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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):
July 29, 1996
1ST UNITED BANCORP
(Exact Name of Registrant as Specified in its Charter)
FLORIDA 0-20254 65-0178023
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State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
980 N. Federal Highway, Boca Raton, Florida 33432
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (407) 392-4000
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ITEM 5 OTHER EVENTS
1st United Bancorp ("Bancorp") has executed an acquisition agreement (the
"Agreement") to acquire Park Bankshares, Inc. ("Park") and its wholly owned
subsidiary First National Bank of Lake Park ("First National").
The Agreement calls for Bancorp to pay to Park Bankshares up to a maximum
of $8.75 million in Bancorp Common Stock. The purchase price may decrease
depending on the value of Park's adjusted closing equity as defined in the
Agreement. The number of Bancorp Common Shares issued will also depend on the
average of the daily closing stock price of Bancorp Common Stock for the 20 days
prior to closing as determined in the Agreement. If the computed average is
below $8.50, then the stock will be valued at $8.50, correspondingly, if the
stock price is above $11.50, then the stock will be valued at $11.50. The
acquisition will be accounted for as a "pooling of interest" under generally
accepted accounting principles.
Lake Park operates out of four locations; its main office in Lake Park and
a branch in each of West Palm Beach, Riviera Beach and Jupiter, Florida. At June
30, 1996, Park had net loans, deposits, assets and shareholders' equity of
approximately $32.6 million, $62.1 million, $67.2 million and $4.2 million,
respectively.
The anticipated completion of the acquisition is in the fourth quarter of
1996. The Agreement is subject to regulatory and Park shareholder approval and
satisfaction of other contingencies.
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ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) Exhibits: Agreement and Plan of Merger
dated July 29, 1996 between 1st
United Bancorp, Park Bankshares,
Inc. and First National Bank of
Lake Park
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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.
1ST UNITED BANCORP
Date: July 29, 1996 By: /s/ WARREN S. ORLANDO
------------------------
Warren S. Orlando
President & CEO
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION PAGE NO.
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2.1 Agreement and Plan of
Merger dated July 29,
1996 between 1st United
Bancorp, Park Bankshares,
Inc. and First National
Bank of Lake Park
(1) The following Exhibits and Schedules to the Agreement are
not being filed with the attached copy of the Agreement.
ITEM DESCRIPTION
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Exhibit "A" Form of Bank Merger Agreement
Exhibit "B" Park Bankshares, Inc. Balance Sheet
Exhibit "C" Form of Non Compete Agreement
Exhibit "D" Form Agreement and Proxy
Exhibit "E" Form of Consulting Agreement
Exhibit "F" Affiliates Letter
Exhibit "G" Park Bankshares, Inc. Form Opinion
Letter
Exhibit "H" Bancorp - Form Opinion Letter
Schedule 4(i) Articles and Bylaws - Bancorp
Schedule 4(ii) Articles and Bylaws - Acquisition
Schedule 4(iii) Articles and Bylaws - 1st United
The company hereby agrees to furnish supplementally a copy of any of the
foregoing Exhibits or Schedules to the Securities & Exchange Commission upon
request.
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BETWEEN
1ST UNITED BANCORP, PARK ACQUISITION CO.,
FIRST NATIONAL BANK OF LAKE PARK
AND PARK BANKSHARES, INC.
DATED: JULY 29, 1996
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TABLE OF CONTENTS
PAGE
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1. Definitions.......................................................2
2. Basic Transaction.................................................8
The Merger.....................................................8
Effective Time.................................................8
Effects of the Merger..........................................9
Articles of Incorporation and By-laws..........................9
Directors and Officers.........................................9
Conversion of Shares...........................................9
The Closing....................................................10
Actions at the Closing.........................................10
Dissenting Shares..............................................10
Exchange of Shares.............................................11
The Bank Merger................................................13
3. Representations and Warranties of Bankshares and Bank.............13
Organization, Qualification and Corporate Power................14
Capitalization.................................................14
Authorization of Transaction...................................15
Noncontravention...............................................15
Filings with the SEC...........................................16
Filing with the FRB and the OCC................................16
Financial Statements...........................................17
Events Subsequent to Most Recent Fiscal Quarter................17
Tax Matters....................................................17
Undisclosed Liabilities........................................18
Broker's Fees..................................................19
Disclosure.....................................................19
Title to Properties............................................20
Employment Contracts...........................................20
Compliance with Laws...........................................20
Litigation and Administrative Proceedings......................20
Employee Benefit Plans.........................................21
Bankshares Subsidiaries........................................23
Real Property..................................................23
Tangible Assets................................................26
Contracts......................................................27
Related Party Transactions.....................................28
4. Representations and Warranties of Bancorp.........................28
Organization, Qualifications and Corporate Power...............28
Capitalization.................................................29
Authorization of Transaction...................................30
Noncontravention...............................................30
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Filings with the SEC...........................................31
Financial Statements...........................................31
Brokers' Fees..................................................32
Disclosure.....................................................32
Events Subsequent to Most Recent Fiscal Quarter................32
Title to Properties............................................32
Compliance with Laws...........................................33
Litigation and Administrative Proceedings......................33
Filings with the FRB and Comptroller...........................33
Undisclosed Liabilities........................................34
Tangible Assets................................................34
5. Covenants.........................................................34
General........................................................35
Notices and Consents of Bankshares.............................35
Consulting and Noncompetition Agreements.......................35
Notices and Consents of Bancorp................................36
Regulatory Matters and Approvals...............................36
Fairness Opinions..............................................41
Operation of Business..........................................41
Bank Operations................................................42
Full Access....................................................44
Notice of Developments.........................................45
Exclusivity....................................................46
Indemnification................................................47
Officer and Director Indemnities...............................48
Environmental Matters..........................................49
Affiliate Letters..............................................49
Post Merger Financial Results..................................51
Employee Benefit Plans.........................................51
Pooling of Interest............................................52
Certain Policies of Bank.......................................52
6. Conditions to Obligation to Close.................................53
Conditions to Obligations of All Parties.......................53
Conditions to Obligation of Bancorp............................54
Conditions to Obligation of Bankshares and Bank................55
7. Termination.......................................................57
Termination of Agreement.......................................57
Effect of Termination..........................................58
8. Miscellaneous.....................................................59
Survival.......................................................59
Press Releases and Announcements...............................59
Third Party Beneficiaries......................................59
Entire Agreement...............................................59
Succession and Assignment......................................59
Counterparts...................................................60
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Headings.......................................................60
Notices........................................................60
Governing Law..................................................61
Amendments and Waivers.........................................61
Severability...................................................62
Expenses.......................................................62
Construction...................................................63
9. Incorporation of Exhibits and Schedules...........................63
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AGREEMENT AND PLAN OF MERGER
Agreement entered into as of July 29, 1996 by and among 1st United
Bancorp, a Florida corporation ("Bancorp"), Park Acquisition Co., a Florida
corporation ("Acquisition"), First National Bank of Lake Park, a national
banking association ("Bank") and Park Bankshares, Inc., a Florida corporation
("Bankshares"). Bancorp, Acquisition, Bank and Bankshares are referred to
collectively herein as the "Parties."
W I T N E S S E T H:
WHEREAS, Bancorp is a Bank Holding Company registered under the Bank
Holding Company Act of 1956, as amended (the "Bank Holding Company Act");
WHEREAS, Acquisition is a wholly owned subsidiary of Bancorp and 1st
United Bank ("1st United") is a Florida chartered bank and a wholly owned
subsidiary of Bancorp;
WHEREAS, Bankshares is a Bank Holding Company registered under the Bank
Holding Company Act and Bank is a wholly owned subsidiary of Bankshares; and
WHEREAS, the Boards of Directors of Bancorp, Acquisition, Bank and
Bankshares have agreed that the Merger of Bankshares with Acquisition on the
terms herein set forth, and the merger of Bank with and into 1st United, are
desirable and in the best interest of their respective shareholders and have
approved this Agreement, and the Board of Directors of Bankshares has directed
that this Agreement be submitted to its stockholders for approval.
Now, therefore, in consideration of the mutual promises herein made, and
in consideration of the representations, warranties, and covenants herein
contained, the Parties agree as follows:
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1. DEFINITIONS DEFINITIONS.
"1ST UNITED" has the meaning provided in the recitals hereof.
"ACQUISITION" has the meaning provided in the recitals hereof.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"AGREEMENT OF MERGER" has the meaning set forth in ss.2.11 hereof.
"ARTICLES OF MERGER" has the meaning set forth in ss.2.2 hereof.
"BANCORP" has the meaning provided in the recitals hereof.
"BANCORP PUBLIC REPORT" has the meaning set forth in ss.4.5 hereof.
"BANCORP PURCHASE STOCK" has the meaning set forth in ss.2.6(ii)
hereof.
"BANCORP SHARES" means the common stock, $.01 par value per share,
of Bancorp.
"BANKSHARES" has the meaning provided in the recitals hereof.
"BANKSHARES AFFILIATE" has the meaning provided in ss.5.15 hereof.
"BANKSHARES CLOSING EQUITY" means the common shareholders' equity of
Bankshares as of the last day of the calendar month ending prior to the Closing
Date adjusted for earnings and expenses for the period from the last day of the
calendar month ending prior to the Closing Date through the Closing Date (to the
extent earnings and expenses are not then known, the Parties shall mutually
agree on a reasonable estimate of such earnings and expenses) determined in
accordance with GAAP; provided, however, that the common shareholders' equity of
Bankshares shall not be reduced by the net after tax effect of: (i) a maximum of
$25,000.00 of the aggregate bonuses Bank agrees to pay to employees of Bank to
induce them to continue in the employment of Bank through the Closing Date; and
(ii) a maximum of $50,000.00 in
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Transaction Expenses other than those in (i) and (iii); and (iii) a maximum of
$200,000.00 of the aggregate costs incurred in terminating employment agreements
between Bankshares or Bank and Louis A. Gaeta, Jr., existing on the Effective
Date; and (iv) the net after tax effect of unrealized losses in excess of
$150,000.00 in securities owned by Bank and classified as available for sale.
The common shareholder's equity shall be reduced by the net after tax effect of
Transaction Expenses other than those set forth in (i), (ii) and (iii) above but
including those in excess of the amounts set forth in (i), (ii) and (iii) above.
The common shareholder's equity of Bankshares shall not be increased by any
gains realized after the Effective Date which are not realized in the Ordinary
Course of Business. Any gains realized from litigation to which Bank or
Bankshares is a party and any gains from the disposition of real estate or other
assets acquired by Bank through the exercise of remedies under loan
documentation shall be gains realized in the Ordinary Course of Business and
shall increase the common shareholder's equity of Bankshares. Any gains realized
from the disposition of investment securities shall not be in the Ordinary
Course of Business and shall not increase the common shareholder's equity of
Bankshares. Any effects to the common shareholder's equity attributable solely
to the actions of Bank taken pursuant to ss.5.19 shall not be taken into account
in calculating Bankshares Closing Equity. Payments due to Mr. Louis A. Gaeta,
Jr. pursuant to the Consulting Agreement referenced in ss.5.3 shall not be taken
into account in calculating Bankshares Closing Equity.
"BANKSHARES FAIRNESS OPINION" has the meaning set forth in ss.5.6
hereof.
"BANKSHARES INITIAL EQUITY" means the common shareholders equity of
Bankshares which the Parties agree is Four Million One Hundred Seventy Thousand
and no/100 Dollars ($4,170,000.00).
"BANKSHARES STOCK" means the $.01 par value per share common stock
of Bankshares.
"BANKSHARES STOCKHOLDER" means any person who or which holds of
record any Bankshares Stock.
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"BANK" has the meaning provided in the recitals hereof.
"BANK MERGER" means the merger of Bank with and into 1st United.
"BANK SHARE" means any share of the Common Stock, $5.00 par value
per share, of Bank.
"BANK STOCK" means 257,700 Bank Shares owned by Bankshares which
comprises 100% of the issued and outstanding stock of Bank.
"CERTIFICATES" means the stock certificates which represent the
Shares as of the Effective Time.
"CLOSING" has the meaning set forth in ss.2.7 hereof.
"CLOSING DATE" has the meaning set forth in ss.2.7 hereof.
"COMPTROLLER" means the Florida Department of Banking and Finance.
"CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of Bancorp, 1st United, Acquisition, Bankshares or Bank;
provided, however, that Confidential Information shall not include any
information (i) which, at the time of disclosure, is available publicly or
already known to the receiving Party, or, (ii) which, after disclosure, becomes
available publicly through no fault of the receiving Party.
"DEFINITIVE BANKSHARES PROXY MATERIALS" means the definitive proxy
materials relating to the Special Bankshares Meeting.
"DISCLOSURE STATEMENT" has the meaning set forth in ss.3 hereof.
"DISSENTING SHARE" shall have the meaning set forth in ss.2.9
hereof.
"EFFECTIVE DATE" means the date on which the last of the Parties
signs this Agreement.
"EFFECTIVE TIME" means the time the Articles of Merger are filed
with the Florida Secretary of State or such other time as stated in the Articles
of Merger for effectiveness of the Merger.
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"EMPLOYEE BENEFIT PLANS" means any employee welfare benefit plan or
employee pension benefit plan, as defined in ERISA, which Bankshares or Bank
maintains or to which Bankshares or Bank contribute or are required to
contribute.
"ENVIRONMENTAL LAWS" means any local, state or federal law, statute,
ordinance, rule, regulation or order relating to pollution or protection of the
environment.
"ERISA" means the Employee Retirement Security Act of 1974 as
amended.
"EXCHANGE FUND" has the meaning set forth in ss.2.10(i) hereof.
"FBCA" means the Florida Business Corporation Act, Chapter 607,
Florida Statutes.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"FLORIDA ACTS" means the FBCA, the Florida Banking Code, Chapter
658, and Chapter 655, Florida Statutes.
"FRB" means the Board of Governors of the Federal Reserve System.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time.
