SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Exchange Act of 1934
Date of Report August 1, 1997
(Date of earliest event reported)
SIMMONS FIRST NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Arkansas 0-6253 71-0407808
(State or other (Commission (I.R.S. employer
jurisdiction of file number) identification No.)
incorporation
or organization)
501 Main Street, Pine Bluff, Arkansas 71601
(Address of principal executive offices) (Zip Code)
(501) 541-1000
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 1, 1997, Simmons First National Corporation ("SFNC"), acquired
all of the issued and outstanding common stock of First Bank of Arkansas,
Russellville and First Bank of Arkansas, Searcy from First Commercial
Corporation ("Seller") pursuant to separate Stock Purchase Agreements, both
dated March 21, 1997 ("Agreements"), for an aggregate cash purchase price of
$53,000,000.00, of which $41,000,000.00 is attributable to the purchase of stock
of First Bank of Arkansas, Russellville and $12,000,000.00 is attributable to
the purchase of the stock of First Bank of Arkansas, Searcy. The banks were
offered to interested bidders in a private bid procedure during the first
quarter of 1997. SFNC was the successful bidder on both banks being offered by
the Seller which culminated in the execution of the Agreements. Simultaneously
with the completion of the purchase transaction, the names of First Bank of
Arkansas, Russellville and First Bank of Arkansas, Searcy were changed to
Simmons First Bank of Russellville ("SFBR") and Simmons First Bank of Searcy
("SFBS"), respectively.
SFBR is an Arkansas state bank having its principal office and 2 operating
branch offices in Russellville, Arkansas, with additional operating branch
offices in Clarksville, Hector and London, Arkansas. As of August 1, 1997, SFBR
had total assets of $263,413,000, deposits of $212,333,000, and total capital of
$41,000,000.
Prior to the consummation of the transaction, two bank branches, located in
Russellville and Dover, Arkansas, were removed from the bank and transferred to
a banking subsidiary of the Seller. The deposits associated with the transferred
branches which were assumed by a banking subsidiary of the Seller aggregated
$39,064,000 were offset by the transfer of the loans associated with the
transfered branches in the aggregate sum of $30,355,000, fixed assets in the
aggregate sum of $651,000 and cash in the aggregate sum of $8,058,000.
SFBS is an Arkansas state bank having its principal office and 2 operating
branch offices in in Searcy, Arkansas, with an additional operating branch
office in Kensett, Arkansas. As of August 1, 1997, SFBS had total assets of
$98,032,000, deposits of $78,746,000, and total capital of $12,000,000.
The funds for the consummation of the acquisition transactions were derived
from three sources: (1)proceeds of a loan in the amount of made in the ordinary
course of business from SunTrust Bank, Nashville, N.A., $20,000,000,(2) proceeds
from the issuance of debentures of SFNC issued pursuant to the Simmons First
Capital Trust Preferred Securities Offering, $17,250,000 and (3) the
corporation's existing liquid assets, $15,750,000.
SFNC plans to continue the respective banking operations of SFBR and SFBS
at their present locations and may consider expanding to additional locations in
the future.
As a result of the consummation of the Agreements, SFNC had consolidated
assets of approximately $1.29 billion, consolidated deposits of $1.05 billion,
and consolidated stockholders' equity of $108 million. In addition to SFBR and
SFBS, SFNC wholly owns and operates five other bank subsidiaries with their
respective principal offices located in Pine Bluff, Jonesboro, Dumas, Lake
Village and Rogers, Arkansas.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The combined financial statements of First Bank of Arkansas, Russellville
and First Bank of Arkansas, Searcy, as of December 31, 1996 (audited) and March
31, 1997 (unaudited) and for the periods then ended, the statements of income
and cash flows for the three (3) months ended March 31, 1996 (unaudited) and the
pro forma condensed combining financial information of SFNC, First Bank of
Arkansas, Russellville and First Bank of Arkansas, Searcy, for the year ended
December 31, 1996 and as of and for the quarter ended March 31, 1997, contained
in the Company's Current Report on Form 8-K, filed June 6, 1997, is incorporated
herein by reference.
(2) Exhibits.
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
- ------------ ----------------------
2 (i) Stock Purchase Agreement by and between First Commercial
Corporation and Simmons First National Corporation, dated as of
March 21, 1997, (relating to First Bank of Arkansas,
Russellville).
2 (ii) Stock Purchase Agreement by and between First Commercial
Corporation and Simmons First National Corporation, dated as of
March 21, 1997, (relating to First Bank of Arkansas, Searcy).
2 (iii) First Letter Amendment, dated April 30, 1997.
2 (iv) Second Letter Amendment, dated August 1, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SIMMONS FIRST NATIONAL CORPORATION
(REGISTRANT)
By /s/ J. Thomas May
J. Thomas May, Chairman
and Chief Executive Officer
Date: August 11, 1997.
EXHIBITS
EXHIBIT 2 (i)
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
FIRST COMMERCIAL CORPORATION
AND
SIMMONS FIRST NATIONAL CORPORATION
Dated as of March 21, 1997
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") dated as of March 21, 1997, by
and between First Commercial Corporation, an Arkansas corporation, ("Seller")
and Simmons First National Corporation, an Arkansas corporation ("SFNC").
WHEREAS, Southwest Bancshares, Inc. ("SWB") is the owner of 10,000 shares
of $10.00 par value voting common stock ("Bank Stock"), being all of the
outstanding voting common stock, of First Bank of Arkansas, Russellville,
Arkansas ("FBAR"), an Arkansas banking association having its principal place of
business at 800 North Arkansas Avenue, Russellville, Arkansas;
WHEREAS, SWB and Seller have entered into a merger agreement pursuant to
which SWB will be merged into Seller and which transaction is expected to be
consummated prior to the consummation of the sale and purchase of the Bank
Stock;
WHEREAS, SFNC has submitted a definitive bid to purchase the Bank Stock
from Seller and Seller hereby accept SFNC's bid to purchase the Bank Stock in
the manner provided herein.
WHEREAS, Seller and SFNC believe that the sale and purchase of the Bank
Stock in the manner provided by, and subject to the terms and conditions set
forth in, this Agreement and all exhibits, schedules and supplements hereto are
desirable and in the best interests of their respective institutions and
shareholders;
WHEREAS, Seller is making certain representations, warranties and
indemnities herein to induce SFNC to enter into this Agreement; and
WHEREAS, the respective boards of directors of SFNC and Seller have
approved the proposed transactions substantially on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE I
SALE OF STOCK; CLOSING
Section 1.1 Bank Stock. Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall sell, transfer and deliver to SFNC, and
SFNC shall purchase, the Bank Stock.
Section 1.2 Purchase Price. (a) The purchase price (the "Purchase
Price") for the Bank Stock shall be $41,000,000.00.
Section 1.3 Closing. Unless this Agreement shall have been terminated and
the transactions herein contemplated shall have been abandoned pursuant to the
provisions of Section 8.1, and subject to the conditions of Article V, the
closing (the "Closing") of the purchase and sale of the Bank Stock shall take
place at 10:00 a.m., Little Rock, Arkansas time, at a mutually agreeable
location and on a mutually agreeable date within forty (40) days after receipt
of all regulatory approvals, the expiration of all waiting periods and the
satisfaction of all conditions to Closing under this Agreement; provided,
however, that the Closing Date shall not be later than the third (3rd) calendar
day in any month. The date and effective time of the Closing are herein referred
to as the "Closing Date". For purposes of this Agreement, the purchase and sale
of the Bank Stock shall be deemed to have been effectuated immediately prior to
the opening of business on the date on which the Closing shall occur.
Section 1.4 Closing Deliveries. (a) At the Closing, Seller shall:
(i) deliver to SFNC certificates representing the Bank Stock, duly
endorsed for transfer to SFNC, which shall transfer to SFNC good title to the
Bank Stock, free and clear of all Encumbrances;
(ii) deliver to SFNC such other documents, including officers'
certificates and opinions of counsel, as may be required by this Agreement or
reasonably requested by SFNC; and
(iii) if the net settlement provided under Section 4.6 (g) has not
occurred prior to Closing and a transfer of funds from Seller and its affiliates
to FBAR is required, cause to be transferred to FBAR, pursuant to the
instructions of SFNC, cash in the amount of the net settlement under Section 4.6
(g) in immediately available funds.
(b) At the Closing, SFNC shall:
(i) cause to be transferred to such account as Seller shall specify
cash in the amount of the Purchase Price in immediately available funds;
(ii) deliver to Seller such other documents, including officers'
certificates and opinions of counsel, as may be required by this Agreement or
reasonably requested by Seller; and
(iii) if the net settlement provided under Section 4.6 (g) has not
occurred prior to Closing and a transfer of funds from FBAR to Seller and its
affiliates is required, cause FBAR to transfer to Seller and its Affiliates,
pursuant to the instructions of Seller, cash in the amount of the net settlement
under Section 4.6 (g) in immediately available funds.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby makes the representations and warranties set forth in this
Article II to SFNC. Seller will deliver to SFNC subject to its approval and
acceptance, the Schedules to this Agreement referred to in this Article II prior
to the date Seller executes this Agreement. Seller agrees to provide SFNC (a)
supplemental Schedules reflecting any changes to Schedules previously delivered,
which changes occur between the date of such previously delivered Schedules and
the date of the Closing and could reasonably be expected to have a Material
Adverse Effect on or with respect to the transactions contemplated hereby
promptly upon having knowledge of such changes, and (b) at the Closing
supplemental Schedules reflecting any other changes to previously delivered
Schedules, which changes occur between the date of such previously delivered
Schedules and the date of the Closing.
Section 2.1 Organization and Qualification. (a) Seller is an Arkansas
corporation and bank holding company under the Bank Holding Company Act of 1956,
as amended (the "BHCA"), and is duly organized, validly existing and in good
standing under the laws of the State of Arkansas and all laws, rules and
regulations applicable to bank holding companies. FBAR is an Arkansas chartered
banking association, duly organized, validly existing and in good standing under
the laws of the State of Arkansas and is a member bank of the Federal Reserve
System in good standing. Each of Seller and FBAR has all requisite corporate
power and authority to carry on its business as now being conducted and to own,
lease and operate its properties and assets as now owned, leased or operated,
and to enter into and carry out its obligations under this Agreement.
(b) FBAR has no Subsidiaries;
(c) The copies of the Articles of Incorporation and the Bylaws of FBAR
previously furnished to SFNC are true, correct and complete and reflect all
amendments thereto as of the date hereof.
Section 2.2 Capitalization; Other Securities. (a) The authorized capital
stock of FBAR consists solely of 10,000 shares of voting common stock, $10.00
par value per share, all of which are issued and outstanding. SWB owns 100% of
the issued and outstanding voting common stock of FBAR.
(b) All of the shares of the Bank Stock are duly authorized, validly
issued, fully paid and, except pursuant to applicable banking laws,
nonassessable. Seller has no knowledge that any Governmental Authority has
threatened or considered any assessment against holders of shares of the Bank
Stock. All of the shares of the Bank Stock are (i) free and clear of any
Encumbrance, (ii) free of preemptive rights and restrictions applicable to the
payment of dividends on such shares except pursuant to applicable banking laws
and regulations and (iii) free of irrevocable proxies with respect to such
shares and any outstanding or authorized subscriptions, options, warrants,
calls, convertible securities, rights, or other agreements or commitments of any
kind restricting the transfer of, requiring the issuance or sale of, or
otherwise relating to any of such shares. All dividends on any shares of the
Bank Stock declared prior to the date hereof have been paid.
(c) FBAR has no equity ownership in any other Person, except shares in
Governmental Authorities as required to perform its ordinary business
operations.
(d) The certificates representing the Bank Stock to be delivered to SFNC at
the Closing, and the signatures on the endorsements thereof or stock powers
delivered therewith, will be valid and genuine. Such stock certificates,
endorsements, stock powers and other documents to be delivered to SFNC on the
date of the Closing will transfer to and vest in SFNC ownership of the Bank
Stock, free and clear of any Encumbrance.
(e) No stock transfer taxes or other similar taxes are or will be required
to be paid by SFNC with respect to the transfer of the Bank Stock.
Section 2.3 Authority Relative to the Agreement. Seller has full corporate
power and authority, and no further corporate proceedings on the part of Seller
are necessary, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, all of which have been duly and validly
authorized by the Board of Directors of Seller. When this Agreement is executed
and delivered by Seller, it shall constitute a duly authorized, valid, legally
binding and enforceable obligation of the Seller, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally and general equitable principles, and
subject to the approval of regulatory agencies and other governmental
authorities having authority over Seller or FBAR as may be required by statute
or regulation. Neither Seller nor FBAR is in violation of, or default under, its
Articles of Incorporation, Bylaws, or any agreement, document or instrument
under which either Seller or FBAR is obligated or bound, or any law, order,
judgment, injunction, award, decree, statute, rule, ordinance or regulation
applicable to Seller or any of its Affiliates, the violation or breach of which
could reasonably be expected to have a Material Adverse Effect on FBAR taken as
a whole or to prevent, delay or make illegal the consummation of the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement in its entirety and the consummation of all the transactions
contemplated hereby will not conflict with, or result in any violation or
default under, the Articles of Incorporation of either Seller or FBAR or any
agreement, document or instrument by which either Seller or FBAR is obligated or
bound, or any law, order, judgment, injunction, award, decree, statute, rule,
ordinance, or regulation applicable to Seller or any of its Affiliates, the
violation or breach of which could reasonably be expected to have a Material
Adverse Effect on FBAR taken as a whole or to prevent, delay or make illegal the
consummation of the transactions contemplated hereby.
Section 2.4 No Violation. Neither the execution, delivery nor performance
of this Agreement in its entirety, nor the consummation of all the transactions
contemplated hereby, following the receipt of such approvals as may be required
from the Board of Governors of the Federal Reserve System ("FRB"), Arkansas
State Bank Department ("ASBD") or other applicable regulatory authorities will
(i) violate any law, order, judgment, injunction, award, decree, statute, rule,
ordinance or regulation applicable to either Seller or FBAR, or (ii) be in
conflict with, result in a breach or termination of any provision of, cause the
acceleration of the maturity of any debt or obligation pursuant to, constitute a
default (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of any Encumbrance upon any property or assets
of FBAR pursuant to, any terms, conditions or provisions of any note, license,
instrument, indenture, mortgage, deed of trust or other agreement or
understanding, or any other restriction of any kind or character, to which FBAR
is a party or by which any of its assets or properties are subject or bound.
Except as disclosed in Schedule 2.9, there are no proceedings pending or, to the
knowledge of either Seller or FBAR, threatened against either Seller or FBAR or
involving the Bank Stock, which could reasonably be expected to result in
liability to SFNC or FBAR upon the consummation of the transactions contemplated
hereby or which could reasonably be expected to prevent, delay or make illegal
such consummation. Except as contemplated hereby, the corporate existence,
business, organization, assets, licenses, permits, authorizations and contracts
of FBAR will not be terminated or impaired by reason of the execution, delivery
or performance by Seller of this Agreement or the consummation by Seller of the
transactions contemplated hereby, assuming receipt of all required regulatory
approvals.
Section 2.5 Consents and Approvals. No prior consent, approval or
authorization of, or declaration, filing or registration with, any Person is
required of either Seller or FBAR in connection with the execution, delivery and
performance by Seller of this Agreement and the transactions contemplated hereby
or the resulting change of control of FBAR, except for any necessary regulatory
approvals.
Section 2.6 Regulatory Reports. FBAR has filed all reports, registrations
and statements, together with any amendments required to be made thereto, that
are required to be filed with the FRB, the ASBD, the Federal Deposit Insurance
Corporation (the "FDIC"), or any other regulatory authority having jurisdiction
over FBAR, and such reports, registrations and statements are true and correct
in all material respects.
Section 2.7 Financial Statements. (a) Seller has provided SFNC with a true
and complete copy of the reports of income and condition of FBAR for the year
ended December 31, 1996 prepared in accordance with generally accepted
accounting principles, and the unaudited balance sheets and statements of income
for the year ended December 31, 1996 and two months ended February 28, 1997
prepared internally in accordance with prior practices (collectively, the "Bank
Financial Statements"). The Bank Financial Statements are complete andaccurately
present the financial condition of FBAR in all material respects as of their
respective dates. The accounting records underlying the Bank Financial
Statements accurately and fairly reflect in all material respects the
transactions of FBAR.
(b) FBAR has no material liability or obligation, accrued, absolute,
contingent or otherwise and whether due or to become due (including, without
limitation, unfunded obligations under any Welfare Benefit Plan, as defined
below) or liabilities for federal, state or local taxes or assessments or
liabilities under any agreement that is not reflected in or disclosed in the
Bank Financial Statements, except (i) those liabilities and expenses incurred in
the ordinary course of business and consistent with prudent business practices
since the date of the Bank Financial Statements and (ii) as disclosed on
Schedule 2.7(b).
Section 2.8 Absence of Certain Changes. Except to the extent set forth on
Schedule 2.8 or attributable to the transactions described in Section 4.6, since
December 31, 1996 (the "Balance Sheet Date"), FBAR has not:
(a) made any amendment to its Articles of Incorporation or Bylaws or
changed the character of its business in any material manner;
(b) suffered any Material Adverse Effect;
(c) entered into any agreement, commitment or transaction except in the
ordinary course of business and consistent with prudent banking practices;
(d) except for regular salary increases and incentive compensation payments
granted in the ordinary course of business and consistent with prior practices,
granted any increase in compensation or paid or agreed to pay or accrue any
bonus, percentage compensation, service award, severance payment or like benefit
to or for the credit of any former shareholder, director, officer, employee or
agent, or entered into any employment or consulting contract or other agreement
with any director, officer or employee, or adopted, amended or terminated any
pension, employee welfare, retirement, stock purchase, stock option, stock
appreciation rights, termination, severance, income protection, golden
parachute, savings or profit-sharing plan (including trust agreements and
insurance contracts embodying such plans), any deferred compensation or
collective bargaining agreement, any group insurance contract or any other
incentive, welfare or employee benefit plan or agreement maintained by FBAR for
the directors, employees or former employees of FBAR ("Employee Benefit Plans")
which have not been previously disclosed to SFNC;
(e) issued, reserved for issuance, granted, sold or authorized the issuance
of any shares of its capital stock or subscriptions, options, warrants, calls,
rights or commitments of any kind relating to the issuance or sale of, or
conversion into, shares of its capital stock;
(f) made any or acquiesced with any material change in any accounting
methods, principles or practices, other than any such changes as might be
required to conform to generally accepted accounting principles; or
(g) agreed, whether in writing or otherwise, to take any action the
performance of which would make the representations contained in this Article II
not true in any material respect as of the Closing.
Section 2.9 Litigation. Other than as disclosed on Schedule 2.9, there are
no, and FBAR knows of no basis for, actions, suits, claims, investigations,
reviews or other proceedings pending or, to the knowledge of either Seller or
FBAR, threatened against Seller or FBAR or involving any of their respective
directors, officers, properties or assets, at law or in equity, or before or by
any foreign, federal, state, municipal or other governmental court, department,
commission, board, bureau, agency or other instrumentality, or any board of
arbitration or similar entity which could reasonably be expected to prevent,
delay or make illegal the transactions contemplated by this Agreement or which
could reasonably be expected to have a Material Adverse Effect on FBAR taken as
a whole.
Section 2.10 Tax Matters. FBAR (or the affiliated group of which it is a
member) has duly and timely filed all tax returns required to be filed by it
involving a tax liability of FBAR or other potential material detriment to FBAR
for failure to file (the "Filed Returns"). Each of the Filed Returns is true and
correct in all material respects. FBAR (or the affiliated group of which it is a
member) has paid, or has established adequate reserves for the payment of, all
federal income taxes, all state and local income taxes and all franchise,
property, sales employment, foreign or other taxes required to be paid with
respect to each such bank and the periods covered by the Filed Returns. FBAR has
not had any tax deficiency proposed or assessed against it and neither FBAR nor
any Person acting on its behalf has executed any waiver of or extended the
statue of limitations on the audit of any tax return or the assessment or
collection of any tax. With respect to the periods for which returns have not
yet been filed, FBAR (or the affiliated group of which it is a member) has
established adequate reserves for the payment of all federal income taxes, all
state and local income taxes and all franchise, property, sales, employment,
foreign or other taxes owed or to be owed by it. FBAR has 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. 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
such taxes or charges.
Section 2.11 Employee Benefit Plans. With respect to all Employee Benefit
Plans in which employees of FBAR participate, the following are true and
correct:
(a) Schedule 2.11(a) lists each employee welfare benefit plan (as such term
is defined in Section 3(1) of the employee Retirement Income Security Act of
1974, as amended ("ERISA")), maintained by FBAR, or to which FBAR contributes or
is required to contribute (such employee welfare benefit plans being hereinafter
collectively referred to as the "Welfare Benefit Plans");
(b) Schedule 2.11(b) lists each employee pension benefit plan (as such term
is defined in Section 3(2) of ERISA and not exempted under Section 4(b) or 201
of ERISA) maintained by FBAR or to which FBAR contributes or is required to
contribute (such employee pension benefit plans being hereinafter collectively
referred to as the "Pension Benefit Plans");
(c) With respect to each Pension Benefit Plan that is intended to be
tax-qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), a favorable determination letter as to the qualification
under the Code of each such Pension Benefit Plan has been issued;
(d) Each Welfare Benefit Plan and Pension Benefit Plan has been
administered in substantial compliance with the requirements of ERISA and, to
the knowledge of Seller, there are no transactions involving such Welfare
Benefit Plans or Pension Benefit Plans which are prohibited under either ERISA
or the Code;
(e) True and complete copies of each Welfare Benefit Plan and each Pension
Benefit Plan, or related trust agreements and the most recent determination
letter issued by the Internal Revenue Service with respect to each Pension
Benefit Plan, have been made available to SFNC by Seller; and
(f) All Pension Benefit Plans in which the employees of FBAR are eligible
to participate or to which FBAR contributes will be merged or terminated upon
the mutual agreement of SFNC and Seller on or prior to the Closing Date and
Seller shall use its best efforts to obtain a favorable determination letter
from the Internal Revenue Service regarding such termination.
Section 2.12 Employment Matters. Except as set forth on Schedule 2.12, FBAR
is not a party to any oral or written contracts of employment, agreements
granting benefits or rights, including retirement or incentive compensation
benefits, to present or former employees or any collective bargaining agreement.
FBAR is in compliance in all material respects with all applicable laws
respecting employment. FBAR is not to its knowledge engaged in any unfair labor
practice. Seller has disclosed the names of all personnel employed by FBAR whose
annual compensation (including bonuses and the like) exceeds $20,000 and the
total annual compensation of each such person. Except as described in Schedule
2.12, FBAR has not entered into or agreed to enter into any employment agreement
or agreement not to compete or consulting agreement with or agreement for the
purchase of the services of any officer or employee. Full and complete copies of
all such agreements and all amendments described in Schedule 2.12 have been
delivered to SFNC.
Section 2.13 Leases, Licenses, Contracts and Agreements. Schedule 2.13 sets
forth a materially accurate and complete description of all leases, subleases,
licenses, contracts and agreements to which FBAR is a party, or by which FBAR is
bound, which obligate FBAR to pay in the aggregate under any such contract an
amount in excess of $50,000 over the entire term of any such agreement (or
contracts of a similar nature which in the aggregate under all such contracts
obligate or may obligate FBAR in the aggregate under any such contracts for an
amount in excess of $250,000 over the respective entire terms of such contracts
(the "Contracts"). For the purposes of this Agreement, the term "Contracts"
shall be deemed not to include loans or loan commitments (including letters of
credit) made by, repurchase agreements made by, bankers acceptances issued by or
deposits accepted by, FBAR. To Seller's and FBAR's knowledge, all of the
Contracts are legal, valid and binding obligations of the parties to the
Contracts enforceable in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
relating to creditors' rights generally and to general equitable principles, to
the extent necessary to give FBAR all material benefits intended to be provided
to FBAR by such Contracts. To Seller's and FBAR's knowledge, there are no
existing defaults by FBAR under the Contracts and no termination, condition or
other event has occurred which could reasonably be expected to constitute a
default under the Contracts, either of which could reasonably be expected to
have a Material Adverse Effect upon FBAR taken as a whole.
Section 2.14 Related Party Transactions. Except as disclosed in Schedule
2.14, there are no agreements, instruments, commitments, extensions of credit,
tax sharing, or allocation agreements, service arrangements or other contractual
agreements of any kind, between or among FBAR, whether on its own behalf or in
its capacity as trustee or custodian for the funds of any employee benefit plan
(as defined in ERISA), and any of its Affiliates.
Section 2.15 Compliance with Laws. Neither FBAR nor Sellers is in default
in respect to or in violation of any judgment, order, writ, injunction, or
decree of any court or any statute, law, ordinance, rule, order, or regulation
of any governmental department, commission, board, bureau, agency or
instrumentality which default or violation could reasonably be expected to have
a Material Adverse Effect on FBAR taken as a whole.
Section 2.16 Insurance. FBAR has in effect the insurance coverage
(including fidelity bonds) described in Schedule 2.16 and has had similar
insurance in force for the last five (5) years. FBAR has not received any
notification from any insurance carrier denying or disputing any pending claim
made by it or on its behalf, denying or disputing any coverage for any such
claim, denying or disputing the amount of any such claim.
Section 2.17 Environmental Compliance. To Seller's knowledge and except as
set forth on Schedule 2.17, FBAR is in compliance with all material federal,
state and local laws, regulations, and ordinances relating to the environment
and to the discharge of matter into the air, ground or water applicable to its
properties. There are no actions, suits or proceedings pending or, to Seller's
knowledge, threatened against FBAR by or before any federal, state, or local
court, or governmental authority or agency, concerning any noncompliance or
alleged noncompliance with such laws, regulations, and ordinances.
Section 2.18 Brokers. Seller shall be responsible for the payment of all
fees, if any, due Alex. Brown & Sons Incorporated related to the transactions
contemplated by this Agreement.
Section 2.19 Regulatory Actions. There are no bank regulatory actions or
proceedings pending or, to the knowledge of Seller or FBAR, threatened against
FBAR. FBAR is not subject to any formal or informal agreement, memorandum of
understanding, enforcement action with, or any type of financial assistance by,
any bank regulatory authority having jurisdiction over it.
Section 2.20 Title to Properties; Encumbrances. Except as set forth in the
Bank Financial Statements, FBAR has unencumbered, good and marketable title to
all its properties and assets reflected in the Bank Financial Statements except
for (i) those properties and assets disposed of for fair market value in the
ordinary course of business and consistent with prudent banking practice since
the date of the Bank Financial Statements, (ii) assets acquired in connection
with a debt previously contracted which, in the aggregate for FBAR, have a value
of less than $150,000 and (iii) those assets and liabilities transferred
pursuant to Section 4.6 hereof. Schedule 2.20 contains a complete and accurate
list of all locations (identified by address, owner/operator, type of facility,
and period of time owned, leased or used by FBAR) of all real property that FBAR
presently owns, leases or uses. All real property and tangible personal property
owned or used by FBAR is in good condition, normal wear and tear excepted, and
is in good operating order.
Section 2.21 Representations Not Misleading. No representation or warranty
by Seller in this Agreement, nor any exhibit or schedule furnished or made
available to SFNC by or on behalf of Seller under and pursuant to, or in
anticipation of, this Agreement, contains or will contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SFNC
SFNC hereby makes the representations and warranties set forth in this
Article III to Seller.
Section 3.1 Organization and Authority. SFNC is an Arkansas corporation and
bank holding company under the BHCA, and is duly organized, validly existing,
and in good standing under the laws of the State of Arkansas and all laws, rules
and regulations applicable to bank holding companies, and has all requisite
corporate power and authority to conduct its business as now conducted, to own,
lease and operate its properties and assets as now owned, leased or operated,
and to enter into and carry out its obligations under this Agreement.
Section 3.2 Investment Intent. SFNC is acquiring the Bank Stock for its own
account, for investment purposes only and not with a view to or with the present
intention of making any distribution of the Bank Stock.
Section 3.3 Authority Relative to Agreement. SFNC has full corporate power
and authority, and no further corporate proceedings on the part of SFNC are
necessary to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by SFNC and is a duly authorized, valid, legally binding and
enforceable obligation of SFNC, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to creditors' rights
generally and general equitable principles, and subject to such shareholder
approvals and such approval of regulatory agencies and other governmental
authorities having authority over SFNC as may be required by statute or
regulation. SFNC is not in violation of, or default under, its Articles of
Incorporation, Bylaws or any agreement, document or instrument under which SFNC
is obligated or bound, or any law, order, judgment, injunction, award, decree,
statute, rule, ordinance or regulation applicable to SFNC or any of its
Subsidiaries, the violation or breach of which could reasonably be expected to
have a Material Adverse Effect on SFNC.
Section 3.4 No Violation. Neither the execution, delivery nor performance
of this Agreement in its entirety, nor the consummation of all the transactions
contemplated hereby, following the receipt of such regulatory approvals as may
be required from the ASBD, the FRB or other regulatory authorities will (i)
violate (with or without the giving of notice or passage of time) any law,
order, writ, judgment, injunction, award, decree, rule, statute, ordinance or
regulation applicable to SFNC or any of its Subsidiaries or (ii) be in conflict
with, result in a breach or termination of any provision of, cause the
acceleration of the maturity of any debt or obligation pursuant to, constitute a
default (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of any security interest, lien, charge or other
encumbrance upon any property or assets of SFNC pursuant to, any terms,
conditions or provisions of SFNC's Articles of Incorporation or Bylaws, or any
note, license, instrument, indenture, mortgage, deed of trust or other
agreement, document, instrument or understanding, or any other restriction of
any kind or character, to which SFNC is a party or by which any of their assets
or properties are obligated or bound. There are no proceedings pending or, to
the knowledge of SFNC, threatened, against SFNC, at law or in equity, or before
any foreign, federal, state, municipal or other governmental court, department,
commission, board, bureau, agency, instrumentality or other Person, which could
reasonably be expected to result in liability to Seller on the consummation of
the transactions contemplated hereby, or which could reasonably be expected to
prevent or delay such consummation. Except as contemplated hereby, the corporate
existence, business organization, assets, licenses, permits, authorizations and
contracts of SFNC will not be terminated or impaired by reason of the execution,
delivery or performance by SFNC of this Agreement or the consummation by SFNC of
the transactions contemplated hereby, assuming receipt of the required
regulatory approvals.
Section 3.5 Consents and Approvals. No prior consent, approval or
authorization of, or declaration, filing or registration with, any Person is
required of or by SFNC in connection with the execution, delivery and
performance by SFNC of this Agreement and the transactions contemplated hereby,
or the resulting change in control of FBAR, except the filing of such
applications and the receipt of such regulatory approvals as may be required
from the ASBD, the FRB and other regulatory authorities.
Section 3.6 Brokers. SFNC has retained Stephens Inc. for assistance in
the negotiations of the transactions contemplated by this Agreement. SFNC
shall be responsible for the payment of all fees, costs and expenses of
Stephens Inc. related to the transactions contemplated by this Agreement.
Seller has consented to SFNC retaining Stephens Inc. for this transaction.
Section 3.7 No Misleading Statements. No representation or warranty by SFNC
in this Agreement, nor any exhibit or schedule furnished or made available to
Seller or FBAR by or on behalf of SFNC under and pursuant to, or in anticipation
of this Agreement, contains or will contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements contained
herein or therein no misleading.
Section 3.8 Financing. SFNC is in receipt of financing commitments which,
subject to the terms thereof, will allow it to consummate the transaction as
herein contemplated. SFNC has no reason to believe that the conditions stated in
the various commitments cannot be satisfied.
ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR TO CLOSING
Section 4.1 Access To, and Information Concerning, Properties and Records.
Between the date of this Agreement and the Closing, Seller shall, to the extent
permitted by law, cause FBAR to give SFNC, its legal counsel, accountants and
other representatives reasonable access, during normal business hours, to all of
FBAR's properties, books, contracts, commitments and records, and to permit
SFNC, at its own expense, to make such inspections as it may require and to
furnish to SFNC during such period all such information concerning FBAR and its
affairs as SFNC may reasonably request. All information obtained by SFNC
pursuant to this Agreement shall be held confidential by SFNC, its agents and
representatives, except as necessary to secure regulatory and other required
consents and approvals and financing. If this Agreement is terminated, SFNC will
return to FBAR all originals and copies of information obtained pursuant to this
Agreement other than those provided to Governmental Authorities. All information
provided pursuant to this Section 4.1 shall be subject to the Confidentiality
Agreement.
Section 4.2 Affirmative Covenants of Seller. During the period commencing
on the date of this Agreement through the Closing, Seller shall cause FBAR,
except as specifically otherwise contemplated by this Agreement:
(a) to operate and to conduct FBAR's business in the ordinary course of
business consistent with prudent banking practices and to provide SFNC with a
monthly balance sheet and income statement for FBAR;
(b) to preserve materially intact FBAR's corporate existence, business
organization, licenses, permits and authorizations;
(c) to comply with all material contractual obligations applicable to
FBAR's operations, except those as to which FBAR may in good faith reasonably
contest;
(d) to maintain all of FBAR's properties in good repair, order and
condition, reasonable wear and tear excepted, and maintain the insurance
coverages described in Schedule 2.16 or obtain comparable insurance coverages
from reputable insurers which, in respect to amounts, types and risks insured,
are adequate for the business conducted by FBAR and consistent with the existing
insurance coverages;
(e) in a timely manner (i) to cooperate with SFNC in satisfying the
conditions in this Agreement, (ii) to assist SFNC in obtaining as promptly as
possible all consents, approvals, authorizations, and rulings, whether
regulatory, corporate or otherwise, as are necessary for SFNC and Seller to
carry out and consummate the transactions contemplated by this Agreement,
including all consents, approvals and authorizations required by any agreement
or understanding existing at the Closing between Seller and any Governmental
Authority or other third party, (iii) to furnish information concerning FBAR not
previously provided to SFNC required for inclusion in any filings or
applications that may be necessary in that regard and (iv) to perform all acts
and execute and deliver all documents necessary to cause the transactions
contemplated by this Agreement to be consummated at the earliest possible date;
(f) to file timely with the ASBD, FRB and other appropriate regulatory
authorities all financial and other reports required to be so filed by FBAR;
(g) to comply in all material respects with all applicable laws, rules,
regulations and orders, domestic and foreign, except to the extent that failure
to so comply could not reasonable be expected to have a Material Adverse Effect
on FBAR taken as a whole;
(h) to notify SFNC promptly upon obtaining knowledge of the institution of
any litigation of any kind against either Seller or FBAR or the happening of any
event or fact that has or could reasonably be expected to have a Material
Adverse Effect on the financial condition, businesses, prospects or affairs of
FBAR taken as a whole or Seller's ability to perform its obligations hereunder
or that causes or could reasonably be expected to cause any of the
representations or warranties of Seller contained in this Agreement to be untrue
or misleading in any material respect;
(i) to deliver to SFNC a list (Schedule 4.2(i) hereto), dated as of the
Closing, showing (i) the name of each bank or institution where FBAR has one or
more accounts or safe deposit boxes, (ii) the name(s) in which such accounts or
boxes are held and (iii) the name of each person authorized to draw thereon or
have access thereto;
(j) to provide access, to the extent that Seller or FBAR has the right to
provide access, to any or all of FBAR's real property to enable SFNC to
physically inspect any structure or components of any structure on such
property, including without limitation surface and subsurface testing and
analyses;
(k) to provide information reasonably requested by SFNC necessary to
convert the data processing systems of FBAR to the data processing systems of
SFNC;
(l) to notify SFNC promptly upon obtaining knowledge that an officer of
FBAR with the title of Vice President or above will not continue his or her
employment with FBAR; and
(m) to consult with SFNC regarding the replacement of employees of FBAR who
cease to be employed prior to the Closing Date.
(n) to notify SFNC of all board meetings and committee meetings of FBAR at
least three (3) days prior to such meeting, if possible, and permit a
representative of SFNC to attend all such meetings.
Section 4.3 Negative Covenants to Seller. During the period from the date
of this Agreement to the Closing, except with the prior written consent of SFNC
or as otherwise specifically permitted by this Agreement, Seller will not permit
FBAR to:
(a) make any amendment to its Articles of Incorporation or Bylaws;
(b) make any change in the number of shares of the capital stock issued and
outstanding, or issue, reserve for issuance, grant, sell or authorize the
issuance of any shares of its capital stock or subscriptions, options, warrants,
calls, rights or commitments of any kind relating to the issuance thereof;
(c) declare any dividend with respect to shares of its capital stock,
except for a final dividend payable immediately prior to Closing in an amount
not exceeding a sum equal to $450,000.00 plus $50,000 per month for each full
calendar month occurring during the period after June 30, 1997 and ending on the
Closing Date;
(d) except as set forth on Schedule 2.8 and except for regular salary
increases and incentive compensation payments granted in the ordinary course of
business and consistent with prior practices, grant any increase in compensation
or directors' fees, pay, or agree to pay, or accrue any bonus or like benefit,
for the credit of any director, officer, employee or other person, or enter into
any employment, consulting or severance agreement or any other agreement, with
any director, officer or employee, or adopt, amend or terminate any Employee
Benefit Plans, or change or modify the period of vesting or retirement age for
any participant of such a plan (except to the extent any amendment, termination,
change or modification is required hereunder);
(e) make any capital expenditure or a series of expenditures of a
similar nature in excess of $75,000 in the aggregate;
(f) except for negotiations and discussions between the parties and others
relating to the transactions contemplated by this Agreement or as otherwise
permitted hereunder, enter into any transaction, or enter into, modify or amend
any contract or commitment other than in the ordinary course of business and
consistent with prudent banking practices;
(g) except as contemplated hereby, adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization, or other reorganization or business combination, of FBAR;
(h) make any material change in FBAR's method of accounting;
(i) make any single new loan in excess of $250,000 or any loan which when
aggregated with other outstanding loans to the borrower or a related group of
borrowers exceed $500,000.00.
(j) mortgage or pledge any material tangible or intangible asset of FBAR,
or permit any such asset to become subject to an Encumbrance (other than liens
for real estate taxes not yet due and payable and mechanics, materialman's and
similar liens imposed by statute that are being contested in good faith);
(k) sell, assign or transfer any material asset or property of any nature
whatsoever, whether real, personal or mixed, tangible or intangible; or
(l) reduce the reserves for loan and lease losses and for other real estate
losses below the amounts presented in the Bank Financial Statements as of
December 31, 1996, except by charge-offs.
Section 4.4 Names; Service marks and Trademarks. SFNC acknowledges and
agrees that (a) it has no rights of any kind whatsoever to or in any of the
names and marks listed on Schedule 4.4 or any of the other names and marks of,
or used by, Seller or any of its Affiliates, and that no such rights are being
granted or transferred in connection with this Agreement and that all of FBAR's
rights of any kind whatsoever to or in any of such names and marks shall
terminate on the Closing, (b) from and after the Closing, SFNC shall refrain
from using any such names and marks, or any word, words, term, logo or
expression similar thereto in the name under which it does business, in its
corporate name and in any trademark, service mark or other name or mark used in
connection with its business and (c) as promptly as practical after the Closing,
but in any event within thirty (30) days after the Closing, the foregoing names
and marks shall be removed from FBAR's premises and such names and marks shall
be removed from all letterhead, brochures, advertisements and similar materials.
SFNC shall not at any time hold itself out to the public as being associated or
affiliated with Seller and shall not expressly or impliedly indicate to the
public that its activities are sponsored or endorsed by Seller. Seller agrees
not to use any of the names or marks listed on Schedule 4.4 in the Russellville
market, unless Seller changes the name of all of its affiliate banks to utilize
a name listed on Schedule 4.4, but in no event will Seller use any name or mark
listed on Schedule 4.4 in the Russellville market for a period of twenty-four
(24) months after Closing. The parties agree and acknowledge that, in the event
of a breach or threatened breach of any of the provision of this Section 4.4,
Seller or SFNC (as the case may be) shall be entitled to immediate and temporary
injunctive relief, as any such breach would cause Seller or SFNC (as the case
may be) irreparable injury for which it would have no adequate remedy at law.
Nothing herein shall be construed to prohibit Seller or SFNC (as the case may
be) from pursuing any other remedies available to it for any such breach or
threatened breach.
Section 4.5 Filing for Regulatory Approvals. As soon as reasonably
practicable, but in no event later than the forty-fifth (45th) day from the date
of this Agreement, SFNC shall file all notices and applications with the ASBD,
the FRB and other applicable regulatory authorities which are necessary or
appropriate to complete the transactions contemplated herein. Seller shall
respond promptly to requests by SFNC for information required by such notices
and applications. SFNC shall provide to Seller copies of all applications and
other notices required in connection with seeking such regulatory approvals
(excluding personal information relating to directors of SFNC or its Affiliates
or regulatory examinations of SFNC) and any other consent, approval or other
action by, or notice to or registration or filing in connection with the
transactions contemplated by this Agreement within five days of such
submissions. SFNC shall provide copies of any comments, requests or
notifications of actions by governmental or administrative agencies or
authorities related to the transaction contemplated by this Agreement to Seller
within five days of SFNC's receipt thereof. SFNC shall not be required to
provide copies of any such comments or requests which relate to personal
information of directors of SFNC or its Affiliates or regulatory examinations of
SFNC, unless such comments or requests indicate that the applications related
thereto may not be approved.
Section 4.6 Transfer of Certain Assets and Liabilities. (a) No later than
one (1) day prior to the Closing, Seller shall cause FBAR to transfer to Seller
or its designee those certain tracts of real property owned by FBAR upon which
are located the branches of FBAR commonly known as 1907 West Main St.,
Russellville, Arkansas and 323 Market St., Dover, Arkansas ("Transferred
Branches") and Seller shall transfer or cause its designee to transfer to FBAR
cash in the amount of the book value of such real property and improvements.
Contemporaneously therewith, Seller shall cause FBAR to transfer all machinery,
equipment, furniture and fixtures located in and used in the operation of the
Transferred Branches and Seller shall transfer or cause their designee to
transfer to FBAR cash in the amount of the book value of such machinery,
equipment, furniture and fixtures.
(b) Prior to the Closing Date, Seller shall preliminarily classify all
deposits and loans assigned to the Transferred Branches on the books and records
of FBAR and shall deliver to SFNC a listing of such deposits and loans showing
the customer name, address, all outstanding relationships and the then current
balance for each such relationship. Seller and SFNC shall proceed in good faith
to confirm that the customers on such list are appropriately assigned to the
Transferred Branches based upon criteria commonly used in the banking industry.
Following the confirmation, the deposits and loans which are assigned to the
Transferred Branches shall be transferred on the Closing Date by FBAR to First
National Bank of Russellville ("FNBR") and removed from the books of FBAR. The
settlement for such transfers shall be based upon the balances, including
accrued interest, shown on the books of FBAR as of the Closing Date. All items,
checks, deposits, payments, ACH items, etc. related to the deposits and loans so
transferred which are in transit or are otherwise received by FBAR after the
Closing shall be delivered to FNBR for its account.
(c) On or before the Closing Date, Seller shall cause FBAR to transfer all
trust accounts and trust relationships from FBAR to FNBR. Seller, SFNC, FNBR and
FBAR shall use their best efforts to assist in completing the transfer of the
trust accounts, including seeking all necessary individual and judicial
approvals such transfers.
(d) The conveyance of the real property, described in subsection (a) above,
shall be by quitclaim deed without any warranties of any type. The transfers of
the tangible personal property described in subsection (b) above shall be by
bill of sale without any warranties of any type whatever, whether express or
implied. All endorsements of FBAR for the transfer of any notes evidencing the
loans assigned to the Transferred Branches shall be "without recourse". Seller
agrees to indemnify and hold SFNC and FBAR harmless for all damages, claims,
causes of action, costs and expenses incurred by FBAR or SFNC relating to the
any loans, deposits, or other general banking transactions relating to any
customer whose account is assigned to the Transferred Branches retained by
Seller or its designee, the conduct of the trust department of FBAR or the
transfer of the trust accounts.
(e) On or before the Closing Date, Seller shall identify all loan
participations purchased by FBAR from a bank affiliated with Seller or sold by
FBAR to a bank affiliated with Seller and compute the estimated book balances,
including accrued interest, of all such participations as of the Closing Date
and deliver to SFNC a schedule of such computations showing the full detail
thereof. On or before the Closing Date, Seller shall cause FBAR and each of the
banks affiliated with Seller to repurchase or resell, as the case may be, all
such loan participations, so that immediately after Closing FBAR shall not own
any loan participations in loans in banks affiliated with Seller and banks
affiliated with Seller shall not own any loan participations in loans owned by
FBAR.
(f) Prior to Closing, Seller shall identify the amounts of all personal
property taxes, real property taxes, utilities, janitorial services and other
expenses attributable to, services utilized by or costs incurred by the
Transferred Branches. All such taxes, expenses and costs shall be prorated as of
the Closing Date. Seller and FNBR shall use their best efforts to cause all such
services, tax assessments and utilities to be transferred to FNBR as soon as
possible after the Closing.
(g) Prior to Closing, Seller shall prepare (or cause FBAR to prepare) an
estimate of the net funds transfer necessary to settle the transfers, prorations
and transactions described in this Section and shall deliver a copy of such
estimate to SFNC for confirmation showing the full detail of the computation.
The settlement shall be made by transfer of immediately available funds on the
Closing Date or at Seller's option prior to the Closing Date. In the event the
cash resources of FBAR are not estimated to be sufficient to accomplish the
required settlement, SFNC and Seller shall evaluate FBAR's assets and determine
which assets shall be sold to provide the necessary liquidity, with such sales
to occur sufficiently prior to settlement to have the proceeds thereof in FBAR
in immediately available funds.
(h) Seller agrees to indemnify and hold SFNC and FBAR harmless for any and
all additional incomes taxes, including penalties and interest attributable
thereto, which FBAR or SFNC may incur by reason of the transfers described in
this section.
Section 4.7 Miscellaneous Agreements and Consents. Subject to the terms and
conditions of this Agreement, SFNC and Seller agree to use all reasonable
efforts to take, or cause to be taken, all actions, and to do or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective, as soon as practicable after the
date hereof, the transaction contemplated by this Agreement. SFNC and Seller
shall use their best efforts to obtain, or cause to be obtained, consents of all
third parties and governmental and regulatory authorities necessary or desirable
for the consummation of the transactions contemplated herein.
Section 4.8 Public Announcement. Subject to written advice of counsel with
respect to legal requirements relating to public disclosure of matters related
to the subject matter of this Agreement, the time and content of any
announcements, press releases or other public statements concerning the
transactions contemplated herein will occur upon, and be determined by, the
mutual consent of Seller and SFNC.
Section 4.9 Untrue Representations. Seller shall promptly notify SFNC in
writing if Seller becomes aware of any fact or condition that makes untrue, or
shows to have been untrue, in any material respect, any Schedule or any other
information furnished to SFNC and any representation or warranty made in or
pursuant to this Agreement or that results in Seller's failure to comply with
any covenant, condition or agreement contained in this Agreement.
Section 4.10 Litigation and Claims. Seller shall promptly notify SFNC in
writing of any litigation, or of any claim, controversy or contingent liability
that might be expected to become the subject of litigation, against FBAR or
affecting any of its properties if such litigation or potential litigation
might, in the event of an unfavorable outcome, result in a Material Adverse
Effect on FBAR taken as a whole, and Seller shall promptly notify SFNC of any
legal action, suit or proceeding or judicial, administrative or governmental
investigation, pending or, to the knowledge of Seller, threatened against the
Seller that question or might question the validity of this Agreement or the
agreements contemplated hereby, or any actions taken or to be taken by FBAR
pursuant hereto or thereto or seeks to enjoin or otherwise restrain the
transactions contemplated hereby or thereby.
Section 4.11 Adverse Changes. Seller shall promptly notify SFNC in writing
if any change shall have occurred or been threatened (or any development shall
have occurred or been threatened involving a prospective change) in the
business, financial condition, operations or prospects of FBAR that has or may
reasonably be expected to have or lead to a Material Adverse Effect on the
assets, liabilities or condition of FBAR taken as a whole, financial or
otherwise. Notwithstanding the disclosure to SFNC of any such change, Seller
shall not be relieved of any liability to SFNC pursuant to this Agreement for,
nor shall the providing of such information by Seller to SFNC be deemed a waiver
by SFNC of, the breach of any representation or warranty of Seller contained in
this Agreement.
Section 4.12 Tax Election. Seller and SFNC shall cause a Section 338(h)(10)
election to be made pursuant to section 338(h)(10)of the Code for FBAR. Seller
and SFNC shall execute and timely file all necessary consents to effectuate the
election. Seller and FBAR shall make all necessary elections to participate in
the Seller's consolidated group.
ARTICLE V
CONDITIONS TO CLOSING
Section 5.1 Condition to Each Party's Obligation. The respective
obligations of each party to effect the transactions contemplated herein are
subject to the satisfaction or waiver of the following conditions prior to the
Closing:
(a) Regulatory Approvals. The receipt of all necessary regulatory approvals
for the transactions as contemplated herein without any additional material
conditions, including, without limitation, the approval of the FRB, the ASBD and
other applicable regulatory authorities, and the expiration of any applicable
waiting period with respect thereto; and
(b) No Violations. The Closing shall not be violative of any
injunction, order or decree of any court or governmental body having
competent jurisdiction.
(c) Consummation of the Merger. Seller and SWB shall have consummated
their pending merger prior to the Closing.
Section 5.2 Conditions to the Obligations of SFNC. The obligations of SFNC
to effect the transactions contemplated herein are subject to the satisfaction
or waiver of the following conditions prior to the Closing:
(a) Representations and Warranties. All representations and warranties
of Seller shall be true and correct in all material respects as of the date
hereof and as of the Closing, with the same force and effect as though made
on the Closing;
(b) Performance of Obligations. Seller shall have performed in all material
respects all obligations and agreements and in all material respects complied
with all covenants and conditions contained in this Agreement to be performed or
complied with by them;
(c) No Material Adverse Effect. Nothing shall have occurred which has
a Material Adverse Effect with respect to FBAR taken as a whole since the
Balance Sheet Date; and
(d) Certifications. SFNC shall have received certificates dated as of the
Closing Date executed by an executive officer of Seller certifying to the effect
described in Section 5.2(a), (b) and (c).
(e) Financing. The consummation of a satisfactory financing arrangement,
consistent with the terms of the financing offers and commitments which SFNC has
received.
Section 5.3 Conditions to the Obligations of Seller. The obligations of
Seller to effect the transactions contemplated herein are subject to the
satisfaction or waiver of the following conditions prior to the Closing:
(a) Representations and Warranties. All representations and warranties of
SFNC contained herein shall be true and correct in all material respects as of
the date hereof and as of the Closing, with the same force and effect as though
made at the Closing;
(b) Performance of Obligations. SFNC shall have performed in all material
respects all obligations and agreements and in all material respects complied
with all covenants and conditions contained in this Agreement to be performed or
complied with by it; and
(c) Filings. SFNC shall have filed all necessary applications and notices
with the appropriate regulatory authorities within forty-five (45) calendar days
from the date of this Agreement.
ARTICLE VI
CONDUCT AND TRANSACTIONS AFTER CLOSING
Section 6.1 Participation in SFNC Plans. Effective as of the Closing Date,
employees of FBAR shall cease participation in all plans, programs, policies and
arrangements maintained for their benefit by Seller or any of its Affiliates.
Commencing on the Closing Date, SFNC shall provide to employees of FBAR such
plans, programs, policies and arrangements being maintained by SFNC and which
contain terms that are, in the aggregate, no less favorable than those provided
to similarly situated employees of SFNC or any of its Affiliates. Each employee
of FBAR shall be given credit under each such employee plan, program, policy and
arrangement maintained by SFNC for which such employee is eligible for all
service prior to the Closing Date with Seller and its Affiliates.
Section 6.2 Claims Incurred Prior to and After Closing. Seller will retain
responsibility for and continue to pay all medical, life insurance, disability
and other welfare plan expenses and benefits for each employee of FBAR or their
covered dependents with respect to claims incurred by such employees and former
employees or their covered dependents prior to the Closing Date. Expenses and
benefits with respect to claims incurred by employees of FBAR or their covered
dependents on or after the Closing Date shall be the responsibility of SFNC. For
purposes of this Section, a claim is deemed incurred when the services that are
the subject of the claim are performed; in the case of life insurance, when the
death occurs; in the case of long-term disability benefits, when the disability
occurs; and, in the case of a hospital stay, when such stay commences. Seller
will retain responsibility for all welfare plan expenses and benefits, if any,
including responsibility for compliance with COBRA, for all former employees of
FBAR who are not employed by FBAR on the Closing Date or such former employees'
Qualified Beneficiaries (as defined in COBRA) and for all Qualified
Beneficiaries with respect to FBAR's plans who are eligible for COBRA coverage
prior to the Closing Date.
Section 6.3 Waiting Periods and Deductibles. With respect to any Welfare
Benefit Plans maintained by SFNC on and after the Closing Date for the benefit
of employees of FBAR, SFNC shall (i) cause to be waived any waiting periods, and
(ii) give effect, in determining any deductible and maximum out-of-pocket
limitations, to claims incurred and amounts paid by, and amounts reimbursed to,
such employees with respect to similar plans maintained by Seller for their
benefit. SFNC shall pay or provide to Seller all premiums collected from
employees or former employees of FBAR relating to existing COBRA coverage for
employees or former employees of FBAR continuing after the Closing.
Section 6.4 Vacation Pay. With respect to any accrued but unused vacation
time to which any employee of FBAR is entitled pursuant to the vacation policy
applicable to such employee immediately prior to the Closing Date (the "Vacation
Policy"), SFNC shall allow such employee to use such accrued vacations;
provided, however, that if SFNC deems it necessary to disallow such employee
from taking such accrued vacation, SFNC shall be liable for and pay in cash to
each such employee an amount equal to such vacation time in accordance with such
employees current salary; provided, further, that SFNC shall be liable for and
pay in cash an amount equal to such accrued vacation time to any employee of
FBAR whose employment terminates for any reason other than "for cause" prior to
the close of business on the last calendar day of the year during which the
Closing Date occurs.
Section 6.5 Indemnification Against Claims for Severance Pay. SFNC agrees
to defend, indemnify and hold harmless Seller and any of its Affiliates from and
against any cost, liability, and expense actually incurred by any of them as a
result of any claim made by any employee of FBAR for severance pay under a
written employment agreement relating to the termination of such employee's
employment on or after the Closing.
Section 6.6 Confidentiality. For a period of three (3) years from the
Closing Date, Seller will, and shall cause its Affiliates to, maintain the
confidentiality of, and not to use, directly or indirectly, in any manner to
compete with or otherwise to the detriment of FBAR, any information identifying
customers of FBAR and their particular needs.
Section 6.7 Cooperation concerning Transferred Branches. (a) Within thirty
(30) days following the Closing Date, Seller shall cause FNBR to notify all
persons whose loans or deposits were assigned to the Transferred Branches and
deliver to such customers new checks, loan payment vouchers and such other
documents as are necessary to convert the name of bank associated with such
relationship from FBAR to FNBR.
(b) SFNC and FBAR shall cooperate with Sellers and FNBR in forwarding any
items, e.g., checks, loan payments ACH items, etc., which it receives relating
to the accounts assigned to the Transferred Branches to FNBR for processing.
FBAR will use reasonable efforts to cause its item processing system to
segregate all checks, drafts, and ACH items received which are drawn on the
accounts assigned to the Transferred Branches. Seller and FNBR shall indemnify
and hold FBAR and SFNC harmless from any and all liabilities, claims, causes of
action, costs and expenses, attributable to the handling by FBAR after Closing
of any items on accounts assigned to the Transferred Branches.
Section 6.8 Solicitation of Employees. Neither Seller nor any of its
Affiliates will contact, solicit or employ any person employed by FBAR on the
Closing Date for a period of two years after the Closing Date without the
consent of SFNC or its Affiliates. Neither SFNC nor any of its Affiliates will
contact, solicit or employ any person employed by FNBR at any of the Transferred
Branches or in connection with FBAR's trust operations who was employed by FBAR
prior to the Closing for a period of two years after the Closing Date without
the consent of Seller or its Affiliates. Nothing herein shall restrict contact,
solicitation or employment of any person after such person has separated from
his respective employment with FBAR, FNBR or any of their respective Affiliates.
ARTICLE VII.
INDEMNIFICATION
Section 7.1 Seller's Indemnification. Seller agrees to defend, indemnify
and hold harmless FBAR and SFNC from and against any and all losses, damages,
response and remediation costs, liabilities and expenses (including court costs,
amounts paid in settlements and judgments and reasonable legal fees), suits,
actions, claims or obligations incurred by or asserted against either FBAR or
SFNC, respectively, (i) by reason of the claim shown as #2 on Schedule 2.9, or
(ii) for a period of one (1) year after the Closing, as a direct result of any
inaccuracy of any representation or warranty made by Seller under this
Agreement, including specifically, but without limitation of the foregoing, the
representations and warranties made in Section 2.17 with respect to
environmental matters.
Section 7.2 SFNC's Indemnification. SFNC agrees to defend, indemnify and
hold harmless Seller from and against any and all losses, damages, liabilities
and expenses (including court costs, amounts paid in settlements and judgments
and reasonable legal fees), suits, actions, claims or obligations incurred by or
asserted against Seller, for a period of one (1) year, as a direct result of any
inaccuracy of any representation or warranty made by SFNC under this Agreement.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time prior to the
Closing by:
(a) mutual written consent of Seller and SFNC;
(b) SFNC, if any of the conditions to the Closing contained in Section
5.1 or 5.2 are not satisfied or waived in writing by SFNC as of the Closing;
(c) Seller, if the conditions to the Closing contained in Section 5.1
or 5.3 are not satisfied or waived in writing by Seller as of the Closing;
(d) Seller or SFNC, upon notice given to the other party, if the Closing
shall not have taken place on or before December 31, 1997, provided, that the
failure of the Closing to occur on or before such date is not the result of the
breach of the covenants, agreements, representations or warranties hereunder of
the party seeking such termination; or
(e) Seller or SFNC, upon written notice to the other party, if any court or
Governmental Authority of competent jurisdiction shall have issued a final
permanent order, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, or if the FRB, the ASBD or other applicable
regulatory authority shall have issued an order denying approval of the purchase
and sale of the Bank Stock and the other transactions contemplated hereby, and
the time for appeal or petition for reconsideration of such order shall have
expired.
Section 8.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1 hereof, this Agreement
shall have no effect, without any liability on the part of any party or its
directors, officers, or shareholders, other than the provisions of this Section
8.2, Section 8.3, and the last two sentences of Section 4.1. Nothing contained
in this Section 8.2 shall relieve any party from liability for any breach of
this Agreement.
Section 8.3 Survival of Representations and Warranties. The representations
and warranties of Seller and SFNC contained in Article II and Article III of
this Agreement shall be deemed to be material and to have been relied upon by
the parties hereto, and survive the Closing for a period of one (1) year
provided, however, that the representations and warranties of Seller contained
in Section 2.2 and 2.11 shall survive the Closing to the greatest extent
permitted by law and shall be subject to a claim for breach thereof within any
applicable statute of limitations; and provided further, that the
representations and warranties of Seller contained in Section 2.10 shall survive
as long as any statute of limitations is open with respect to the assessment of
any such taxes against FBAR or SFNC, whether by statute, rule of law or
agreement extending any such statute of limitations.
Section 8.4 Amendment. This Agreement may not be modified or amended
except by a written instrument executed by all parties hereto.
Section 8.5 Extension and Waiver. At any time prior to the Closing, the
parties may mutually agree to (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto, or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the party of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing and signed on behalf of such
party.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Expenses. All costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such costs and expenses.
Section 9.2 Entire Agreement; Assignment. This Agreement and the
Confidentiality Agreement constitute the entire agreement among the parties with
respect to the subject matter hereto and supersede all other prior agreements
and understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof, and shall not be assigned by operation of
law or otherwise.
Section 9.3 Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
Section 9.4 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
Section 9.5 Notices. All notices, requests, claims, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by cable, telegram or telex, or by
registered or certified mail (postage prepaid, return receipt requested), to the
respective parties as follows:
if to Seller:
First Commercial Corporation
400 West Capitol Avenue
P. O. Box 1471
Little Rock, Arkansas 72203-1471
Fax No.: (501) 371-7413
Attention: Barnett Grace
with copies to:
Alex. Brown & Sons Incorporated
One South Street
Baltimore, Maryland 21202
Fax No.: (410) 895-4660
Attention: Howard Loewenberg
and
Friday, Eldredge & Clark
400 West Capitol Avenue, Suite 2000
Little Rock, Arkansas 72201-3493
Fax No.: (501) 376-2147
Attention: Clay Randolph
if to SFNC:
Simmons First National Corporation
501 Main Street
P. O. Box 7009
Pine Bluff, Arkansas 71611-7009
Fax No.: (501) 541-1123
Attention: J. Thomas May
with copies to:
Stephens, Inc.
111 Center Street
P. O. Box 3507
Little Rock, Arkansas 72203-3507
Fax No.: (501) 377-2674
Attention: Robert Ulrey
and
Ramsay, Bridgforth, Harrelson & Starling
P. O. Box 8509
Pine Bluff, Arkansas 71611-8509
Fax No.: (501) 535-8544
Attention: Patrick A. Burrow
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
Section 9.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Arkansas, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.7 Descriptive Headings. The descriptive headings are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
Section 9.8 Parties in Interest. This Agreement shall be binding upon, and
inure solely to the benefit of, each party hereto and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement. Seller
agrees to use its best interest to cause, or to use its best efforts to cause
SWB to cause FBAR to perform all covenants and obligations of FBAR set forth
herein.
Section 9.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 9.10 Incorporation by References. Any and all schedules, exhibits,
annexes, statements, reports, certificates or other documents or instruments
referred to herein or attached hereto are incorporated hereby by reference
hereto as though fully set forth at the point referred to in the Agreement.
Section 9.11 Certain Definitions.
(a) "Affiliate" means any Person that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with the Person specified through the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
(b) "Bank" shall mean First Bank of Arkansas, Russellville, Arkansas.
(c) "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation
Act of 1985.
(d) "Confidentiality Agreement" shall mean the Confidentiality Agreement
dated February 11, 1997, between Seller and SFNC.
(e) "Encumbrance" means any lien, pledge, hypothecation, charge, mortgage,
deed of trust, security interest, encumbrance, equity, trust, equitable
interest, claim, easement, right-of-way, servitude, right of possession, lease
tenancy, license, encroachment, burden, intrusion, covenant, infringement,
interference, proxy, option, right of first refusal, community property
interest, legend, defect, impediment, exception, condition, restriction,
reservation, limitation, impairment, imperfection of title, restriction on, or
condition to, the voting of any security, restriction on the transfer of any
security or other asset, restriction on the receipt of any income derived from
any security or other asset, and restriction on the possession, use, exercise or
transfer of any other attribute of ownership, based on or arising from common
law or contract.
(f) "Entity" means any corporation (including any non-profit corporation),
general partnership, limited partnership, joint venture, joint stock
association, estate, trust cooperative, foundation , union, syndicate, league,
consortium, coalition, committee, society, firm, company or other enterprise,
association, organization or entity of any nature, other than a Governmental
Authority.
(g) "Governmental Authority" means any foreign governmental authority, the
United States of America, and State of the United States, any local authority
and any political subdivision of any of the foregoing, any multi-national
organization or body, any agency, department, commission, board, bureau, court
or other authority thereof, or any quasi-governmental or private body
exercising, or purporting to exercise, any executive, legislative, judicial,
administrative, police, regulatory or taxing authority or power of any nature.
(h) "Knowledge" or "known" -- An individual shall be deemed to have
"knowledge" of or to have "known" a particular fact or other matter if such
individual is actually aware of such fact or other matter. Seller, FBAR, SFNC,
any other corporation or bank shall be deemed to have "knowledge" of or to have
"known" a particular fact or other matter if any individual who is serving as a
director or executive officer (or in any similar capacity) of either of Seller,
FBAR, SFNC or such other corporation or bank, respectively, has, or at any time
had, actual awareness of such fact or other matter.
(i) "Material Adverse Effect" shall mean any material adverse change in the
financial condition, assets, liabilities (absolute, accrued, contingent or
otherwise), business, or results of operations.
(j) "Person" means any individual, Entity or Governmental Authority.
(k) "Subsidiary" means, with respect to any Person, any corporation,
partnership, joint venture, joint stock association, business trust or other
Entity (which shall not include joint operating arrangements in oil and gas
properties) of which such Person or another Subsidiary of such Person directly
or indirectly owns more than 20% of the outstanding capital stock or other
equity interest.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year first above written.
FIRST COMMERCIAL CORPORATION
By: /s/ J.Lynn Wright
Name and Title : J. LynnWright, Chief Financial
Officer
SIMMONS FIRST NATIONAL CORPORATION
By: /s/ J. Thomas May
J. Thomas May, Chairman, President and
Chief Executive Officer
Schedule 2.7(b)
Material Liabilities not shown on Bank Financial Statements
None
Schedule 2.8
Certain Changes
None
Schedule 2.9
Pending and Threatened Litigation
1. Denman Wolfe v. First Bank of Arkansas CIV-95-259 Pope County Circuit Court -
Negligence/Breach of contract action damages prayed for $20,000 compensatory and
$250,000.00 punitive. Wife with possession of a safe deposit key intimidated
bank employee to let her into her husband's safe deposit box to which she was
not authorized access under the agreement. After access was granted, wife
located and read husband's will. Subsequently, she sued husband for divorce.
Husband's claim is for amount of property settlement ($20,000) plus punitive
damages.
2. Marion Alene Mitchell claim. Claim asserted but no suit has been filed to
date. A new client of trust department just after it opened was in the process
of transferring control of certain investments and related matters to the Trust
Department. She had securities in her possession which she had received upon her
husband's death. The husband was the record owner and all notices concerning the
securities were being received by the client at her home. An election relating
to a merger transaction involving the securities was missed due to (i) the trust
department not receiving (or being informed of) the notice and (ii) the failure
to have the securities re-issued in the client's name or a street name. Since a
timely election was not made concerning the type of consideration to be received
in the merger, all of the merger consideration must be taken in cash, rather
than 60% stock and 40% cash. The client has moved the account and is threatening
a claim for the "extra" capital gains tax and interest for the loss of the use
of the funds since the election date. FBAR has discussed this matter with
claimant counsel and is awaiting a specific claim amount. FBAR has notified its
Errors and Omissions Insurance carrier. The policy has $25,000 deductible.
No loss expected beyond the deductible.
3. James Lee Shinn Estate/Karen Bird. No suit filed. Dispute between wife and
husband's estate concerning whether wife was authorized to endorse and cash
insurance proceeds check. Bank issued Cashier's Check to wife when she cashed
the insurance company's check. Bank has frozen wife's account, has refused to
honor the Cashier's Check and notified all parties that it is holding the funds
pending a judicial resolution of the dispute.
Schedule 2.11(a)
Welfare Benefits Plans
1. Delta Dental Plan of Arkansas
2. Arkansas Blue Cross Blue Shield Managed Benefits Comprehensive Major
Medical Preferred Provider Organization Group Plan
Schedule 2.11(b)
Pension Benefit Plans
1. Southwest Bancshares, Inc. Section 401(k) Plan.
Schedule 2.12
Employment Matters
1. Employment Agreement of Roy Reaves.
2. Employee Severance Agreements as previously disclosed.
Schedule 2.13
Leases, Licenses, Contracts and Agreements
1. Operations Center Lease, location Highway 64 East, start date January 3,
1991, term 10 years, Amendment grants additional 5 year term, Rent during first
5 years (1/1/91-12/31/95) is $3,000 per month, next 60 months $3,000 per month
plus annual CPI adjustment, last 5 years as negotiated. Lessee pays maintenance,
insurance and taxes on the building. Lessor is Ward J.
Ramsay.
2. Kroger Lease - Kroger has entered into master arrangement for bank facilities
in the "Delta region" with National Commerce Bancorporation (Memphis,
Tennessee). The "lease" agreement is a Sublicense Agreement authorizing FBAR to
install a financial service facility in the Russellville Kroger store. The
arrangement started August 9, 1990 and proceeded for an initial term of five
years. The Sublicense has 3 additional renewal terms of five years each, which
automatically renew unless notice of non-renewal is given 90 days prior to the
expiration of the term. Annual License fees are $29,000 (current rate) during
the first renewal term, $33,500 during the second renewal term and $43,500
during the third renewal term. In addition, the bank is obligated to pay to
Kroger the greater of $0.10 for each financial transaction in excess of 5200 per
month or 25% of any net profit earned during the month in connection with any
ATM or cash dispenser.
3. Data processing Contract with Kirchman Corporation. States in Section 2 that
it may be terminated at any time. The Addendum dated October 19, 1994, sets
forth a modification to the PACT License Fee payable through November 1, 2001,
but does not specifically modify the "terminate at any time" language set forth
in Section 2. There is no clear provision in this contract which would preclude
ermination of the Contract prior to November 1, 2001, even though the Fee
addendum sets fees through November 1, 2001.
3. Long term borrowing from FHLB which totals $8,637,171.77 with maturities
ranging from 12/01/02 to 11/02/15.
4. Promissory Note with current balance of $36,000.00 payable in 2 annual
installments related to land acquisition at the Arkansas Avenue location.
Schedule 2.14
Related Party Transactions
1. Tax Sharing Agreement among the affiliates in SWB.
2. Loan Participations among FBAR and other banks presently owned by SWB, all of
which will be re-sold by the holder and re-purchased by the lead bank on or
before the Closing Date.
Schedule 2.16
Insurance Coverages
INSURANCE PROPOSAL
FOR
FIRST BANK OF ARKANSAS, RSVL
PROPERTY
COVERAGES:
Buildings - Special Form
Contents - Special Form, Including Theft
Extra Expense - Special Form - 40/80/100
90% Co-Insurance
Replacement Cost
$500 Deductible
LOCATIONS & LIMITS
<TABLE>
Location #1 - 323 Market Street, Dover, Arkansas
<CAPTION>
<S> <C>
Building $200,000
Contents $ 25,000
Extra Expense $ 10,000
Valuable Papers $ 20,000
Earthquake 10% Deductible
</TABLE>
<TABLE>
Location #2 - Hwy. 105, Hector, Arkansas
<CAPTION>
<S> <C>
Building $ 36,000
Contents $ 10,000
Extra Expense $ 10,000
Earthquake 10% Deductible
</TABLE>
<TABLE>
Location #3 - Hwy. 64, London, Arkansas
<CAPTION>
<S> <C>
Building $155,000
Contents $ 25,000
Extra Expense $ 10,000
Earthquake 10% Deductible
</TABLE>
<TABLE>
Location #4 - 2000 E. Main Street, Russellville, Arkansas
<CAPTION>
<S> <C>
Building $102,000
Earthquake 10% Deductible
</TABLE>
<TABLE>
Location #5- 800 North Arkansas, Russellville, Arkansas
<CAPTION>
<S> <C>
Building $1,100,000
Contents $ 100,000
Extra Expense $ 10,000
Valuable Papers $ 20,000
Earthquake 5% Deductible
</TABLE>
<TABLE>
Location #6 - Hwy. 7 & &T (Krogers), Russellville, Arkansas
<CAPTION>
<S> <C>
Contents $ 10,000
Extra Expense $ 10,000
Earthquake 10% Deductible
</TABLE>
<TABLE>
Location #7 - 3079 East Main, Russellville, Arkansas
<CAPTION>
<S> <C>
Building $398,000
Contents $100,000
Extra Expense $ 10,000
Earthquake 5% Deductible
</TABLE>
<TABLE>
Location #8 - 1907 West Main, Russellville, Arkansas
<CAPTION>
<S> <C>
Building $340,000
Contents $ 10,000
Extra Expense $ 10,000
Earthquake 10% Deductible
</TABLE>
MORTGAGE ERRORS & OMISSION
$500.00 Limit
Based On: 636 Mortgages
ELECTRONIC DATA PROCESSING EQUIPMENT
$250 Deductible Applies
<TABLE>
Location: 323 Market Street, Dover, Arkansas
<CAPTION>
<S> <C>
IBM Printer #5256 43175 $1,100
IBM CRT #5251 91AR171 700
IBM CRT #5251 91AB205 700
IBM CRT #5251 9139352 700
IBM CRT #5291 2N7375 700
Axion PC 1,800
Hewlett Packard Laser Printer 1,500
Total $7,200
Data & Media 10,000
Extra Expense 10,000
</TABLE>
<TABLE>
Location: 800 North Arkansas, Russellville, Arkansas
<CAPTION>
<S> <C>
Diebold Automatic Teller Model 1074 $37,500
IBM CPU Unit #361035682 40,000
IBM Reader/Sorter #1255-3 7,500
IBM PC #05902911 W/Printer #4014791-65 1,500
IBM Modem #47456 1,200
IBM Printer #5256-52944 1,100
IBM CRT #5291 9124656 700
IBM CRT #5291 91C3339 700
IBM CRT #5291 91C3313 700
IBM CRT #F59156 700
IBM CRT #F51233 700
IBM CRT #F51258 700
IBM CRT #F53651 700
IBM CRT #F53661 700
IBM CRT #4248416 700
3-AXION PC'S @ $1,800 ea. 5,400
2-Hewlett Packard Laser Printers @ $1,500 ea. 3,000
Packard Bell PC 418669 1,000
Packard Bell PC Legend 300 SX 1,000
Total 105,500
Data & Media 20,000
Extra Expense 20,000
</TABLE>
<TABLE>
Location: Hwy. 7 & &T (Krogers), Russellville, AR
<CAPTION>
<S> <C>
Automatic Teller Diebold Model 1062 $22,500
IBM Printer-Type 4202003, S313050872 1,000
Controller 5294 - S#40269 including 1,000
Model #3864-2, SF65926
IBM CRT #23-DK 480 1,000
IBM CRT #23-DK 481 1,000
IBM CRT #23-DK 482 1,000
IBM CRT #23-DK 483 1,000
Total $28,500
Data & Media 10,000
</TABLE>
<TABLE>
Location: 3079E East Main Street, Russellville, AR
<CAPTION>
<S> <C>
CRT 3476BG3, XK497 600
CRT 3476BG3, XK913 600
CRT 3476BG3, XK563 600
CRT 3476BG3, XK496 600
CRT 3487, 88-14348 1,059
Modem 7855-10, 81-376 1,295
Printer 2391, 11B9478 549
Controller 5294, 40269 995
Total 6,298
Data & Media 10,000
Extra Expense 10,000
</TABLE>
<TABLE>
Location: 1907 West Main, Russellville, AR
<CAPTION>
<S> <C>
CRT 3487, 88-14359 1,059
CRT 3476, 88-YG025 669
CRT 3476, 88-YG023 669
CRT 3476, 88-XK551 669
CRT 3476, 88-YG028 669
Printer 2391, 11-B9695 549
Modem 7855-10, 23-0090251 1,295
Controller 5294, 91-04998 995
Total 6,574
Data & Media 10,000
Extra Expense 10,000
</TABLE>
<TABLE>
SIGNS
<CAPTION>
<S> <C>
Deductible: 5% of Coverage Amount
Location: 3079 East Main, Russellville, AR
Lighted Plastic Sign $9,000
Location: 1907 West Main, Russellville, AR
Lighted Plastic Sign $9,000
Location: Hwy. 105, Hector, AR
Lighted Sign $3,000
</TABLE>
GLASS
<TABLE>
Location #1: 323 Market Street, Dover, Arkansas
<CAPTION>
<S> <C>
2 - 66 x 78 Plain Plate
1 - 88 x 78 Plain Plate
2 - 32 x 78 Plain Plate
1 - 26 x 78 Plain Plate
2 - 32 x 76 Plain Plate
1 - 62 x 75 Plain Plate
3 - 34 x 66 Plain Plate
1 - 35 x 19 Plain Plate
4 - 35 x 65 Plain Plate
</TABLE>
<TABLE>
Location #2: Hwy 105, Hector, Arkansas
<CAPTION>
<S> <C>
1 - 34 x 76 Plain Plate
1 - 6 x 35 Plain Plate
3 - 33 x 91 Plain Plate
</TABLE>
<TABLE>
Location #3: Hwy 64, London, Arkansas
<CAPTION>
<S> <C>
3 - 58 x 47 Plain Plate
2 - 56 x 34 Plain Plate
</TABLE>
<TABLE>
Location #5: 800 North Arkansas, Russellville, AR
<CAPTION>
<S> <C>
7 - 86 x 36 Smoke Colored
26 - 72 x 30 Smoke Colored
2 - 72 x 40 Smoke Colored
10 - 72 x 44 Smoke Colored
4 - 50 x 22 Smoke Colored
11 - 50 x 30 Smoke Colored
2 - 50 x 40 Clear Interior
21 - 50 x 44 Smoke Colored
4 - 44 x 38 Smoke Colored
10 - 44 x 40 Smoke Colored
31 - 44 x 18 Smoke Colored
2 - 40 x 18 Smoke Colored
2 - 40 x 36 Smoke Colored
2 - 36 x 26 Smoke Colored
12 - 30 x 18 Smoke Colored
2 - 30 x 26 Smoke Colored
25 - 24 x 18 Smoke Colored
1 - 22 x 18 Smoke Colored
2 - 30 x 26 Clear Interior W/Wire Mesh
2 - 59 x 36 Smoke Colored Bullet Proof
4 - 50 x 44 Clear Interior
2 - 36 x 26 Smoke Colored Interior
2 - 30 x 26 Smoke Colored Interior
4 - 72 x 44 Smoke Colored Interior
</TABLE>
<TABLE>
Location #7: 3079 East Main, Russellville, AR
<CAPTION>
<S> <C>
1 - 108 x 52 1/4" Clear Tempered
4 - 29 x 72 1/4" Bronze Tempered
1 - 40 x 84 1/4" Bronze Tempered
2 - 44 x 36 1" Bronze Annealed Insulated
2 - 36 x 36 1" Bronze Annealed Insulated
1 - 88 x 66 1" Bronze Annealed Insulated
1 - 60 x 60 1" Bronze Annealed Insulated
1 - 36 x 29 1" Bronze Annealed Insulated
2 - 18 x 52 1/4" Bronze Spandrel
1 - 29 x 36 1/4" Bronze Spandrel
2 - 132 x 48 1" Bronze Tempered Insulated
2 - 108 x 48 1" Bronze Tempered Insulated
1 - 108 x 52 1" Bronze Tempered Insulated
1 - 108 x 40 1" Bronze Tempered Insulated
</TABLE>
<TABLE>
3079 East Main, Russellville, AR (Continued)
<CAPTION>
<S> <C>
2 - 108 x 50 1" Bronze Tempered Insulated
2 - 126 x 38 1" Bronze Tempered Insulated
1 - 24 x 108 1" Bronze Tempered Insulated
1 - 60 x 24 1" Bronze Insulated Panel
15 - 36 x 144 1" Tempered Green Sunglas-Clear Laminated
2 - 36 x 60 Bullet Resistant
</TABLE>
<TABLE>
Location #8: 1907 West Main, Russellville, AR
<CAPTION>
<S> <C>
4 - 29 x 73 1" Bronze Tempered Insulated Unit
2 - 39 x 82 1" Bronze Tempered Insulated Unit
1 - 39 x 35 1" Bronze Annealed Insulated Unit
2 - 39 x 53 1" Bronze Annealed Insulated Unit
2 - 37 x 51 1" Bronze Annealed Insulated Unit
4 - 45 x 59 1" Bronze Annealed Insulated Unit
1 - 25 x 59 1" Bronze Annealed Insulated Unit
4 - 37 x 59 1" Bronze Annealed Insulated Unit
4 - 29 x 73 1/4" Clear Tempered
2 - 36 x 60 Bullet Resistant
1 - 39 x 35 1" Bronze Spandrel Insulated Unit
1 - 39 x 37 1" Bronze Spandrel Insulated Unit
1 - 39 x 82 1" Bronze Spandrel Insulated Unit
2 - 42 x 83 1/4" Clear Tempered
1 - 40 x 82 1/4" Clear Tempered
1 - 38 x 83 1/4" Clear Tempered
1 - 36 x 88 1/4" Clear Tempered
2 - 35 x 83 1/4" Clear Tempered
1 - 36 x 83 1" Bronze Insulated Unit
2 - 36 x 16 1" Bronze Insulated Unit
</TABLE>
<TABLE>
GENERAL LIABILITY
<CAPTION>
<S> <C>
$2,000,000 General Aggregate
$2,000,000 Products & Completed Operations
$1,000,000 Personal & Advertising Injury
$1,000,000 Each Occurrence
$ 50,000 Fire Damage
$ 5,000 Per Person Medical Expense
</TABLE>
Based On:
GENERAL LIABILITY (CONTINUED)
Building or Premises - Bank Code 61223
323 Market Street, Dover, AR 4,000 Area Hwy 105, Hector, AR 1,000 Area Hwy
64, London, AR 3,000 Area 2110 East Main, Russellville, AR 1,800 Area 900
North Arkansas, Russellville, AR 9,400 Area Hwy & Hwy 7T (Krogers),
Russellville, AR 400 Area 3079E East Main, Russellville, AR 4,000 Area 1907
West Main, Russellville, AR 2,900 Area
<TABLE>
EMPLOYEE BENEFITS LIABILITY
<CAPTION>
<S> <C>
$1,000,000 Limit
$ 1,000 Deductible
Based on 90 Employees
</TABLE>
<TABLE>
AUTOMOBILE
<CAPTION>
<S> <C>
$1,000,000 Combined Single Limit Liability
$ 5,000 Medical Payments
$1,000,000 Uninsured Motorist Bodily Injury
$ 25,000 Uninsured Motorist Property Damage
$1,000,000 Underinsured Motorist
Hired & Non-Owned Auto Liability
$ 250 Deductible Comprehensive
$ 1,000 Deductible Collision
Applies To:
1987 Ford LTD #2942
1995 Dodge Dakota PU #1932
1994 Jeep Grand Cherokee #7687
1996 Lincoln Towncar #9130
</TABLE>
<TABLE>
UMBRELLA
<CAPTION>
<S> <C>
$2,000,000 Limit
$ 10,000 Retained Limit
</TABLE>
<TABLE>
WORKER'S COMPENSATION
<CAPTION>
<S> <C>
$500,000 Each Accident
$500,000 Disease - Policy Limit
$500,000 Disease - Each Employee
Experience Mod: .82
Officers Included: Roy Reeves, Pres, CEO
Bennie Harris, Exec VP
Mike Powers, Senior VP
Harold Hayes, Senior VP
Based On:
Clerical Code 8810 $1,283,704 Payroll
</TABLE>
Schedule 2.17
Environmental Compliance
None
<TABLE>
Schedule 2.20
Properties
<CAPTION>
Address Facility Status Period of Occupancy
<S> <C> <C> <C>
800 N. Arkansas Avenue
Russellville, Arkansas Main Office owned 7 years
3709E East Main St.
Russellville, Arkansas Branch owned 5 years
Main Street
Hector, Arkansas Branch owned 29 years
Hwys 64 & 333
London, Arkansas Branch owned 18 years
1100 South Rogers St.
Clarksville, Arkansas Branch owned 2 years
Highway 64 East
Russellville, Arkansas Operation Center leased 6 years
Highway 7 South
(Kroger Store)
Russellville, Arkansas Branch leased 6 years
</TABLE>
Schedule 4.2(i)
Accounts or Safe Deposits Boxes Maintained by FBAR
To be delivered at Closing
Name Shown on
Name of Institution Account or Safe Deposit Box Authorized Signatories
Schedule 4.4
Names; Service Marks and Trademarks
1. "First Bank of Arkansas" and its associated log
EXHIBIT 2 (ii)
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
FIRST COMMERCIAL CORPORATION
AND
SIMMONS FIRST NATIONAL CORPORATION
Dated as of March 21, 1997
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") dated as of March 21, 1997, by
and between First Commercial Corporation, an Arkansas corporation, ("Seller"),
and Simmons First National Corporation, an Arkansas corporation ("SFNC").
WHEREAS, Southwest Bancshares, Inc. ("SWB") is the owner of 10,000 shares
of $10.00 par value voting common stock ("Bank Stock"), being all of the
outstanding voting common stock, of First Bank of Arkansas, Searcy, Arkansas
("FBAS"), an Arkansas banking association having its principal place of business
at 125 North Poplar, Searcy, Arkansas;
WHEREAS, SWB and Seller have entered into a merger agreement pursuant to
which SWB will be merged into Seller and which transaction is expected to be
completed prior to the consummation of the sale and purchase of the Bank Stock;
WHEREAS, SFNC has submitted a definitive bid to purchase the Bank Stock
from Seller and Seller hereby accept SFNC's bid to purchase the Bank Stock in
the manner provided in this Agreement;
WHEREAS, Seller and SFNC believe that the sale and purchase of the Bank
Stock in the manner provided by, and subject to the terms and conditions set
forth in, this Agreement and all exhibits, schedules and supplements hereto are
desirable and in the best interests of their respective institutions and
shareholders;
WHEREAS, Seller is making certain representations, warranties and
indemnities herein to induce SFNC to enter into this Agreement; and
WHEREAS, the respective boards of directors of SFNC and Seller have
approved the proposed transactions substantially on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE I
SALE OF STOCK; CLOSING
Section 1.1 Bank Stock. Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall sell, transfer and deliver to SFNC, and
SFNC shall purchase, the Bank Stock.
Section 1.2 Purchase Price. (a) The purchase price (the "Purchase
Price") for the Bank Stock shall be $12,000,000.00.
Section 1.3 Closing. Unless this Agreement shall have been terminated and
the transactions herein contemplated shall have been abandoned pursuant to the
provisions of Section 8.1, and subject to the conditions of Article V, the
closing (the "Closing") of the purchase and sale of the Bank Stock shall take
place at 10:00 a.m., Little Rock, Arkansas time, at a mutually agreeable
location and on a mutually agreeable date within forty (40) days after receipt
of all regulatory approvals, the expiration of all waiting periods and the
satisfaction of all conditions to Closing under this Agreement; provided,
however, that the Closing Date shall not be later than the third (3rd) calendar
day in any month. The date and effective time of the Closing are herein referred
to as the "Closing Date". For purposes of this Agreement, the purchase and sale
of the Bank Stock shall be deemed to have been effectuated immediately prior to
the opening of business on the date on which the Closing shall occur.
Section 1.4 Closing Deliveries. (a) At the Closing, Seller shall
deliver to SFNC:
(i) certificates representing the Bank Stock, duly endorsed for
transfer to SFNC, which shall transfer to SFNC good title to the Bank Stock,
free and clear of all Encumbrances;
(ii) such other documents, including officers' certificates and
opinions of counsel, as may be required by this Agreement or reasonably
requested by SFNC; and
(iii) if the net settlement for the repurchase and resale of loan
participations described in Section 6.7 requires a transfer of funds from Seller
and its affiliates to FBAS, cause to be transferred to FBAS, pursuant to the
instructions of SFNC, cash in the amount of the net settlement under Section 6.7
in immediately available funds.
(b) At the Closing, SFNC shall:
(i) cause to be transferred to such account as Seller shall specify
cash in the amount of the Purchase Price in immediately available funds;
(ii) deliver to Seller such other documents, including officers'
certificates and opinions of counsel, as may be required by this Agreement or
reasonably requested by Seller; and
(iii) if the net settlement for the repurchase and resale of loan
participations described in Section 6.7 requires a transfer of funds from FBAS
to Seller and its affiliates, cause FBAS to transfer to Seller and its
Affiliates, pursuant to the instructions of Seller, cash in the amount of the
net settlement under Section 6.7 in immediately available funds.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby makes the representations and warranties set forth in this
Article II to SFNC. Seller will deliver to SFNC subject to its approval and
acceptance, the Schedules to this Agreement referred to in this Article II prior
to the date Seller executes this Agreement. Seller agrees to provide SFNC (a)
supplemental Schedules reflecting any changes to Schedules previously delivered,
which changes occur between the date of such previously delivered Schedules and
the date of the Closing and could reasonably be expected to have a Material
Adverse Effect on or with respect to the transactions contemplated hereby
promptly upon having knowledge of such changes, and (b) at the Closing
supplemental Schedules reflecting any other changes to previously delivered
Schedules, which changes occur between the date of such previously delivered
Schedules and the date of the Closing.
Section 2.1 Organization and Qualification. (a) Seller is an Arkansas
corporation and bank holding company under the Bank Holding Company Act of 1956,
as amended (the "BHCA"), and is duly organized, validly existing and in good
standing under the laws of the State of Arkansas and all laws, rules and
regulations applicable to bank holding companies. FBAS is an Arkansas chartered
banking association, duly organized, validly existing and in good standing under
the laws of the State of Arkansas and is a member bank of the Federal Reserve
System in good standing. Each of Seller and FBAS has all requisite corporate
power and authority to carry on its business as now being conducted and to own,
lease and operate its properties and assets as now owned, leased or operated,
and to enter into and carry out its obligations under this Agreement.
(b) FBAS has no Subsidiaries;
(c) The copies of the Articles of Incorporation and the Bylaws of FBAS
previously furnished to SFNC are true, correct and complete and reflect all
amendments thereto as of the date hereof.
Section 2.2 Capitalization; Other Securities. (a) The authorized capital
stock of FBAS consists solely of 10,000 shares of voting common stock, $10.00
par value per share, all of which are issued and outstanding. SWB owns 100% of
the issued and outstanding voting common stock of FBAS.
(b) All of the shares of the Bank Stock are duly authorized, validly
issued, fully paid and, except pursuant to applicable banking laws,
nonassessable. Seller has no knowledge that any Governmental Authority has
threatened or considered any assessment against holders of shares of the Bank
Stock. All of the shares of the Bank Stock are (i) free and clear of any
Encumbrance, (ii) free of preemptive rights and restrictions applicable to the
payment of dividends on such shares except pursuant to applicable banking laws
and regulations and (iii) free of irrevocable proxies with respect to such
shares and any outstanding or authorized subscriptions, options, warrants,
calls, convertible securities, rights, or other agreements or commitments of any
kind restricting the transfer of, requiring the issuance or sale of, or
otherwise relating to any of such shares. All dividends on any shares of the
Bank Stock declared prior to the date hereof have been paid.
(c) FBAS has no equity ownership in any other Person, except shares in
Governmental Authorities as required to perform its ordinary business
operations.
(d) The certificates representing the Bank Stock to be delivered to SFNC at
the Closing, and the signatures on the endorsements thereof or stock powers
delivered therewith, will be valid and genuine. Such stock certificates,
endorsements, stock powers and other documents to be delivered to SFNC on the
date of the Closing will transfer to and vest in SFNC ownership of the Bank
Stock, free and clear of any Encumbrance.
(e) No stock transfer taxes or other similar taxes are or will be required
to be paid by SFNC with respect to the transfer of the Bank Stock.
Section 2.3 Authority Relative to the Agreement. Seller has full corporate
power and authority, and no further corporate proceedings on the part of Seller
are necessary, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, all of which have been duly and validly
authorized by the Board of Directors of Seller. When this Agreement is executed
and delivered by Seller, it shall constitute a duly authorized, valid, legally
binding and enforceable obligation of the Seller, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally and general equitable principles, and
subject to the approval of regulatory agencies and other governmental
authorities having authority over Seller or FBAS as may be required by statute
or regulation. Neither Seller nor FBAS is in violation of, or default under, its
Articles of Incorporation, Bylaws, or any agreement, document or instrument
under which either Seller or FBAS is obligated or bound, or any law, order,
judgment, injunction, award, decree, statute, rule, ordinance or regulation
applicable to Seller or any of its Affiliates, the violation or breach of which
could reasonably be expected to have a Material Adverse Effect on FBAS taken as
a whole or to prevent, delay or make illegal the consummation of the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement in its entirety and the consummation of all the transactions
contemplated hereby will not conflict with, or result in any violation or
default under, the Articles of Incorporation of either Seller or FBAS or any
agreement, document or instrument by which either Seller or FBAS is obligated or
bound, or any law, order, judgment, injunction, award, decree, statute, rule,
ordinance, or regulation applicable to Seller or any of its Affiliates, the
violation or breach of which could reasonably be expected to have a Material
Adverse Effect on FBAS taken as a whole or to prevent, delay or make illegal the
consummation of the transactions contemplated hereby.
Section 2.4 No Violation. Neither the execution, delivery nor performance
of this Agreement in its entirety, nor the consummation of all the transactions
contemplated hereby, following the receipt of such approvals as may be required
from the Board of Governors of the Federal Reserve System ("FRB"), Arkansas
State Bank Department ("ASBD") or other applicable regulatory authorities will
(i) violate any law, order, judgment, injunction, award, decree, statute, rule,
ordinance or regulation applicable to either Seller or FBAS, or (ii) be in
conflict with, result in a breach or termination of any provision of, cause the
acceleration of the maturity of any debt or obligation pursuant to, constitute a
default (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of any Encumbrance upon any property or assets
of FBAS pursuant to, any terms, conditions or provisions of any note, license,
instrument, indenture, mortgage, deed of trust or other agreement or
understanding, or any other restriction of any kind or character, to which FBAS
is a party or by which any of its assets or properties are subject or bound.
Except as disclosed Schedule 2.9, there are no proceedings pending or, to the
knowledge of either Seller or FBAS, threatened against either Seller or FBAS or
involving the Bank Stock, which could reasonably be expected to result in
liability to SFNC or FBAS upon the consummation of the transactions contemplated
hereby or which could reasonably be expected to prevent, delay or make illegal
such consummation. Except as contemplated hereby, the corporate existence,
business, organization, assets, licenses, permits, authorizations and contracts
of FBAS will not be terminated or impaired by reason of the execution, delivery
or performance by Seller of this Agreement or the consummation by Seller of the
transactions contemplated hereby, assuming receipt of all required regulatory
approvals.
Section 2.5 Consents and Approvals. No prior consent, approval or
authorization of, or declaration, filing or registration with, any Person is
required of either Seller or FBAS in connection with the execution, delivery and
performance by Seller of this Agreement and the transactions contemplated hereby
or the resulting change of control of FBAS, except for any necessary regulatory
approval.
Section 2.6 Regulatory Reports. FBAS has filed all reports, registrations
and statements, together with any amendments required to be made thereto, that
are required to be filed with the FRB, the ASBD, the Federal Deposit Insurance
Corporation (the "FDIC"), or any other regulatory authority having jurisdiction
over FBAS, and such reports, registrations and statements are true and correct
in all material respects.
Section 2.7 Financial Statements. (a) Seller has provided SFNC with a true
and complete copy of the reports of income and condition of FBAS for the year
ended December 31, 1996 prepared in accordance with generally acceptable
accounting principles, and the unaudited balance sheets and statements of income
for the year ended December 31, 1996 and two months ended February 28, 1997
prepared internally in accordance with prior practices (collectively, the "Bank
Financial Statements"). The Bank Financial Statements are complete and
accurately present the financial condition of FBAS in all material respects as
of their respective dates. The accounting records underlying the Bank Financial
Statements accurately and fairly reflect in all material respects the
transactions of FBAS.
(b) FBAS has no material liability or obligation, accrued, absolute,
contingent or otherwise and whether due or to become due (including, without
limitation, unfunded obligations under any Welfare Benefit Plan, as defined
below) or liabilities for federal, state or local taxes or assessments or
liabilities under any agreement that is not reflected in or disclosed in the
Bank Financial Statements, except (i) those liabilities and expenses incurred in
the ordinary course of business and consistent with prudent business practices
since the date of the Bank Financial Statements and (ii) as disclosed on
Schedule 2.7(b).
Section 2.8 Absence of Certain Changes. Except to the extent set forth on
Schedule 2.8, since December 31, 1996 (the "Balance Sheet Date"), FBAS has not:
(a) made any amendment to its Articles of Incorporation or Bylaws or
changed the character of its business in any material manner;
(b) suffered any Material Adverse Effect;
(c) entered into any agreement, commitment or transaction except in the
ordinary course of business and consistent with prudent banking practices;
(d) except for regular salary increases and incentive compensation payments
granted in the ordinary course of business and consistent with prior practices,
granted any increase in compensation or paid or agreed to pay or accrue any
bonus, percentage compensation, service award, severance payment or like benefit
to or for the credit of any former shareholder, director, officer, employee or
agent, or entered into any employment or consulting contract or other agreement
with any director, officer or employee, or adopted, amended or terminated any
pension, employee welfare, retirement, stock purchase, stock option, stock
appreciation rights, termination, severance, income protection, golden
parachute, savings or profit-sharing plan (including trust agreements and
insurance contracts embodying such plans), any deferred compensation or
collective bargaining agreement, any group insurance contract or any other
incentive, welfare or employee benefit plan or agreement maintained by FBAS for
the directors, employees or former employees of FBAS ("Employee Benefit Plans")
which have not been previously disclosed to SFNC.
(e) issued, reserved for issuance, granted, sold or authorized the issuance
of any shares of its capital stock or subscriptions, options, warrants, calls,
rights or commitments of any kind relating to the issuance or sale of, or
conversion into, shares of its capital stock;
(f) made any or acquiesced with any material change in any accounting
methods, principles or practices, other than any such changes as might be
required to conform to generally accepted accounting principles; or
(g) agreed, whether in writing or otherwise, to take any action the
performance of which would make the representations contained in this Article II
not true in any material respect as of the Closing.
Section 2.9 Litigation. Other than as disclosed on Schedule 2.9, there are
no, and FBAS knows of no basis for, actions, suits, claims, investigations,
reviews or other proceedings pending or, to the knowledge of either Seller or
FBAS, threatened against Seller or FBAS or involving any of their respective
directors, officers, properties or assets, at law or in equity, or before or by
any foreign, federal, state, municipal or other governmental court, department,
commission, board, bureau, agency or other instrumentality, or any board of
arbitration or similar entity which could reasonably be expected to prevent,
delay or make illegal the transactions contemplated by this Agreement or which
could reasonably be expected to have a Material Adverse Effect on FBAS taken as
a whole.
Section 2.10 Tax Matters. FBAS (or the affiliated group of which it is a
member) has duly and timely filed all tax returns required to be filed by it
involving a tax liability of FBAS or other potential material detriment to FBAS
for failure to file (the "Filed Returns"). Each of the Filed Returns is true and
correct in all material respects. FBAS (or the affiliated group of which it is a
member) has paid, or has established adequate reserves for the payment of, all
federal income taxes, all state and local income taxes and all franchise,
property, sales employment, foreign or other taxes required to be paid with
respect to each such bank and the periods covered by the Filed Returns. FBAS has
not had any tax deficiency proposed or assessed against it and neither FBAS nor
any Person acting on its behalf has executed any waiver of or extended the
statue of limitations on the audit of any tax return or the assessment or
collection of any tax. With respect to the periods for which returns have not
yet been filed, FBAS (or the affiliated group of which it is a member) has
established adequate reserves for the payment of all federal income taxes, all
state and local income taxes and all franchise, property, sales, employment,
foreign or other taxes owed or to be owed by it. FBAS has 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. 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
such taxes or charges.
Section 2.11 Employee Benefit Plans. With respect to all Employee Benefit
Plans in which employees of FBAS participate, the following are true and
correct:
(a) Schedule 2.11(a) lists each employee welfare benefit plan (as such term
is defined in Section 3(1) of the employee Retirement Income Security Act of
1974, as amended ("ERISA")), maintained by FBAS, or to which FBAS contributes or
is required to contribute (such employee welfare benefit plans being hereinafter
collectively referred to as the "Welfare Benefit Plans");
(b) Schedule 2.11(b) lists each employee pension benefit plan (as such term
is defined in Section 3(2) of ERISA and not exempted under Section 4(b) or 201
of ERISA) maintained by FBAS or to which FBAS contributes or is required to
contribute (such employee pension benefit plans being hereinafter collectively
referred to as the "Pension Benefit Plans");
(c) With respect to each Pension Benefit Plan that is intended to be
tax-qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), a favorable determination letter as to the qualification
under the Code of each such Pension Benefit Plan has been issued;
(d) Each Welfare Benefit Plan and Pension Benefit Plan has been
administered in substantial compliance with the requirements of ERISA and, to
the knowledge of Seller, there are no transactions involving such Welfare
Benefit Plans or Pension Benefit Plans which are prohibited under either ERISA
or the Code;
(e) True and complete copies of each Welfare Benefit Plan and each Pension
Benefit Plan, or related trust agreements and the most recent determination
letter issued by the Internal Revenue Service with respect to each Pension
Benefit Plan, have been made available to SFNC by Seller; and
(f) All Pension Benefit Plans in which the employees of FBAS are eligible
to participate or to which FBAS contributes will be merged or terminated upon
the mutual agreement of SFNC and Seller on or prior to the Closing Date and
Seller shall use its best efforts to obtain a favorable determination letter
from the Internal Revenue Service regarding such termination.
Section 2.12 Employment Matters. Except as set forth on Schedule 2.12, FBAS
is not a party to any oral or written contracts of employment, agreements
granting benefits or rights, including retirement or incentive compensation
benefits, to present or former employees or any collective bargaining agreement.
FBAS is in compliance in all material respects with all applicable laws
respecting employment. FBAS is not to its knowledge engaged in any unfair labor
practice. Seller has disclosed the names of all personnel employed by FBAS whose
annual compensation (including bonuses and the like) exceeds $20,000 and the
total annual compensation of each such person. Except as described in Schedule
2.12, FBAS has not entered into or agreed to enter into any employment agreement
or agreement not to compete or consulting agreement with or agreement for the
purchase of the services of any officer or employee. Full and complete copies of
all such agreements and all amendments described in Schedule 2.12 have been
delivered to SFNC.
Section 2.13 Leases, Licenses, Contracts and Agreements. Schedule 2.13 sets
forth a materially accurate and complete description of all leases, subleases,
licenses, contracts and agreements to which FBAS is a party, or by which FBAS is
bound, which obligate FBAS to pay in the aggregate under any such contract an
amount in excess of $50,000 over the entire term of any such agreement (or
contracts of a similar nature which in the aggregate under all such contracts
obligate or may obligate FBAS in the aggregate under any such contracts for an
amount in excess of $250,000 over the respective entire terms of such contracts
(the "Contracts"). For the purposes of this Agreement, the term "Contracts"
shall be deemed not to include loans or loan commitments (including letters of
credit) made by, repurchase agreements made by, bankers acceptances issued by or
deposits accepted by, FBAS. To Seller's and FBAS' knowledge, all of the
Contracts are legal, valid and binding obligations of the parties to the
Contracts enforceable in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
relating to creditors' rights generally and to general equitable rinciples, to
the extent necessary to give FBAS all material benefits intended to be provided
to FBAS by such Contracts. To Seller's and FBAS' knowledge, there are no
existing defaults by FBAS under the Contracts and no termination, condition or
other event has occurred which could reasonably be expected to constitute a
default under the Contracts, either of which could reasonably be expected to
have a Material Adverse Effect upon FBAS taken as a whole.
Section 2.14 Related Party Transactions. Except as disclosed in Schedule
2.14, there are no agreements, instruments, commitments, extensions of credit,
tax sharing, or allocation agreements, service arrangements or other contractual
agreements of any kind, between or among FBAS, whether on its own behalf or in
its capacity as trustee or custodian for the funds of any employee benefit plan
(as defined in ERISA), and any of its Affiliates.
Section 2.15 Compliance with Laws. Neither FBAS nor Seller is in default in
respect to or in violation of any judgment, order, writ, injunction, or decree
of any court or any statute, law, ordinance, rule, order, or regulation of any
governmental department, commission, board, bureau, agency or instrumentality
which default or violation could reasonably be expected to have a Material
Adverse Effect on FBAS taken as a whole.
Section 2.16 Insurance. FBAS has in effect the insurance coverage
(including fidelity bonds) described in Schedule 2.16 and has had similar
insurance in force for the last five (5) years. FBAS has not received any
notification from any insurance carrier denying or disputing any pending claim
made by it or on its behalf, denying or disputing any coverage for any such
claim, denying or disputing the amount of any such claim.
Section 2.17 Environmental Compliance. To Seller's knowledge and except as
set forth on Schedule 2.17, FBAS is in compliance with all material federal,
state and local laws, regulations, and ordinances relating to the environment
and to the discharge of matter into the air, ground or water applicable to its
properties. There are no actions, suits or proceedings pending or, to Seller's
knowledge, threatened against FBAS by or before any federal, state, or local
court, or governmental authority or agency, concerning any noncompliance or
alleged noncompliance with such laws, regulations, and ordinances.
Section 2.18 Brokers. Seller shall be responsible for the payment of all
fees, if any, due Alex. Brown & Sons Incorporated related to the transactions
contemplated by this Agreement.
Section 2.19 Regulatory Actions. There are no bank regulatory actions or
proceedings pending or, to the knowledge of Seller or FBAS, threatened against
FBAS. FBAS is not subject to any formal or informal agreement, memorandum of
understanding, enforcement action with, or any type of financial assistance by,
any bank regulatory authority having jurisdiction over it.
Section 2.20 Title to Properties; Encumbrances. Except as set forth in the
Bank Financial Statements, FBAS has unencumbered, good and marketable title to
all its properties and assets reflected in the Bank Financial Statements except
for (i) those properties and assets disposed of for fair market value int he
ordinary course of business and consistent with prudent banking practice since
the date of the Bank Financial Statements and (ii) assets acquired in connection
with a debt previously contracted which, in the aggregate for FBAS, have a value
of less than $150,000. Schedule 2.20 contains a complete and accurate list of
all locations (identified by address, owner/operator, type of facility, and
period of time owned, leased or used by FBAS) of all real property that FBAS
presently owns, leases or uses. All real property and tangible personal property
owned or used by FBAS is in good condition, normal wear and tear excepted, and
is in good operating order.
Section 2.21 Representations Not Misleading. No representation or warranty
by Seller in this Agreement, nor any exhibit or schedule furnished or made
available to SFNC by or on behalf of Seller under and pursuant to, or in
anticipation of, this Agreement, contains or will contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SFNC
SFNC hereby makes the representations and warranties set forth in this
Article III to Seller.
Section 3.1 Organization and Authority. SFNC is an Arkansas corporation and
bank holding company under the BHCA, and is duly organized, validly existing,
and in good standing under the laws of the State of Arkansas and all laws, rules
and regulations applicable to bank holding companies, and has all requisite
corporate power and authority to conduct its business as now conducted, to own,
lease and operate its properties and assets as now owned, leased or operated,
and to enter into and carry out its obligations underthis
Agreement.
Section 3.2 Investment Intent. SFNC is acquiring the Bank Stock for its own
account, for investment purposes only and not with a view to or with the present
intention of making any distribution of the Bank Stock.
Section 3.3 Authority Relative to Agreement. SFNC has full corporate power
and authority, and no further corporate proceedings on the part of SFNC are
necessary to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by SFNC and is a duly authorized, valid, legally binding and
enforceable obligation of SFNC, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to creditors' rights
generally and general equitable principles, and subject to such shareholder
approvals and such approval of regulatory agencies and other governmental
authorities having authority over SFNC as may be required by statute or
regulation. SFNC is not in violation of, or default under, its Articles of
Incorporation, Bylaws or any agreement, document or instrument under which SFNC
is obligated or bound, or any law, order, judgment, injunction, award, decree,
statute, rule, ordinance or regulation applicable to SFNC or any of its
Subsidiaries, the violation or breach of which could reasonably be expected to
have a Material Adverse Effect on SFNC.
Section 3.4 No Violation. Neither the execution, delivery nor performance
of this Agreement in its entirety, nor the consummation of all the transactions
contemplated hereby, following the receipt of such regulatory approvals as may
be required from the ASBD, the FRB or other regulatory authorities will (i)
violate (with or without the giving of notice or passage of time) any law,
order, writ, judgment, injunction, award, decree, rule, statute, ordinance or
regulation applicable to SFNC or any of its Subsidiaries or (ii) be in conflict
with, result in a breach or termination of any provision of, cause the
acceleration of the maturity of any debt or obligation pursuant to, constitute a
default (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of any security interest, lien, charge or other
encumbrance upon any property or assets of SFNC pursuant to, any terms,
conditions or provisions of SFNC's Articles of Incorporation or Bylaws, or any
note, license, instrument, indenture, mortgage, deed of trust or other
agreement, document, instrument or understanding, or any other restriction of
any kind or character, to which SFNC is a party or by which any of their assets
or properties are obligated or bound. There are no proceedings pending or, to
the knowledge of SFNC, threatened, against SFNC, at law or in equity, or before
any foreign, federal, state, municipal or other governmental court, department,
commission, board, bureau, agency, instrumentality or other Person, which could
reasonably be expected to result in liability to Seller on the consummation of
the transactions contemplated hereby, or which could reasonably be expected to
prevent or delay such consummation. Except as contemplated hereby, the corporate
existence, business organization, assets, licenses, permits, authorizations and
contracts of SFNC will not be terminated or impaired by reason of the execution,
delivery or performance by SFNC of this Agreement or the consummation by SFNC of
the transactions contemplated hereby, assuming receipt of the required
regulatory approvals.
Section 3.5 Consents and Approvals. No prior consent, approval or
authorization of, or declaration, filing or registration with, any Person is
required of or by SFNC in connection with the execution, delivery and
performance by SFNC of this Agreement and the transactions contemplated hereby,
or the resulting change in control of FBAS, except the filing of such
applications and the receipt of such regulatory approvals as may be required
from the ASBD, the FRB and other regulatory authorities.
Section 3.6 Brokers. SFNC has retained Stephens Inc. for assistance in
the negotiations of the transactions contemplated by this Agreement and SFNC
shall be responsible for the payments of all fees, costs and expenses of
Stephens Inc. related to the transactions contemplated by this Agreement.
Seller has consented to SFNC retaining Stephens Inc. for this transaction.
Section 3.7 No Misleading Statements. No representation or warranty by SFNC
in this Agreement, nor any exhibit or schedule furnished or made available to
Seller or FBAS by or on behalf of SFNC under and pursuant to, or in anticipation
of this Agreement, contains or will contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements contained
herein or therein no misleading.
ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR TO CLOSING
Section 4.1 Access To, and Information Concerning, Properties and Records.
Between the date of this Agreement and the Closing, Seller shall, to the extent
permitted by law, cause FBAS to give SFNC, its legal counsel, accountants and
other representatives reasonable access, during normal business hours, to all of
FBAS' properties, books, contracts, commitments and records, and to permit SFNC,
at its own expense, to make such inspections as it may require and to furnish to
SFNC during such period all such information concerning FBAS and its affairs as
SFNC may reasonably request. All information obtained by SFNC pursuant to this
Agreement shall be held confidential by SFNC, its agents and representatives,
except as necessary to secure regulatory and other required consents and
approvals and financing. If this Agreement is terminated, SFNC will return to
FBAS all originals and copies of information obtained pursuant to this Agreement
other than those provided to Governmental Authorities. All information provided
pursuant to this Section 4.1 shall be subject to the Confidentiality Agreement.
Section 4.2 Affirmative Covenants of Seller. During the period commencing
on the date of this Agreement through the Closing, Seller shall cause FBAS,
except as specifically otherwise contemplated by this Agreement:
(a) to operate and to conduct FBAS' business in the ordinary course of
business consistent with prudent banking practices and to provide SFNC with a
monthly balance sheet and income statement for FBAS;
(b) to preserve materially intact FBAS' corporate existence, business
organization, licenses, permits and authorizations;
(c) to comply with all material contractual obligations applicable to FBAS'
operations, except those as to which FBAS may in good faith reasonably contest;
(d) to maintain all of FBAS' properties in good repair, order and
condition, reasonable wear and tear excepted, and maintain the insurance
coverages described in Schedule 2.16 or obtain comparable insurance coverages
from reputable insurers which, in respect to amounts, types and risks insured,
are adequate for the business conducted by FBAS and consistent with the existing
insurance coverages;
(e) in a timely manner (i) to cooperate with SFNC in satisfying the
conditions in this Agreement, (ii) to assist SFNC in obtaining as promptly as
possible all consents, approvals, authorizations, and rulings, whether
regulatory, corporate or otherwise, as are necessary for SFNC and Seller (or
either of them) to carry out and consummate the transactions contemplated by
this Agreement, including all consents, approvals and authorizations required by
any agreement or understanding existing at the Closing between Seller and any
Governmental Authority or other third party, (iii) to furnish information
concerning FBAS not previously provided to SFNC required for inclusion in any
filings or applications that may be necessary in that regard and (iv) to perform
all acts and execute and deliver all documents necessary to cause the
transactions contemplated by this Agreement to be consummated at the earliest
possible date;
(f) to file timely with the ASBD, FRB and other appropriate regulatory
authorities all financial and other reports required to be so filed by FBAS;
(g) to comply in all material respects with all applicable laws, rules,
regulations and orders, domestic and foreign, except to the extent that failure
to so comply could not reasonable be expected to have a Material Adverse Effect
on FBAS taken as a whole;
(h) to notify SFNC promptly upon obtaining knowledge of the institution of
any litigation of any kind against either Seller or FBAS or the happening of any
event or fact that has or could reasonably be expected to have a Material
Adverse Effect on the financial condition, businesses, prospects or affairs of
FBAS taken as a whole or Sellers' ability to perform its obligations hereunder
or that causes or could reasonably be expected to cause any of the
representations or warranties of Sellers contained in this Agreement to be
untrue or misleading in any material respect;
(i) to deliver to SFNC a list (Schedule 4.2(i) hereto), dated as of the
Closing, showing (i) the name of each bank or institution where FBAS has one or
more accounts or safe deposit boxes, (ii) the name(s) in which such accounts or
boxes are held and (iii) the name of each person authorized to draw thereon or
have access thereto;
(j) to provide access, to the extent that Seller or FBAS has the right to
provide access, to any or all of FBAS' real property to enable SFNC to
physically inspect any structure or components of any structure on such
property, including without limitation surface and subsurface testing and
analyses;
(k) to provide information reasonably requested by SFNC necessary to
convert the data processing systems of FBAS to the data processing systems of
SFNC;
(l) to notify SFNC promptly upon obtaining knowledge that an officer of
FBAS with the title of Vice President or above will not continue his or her
employment with FBAS; and
(m) to consult with SFNC regarding the replacement of employees of FBAS who
cease to be employed prior to the Closing Date.
(n) to notify SFNC of all board meeting and committee meeting at least
three (3) days prior to such meeting and permit a representative of SFNC to
attend all such meetings.
Section 4.3 Negative Covenants to Seller. During the period from the date
of this Agreement to the Closing, except with the prior written consent of SFNC
or as otherwise specifically permitted by this Agreement, Seller will not permit
FBAS to:
(a) make any amendment to its Articles of Incorporation or Bylaws;
(b) make any change in the number of shares of the capital stock issued and
outstanding, or issue, reserve for issuance, grant, sell or authorize the
issuance of any shares of its capital stock or subscriptions, options, warrants,
calls, rights or commitments of any kind relating to the issuance of or declare
any dividend with respect to shares of its capital stock;
(c) except as set forth on Schedule 2.8 and except for regular salary
increases and incentive compensation payments granted in the ordinary course of
business and consistent with prior practices, grant any increase in compensation
or directors' fees, pay, or agree to pay, or accrue any bonus or like benefit,
for the credit of any director, officer, employee or other person, or enter into
any employment, consulting or severance agreement or any other agreement, with
any director, officer or employee, or adopt, amend or terminate any Employee
Benefit Plans, or change or modify the period of vesting or retirement age for
any participant of such a plan (except to the extent any amendment, termination,
change or modification is required hereunder);
(d) make any capital expenditure or a series of expenditures of a
similar nature in excess of $75,000 in the aggregate;
(e) except for negotiations and discussions between the parties and others
relating to the transactions contemplated by this Agreement or as otherwise
permitted hereunder, enter into any transaction, or enter into, modify or amend
any contract or commitment other than in the ordinary course of business and
consistent with prudent banking practices;
(f) except as contemplated hereby, adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization, or other reorganization or business combination, of FBAS;
(g) make any material change in FBAS' method of accounting;
(h) make any single new loan in excess of $250,000 or any loan which when
aggregated with other outstanding loans to the borrower or a related group of
borrowers exceed $500,000.00.
(i) mortgage or pledge any material tangible or intangible asset of FBAS,
or permit any such asset to become subject to an Encumbrance (other than liens
for real estate taxes not yet due and payable and mechanics, materialman's and
similar liens imposed by statute that are being contested in good faith);
(j) sell, assign or transfer any material asset or property of any nature
whatsoever, whether real, personal or mixed, tangible or intangible; or
(k) reduce the reserves for loan and lease losses and for other real estate
losses below the amounts presented in the Bank Financial Statements as of
December 31, 1996, except by charge-offs.
Section 4.4 Names; Service marks and Trademarks. SFNC acknowledges and
agrees that (a) it has no rights of any kind whatsoever to or in any of the
names and marks listed on Schedule 4.4 or any of the other names and marks of,
or used by, Seller or any of its Affiliates, and that no such rights are being
granted or transferred in connection with this Agreement and that all of FBAS'
rights of any kind whatsoever to or in any of such names and marks shall
terminate on the Closing, (b) from and after the Closing, SFNC shall refrain
from using any such names and marks, or any word, words, term, logo or
expression similar thereto in the name under which it does business, in its
corporate name and in any trademark, service mark or other name or mark used in
connection with its business and (c) as promptly as practical after the Closing,
but in any event within thirty (30) days after the Closing, the foregoing names
and marks shall be removed from FBAS' premises and such names and marks shall be
removed from all letterhead, brochures, advertisements and similar materials.
SFNC shall not at any time hold itself out to the public as being associated or
affiliated with Seller and shall not expressly or impliedly indicate to the
public that its activities are sponsored or endorsed by Seller. Seller agrees
not to use any of the names or marks listed on Schedule 4.4 in the Searcy
market, unless Seller changes the name of all of its affiliate banks to utilize
a name listed on Schedule 4.4, but in no event will Seller use any name or mark
listed on Schedule 4.4 in the Searcy market for a period of twenty-four (24)
months after Closing. The parties agree and acknowledge that, in the event of a
breach or threatened breach of any of the provision of this Section 4.4, Seller
or SFNC (as the case may be) shall be entitled to immediate and temporary
injunctive relief, as any such breach would cause Seller or SFNC (as the case
may be) irreparable injury for which it would have no adequate remedy at law.
Nothing herein shall be construed to prohibit Seller or SFNC (as the case may
be) from pursuing any other remedies available to it for any such breach or
threatened breach.
Section 4.5 Filing for Regulatory Approvals. As soon as reasonably
practicable, but in no event later than the forty-fifth (45th) day from the date
of this Agreement, SFNC shall file all notices and applications with the ASBD,
the FRB and other applicable regulatory authorities which are necessary or
appropriate to complete the transactions contemplated herein. Seller shall
respond promptly to requests by SFNC for information required by such notices
and applications. SFNC shall provide to Seller copies of all applications and
other notices required in connection with seeking such regulatory approvals
(excluding personal information relating to directors of SFNC or its Affiliates
or regulatory examinations of SFNC) and any other consent, approval or other
action by, or notice to or registration or filing in connection with the
transactions contemplated by this Agreement within five days of such
submissions. SFNC shall provide copies of any comments, requests or
notifications of actions by governmental or administrative agencies or
authorities related to the transaction contemplated by this Agreement to Seller
within five days of SFNC's receipt thereof. SFNC shall not be required to
provide copies of any such comments or requests which relate to personal
information of directors of SFNC or its Affiliates or regulatory examinations of
SFNC, unless such comments or requests indicate that the applications related
thereto may not be approved.
Section 4.6 Miscellaneous Agreements and Consents. Subject to the terms and
conditions of this Agreement, SFNC and Seller agree to use all reasonable
efforts to take, or cause to be taken, all actions, and to do or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective, as soon as practicable after the
date hereof, the transaction contemplated by this Agreement. SFNC and Seller
shall use their respective best efforts to obtain, or cause to be obtained,
consents of all third parties and governmental and regulatory authorities
necessary or desirable for the consummation of the transactions contemplated
herein.
Section 4.7 Public Announcement. Subject to written advice of counsel with
respect to legal requirements relating to public disclosure of matters related
to the subject matter of this Agreement, the time and content of any
announcements, press releases or other public statements concerning the
transactions contemplated herein will occur upon, and be determined by, the
mutual consent of Seller and SFNC.
Section 4.8 Untrue Representations. Seller shall promptly notify SFNC in
writing if Seller becomes aware of any fact or condition that makes untrue, or
shows to have been untrue, in any material respect, any Schedule or any other
information furnished to SFNC and any representation or warranty made in or
pursuant to this Agreement or that results in Seller's failure to comply with
any covenant, condition or agreement contained in this Agreement.
Section 4.9 Litigation and Claims. Seller shall promptly notify SFNC in
writing of any litigation, or of any claim, controversy or contingent liability
that might be expected to become the subject of litigation, against FBAS or
affecting any of its properties if such litigation or potential litigation
might, in the event of an unfavorable outcome, result in a Material Adverse
Effect on FBAS taken as a whole, and Seller shall promptly notify SFNC of any
legal action, suit or proceeding or judicial, administrative or governmental
investigation, pending or, to the knowledge of Seller, threatened against the
Seller that question or might question the validity of this Agreement or the
agreements contemplated hereby, or any actions taken or to be taken by FBAS
pursuant hereto or thereto or seeks to enjoin or otherwise restrain the
transactions contemplated hereby or thereby.
Section 4.10 Adverse Changes. Seller shall promptly notify SFNC in writing
if any change shall have occurred or been threatened (or any development shall
have occurred or been threatened involving a prospective change) in the
business, financial condition, operations or prospects of FBAS that has or may
reasonably be expected to have or lead to a Material Adverse Effect on the
assets, liabilities or condition of FBAS taken as a whole, financial or
otherwise. Notwithstanding the disclosure to SFNC of any such change, Seller
shall not be relieved of any liability to SFNC pursuant to this Agreement for,
nor shall the providing of such information by Seller to SFNC be deemed a waiver
by SFNC of, the breach of any representation or warranty of Seller contained in
this Agreement.
Section 4.11 Tax Election. Seller and SFNC shall cause a Section 338(h)(10)
election to be made pursuant to Section 338(h)(10) of the Code for FBAS. Seller
and SFNC shall execute and timely file all necessary consents to effectuate the
election. Seller and FBAS shall make all necessary elections to participate in
Seller's consolidated group.
ARTICLE V.
CONDITIONS TO CLOSING
Section 5.1 Condition to Each Party's Obligation. The respective
obligations of each party to effect the transactions contemplated herein are
subject to the satisfaction or waiver of the following conditions prior to the
Closing:
(a) Regulatory Approvals. The receipt of all necessary regulatory
approvals for the transactions as contemplated herein without any additional
material conditions, including, without limitation, the approval of the FRB,
the ASBD. and other applicable regulatory authorities, and the expiration of any
applicable waiting period with respect thereto; and
(b) No Violations. The Closing shall not be violative of any
injunction, order or decree of any court or governmental body having competent
jurisdiction.
(c) Consummation of the Mergers. Seller and SWB shall have consummated
their pending merger prior to the Closing. Further, Seller and First Central
Corporation shall have consummated their pending merger prior to the Closing.
Section 5.2 Conditions to the Obligations of SFNC. The obligations of SFNC
to effect the transactions contemplated herein are subject to the satisfaction
or waiver of the following conditions prior to the Closing:
(a) Representations and Warranties. All representations and warranties
of Seller shall be true and correct in all material respects as of the date
hereof and as of the Closing, with the same force and effect as though made
on the Closing;
(b) Performance of Obligations. Seller shall have performed in all material
respects all obligations and agreements and in all material respects complied
with all covenants and conditions contained in this Agreement to be performed or
complied with by them;
(c) No Material Adverse Effect. Nothing shall have occurred which has a
Material Adverse Effect with respect to FBAS taken as a whole since the Balance
Sheet Date; and
(d) Certifications. SFNC shall have received certificates dated as of the
Closing Date executed by an executive officer of Seller certifying to the effect
described in Section 5.2(a), (b) and (c).
Section 5.3 Conditions to the Obligations of Seller. The obligations of
Seller to effect the transactions contemplated herein are subject to the
satisfaction or waiver of the following conditions prior to the Closing:
(a) Representations and Warranties. All representations and warranties of
SFNC contained herein shall be true and correct in all material respects as of
the date hereof and as of the Closing, with the same force and effect as though
made at the Closing;
(b) Performance of Obligations. SFNC shall have performed in all material
respects all obligations and agreements and in all material respects complied
with all covenants and conditions contained in this Agreement to be performed or
complied with by it; and
(c) Filings. SFNC shall have filed all necessary applications and notices
with the appropriate regulatory authorities within forty-five (45) calendar days
from the date of this Agreement.
ARTICLE VI.
CONDUCT AND TRANSACTIONS AFTER CLOSING
Section 6.1 Participation in SFNC Plans. Effective as of the Closing Date,
employees of FBAS shall cease participation in all plans, programs, policies and
arrangements maintained for their benefit by Seller or any of its Affiliates.
Commencing on the Closing Date, SFNC shall provide to employees of FBAS such
plans, programs, policies and arrangements being maintained by SFNC and which
contain terms that are, in the aggregate, no less favorable than those provided
to similarly situated employees of SFNC or any of its Affiliates. Each employee
of FBAS shall be given credit under each such employee plan, program, policy and
arrangement maintained by SFNC for which such employee is eligible for all
service prior to the Closing Date with Seller and its Affiliates.
Section 6.2 Claims Incurred Prior to and After Closing. Seller will retain
responsibility for and continue to pay all medical, life insurance, disability
and other welfare plan expenses and benefits for each employee of FBAS or their
covered dependents with respect to claims incurred by such employees and former
employees or their covered dependents prior to the Closing Date. Expenses and
benefits with respect to claims incurred by employees of FBAS or their covered
dependents on or after the Closing Date shall be the responsibility of SFNC. For
purposes of this Section, a claim is deemed incurred when the services that are
the subject of the claim are performed; in the case of life insurance, when the
death occurs; in the case of long-term disability benefits, when the disability
occurs; and, in the case of a hospital stay, when such stay commences. Seller
will retain responsibility for all welfare plan expenses and benefits, if any,
including responsibility for compliance with COBRA, for all former employees of
FBAS who are not employed by FBAS on the Closing Date or such former employees'
Qualified Beneficiaries (as defined in COBRA) and for all Qualified
Beneficiaries with respect to FBAS' plans who are eligible for COBRA coverage
prior to the Closing Date.
Section 6.3 Waiting Periods and Deductibles. With respect to any Welfare
Benefit Plans maintained by SFNC on and after the Closing Date for the benefit
of employees of FBAS, SFNC shall (i) cause to be waived any waiting periods, and
(ii) give effect, in determining any deductible and maximum out-of-pocket
limitations, to claims incurred and amounts paid by, and amounts reimbursed to,
such employees with respect to similar plans maintained by Seller for their
benefit. SFNC shall pay or provide to Seller all premiums collected from
employees or former employees of FBAS relating to existing COBRA coverage for
employees or former employees of FBAS continuing after the Closing.
Section 6.4 Vacation Pay. With respect to any accrued but unused vacation
time to which any employee of FBAS is entitled pursuant to the vacation policy
applicable to such employee immediately prior to the Closing Date (the "Vacation
Policy"), SFNC shall allow such employee to use such accrued vacations;
provided, however, that if SFNC deems it necessary to disallow such employee
from taking such accrued vacation, SFNC shall be liable for and pay in cash to
each such employee an amount equal to such vacation time in accordance with such
employees current salary; provided, further, that SFNC shall be liable for and
pay in cash an amount equal to such accrued vacation time to any employee of
FBAS whose employment terminates for any reason other than "for cause" prior to
the close of business on the last calendar day of the year during which the
Closing Date occurs.
Section 6.5 Indemnification Against Claims for Severance Pay. SFNC agrees
to defend, indemnify and hold harmless Seller and any of its Affiliates from and
against any cost, liability, and expense actually incurred by any of them as a
result of any claim made by any employee of FBAS for severance pay under a
written employment agreement relating to the termination of such employee's
employment on or after the Closing.
Section 6.6 Confidentiality. For a period of three (3) years from the
Closing Date, Seller will, and shall cause its Affiliates to, maintain the
confidentiality of, and not to use, directly or indirectly, in any manner to
compete with or otherwise to the detriment of FBAS, any information identifying
customers of FBAS and their particular needs.
Section 6.7 Loan Participations. On or immediately prior to the Closing
Date, Seller shall cause each of their affiliated banks to repurchase or resell,
as the case may be, any loan participation any such bank may have with FBAS, and
FBAS shall resell or repurchase such loan participations, as the case may be.
The net proceeds of such transactions shall be settled by transfer of
immediately available funds on the Closing Date.
ARTICLE VII.
INDEMNIFICATION
Section 7.1 Seller's Indemnification. Seller agrees to defend, indemnify
and hold harmless FBAS and SFNC from and against any and all losses, damages,
response and remediation costs, liabilities and expenses (including court costs,
amounts paid in settlements and judgments and reasonable legal fees), suits,
actions, claims or obligations incurred by or asserted against either FBAS or
SFNC, respectively, for a period of one (1) year after the Closing, as a direct
result of any inaccuracy of any representation or warranty made by Seller under
this Agreement, including specifically, but without limitation of the foregoing,
the representations and warranties made in Section 2.17 with respect to
environmental matters.
Section 7.2 SFNC's Indemnification. SFNC agrees to defend, indemnify and
hold harmless Seller from and against any and all losses, damages, liabilities
and expenses (including court costs, amounts paid in settlements and judgments
and reasonable legal fees), suits, actions, claims or obligations incurred by or
asserted against Seller, for a period of one (1) year after the Closing, as a
direct result of any inaccuracy of any representation or warranty made by SFNC
under this Agreement.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time prior to the
Closing by:
(a) mutual written consent of Seller and SFNC;
(b) SFNC, if any of the conditions to the Closing contained in Section 5.1
or 5.2 are not satisfied or waived in writing by SFNC as of the Closing;
(c) Seller, if the conditions to the Closing contained in Section 5.1 or
5.3 are not satisfied or waived in writing by Seller as of the Closing;
(d) Seller or SFNC, upon notice given to the other party, if the Closing
shall not have taken place on or before December 31, 1997, provided, that the
failure of the Closing to occur on or before such date is not the result of the
breach of the covenants, agreements, representations or warranties hereunder of
the party seeking such termination; or
(e) Seller or SFNC, upon written notice to the other party, if any court or
Governmental Authority of competent jurisdiction shall have issued a final
permanent order, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, or if the FRB, the ASBD or other applicable
regulatory authority shall have issued an order denying approval of the purchase
and sale of the Bank Stock and the other transactions contemplated hereby, and
the time for appeal or petition for reconsideration of such order shall have
expired.
Section 8.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1 hereof, this Agreement
shall have no effect, without any liability on the part of any party or its
directors, officers, or shareholders, other than the provisions of this Section
8.2, Section 8.3, and the last two sentences of Section 4.1. Nothing contained
in this Section 8.2 shall relieve any party from liability for any breach of
this Agreement.
Section 8.3 Survival of Representations and Warranties. The representations
and warranties of Seller and SFNC contained in Article II and Article III of
this Agreement shall be deemed to be material and to have been relied upon by
the parties hereto, and survive the Closing for a period of one (1) year
provided, however, that the representations and warranties of Seller contained
in Section 2.2 and 2.11 shall survive the Closing to the greatest extent
permitted by law and shall be subject to a claim for breach thereof within any
applicable statute of limitations; and provided further, that the
representations and warranties of Seller contained in Section 2.10 shall survive
as long as any statute of limitations is open with respect to the assessment of
any such taxes against FBAS or SFNC, whether by statute, rule or law or
agreement extending any such statute of limitations.
Section 8.4 Amendment. This Agreement may not be modified or amended
except by a written instrument executed by all parties hereto.
Section 8.5 Extension and Waiver. At any time prior to the Closing, the
parties may mutually agree to (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto, or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the party of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing and signed on behalf of such
party.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Expenses. All costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such costs and expenses.
Section 9.2 Entire Agreement; Assignment. This Agreement and the
Confidentiality Agreement constitute the entire agreement among the parties with
respect to the subject matter hereto and supersede all other prior agreements
and understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof, and shall not be assigned by operation of
law or otherwise.
Section 9.3 Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
Section 9.4 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
Section 9.5 Notices. All notices, requests, claims, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by cable, telegram or telex, or by
registered or certified mail (postage prepaid, return receipt requested), to the
respective parties as follows:
if to Seller:
First Commercial Corporation
400 West Capitol Avenue
P. O. Box 1471
Little Rock, Arkansas 72203-1471
Fax No.: (501) 371-7413
Attention: Barnett Grace
with copies to:
Alex. Brown & Sons Incorporated
One South Street
Baltimore, Maryland 21202
Fax No.: (410) 895-4660
Attention: Howard Loewenberg
and
Friday, Eldredge & Clark
400 West Capitol Avenue, Suite 2000
Little Rock, Arkansas 72201-3493
Fax No.: (501) 376-2147
Attention: Clay Randolph
if to SFNC:
Simmons First National Corporation
501 Main Street
P. O. Box 7009
Pine Bluff, Arkansas 71611-7009
Fax No.: (501) 541-1123
Attention: J. Thomas May
with copies to:
Stephens Inc.
111 Center Street
P. O. Box 3507
Little Rock, Arkansas 72203-3507
Fax No.: (501) 377-2674
Attention: Robert Ulrey
and
Ramsay, Bridgforth, Harrelson & Starling
P. O. Box 8509
Pine Bluff, Arkansas 71611-8509
Fax No.: (501) 535-8544
Attention: Patrick A. Burrow
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
Section 9.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Arkansas, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.7 Descriptive Headings. The descriptive headings are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
Section 9.8 Parties in Interest. This Agreement shall be binding upon, and
inure solely to the benefit of, each party hereto and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement. Seller
agrees to use its best interest to cause, or to use its best efforts to cause
SWB to cause FBAS to perform all covenants and obligations of FBAS set forth
herein.
Section 9.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 9.10 Incorporation by References. Any and all schedules, exhibits,
annexes, statements, reports, certificates or other documents or instruments
referred to herein or attached hereto are incorporated hereby by reference
hereto as though fully set forth at the point referred to in the Agreement.
Section 9.11 Certain Definitions.
(a) "Affiliate" means any Person that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with the Person specified through the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
(b) "Bank" shall mean First Bank of Arkansas, Searcy, Arkansas.
(c) "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act
of 1985.
(d) "Confidentiality Agreement" shall mean the Confidentiality Agreement
dated February 11. 1997, between Seller and SFNC.
(e) "Encumbrance" means any lien, pledge, hypothecation, charge, mortgage,
deed of trust, security interest, encumbrance, equity, trust, equitable
interest, claim, easement, right-of-way, servitude, right of possession, lease
tenancy, license, encroachment, burden, intrusion, covenant, infringement,
interference, proxy, option, right of first refusal, community property
interest, legend, defect, impediment, exception, condition, restriction,
reservation, limitation, impairment, imperfection of title, restriction on, or
condition to, the voting of any security, restriction on the transfer of any
security or other asset, restriction on the receipt of any income derived from
any security or other asset, and restriction on the possession, use, exercise or
transfer of any other attribute of ownership, based on or arising from common
law or contract.
(f) "Entity" means any corporation (including any non-profit corporation),
general partnership, limited partnership, joint venture, joint stock
association, estate, trust cooperative, foundation , union, syndicate, league,
consortium, coalition, committee, society, firm, company or other enterprise,
association, organization or entity of any nature, other than a Governmental
Authority.
(g) "Governmental Authority" means any foreign governmental authority, the
United States of America, and State of the United States, any local authority
and any political subdivision of any of the foregoing, any multi-national
organization or body, any agency, department, commission, board, bureau, court
or other authority thereof, or any quasi-governmental or private body
exercising, or purporting to exercise, any executive, legislative, judicial,
administrative, police, regulatory or taxing authority or power of any nature.
(h) "Knowledge" or "known" -- An individual shall be deemed to have
"knowledge" of or to have "known" a particular fact or other matter if such
individual is actually aware of such fact or other matter. Seller, FBAS, SFNC,
any other corporation or bank shall be deemed to have "knowledge" of or to have
"known" a particular fact or other matter if any individual who is serving as a
director or executive officer (or in any similar capacity) of either of Seller,
FBAS, SFNC or such other corporation or bank, respectively, has, or at any time
had, actual awareness of such fact or other matter.
(i) "Material Adverse Effect" shall mean any material adverse change in the
financial condition, assets, liabilities (absolute, accrued, contingent or
otherwise), business, or results of operations.
(j) "Person" means any individual, Entity or Governmental Authority.
(k) "Subsidiary" means, with respect to any Person, any corporation,
partnership, joint venture, joint stock association, business trust or other
Entity (which shall not include joint operating arrangements in oil and gas
properties) of which such Person or another Subsidiary of such Person directly
or indirectly owns more than 20% of the outstanding capital stock or other
equity interest.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year first above written.
FIRST COMMERCIAL CORPORATION
By: /s/ J. Lynn Wright
Name and Title :J. Lynn Wright, Chief Financial
Officer
SIMMONS FIRST NATIONAL CORPORATION
By: /s/ J. Thomas May
J. Thomas May, Chairman, President and
Chief Executive Officer
Schedule 2.7(b)
Material Liabilities not shown on Bank Financial Statements
None
Schedule 2.8
Certain Changes
None
Schedule 2.9
Litigation
None
Schedule 2.11(a)
Welfare Benefits Plans
1. Delta Dental Plan of Arkansas
2. Arkansas Blue Cross Blue Shield Managed Benefits Comprehensive
Major Medical Preferred Provider Organization Group Plan
Schedule 2.11(b)
Pension Benefit Plans
1. Southwest Bancshares, Inc. Section 401(k) Plan.
Schedule 2.12
Employment Matters
1. Employee Severance Agreements as previously disclosed to SFNC
Schedule 2.13
Leases, Licenses, Contracts and Agreements
1. Lease on Spring Street Branch - Lease date January 5, 1995, First term 2
years, addendum provides for additional 2 year term commencing January 5, 1997
hich was exercised by letter dated August 21, 1996. Rentis $800, Lessor pays
taxes; Lessor maintains the external portions of building and FBAS maintains the
inside improvements. Lessor pays insurance on the structure and FBAS pays
insurance on improvements. The addendum also provides for an additional 3 year
extension term commencing on January 5, 1999 upon terms to be negotiated. Note:
Parking Lot adjacent to the Spring St. Branch is not owned or leased by FBAS.
The parking lot is owned by the First Baptist Church, located across the street.
The church allows the FBAS to use the lot. A prior tenant of the Spring St.
location had leased the lot, but the Church declined to enter into a formal
arrangement concerning the parking lot when FBAS occupied the building. The bank
makes a monthly contribution to the church in the amount of the rent called for
in the prior lease.
2. Data processing Contract with Advance Data. Terminable on 90 days notice.
3. FHLB long term borrowings $4,498,324.20, as of February 28, 1997, with
maturities from July 1, 2005 and August 1, 2011 and interest rates between
6.294% and 6.723%.
Schedule 2.14
Related Party Transactions
1. Tax Sharing Agreement among the affiliates in SWB.
2. Loan Participations among FBAS and other banks presently owned by SWB, all of
which will be re-sold by the holder and re-purchased by the lead bank on or
before the Closing Date.
<TABLE>
Schedule 2.16
Insurance Coverage
Insurance - First Bank of Arkansas, Searcy
<CAPTION>
<S> <C>
Worker's Compensation Aetna Life & Casualty Policy No. 008C24709746CAA --
Cargile Insurance Agency -- Expires 8/8/97
Automobile Shelter Insurance Policy No. 03-1-5133247-2 --
Cargile Insurance Agency -- Expires 2/23/97
Repossessed Auto Shelter Insurance Policy No. 03-1-5133247-1 --
Cargile Insurance Agency -- Expires 8/23/97
Business Insurance Shelter Insurance Policy No. 03-78-005133247-00
(Beebe Capps Branch) Cargile Insuarnce Agency - Expires 8/30/97
Coverage Limits - $200,000 Building; $100,000
Personal Property; $1,000,000 Liabiity
Business Insurance Shelter Insurance Policy No. 03-78-005133247-00
(Spring St. Branch) Cargile Insuarnce Agency - Expires 8/30/97
Coverage Limits - $100,000 Personal Property;
$1,000,000 Liabiity
Business Insurance Shelter Insurance Policy No. 03-78-005133247-00
(125 North Poplar) Cargile Insuarnce Agency - Expires 8/30/97
Coverage Limits - $1,000,000 Building; $500,000
Personal Property; $1,000,000 Liabiity
Business Insurance Shelter Insurance Policy No. 03-78-005133247-00
(Kensett Branch) Cargile Insuarnce Agency - Expires 8/30/97
Coverage Limits - $150,000 Building; $50,000
Personal Property; $1,000,000 Liabiity
</TABLE>
Schedule 2.17
Environmental Compliance
None
<TABLE>
Schedule 2.20
Properties
<CAPTION>
Address Facility Status Period of Occupancy
<S> <C> <C> <C>
125 N. Poplar
Searcy, Arkansas Main Office owned 6 years
110 South Spring
Searcy, Arkansas Branch leased 2 years
1621 Beebe-Capps
Searcy, Arkansas Branch owned 2 years
112 NE First St.
Kensett, Arkansas Branch owned over 20 years
</TABLE>
Schedule 2.17
Environmental Compliance
None
Schedule 4.2(i)
Accounts or Safe Deposits Boxes Maintained by FBAS
To be delivered at Closing
Name Shown on
Name of Institution Account or Safe Deposit Box Authorized Signatories
Schedule 4.4
Names; Service Marks and Trademarks
1. "First Bank of Arkansas" and its associated logo
EXHIBIT 2(iii)
[Logo] SIMMONS FIRST NATIONAL CORPORATION
April 30, 1997
Mr. Lynn Wright VIA FAX
First Commercial Corporation
400 West Capitol Ave
Little Rock, Arkansas 72203
Re: Acquisition of First Bank of Arkansas, Russellville and First Bank
of Arkansas, