR Borrowing (all notices being effective on the day delivered so long
as the Agent shall have received the required notice prior to 10:00 A.M. (Boise,
Idaho time). Each Notice of Borrowing shall specify:
(i) the date of such Borrowing, which shall be a Business
Day in the case of a Prime Rate Borrowing or a LIBOR Business Day in
the case of a LIBOR Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) which portion of such Borrowing, is to be a Prime
Rate Advance and which portion is to be a LIBOR Advance, and
(iv) in the case of a LIBOR Borrowing, the duration of the
LIBOR Interest Period applicable thereto, subject to the provisions of
the definition of LIBOR Interest Period.
(b) Upon timely receipt of a Notice of Borrowing, the Agent
shall on the same date of its receipt of the required Notice of Borrowing notify
each Lender of the contents thereof and of such Lender's ratable share of such
Borrowing and such Notice of Borrowing shall not thereafter be revocable by the
Borrower.
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(c) Not later than 12:00 P.M. (local time of the Agent) on the
date of each Borrowing each Lender shall (except as provided in paragraph (d) of
this Section) make available its ratable share of such Borrowing, in Federal or
other funds immediately available to the Agent at the location designated by the
Agent. Unless the Agent has been notified by a Lender that the conditions
precedent to any Borrowing have not been satisfied or that an Event of Default
has occurred, the Agent will make the funds so received from the Lenders
available to the Borrower. Unless the Agent receives notice from a Lender, no
later than 12:00 P.M. (local time of the Agent) on the date of any such
Borrowing stating that such Lender will not make an Advance in connection with
the Borrower's request, the Agent shall be entitled to assume that such Lender
will make the requested Advance and, in reliance on such assumption, the Agent
may (but shall not be obligated to) make available such Lender's ratable share
of such requested Advance to the Borrower for the account of such Lender. If
the Agent makes such Lender's ratable share available to the Borrower and such
Lender does not in fact make its ratable share of such requested Advance
available to Agent on such date, the Agent shall be entitled to recover such
Lender's ratable share from such Lender or the Borrower (and for such purpose
shall be entitled to charge such amount to any account of the Borrower
maintained with the Agent), together with interest thereon for each day during
the period from the date of such Borrowing until such sum shall be paid in full.
(d) If any Lender makes a new Advance hereunder on a day on
which the Borrower is to repay all or any part of an outstanding Advance from
such Lender, such Lender shall apply the proceeds of its new Advance to make
such repayment and only an amount equal to the difference (if any) between the
amount being borrowed and the amount being repaid shall be made available by
such Lender to the Agent.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Prime Rate Advance or LIBOR Advance may be made if there shall
have occurred a Default or an Event of Default, which Default or Event of
Default shall not have been cured or waived.
(f) In the event any Notice of Borrowing fails to specify
whether the requested Advances are to be Prime Rate Advances or LIBOR Advances,
such Advances shall be made as Prime Rate Advances. If the Borrower is
otherwise entitled under this Agreement to repay any Advances maturing at the
end of a LIBOR Interest Period applicable thereto with the proceeds of a new
Advance, and Borrower fails to repay such Advances using its own moneys and
fails to give a Notice of Borrowing in connection with such new Borrowing or if
a Default or Event of Default shall have occurred and shall not have been cured
or waived, a new Borrowing
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shall be deemed to be made on the date such Advances mature in an amount equal
to the principal amount of the Advances so maturing, and the new Borrowing shall
be Prime Rate Advances, PROVIDED, HOWEVER, that no such deemed Advance pursuant
to the above clause shall constitute a cure or waiver of any Default or Event of
Default then in existence (including without limitation the Default arising from
the failure to repay the maturing Advance at the end of the Interest Period) or
a limitation of or restriction on the right of the Agent, at the direction of
the Lenders, to accelerate the obligations of the Borrower hereunder and impose
any rights and remedies contained in Section 10.
(g) Notwithstanding anything to the contrary contained herein,
there shall not be more than 6 LIBOR Advances per Lender at any given time.
3.5 LIBOR ADVANCES EXTENSIONS AND CONVERSIONS. So long as no Event
of Default has occurred and subject to the terms and conditions hereof, the
Borrower may extend a LIBOR Advance beyond its current LIBOR Interest Period by
providing Agent written notice of the requested extensions and of the duration
of the next period which notice Agent shall promptly notify each Lender of the
contents thereof. Such notice shall be given not later than 10:00 a.m., Boise,
Idaho time, at least 3 Business Days prior to the end of the applicable LIBOR
Interest Period. Subject to the terms and conditions hereof, the Borrower shall
also have the option at any time to convert a LIBOR Advance into a Prime Rate
Advance or a Prime Rate Advance into a LIBOR Advance as applicable; provided,
however, that a LIBOR Rate Advance may be converted only on the last day of the
applicable LIBOR Interest Period. The Borrower shall notify the Agent in
writing of each proposed conversion, the proposed conversion date (which shall
be a Business Day), and, in the case of a proposed conversion into a LIBOR
Advance, the duration of the LIBOR Interest Period thereof. Upon receipt of
such notice, Agent shall promptly notify each Lender of the contents thereof.
In the case of a proposed extension of or conversion into a LIBOR Advance, such
notice shall be at least 3 Business Days prior to the proposed conversion date,
and if such notice is not forthcoming, the Advance shall automatically convert
to or remain a Prime Rate Advance. Unless Agent receives notice of a proposed
extension or conversion as and when required hereunder, then at the end of a
LIBOR Interest Period for a LIBOR Advance, such LIBOR Advance shall
automatically convert to a Prime Rate Advance; provided, in no event shall
Borrower convert any or all of the Credit Facility into a LIBOR Advance with a
LIBOR Interest Period that ends after the Termination Date.
3.6 NOTES. (a) The Advances of each Lender shall be evidenced by a
single Note payable to the order of such Lender in
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an amount equal to the original principal amount of such Lender's Commitment.
(b) Upon receipt of each Lender's Note pursuant to Section 5.2,
the Agent shall deliver such Note to such Lender. Each Lender shall record, and
prior to any transfer of its Note, if permitted, shall endorse on the schedules
forming a part of its Note, appropriate notations to evidence, the date, amount
and maturity of, and effective interest rate for, each Advance made by it, the
date and amount of each payment of principal made by the Borrower with respect
thereto, and such schedules of each such Lender's Note shall constitute
rebuttable presumptive evidence of the respective principal amounts owing and
unpaid on such Lender's Note; provided that the failure of any Lender to make
any such recordation or endorsement shall not affect the obligation of the
Borrower hereunder or under the Note or the ability of any Lender to assign its
Note in accordance with the provisions of this Agreement. Each Lender is hereby
irrevocably authorized by the Borrower to enforce its Note and to attach to and
make a part of the Note a continuation of any such schedule as and when
required.
3.7 MATURITY AND PRINCIPAL PAYMENTS OF ADVANCES. (a) Subject to
Section 3.7(d), each LIBOR Advance shall mature on the last day of the LIBOR
Interest Period applicable to such LIBOR Borrowing.
(b) On each date on which the Commitments are reduced pursuant
to Section 3.2 or Section 3.3, the Borrower shall repay such principal amount of
the outstanding Advances, as may be necessary so that after such payment the
aggregate unpaid principal amount of the Advances does not exceed the amount of
the Aggregate Commitment as then reduced.
(c) (i) The Borrower may, without penalty, upon at least 1
Business Day's notice to the Agent, pay any Prime Rate Advance in whole or in
part at any time, in minimum amounts of Two Hundred Fifty Thousand Dollars
($250,000) which shall be applied to principal. Each such optional payment
shall be applied to pay ratably the principal portion of the Prime Rate Advances
of the Lenders then outstanding.
(ii) Except as provided in Section 3.10 (but subject in
any event to Section 3.13), the Borrower may not, without the prior
written consent of the Lenders, pay all or any portion of the
principal amount of any LIBOR Advance prior to the end of the relevant
LIBOR Interest Period applicable to such Advance.
(iii) Upon receipt of a notice of payment pursuant to this
Section 3.7, the Agent shall promptly
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notify each Lender of the contents thereof and of such Lender's
ratable share of such payment and such notice shall not thereafter be
revocable by the Borrower.
(d) In addition to the foregoing, the outstanding principal
amount of the Prime Rate Advances and the LIBOR Advances, together with all
accrued but unpaid interest thereon, if any, shall be due and payable, unless
accelerated as provided for herein, on the Termination Date.
3.8 INTEREST RATES. (a) Each Prime Rate Advance shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Advance is made until it becomes due, at a rate per annum equal to the then
applicable Prime Rate for such day plus the Applicable Margin. Interest accrued
on each Prime Rate Advance shall be due and payable quarterly in arrears on the
tenth (10th) calendar day of the month following the end of a calendar quarter
in an amount equal to the interest accrued as of the last day of the immediately
preceding calendar quarter beginning on the end of the first calendar quarter
following the Closing Date and continuing thereafter until the Termination Date.
(b) Each LIBOR Advance shall bear interest on the outstanding
principal amount thereof, for the LIBOR Interest Period applicable thereto, at a
rate per annum equal to the sum of the Applicable Margin plus the Adjusted LIBOR
Rate for such LIBOR Interest Period. Interest accrued on each LIBOR Advance
that is for a LIBOR Interest Period of three (3) months or less shall be due and
payable on the last day of the LIBOR Interest Period. Interest accrued on each
LIBOR Advance that is for LIBOR Interest Period in excess of three (3) months
shall be due and payable every three (3) months after the date the LIBOR Advance
is made and on the last day of the LIBOR Interest Period.
(c) Interest on Prime Rate Advances shall be computed on the
basis of a year of 365/366 days and paid for the actual number of days elapsed
(including the first but excluding the last day). Interest on LIBOR Advances
shall be computed on the basis of the actual number of days in the calendar year
of calculation divided by 360 days and paid for the actual number of days
elapsed, calculated as to each applicable LIBOR Interest Period from and
including the first day thereof to but excluding the last day thereof.
(d) After the date any principal of any Advance is due and
payable (whether on the maturity date, upon acceleration, or otherwise), or
after any other monetary obligation of the Borrower to the Agent or the Lenders
shall have become due and payable and is not then paid, the Borrower shall
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pay, but only to the extent permitted by law, interest equal to the Default
Rate.
3.9 DETERMINATION OF APPLICABLE MARGIN. In determining the
Applicable Margin on a quarterly basis, the Borrower and the Lenders shall refer
to the Borrower's most recent consolidated financial statements for the quarter
delivered to the Lenders; PROVIDED THAT, any necessary changes in the Applicable
Margin shall not be effective until the first day of the next succeeding
calendar quarter. All determinations hereunder shall be made by the Agent.
Notwithstanding anything to the contrary stated above in this Section 3.9, the
Applicable Margin from the Closing Date through March 31, 1997 will be with
respect to LIBOR Advances 175 basis points and with respect to Prime Rate
Advances 0 basis points.
3.10 ILLEGALITY. If, after the date hereof, the adoption of any
applicable law, rule, regulation, statute, treaty, judgment or decree, or any
change therein, or any change in the interpretation or administration thereof by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof (any such agency being referred to as
an "Authority" and any such event being referred to as a "Change of Law"), or
compliance by any Lender (or its applicable Lending Office) with any request or
directive, rule, consent, approval, authorization, guideline, order or policy
(whether or not having the force of law) of any Authority shall make it unlawful
or impossible for any Lender (or its applicable Lending Office) to make,
maintain or fund its LIBOR Advances and such Lender shall so notify the Agent,
the Agent shall forthwith give notice thereof to the other Lenders and the
Borrower, whereupon until such Lender notifies the Borrower and the Agent that
the circumstances giving rise to such suspension no longer exist, the obligation
of such Lender (but no other Lender unless such other Lender shall have notified
the Agent of similar circumstances) to make LIBOR Advances shall be suspended.
Before giving any notice to the Agent pursuant to this Section, such Lender
shall designate a different Lending Office if such designation will avoid the
need for giving such notice and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. If such Lender shall determine that
it may not lawfully continue (i) to make any LIBOR Advances or (ii) to maintain
and fund any of its outstanding LIBOR Advances to maturity and shall so specify
in each such notice, in the case of clause (i), such Lender nevertheless shall
be obligated to make Prime Rate Advances, and in the case of clause (ii), the
Borrower shall immediately prepay in full the then outstanding principal amount
of each LIBOR Advance of such Lender, together with accrued interest thereon.
Concurrently with prepaying each such LIBOR Advance, the Borrower shall borrow a
Prime Rate Advance in an equal principal amount from such
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Lender (on which interest and principal shall be payable contemporaneously with
the related LIBOR Advances of the other Lenders), and such Lender shall make
such a Prime Rate Advance.
3.11 INCREASED COST AND REDUCED RETURN. (a) If after the date
hereof, a change of law or compliance by any Lender (or its applicable Lending
Office) with any request, directive, rule, consent, approval, authorization,
guideline, order or policy (whether or not having the force of law) of any
Authority:
(i) shall subject any Lender (or its applicable Lending Office)
to any tax, duty or other charge with respect to its Advances, Notes,
or its obligation to make Advances, or shall change the basis of
taxation of payments to any Lender (or its applicable Lending Office)
of the principal of or interest on its Advances, or any other amounts
due under this Agreement in respect of its Advances, (except for
changes in the rate of tax on the overall net income of such Lender or
its Lending Office imposed by the jurisdiction in which such Lender's
principal executive office or Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding with respect to any LIBOR Advance any
such requirement included in an applicable Adjusted LIBOR Rate)
against assets of, deposits with or for the account of, or credit
extended by, any Lender (or its applicable Lending Office); or
(iii) shall impose on any Lender (or its applicable Lending
Office) or on the London Interbank or other applicable market any
other condition affecting its Advances, Notes, or its obligation to
make Advances;
and the result of any of the foregoing is to increase the cost to such Lender
(or its applicable Lending Office) of making or maintaining any Advance or to
reduce the amount of any sum received or receivable by such Lender (or its
applicable Lending Office) under this Agreement or under its Notes in connection
with LIBOR Advances, by an amount deemed by such Lender to be material, then,
within 15 days after demand by such Lender (with a copy to the Agent), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction.
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(b) If any Lender shall have determined that after the date hereof
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof, or compliance by any Lender (or its applicable Lending
Office) with any request or directive regarding capital adequacy (whether or not
having the force of law) of any Authority, has or would have the effect of
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) and assuming that the
capital of such Lender was fully utilized prior to such adoption, change or
compliance by an amount deemed by such Lender to be material, then from time to
time, within 15 days after demand by such Lender, the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Each Lender will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 3.11 and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Lender, be otherwise disadvantageous to such Lender. A certificate of any
Lender claiming compensation under this Section 3.11 and setting forth in
reasonable detail the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.
Each Lender will notify the Borrower of any change that will entitle the Lender
to compensation pursuant to this Section 3.11 as promptly as practicable, but in
any event within 45 days after the Lender obtains knowledge of such a change;
PROVIDED, HOWEVER that if the Lender fails to give such notice within 45 days
after it obtains knowledge of such an event, the Lender shall, with respect to
compensation payable pursuant to this Section 3.11 of any costs resulting from
such event, only be entitled to payment under this Section 3.11 for costs
incurred from and after the date 45 days prior to the date that the Lender does
give notice.
(d) Subject to the provisions of Section 13.6(e), the provisions of
this Section 3.11 shall be applicable with respect to any Participant, Assignee
or other Transferee, and any calculations required by such provisions shall be
made based upon the circumstances of such Participant, Assignee or other
Transferee.
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3.12 PRIME RATE ADVANCES SUBSTITUTED FOR LIBOR ADVANCES. If (i) the
obligation of any Lender to make or maintain LIBOR Advances has been suspended
pursuant to Section 3.10 or (ii) any Lender has demanded compensation under
Section 3.11, and the Borrower shall, by at least 5 LIBOR Business Days' prior
notice to such Lender through the Agent, have elected that the provisions of
this Section shall apply to such Lender, then, unless and until such Lender
notifies the Borrower that the circumstances giving rise to such suspension or
demand for compensation no longer apply:
(a) all Advances which would otherwise be made by such Lender as
LIBOR Advances shall be made instead as Prime Rate Advances (in all cases
interest and principal on such Advances shall be payable contemporaneously with
the related LIBOR Advances of the other Lenders), and
(b) after each of its LIBOR Advances has been repaid, all
payments of principal which would otherwise be applied to repay such LIBOR
Advances shall be applied to repay its Prime Rate Advances instead.
3.13 COMPENSATION. (a) Upon the request of any Lender along with a
certificate of the Lender setting forth the basis for determining such loss,
cost or expense, delivered to the Borrower and the Agent, the Borrower shall pay
to such Lender such amount or amounts as shall compensate such Lender for any
loss, cost or expense incurred by such Lender as a result of:
(i) any payment of any LIBOR Advance on a date other than the
last day of an LIBOR Interest Period for such LIBOR Advance;
(ii) any failure by the Borrower to prepay a LIBOR Advance on
the date for such prepayment specified in the relevant notice of
prepayment hereunder; or
(iii) any failure by the Borrower to borrow a LIBOR Advance on
the date for the LIBOR Advance as specified in the applicable Notice
of Borrowing delivered pursuant to Section 3.2.
3.14 LIBOR INDEMNIFICATION. Borrower hereby agrees to indemnify and
hold each Lender free and harmless from any loss or expense (including without
limitation any loss or expense incurred by reason of the liquidation or
redeployment of deposits or other funds acquired by any Lender to fund or
maintain any LIBOR Advance which any Lender may incur as a result of (i) the
Borrower's failure to make a borrowing, conversion, or extension with respect to
a LIBOR Advance after making a request therefor; (ii) a prepayment (whether
optional or mandatory) of a LIBOR
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Advance prior to the expiration of a related LIBOR Interest Period; (iii) the
conversion of a LIBOR Advance as a result of any of the events indicated in
Section 3.10 hereof; and (iv) any demand, made in accordance with the terms of
the Loan Documents, for payment of a LIBOR Advance by Lenders prior to the
expiration of the related LIBOR Interest Period).
3.15 COMMITMENT FEE. FOR AND IN CONSIDERATION of the Lender's
Commitments to establish the Credit Facility set forth herein, Borrower agrees
to pay to Agent, for the account of each Lender, on the Closing Date a
non-refundable Commitment Fee of twenty (20) basis points of each Lender's
prorata share of the Aggregate Commitment.
3.16 UNUSED COMMITMENT FEE. Borrower agrees to pay to the Agent, for
the account of each Lender, an Unused Commitment Fee equal to fifteen (15) basis
points of each Lender's Unused Commitment annualized on the basis of a 360 day
year and actual days elapsed on the daily unused portions of the Aggregate
Commitment for each day from the Closing Date until the Termination Date or
until this Agreement is sooner terminated. Said Unused Commitment Fee is
payable on the tenth Business Day following the end of each calendar year
quarter in arrears beginning with the calendar quarter ending on December 31,
1996 or on the Termination Date.
3.17 REIMBURSEMENT FOR OUT-OF-POCKET COSTS. In addition to the
Commitment Fee described in Section 3.15 above, Borrower agrees to reimburse
Agent for all out-of-pocket fees, costs and expenses reasonably incurred and
paid by Agent incident to or in connection with the preparation of this
Agreement and the documents and instruments attached hereto or referred to
herein in anticipation of, and in effecting closing hereunder, including,
without limitation, Agent's reasonable attorney fees, and the cost of lien and
security interest searches and filing fees. Borrower hereby agrees that it will
reimburse Agent for all such out-of-pocket fees, costs and expenses whether or
not closing takes place. In the event closing takes place, all such fees, costs
and expenses shall be paid at closing. If closing does not take place, such
fees, costs and expenses shall be reimbursed to Agent within 10 days of
Borrower's receipt of billing from Agent for such fees, costs and expenses.
3.18 AGENT FEE. Borrower agrees to pay to Agent, for the account and
sole benefit of the Agent, such fees and other amounts at such times as agreed
to by Agent and Borrower.
3.19 GENERAL PROVISIONS AS TO PAYMENTS. (a) The Borrower shall make
each payment of principal and interest and of fees hereunder, not later than
10:00 a.m. (local time of the Agent) on the date when due, in Federal or other
funds
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immediately available to the Agent at its address referred to in Section 13.
The Agent will promptly distribute to each Lender (and, following the occurrence
and during the continuance of an Event of Default, for application by such
Lender against amounts owing to such Lender by the Borrower in such order as
such Lender shall elect) its ratable share of each such payment received by the
Agent for the account of the Lenders.
(b) Whenever any payment of principal or interest on the Prime
Rate Advances, or of fees shall be due on a day which is not a Business Day, the
date for payment thereof shall be extended to the next succeeding Business Day.
(c) All payments of principal, interest and fees and all other
amounts to be paid by Borrower pursuant to this Agreement with respect to any
Advance, or fee relating thereto shall be paid without deduction for, and free
from, any tax, imposts, levies, duties, deductions, or withholdings of any
nature now or at any time hereafter imposed by any governmental authority or by
any taxing authority thereof or therein excluding taxes imposed on or measured
by a Lender's net income ("Taxes"). In the event that Borrower is required by
applicable law to make any such withholding or deduction of Taxes with respect
to any Advance or fee or other amount, the Borrower shall pay such deduction or
withholding to the applicable taxing authority, shall promptly furnish to the
Agent in respect of which such deduction or withholding is made all receipts and
other documents evidencing such payment and shall pay to each Lender additional
amounts as may be necessary in order that the amount received by that Lender
after the required withholding or other payment shall equal the amount that
Lender would have received had no such withholding or other payment been made.
Without limiting the foregoing, Borrower agrees to indemnify and hold harmless
each Lender and the Agent for the full amount of all Taxes paid by such Lender
or the Agent, as the case may be, and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted. In the
event any Lender receives a subsequent recovery of any Taxes for which it has
received payment from the Borrower under this Section 3.19, such Lender shall
promptly pay the amount of such recovery to the Borrower.
Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower and the
Lenders contained in this Section 3.19(c) constitute a continuing agreement and
shall survive the termination of this Agreement and the payment in full or
cancellation of the Notes.
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SECTION 4. CLOSING.
4.1 CLOSING. Closing under this Agreement shall take place when
Borrower shall have complied with all preconditions to closing set forth in this
Agreement and Borrower obtains its initial Advance under the Commitment. If the
closing does not occur on the Closing Date, Lenders' Commitment under Section 3
shall expire, and Lenders shall have no further obligations hereunder, and this
Agreement shall be of no further force or effect; PROVIDED, HOWEVER, Borrower
shall nevertheless remain obligated to reimburse Agent for all of its
out-of-pocket fees, costs and expenses as described in Section 3.17 hereof.
SECTION 5. CLOSING UNDER THIS AGREEMENT; PRECONDITIONS.
5.1 CLOSING DATE. The closing under this Agreement shall take place
on the Closing Date at the offices of Agent, Ninth and Idaho Street, Boise,
Idaho, or such other place as Lenders shall designate in writing. If all
preconditions to closing set forth in this Agreement have been met to Lenders'
and Agent's satisfaction prior thereto, then closing may occur at such earlier
date as may be mutually agreed to between Borrower and Lenders.
5.2 PRECONDITIONS TO FIRST BORROWING. The parties hereto agree that
the obligation of each Lender to make an Advance on the occasion of the First
Borrowing is subject to the satisfaction of the following conditions:
(a) Prior to the Closing Date, Borrower shall have delivered to
Agent the unqualified, audited, consolidated Financial Statements of Borrower
and its Banking Subsidiaries dated as of December 31, 1995, prepared in
accordance with GAAP and audited by KPMG Peat Marwick, L.L.P. Borrower also
shall have delivered to Agent its unconsolidated, company prepared balance sheet
and its unconsolidated, company prepared income and expense statement dated as
of June 30, 1996, certified, as to their accurateness and as being prepared
consistently in accordance with GAAP, by a Responsible Officer of Borrower. All
of said Financial Statements and unconsolidated balance sheet and income and
expense statements required above shall be satisfactory to Lenders.
(b) On or before the Closing Date, Borrower shall have
delivered to Agent the Loan Documents, including but not limited to a Note for
the account of each Lender in the amount of each Lender's Commitment in the form
of EXHIBIT "A," duly executed and acknowledged, where necessary.
(c) On the Closing Date, Borrower shall have delivered to Agent
a certificate of the Secretary of the
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Borrower, certified as of the Closing Date, as to the incumbency and signatures
of the officers signing this Agreement, the Loan Documents and any documents
contemplated or delivered under this Agreement and a certification by a
Responsible Officer as to the incumbency and signature of the Secretary of the
Borrower.
(d) On the Closing Date, Borrower shall have delivered to Agent
a certificate or certificates signed by a Responsible Officer of the Borrower
and its Banking Subsidiaries certifying that:
(i) Borrower and its Banking Subsidiaries are validly
organized and in good standing in the states in which each operates;
and
(ii) Borrower and its Banking Subsidiaries have delivered
to Agent a certified copy of the Borrower's and its Banking
Subsidiaries' Articles of Incorporation, By-Laws and all amendments
thereto.
(iii) No Default has occurred; and
(iv) The representations and warranties of the Borrower
set forth in this Agreement are true on and as of the Closing Date.
(v) That neither the Borrower nor any of its Banking
Subsidiaries nor any of the Acquisitions have guaranteed the repayment
of any debt owed to any creditor by any Person, except for those
guarantees specifically listed on EXHIBIT "D" attached hereto.
(e) All representations, warranties and covenants required to
be made by Borrower under this Agreement and the Loan Documents on or before the
Closing Date shall be true and correct as of the Closing Date. Borrower shall
have performed and complied with, and shall have caused its Banking Subsidiaries
to have performed and complied with, all other agreements and conditions which
are required to be performed and complied with, and shall have caused its
Banking Subsidiaries to have performed and complied with, all other agreements
and conditions which are required to be performed and complied with under this
Agreement on or prior to the Closing Date.
(f) Agent shall have received, at no cost to any Lender, an
opinion of counsel addressed to each Lender, dated as of the Closing Date,
substantially in the form of EXHIBIT "E" attached hereto.
(g) Prior to the Closing Date, Borrower shall deliver to Agent
documentation satisfactory to Agent verifying
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that Borrower has obtained all Governmental Authority approvals for its
acquisition of First Interstate Bank of Montana, N.A. and First Interstate Bank
of Wyoming, N.A.
(h) On or before the Closing Date, the Agent shall have
received (i) a copy of the Borrower's certificate of incorporation, certified by
the Secretary of State of the State of Montana; (ii) a certificate of such
Secretary of State, dated as of a recent date, as to the good standing and
charter documents of the Borrower on file in the office of such Secretary of
State; (iii) a certificate of the Secretary of the Borrower dated the Closing
Date and certifying (A) that attached thereto is a true and complete copy of the
bylaws of the Borrower as in effect on the date of such certification, (B) that
attached thereto is a true and complete copy of resolutions adopted by the Board
of Directors of the Borrower authorizing the execution, delivery and performance
of this Agreement, the Borrowings hereunder and the execution and delivery of
the Notes, (C) that the certificate of incorporation of the Borrower has not
been amended, and (iii) such other documents as any Lender or its counsel may
reasonably request.
(i) On the Closing Date, Borrower shall be in compliance with
all material regulatory requirements.
(j) On or before the Closing Date, Borrower shall have
delivered to Agent documentation, satisfactory to Lenders, verifying and
providing that all term indebtedness of Borrower owed to any Person and any
security interests, mortgages and liens on or in any collateral given to secure
the repayment thereof has been or will be on the Closing Date completely
subordinated to the rights of the Lenders in a manner satisfactory to Lenders.
(k) On or before the Closing Date, Borrower shall deliver to
the Agent verification that Borrower has obtained or contemporaneously with the
closing of this transaction will obtain funding in the amount of at least Forty
Million Dollars ($40,000,000). Said funding shall consist of Twenty Million
Dollars ($20,000,000) in Tier One Capital raised from the sale of preferred
stock and Twenty Million Dollars ($20,000,000) in Tier Two Capital raised from
the issuance of Subordinated Debt or other debt instruments the repayment of
which is to be fully subordinate to the Borrower's Obligations hereunder. All
loan agreements, purchase agreements and/or similar documents concerning such
Forty Million Dollars ($40,000,000) shall be in a form acceptable to Lenders.
(l) On the Closing Date, Borrower shall own all of the issued
and outstanding shares of Capital Stock of the Acquisitions and Borrower shall
deliver to Agent as Collateral
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all of said Capital Stock of the Acquisitions and Capital Stock of each of its
Banking Subsidiaries.
(m) All documents and legal matters in connection with the
transaction contemplated by this Agreement shall be satisfactory in form and
substance to each Lender and its respective counsel.
(n) On the Closing Date, the Agent shall have received the
Commitment Fee and all other fees and costs due and payable under this
Agreement.
5.3 CONDITIONS TO ALL BORROWINGS. The obligation of each Lender to
make an Advance on the occasion of each requested Advance is subject to the
satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing;
(b) immediately before and after such Advance, no Default shall
be existing hereunder;
(c) the representations and warranties of the Borrower
contained in Sections 6.1, 6.2, 6.6, 6.7, 6.8, 6.11, 6.12, 6.13 and 6.16 below
shall be true on and as of the date of such Advance; and
(d) immediately after such Advance, the aggregate outstanding
principal amount of the Advances of each Lender will not exceed the amount of
the Aggregate Commitment.
Each Advance shall be deemed to be a representation and warranty by the Borrower
on the date of such Borrowing as to the accuracy of the facts specified in
Section 5.3(b), (c) and (d) above.
SECTION 6. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that on the Closing Date:
6.1 EXISTENCE AND POWER. Borrower and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such qualification
is necessary and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required in all material respects to
carry on its business as now conducted.
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6.2 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the Borrower of this Agreement, the Notes, the Pledge Agreement
and the other Loan Documents (i) are within Borrower's corporate powers;
(ii) have been duly authorized by all necessary corporate action; (iii) require
no action by or in respect of or filing with, any governmental body, agency or
official; (iv) do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of incorporation or
by-laws of Borrower or any of its Subsidiaries, or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or any
of its Subsidiaries, and (v) do not result in the creation or imposition of any
Lien on any asset of the Borrower or its Subsidiaries.
6.3 BINDING EFFECT. This Agreement constitutes a valid and binding
agreement of the Borrower enforceable in accordance with its terms, and the
Notes, the Pledge Agreement and the other Loan Documents when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms, PROVIDED that the enforceability hereof and thereof is subject in each
case to general principles of equity and to bankruptcy, insolvency and similar
laws affecting the enforcement of creditors' rights generally.
6.4 FINANCIAL INFORMATION. (a) The consolidated balance sheet of
the Borrower and its Banking Subsidiaries as of December 31, 1995 and the
related consolidated statements of income, shareholders' equity and cash flows
for the Fiscal Year then ended, reported on by KPMG Peat Marwick, L.L.P., copies
of which have been delivered to each of the Lenders, and the unaudited
consolidated financial statements of the Borrower and its Banking Subsidiaries
for the interim period ended June 30, 1996, copies of which have been delivered
to each of the Lenders, fairly present, in conformity with GAAP, the
consolidated financial position of the Borrower and its Banking Subsidiaries as
of such dates and their consolidated results of operations and cash flows for
such periods stated.
(b) Since June 30, 1996, no Material Adverse Effect has
occurred.
6.5 NO LITIGATION. There is no action, suit or proceeding pending,
or to the knowledge of Borrower threatened, against or affecting Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable probability of an adverse
determination that would have or cause a Material Adverse Effect or which in any
manner draws into question the validity of this
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Agreement, the Notes or any of the other Loan Documents except as listed on
EXHIBIT "F".
6.6 COMPLIANCE WITH ERISA. (a) The Borrower and each of its
Subsidiaries and each ERISA Affiliate have fulfilled all of their obligations in
all material respects under ERISA and the Code with respect to each Plan,
including but not limited to all minimum funding standards, all reporting and
disclosure requirements and, where applicable, the continuation coverage
requirements in Part 6 of Title I of ERISA and Section 4980B of the Code; and
they are in compliance in all material respects with the presently applicable
provisions of ERISA and the Code; and they have not incurred any liability to
the PBGC (other than premiums due and not delinquent under Section 4007 of
ERISA) or a Plan under ERISA. The representations and warranties set forth in
this Section 6.6(a) (other than as to the incurrence of any liability to a Plan
under ERISA) are made to the best of Borrower's knowledge to the extent they
apply to any Multiemployer Plan.
(b) Neither the Borrower nor any of its Subsidiaries nor any
ERISA Affiliate has incurred any withdrawal liability with respect to any
Multiemployer Plan under Title IV of ERISA, and no such liability is expected to
be incurred.
(c) Neither the Borrower nor any of its Subsidiaries nor any
ERISA Affiliate has incurred any unpaid liability for excise taxes under the
Code with respect to any Plan, and no such liability is expected to be incurred.
6.7 COMPLIANCE WITH LAWS; PAYMENTS OF TAXES. The Borrower and its
Subsidiaries are in compliance with all material applicable laws, regulations
and similar requirements of governmental authorities, except where such
compliance is being contested in good faith through appropriate proceedings.
There have been filed on behalf of the Borrower and its Subsidiaries all
material Federal, state and local income, excise, property and other tax returns
which are required to be filed by them and all taxes due pursuant to such
returns or pursuant to any assessment received by or on behalf of the Borrower
or any Subsidiary have been paid, except for any taxes which are being contested
in good faith and by proper proceedings and as to which adequate reserves have
been maintained. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower, adequate.
6.8 SUBSIDIARIES. Each of the Borrower's Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has all corporate powers and all
governmental
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licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The Borrower has no Subsidiaries except for those
Subsidiaries listed on Exhibit 6.8 (as such Exhibit may be supplemented from
time to time by notice to the Agent from Borrower), which accurately sets forth
each such Subsidiary's complete name and jurisdiction of incorporation or
formation.
6.9 NOT AN INVESTMENT COMPANY. Neither Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6.10 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has title to or valid lease interests in its Properties sufficient
for the conduct of its business, and none of such Property is subject to any
Lien except as permitted herein.
6.11 NO DEFAULT. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any agreement, instrument or undertaking to
which it is a party or by which it or any of its Property is bound which has a
reasonable probability of having or causing a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
6.12 FULL DISCLOSURE. All information heretofore furnished by the
Borrower to the Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such information
hereafter furnished by the Borrower to the Agent or any Lender will be, true,
accurate and complete in every material respect, or based on reasonable
estimates, on the date as of which such information is stated or certified. The
Borrower has disclosed to the Lenders in writing any and all facts which have a
reasonable probability of having or causing a Material Adverse Effect.
6.13 ENVIRONMENTAL MATTERS. (a) Neither the Borrower nor any of its
Subsidiaries are subject to any environmental liability which has a reasonable
probability of having or causing a Material Adverse Effect and neither the
Borrower nor any of its Subsidiaries have been designated as a potentially
responsible party under CERCLA or under any state statute similar to CERCLA.
(b) The Borrower and each of its Subsidiaries are in compliance
with all environmental requirements in connection with the operation of their
Properties and their respective businesses.
6.14 CAPITAL STOCK. All Capital Stock, debentures, bonds, notes and
all other securities of the Borrower and its Subsidiaries presently issued and
outstanding are validly and
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properly issued in accordance with all applicable laws. The issued shares of
Capital Stock of Borrower's Subsidiaries and following closing hereunder, the
Capital Stock of the Acquisitions, are owned by Borrower free and clear of any
Lien or adverse claim, except for the Lien granted to the Lenders pursuant to
this Agreement.
6.15 MARGIN STOCK. Neither the Borrower nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of purchasing or carrying any Margin Stock, and no part of the proceeds of any
Advance hereunder will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock, or be used for any purpose which violates, or which is inconsistent with,
the provisions of Regulation X.
6.16 INSOLVENCY. After giving effect to the execution and delivery
of the Loan Documents and the making of the Advances under this Agreement,
Borrower will not be "insolvent," within the meaning of such term as defined in
Section 101 of Title 11 of the United States Code or Section 2 of the Uniform
Fraudulent Transfer Act, as each is amended from time to time, or be unable to
pay its debts generally as such debts become due, or have unreasonably little
capital to engage in any business or transaction, whether current or
contemplated.
SECTION 7. COVENANTS
The Borrower agrees that, so long as any Lender has any Commitment
hereunder or Borrower owes any Obligations to any Lender or the Agent hereunder:
7.1 INFORMATION. The Borrower will deliver to each of the Lenders:
(a) as soon as available, but not later than 120 days after the
end of each Fiscal Year, a copy of the audited consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, and accompanied by the opinion of
independent public accountants of nationally recognized standing ("Independent
Auditor") acceptable to Lenders which report shall state that such consolidated
Financial Statements present fairly the financial position of the Borrower and
its Subsidiaries for the periods indicated in conformity with GAAP applied on a
basis consistent with prior periods. Such opinion shall not be qualified or
limited because of a restricted or limited examination by the Independent
Auditor
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of any material portion of the Borrower's or any Subsidiary's records;
(b) as soon as available, but not later than 60 days after the
end of each of the first three fiscal quarters of each Fiscal Year, a copy of
the unaudited consolidated balance sheet of the Borrower and its Subsidiaries as
of the end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer as fairly presenting, in accordance with GAAP (subject to ordinary, good
faith year end audit adjustments), the financial position and the results of
operations of the Borrower and its Subsidiaries;
(c) within 60 days after the end of each fiscal quarter, CALL
reports (Report of Condition and Income) for each Banking Subsidiary required to
deliver a CALL report (Report of Condition and Income), as at the end of such
fiscal quarter, each certified by a Responsible Officer of such Banking
Subsidiary and reports filed on Form FR Y-9C and Form FR Y-9LP;
(d) promptly after the sending or filing thereof, copies of all
reports which the Borrower sends to any of its security holders, and all reports
and registration statements which the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission or any national securities exchange;
(e) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its Banking
Subsidiaries as the Agent or any Lender may from time to time reasonably
request;
(f) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a), (b) and (c) above, a certificate of a
Responsible Officer of the Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower and its Banking
Subsidiaries were in compliance with the financial covenants set forth herein on
the date of such Financial Statements and (ii) stating whether, to the best
knowledge of such person, any Default exists on the date of such certification
and, if any Default then exists, setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect thereto;
and
(g) simultaneously with the delivery of each set of annual
Financial Statements referred to in paragraph (a) above, a statement of the
Independent Auditors which reported on such statements to the effect that
nothing has come to their
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attention to cause them to believe that any Default existed on the date of such
Financial Statements.
7.2 INSPECTION OF PROPERTY, BOOKS AND RECORDS. The Borrower will
(i) keep, and cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries in conformity with GAAP shall be made of
all dealings and transactions in relation to its business and activities; and
(ii) permit, and cause each Subsidiary to permit, representatives of any Lender
at such Lender's expense prior to the occurrence of a Default and at the
Borrower's expense after the occurrence of a Default to visit and inspect any of
their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and Independent Auditors.
The Borrower agrees to cooperate and assist in such visits and inspections, in
each case at such reasonable times and as often as may reasonably be desired.
7.3 FINANCIAL COVENANTS.
(a) The Borrower on a consolidated basis measured quarterly
shall maintain the following:
(i) TOTAL RISK BASED CAPITAL RATIO. A ratio of Tier One
Capital plus Tier Two Capital to Risk Weighted Assets of not less than
8.0%.
(ii) TIER ONE RISK BASED CAPITAL RATIO. A ratio of Tier
One Capital to Risk Weighted Assets of not less than 6.0%.
(iii) LEVERAGE RATIO. A ratio of Tangible Primary Capital
to total Tangible Primary Assets of not less than 4.5%.
(iv) NON-PERFORMING LOAN RATIO. A ratio of Non-Performing
Loans to Tangible Net Worth of 25% or less.
(b) Borrower shall cause each of its Subsidiaries, by
individual State or in the aggregate should any of Borrower's Banking
Subsidiaries merge, to each maintain the following measured quarterly:
(i) RETURN ON AVERAGE ASSETS. A return on average assets
of at least 00.75%.
(ii) NON-PERFORMING RATIO. A ratio of Non-Performing Loans
to total loans plus OREO of no more than 3.0%.
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(c) The Borrower on a consolidated basis shall at all times
maintain the following:
(i) DEBT SERVICE RATIO. A ratio of (a) Net Income (b)
plus Depreciation Expense plus (c) Amortization Expense related to the
Acquisitions, to Current Maturities of Funded Debt plus dividends
(preferred and common) of not less than 1.5:1.
7.4 SUBSIDIARIES' CASH DIVIDENDS. No more than 100% of the net
profit of each of Borrower's Subsidiaries shall be distributed as a cash
dividend to Borrower in any Fiscal Year.
7.5 BORROWER'S DIVIDENDS ON COMMON STOCK. No more than 33.0% of
Borrower's Net Income for any Fiscal Year shall be declared and paid out as a
dividend on common stock for any Fiscal Year. Notwithstanding anything to the
contrary stated in this Section 7.5 no dividends shall be paid by Borrower if an
Event of Default as defined herein exists.
7.6 MAINTENANCE OF OWNERSHIP IN ACQUISITIONS. The Borrower will not
cease to own 100% of the outstanding shares of Capital Stock of the Acquisitions
and its Banking Subsidiaries.
7.7 NO SUBSIDIARY STOCK DIVIDENDS, STOCK SPLITS, OR REDEMPTIONS
WITHOUT CONSENT. Borrower will not and will not permit its Banking
Subsidiaries, including the Acquisitions, to issue any additional shares of
their Capital Stock, or any warrant, right or option relating thereto or any
security convertible into any of the foregoing or authorize any stock splits or
redeem, any of its Banking Subsidiaries, including the Acquisitions, own Capital
Stock without the prior consent of Lenders, provided, however, that if any such
additional shares of its Banking Subsidiaries, including the Acquisitions,
additional Capital Stock, or any warrant, right or option relating thereto or
any security convertible into any of the foregoing are approved by the Lenders
all of the foregoing additional Capital Stock resulting from such action shall
be delivered to Agent as additional Collateral and properly endorsed as required
herein.
7.8 LOANS OR ADVANCES. Neither the Borrower nor any of its
Subsidiaries shall make loans or advances to any Person except: (i) deposits
required by government agencies, public utilities or others in the ordinary
course of business, (ii) loans in the normal course of its business, (iii) loans
to Subsidiaries, PROVIDED that after giving effect to the making of any loans,
advances or deposits permitted by clauses (i), (ii) and (iii) of this Section
7.8, the Borrower will be in full compliance with all the provisions of this
Agreement and no Default shall be in existence or caused thereby; AND FURTHER
PROVIDED, that, all loans permitted by clause (iii) of this
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Section 7.8 shall at all times be evidenced by a legally enforceable promissory
note made by the recipient of any such relevant loan payable to the Borrower in
the amount of any such relevant loan.
7.9 JUDGMENTS AND CLAIMS. The Borrower will and will cause each of
its Subsidiaries to notify each Lender and the Agent in writing within 30 days
of the rendering of any judgment against the Borrower or any of its Subsidiaries
in an amount of One Million Dollars ($1,000,000) or more. Furthermore, the
Borrower will and will cause each of its Subsidiaries to notify each Lender and
the Agent in writing within 30 days of Borrower's receipt of notice that any
litigation or governmental proceeding is threatened or commenced against
Borrower or any of its Subsidiaries which may create a liability or liabilities
for the Borrower or any of its Subsidiaries in an amount of One Million Dollars
($1,000,000) or more.
7.10 FUNDED DEBT. Neither the Borrower nor any of its Subsidiaries
shall incur any additional Funded Debt without the Lenders' prior written
consent, except for the repurchase of its Capital Stock provided that Borrower
is in compliance with this Agreement.
7.11 NO AMENDMENT OF NOTE PURCHASE AGREEMENT. The Borrower will not
amend, without the prior written consent of each Lender, the terms and
provisions of that certain Note Purchase Agreement dated as of August 30, 1996
by and among the Montana Board of Investments and the Borrower.
7.12 NEGATIVE PLEDGE. Neither the Borrower nor any of its
Subsidiaries will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement as listed on
EXHIBIT "G" attached hereto;
(b) Liens imposed by operation of law such as mechanics',
landlords', carriers' and similar liens arising in the ordinary course of
business and which are not delinquent or remain payable without penalty or are
being contested in good faith by proper proceedings and for which adequate
reserves have been established; and
(c) Liens, pledges or deposits required in connection with
workers compensation, unemployment, social security or similar legislation.
(d) Liens on property of any corporation at the time such
corporation becomes a Subsidiary of Borrower.
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(e) Liens for taxes, assessments and governmental charges or
levies not yet due and payable.
7.13 PREPARATION OF FINANCIAL STATEMENTS. Borrower will not, except
as permitted by FASB, modify, amend or revise the manner of the preparation of
its financial statements as the same exists as of June 30, 1996 without the
prior written consent of the Lenders. Borrower agrees that if it does modify,
amend or revise the manner of the preparation of its financial statements as
permitted by FASB, it will provide the Lenders and the Agent with written notice
of such modification, amendment or revision within 45 days of such event.
7.14 MAINTENANCE OF EXISTENCE. Except as permitted by Section 7.15
or 7.16, Borrower shall, and shall cause each Subsidiary to, maintain its
corporate existence and carry on its business in substantially the same manner
and in substantially the same fields as such business is now carried on and
maintained.
7.15 DISSOLUTION. Neither the Borrower nor any of its Subsidiaries
shall suffer or permit dissolution or liquidation either in whole or in part or
purchase, repurchase, redeem, or retire any shares of the stock of the Borrower
or that of any Subsidiary which is a corporation, except through corporate
reorganization to the extent permitted by Section 7.16.
7.16 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The Borrower will
not, nor will it permit any Subsidiary to, consolidate or merge with or into, or
sell, lease or otherwise transfer all or any substantial part of its assets
(other than sales of assets in the ordinary course of business or the
disposition of obsolete equipment) to, any Person, or discontinue or eliminate
any material business line or segment, PROVIDED that: (a) the Borrower or any
corporate Subsidiary of Borrower may merge with another Person if (i) such
Person was organized under the laws of the United States of America or one of
its states, (ii) the Borrower or any corporate Subsidiary (except that the
Borrower shall be the remaining corporation upon a merger of a Subsidiary with
the Borrower) is the corporation surviving such merger, and (iii) immediately
after giving effect to such merger, no default shall have occurred; (b)
corporate Subsidiaries of Borrower may consolidate or merge with or into or
transfer assets to the Borrower or one another; and (c) the Acquisitions may
consolidate or merge with or into one or more of the Borrower's existing Banking
Subsidiaries.
7.17 CHANGE IN CONTROL. Borrower will not, without Lenders' prior
written consent, enter into any transaction or series of transactions (including
without limitation a sale, tender offer, merger or consolidation) the result of
which being
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that the Principals and their Related Parties following such transaction would
then own less than 60% of the issued and outstanding shares of stock of
Borrower.
7.18 USE OF PROCEEDS. The proceeds of the Advances will be used for
general corporate purposes, including the purchase of all of the stock of the
Acquisitions and will not be used by either Borrower or any Subsidiary (i)
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any Margin Stock, or (ii) for any purpose in
violation of any applicable law or regulation.
7.19 COMPLIANCE WITH LAWS; PAYMENT OF TAXES. (a)
The Borrower will, and will cause each of its Subsidiaries and ERISA
Affiliates to, comply in all material respects with applicable laws (including
but not limited to ERISA), regulations and similar requirements of governmental
authorities (including but not limited to IRS, DOL and PBGC), except to the
extent any failure to comply would not have a Material Adverse Effect or where
the necessity of such compliance is being contested in good faith through
appropriate proceedings. The Borrower will, and will cause each of its
Subsidiaries and ERISA Affiliates to, keep all Plans in compliance with ERISA
and the Code and all applicable regulations and similar requirements of
governmental authorities (including, but not limited to, IRS, DOL and PBGC),
except where the necessity of such compliance is being contested in good faith
through appropriate proceedings. The Borrower will, and will cause each of its
Subsidiaries and ERISA Affiliates to, pay promptly when due all taxes,
assessments, governmental charges, claims for labor, supplies, rent and other
obligations which, if unpaid, might become a lien against the property of
Borrower or any Subsidiary or ERISA Affiliate, except liabilities being
contested in good faith and against which such Borrower or Subsidiary or ERISA
Affiliate will set up reserves in accordance with GAAP.
7.20 INSURANCE. The Borrower will maintain, and will cause each of
its Subsidiaries to maintain (either in Borrower or Subsidiary's own name), with
financially sound and reputable insurance companies, insurance on all its
Property in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies of established repute
engaged in the same or similar business.
7.21 CHANGE IN FISCAL YEAR. Borrower will not change its Fiscal Year
without the consent of the Lenders.
7.22 ENVIRONMENTAL NOTICES. Within 30 days after Borrower becomes
aware thereof, Borrower shall furnish to the Agent prompt written notice of all
environmental liabilities, pending, threatened or anticipated environmental
proceedings,
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environmental notices, environmental judgments and orders, and environmental
releases that are required to be reported to an environmental authority, at, on,
in, under or in any way affecting the Properties or any adjacent property, in
the amount of Two Hundred Fifty Thousand Dollars ($250,000) or more in any one
instance or the aggregate amount of One Million Dollars ($1,000,000) or more for
all such instances, and all facts, events, or conditions that could have a
reasonable probability of leading to any of the foregoing.
7.23 ENVIRONMENTAL MATTERS. Borrower will not, or will not permit
any third party to, use, produce, manufacture, process, treat, recycle,
generate, store, dispose of, manage at, or otherwise handle, or ship or
transport to or from the Properties any Hazardous Materials except for Hazardous
Materials used, produced, manufactured, processed, treated, recycled, generated,
stored, disposed, managed, or otherwise handled in the ordinary course of
business in compliance in all material respects with all applicable
environmental requirements.
7.24 ENVIRONMENTAL RELEASE. Borrower agrees that upon the occurrence
of an environmental release for which it or a Subsidiary may be subject to any
environmental liability or at, on, in, under or in any way affecting the
Properties, it will act or will cause its Subsidiary, as applicable, to act as
promptly as practicable (and to the fullest extent within its or such
Subsidiary's control) immediately to investigate the extent of, and to take
appropriate remedial, removal or response action with respect to such
environmental release, whether or not ordered or otherwise directed to do so by
any environmental authority.
SECTION 8. SECURITY
As Collateral for the repayment of the Obligations, Borrower hereby
agrees to pledge, assign, transfer, deliver and convey to Agent, for the benefit
of Lenders, prior to or on the Closing Date, all of the issued and outstanding
common stock of the Acquisitions and of any of Borrower's other Banking
Subsidiaries by delivery to Agent of a duly executed Pledge Agreement, in the
form of EXHIBIT "C" attached hereto, the stock certificate(s) thereof, and duly
executed assignments thereof in blank to allow Agent to transfer the Collateral
to itself or any third party.
SECTION 9. ACCESS
9.1 ACCESS. From the date hereof and until all of Borrower's
Obligations to each Lender hereunder have been paid in full, each Lender and
Agent shall, during normal business hours, have full access to all of Borrower's
and its Subsidiaries' books and records. In addition to access, each Lender and
Agent may
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make copies of all or any portion of such books and records. Lenders and Agent
agree, that in examining the books and records of the Borrower and/or its
Subsidiaries they will use their best efforts not to disrupt the normal business
activities of the Borrower and/or its Subsidiaries.
9.2 EXAMINATION. Agent may, at a Lender's request, and at any time,
employ accountants and other agents to examine Borrower's and/or its
Subsidiaries' books and records. Any fees and expenses of Agent in connection
with such examination shall be paid by Borrower to Agent on demand, together
with interest at the Prime Rate from date of demand by Agent, and the repayment
of such fees and expenses shall be secured by the Loan Documents, provided, in
the event the financial reports prepared by agents employed by the Lenders to
examine Borrower's books and records do not disclose any adverse material
discrepancy from those provided to Lenders by Borrower as herein required,
Borrower shall not be obligated to reimburse Lenders for the fees and expenses
of such agents, nor shall the same be secured by the Loan Documents.
SECTION 10. DEFAULT
10.1 EVENTS OF DEFAULT. The following events shall constitute Events
of Default under this Agreement:
(a) The failure of the Borrower to pay any payment of principal
as required in the Notes or herein, within 10 calendar days after any such
payment becomes due and payable, whether at maturity, upon acceleration or
otherwise.
(b) The failure of the Borrower to pay any obligation or fees
required in said Notes or herein within 10 days after any such amount becomes
due in accordance with the terms thereof or hereof.
(c) The breach by Borrower of any covenant, warranty,
representation, agreement, provision or condition contained in this Agreement or
in the Loan Documents.
(d) If any written warranty or representation given by the
Borrower or any Subsidiary in connection with or contained in this Agreement, or
if any financial data or other information provided to Lenders to induce them to
make the Advances proves to be false or misleading in any material respect.
(e) If the Borrower or any Subsidiary shall (i) fail to pay any
amount of Funded Debt in excess of One Million Dollars ($1,000,000) within 10
calendar days after the expiration of any applicable grace period, whether at
maturity, at a date
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fixed for payment, upon acceleration or otherwise, or (ii) default in the
performance or observance of any other provision contained in any instrument or
agreement evidencing such Funded Debt (which default shall not have been waived)
if the effect of such default is to cause or permit the holder of such Funded
Debt or a trustee or agent to cause, such Funded Debt or a trustee or agent to
cause, such Funded Debt to become or be declared due and payable prior to its
scheduled maturity.
(f) (i) Any Plan shall incur an "accumulated funding
deficiency," within the meaning of Section 412(a) of the Code, with respect to
any plan year, or (ii) any waiver of such standard shall be sought or granted
under Section 412(d) of the Code, or (iii) any Plan shall be, have been or be
likely (in the reasonable opinion of the Lenders) to be terminated or the
subject of termination proceedings under ERISA, or (iv) the Borrower shall incur
or be likely to incur a liability to or on account of a Plan under Section 4062,
4063, 4064, or 4201 of ERISA, or (v) a Reportable Event occurs, or (vi) the
Borrower shall incur or be likely to incur a liability for any excise tax under
Sections 4970 through 5000 of the Code, or (vii) the funded vested benefit
percentage (as determined under Section 4043(b)(1)(B) of ERISA for any Plan
shall be less than 90%, and there shall result from any such event or events
either a liability or a material risk of incurring a liability to the IRS, DOL,
PBGC or a Plan, which in the reasonable opinion of the Lenders could have a
Material Adverse Effect on the business, earnings, prospects, properties or
condition (financial or other) of the Borrower and its Subsidiaries.
(g) There shall be rendered against the Borrower or any of its
Subsidiaries one or more final judgments or decrees involving an aggregate
liability of Five Million Dollars ($5,000,000) or more, which has or have become
non-appealable and shall remain undischarged, unsatisfied by insurance and
unstayed for more than 30 days, whether or not consecutive.
(h) The Borrower or any Subsidiary shall become insolvent or
fail to pay its debts as such debts become due, or ceases to conduct its
business, or shall be enjoined, restrained, or in any way prevented by court
order from conducting all or any material part of its business affairs, or shall
make a general assignment for the benefit of creditors or shall file a voluntary
petition in bankruptcy or a petition or answer seeking reorganization, to effect
a plan or other arrangement with creditors or any other relief under the
Bankruptcy Act, or under any other state or federal law relating to bankruptcy
or reorganization granting relief to debtors, whether now or hereafter in
effect, or shall file an answer admitting the jurisdiction of the court and the
material allegations of any involuntary petition filed against the Borrower or
any Subsidiary
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pursuant to the Bankruptcy Act or any such other state or federal law, or any
order for relief shall be entered against the Borrower or any Subsidiary in any
involuntary proceeding under the Bankruptcy Act or any such other state or
federal law, or the Borrower or any Subsidiary shall be adjudicated bankrupt, or
shall make an assignment for the benefit of creditors, or shall apply for or
consent to the appointment of any custodian, receiver or trustee for all or any
substantial part of the Property of Borrower or any Subsidiary, or shall take
any action to authorize any of the actions set forth above in this subsection
for an involuntary petition seeking any of the relief specified in this
subsection shall be filed against the Borrower or any Subsidiary and shall not
be dismissed within 60 days.
10.2 REMEDIES. Upon the occurrence of any Event of Default specified
in Section 10.1(a), the Commitments of the Lenders, if they have not theretofore
terminated, shall immediately terminate and all Obligations of Borrower shall
immediately become due and payable without any presentment, demand, protest, or
notice of any kind. In the event of the occurrence of any other Event of
Default, set forth in Section 10.1, and following Borrower's failure to cure
such default within 15 calendar days after Agent's notice to Borrower of such
default, Agent, at the discretion of Lenders, may declare the Commitments of the
Lenders, if they have not theretofore terminated, immediately terminated and all
Obligations of Borrower shall immediately become due and payable without any
presentment, demand, protest, or notice (except to the extent required by this
Agreement) of any kind to the extent permitted by applicable law which cannot be
waived. In the event all Obligations of the Borrower become immediately due and
payable as provided above, Lenders may thereupon effect any and all remedies
granted to it under this Agreement, the Loan Documents and/or governing law.
10.3 NONWAIVER. The failure of Lenders, for any reason, to declare a
Default or breach, or to enforce or insist on the strict performance of the
covenants, obligations and conditions of this Agreement or the Loan Documents,
or to seek any redress available to Lenders under this Agreement or the Loan
Documents, shall not be deemed a waiver of such Default or breach or waiver of
strict performance of any covenant, obligation or condition of this Agreement or
the Loan Documents nor prevent a subsequent act by Borrower from having all the
force and effect of an original Default or breach.
SECTION 11. RIGHT OF SET-OFF
11.1 SET-OFF. Upon the occurrence and during the continuance of any
Event of Default as defined herein, each Lender is hereby authorized at any time
and from time to time,
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without further notice to the Borrower, such notice is hereby expressly waived
by the Borrower, to set-off and apply any and all deposits at any time held and
other indebtedness at any time owing by any Lender to or for the credit or the
account of the Borrower against any and all of the Obligations of the Borrower
now or hereafter existing under this Agreement and the Loan Documents,
irrespective of whether or not Lenders shall have made any demand under this
Agreement or the Loan Documents. Lenders hereby agree to promptly notify the
Borrower and each other Lender after any such set-off and application made by
it, provided that the failure to give such notice shall not affect the validity
of such set-off and application of such deposits. The rights of Lenders under
this section are in addition to other rights and remedies, including, without
limitation, any other rights of set-off, which Lenders and/or Agent may have.
11.2 SHARING OF SET-OFFS. Each Lender agrees that if it shall, by
exercising any right of set-off or otherwise, receive payment of all or any part
of the Note held by it, in a greater proportion than any such payment received
by any other Lender, if any, in respect of such other Lender's Note held by it,
the Lender receiving the payment shall purchase for cash from the other Lenders
such portion of each such other Lender's Notes as shall be necessary to cause
the Lender receiving the payment to share it ratably with each of the Lenders,
PROVIDED, HOWEVER, that if all or any portion of such payment received pursuant
to said set-off is recovered by the Borrower, such purchase from each of the
other Lenders shall be rescinded and the purchase price returned to the Lender
receiving the payment but without interest. Borrower agrees that each Lender so
purchasing a portion of another Lender's Note may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion.
SECTION 12. THE AGENT
12.1 APPOINTMENT; POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent: (a) shall have no duties or
responsibilities except as expressly set forth in this Agreement and the other
Loan Documents, and shall not by reason of this Agreement or any other Loan
Document be a trustee for any Lender; (b) shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained in
this Agreement or any other Loan Document, or in any certificate or other
document referred to or provided for in, or received by any Lender under, this
Agreement or any other Loan Document, or
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for the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or any other document referred to or
provided for herein or therein or for any failure by Borrower to perform any of
its obligations hereunder or thereunder; (c) shall not be required to initiate
or conduct any litigation or collection proceedings hereunder or under any other
Loan Document except to the extent requested by the Lenders, and then only on
terms and conditions satisfactory to the Agent, and (d) shall not be responsible
for any action taken or omitted to be taken by it hereunder or under any other
Loan Document or any other document or instrument referred to or provided for
herein or therein or in connection herewith or therewith, except for its own
gross negligence or wilful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
The provisions of this Section 12 are solely for the benefit of the Agent and
the Lenders, and the Borrower shall not have any rights as a third party
beneficiary of any of the provisions hereof. In performing its function and
duties under this Agreement and under the other Loan Documents, the Agent shall
act solely as agent of the Lenders and does not assume and shall not be deemed
to have assumed any obligation towards or relationship of agency or trust with
or for the Borrower. The duties of the Agent shall be ministerial and
administrative in nature, and the Agent shall not have by reason of this
Agreement or any other Loan Document a fiduciary relationship in respect of any
Lender.
12.2 RELIANCE BY AGENT. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telefax, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants or
other experts selected by the Agent. As to any matters not expressly provided
for by this Agreement or any other Loan Document, the Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions signed by the Majority Lenders, and
such instructions of the Majority Lenders in any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.
12.3 DEFAULTS. The Agent shall not be deemed to have knowledge of
the occurrence of a Default or an Event of Default (other than the nonpayment of
principal of or interest of the Advances) unless the Agent has received notice
from a Lender or Borrower specifying such Default or Event of Default and
stating that such notice is a "Notice of Default." In the event that the Agent
receives such a notice of the occurrence of a Default or an
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Event of Default, the Agent shall give prompt notice thereof to the Lenders.
The Agent shall give each Lender prompt notice of each nonpayment of principal
of or interest on the Advances whether or not it has received any notice of the
occurrence of such nonpayment. The Agent shall take such action hereunder with
respect to such Default or Event of Default as shall be directed by the Lenders,
PROVIDED THAT, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
12.4 RIGHTS OF AGENT AS A LENDER. With respect to the Advances made
by it, First Security Bank in its capacity as a Lender hereunder shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as the Agent, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include First Security Bank in
its individual capacity. The Agent may (without having to account therefor to
any Lender) accept deposits from, lend money to and generally engage in any kind
of banking, trust or other business with the Borrower (and any of its
Subsidiaries) as if it were not acting as the Agent, and the Agent may accept
fees and other consideration from the Borrower (in addition to any agency fees
and arrangement fees heretofore agreed to between the Borrower and the Agent)
for services in connection with this Agreement or any other Loan Document or
otherwise without having to account for the same to the Lenders.
12.5 INDEMNIFICATION. Each Lender severally agrees to indemnify the
Agent, to the extent the Agent shall not have been reimbursed by the Borrower,
ratably in accordance with its Commitment, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and disbursements) or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; PROVIDED, HOWEVER, that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or wilful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
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commence, to do the acts indemnified against until such additional indemnity is
furnished.
12.6 CONSEQUENTIAL DAMAGES. THE AGENT SHALL NOT BE RESPONSIBLE OR
LIABLE TO THE BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARY
OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
12.7 PAYEE OF NOTE TREATED AS OWNER. The Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Agent and the provisions of this Agreement have been satisfied.
Any requests, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of that
Note or of any Note or Notes issued in exchange therefor or replacement thereof.
12.8 NONRELIANCE ON AGENT AND OTHER LENDERS. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower, its Subsidiaries and the Acquisitions, and
its own decision to enter into this Agreement and that it will, independently
and without reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this
Agreement or any of the other Loan Documents. The Agent shall not be required
to keep itself informed as to the performance or observance by the Borrower of
this Agreement or any of the other Loan Documents or any other document referred
to or provided for herein or therein or to inspect the Properties or books of
the Borrower or any other Person. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder or under the other Loan Documents, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Borrower, its Subsidiaries, the Acquisitions, or any other Person which may come
into the possession of the Agent.
12.9 FAILURE TO ACT. Except for action expressly required of the
Agent hereunder or under the other Loan Documents, the Agent shall in all cases
be fully justified in failing or refusing to act hereunder and thereunder unless
it shall receive further assurances to its satisfaction by the Lenders of their
indemnification obligations under Section 12.5 against any and all liability and
expense which may be incurred
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by the Agent by reason of taking, continuing to take, or failing to take any
such action.
12.10 RESIGNATION OF AGENT. Subject to the appointment and acceptance
of a successor Agent as provided below, the Agent may resign at any time by
giving at least 60 days' notice thereof to the Lenders and the Borrower. Upon
any such resignation Lenders shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within 30 days after the retiring Agent's
notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 12 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent hereunder.
SECTION 13. MISCELLANEOUS
13.1 NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telecopier or similar
writing) and shall be given to such party at its address or telecopier number
set forth on the signature pages hereof or such other address or telecopier
number as such party may hereafter specify for the purpose by notice to each
other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified on the signature pages hereof or as otherwise
specified hereafter and the appropriate confirmation is received, (ii) if given
by mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section 13.1; PROVIDED
that notices to the Agent under Section 3 or Section 12 shall not be effective
until received.
13.2 NO WAIVERS. No failure or delay by the Agent or any Lender in
exercising any right, power or privilege hereunder or under any Note or other
Loan Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
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13.3 EXPENSES; DOCUMENTARY TAXES. The Borrower shall pay (i) all
reasonable out-of-pocket expenses of the Agent, including fees and disbursements
of special counsel for the Lenders and the Agent, in connection with any waiver
or consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder and (ii) if a Default occurs,
all reasonable out-of-pocket expenses incurred by the Agent and the Lenders,
including fees and disbursements of counsel, other professionals and consultants
and any allocated costs of internal counsel, other professionals and consultants
in connection with such Default and collection and other enforcement proceedings
resulting therefrom, including out-of-pocket expenses incurred in enforcing this
Agreement and the other Loan Documents and on any appeal. The Borrower shall
indemnify the Agent and each Lender against any transfer taxes, documentary
taxes, assessments or charges made by any Governmental Authority by reason of
the execution and delivery of this Agreement or the other Loan Documents.
13.4 INDEMNIFICATION. The Borrower shall indemnify the Agent, the
Lenders and their respective directors, officers, employees and agents from, and
hold each of them harmless against, any and all losses, liabilities, claims or
damages to which any of them may become subject, insofar as such losses,
liabilities, claims or damages arise out of or result from any actual or
proposed use by Borrower of the proceeds of any extension of credit by any
Lender hereunder or are in any way associated with any of the Loan Documents and
the transactions and events (including the enforcement or defense thereof) at
any time associated therewith or contemplated therein or breach by Borrower of
this Agreement or any other Loan Document or from any investigation, litigation
(including, without limitation, any actions taken by the Agent or any of the
Lenders to enforce this Agreement [except an enforcement action on which
Borrower prevails on the merits] or any of the other Loan Documents) or other
proceeding (including, without limitation, any threatened investigation or
proceeding) relating to the foregoing, and the Borrower shall reimburse the
Agent and each Lender and their respective directors, officers, employees and
agents, upon demand for any reasonable expenses (including, without limitation,
legal fees and any allocated costs of internal counsel) incurred in connection
with any such investigation or proceeding; but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or wilful misconduct of the Person to be indemnified.
13.5 AMENDMENTS AND WAIVERS. (a) Any provision of this Agreement,
the Notes or any other Loan Documents may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by the Borrower and the
Lenders and, if the rights or duties of the Agent are affected thereby, by the
Agent;
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PROVIDED that, no such amendment or waiver shall, unless signed by all Lenders,
(i) change the Commitment of any Lender or subject any Lender to any additional
obligation, (ii) change the principal of or rate of interest on any Advance or
any fees hereunder, (iii) change the date fixed for any payment of principal of
or interest on any Advance or any fees due on any date fixed for the payment
thereof, (v) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the percentage of Lenders, which shall be
required for the Lenders or any of them to take any action under this Section or
any other provision of this Agreement, (vi) change the manner of application of
any payments made under this Agreement or the Notes, (vii) release or substitute
all or any part of the Collateral held as security for the Obligations.
(b) The Borrower will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement unless each Lender shall be informed thereof by the Borrower and
shall be afforded an opportunity of considering the same and shall be supplied
by the Borrower with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any
waiver or consent effected pursuant to the provisions of this Agreement shall be
delivered by the Borrower to each Lender forthwith following the date on which
the same shall have been executed and delivered by the Lenders. The Borrower
will not, directly or indirectly, pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest, fee or otherwise, to any
Lender (in its capacity as such) as consideration for or as an inducement to the
entering into by such Lender of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently paid, on
the same terms, ratably to all such Lenders.
13.6 SUCCESSORS AND ASSIGNS. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that Borrower may not assign or
otherwise transfer any of its rights under this Agreement.
(b) Any Lender may, with the prior written consent of the Agent
and the Borrower, which consent shall not be unreasonably withheld, at any time
sell to one or more Persons (each a "Participant") participating interests in
any Advance owing to such Lender, any Note held by such Lender, any Commitment
hereunder or any other interest of such Lender hereunder. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance
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thereof, such Lender shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. In no event shall a Lender that sells a
participation be obligated to the Participant to take or refrain from taking
any action hereunder except that such Lender may agree that it will not (except
as provided below), without the consent of the Participant, agree to (i) the
change of any date fixed for the payment of principal of or interest on the
related Advances, (ii) the change of the amount of any principal, interest or
fees due on any date fixed for the payment thereof with respect to the related
Advance or Advances, (iii) any change in the rate at which either interest is
payable thereon or (if the Participant is entitled to any part thereof)
Commitment Fee is payable hereunder from the rate at which the Participant is
entitled to receive interest or Commitment Fee (as the case may be) in respect
of such participation, or (iv) the release or substitution of all or any part of
the Collateral held as security for the Advances. Each Lender selling a
participating interest in any Advance, Note, Commitment or other interest under
this Agreement shall, within 10 Business Days of such sale, provide the Borrower
and the Agent with written notification stating that such sale has occurred and
identifying the Participant and the interest purchased by such Participant. The
Borrower agrees that each Participant shall be entitled to the benefits of
Section 3 with respect to its participation in Advances outstanding from time to
time.
(c) Any Lender may, with the prior written consent of the Agent
and the Borrower, which consent shall not be unreasonably withheld, at any time
assign to one or more banks or financial institutions (each an "Assignee") all,
or a proportionate part of all of its Advances and Commitments, of its rights
and obligations under this Agreement, the Notes and the other Loan Documents,
and such Assignee shall assume all such rights and obligations, pursuant to an
Assignment and Acceptance executed by such Assignee, such transferor Lender, the
Agent and the Borrower; provided that no interest may be sold by a Lender
pursuant to this paragraph (c) unless the Assignee shall agree to assume ratably
equivalent portions of the transferor Lender's Commitment. Upon (A) execution
of the Assignment and Acceptance by such transferor Lender, such Assignee, the
Agent and the Borrower, (B) delivery of an executed copy of the Assignment and
Acceptance to the Borrower and the Agent, (C) payment by such Assignee to such
transferor Lender of an amount equal to the purchase price agreed between such
transferor Lender and such Assignee, and (D) payment of a processing and
recordation fee of Two Thousand Dollars ($2,000) to the Agent, such Assignee
shall for all purposes be a Lender party to this Agreement and shall have all
the rights and obligations of a Lender under this
- 50 -
<PAGE>
Agreement to the same extent as if it were an original party hereto with a
Commitment as set forth in such instrument of assumption, and the transferor
Lender shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by the Borrower, the Lenders or the
Agent shall be required. Upon the consummation of any transfer to an Assignee
pursuant to this paragraph (c), the transferor Lender, the Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note or
Notes is issued to such Assignee.
(d) Subject to the provisions of Section 13.7, the Borrower
authorizes each Lender to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and, with the Borrower's consent (which shall
not be unreasonably withheld), any and all financial information in such
Lender's possession concerning the Borrower which has been delivered to such
Lender by the Borrower pursuant to this Agreement or which has been delivered to
such Lender by the Borrower in connection with such Lender's credit evaluation
prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment
under Section 3.11 than the transferor Lender would have been entitled to
receive with respect to the rights transferred, unless such transfer is made
with the Borrower's prior written consent or by reason of the provisions of
Section 3.10 requiring such Lender to designate a different Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Anything in this Section 13.6 to the contrary notwithstanding,
any Lender may assign and pledge all or any portion of the Advances owing to it
to any Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and any Operating Circular issued by such Federal Reserve Bank, provided that
any payment in respect of such assigned Advances made by the Borrower to the
assigning and/or pledging Lender in accordance with the terms of this Agreement
shall satisfy the Borrower's obligations hereunder in respect of such assigned
Advances to the extent of such payment. No such assignment shall release the
assigning and/or pledging Lender from its obligations hereunder.
13.7 CONFIDENTIALITY. Each Lender agrees to exercise its best
efforts to keep confidential any information delivered or made available by the
Borrower to it other than from persons employed or retained by such Lender who
are or are expected to become engaged in evaluating, approving, structuring or
administering the Advances; PROVIDED, HOWEVER, that nothing herein shall prevent
any Lender from disclosing such information
- 51 -
<PAGE>
(i) to any other Lender, (ii) upon the order of any court or administrative
agency, (iii) upon the request or demand of any regulatory agency or authority
having jurisdiction over such Lender, (iv) which has been publicly disclosed,
(v) to the extent reasonably required in connection with any litigation to which
the Agent or any Lender may be a party, (vi) to the extent reasonably required
in connection with the exercise of any remedy hereunder, (vii) to such Lender's
legal counsel and independent auditors and (viii) to any actual or proposed
Participant, Assignee or other Transferee of all or part of its rights hereunder
which has agreed in writing to be bound by the provisions of this Section 13.7.
The agreements and obligations of the Lenders contained in this Section 13.7
constitute a continuing agreement and shall survive termination of this
Agreement and the payment in full of the Notes.
13.8 REPRESENTATION BY LENDERS. Each Lender hereby represents that
it is a commercial lender or financial institution which makes loans in the
ordinary course of its business and that it will make its Advances hereunder for
its own account in the ordinary course of such business; PROVIDED, HOWEVER,
that, subject to Section 13.7, the disposition of the Notes and other Loan
Documents held by that Lender shall at all times be within its exclusive
control.
13.9 OBLIGATIONS. The obligations of each Lender hereunder are
several, and no Lender shall be responsible for the obligations or commitment of
any other Lender hereunder. Nothing contained in this Agreement and no action
taken by Lenders pursuant hereto shall be deemed to constitute the Lenders to be
a partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement or any other Loan Document and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
13.10 IDAHO LAW. This Agreement and each Note shall be construed in
accordance with and governed by the law of the State of Idaho.
13.11 INTERPRETATION. No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
13.12 WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION. The Borrower and
each of the Lenders and the Agent (a)
- 52 -
<PAGE>
irrevocably waive any and all right to trial by jury in any legal proceeding
arising out of this Agreement, any of the other Loan Documents, or any of the
transactions contemplated hereby or thereby, (b) submit to the nonexclusive
personal jurisdiction in the State of Idaho, County of Ada, the courts thereof
and the United States District Court sitting therein, for the enforcement of
this Agreement, the Notes and the other Loan Documents, and (c) waive any and
all personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or venue
within the State of Idaho for the purpose of litigation to enforce this
Agreement, the Notes or the other Loan Documents. The Borrower agrees that
service of process may be made upon them in the manner prescribed in
Section 13.1 for the giving of notice to the Borrower. Nothing herein
contained, however, shall prevent the Agent from bringing any action or
exercising any rights against any security and against the Borrower personally,
and against any assets of the Borrower, within any other state or jurisdiction.
13.13 COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13.14 SEVERABILITY. In case any one or more of the provisions
contained in this Agreement, the Notes, or any of the other Loan Documents
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired thereby and shall be
enforced to the greatest extent permitted by law.
13.15 INTEREST. In no event shall the amount of interest due or
payable hereunder or under the Notes exceed the maximum rate of interest allowed
by applicable law, and in the event any such payment is inadvertently made to
any Lender by Borrower or inadvertently received by any Lender, then such excess
sum shall be credited as a payment of principal, unless Borrower shall notify
such Lender in writing that it elects to have such excess sum returned
forthwith. It is the express intent hereof that the Borrower not pay and the
Lenders not receive, directly or indirectly in any manner whatsoever, interest
in excess of that which may legally be paid by the Borrower under applicable
law.
- 53 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
FIRST INTERSTATE BANCSYSTEM
OF MONTANA, INC.
By:________________________________
Name:______________________________
Title:_____________________________
(A duly authorized officer)
401 North 31st Street
Billings, Montana 59116-0918
Attention: Chief Financial Officer
Telecopier Number (406) 255-5350
Telephone Number (406) 255-5304
COMMITMENTS
-----------
Commitment Percentage
Amount Amount
- ------------ ------------
$18,000,000 40.0% FIRST SECURITY BANK, N.A., a
national banking association
By:_______________________________
Vicki V. Riga
Vice President
(A duly authorized officer)
LENDING OFFICE
--------------
First Security Bank
119 North 9th Street
P.O. Box 7069
Boise, Idaho 83730
Attention: Corporate Banking
Telecopier Number (208) 393-2472
Telephone Number (208) 393-2163
$13,500,000 30.0% WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking
association
By:________________________________
James L. Franzen
Vice President
(A duly authorized officer)
- 54 -
<PAGE>
LENDING OFFICE
--------------
Wells Fargo Bank, National
Association
1300 S.W. Fifth Avenue
Portland, Oregon 97201
Attention: Portland RCBO (6101-192)
Telecopier Number (503) 220-4896
Telephone Number (503) 225-2288
$13,500,000 30.0% COLORADO NATIONAL BANK, a national
banking association
By:_________________________________
Jeffrey M. Parr
Assistant Vice President
(A duly authorized officer)
LENDING OFFICE
--------------
Colorado National Bank
950 17th Street (CNDT 0312)
Denver, Colorado 80202
Attention: Financial Institution
Division
Telecopier Number (303) 585-6273
Telephone Number (303) 585-4239
FIRST SECURITY BANK, N.A., a
national banking association
By:________________________________
Vicki V. Riga
Vice President
(A duly authorized officer)
AGENT
- 55 -
<PAGE>
EXECUTION COPY
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
$20,000,000 PRINCIPAL AMOUNT
OF
SUBORDINATED NOTES DUE OCTOBER 1, 2006
NOTE PURCHASE AGREEMENT
dated as of August 30, 1996
<PAGE>
NOTE PURCHASE AGREEMENT
TABLE OF CONTENTS
SECTION 1. DEFINITIONS................................................... 1
1.1 Definitions........................................................ 1
SECTION 2. ISSUE OF NOTES................................................ 1
2.1 The Note........................................................... 1
2.1.1 Maturity.................................................... 1
2.1.2 Principal Amount............................................ 2
2.1.3 Interest.................................................... 2
2.1.4 Interest Payments........................................... 2
2.1.5 Principal Payments.......................................... 2
2.1.6 Prepayment.................................................. 2
2.2 Manner of Payment.................................................. 3
2.3 Use of Proceeds.................................................... 3
2.4 Closing............................................................ 3
2.5 Failure to Close................................................... 4
2.6 Legend............................................................. 4
SECTION 3. CLOSING CONDITIONS............................................ 4
3.1 Conditions to Each Party's Obligation to Effect
the Purchase and Sale of the Note.................................. 4
(a) Governmental and Regulatory Consents.......................... 4
(b) Third Party Consents.......................................... 5
(c) Purchase Permitted by Applicable Laws......................... 5
(d) Consummation of the Acquisition............................... 5
3.2 Conditions to Obligation of the Purchaser.......................... 5
(a) Representations and Warranties................................ 5
(b) Event of Default.............................................. 5
(c) Delivery of Documents......................................... 5
3.3 Conditions to Obligation of the Company............................ 6
SECTION 4. REPRESENTATIONS AND WARRANTIES................................ 6
4.1 Organization; Bank Holding Company Registration.................... 6
4.2 Corporate Power; Authorization..................................... 6
4.3 No Conflicts....................................................... 7
4.4 Governmental Consents.............................................. 7
4.5 Subsidiaries....................................................... 7
4.6 Compliance with Law................................................ 8
4.7 Required Licenses.................................................. 8
4.8 Litigation......................................................... 8
4.9 Title to Assets.................................................... 9
4.10 Employee Benefits................................................. 9
4.11 Environmental Matters............................................. 10
4.12 Taxes............................................................. 11
4.13 Financial Statements.............................................. 11
ii
<PAGE>
4.14 No Broker's Fee................................................... 11
SECTION 5. COVENANTS..................................................... 11
5.1 Payment of Note.................................................... 11
5.2 Payment of Taxes................................................... 11
5.3 Reports and Notices................................................ 12
(a) Annual Financial Statements.................................... 12
(b) Quarterly Financial Statements................................ 12
5.4 Maintenance of Properties.......................................... 12
5.5 Maintenance of Corporate Existence................................. 12
5.6 Compliance With Law................................................ 12
5.7 Insurance.......................................................... 13
SECTION 6. EVENTS OF DEFAULT; REMEDIES................................... 13
6.1 Events of Default.................................................. 13
6.2 Rights and Remedies................................................ 13
6.3 Costs and Expenses................................................. 13
SECTION 7. SUBORDINATION................................................. 13
7.1 Note Subordinated to Senior Indebtedness........................... 13
7.2 Payment Permitted if No Default.................................... 15
SECTION 8. PAYMENT, REGISTRATION, EXCHANGE AND TRANSFER
OF THE NOTE................................................... 15
8.1 Appointment of Paying Agent........................................ 15
8.2 Payments........................................................... 16
8.3 Registration.................................................. 16
8.4 Exchange and Transfer......................................... 16
8.5 Replacement................................................... 16
SECTION 9. MISCELLANEOUS................................................. 16
9.1 Definitions....................................................... 16
9.2 Course of Dealing.................................................. 19
9.3 Notices............................................................ 19
9.4 Purchaser Representations.......................................... 21
9.5 Headings........................................................... 21
9.6 Severability....................................................... 21
9.7 Entire Agreement; Interpretation................................... 22
9.8 Assignment......................................................... 22
9.9 Amendment; Waiver.................................................. 22
9.10 Governing Law; Consent to Jurisdiction............................ 22
9.11 Counterparts...................................................... 22
9.12 JURY WAIVER........................................................ 22
9.13 Time.............................................................. 23
iii
<PAGE>
EXHIBITS AND SCHEDULES
Exhibit A Form of Subordinated Note
Schedule 4.4 Governmental Consents
Schedule 4.5 Subsidiaries
Schedule 4.6 Violations of Laws
Schedule 4.9 Encumbrances
Schedule 4.10 Employee Benefit Plans
Schedule 4.11 Violations of Environmental Laws; Hazardous
Substances
Schedule 4.12 Tax Matters
iv
<PAGE>
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
401 NORTH 31ST STREET
BILLINGS, MONTANA 59103-0639
NOTE PURCHASE AGREEMENT
This Note Purchase Agreement ("Agreement") is made as of the 30th day of
August, 1996 by and among the MONTANA BOARD OF INVESTMENTS (the "Purchaser") and
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC., a Montana corporation (the
"Company").
R E C I T A L S
A. The Company has entered into a Stock Purchase Agreement ("Stock
Purchase Agreement") dated as of May 24, 1996 by and among the Company and Wells
Fargo & Company ("Wells Fargo") pursuant to which Wells Fargo has agreed to
sell, and the Company has agreed to purchase, all of the issued and outstanding
capital stock of First Interstate Bank of Montana, N.A. ("Montana Bank") and
First Interstate Bank of Wyoming, N.A. ("Wyoming Bank"), (the Montana Bank and
the Wyoming Bank shall be collectively referred to herein as the "Banks").
B. In order to finance a portion of the purchase price to be paid by the
Company for the acquisition of all of the issued and outstanding capital stock
of the Banks (the "Acquisition"), the Company has agreed to sell, and the
Purchaser has agreed to purchase, the Company's Subordinated Note in the
principal amount of $20,000,000 (the "Note"), on the terms and conditions set
forth herein.
A G R E E M E N T
SECTION 1. DEFINITIONS
1.1 DEFINITIONS. Certain terms are used in this Agreement as specifically
defined herein. These definitions are set forth or referred to in Section 9.1.
SECTION 2. ISSUE OF NOTES
2.1 THE NOTE. The Company will authorize the issue of the Note. The Note
shall be dated October 1, 1996 ("Issuance Date"), shall be in substantially the
form set forth on EXHIBIT A, and shall have the following terms:
2.1.1 MATURITY. The Note shall mature and all unpaid principal and
accrued interest shall be due and payable on October 1, 2006 ("Maturity Date").
<PAGE>
2.1.2 PRINCIPAL AMOUNT. The principal amount of the Note shall be
$20,000,000 and the purchase price for the Note shall be 100% of the principal
amount.
2.1.3 INTEREST. The Note shall bear interest from the Closing Date,
computed on the basis of actual days elapsed and a year of 360 days and months
of 30 days, on the unpaid principal amount thereof at a rate per annum equal to
the yield to maturity on actively traded U.S. Treasury instruments having a
maturity date closest to the weighted average life of the Note, taking into
account the amortization schedule set forth in Section 2.1.5, three Business
Days prior to the Closing Date, and rounded to the nearest one-eighth of a
percent (the "Base Rate") plus 90 basis points (the "Spread"), (the Base Rate
plus the Spread shall be referred to herein as the "Treasury Rate"); PROVIDED,
HOWEVER, that if the Treasury Rate is less than 7.00% per annum, the Note shall
bear interest at the rate of 7.00% per annum, and if the Treasury Rate is
greater than 8.25% per annum, the Note shall bear interest at the rate of 8.25%
per annum. The parties agree that if the Base Rate cannot be established by
examining a single U.S. Treasury instrument, the parties shall in good faith
establish the Base Rate by a process of interpolation using yields on actively
traded U.S. Treasury instruments having maturities near the weighted average
maturity life of the Note.
2.1.4 INTEREST PAYMENTS. Interest shall be payable semiannually in
arrears, commencing on April 1, 1997 and continuing on each October 1 and April
1 thereafter until the Note has been paid in full. On the first interest
payment date, interest shall be payable for the period from the Closing Date to
such payment date.
2.1.5 PRINCIPAL PAYMENTS. Interest shall be payable in the amounts
and on the dates set forth below:
Date Repayment Amount
---- ----------------
October 1, 2002 $3,400,000
October 1, 2003 $3,700,000
October 1, 2004 $4,000,000
October 1, 2005 $4,300,000
October 1, 2006 $4,600,000
2.1.6 PREPAYMENT. Upon the occurrence of a Change of Control of the
Company, the Company shall have the right to prepay in full, but not in part,
the outstanding principal balance on the Note, provided that: (a) the Company
shall, at least thirty (30) calendar days prior to making any such prepayment,
deliver to the Holder a written notice which sets forth the amount of the
prepayment and the date on which the prepayment will be made ("Prepayment
Date"); (b) on the Prepayment Date the Company shall pay all accrued and unpaid
2
<PAGE>
interest relating to the amount prepaid through the Prepayment Date; and (c) on
the Prepayment Date, the Company shall pay the Make-Whole Amount, if any,
resulting from the prepayment. "Make-Whole Amount" shall mean (i) the amount by
which (A) the present value of the amount of interest which would have accrued
on the amount prepaid during the period commencing on the Prepayment Date and
ending on the Maturity Date ("Remaining Loan Period") exceeds (B) the present
value of the amount of interest that Holder would earn if the amount prepaid
were reinvested for the "Remaining Loan Period" in U.S. Treasury obligations
having a weighted average life approximately equal to the Remaining Loan Period.
For purposes of calculating present value, the discount rate will be the rate of
interest accruing on the U.S. Treasury obligations selected in (i)(B) above. If
the Make-Whole Amount would be less than zero, it shall be deemed to be zero.
2.2 MANNER OF PAYMENT. The Company shall deposit with the Paying Agent
all payments that the Company is required or permitted to make under this
Agreement no later than noon, Mountain Time, on the date payment is due or
permitted, by wire transfer of immediately available funds in accordance with
wire transfer instructions as designated in writing by the Paying Agent. All
amounts deposited with the Paying Agent shall be held in trust by it and applied
by it to the payment to the Holder of such amounts, no later than 3:00 p.m.
Mountain Time on the date payment is received by the Paying Agent, by wire
transfer of immediately available funds, (a) if the Purchaser is the Holder, to
the following account of Purchaser in accordance with wire transfer instructions
as designated in writing by the Purchaser, or (b) if Purchaser is not the
Holder, to the account of the Holder, and in accordance with the wire transfer
instructions set forth in the register maintained pursuant to Section 8.2 of
this Agreement. Whenever any payment required under this Agreement is due on a
day which is not a Business Day, such payment shall be made on the next Business
Day.
2.3 USE OF PROCEEDS. The proceeds of the sale and purchase of the Note
shall be used to fund the Acquisition and the balance, if any, to fund the
Company's working capital.
2.4 CLOSING. The closing of the sale and purchase of the Note ("Closing")
shall take place at 10:00 a.m. Mountain Time, at the offices of Holland & Hart,
401 North 31st Street, Suite 1500, Billings, Montana, on October 1, 1996, or
such other date as the Company and the Purchaser mutually agree (the "Closing
Date"), which date shall be no later than December 31, 1996 ("Outside Closing
Date"). At the Closing, the Company will deliver to the Purchaser a single
Note, in the principal amount of $20,000,000, dated the Closing Date, and
payable to the Purchaser or its designated nominee or custodian.
3
<PAGE>
2.5 FAILURE TO CLOSE. (a) It is agreed that it is impossible to determine
with certainty the damages which will accrue to Purchaser in the event that the
Closing does not occur on or before the Outside Closing Date as a result of the
Company's failure to satisfy, or to cause the satisfaction of, any of the
conditions set forth in Section 3.1(b) or 3.2(a) of this Agreement. Therefore,
the Company agrees that if Closing does not occur on or before the Outside
Closing Date as a result of the Company's failure to satisfy, or to cause the
satisfaction of, any of the conditions set forth in Section 3.1(b) or 3.2(a) of
this Agreement, the Company shall pay the Purchaser a fee of $200,000 on January
1, 1997 by wire transfer of immediately available funds in accordance with the
wire transfer instructions set forth in Section 2.2 of this Agreement.
(b) It is agreed that it is impossible to measure in money the damages
which will accrue to the Company in the event that the Closing does not occur on
or before the Outside Closing Date as a result of the Purchaser's failure to
satisfy, or cause the satisfaction of, any of the conditions set forth in
Section 3.1(b) or 3.3 of this Agreement. Therefore, the Purchaser agrees that
if Closing does not occur on or before the Outside Closing Date as a result of
the Purchaser's failure to satisfy, or to cause the satisfaction of, any of the
conditions set forth in Sections 3.1(b) or 3.3 of this Agreement, the Company
may pursue all remedies available to it under applicable law, including without
limitation, specific performance.
2.6 LEGEND. The Note shall contain the following legend:
"THIS SUBORDINATED NOTE IS NOT A DEPOSIT AND IS NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY AND IS SUBORDINATE IN RIGHT OF PAYMENT TO ALL SENIOR
INDEBTEDNESS (AS DEFINED IN THE NOTE PURCHASE AGREEMENT DATED AS
OF AUGUST 30, 1996) OF THE COMPANY."
SECTION 3. CLOSING CONDITIONS
3.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE PURCHASE AND SALE
OF THE NOTE. The respective obligation of each of the Company and the Purchaser
to consummate the purchase and sale of the Note is subject to the fulfillment,
or written waiver by the Company and the Purchaser, of each of the following
conditions:
(a) GOVERNMENTAL AND REGULATORY CONSENTS. The approval of (i) the
Federal Reserve Board ("FRB") of the issuance of the Note on the terms and
conditions set forth herein, and (ii) the FRB of the inclusion of the
indebtedness of the Company
4
<PAGE>
evidenced by the Note in the Company's Tier 2 Capital, and (iii) the FRB and the
Wyoming state banking commissioner of the Acquisition, shall have been obtained
and shall be in full force and effect and all related waiting periods, if any,
shall have expired.
(b) THIRD PARTY CONSENTS. All consents or approvals of all Persons
(other than the consents set forth in Section 3.1(a)) required for or in
connection with the execution, delivery and performance of this Agreement and
the consummation of the purchase and sale of the Note shall have been obtained
and shall be in full force and effect, unless the failure to obtain any such
consent or approval would not have a Material Adverse Effect.
(c) PURCHASE PERMITTED BY APPLICABLE LAWS. No United States or state
court or other Governmental Entity of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and prohibits consummation of the transactions
contemplated by this Agreement.
(d) CONSUMMATION OF THE ACQUISITION. All conditions to the
Acquisition shall have been satisfied or waived on or prior to December 31,
1996.
3.2 CONDITIONS TO OBLIGATION OF THE PURCHASER. The obligation of the
Purchaser to consummate the purchase of the Note is also subject to the
fulfillment, or written waiver by the Purchaser, of each of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in Section 4 of this Agreement shall be true
and correct in all material respects as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date (except that
representations and warranties that by their terms speak as of the date of this
Agreement or some other date shall be true and correct in all material respects
as of such date), and the Purchaser shall have received a certificate, dated as
of the Closing Date, signed on behalf of the Company by an Executive Officer of
the Company to such effect.
(b) EVENT OF DEFAULT. No event shall have occurred which, if the
Note had been outstanding on and after the date hereof, would constitute an
Event of Default on such Closing Date.
(c) DELIVERY OF DOCUMENTS. The Company shall have executed and
delivered to the Purchaser the following:
(i) the Note;
5
<PAGE>
(ii) a copy of (A) the bylaws of the Company, and (B) the
resolutions of the Board of Directors of the Company authorizing the execution
and delivery of this Agreement, the issuance of the Note, and the consummation
of the transactions contemplated by this Agreement, certified as true and
complete copies by the Secretary of the Company;
(iii) a copy of the certificate of incorporation of the Company,
certified as true and complete by the Montana Secretary of State; and
(iv) a certificate issued by the Montana Secretary of State
certifying that the Company is in good standing in such State.
3.3 CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of the
Company to consummate the sale of the Note is also subject to the fulfillment,
or written waiver by the Company, prior to the Closing Date of each of the
following conditions:
(a) the Company shall have received a copy of the resolutions of the
Purchaser authorizing the execution and delivery of this Agreement and the
purchase of the Note, certified as true and complete by the Secretary of the
Purchaser.
(b) the Company shall have received payment from the Purchaser, by
wire transfer of immediately available funds, in the amount of $20,000,000, to
the account specified in and in accordance with wire transfer instructions as
designated in writing by the Company.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 ORGANIZATION; BANK HOLDING COMPANY REGISTRATION. The Company has been
duly incorporated and is a validly existing corporation in good standing under
the laws of the State of Montana, with its chief executive offices located in
Billings, Montana. The Company is a bank holding company registered under the
Bank Holding Company Act of 1956, as amended.
4.2 CORPORATE POWER; AUTHORIZATION. The Company has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement. This Agreement has been duly and validly authorized by
the Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity. The issuance of the Note on the terms and conditions
contained herein has been duly and validly authorized by the Company and, when
the
6
<PAGE>
Note is issued, sold and delivered in the manner set forth in this Agreement,
will be the valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
4.3 NO CONFLICTS. Neither the execution and delivery of this Agreement nor
the performance of the transactions contemplated hereby, will: (a) violate,
conflict with or result in a default under (i) any material contract,
instrument, agreement, indenture, obligation or commitment to which the Company
is a party or by which the Company or its assets are bound, (ii) any provision
of the certificate of incorporation or bylaws of the Company, or (iii) any law,
rule, ordinance or regulation or judgment, decree, order, award or governmental
or non-governmental permit or license to which the Company is subject.
4.4 GOVERNMENTAL CONSENTS. Except as set forth in Schedule 4.4, no
notices, reports or other filings are required to be made by the Company with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by the Company from, any governmental or regulatory
authority, agency, court, commission or other entity ("Governmental Entities"),
in connection with the execution, delivery or performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
hereby.
4.5 SUBSIDIARIES. The Subsidiaries of the Company and the percentage of
issued and outstanding shares of stock of each such Subsidiary owned of record
and beneficially by the Company are as set forth in Schedule 4.5. All of the
issued and outstanding shares of capital stock of the Company's Subsidiaries
have been duly and validly authorized and issued and are fully paid and
nonassessable. Except as set forth on Schedule 4.5, there are no options,
warrants, agreements, contracts or other rights in existence to purchase or
acquire from the Company any shares of the capital stock of any of the Company's
Subsidiaries. Each such Subsidiary has been duly incorporated and is validly
existing and in good standing under the laws of the state of its incorporation.
Each such Subsidiary has the corporate power and authority to own its properties
and conduct its business as presently conducted and is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction in which
(a) its ownership or lease of real property or the conduct of its business makes
such qualification necessary and (b) the failure to so qualify would have a
Material Adverse Effect. Other than the Subsidiaries set forth on Schedule 4.5,
the Company owns no capital stock or other equity, ownership or proprietary
interest in any other entity. The deposit accounts
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of each of the Company's Subsidiaries which are banks are insured by the Bank
Insurance Fund of the Federal Deposit Insurance Corporation ("FDIC") up to the
maximum applicable amount in accordance with the rules and regulations of the
FDIC, and no proceedings for the termination or revocation of such membership or
insurance are pending, or, to the knowledge of the Company, threatened.
4.6 COMPLIANCE WITH LAW. Except where the failure to comply would not have
a Material Adverse Effect and except as disclosed in Schedule 4.6, the Company
and its Subsidiaries are in compliance, in the conduct of their respective
businesses, with all applicable federal, state, local and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders or decrees applicable
thereto or to the employees conducting such businesses, including, without
limitation, the Fair Lending Laws.
4.7 REQUIRED LICENSES. Except where such failure would not have a Material
Adverse Effect, the Company and its Subsidiaries have all permits, licenses,
certificates of authority, orders and approvals of, and have made all filings,
applications and registrations with, Governmental Entities, that are required in
order to permit them to carry on their respective businesses as presently
conducted. Neither the Company nor any of its Subsidiaries has received
notification or communication from any Governmental Entity (including the OCC
and any other bank, insurance and securities regulatory authorities) or the
staff thereof, which remains in effect (a) asserting that the Company or any of
its Subsidiaries is not in compliance with any of the statutes, regulations or
ordinances that such Governmental Entity enforces; (b) threatening to revoke any
license, franchise, permit or governmental authorization of the Company or any
of its Subsidiaries; or (c) threatening or contemplating revocation or
limitation of, or which would have the effect of revoking or limiting, FDIC
deposit insurance of the Company's Subsidiaries which are banks.
4.8 LITIGATION. There are no criminal or administrative investigations or
hearings of, before or by any Governmental Entity, or civil, criminal or
administrative actions, suits, claims or proceedings of, before or by any person
or entity (including any Governmental Entity) pending or, to the knowledge of
the Company's Executive Officers, threatened, against the Company or any of its
Subsidiaries (including, without limitation, under any of the Fair Lending
Laws); and neither the Company nor any of its Subsidiaries is a party to or is
subject to any order, decree, agreement, memorandum of understanding or similar
arrangement with, or similar submission to, any Governmental Entity charged with
the supervision or regulation of depository institutions or engaged in the
insurance of deposits (including, without limitation, the Comptroller of the
Currency (the "OCC") and the FDIC) or the supervision or regulation of it
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or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries
has been advised by any such Governmental Entity that such Governmental Entity
is contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, or similar submission.
4.9 TITLE TO ASSETS. Except as disclosed or reserved against in the Call
Reports or as disclosed in Schedule 4.9, the Company and its Subsidiaries have
good and marketable title, free and clear of all liens, claims, security
interests or other encumbrances (except those encumbrances which do not
interfere in any material respect with the use of the property or the conduct of
the business of the Company and its Subsidiaries) their properties and assets,
tangible or intangible.
4.10 EMPLOYEE BENEFITS. (a) Schedule 4.10 sets forth, as of the date of
this Agreement, a true and complete list of each employee benefit plan,
arrangement or agreement (the "Plans") that covers employees or former employees
(the "Employees") of the Company and its Subsidiaries (each, an "ERISA
Affiliate"), which together would be deemed a "single employer" within the
meaning of Section 4001 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").
(b) All of the Plans of the Company and its ERISA Affiliates have
been operated and administered in all material respects in accordance with ERISA
and the Internal Revenue Code (the "Code") and each of the Plans which is an
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA and
which is intended to be "qualified" under Section 401(a) of the Code is so
qualified. There are no pending, threatened or anticipated claims (other than
routine claims for benefits) by, or on behalf of or against any of the Plans or
any trusts related thereto.
(c) All required contributions which are due from the Company and its
ERISA Affiliates have either been made or properly accrued, and no Plan has an
accumulated or waived funding deficiency within the meaning of Section 412 of
the Internal Revenue Code or Section 302 of ERISA. Neither the Company nor any
ERISA Affiliate has incurred, directly or indirectly, any liability (including
material contingent liability) to or on account of a Plan pursuant to Title IV
of ERISA. No proceedings have been instituted to terminate any Plan that is
subject to Title IV of ERISA. The current value of the assets of each of the
Plans that is subject to Title IV of ERISA, based upon the actuarial assumptions
(to the extent reasonable) presently used by such Plan, exceeds the present
value of the accrued benefits under such Plan.
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4.11 ENVIRONMENTAL MATTERS. (a) For purposes of this Section 4.11, the
following terms shall have the indicated meaning:
"BUSINESS" means the business conducted by the Company and its
Subsidiaries.
"ENVIRONMENTAL LAW" means any law, regulation, order or decree relating to
Hazardous Substances or the protection of the environment.
"HAZARDOUS SUBSTANCES" means substances which are listed or classified
pursuant to any Environmental Law, including any petroleum products or
byproducts, polychlorinated biphenyls ("PCBs"), radioactive materials or
radon gas.
(b) Except as disclosed in Schedule 4.11, the Company and its
Subsidiaries, and all real property owned by the Company or its Subsidiaries
(collectively, "Real Property"), are in material compliance with applicable
Environmental Laws.
(c) There are no pending claims, actions, or proceedings involving the
Company or any of its Subsidiaries relating to:
(i) an asserted liability of the Company or its Subsidiaries
under any Environmental Law or the terms and conditions of any permit, license,
authority, settlement, agreement, decree or other obligation pursuant to any
Environmental Law;
(ii) the handling, storage, use, transportation, removal or
disposal of Hazardous Substances;
(iii) the discharge, release or emission of Hazardous Substances
from, on or under or within the Real Property into the air, water, surface
water, ground water, land surface or subsurface strata; or
(iv) personal injuries or damage to property caused by a release
of Hazardous Substances.
(d) Except as disclosed in Schedule 4.11, to the knowledge of the
Company's Executive Officers and the Executive Officers of the Company's
Subsidiaries, no Hazardous Substances have been used, handled, stored, released
or emitted by the Company or its Subsidiaries at or on any Real Property except
in compliance with applicable Environmental Laws and as would not be reasonably
expected to create conditions requiring remediation under any Environmental Law.
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4.12 TAXES. The Company has timely filed, for itself and on behalf of its
Subsidiaries, all tax returns reasonably deemed by the Company to be required
and has paid all Taxes due, payable or owed for all periods for which returns
are required to be filed, other than Taxes contested in good faith. Except as
set forth on Schedule 4.12, (a) no governmental entity has, during the past
three years, examined or is in the process of examining any tax returns of
either the Company or its Subsidiaries, and (b) no governmental entity has
proposed any deficiency, assessment, or claim for Taxes against either the
Company or its Subsidiaries.
4.13 FINANCIAL STATEMENTS. The Company has furnished to the Purchaser its
consolidated financial statements for its three most recent fiscal years. (Such
financial statements are collectively referred to as the "Reports".) The
consolidated financial statements and related notes included in the Reports
present fairly the consolidated financial position of the Company and its
Subsidiaries at the dates of the balance sheets included therein and the
consolidated results of their operations for the periods covered and were
prepared in conformity with GAAP consistently applied, except as may be noted
therein. Since January 1, 1996, there has been no change in the financial
condition or business of the Company or its Subsidiaries, taken as a whole,
which would constitute a Material Adverse Effect.
4.14 NO BROKER'S FEE. Except for fees payable to D.A. Davidson & Co.,
which are payable by the Company, the Company has not incurred any liability for
any finder's or broker's fee in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.
SECTION 5. COVENANTS
The Company covenants and agrees that:
5.1 PAYMENT OF NOTE. The Company will punctually pay or cause to be paid
the principal and interest to become due in respect of the Note according to the
terms thereof and hereof.
5.2 PAYMENT OF TAXES. The Company and its subsidiaries will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, all Taxes levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property of the Company or any
Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
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5.3 REPORTS AND NOTICES. The Company shall provide to the Purchaser the
following reports, information and notices:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in no
event later than 120 days after the end of any fiscal year of the Company
occurring while the Note is outstanding, annual financial statements of the
Company and its Subsidiaries on a consolidated basis, prepared in accordance
with GAAP consistently applied which shall: (i) be audited by independent
certified public accountants selected by the Company; (ii) be accompanied by a
report of such accountants containing an opinion of such accountants; and
(iii) include a balance sheet, an income statement, a statement of cash flows, a
statement of stockholders' equity, and all notes and schedules relating thereto.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but in no
event more than 60 days after the end of each of the first three quarters in any
fiscal year of the Company occurring while this Agreement is in effect, the
following financial statements of the Company and its Subsidiaries on a
consolidated basis, prepared in accordance with GAAP consistently applied: (i)
a balance sheet, (ii) an income statement, and (iii) a statement of
stockholders' equity, for such quarter and for the year to date.
5.4 MAINTENANCE OF PROPERTIES. The Company will cause its properties and
the properties of its Subsidiaries used or useful in the conduct of the business
of the Company and its Subsidiaries to be maintained and kept in good
conditions, repair and working order and supplied with all necessary facilities
and equipment and will cause to be made all necessary repairs, renewals,
replacements and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER, that the
foregoing shall not prevent the Company or a Subsidiary from discontinuing the
operation and maintenance of any of its properties if such discontinuance is, in
the judgment of the Company desirable in the conduct of its business and not
disadvantageous in any material respect to the Purchaser.
5.5 MAINTENANCE OF CORPORATE EXISTENCE. The Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect the
corporate existence, of the Company and its Subsidiaries.
5.6 COMPLIANCE WITH LAW. The Company and its subsidiaries shall comply with
all statutes, rules, regulations and orders of and restrictions imposed by
governmental and administrative authorities and agencies applicable to the
Company and its subsidiaries.
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5.7 INSURANCE. Subject to the right to sell, abandon or otherwise dispose
of any building or property whenever in the opinion of the Company the retention
thereof is inadvisable or not necessary to the business of the Company and its
Subsidiaries, the Company will at all times cause all buildings, equipment and
other insurable properties owned or operated by it or any Subsidiary to be
insured with responsible insurance carriers against loss or damage by fire and
other hazards, to the extent, and in such amounts, as is customary among
corporations owning or operating properties of a similar character.
SECTION 6. EVENTS OF DEFAULT; REMEDIES
6.1 EVENTS OF DEFAULT. Upon the commencement by the Company of any
voluntary bankruptcy proceeding or the entry of a decree or order for relief in
an involuntary bankruptcy proceeding under Chapter 7 or Chapter 11 of the
Bankruptcy Code (an "Event of Default"), the outstanding principal amount of the
Note, and the interest accrued thereon, shall be immediately due and payable
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or character.
6.2 RIGHTS AND REMEDIES. Subject to the provisions of Section 7 of this
Agreement, upon the occurrence of an Event of Default, the Purchaser shall be
entitled to institute a judicial proceeding for the collection of the money so
due and unpaid, and may prosecute such proceeding to judgment or final decree,
and may enforce the same against the Company and collect the money adjudged or
decreed to be payable in the manner provided by law out of the property of the
Company.
6.3 COSTS AND EXPENSES. The Company covenants that if payment of the
outstanding principal of, and accrued interest on, the Note is accelerated, the
Company will pay to the Purchaser, to the extent permitted under applicable law
such further amount (in addition to any amounts due under the Note) as shall be
sufficient to cover the reasonable costs and expenses of collection, including
reasonable attorneys' fees and expenses for all services rendered in connection
therewith.
SECTION 7. SUBORDINATION
7.1 NOTE SUBORDINATED TO SENIOR INDEBTEDNESS. The Company covenants and
agrees, and the Purchaser and each subsequent Holder, by such Holder's
acceptance thereof, likewise covenants and agrees, that the indebtedness
evidenced by the Note is subordinate and junior in right of payment to all
Senior Indebtedness. Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of these subordination provisions
irrespective of any amendment, modification or waiver
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of any term of the Senior Indebtedness or extension or renewal of the Senior
Indebtedness.
(a) Upon the occurrence of a Senior Indebtedness Default, then, upon
written notice of such Senior Indebtedness Default to the Company by the holders
of such Senior Indebtedness, unless and until such Senior Indebtedness Default
shall have been cured or waived or shall have ceased to exist, no direct or
indirect payment (in cash, property, securities, by set-off or otherwise) shall
be made or agreed to be made on account of the principal of or interest on the
Note, or in respect of any redemption of the Note.
(b) In the event of:
(i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Company;
(ii) any proceeding for the liquidation, dissolution or other
winding up of the Company, voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings;
(iii) any assignment by the Company for the benefit of creditors;
or
(iv) any other marshalling of the assets of the Company,
all Senior Indebtedness of the Company (including any interest thereon accruing
after the commencement of any such proceedings) shall first be paid in full
before any payment or distribution, whether in cash, securities or other
property, shall be made to the Holder of the Note. Any payment or distribution,
whether in cash or other property, which would otherwise (but for these
subordination provisions) be payable or deliverable in respect of the Note shall
be paid or delivered directly to the holders of the Senior Indebtedness in
accordance with the priorities then existing among such holders until all Senior
Indebtedness (including any interest accruing thereon after the commencement of
any such proceedings) shall have been paid in full.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of any character, whether in cash or other property, shall be
received by the Holder in contravention of any of the terms hereof, such payment
or distribution shall be received in trust for the benefit of, and shall be paid
over or delivered and transferred to, the holders of the Senior Indebtedness at
the time outstanding in accordance with the priorities then existing among such
holders for application to the payment of all Senior Indebtedness remaining
unpaid, to the
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extent necessary to pay all such Senior Indebtedness in full. In the event of
the failure of the Holder to endorse or assign any such payment or distribution,
each holder of Senior Indebtedness of the Company is hereby irrevocably
authorized to endorse or assign the same.
(d) No present or future holder of any Senior Indebtedness shall be
prejudiced in the right to enforce subordination of the indebtedness evidenced
by the Note by any act or failure to act on the part of the Company. Nothing
contained herein shall impair, as between the Company and Holder, the obligation
of the Company to pay to Holder, the principal of and interest on, the Note or
prevent Holder from exercising all rights, powers and remedies otherwise
permitted by applicable law or hereunder upon the occurrence of an Event of
Default, all subject to the rights of the holders of the Senior Indebtedness of
the Company to receive cash or other property otherwise payable or deliverable
to Holder.
(e) Upon any payment or distribution of assets of the Company referred
to in this Section 7.1, Holder shall be entitled to rely upon an order or decree
made by any court of competent jurisdiction in which such dissolution or winding
up or liquidation or reorganization or arrangement proceedings are pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, or other person making such payment or distribution,
delivered to Holder, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Indebtedness, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto. In the absence of any such
bankruptcy trustee, receiver, assignee or other person, Holder shall be entitled
to rely upon a written notice by a Person representing himself to be a holder of
Senior Indebtedness (or a trustee or representative on behalf of such holder) as
evidence that such Person is a holder of such Senior Indebtedness (or is such a
trustee or representative).
7.2 PAYMENT PERMITTED IF NO DEFAULT. Notwithstanding any provision in this
Agreement to the contrary, the Company may make payments of the principal of,
and interest on, the Note so long as no Senior Indebtedness Default has occurred
and is continuing.
SECTION 8. PAYMENT, REGISTRATION, EXCHANGE AND TRANSFER OF THE NOTE.
8.1 APPOINTMENT OF PAYING AGENT. The Company and the Purchaser agree to
appoint First Trust Company of Montana, or another independent third party
acceptable to the Purchaser as paying agent and registrar for the Notes.
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8.2 PAYMENTS. Payments of principal and interest in respect of the Note
shall be paid at the Holder's address for payment set forth in the register
maintained by the Company or the Paying Agent pursuant to Section 8.3 of this
Agreement. Presentment or notation of payment shall not be required.
8.3 REGISTRATION. The Paying Agent shall maintain a true and complete
register showing the name, address, and wire transfer instructions of the
Holder, and all transfers of the Note and the names and addresses of the
transferees. The Person in whose name the Note is registered shall be deemed
and treated as the owner of the Note for all purposes of this Agreement and
shall be entitled to the principal and interest evidenced by the Note in
accordance with the provisions of this Agreement, and the Company shall not be
affected by any notice or knowledge to the contrary.
8.4 EXCHANGE AND TRANSFER. A Holder may surrender any outstanding Note
issued pursuant to the terms of this Agreement and held by Holder for exchange
at the principal office of the Paying Agent. Within a reasonable time
thereafter and without expense (other than any applicable transfer taxes) to the
Holder, the Company shall issue another Note in exchange. Such Note shall be of
like tenor, shall be dated and bear interest from the date to which interest has
been paid on, and shall be for the same aggregate principal amount as the unpaid
principal amount of, the surrendered note. Each new Note shall be registered by
the Company in such name or names as the surrendering Holder may designate. Any
Holder transferring its Note hereunder (x) will, prior to the delivery of such
Note make a notation thereon of all principal, if any, prepaid on such Note and
will also note thereon the date to which interest has been paid on such Note,
and (y) will notify the Company of the name and address of the transferee of any
Note so transferred.
8.5 REPLACEMENT. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any Note and upon
delivery of indemnity reasonably satisfactory to the Company, and in the case of
mutilation, upon surrender and cancellation of such Note, the Company will issue
a new Note, of like tenor and principal amount and dated the date to which
interest has been paid.
SECTION 9. MISCELLANEOUS
9.1 DEFINITIONS. For purposes of this Agreement:
"Bankruptcy Code" shall mean Title 11 of the United States Code, as amended
from time to time.
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"Business Day" shall mean any day other than a Saturday or Sunday and other
than a day which is a Federal legal holiday or a legal holiday for banks in the
State of Montana.
"Call Reports" shall mean the each Consolidated Report of Condition filed
by the Company's Subsidiaries which are banks with respect to periods since
January 1, 1996.
"Change of Control" shall mean any transaction or series of transactions
(including without limitation a tender offer, merger or consolidation) the
result of which is that any "person" (as such term is used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than the Principals and their Related Parties, or a trustee or other
fiduciary holding equity securities under an employee benefit plan of the
Company becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), of 50% or more of the aggregate voting power of all classes of
voting stock of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended, from time
to time, or any successor statute thereto.
"Executive Officer" shall mean (a) for the Company, the chief executive
officer, president and chief financial officer; and (b) for the Company's
Subsidiaries which are banks, the chief executive officer, president and
executive vice presidents.
"Fair Lending Laws" shall mean the National Bank Act, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home
Mortgage Disclosure Act and all other applicable fair lending laws or other laws
relating to discrimination.
"GAAP" shall mean generally accepted accounting principles as from time to
time defined by controlling pronouncements of the Financial Accounting Standards
Board or any successor organization, consistently applied.
"Holder" shall mean the Person in whose name the Note is registered
pursuant to Section 8.2.
"Material Adverse Effect" shall mean an effect which (a) is materially
adverse to the business, financial condition, results of operations or prospects
of the Company and its Subsidiaries taken as a whole, (b) significantly and
adversely affects the ability of the Company to consummate the transactions
contemplated hereby or to perform its material obligations hereunder, or (c)
enables any person or entity to prevent the consummation of the transactions
contemplated hereby; PROVIDED, HOWEVER, that any effect resulting from (i)
actions or omissions of the Company taken with the prior consent of the
Purchaser in
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contemplation of the transactions provided for herein or (ii) circumstances
affecting the banking industry in Montana or Wyoming generally shall be deemed
not to be a Material Adverse Effect.
"Person" shall mean a corporation, association, partnership, joint venture,
trust, organization, business, individual or government or any governmental
agency or political subdivision thereof.
"Principals and Related Parties" shall mean the following individuals, any
trusts for their benefit, and their executors or heirs: James R. Scott; Homer
Scott, Jr.; Dan S. Scott; Thomas W. Scott; Susan Scott Heyneman; John M.
Heyneman; Thomas Scott Heyneman; James R. Heyneman; Charles Matthew Heyneman;
Alexander Paul Heyneman; Randall Isham Scott; Ronald Noel Scott; Riki Rae Scott
Davidson; Risa Kae Scott; Rae Ann Scott; Sarah E. Scott Suzor; Samuel Moise
Suzor; Jonathan R. Scott; Julie Anne Scott; Jeanne I. Scott; Susan Elizabeth
Scott; James Marshall Scott; Homer Rollins Scott; Sandra Arlene Scott; Janet E.
Scott; James R. Scott, Jr.; Courtney L. Scott; Dana A. Scott; Joan Scott.
"Senior Indebtedness" shall mean any obligation of the Company to pursuant
to the Loan Agreement between the Company, First Security Bank, N.A., Wells
Fargo Bank, National Association and Colorado National Bank, as amended from
time to time, or to its general creditors, whether now outstanding or
subsequently incurred.
"Senior Indebtedness Default" shall mean an event of default or a default
under any of the Senior Indebtedness.
"Subsidiary" shall mean any Person of which the Company owns, directly or
indirectly, 50% or more of the issued and outstanding voting capital stock or
general partnership interest.
"Tax" shall mean any tax or similar governmental charge, assessment or levy
(including, without limitation, income taxes, franchise taxes, transfer taxes or
fees, stamp taxes, sales taxes, use taxes, excise taxes, ad valorem taxes,
withholding taxes, employee withholding taxes, worker's compensation, payroll
taxes, unemployment insurance, social security, or minimum taxes), together with
any related liabilities, penalties, fines, additions to tax or interest, imposed
by the United States or any state, county, provincial, local or foreign
government or subdivisions or agency thereof.
"Tier 2 Capital" shall have the meaning and characteristics ascribed to
such term in Appendix A to 12 C.F.R. Part 225.
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The following terms are defined elsewhere in the Agreement:
Term Section
---- --------
"Acquisition" Recitals
"Agreement" Recitals
"Banks" Recitals
"Base Rate" Section 2.1.3
"Business" Section 4.11(a)
"Closing" Section 2.4
"Closing Date" Section 2.4
"Code" Section 4.10(b)
"Company" Recitals
"Employees" Section 4.10(a)
"Environmental Law" Section 4.11(a)
"ERISA" Section 4.10(a)
"ERISA Affiliate" Section 4.10(a)
"Event of Default" Section 6.1
"FDIC" Section 4.5
"FRB" Section 3.1(a)
"Governmental Entities" Section 4.4
"Hazardous Substances" Section 4.11(a)
"Issuance Date" Section 2.1
"Make-Whole Amount" Section 2.1.6
"Maturity Date" Section 2.1.1
"Montana Bank" Recitals
"Note" Recitals
"OCC" Section 4.8
"Outside Closing Date" Section 2.4
"Paying Agent" Section 8.1
"Prepayment Date" Section 2.1.6
"Purchaser" Recitals
"Real Property" Section 4.11(b)
"Remaining Loan Period" Section 2.1.6
"Reports" Section 4.14
"Securities Act" Section 9.4
"Spread" Section 2.1.3
"Stock Purchase Agreement" Recitals
"Treasury Rate" Section 2.1.3
"Wells Fargo" Recitals
"Wyoming Bank" Recitals
9.2 COURSE OF DEALING. For the purposes of this Agreement and all
documents and instruments executed pursuant hereto, except as otherwise
specifically set forth herein or therein, no course of dealing between the
Company and Holder and no delay on the part of any party hereto in exercising
any rights hereunder or thereunder shall operate as a waiver of the rights
hereof and thereof.
9.3 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party to the other shall be
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in writing and shall be deemed to have been duly given (a) on the date of
delivery if delivered personally or by facsimile upon confirmation of receipt,
(b) on the first business day following the date of mailing if delivered by
next-day courier service, or (c) on the third business day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices, requests, instructions or other documents to be
given hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice, request, instruction or document in accordance with this Section 9.3:
(a) If to the Company:
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
401 N. 31st Street
Billings, Montana 59101-1200
Facsimile: 406-255-5069
Attention: Thomas W. Scott
Terrill R. Moore
with a copy to:
Holland & Hart LLP
401 North 31st Street
Suite 1500
Billings, Montana 59101-1200
Facsimile: 406-252-1669
Attention: David R. Chisholm, Esq.
(b) If to the Purchaser:
MONTANA BOARD OF INVESTMENTS
P.O. Box 200126
555 Fuller Avenue
Helena, Montana 59620-0126
Facsimile: 406-449-6579
Attention: Chief Investment Officer
(c) If to the Paying Agent:
First Trust Company of Montana
First Trust Building
303 North Broadway, 2nd Floor
P.O. Box 30678
Billings, Montana 59115
Facsimile: 406-657-8034
Attention: Corporate Trust Officer
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9.4 PURCHASER REPRESENTATIONS. Purchaser represents and warrants to the
Company (a) that it will acquire the Note for its own account, for the purpose
of investment and not with a view to the distribution of the Note or any part
thereof; PROVIDED, HOWEVER, that the disposition of the Purchaser's property
shall be at all times within its own control and the provisions hereof shall be
without prejudice to the Purchaser's right at all times to sell or otherwise
dispose of all or any part of the Note in compliance with applicable securities
law, (b) that the acquisition of the Note will not constitute a "prohibited
transaction" (as such term is defined under ERISA) under Section 406 of ERISA or
Section 4975 of the Code, and (c) that it has not, directly or indirectly,
incurred and will not directly or indirectly incur any obligation for any
finder's or broker's or similar fees or commissions in connection with this
Agreement, the issuance and delivery of the Note, or the transactions
contemplated hereby. The acquisition of the Note by the Purchaser at Closing
shall constitute confirmation by it of the accuracy of the foregoing
representations and warranties on and as of the time the Note is issued.
The Purchaser acknowledges that the Note has not been registered under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act"), or the securities laws of any state or other
jurisdiction and cannot be disposed of unless it is subsequently registered
under the Securities Act and any applicable state laws or exemption from such
registration is available. The Purchaser agrees not to transfer the Note except
in accordance with all applicable securities laws. The Purchaser agrees to the
imprinting, so long as the securities are not registered under the Securities
Act or the securities laws of any state, of the following legend on the Note:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAW AND MAY BE REOFFERED AND
SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE."
9.5 HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
9.6 SEVERABILITY. If any provision of this Agreement or the application
thereof to any Person or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to Persons or circumstances other
than those as to which it has been held invalid or unenforceable, shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated thereby, so long as the
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economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original intent
of the parties.
9.7 ENTIRE AGREEMENT; INTERPRETATION. This Agreement, including the
Schedules hereto, constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral. It is the intention of the parties that
this Agreement shall not be construed more strictly with regard to one party
than with regard to any other party.
9.8 ASSIGNMENT. Without the written consent of the other parties hereto,
this Agreement shall not be assigned by operation of law or otherwise (any
attempted assignment in contravention hereof being null and void).
9.9 AMENDMENT; WAIVER. This Agreement may not be amended or modified
except by written agreement executed and delivered by duly authorized officers
of the parties. Waiver of any term or condition of this Agreement (including
any extension of time required for performance) shall only be effective if in
writing, executed and delivered by a duly authorized officer of the waiving
party, and shall not be construed as a waiver of any subsequent breach of the
same term or condition or as a waiver of any other term or condition of this
Agreement. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof.
9.10 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of Montana.
Each party hereto for such party and such party's successors and assigns agrees
that the State of Montana shall be the exclusive venue (to the extent that
subject matter jurisdiction exists) for all causes of action arising out of this
Agreement. This consent to jurisdiction and venue shall not be deemed a waiver
of any right of any party to remove any litigation to a federal court located in
the State of Montana.
9.11 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
9.12 JURY WAIVER. EACH OF THE COMPANY AND THE PURCHASER HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, PROCEEDING, SUIT, OR COUNTERCLAIM ON ANY MATTER
WHATSOEVER ARISING OUT OF OR IN ANY
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WAY CONNECTED WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
9.13 TIME. Time is of the essence.
IN WITNESS WHEREOF, the Company and the Purchaser have caused this
Agreement to be duly executed as of the date first written above by their
respective officers thereunto duly authorized.
FIRST INTERSTATE BANCSYSTEM OF
MONTANA, INC.
By:___________________________
Name: Thomas W. Scott
Title: President & Chief
Executive Officer
MONTANA BOARD OF INVESTMENTS
By:___________________________
Name: Robert T. Bugni, CFA
Title: Assistant Investment Officer
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