"HAZARDOUS SUBSTANCES" means any petroleum products or wastes and
any pollutants, toxic or hazardous materials or wastes or regulated materials as
defined in or regulated by any Environmental Laws.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" means (i) as of the Effective Date, the actual knowledge
of any executive officers or directors of the Party in question, and (ii) as of
any date after the Effective Date, the actual knowledge of any officer or
director of the Party in question.
"MARKET VALUE" means the average of the closing price quotations for
Bancorp Shares reported in the Wall Street Journal for the twenty (20) most
recent Trade Days prior to the Valuation Date; provided, however, that for the
purpose of calculating the number of Bancorp Shares comprising the Bancorp
Purchase Stock the Market Value shall be $8.50 per share if the
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Market Value as calculated above is less than $8.50 per share and shall be
$11.50 per share if the Market Value as calculated above is more than $11.50 per
share.
"MERGER" has the meaning set forth in ss.2.1 hereof.
"MERGER CONSIDERATION" has the meaning set forth in ss.2.6(ii)
hereof.
"MOST RECENT FISCAL QUARTER" means the fiscal quarter ended June 30,
1996.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency) and including, specifically, without limitation, accruals consistent
with prior years for all expenses, including, without limitation, third party
audits and real estate taxes.
"PARTIES" has the meaning set forth in the preface above.
"PROPERTY" means any real property owned or leased by Bankshares or
Bank.
"PROSPECTUS" means the final prospectus, if any, relating to the
registration of the Bancorp Purchase Stock under the Securities Act.
"REGISTRATION STATEMENT" has the meaning set forth in ss.5.5(ii)(e)
hereof.
"RELATED CONTRACTS" has the meaning set forth in ss.3.22 hereof.
"REQUISITE BANKSHARES STOCKHOLDER APPROVAL" means the affirmative
vote of the holders of a majority of the Bankshares Stock in favor of this
Agreement and the Merger.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
"SECURITY INTEREST" means any mortgage, pledge, security interest,
encumbrance, charge, or other lien, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for taxes not yet due and payable or for taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
liens arising under worker's compensation, unemployment insurance, social
security, retirement, and similar legislation, (d) liens arising in connection
with
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sales of foreign receivables, (e) liens on goods in transit incurred pursuant to
documentary letters of credit, (f) purchase money liens and liens securing
rental payments under capital lease arrangements, and (g) other liens arising in
the Ordinary Course of Business and not incurred in connection with the
borrowing of money.
"SHARE" or "SHARES" means shares of Bankshares Stock other than
shares of Bankshares Stock owned by Bankshares.
"SPECIAL BANKSHARES MEETING" has the meaning set forth in
ss.5.5(ii)(f) hereof.
"SUBSIDIARY" means any corporation with respect to which another
specified corporation has the power directly or indirectly to vote or direct the
voting of sufficient securities to elect a majority of the directors.
"SUBSTANTIAL ADVERSE DEVELOPMENT" means, as to Bankshares or Bank,
an occurrence or development which substantially impairs Bankshares' or Bank's
ability to consummate the Merger or which has or is reasonably likely to have a
material adverse impact on the assets, liabilities, business or operations of
Bankshares and Bank, taken as a whole, including, specifically without
limitation, a decrease of more than 10% in the aggregate of Bank's demand, NOW,
money market and savings accounts, other than deposits of public funds, from the
average of those deposits for the month of June, 1996, or the assertion of
claims or counterclaims in litigation, whether or not currently pending, to
which Bankshares or Bank are parties which involves an amount in controversy
greater than $250,000.00 and, as to Bancorp or 1st United, means an occurrence
or development which substantially impairs Bancorp's ability to consummate the
Merger or substantially impairs 1st United's ability to consummate the Bank
Merger or which has or is reasonably likely to have a material adverse impact on
the assets, liabilities, business, financial condition, operations or results of
operations of Bancorp.
"SURVIVING CORPORATION" has the meaning set forth in ss.2.1 hereof.
"TRANSACTION EXPENSES" means any and all costs or expenses incurred
or to be incurred by Bankshares or Bank before Closing, whether or not accrued
or actually paid by
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Bankshares or Bank, in connection with the Merger, Bank Merger, the Definitive
Bankshares Proxy Materials or any of the other actions contemplated by or in
connection with this Agreement, including, without limitation, bonuses to be
paid to employees, costs incurred under any employment agreements (including
costs of terminating the employment agreement with Louis A. Gaeta, Jr.),
payments to be made under the Noncompetition Agreements referenced in ss.5.3,
attorneys', accountants' and consultants' fees and expenses, and fees,
commissions or expenses payable to Professional Bank Services, Incorporated and
Financial Solutions of Central Florida, Inc. before or after Closing. In the
event Bankshares and Bank have not paid or accrued for such expenses by the date
on which Bankshares Closing Equity is determined, Bankshares or Bank shall
accrue for such expenses through Closing and include such expenses in the
computation of the Bankshares Closing Equity.
"TRANSFER AGENT" means American Stock Transfer and Trust Company or
such other agent as Bancorp may designate from time to time as Bancorp's agent
for the transfer of Bancorp Shares.
"VALUATION DATE" means the last trading day ending five (5) days
prior to the Closing Date.
2. BASIC TRANSACTION TRANSACTION.
SECTION 2.1. THE MERGER. Upon the terms and subject to the
conditions hereof, and in accordance with the FBCA, Bankshares shall be merged
with and into Acquisition (the "Merger") as soon as practicable following the
satisfaction or waiver, if permissible, of the conditions set forth in Article 6
hereof. Following the Merger, Acquisition shall continue as the surviving
corporation (the "Surviving Corporation") and the separate corporate existence
of Bankshares shall cease. Only Acquisition and Bankshares shall be deemed to be
parties to the Merger for purposes of Section 607.1106 of the FBCA.
SECTION 2.2. EFFECTIVE TIME. The Merger shall be consummated by the
filing with the Florida Department of State of Articles of Merger (the "Articles
of Merger") in the form
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required by and executed in accordance with the relevant provisions of the FBCA.
The date the Merger shall be consummated as of the date of such filing or such
other time and date as may be specified in the Articles of Merger, which shall
be the "Effective Time."
SECTION 2.3. EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in the FBCA.
SECTION 2.4. ARTICLES OF INCORPORATION AND BY-LAWS. The Articles of
Incorporation and the By-Laws of Acquisition, in each case as in effect at the
Effective Time, shall be the Articles of Incorporation and By-Laws of the
Surviving Corporation.
SECTION 2.5. DIRECTORS AND OFFICERS. The directors and officers of
Acquisition at the Effective Time shall be the directors and officers of the
Surviving Corporation and shall hold office from the Effective Time until their
respective successors are duly elected or appointed and qualified in the manner
provided in the Articles of Incorporation and By-Laws of the Surviving
Corporation, or as otherwise provided by law.
SECTION 2.6. CONVERSION OF SHARES.
(i) At and as of the Effective Time, each Share, issued and
outstanding immediately prior to the Effective Time other than the Dissenting
Shares, shall, by virtue of the Merger and without any action on the part of the
Bankshares Stockholders, be converted into and represent the right to receive a
portion of the Merger Consideration calculated as provided in ss.2.6(ii) and
deliverable to the holder of record thereof, without interest thereon, upon
surrender of the Certificate representing such Share.
(ii) Subject to any adjustments made to the amount of the Merger
Consideration pursuant to ss. 2.6(iv), each holder of Shares as of the Effective
Time shall receive for each Share, so held a portion of the Merger Consideration
equal to the quotient of the Merger Consideration divided by the number of
Shares outstanding immediately prior to the Effective Time deliverable as
provided hereinafter. The Merger Consideration (the "Merger Consideration")
shall have an aggregate value equal to Eight Million Seven Hundred Fifty
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Thousand and no/100 Dollars ($8,750,000.00), subject to adjustment as to amount
as provided in ss.2.6(iv) hereof, and shall be comprised of Bancorp Stock (the
"Bancorp Purchase Stock"), except that Bancorp shall not issue any fractional
Bancorp Shares and the value of any fractional Bancorp Share to which the holder
of Shares would otherwise be entitled shall be paid to the Bankshares
Stockholder in cash with the value of the fractional Shares to be based on the
Market Value.
(iii) The number of Bancorp Shares comprising the Bancorp Purchase
Stock shall be calculated by dividing the Merger Consideration by the Market
Value.
(iv) The Merger Consideration described in Section 2.6(ii) shall be
decreased by an amount equal to the product of multiplying the difference
between Bankshares Initial Equity and Bankshares Closing Equity times two point
ten (2.10) if Bankshares Initial Equity is greater than Bankshares Closing
Equity.
SECTION 2.7. THE CLOSING. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Akerman, Senterfitt & Eidson, P.A. in West Palm Beach, Florida, commencing at
9:00 a.m. local time or such other time as the parties mutually agree as soon as
practicable following the satisfaction or waiver of all conditions to the
obligations of the parties to consummate the transactions contemplated hereby or
such other date as the parties may mutually determine (the "Closing Date").
SECTION 2.8. ACTIONS AT THE CLOSING. At the Closing, (i) Bankshares
will deliver to Bancorp the various certificates, instruments, and documents
required to consummate the Merger, (ii) Bancorp will deliver to Bankshares the
various certificates, instruments, and documents required to consummate the
Merger, and (iii) Bancorp and Bankshares will request that the Secretary of
State of the State of Florida record the "Articles of Merger."
SECTION 2.9. DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, Shares which are issued and outstanding immediately
prior to the Effective Time and which are held by Bankshares Stockholders who
have not voted such Shares in favor of the
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Merger and who shall have delivered a written demand for payment of the fair
value of such Shares within the time and in the manner provided in Section
607.1320 of the FBCA (the "Dissenting Shares") shall not be converted into or be
exchangeable for the right to receive Merger Consideration, but shall be
converted into the right to receive payment from the Surviving Corporation with
respect thereto in accordance with the provisions of the FBCA. However, if such
holder shall have failed to perfect or shall have effectively withdrawn or lost
his right to appraisal and payment under the FBCA, such holder's Shares shall
thereupon be deemed to have been converted into and to have become exchangeable
for, at the Effective Time, the right to receive the Merger Consideration
payable with respect to such Shares without any interest thereon.
SECTION 2.10. EXCHANGE OF SHARES.
(i) Within three (3) business days after the Effective Time, Bancorp
shall deposit cash and transmit instructions to the Transfer Agent to issue and
deliver the Bancorp Purchase Stock and cash in amounts necessary to make
delivery of the Merger Consideration pursuant to Section 2.6 hereof to holders
of Shares that are issued and outstanding immediately prior to the Effective
Time and to make the appropriate cash payments, if any, to holders of Dissenting
Shares (such amounts being hereinafter referred to as the "Exchange Fund"). The
Transfer Agent shall, pursuant to such instructions given by Bancorp, promptly
make the payments and delivery provided for in the preceding sentence out of the
Exchange Fund upon surrender of the Certificates in accordance with Section
2.10(ii). Payments to the holders of Dissenting Shares shall be made as required
by the FBCA. Subject to holding sufficient cash to make prompt payments to
holders of Shares, the Transfer Agent shall invest the Exchange Fund in a money
market account with 1st United. Bancorp shall bear the risk of any investment
losses by the Transfer Agent and shall contribute additional funds if necessary
to pay all of the Merger Consideration and the payments due to the holders of
Dissenting Shares. The Exchange Fund shall not be used for any other purpose,
except as provided in this Agreement.
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(ii) Within five (5) business days after the Effective Time the
Transfer Agent shall mail to each record holder of an outstanding Certificate or
Certificates, a form letter of transmittal approved by Bankshares and Bancorp
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates to
the Transfer Agent) and instructions for use in effecting the surrender of the
Certificates. Upon surrender to the Transfer Agent of a Certificate, together
with such letter of transmittal duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor Bancorp Purchase Stock in the
amount and proportions provided in Section 2.6(ii), and such Certificate shall
forthwith be canceled. No interest will be paid or accrued on the cash payable
upon surrender of the Certificate. If payment or delivery of Merger
Consideration is to be made to a person other than the person in whose name the
Certificate surrendered is registered, it shall be a condition of payment that
the Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment and delivery of Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Until surrendered in accordance
with the provisions of this Section 2.10, each Certificate (other than
Certificates representing Dissenting Shares) shall represent for all purposes
the right to receive the Merger Consideration without any interest thereon.
(iii) Bancorp shall not pay any dividend or make any distribution on
Bancorp Purchase Stock to any Bankshares Stockholder until the Bankshares
Stockholder surrenders for exchange its Certificates. Bancorp shall instead pay
the dividend or make the distribution to the Transfer Agent in trust for the
benefit of the Bankshares Stockholder to be distributed to the Bankshares
Stockholder on surrender of the Certificates and such dividends or distributions
shall become a part of the Exchange Fund. In no event shall a Bankshares
Stockholder be entitled to interest or earnings on the dividends or
distributions held by the Transfer Agent.
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(iv) After the Effective Time, the stock transfer ledger of
Bankshares shall be closed and there shall be no transfers on the stock transfer
books of Bankshares of the Shares which were outstanding immediately prior to
the Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation, they shall be promptly presented to the Transfer
Agent and exchanged as provided above.
(v) Any portion of the Exchange Fund (including the proceeds of any
investments thereof) that remains unclaimed by the shareholders of Bankshares
for six months after the Effective Time shall be paid to Bancorp, and the
holders of Shares not theretofore presented to the Transfer Agent shall look to
Bancorp as a general creditor only, and not to the Transfer Agent, for the
payment of any portion of the Exchange Fund in respect of such Shares.
SECTION 2.11. THE BANK MERGER. On the Effective Date, Bankshares and
Bancorp shall cause Bank and 1st United respectively to enter into a Plan of
Merger and Merger Agreement (the "Agreement of Merger") in substantially the
form attached hereto as Exhibit "A" pursuant to which Bank will merge with and
into 1st United. The obligations of Bank and 1st United to consummate the Bank
Merger shall be conditioned on the Closing of the Merger as well as the other
conditions provided in the Agreement of Merger.
3. REPRESENTATIONS AND WARRANTIES OF BANKSHARES AND BANK Bankshares and
Bank represent and warrant to Bancorp that the statements contained in this ss.3
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
ss.3), except as set forth in the disclosure statement prepared by Bankshares
and Bank and submitted to Bancorp as of the Effective Date (the "Disclosure
Statement") as updated pursuant to ss.5.10(ii). Bankshares and Bank agree that
as soon as reasonably practicable after the Effective Date, Bankshares and Bank
will ascertain whether any of their officers have actual knowledge that any of
the representations and warranties of Bankshares and Bank in this Agreement are
materially incorrect or incomplete
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and, if incorrect or incomplete, will immediately revise such warranties and
representations in the fashion provided in ss.5.10(ii).
SECTION 3.1. ORGANIZATION, QUALIFICATION, AND CORPORATE POWER.
Bankshares is a Florida corporation duly organized, validly existing and in good
standing under the laws of Florida. Bank is a national banking association, duly
organized, validly existing, and in good standing under the laws of the United
States of America. Bank is duly authorized to engage in the business of banking
in Florida as an insured bank under the Federal Deposit Insurance Act, as
amended. Each of Bankshares and Bank is duly authorized to conduct business and
is in good standing under the laws of each jurisdiction in which the nature of
its businesses or the ownership or leasing of its properties requires such
qualification except where the lack of such qualification would not have a
material adverse effect on the consolidated financial condition of Bankshares
and Bank, or on the ability of the Parties to consummate the transactions
contemplated by this Agreement. Each of Bankshares and Bank has full corporate
power and authority to carry on the businesses in which it is engaged and to own
and use the properties owned and used by it. True and complete copies of the
Articles of Incorporation and the Bylaws of Bankshares and of the Articles of
Incorporation and the Bylaws of Bank are appended to the Disclosure Statement.
SECTION 3.2. CAPITALIZATION. The entire authorized capital stock of
Bankshares consists of 2,000,000 shares of Bankshares Stock of which 232,250
shares are issued and outstanding. The entire authorized capital stock of Bank
consists of 330,000 Bank Shares of which 257,700 shares are issued and
outstanding. Bankshares is the owner of 100% of the Bank Shares free and clear
of any liens, claims or encumbrances whatsoever. All of the issued and
outstanding shares of Bankshares Stock and the Bank Shares have been duly
authorized and are validly issued, fully paid, and nonassessable. There are no
outstanding or authorized options, warrants, rights, contracts, calls, puts,
rights to subscribe, conversion rights, or other agreements or commitments to
which Bankshares or Bank is a party or which are binding upon Bankshares
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or Bank providing for the issuance, disposition, or acquisition of any class of
their capital stock, except for the options authorized for issuance under Bank's
Employee Stock Option Plan, under which no options are currently issued or
outstanding. There are no outstanding or authorized stock appreciation, phantom
stock, or similar rights with respect to Bank or Bankshares.
SECTION 3.3. AUTHORIZATION OF TRANSACTION. Bankshares and Bank each
have full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder;
provided, however, that Bankshares and Bank cannot consummate the Merger or the
Bank Merger unless and until it receives the Requisite Bankshares Stockholder
Approval, unless the Merger and the Bank Merger are approved by the Comptroller
and the FRB, and unless it receives all of the consents contemplated by Article
5. Subject to the foregoing sentence, this Agreement constitutes the valid and
legally binding obligation of Bankshares and Bank, enforceable in accordance
with its terms and conditions. To the Knowledge of Bankshares and Bank, and
other than in connection with the provisions of the Florida Acts, the Federal
Deposit Insurance Act, the National Bank Act, the Securities Exchange Act, the
Securities Act, the state securities laws, and the Bank Holding Company Act
neither Bankshares nor Bank needs to give any notice to, make any filing with,
or obtain any authorization, consent or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, except where the failure to give notice, to
file, or to obtain any authorization, consent, or approval would not have a
Substantial Adverse Effect on Bankshares and Bank taken as a whole or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement.
SECTION 3.4. NONCONTRAVENTION. Subject to obtaining the Requisite
Bankshares Stockholder Approval, the approval of the Comptroller, the FDIC and
the FRB and the consents listed on the Disclosure Statement attached hereto, to
the Knowledge of Bankshares and Bank, neither the execution and the delivery of
this Agreement by Bankshares or Bank, nor the consummation of the transactions
contemplated hereby, will (i) violate any statute, regulations,
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rule, judgment, order, decree, stipulation, injunction, charge, or other
restriction of any government, governmental agency, or court to which either
Bankshares or Bank is subject or any provision of the charter or bylaws of
either Bankshares or Bank or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any contract, lease, sublease, license, franchise, permit, indenture,
agreement or mortgage for borrowed money, instrument of indebtedness, Security
Interest, or other obligation to which either Bankshares or Bank is a party or
by which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets) except where the
violation, conflict, breach, defaults, acceleration, termination, modification,
cancellation, failure to give notice, or Security Interest would not have a
material adverse effect on the financial condition of Bankshares or Bank taken
as a whole or on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
SECTION 3.5. FILINGS WITH THE SEC. Bankshares and Bank are not
subject to the registration provisions of the Securities Exchange Act nor the
rules and regulations thereunder other than the anti-fraud provisions of the
Securities Exchange Act. All issuances of securities by Bankshares or Bank have
been registered under the Securities Act and all other applicable laws or were
exempt from such registration.
SECTION 3.6. FILING WITH THE FRB AND THE OCC. Bankshares and Bank
have made all filings with the FRB and the OCC that each has been required to
make under the Bank Holding Company Act and the Federal Deposit Insurance Act
and the National Bank Act, as the case may be (collectively the "Bank Reports").
To the Knowledge of Bank and Bankshares, each of the Bank Reports has complied
with the Florida Acts, the Bank Holding Company Acts, the National Bank Act and
the Federal Deposit Insurance Act in all material respects. To the Knowledge of
Bank and Bankshares, each of the Bank Reports is true, complete and correct in
all material respects as of their respective dates and none of the Bank Reports,
as of their
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respective dates, contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
Bankshares has delivered to Bancorp a correct and complete copy of each F.R. Y-6
report, F.R. Y-9 and FFIEC Consolidated Report of Condition (Call Report) filed
since December 31, 1994 (together with all exhibits and schedules thereto and as
amended to date).
SECTION 3.7. FINANCIAL STATEMENTS. Bankshares and Bank have provided
Bancorp with audited consolidated financial statements for the fiscal year ended
December 31, 1995 and unaudited unconsolidated financial statements for each of
Bankshares and Bank, prepared by Bankshares and Bank for the period from January
1, 1996 to June 30, 1996. If Closing has not occurred before December 31, 1996,
Bankshares and Bank will, upon the request of Bancorp, make arrangements to
commence a consolidated audit for the fiscal year ended December 31, 1996 by
Grant Thornton LLP or another auditor mutually acceptable to Bancorp and
Bankshares. All financial statements delivered to Bancorp (including the related
notes and schedules) have been and shall be prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby and present
fairly the financial condition of Bankshares and Bank as of the indicated dates
and the results of operations of Bankshares and Bank for the indicated periods,
provided, however, that the interim statements are subject to normal year-end
adjustments and need not include footnotes which would be included in year end
statements pursuant to GAAP.
SECTION 3.8. EVENTS SUBSEQUENT TO MOST RECENT FISCAL QUARTER. Since
the end of the Most ER. Recent Fiscal Quarter, there has not been any material
adverse change in the assets, liabilities, business, financial condition,
operations, results of operations, or future prospects of Bankshares and its
Subsidiaries taken as a whole.
SECTION 3.9. TAX MATTERS. Bankshares and Bank have duly filed all
tax returns required to be filed by them other than for the year 1996 for which
a request for extension has
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been filed (the "Filed Returns"). Bankshares and Bank have paid, or, to the
Knowledge of Bank and Bankshares, have established adequate reserves for the
payment of, all federal income taxes and all state and local income taxes and
all franchise, property, sales, employment, foreign or other taxes required to
be paid with respect to the periods covered by the Filed Returns. With respect
to the periods for which returns have not yet been filed, to the Knowledge of
Bank and Bankshares, Bankshares and Bank have established adequate reserves
determined in accordance with GAAP for the payment of all federal income taxes
and all state and local income taxes and all franchise, property, sales,
employment, foreign or other taxes. Except as described in the Disclosure
Statement, to the Knowledge of Bank and Bankshares, Bankshares and Bank have no
direct or indirect liability for the payment of federal income taxes, state and
local income taxes, and franchise, property, sales, employment or other taxes in
excess of amounts paid or reserves established. Except as set forth on the
Disclosure Statement, neither Bankshares nor Bank has entered into any tax
sharing agreement or other agreement regarding the allocation of the tax
liability of Bankshares or Bank. Neither Bankshares nor Bank have filed any
Internal Revenue Service ("IRS") Forms 1139 (Application for Tentative Refund).
Except as set forth on the Disclosure Statement, there are no pending questions
raised in writing by the IRS or other taxing authority for taxes or assessments
of Bankshares or Bank, nor are there any outstanding agreements or waivers
extending the statutory period of limitation applicable to any tax return of
Bankshares or Bank for any period. To the Knowledge of Bank and Bankshares,
Bankshares and Bank have withheld from employee wages and paid over to the
proper governmental authorities all amounts required to be so withheld and paid
over. For the purposes of this Agreement, the term "tax" shall include all
federal, state and local taxes and related governmental charges and any interest
or penalties payable in connection with the payment of taxes.
SECTION 3.10. UNDISCLOSED LIABILITIES. Except as set forth on the
Disclosure Statement attached hereto, neither Bankshares nor Bank has any
liability (whether known or unknown, whether absolute or contingent, whether
liquidated or unliquidated, and whether due
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or to become due), including any liability for taxes, except for (i) liabilities
set forth on the face of Bankshares' consolidated balance sheet dated as of June
30, 1996 attached hereto as Exhibit "B" (rather than in any notes thereto) and
(ii) liabilities which have arisen after the end of the Most Recent Fiscal
Quarter in the Ordinary Course of Business or in connection with the
transactions provided for in this Agreement (none of which relates to any breach
of contract, breach of warranty, tort, infringement, or violation of law or
arose out of any charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand and none of which, individually or in the
aggregate, materially and adversely affect the business, assets, financial
condition or prospects of Bankshares and Bank taken as a whole).
SECTION 3.11. BROKER'S FEES. Other than pursuant to the agreements
between Bankshares and Professional Bank Services, Incorporated and Financial
Solutions of Central Florida, Inc., none of Bankshares or its Subsidiaries has
any liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.
SECTION 3.12. DISCLOSURE. The Definitive Bankshares Proxy Materials
will substantially comply with the disclosure requirements of Schedule 14A
(Regulation 14a-101) under the Exchange Act, if Bancorp determines that
compliance is necessary to obtain the No-Action Letter referenced in
ss.5.5(ii)(a), and otherwise satisfy the requirements of applicable state and
federal laws, rules and regulations. The Definitive Bankshares Proxy Materials
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they will be made, not misleading;
provided, however, that Bankshares makes no representation or warranty with
respect to any information that Bancorp will supply specifically for use in the
Definitive Bankshares Proxy Materials. None of the information that Bankshares
will supply specifically for use in the Registration Statement or the Prospectus
will contain any untrue statement of a
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material fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they will
be made, not misleading.
SECTION 3.13. TITLE TO PROPERTIES. Except as set forth on the
Disclosure Statement, to the Knowledge of Bankshares and Bank, Bankshares and
Bank have good and marketable title to all of their real estate and assets
(including those reflected in Bankshares' June 30, 1996 consolidated balance
sheet except such as have been disposed of in the Ordinary Course of Business)
free of any mortgage, encumbrance, lien or Security Interest except pledges of
assets to secure public deposits and minor imperfections in title and
encumbrances which do not or will not materially and adversely affect the
operations of Bankshares and Bank taken as a whole.
SECTION 3.14. EMPLOYMENT CONTRACTS. Except as set forth on the
Disclosure Statement, neither Bankshares nor its Subsidiaries is a party or
subject to any contract of employment not terminable at will or any profit
sharing, incentive compensation, bonus, thrift, savings or other Employee
Benefit Plan providing for employer contributions.
SECTION 3.15. COMPLIANCE WITH LAWS. Except as set forth on the
Disclosure Statement, to the Knowledge of Bank and Bankshares, Bankshares and
Bank are in substantial compliance with all laws, rules, regulations and other
legal requirements applicable to them.
SECTION 3.16. LITIGATION AND ADMINISTRATIVE PROCEEDINGS. Except as
set forth on the S. Disclosure Statement attached hereto, to the Knowledge of
Bankshares and Bank, there is no action, suit, arbitration or administrative
proceeding or investigation to which Bankshares or Bank is or may be a party or
subject which is pending, or threatened other than collection proceedings by the
Bank as a creditor in the Ordinary Course of Business in which no counterclaim
or offset has been asserted or threatened. Except as set forth on the Disclosure
Statement, to the Knowledge of Bank and Bankshares, there are no potential
unasserted claims against Bankshares or Bank that may have a material adverse
effect on Bankshares or Bank condition, financial or otherwise, or its
businesses or their assets. Bankshares and Bank have
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furnished or made available to Bancorp, or will do so upon delivery of the
Disclosure Statement, copies of all relevant court papers and other documents
relating to any matters set forth in the Disclosure Statement. Except as set
forth in the Disclosure Statement, neither Bankshares nor Bank is in default
under, or currently subject to, any judgment, order, decree, injunction or
cease-and-desist order of any foreign, federal, state or local court,
department, agency or instrumentality.
SECTION 3.17. EMPLOYEE BENEFIT PLANS.
(i) Except as set forth on the Disclosure Statement, to the
Knowledge of Bank and Bankshares, all of the Employee Benefit Plans and any
related trust agreements or annuity contracts (or any other funding instruments)
comply currently, and have complied in the past, both as to form and operation,
with the provisions of ERISA, the Internal Revenue Code (the "Code") and with
all other applicable laws, rules and regulations governing the establishment and
operation of the Employee Benefit Plans; all necessary governmental approvals
relating to the establishment of the Employee Benefit Plans have been obtained;
and with respect to each Employee Benefit Plan that is intended to be
tax-qualified under Section 401(a) or 403(a) of the Code, a favorable
determination letter as to the qualification under the Code of each such
Employee Benefit Plan and each material amendment thereto has been issued by the
Internal Revenue Service (and nothing has occurred since the date of the last
such determination letter which resulted in, or is likely to result in the
revocation of such determination);
(ii) To the Knowledge of Bank and Bankshares, each Employee Benefit
Plan has been administered in compliance with the requirements of the Code,
ERISA, and all other applicable laws, and all reports and disclosures required
by ERISA, the Code and any other applicable laws with respect to each Employee
Benefit Plan have been timely filed;
(iii) On and after January 1, 1975, to the Knowledge of Bank and
Bankshares, neither Bankshares, Bank nor any plan fiduciary of any Employee
Benefit Plan or Pension Benefit Plan has engaged in any transaction in violation
of Section 406 of ERISA (for which
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transaction no exemption exists under Section 408 of ERISA) or in any
"prohibited transaction" as defined in Section 4975(c)(1) of the Code (for which
no exemption exists under Section 4975(c)(2) or 4975(d) of the Code);
(iv) The Disclosure Statement lists each Employee Benefit Plan and
each deferred compensation plan, bonus plan, stock option plan, employee stock
purchase plan, restricted stock, excess benefit plan, incentive compensation,
stock bonus, cash bonus, severance pay, golden parachute, life insurance, all
nonqualified deferred compensation arrangements, all unfunded plans and any
other employee benefit plan, agreement, arrangement or commitment not included
in the term Employee Benefit Plan (other than normal policies concerning
holidays, vacations and salary continuation during short absences for illness or
other reasons) maintained by Bankshares or Bank;
(v) True and complete copies of each Employee Benefit Plan, related
trust agreements or annuity contracts (or any other funding instruments),
summary plan descriptions, each plan, agreement, arrangement, and commitment
relating to such Employee Benefit Plan, the most recent determination letter
issued by the Internal Revenue Service with respect to each Employee Benefit
Plan, the most recent application for a determination letter from the Internal
Revenue Service with respect to each Employee Benefit Plan and Annual Reports on
form 5500 series filed with any governmental agency for each Employee Benefit
Plan for the two most recent plan years, have been furnished to Bancorp;
(vi) All Employee Benefit Plans, related trust agreements or annuity
contracts (or any other funding instruments), and all plans, agreements,
arrangements and commitments relating to such Employee Benefit Plans are, to the
Knowledge of Bank and Bankshares, legally valid and binding and in full force
and effect and there are no promised increases in benefits (whether expressed,
implied, oral or written) under any of these plans nor any obligations,
commitments or understandings to continue any of such plans, (whether expressed,
implied, oral or written) except as required by Section 4980B of the Code and
Sections 601-608 or ERISA;
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(vii) There are no claims pending with respect to, or under, any
Employee Benefit Plan or any plan, agreement, arrangement or commitment relating
to any Employee Benefit Plan, other than routine claims for plan benefits, and
there are no disputes or litigation pending or, to the Knowledge of Bank and
Bankshares, threatened with respect to any such plans;
(viii) To the Knowledge of Bank and Bankshares, no action has been
taken, nor has there been a failure to take any action that would subject any
person or entity to any liability for any income, excise or other tax or penalty
in connection with any Employee Benefit Plan or any plan, agreement, arrangement
or commitment relating to such Employee Benefit Plans, other than for income
taxes due with respect to benefits paid; and
(ix) Except as otherwise set forth in the Disclosure Statement,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment to be made by
Bankshares or Bank (including, without limitation, severance, unemployment
compensation, golden parachute (defined in Section 280G of the Code), or
otherwise) becoming due to any employee, or (ii) increase any benefits otherwise
payable under any Employee Benefit Plan, or any plan, agreements, arrangements,
and commitments relating to such Employee Benefit Plan.
SECTION 3.18. BANKSHARES SUBSIDIARIES. Bank is the only Subsidiary
of Bankshares. Bank has no Subsidiaries
SECTION 3.19. REAL PROPERTY.
(i) The Disclosure Statement lists and describes briefly all real
property that either of Bankshares or Bank owns including real property obtained
through foreclosure or conveyance in lieu of foreclosure. With respect to each
such parcel of owned real property:
a) the identified owner has good and marketable title to the
parcel of real property, free and clear of any Security Interest, easement,
covenant, or other restriction, except for matters disclosed on the Disclosure
Statement and installments of special assessments
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not yet delinquent and recorded easements, covenants, and other restrictions
which do not impair the current use, occupancy, or value, or the marketability
of title, of the property subject thereto;
b) there are no pending or, to the Knowledge of any of
Bankshares or Bank threatened condemnation proceedings, lawsuits, or
administrative actions relating to the property or other matters affecting
materially and adversely the current use, occupancy, or value thereof;
c) the legal description for the parcel contained in the deed
thereof describes such parcel fully and adequately, to the Knowledge of Bank and
Bankshares, the buildings and improvements (except as set forth in the
Disclosure Statement) are located within the boundary lines of the described
parcels of land, are not in violation of applicable setback requirements, zoning
laws, and ordinances, and the land does not serve any adjoining property for the
purpose inconsistent with the use of the land, and the property is not located
within any flood plain or subject to any similar type restriction for which any
permits or licenses necessary to the use thereof have not been obtained;
d) to the Knowledge of Bankshares and Bank, all facilities
have received all approvals of governmental authorities (including licenses and
permits) required in connection with the ownership or operation thereof and have
been operated and maintained substantially in accordance with applicable laws,
rules and regulations;
e) there are no leases, subleases, licenses, concessions, or
other agreements, written or oral, granting to any party or parties the right of
use or occupancy of any portion of the parcel of real property except as set
forth on the Disclosure Statement;
f) except as set forth on the Disclosure Statement, there are
no outstanding contracts for sale, options or rights of first refusal to
purchase any parcel of real property, or any portion thereof or interest
therein;
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g) there are no parties (other than Bankshares and Bank) in
possession of the parcel of real property, other than tenants under any leases
disclosed in the Disclosure Statement who are in possession of space to which
they are entitled;
h) all facilities located on the parcel of real property are
supplied with utilities and other services necessary for the operation of such
facilities, including gas, electricity, water, telephone, sanitary sewer, and
storm sewer, all of which services are, to the Knowledge of Bank and Bankshares,
adequate in accordance with all applicable laws, ordinances, rules and
regulations and are provided via public roads or via permanent, irrevocable,
appurtenant easements benefiting the parcel of real property; and
i) except as set forth on the Disclosure Statement, each
parcel of real property has direct vehicular access to a public road, or has
access to a public road via a permanent, irrevocable, appurtenant easement
benefiting the parcel of real property; and
j) to the Knowledge of Bank and Bankshares, each parcel is in
compliance with all Environmental Laws, no Hazardous Substances are or have been
manufactured, stored, used or disposed of on any such parcel except in strict
compliance with all Environmental Laws, there has been no release or discharge
of Hazardous Substances on or from any such parcel and no litigation or
administrative proceeding is pending or has been threatened in connection with
the manufacture, storage, use, disposal or discharge of Hazardous Substances on
or from any such parcel or naming Bank or Bankshares as a defendant or
potentially responsible party.
(ii) The Disclosure Statement lists and describes briefly all real
property leased or subleased to Bankshares or Bank. Bankshares or Bank has
delivered to Bancorp correct and complete copies of the leases and subleases
listed in the Disclosure Statement (as amended to date). With respect to each
lease and sublease listed in the Disclosure Statement:
a) to the Knowledge of Bankshares and Bank, the lease or
sublease is legal, valid, binding, enforceable, and in full force and effect;
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b) the lease or sublease will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms following
the consummation of the transactions contemplated hereby;
c) to the Knowledge of Bank and Bankshares, no party to the
lease or sublease is in material breach or default, and no event has occurred
which, with notice or lapse of time, would constitute a breach or default or
permit termination, modification, or acceleration thereunder;
d) to the Knowledge of Bank and Bankshares, no party to the
lease or sublease has repudiated any provision thereof;
e) to the Knowledge of Bank and Bankshares, there are no
disputes, oral agreements, or forbearance programs in effect as to the lease or
sublease;
f) to the Knowledge of Bank and Bankshares, with respect to
each sublease, the representations and warranties set forth in subsections (a)
through (e) above are true and correct with respect to the underlying lease;
g) neither of Bankshares nor Bank has assigned, transferred,
conveyed, mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold; and
h) to the Knowledge of Bank and Bankshares, all facilities
leased or subleased thereunder have received all approvals of governmental
authorities (including licenses and permits) required in connection with the
operation thereof and have been operated and maintained substantially in
accordance with applicable laws, rules and regulations.
SECTION 3.20. TANGIBLE ASSETS. Bankshares and Bank own or lease all
buildings, machinery, equipment, and other tangible assets necessary for the
conduct of their businesses as presently conducted. Each such tangible asset has
been maintained in accordance with normal industry practice, is in good
operating condition and repair (subject to normal wear and tear), and is
suitable for the purposes for which it presently is used.
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SECTION 3.21. CONTRACTS. The Disclosure Statement lists the
following contracts and other agreements to which any of Bankshares or Bank is a
party other than leases or subleases of real property:
(i) any agreement (or group of related agreements), other than those
cancelable without penalty or continued obligation on 90 days notice or less,
for the lease of personal property to or from any entity or person providing for
lease payments in excess of $15,000.00 per annum;
(ii) any agreement (or group of related agreements), other than
those cancelable without penalty or continued obligation on 90 days notice or
less, for the purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or receipt of
services, the performance of which will extend over a period of more than one
year, or involve consideration in excess of $15,000.00;
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under which it
has created, incurred, assumed, or guaranteed any indebtedness for borrowed
money, or any capitalized lease obligation, in excess of $15,000.00 or under
which it has imposed a Security Interest on any of its assets, tangible or
intangible;
(v) any agreement concerning confidentiality or noncompetition;
(vi) any collective bargaining agreement;
(vii) any agreement, other than those cancelable without penalty or
continued obligation on 90 days notice or less, for the employment of any
individual on a full-time, part-time, consulting, or other basis other than
employees at will providing annual compensation in excess of $25,000.00 or
providing severance benefits;
(viii) any agreement under which it has advanced or loaned any
amount to any of its directors or Executive Officers;
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(ix) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business, financial
condition, operations, results of operations, or future prospects of any of
Bankshares or Bank; or
(x) any other agreements (or group of related agreements), other
than those cancelable without penalty or continued obligation on 90 days notice
or less, the performance of which involves consideration in excess of
$15,000.00.
SECTION 3.22. RELATED PARTY TRANSACTIONS. The Disclosure Statement
lists all agreements, extensions of credit, commitments, tax sharing or
allocation agreements or other contractual agreements of any kind between
Bankshares, Bank or any of their Affiliates and any past or present director of
Bankshares or Bank or any of their Affiliates or, to the Knowledge of Bankshares
and Bank, their spouses, children, parents or siblings or their Affiliates (the
"Related Contracts").
4. REPRESENTATIONS AND WARRANTIES OF BANCORP. Bancorp and Acquisition
represent and warrant to Bankshares and Bank that the statements contained in
this ss.4 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
ss.4), except as set forth in the Disclosure Statement attached hereto as
updated pursuant to ss.5.10(ii). Bancorp and Acquisition agree that as soon as
reasonably practicable after the Effective Date, Bancorp and Acquisition will
ascertain whether any of their officers have actual knowledge that any of the
representations and warranties of Bancorp and Acquisition in this Agreement are
materially incorrect or incomplete and, if incorrect or incomplete, will
immediately revise such warranties and representations in the fashion provided
in ss.5.10(ii).
SECTION 4.1. ORGANIZATION, QUALIFICATIONS AND CORPORATE POWER.
Bancorp and Acquisition are corporations duly organized, validly existing, and
in good standing under the laws of Florida and Bancorp is duly registered under
the Bank Holding Company Act. 1st
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United is a Florida chartered bank duly organized, validly existing, and in good
standing under the laws of Florida. 1st United is duly authorized to engage in
the business of banking in Florida as an insured bank under the Federal Deposit
Insurance Act, as amended. Each of Bancorp, Acquisition and 1st United is duly
authorized to conduct business and is in good standing under the laws of each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties requires such qualification, except where the lack of such
qualification would not have a material adverse effect on the financial
condition of Bancorp, Acquisition or 1st United, taken as a whole or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement. Each of Bancorp, Acquisition and 1st United has full corporate power
and authority to carry on the businesses in which it is engaged and to own and
use the properties owned and used by it. True and complete copies of the
Articles of Incorporation and Bylaws of Bancorp, Acquisition and 1st United are
attached hereto as Schedule 4.1(i), 4.1(ii) and 4.1(iii), respectively.
SECTION 4.2. CAPITALIZATION. The entire authorized capital stock of
Bancorp consists of 20,000,000 Bancorp Shares and 5,000,000 shares of preferred
stock, of which 7,449,704 Bancorp Shares are issued and outstanding and
12,550,296 Bancorp Shares are authorized but unissued. No shares of preferred
stock have been issued. The entire authorized capital stock of Acquisition (the
"Acquisition Stock") consists of 1,000 shares of common stock, of which 1,000
shares are issued and outstanding and 0 shares are authorized but unissued. The
entire authorized capital stock of 1st United consists of 10,000,000 1st United
Shares, of which 1,035,499 1st United Shares are issued and outstanding and
8,964,501 1st United Shares are authorized but unissued. All of the issued and
outstanding 1st United Shares are owned, beneficially and of record, by Bancorp
or TAB Acquisition Co. free and clear of any liens, claims or encumbrances
whatsoever. All of the issued and outstanding Bancorp Shares, Acquisition Shares
and 1st United Shares have been fully authorized and are validly issued, fully
paid, and nonassessable. The Bancorp Purchase Shares to be issued to Bankshares
pursuant to the Merger,
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when so issued, will be duly authorized and validly issued, fully paid and
nonassessable, and there will be no preemptive rights in respect thereof.
SECTION 4.3. AUTHORIZATION OF TRANSACTION. Bancorp and Acquisition
have full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder;
provided, however, that Bancorp, Acquisition and 1st United cannot consummate
the Merger or the Bank Merger unless and until they receive approval from the
SEC, the FRB, the Comptroller, and all of the consents contemplated in Article 5
hereof. Subject to the foregoing sentence, this Agreement constitutes a valid
and legally binding obligation of Bancorp and Acquisition enforceable in
accordance with its terms and conditions. To the Knowledge of Bancorp and
Acquisition, other than in connection with the provisions of the Florida Acts,
the Securities Exchange Act, the Securities Act, the state securities laws, the
Federal Deposit Insurance Act and the Bank Holding Company Act, Bancorp,
Acquisition and 1st United do not need to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, except where the failure to give notice, to
file, or to obtain any authorization, consent, or approval would not have a
material adverse effect on Bancorp, Acquisition and 1st United taken as a whole
or the ability of the Parties to consummate the transactions contemplated by
this Agreement.
SECTION 4.4. NONCONTRAVENTION. To the Knowledge of Bancorp and
Acquisition, neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (i) violate any
statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge, or other restriction of any government, governmental agency, or court to
which Bancorp, Acquisition or 1st United is subject or any provision of the
charter or bylaws of Bancorp, Acquisition or 1st United or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any contract, lease, sublease, license,
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franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest, or other obligation to which
Bancorp, Acquisition or 1st United is a party or by which either of them is
bound or to which any of their assets is subject (or result in the imposition of
any Security Interest upon any of its assets) except where the violation,
conflicts, breach, defaults, acceleration, termination, modification,
cancellation, or failure to give notice would not have a material adverse effect
on the financial condition of Bancorp, Acquisition and 1st United taken as a
whole or on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
SECTION 4.5. FILINGS WITH THE SEC. Bancorp has made all material
filings with the SEC, if any, that it has been required to make under the
Securities Act and the Securities Exchange Act (collectively the "Bancorp Public
Reports"). Each of the Bancorp Public Reports has complied with the Securities
Act and the Securities Exchange Act in all material respects. Each of the
Bancorp Public Reports is true, complete and correct as of its respective date
and none of the Bancorp Public Reports, as of their respective dates, contained
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Bancorp has delivered
to Bankshares a correct and complete copy of each Bancorp Public Report filed
since December 31, 1995 (together with all exhibits and schedules thereto and as
amended to date).
SECTION 4.6. FINANCIAL STATEMENTS. Bancorp has filed Quarterly
Reports on form 10Q as required by the SEC for the Most Recent Fiscal Quarter
and an Annual Report on form 10KSB as required by the SEC for the fiscal year
ended December 31, 1995. The financial statements included in or incorporated by
reference into the Public Reports (including the related notes and schedules)
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby and present fairly the financial
condition of Bancorp and its Subsidiaries as of the indicated dates and the
results of operations of Bancorp and its
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Subsidiaries for the indicated periods, provided, however, that the interim
statements are subject to normal year-end adjustments and may not include
footnotes which would be included in year end statements pursuant to GAAP.
SECTION 4.7. BROKERS' FEES. Bancorp, Acquisition and 1st United do
not have any liability or obligation to pay any fees or commission to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement.
SECTION 4.8. DISCLOSURE. The Registration Statement and the
Prospectus, will comply with the Securities Act and the Securities Exchange Act
in all material respects. The Registration Statement and the Prospectus will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they will be made, not misleading, provided, however,
that Bancorp and Acquisition make no representation or warranty with respect to
any information that Bankshares or Bank will supply specifically for use in the
Registration Statement or the Prospectus. None of the information that Bancorp,
Acquisition or 1st United will supply specifically for use in the Definitive
Bankshares Proxy Materials will contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they will be made, not
misleading.
SECTION 4.9. EVENTS SUBSEQUENT TO MOST RECENT FISCAL QUARTER. Since
the end of the Most ER. Recent Fiscal Quarter , there has not been any material
adverse change in the assets, liabilities, business, financial condition,
operations, results of operations, or future prospects of Bancorp and its
Subsidiaries taken as a whole.
SECTION 4.10. TITLE TO PROPERTIES. To the Knowledge of Bancorp and
Acquisition, Bancorp, Acquisition and 1st United have good and marketable title
to all of their real estate and assets (including those reflected in Bancorp's
December 31, 1995 consolidated balance sheet except such as have been disposed
of in the Ordinary Course of Business) free of
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any mortgage, encumbrance, lien or security interest except pledges of assets to
secure public deposits and minor imperfections in title and encumbrances which
do not materially detract from the value or impair the use of the properties
affected thereby.
SECTION 4.11. COMPLIANCE WITH LAWS. To the Knowledge of Bancorp and
Acquisition, Bancorp, Acquisition and 1st United are in substantial compliance
with all laws, rules, regulations and other legal requirements applicable to
them and they know of no reason why the Merger and the Bank Merger will not be
approved by the requisite governmental and regulatory authorities.
SECTION 4.12. LITIGATION AND ADMINISTRATIVE PROCEEDINGS. To the
Knowledge of Bancorp and Acquisition, there is no action, suit, arbitration or
administrative proceeding or investigation to which Bancorp, Acquisition or 1st
United is or may be a party or subject which is pending, or threatened, in which
there could be a judgment, order, decree, liability, fine, penalty, injunction
or cease-and-desist order which could have a material adverse effect on its
condition, financial or otherwise, or the conduct of its business. To the
Knowledge of Bancorp and Acquisition, there are no potential unasserted claims
against Bancorp or Acquisition that may have a material adverse effect on
Bancorp, Acquisition or 1st United, financial or otherwise, or their businesses
or their assets. Neither Bancorp, Acquisition nor 1st United is in default
under, or currently subject to, any material judgment, order, decree, injunction
or cease-and-desist order of any foreign, federal, state or local court,
department, agency or instrumentality.
SECTION 4.13. FILINGS WITH THE FRB AND COMPTROLLER. Bancorp,
Acquisition and 1st United have made all filings with the FRB and the
Comptroller that each has been required to make under the Florida Acts, the Bank
Holding Company Act and the Federal Deposit Insurance Act, as the case may be
(collectively the "Bancorp Reports"). Each of the Bancorp Reports has complied
with the Florida Acts, the Bank Holding Company Act and the Federal Deposit
Insurance Act in all material respects. Each of the Bancorp Reports is true,
complete and correct as of their respective dates and none of the Bancorp
Reports, as of their respective dates,
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contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Bancorp or Acquisition
have delivered to Bankshares a correct and complete copy of each Bancorp Report
(together with all exhibits and schedules thereto and as amended to date).
SECTION 4.14. UNDISCLOSED LIABILITIES. Neither of Bancorp,
Acquisition nor 1st United has any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated, and whether due or
to become due), including any liability for taxes, except for (i) liabilities
set forth on the face of the balance sheet dated as of the end of the Most
Recent Fiscal Quarter (rather than in any notes thereto) and (ii) liabilities
which have arisen after the Most Recent Fiscal Quarter in the Ordinary Course of
Business or in connection with the transactions provided for in this Agreement
(none of which relates to any breach of contract, breach of warranty, tort,
infringement, or violation of law or arose out of any charge, complaint, action,
suit, proceeding, hearing, investigation, claim, or demand and none of which,
individually or in the aggregate, materially and adversely affect the business,
assets, financial condition or prospects of Bancorp, Acquisition or 1st United).
SECTION 4.15. TANGIBLE ASSETS. Bancorp and its Subsidiaries own or
lease all buildings, machinery, equipment, and other tangible assets necessary
for the conduct of their businesses as presently conducted. Each such tangible
asset has been maintained in accordance with normal industry practice, is in
good operating condition and repair (subject to normal wear and tear), and is
suitable for the purposes for which it presently is used.
As of the Effective Date, neither Bancorp, Acquisition nor 1st
United has any actual notice of any existing breach of a warranty,
representation or covenant given by Bankshares or Bank under this Agreement.
5. COVENANTS. The Parties agree as follows with respect to the period from
and after the execution of this Agreement.
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SECTION 5.1. GENERAL. Each of the Parties will use its reasonable
best efforts to take all action and to do all things necessary, proper, or
advisable to consummate and make effective the transactions contemplated by this
Agreement as soon as practicable (including satisfying the closing conditions
set forth in Article 6 below).
SECTION 5.2. NOTICES AND CONSENTS OF BANKSHARES. Bankshares and Bank
will give any notices to third parties, and will use its reasonable best efforts
to obtain any third party consents, that Bancorp or Acquisition reasonably may
request in connection with the matters pertaining to Bankshares or Bank
including, without limitation:
(i) within fifteen (15) days after the Effective Date,
Noncompetition Agreements from each of the directors of Bankshares and Bank in
substantially the form attached hereto as Exhibit "C", the term of which shall
be two (2) years after the Effective Time as to all of the directors except
Louis A. Gaeta, Jr., for whom the term shall be three (3) years;
(ii) within fifteen (15) days after the Effective Date,
agreements from each of the directors of Bankshares and Bank in substantially
the form of the Agreement and Proxy attached hereto as Exhibit "D"; and
(iii) within fifteen (15) days after the Effective Date, an
agreement in form and substance mutually acceptable to Bancorp and Louis A.
Gaeta, Jr. pursuant to which Louis A. Gaeta, Jr. agrees that the Employment
Agreement between Mr. Gaeta, Bankshares and Bank dated as of April 4, 1996 will
be terminated on or before the Closing Date.
The agreements referenced in (i), (ii) and (iii) above shall be held
in escrow by Bankshares and delivered to Bancorp at Closing and shall become
effective only from and after Closing.
SECTION 5.3. CONSULTING AND NONCOMPETITION AGREEMENTS.
(i) Bancorp agrees that it will enter into a Consulting Agreement
with Louis A. Gaeta, Jr. at Closing in substantially the form attached hereto as
Exhibit "E".
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(ii) Bancorp agrees that the Noncompetition Agreements with June
White, Bruce Smith, Burton Lewis and Clifford O'Donnell shall provide for two
annual payments to each such director of $5,000.00, with the first payment being
due within ten (10) days after the Closing Date and the other on the first
anniversary date of the Effective Time. The Noncompetition Agreement for Louis
A. Gaeta, Jr. shall provide for no payment to Louis A. Gaeta, Jr. with the
understanding that the payments to Louis A. Gaeta, Jr. under the Consulting
Agreement referenced in (i) above are also consideration for his Noncompetition
Agreement. Bankshares shall accrue the payments to be due under the
Noncompetition Agreements prior to the Closing as an expense of Bankshares.
SECTION 5.4. NOTICES AND CONSENTS OF BANCORP. Bancorp and
Acquisition will give any notices to third parties, and will use its reasonable
best efforts to obtain any third party consents, that Bankshares reasonably may
request in connection with the matters pertaining to Bancorp, Acquisition and
1st United disclosed or required to be disclosed in the Disclosure Statement.
SECTION 5.5. REGULATORY MATTERS AND APPROVALS.
(i) Bank Regulatory Matters. Bancorp will cause to be prepared and
filed with the Federal Reserve Bank of Atlanta and with the Comptroller,
applications for their approval of the Merger and the Bank Merger within thirty
(30) days after the Effective Date, and with any other regulatory agencies
having jurisdiction any other applications for approvals or consents which may
be necessary for the consummation of the Merger and the Bank Merger. Bancorp
will take or cause to be taken all actions necessary for such applications to be
approved and will provide Bankshares with the proposed form of applications to
be filed at least five (5) days prior to filing and subsequently with copies of
all correspondence and notices to or from such agencies concerning such
applications.
(ii) Securities Act, Securities Exchange Act, State Securities
Laws and Federal Deposit Insurance Act.
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a) NO-ACTION LETTER. Bancorp shall have the option to seek to
obtain assurances that the issuance of the Bancorp Purchase Stock will qualify
for exemption from the registration requirements of the Securities Act and
applicable state securities laws, pursuant to the exemption therefrom contained
in Section 3(a)(10) of the Securities Act and similar exemptions contained in
states securities laws, respectively. After the execution of this Agreement,
Bancorp and its counsel may submit to the Division of Corporation Finance of the
SEC a request for a "no-action letter" (the "No-Action Letter"). The No-Action
Letter will seek a statement from the Division of Corporation Finance that it
will take no enforcement or administrative action if the Bancorp Purchase Stock
proposed to be issued in connection with the Merger are issued in reliance upon
and in accordance with the exemption from registration contained in Section
3(a)(10) of the Securities Act. Bancorp shall make the request for the No Action
Letter not later than ten (10) business days after the Effective Date, or
Bancorp shall be deemed to have waived the right to seek the No Action Letter.
Similar requests will be made to the State of Florida Department of Banking and
Finance and to such other state securities authorities as Bancorp may determine
is necessary or desirable.
b) RULE 144. The request for the No-Action Letter will also
seek confirmation from the Division of Corporation Finance that, with respect to
public resales of Bancorp Purchase Stock:
(i) The Bancorp Purchase Stock will not be deemed
"restricted" pursuant to Rule 144(a)(3).
(ii) Non-affiliates of Bankshares who are non-affiliates
of Bancorp may resell Bancorp Purchase Stock without regard to Rules 144 or
145(c) and (d).
(iii) Affiliates of Bankshares who are non-affiliates of
Bancorp may sell Bancorp Purchase Stock in any manner permitted by Rule 145(d).
Such persons may resell such shares in the manner permitted by Rule 145(d)(1)
without regard to the holding period required by Rule 144(d). In computing the
holding period of Bancorp Purchase Stock acquired
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in the transaction for purposes of Rule 145(d)(2) or (3), however, such persons
may not "tack" the holding period of their Bankshares Shares.
c) PUBLIC HEARING. To cause the exemption from the
registration contained in Section 3(a)(10) of the Securities Act to be
applicable to the issuance of the Bancorp Purchase Stock, Bancorp further
agrees, promptly after receipt of the No-Action Letter, to submit appropriate
requests to the Comptroller, pursuant to Chapter 655 of the Florida Statues and
Rule 3C-9.004 of the Administrative Rules of the Florida Department of Banking
and Finance, for a public hearing upon the fairness of the valuation of the
consideration to be received by Bankshares Stockholders in the transactions
contemplated herein and the fairness of the terms and conditions of the issuance
of the Bancorp Purchase Stock. Each Bankshares Stockholder shall have the right
to appear at such hearing. Upon the scheduling of such public hearing,
Bankshares agrees promptly to provide each Bankshares Stockholder with notice of
such public hearing in accordance with the Florida Statutes and the
Administrative Rules of the Florida Department of Banking and Finance, and
otherwise in accordance with any other conditions or requirements imposed by the
Comptroller with respect to such public hearing. In the event the public hearing
results in the Bank Merger being disapproved by the Comptroller, Bancorp shall
have no obligation to prepare or file the Registration Statement.
d) PROXY MATERIALS. Bankshares shall, at Bankshares' sole cost
and expense, prepare for delivery to the Bankshares Stockholders the Definitive
Bankshares Proxy Materials regarding the terms of the transactions contemplated
by this Agreement in form and substance sufficient to substantially comply with
the disclosure requirements of Schedule 14A (Regulation 14a-101) under the
Exchange Act, if Bancorp determines that compliance is necessary to obtain the
No-Action Letter, and otherwise satisfy the requirements of applicable state and
federal laws, rules and regulations. Bankshares shall submit the Definitive
Bankshares Proxy Materials to Bancorp for Bancorp's review and written approval
prior to delivery to the Bankshares Stockholders. The Definitive Bankshares
Proxy Materials shall be mailed to the
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Bankshares Stockholders not later than the earlier to occur of: (i) ten (10)
days after receipt of the later of the approvals of the applications submitted
to the Federal Reserve Bank of Atlanta and the Comptroller, or (ii) October 31,
1996. Bancorp will provide Bankshares with whatever information and assistance
in connection with the preparation of the Definitive Bankshares Proxy Materials
that is necessary to disclose all facts material to the condition, assets,
properties, rights, businesses, operations or prospects of Bancorp and 1st
United so as to satisfy the requirements of applicable state and federal laws,
rules and regulations. Bankshares shall not be liable for any untrue statement
of material fact or omission to state a material fact made in reliance upon, and
in conformity with, information furnished to Bankshares by Bancorp or 1st United
for use therein. Bancorp and 1st United shall have no responsibility or
liability for any untrue statement of material fact in the Definitive Bankshares
Proxy Materials or omission to state a material fact necessary in order to make
statements made in the Definitive Bankshares Proxy Materials not misleading
unless such statement is based on information supplied by Bancorp or 1st United.
e) REGISTRATION. In the event the No-Action Letter is not
issued by the SEC as contemplated by Section 5.5(ii)(a) and (b) within 120 days
after the Effective Date or within thirty (30) days after the date Bancorp
decides not to request the No-Action Letter, Bancorp will prepare and file with
the SEC a registration statement under the Securities Act relating to the
offering and issuance of the Bancorp Purchase Stock (the "Registration
Statement") and will file, as necessary, registrations or other documents with
state securities agencies required under applicable state securities regulations
all such filings to be made as soon as reasonably practical after the expiration
of the time to receive the No Action Letter if not timely received. Bancorp will
use its reasonable best efforts to respond to the comments of the SEC thereon
and will make any further filings (including amendments and supplements) in
connection therewith that may be necessary, proper, or advisable. Bancorp will
provide Bankshares, and Bankshares will provide Bancorp, with whatever
information and assistance in connection with the foregoing filings that the
filing Party reasonably may request. Bancorp will not be liable for
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any untrue statement of a material fact or omission to state a material fact in
the Registration Statement made in reliance upon, and in conformity with,
information furnished to Bancorp by Bankshares or Bank for use therein.
Bankshares will not be liable for any untrue statement of a material fact or
omission to state a material fact in the Definitive Bankshares Proxy Materials
made in reliance upon, or in conformity with, information furnished to
Bankshares by Bancorp, Acquisition or 1st United for use therein. Bancorp and
Bankshares will provide the other Party with copies of all correspondence,
comment letters or notices to or from the SEC concerning or relating to the
Registration Statement or the Definitive Bankshares Proxy Materials and Bancorp
will advise Bankshares promptly after it receives notice of the time when the
Registration Statement has become effective or any supplement or amendment
thereto has been filed, of the issuance of any stop order with respect to the
effectiveness thereof, of the suspension of the qualification of the Bancorp
Purchase Stock to be issued in connection with the Merger for offering or sale
in any jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or the filing or submission of additional information.
Bancorp will take all actions that may be necessary, proper, or advisable under
state securities laws in connection with the offering and issuance of the
Bancorp Purchase Shares.
f) FLORIDA ACTS. Bancorp shall cause 1st United to take and
Bank shall take action as soon as reasonably practicable to obtain approval of
the Bank Merger in accordance with the Florida Acts. Bankshares will call a
special meeting of the Bankshares Stockholders (the "Special Bankshares
Meeting") as soon as reasonably practicable after the mailing of the Definitive
Bankshares Proxy Materials in order that its stockholders may consider and vote
upon the adoption of this Agreement and the approval of the
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Merger. The Definitive Bankshares Proxy Materials will contain the affirmative
recommendations of the board of directors of Bankshares in favor of the adoption
of this Agreement and the approval of the Merger except to the extent that such
recommendation would cause any director or officer of any Party to violate any
fiduciary duty or other requirement imposed by law in connection therewith.
g) OTHER GOVERNMENTAL MATTERS. Each of the Parties will take
any additional action that may be necessary, proper, or advisable in connection
with any other notices to, filings with, and authorizations, consents, and
approvals of governments and governmental agencies that it may be required to
give, make or obtain.
SECTION 5.6. FAIRNESS OPINIONS. On or before the Effective Date
Bankshares shall obtain a verbal opinion from an investment banker or other
consultant of Bankshares' choosing as to the fairness of the Merger to
Bankshares Stockholders from a financial point of view (the "Bankshares Fairness
Opinion"). Prior to the date the Definitive Bankshares Proxy Materials are
mailed to the Bankshares Stockholders and the date of the public hearing
contemplated by ss.5.5(ii)(c), Bankshares will obtain the Bankshares Fairness
Opinion in written form.
SECTION 5.7. OPERATION OF BUSINESS. Without the prior written
consent of Bancorp and Acquisition, which may be given or withheld in the sole
discretion of Bancorp or Acquisition unless otherwise provided in this ss.5.7,
Bank and Bankshares will not engage in any practice, take any action, embark on
any course of inaction, or enter into any transaction outside the Ordinary
Course of Business except as otherwise specifically provided in the Disclosure
Statement or this Agreement. Without limiting the generality of the foregoing,
neither Bankshares nor Bank will:
(i) authorize or effect any change in its charter or bylaws;
(ii) grant any options, warrants, or other rights to purchase or
obtain any of its capital stock or issue, sell, or otherwise dispose of any of
its capital stock;
(iii) declare, set aside, or pay any dividend or distribution with
respect to its capital stock, or redeem, repurchase, or otherwise acquire any of
its capital stock; provided, however, if the Closing Date has not occurred by
February 1, 1997, Bankshares may declare and
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pay an annual dividend in February, 1997, consistent with dividend declared and
paid by Bankshares in 1996;
(iv) create, incur, assume, or guarantee any indebtedness (including
any capitalized leased obligation) outside the Ordinary Course of Business;
(v) impose, grant or suffer any Security Interest upon any of its
assets outside the Ordinary Course of Business;
(vi) make any capital investment in, make any loan to, or acquire
the securities or assets of any other person outside the Ordinary Course of
Business unless Bancorp has consented to such action or, as to Bank, to such
loan or increase is fully secured by a certificate of deposit of Bank or is
permitted under ss.5.8;
(vii) except as set forth in the Disclosure Statement, make any
change in employment terms for any of its directors, officers, and employees
outside the Ordinary Course of Business with the understanding that entering
into any new employment contracts or renewing any existing employment contracts
shall be deemed outside the Ordinary Course of Business;
(viii) enter into any agreement which would be required to be
disclosed pursuant to Section 3.21 of this Agreement;
(ix) discontinue or omit the independent loan review and internal
audit services contemplated by Bankshares' and Bank's 1996 business plan as of
the Effective Date;
(x) knowingly permit the occurrence of any change or event which
would render any of its representations and warranties contained herein
materially untrue at and as of the Closing Date; or
(xi) commit to do any of the foregoing. Bancorp and Acquisition
agree that their consent to the matters covered by subsections (iv), (v) and
(viii) above will not be unreasonably withheld.
SECTION 5.8. BANK OPERATIONS. Without the prior written consent of
Bancorp which shall not be unreasonably withheld, Bank shall not:
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(i) make or commit to make any new or renewal loan or series of
related loans to one borrower or its Affiliates or which would be aggregated for
the purpose of ascertaining Bank's compliance with the provisions of 12 U.S.C.
ss.84, with an aggregate principal balance greater than $250,000;
(ii) agree to any increase in an existing loan so that the
outstanding principal balance of that loan exceeds $250,000;
(iii) make or commit to make any loan financing the purchase of real
estate owned by Bank that exceeds $250,000.00 in principal balance or the
principal balance of which exceeds eighty percent (80%) of the fair market value
of the collateral securing the loan;
(iv) make or commit to make any loan to pay interest or taxes on any
existing Bank loan;
(v) make or commit to make any unsecured loan with a principal
balance in excess of $25,000.00;
(vi) make or commit to make a new loan or modify an existing loan to
any officer, director or former director of Bankshares or Bank.
(vii) other than in the Ordinary Course of Business and consistent
with past practices of Bank, accept term deposits or change the interest rates
or service charges on its deposit accounts.
(viii) make any change to its reserves for loan losses except for
charge offs, recoveries of loans previously written off or written down to the
extent of the write offs or write downs and increases in provisions for loan
losses which have been reflected on Bank's income statements.
(ix) either sell any of the investment securities in its investment
portfolio (unless sale is required to accomplish necessary liquidity for Bank)
or purchase any new investment securities which have an aggregate value in
excess of $500,000.00 per transaction.
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(x) reclassify investment securities from "held for sale" to "held
to maturity" or from "held to maturity" to "held for sale", as those terms are
used in FASB 115.
(xi) sell any assets (other than investment securities as provided
in subsection (x) above), including, without limitation, real estate (except
real estate or other assets acquired by Bank through the exercise of remedies
under loan documentation and obsolete or damaged equipment and furniture
provided that such equipment and furniture is replaced with items of equal
utility and value), loans (other than Small Business Administration loans or
newly originated residential mortgage loans sold in the Ordinary Course of
Business) or loan servicing rights.
(xii) sell or agree to sell any real estate owned by Bank or any of
Bank's Subsidiaries to any director, former director, officer or former officer
of Bankshares or Bank or any Bankshares Stockholder (the "Insiders") or to any
Subsidiary, Affiliate, relative or fiduciary for the benefit of any of the
Insiders or any entity which is controlled by or in which any of the Insiders
has an ownership interest.
The restrictions set out in subsection (i) through (v) above shall
not apply if the loan is fully secured by a certificate of deposit of Bank.
Bancorp agrees that its consent will not be unreasonably withheld and that if it
has not responded to a request for its consent within two (2) business days
after receipt of a written request Bancorp's consent shall be deemed to have
been given.
SECTION 5.9. FULL ACCESS. Bankshares and Bank will permit
representatives of Bancorp and Acquisition to have full access at all reasonable
times, and in a manner so as not to interfere with the normal business
operations of Bankshares and Bank, to all premises, properties, books, records,
contracts, tax records, and documents of or pertaining to each of Bankshares and
Bank. Bancorp shall permit representatives of Bankshares to have full access at
all reasonable times to such financial information and other information
regarding or affecting results of operations or financial condition of Bancorp
and 1st United as are material to the future
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prospects of Bancorp except such information as Bancorp determines cannot be
disclosed under laws, rules or regulations applicable to Bancorp. Each Party
will treat and hold as such any Confidential Information it receives from the
other Parties in the course of the reviews contemplated by this Agreement, will
not use any of the Confidential Information except in connection with this
Agreement, and, if this Agreement is terminated for any reason whatsoever,
agrees to return to the delivering Party all tangible embodiments (and all
copies) thereof which are in its possession.
SECTION 5.10. NOTICE OF DEVELOPMENTS.
(i) Each Party will give prompt written notice to the others of any
Substantial Adverse Development affecting such Party and its Subsidiaries taken
as a whole. Each Party will give prompt written notice to the other of any such
Substantial Adverse Development affecting the ability of the Parties to
consummate the transactions contemplated by this Agreement. Any such notices
shall be accompanied by copies of any and all pertinent documents,
correspondence and similar papers relevant to a complete understanding of such
Substantial Adverse Development. In the event such Substantial Adverse
Development consists of litigation threatened or filed against one or more
Parties, the Parties hereby agree to exert their reasonable good faith efforts
to quantify the risk to the Party or Parties against whom the litigation has
been threatened or filed, to ascertain the likelihood of an adverse result in
such litigation and to arrive at a mutually satisfactory resolution of such
risks so as to allow the consummation of the transactions contemplated in this
Agreement and the realization of the Parties and their shareholders of the
expected benefits of such transactions. The running of the time for exercising
termination rights by reason of such litigation or threatened litigation shall
be suspended during the period the Parties are mutually attempting to access and
resolve such litigation or claim. Bancorp or Acquisition will have 15 business
days after Bankshares gives any written notice pursuant to this ss.5.10 within
which to exercise any right it may have to terminate this Agreement pursuant to
ss.7.11(iii) below by reason of the Substantial Adverse Development, and
Bankshares
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likewise will have 15 business days after Bancorp or Acquisition gives any
written notice pursuant to this ss.5.10 within which to exercise any right
Bankshares may have to terminate this Agreement pursuant to ss.7.1(iii) below by
reason of the Substantial Adverse Development. Unless one of the Parties
terminates this Agreement within the aforementioned period, the written notice
of a material development will be deemed to have amended the Disclosure
Statement, to have qualified the representations and warranties contained
herein, and to have cured any misrepresentation or breach of warranty that
otherwise might have existed hereunder by reason of the Substantial Adverse
Development.
(ii) Any Party may update its representations and warranties
contained in this Agreement by delivery of a revised Disclosure Statement or
Disclosure Schedules to the other Parties. If the matters disclosed in such
revised Disclosure Statement or Disclosure Schedules do not comprise Substantial
Adverse Developments or breaches of this Agreement, the representations and
warranties of the disclosing Party shall be deemed revised as shown in the
revised Disclosure Statement or Disclosure Schedules for the purpose of
compliance with the provisions of this Agreement, including, without limitation,
Article 6.
SECTION 5.11. EXCLUSIVITY. Neither Bankshares nor Bank will continue
or resume any negotiations or communications in which Bankshares or Bank was
engaged prior to the Effective Date or solicit, initiate, or encourage the
submission of any proposal or offer from any person (other than a Party)
relating to any (i) liquidation, dissolution, or recapitalization, (ii) merger
or consolidation, (iii) acquisition or purchase of securities or assets other
than in the Ordinary Course of Business, or (iv) similar transaction or business
combination involving any of the Parties or its Subsidiaries, or their
respective assets, provided, however, that Bankshares, Bank, and their directors
and officers will remain free to participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any person to do or seek
any of the foregoing in the event a majority of the full board of directors of
Bankshares or Bank have
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determined on written advice of counsel that the board of directors has a
fiduciary duty to consider and respond to such effort or attempt. Bankshares and
Bank may respond to inquiries from Persons with whom Bankshares or Bank engaged
in discussions regarding mergers, consolidations or similar transactions or
business combinations prior to the Effective Date by advising such Persons that
Bankshares and Bank have entered into this Agreement and have agreed not to
engage in such discussions during the term of this Agreement. Each Party shall
notify the others immediately if any person (other than a Party) makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing.
SECTION 5.12. INDEMNIFICATION.
(i) Bankshares and Bank hereby indemnify and hold harmless Bancorp,
Acquisition and 1st United and their Subsidiaries and their Affiliates,
successor and assigns from and against any and all claims, costs, expenses,
actions, demands, losses or liabilities, penalties and damages (including legal
and accounting fees and other expenses of any nature whatsoever incurred in
investigating or in attempting to avoid the same or to defend the imposition
thereof), resulting to Bancorp, 1st United or Acquisition, or their respective
Affiliates, successors or assigns, from or arising out of any misrepresentation,
breach or nonfulfillment of any warranty, representation, agreement or covenant
on the part of Bankshares or Bank or any of their Subsidiaries and Affiliates,
under this Agreement, or from any misrepresentation in or omission from any
Exhibit, Schedule or other instrument furnished or to be furnished to Bancorp,
Acquisition or 1st United hereunder or thereunder.
(ii) Bancorp and Acquisition hereby indemnify and hold harmless
Bankshares and Bank and their Affiliates, successors and assigns, at all times
from and against any and all claims, costs, expenses, actions, demands, losses
or liabilities, penalties and damages (including legal and accounting fees and
other expenses of any nature whatsoever incurred in investigation or in
attempting to avoid the same or to defend the imposition thereof), resulting to
Bankshares, Bank or their Affiliates, successors or assigns from or arising out
of any misrepresentation,
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breach or nonfulfillment of any warranty, representation, agreement or covenant
on the part of Bancorp, Acquisition or their Affiliates under this Agreement, or
from any misrepresentation in or omission from any Exhibit, Schedule or other
instrument furnished or to be furnished to Bankshares or Bank hereunder.
SECTION 5.13. OFFICER AND DIRECTOR INDEMNITIES. Subject to the
conditions set forth below for a period of six (6) years from and after the
Closing Date, Bancorp agrees that it will indemnify and hold harmless the
officers, directors and employees of Bankshares and Bank in office on the
Effective Time against all claims arising out of actions or omissions occurring
prior to the Effective Time for which such parties would be entitled to
indemnification under and in the same fashion and on the same terms as are
provided in the FBCA, the Florida Acts on the Effective Time and the articles of
incorporation and bylaws of Bankshares and Bank in effect on the Effective Date.
Any indemnified party wishing to claim indemnification under this paragraph
shall promptly notify Bancorp thereof. Bancorp shall have the right to assume
the defense thereof and Bancorp shall not be liable to such indemnified parties
for any legal expenses of other counsel or any other expenses subsequently
incurred by such indemnified parties in connection with the defense thereof,
except that if Bancorp elects not to assume such defense or counsel for the
indemnified parties advises that there are substantive issues which raise
conflicts of interest between Bancorp and the indemnified parties, the
indemnified parties may retain counsel satisfactory to them, and Bancorp shall
pay all reasonable fees and expenses of such counsel for the indemnified parties
promptly as statements therefor are received; provided, however, that Bancorp
shall be obligated pursuant to this paragraph to pay for only one firm of
counsel for all indemnified parties in any jurisdiction, the indemnified parties
will cooperate in the defense of any such litigation, and Bancorp shall not be
liable for any settlement effected without its prior written consent which
consent shall not be unreasonably withheld; and provided further that Bancorp
shall not have any obligation hereunder to any indemnified party when and if a
court of competent jurisdiction shall determine, and such determination shall
have become
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final, that the indemnification of such indemnified party in the manner
contemplated hereby is prohibited by applicable law.
SECTION 5.14. ENVIRONMENTAL MATTERS. Bankshares and Bank agree that
all engineers and consultants who prepared or furnished reports on the
environmental condition of the Property may discuss such reports and information
with Bancorp or Acquisition and shall be entitled to certify the same in favor
of Bancorp or Acquisition and their consultants, agents and representatives and
make all other data available to Bancorp or Acquisition and their consultants,
agents and representatives. In the event Bank proposes to take title to any real
estate which is collateral for loans made by Bank, Bank will first obtain a
Phase I environmental audit of such property, comply with the suggestions of
such audit, provide a copy of such audit and any subsequent audits or studies
and, if requested by Bancorp, will take title to such property in the name of a
newly formed Subsidiary.
SECTION 5.15. AFFILIATE LETTERS.
a) The Disclosure Statement sets forth a list of names and
addresses of those persons who are "affiliates" of Bankshares within the meaning
of Rule 145 under the Securities Act ("Rule 145"), including, without
limitation, any Bankshares Stockholder who or which holds of record more than
ten percent (10%) of the outstanding Shares and all other officers and directors
of Bankshares (each "Bankshares Affiliate"). Bankshares shall provide Bancorp
such information and documents as Bancorp shall reasonably request for purposes
of reviewing the accuracy and completeness of such list. There shall be added to
such list the names and addresses of any other Person who becomes a Bankshares
Affiliate at any time after the date hereof up to and including the time of the
Special Bankshares Meeting or who Bancorp reasonably identifies (by written
notice to Bankshares) as being a Person who may be deemed to be a Bankshares
Affiliate. Not less than forty-five (45) days prior to the Closing Date,
Bankshares shall deliver or cause to be delivered to Bancorp, from each of the
Bankshares Affiliates identified on the Disclosure Statement (as the same may be
supplemented as
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aforesaid), a letter substantially in the form of Exhibit "F" hereto (the
"Affiliate Letter"), which shall contain (i) a covenant that such Affiliate
shall not sell or otherwise dispose of any shares of Bancorp Purchase Stock
issued to it in the Merger until such time as final results of operations of
Bancorp covering at least thirty (30) days of combined operations of Bancorp,
Bankshares and Bank have been published, and (ii) a covenant that such
Bankshares Affiliate will not sell or otherwise dispose of any shares of Bancorp
Purchase Stock issued to it in the Merger, except pursuant to an effective
registration statement under the Securities Act or in accordance with the
provisions of paragraph (d) of Rule 145 or another exemption from registration
under the Securities Act. The Affiliate Letter with Louis A. Gaeta, Jr. shall
provide that Mr. Gaeta acknowledges that he will be subject to and must comply
with the provisions of Rule 144(e) under the Securities Act in connection with
sales of Bancorp Purchase Stock except for sales occurring more than two (2)
years after the Effective Time.
b) Bancorp shall be entitled to place appropriate legends on
the certificates evidencing the Bancorp Purchase Stock to be received by such
Bankshares Affiliates pursuant to the terms of this Agreement, and to issue
appropriate stock transfer instructions to the Transfer Agent, to the effect
that the shares of Bancorp Purchase Stock received or to be received by such
Bankshares Affiliates pursuant to the terms of this Agreement may only be sold,
transferred or otherwise conveyed, and the holder thereof may only reduce his
interest in or risks relating to such shares of Bancorp Purchase Stock, pursuant
to an effective registration statement under the Securities Act or in accordance
with the provisions of paragraph (d) of Rule 145 or another exemption from
registration under the Securities Act and, in any event, only after financial
results covering at least 30 days of combined operations of Bancorp, Bankshares
and Bank after the Effective Date shall have been published. The foregoing
restrictions on the transferability of Bancorp Purchase Stock shall apply to all
purported sales, transfers and other conveyances of the shares of Bancorp
Purchase Stock received or to be received by such Bankshares Affiliates pursuant
to this Agreement and to all purported reductions in the interest in
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or risks relating to such shares of the Bancorp Purchase Stock whether or not
such Bankshares Affiliate has exchanged the Certificates previously evidencing
such Bankshares Affiliate's Shares for certificates evidencing the shares of
Bancorp Purchase Stock into which such Shares were converted. The Proxy
Statement and the Registration Statement shall disclose the foregoing in a
reasonably prominent manner.
SECTION 5.16. POST MERGER FINANCIAL RESULTS. If the Effective Time
shall not have occurred by November 30, 1996, Bancorp agrees to publish its
post-merger financial results (as the term "publish" is used in the
interpretations to Accounting Principles Board Opinion No. 16) within fifteen
(15) days after the end of the first full calendar month after the Effective
Time, with such results to be as of the end of such month and which shall cover
a period of at least thirty (30) days subsequent to the Effective Time.
SECTION 5.17. EMPLOYEE BENEFIT PLANS. Bancorp agrees to use its best
efforts to provide to all eligible employees of Bankshares or Bank who remain
employees of 1st United following the Effective Time ("Continuing Employees")
employee welfare and pension benefits substantially equivalent (in the
aggregate) to those uniformly provided to employees of 1st United from time to
time, PROVIDED, HOWEVER, that Bancorp shall not be required to give credit to
any such Continuing Employees in respect of past service with Bankshares or Bank
prior to the Effective Time for any purposes under any employee benefit plan or
arrangement of 1st United, except for purposes of eligibility and participation
(but not for purposes of vesting or benefit accrual) in 1st United's 401(k) Plan
and for purposes of determining vacation benefits under 1st United's vacation
plan. Notwithstanding the foregoing, no Continuing Employee shall have the right
to participate in 1st United's 401(k) Plan until such Continuing Employee shall
have been in the continuous employment of 1st United for at least ninety (90)
days after the Effective Time. Bancorp agrees that 1st United will establish a
special entry date into the 401(k) Plan for eligible Continuing Employees as
soon as practicable after ninety (90) days after the Effective Time. Bancorp
shall use its best efforts to ensure that any Continuing Employees and their
eligible
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dependents who have coverage under the Bank's existing medical plan will not be
subject to any waiting period or preexisting condition requirement under 1st
United's medical insurance plan, except to the extent that such Continuing
Employees and eligible dependents are currently subject to any such preexisting
condition. Bancorp agrees that it will pay the termination fee charged by the
Trustee of Bank's 401(k) Plan and the exit fees charged to the beneficiaries of
Bank's 401(k) Plan under the agreement with the Trustee as of the Effective
Date.
SECTION 5.18. POOLING OF INTEREST. The Parties acknowledge that it
is their intention that the Merger and the Bank Merger be qualified for pooling
of interest accounting treatment and therefore agree to take such actions as are
necessary to assure pooling of interest treatment and to refrain from taking any
actions which would result in disqualification for pooling of interest
treatment, both as determined by Bancorp.
SECTION 5.19. CERTAIN POLICIES OF BANK. At the request of Bancorp,
Bank shall modify and change its operating, loan, litigation and real estate
valuation policies and practices (including loan classifications and levels of
reserves) prior to the Effective Time so as to be consistent on a mutually
satisfactory basis with those of Bancorp. Bank shall not be required to modify
or change any such policies or practices, however, until (i) such time as Bank
and Bancorp shall reasonably agree that the Effective Time will occur prior to
the public disclosure of such modification or changes in regular periodic
earnings releases or periodic reports filed with the OCC, or (ii) such time as
Bancorp acknowledges in writing that all conditions to Bancorp's obligations to
consummate the Merger (and Bancorp's rights to terminate this Agreement) have
been waived or satisfied; provided, however, that in all circumstances Bank
shall make such modifications and changes not later than immediately prior to
the Effective Time. Bank's representations, warranties and covenants contained
in this Agreement shall not be deemed to be untrue or breached in any respect as
a consequence of any modifications or exchanges undertaken solely on account of
this Section.
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6. CONDITIONS TO OBLIGATION TO CLOSE CLOSE.
SECTION 6.1. CONDITIONS TO OBLIGATIONS OF ALL PARTIES.
(i) this Agreement and the Merger shall have received the Requisite
Bankshares Stockholder Approval;
(ii) Bankshares and Bancorp shall have procured all of the consents
specified in ss.5.1 hereof.
(iii) no action, suit, or proceeding (other than those arising out
of the applications submitted to the FRB and the Comptroller as contemplated
herein) shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction
wherein an unfavorable judgment, order, decree, stipulation, injunction, or
charge could (A) prevent consummation of any of the transactions contemplated by
this Agreement, (B) cause any of the transactions contemplated by this Agreement
to be rescinded following consummation, or (C) materially and adversely affect
the right of Bancorp and 1st United to own, operate, or control substantially
all of the assets and operations of Bankshares and Bank (and no such judgment,
order, decree, stipulation, injunction, or charge shall be in effect);
(iv) the Registration Statement shall have become effective under
the Securities Act or Bancorp shall have obtained the No Action Letter and the
No Action Letter shall not have been revoked; the Bancorp Purchase Stock shall
have been registered or exempt from registration under applicable state
securities laws; and, subject to the requirements of Rule 145 of the Securities
Act and the Affiliates Letters, the Bancorp Purchase Stock shall be freely
transferable in the hands of Bankshares Stockholders who receive same; and;
(v) the Merger and the Bank Merger shall have been approved by the
FRB; the Bank Merger shall have been approved by the Comptroller under the
Florida Acts; and any other regulatory approvals necessary to the consummation
of the Merger and the Bank Merger
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shall have been obtained and such approvals shall not impose any term, condition
or restriction upon any of Bancorp, 1st United or Acquisition that Bancorp, in
good faith, reasonably determines would so materially adversely affect the
economic or business benefits of the transactions contemplated by this Agreement
to Bancorp as to render inadvisable in the reasonable good faith judgment of
Bancorp the consummation of the Merger.
SECTION 6.2. CONDITIONS TO OBLIGATION OF BANCORP. The obligations of
Bancorp and Acquisition to consummate the transactions to be performed by
Bancorp and Acquisition in connection with the Closing are subject to
satisfaction of the following conditions:
(i) Bankshares and Bank shall have procured all of the third party
consents and agreements to be obtained by Bankshares or Bank specified in
Article 5 above or otherwise complied with the requirements of Article 5 above
which are material to the consummation of the Merger or the Bank Merger;
(ii) no material breach or breaches of the representations and
warranties of Bankshares or Bank under this Agreement has occurred and is
continuing at and as of the Closing Date;
(iii) all covenants of Bankshares and Bank under this Agreement
which are to be performed prior to or at Closing shall have been duly performed
and complied with in all material respects.
(iv) Bankshares and Bank shall have delivered to Bancorp and
Acquisition certificates (without qualification as to knowledge or materiality
or otherwise) to the effect that each of the conditions specified above in ss.
6.2(i)-(iv) is satisfied in all respects;
(v) the Parties shall have received all other authorizations,
consents, and approvals of governments and governmental agencies set forth in
the Disclosure Statement;
(vi) Bancorp and Acquisition shall have received from counsel to
Bankshares an opinion with respect to the matters set forth on Exhibit "G"
attached hereto, addressed to Bancorp and dated as of the Closing Date;
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(vii) Bancorp and Acquisition shall have received the resignations,
effective as of the Closing, of each trustee or officer of any Employee Benefit
Plan designated by Bancorp or Acquisition in writing at least five (5) business
days prior to the Closing;
(viii) all actions to be taken by Bankshares and Bank in connection
with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
Bancorp and Acquisition;
(ix) no Substantial Adverse Development shall have occurred with
respect to Bankshares or Bank which has not been waived by Bancorp and
Acquisition or deemed waived pursuant to Section 5.10; and
(x) no event shall have occurred or failed to occur which, in
the reasonable judgment of Bancorp, could result in the Merger or the Bank
Merger being disqualified from pooling of interest accounting treatment and
Bancorp shall have received an opinion letter from Ernst & Young in form and
substance acceptable to Bancorp confirming that the Merger and the Bank Merger
qualify for financial accounting treatment as a pooling of interest.
Bancorp may waive any condition specified in this ss.6.2 if it
executes a writing so stating at or prior to the Closing.
SECTION 6.3. CONDITIONS TO OBLIGATION OF BANKSHARES AND BANK. The
obligation of Bankshares and Bank to consummate the transactions to be performed
by each of them in connection with the Closing is subject to satisfaction of the
following conditions:
(i) no material breach or breaches of the representations and
warranties of Bancorp or Acquisition under this Agreement or agreements to be
obtained by Bancorp or Acquisition as has occurred and is continuing at and as
of the Closing Date;
(ii) Bancorp and Acquisition shall have procured all of the third
party consents specified in Article 5 above;
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(iii) all covenants of Bancorp and Acquisition under this Agreement
which are to be performed prior to or at Closing shall have been duly performed
and complied with in all material respects.
(iv) Bancorp and Acquisition shall have delivered to Bankshares a
certificate (without qualification as to knowledge or materiality or otherwise)
to the effect that each of the conditions specified in ss.6.3(i)-(iii) is
satisfied in all respects;
(v) Bankshares shall have received from counsel to Bancorp and
Acquisition an opinion with respect to the matters set forth in Exhibit "H"
attached hereto, addressed to Bankshares and dated as of the Closing Date; and
(vi) all actions to be taken by Bancorp and Acquisition in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to Bankshares and Bank.
(vii) no Substantial Adverse Development shall have occurred with
respect to Bancorp or its Subsidiaries which has not been waived by Bankshares
and Bank or deemed waived pursuant to Section 5.10.
(viii) Bankshares shall have received from its legal counsel an
opinion, dated the Effective Time, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, the merger will for
federal income tax purposes constitute a reorganization within the meaning of
Section 368, or any successor thereto, of the Code and that (except with respect
to holders of Bankshares Stock who exercise dissenters' rights and except for
cash payments in lieu of a fractional share interest), (i) no gain or loss will
be recognized by a holder of Bankshares Stock upon conversion in the Merger of
Bankshares Stock into Bancorp Purchase Stock, (ii) the basis of Bancorp Purchase
Stock to be received in the Merger by a holder of Bankshares Stock will be the
same as such holder's basis in the Bankshares Stock exchanged therefor, and
(iii) the holding period of Bancorp Purchase Stock to be received in the Merger
by a
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holder of Bankshares Stock will include the period during which such holder held
the Bankshares Stock exchanged therefor, provided that such Bankshares Stock was
held as a capital asset immediately prior to the consummation of the Merger; in
rendering such opinion, such tax advisor may rely upon certificates of officers
of Bankshares and Bancorp as to factual matters.
Bankshares and Bank may waive any condition specified in this ss.6.3
if it executes a writing so stating at or prior to the Closing.
7. TERMINATION TERMINATION.
SECTION 7.1. TERMINATION OF AGREEMENT. Any of the Parties may
terminate this Agreement with the prior authorization of its board of directors
(whether before or after stockholder approval) as provided below:
(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing Date;
(ii) Bancorp or Acquisition may terminate this Agreement by giving
written notice to Bankshares and Bank at any time prior to the Closing Date in
the event Bankshares or Bank is in breach of any representation, warranty, or
covenant contained in this Agreement in any material respect and Bankshares and
Bank may terminate this Agreement by giving written notice to Bancorp and
Acquisition at any time prior to the Closing Date in the event Bancorp or
Acquisition is in breach of any representation, warranty, or covenant contained
in this Agreement in any material respect. Each Party shall have the right to
cure any such breach within fifteen (15) days of receipt of written notice of
such breach or within any such longer period mutually agreed to in writing by
the Parties hereto ("Cure Period") and the termination rights provided above may
not be exercised until after written notice of breach is given and the
applicable Cure Period has expired;
(iii) if a Substantial Adverse Development shall have occurred with
regard to Bancorp or Acquisition, Bankshares may terminate this agreement by
giving written notice to Bancorp and Acquisition and if a Substantial Adverse
Development shall have occurred with
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regard to Bankshares, Bancorp or Acquisition may terminate this agreement by
giving written notice to Bankshares and Bank;
(iv) Bancorp, Acquisition, Bank or Bankshares may terminate this
Agreement by giving written notice to the other Parties at any time prior to the
Closing Date in the event the Bankshares Fairness Opinion is withdrawn;
(v) either Party may terminate this Agreement by giving written
notice to the other Party within five (5) days after the Special Bankshares
Meeting, in the event this Agreement or the Merger fail to receive the Requisite
Bankshares Stockholder Approval;
(vi) Bancorp or Acquisition may terminate this Agreement by giving
written notice to Bankshares and Bank at any time prior to the Closing Date if
the Closing shall not have occurred on or before March 31, 1997 by reason of the
failure of any condition precedent under ss.6.1 or 6.2 hereof (unless the
failure results primarily from Bancorp or Acquisition itself breaching any
representation, warranty, or covenant contained in this Agreement), provided,
however, that Bancorp and Acquisition shall not have the right to terminate this
Agreement pursuant to this paragraph during the pendency of any Cure Period; or
(vii) Bankshares or Bank may terminate this Agreement by giving
written notice to Bancorp and Acquisition at any time prior to the Closing Date
if the Closing shall not have occurred on or before March 31, 1997 by reason of
the failure of any condition precedent under ss.6.1 or 6.3 hereof (unless the
failure results primarily from Bankshares or Bank itself breaching any
representation, warranty, or covenant contained in this Agreement), provided,
however, that Bankshares and Bank shall not have the right to terminate this
Agreement pursuant to this paragraph during the pendency of any Cure Period.
SECTION 7.2. EFFECT OF TERMINATION. If any Party terminates this
Agreement pursuant to ss.7.1 above, all obligations of the Parties hereunder
shall terminate without any liability of any Party to any other Party (except
for any liability of any Party then in breach);
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provided, however, that the provisions of ss.ss. 3.11, 4.7, 5.9 (as to the
confidentiality provisions only), 5.12, and Article 8 shall survive any such
termination.
8. MISCELLANEOUS.
SECTION 8.1. SURVIVAL. None of the representations, warranties,
covenants and agreements of the Parties contained in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive Closing, except
the provisions of Articles 1 and 2 and ss.ss.3.11, 4.7, 5.13, 5.15, 5.16, 5.17,
5.18, and Article 8.
SECTION 8.2. PRESS RELEASES AND ANNOUNCEMENTS. No Party shall issue
any press release or announcement relating to the subject matter of this
Agreement without the prior written approval of the other Parties; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by law or regulation (in which case the disclosing Party will advise
the other Parties prior to making the disclosure).
SECTION 8.3. THIRD PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any person other than the Parties and their
respective successors and permitted assign, except with respect to those third
parties as specifically contemplated in Sections 5.13 and 5.17 and, with respect
to all Bankshares stockholders, Section 5.16.
SECTION 8.4. ENTIRE AGREEMENT. This Agreement (including the
documents referred to herein) constitutes the entire Agreement among the Parties
and supersedes any prior understandings, Agreements, or representations by or
among the Parties, written or oral, that may have related in any way to the
subject matter hereof, including, without limitation, the confidentiality
agreement and the letter of intent between Bankshares, Bank, Bancorp and 1st
United.
SECTION 8.5. SUCCESSION AND ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without the
prior written approval of the other Parties.
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SECTION 8.6. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
SECTION 8.7. HEADINGS. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 8.8. NOTICES. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if it is sent
by registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to Bankshares:
Mr. Louis A. Gaeta, Jr.
Park Bankshares, Inc.
1015 - 10th Street
Lake Park, Florida 33403-2196
If to Bank:
Mr. Louis A. Gaeta, Jr.
First National Bank of Lake Park
1015 - 10th Street
Lake Park, Florida 33403-2196
With Copy To:
Michael V. Mitrione, Esq.
Gunster, Yoakley, Valdes-Fauli & Stewart, P.A.
Phillips Point - East Tower
777 S. Flagler Drive
Suite 500
West Palm Beach, Florida 33401
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If to Bancorp:
980 North Federal Highway
Boca Raton, Florida 33432
Attn: Warren S. Orlando
If to Acquisition:
980 North Federal Highway
Boca Raton, Florida 33432
Attn: Warren S. Orlando
With Copy to:
Akerman, Senterfitt & Eidson, P.A.
777 S. Flagler Drive
Suite 900 East
West Palm Beach, Florida 33401
Attn: Russell T. Kamradt, Esq.
Each such notice shall be deemed delivered on the date upon which the return
receipt is signed or delivery is refused or the notice is designated by the
postal authorities as not deliverable, as the case may be, if mailed. Any Party
may give any notice, request, demand, claim, or other communication hereunder
using any other means (including personal delivery, expedited courier, messenger
service, TELECOPY, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the individual for
whom it is intended or written proof of delivery or refusal of delivery is
provided by an independent third party delivering same. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving other Parties notice in the manner
herein set forth.
SECTION 8.9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the State of Florida.
SECTION 8.10. AMENDMENTS AND WAIVERS. The Parties may mutually amend
any provision of this Agreement at any time prior to the Closing Date with the
prior authorization of
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their respective boards of directors; provided, however, that any amendment
effected subsequent to stockholder approval will be subject to the restrictions
contained in the Florida Acts. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by all of the
Parties. No waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
SECTION 8.11. SEVERABILITY. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
SECTION 8.12. EXPENSES. Except as otherwise provided in this
ss.8.12, all costs and expenses including, without limitation, filing,
registration and application fees and fees and expenses of its own financial and
other consultants, investment bankers, accountants and counsel incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the Party incurring such costs and expenses. Notwithstanding the
foregoing, in the event of breach of this Agreement by a Party, the
nonprevailing Party shall pay all such costs and
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expenses of all Parties, including, without limitation, those incurred in
litigation brought to enforce this Agreement or brought by reason of a breach of
this Agreement. When used herein the term legal fees and expenses shall mean
legal fees and expenses at all levels through final appeal. Nothing contained in
this ss.8.12 shall constitute an agreement for liquidated damages or otherwise
limit the rights or remedies of the nonbreaching Parties. The Parties agree that
irreparable damage would be suffered by reason of a breach of this Agreement and
that the Parties shall be entitled to injunctive relief to prevent or cure such
breach and specifically enforce the terms of this Agreement all without the
necessity of posting a bond and in addition to any other remedies provided at
law or in equity.
8.13. CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the Parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any Party.
Any reference to any federal, state, local or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context otherwise requires.
9. INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first below written.
1ST UNITED BANCORP
By:___________________________________
Title:________________________________
Date:_________________________________
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PARK ACQUISITION CO.
By:___________________________________
Title:________________________________
Date:_________________________________
FIRST NATIONAL BANK OF LAKE PARK
By:___________________________________
Title:________________________________
Date:_________________________________
PARK BANKSHARES, INC.
By:___________________________________
Title:________________________________
Date:_________________________________
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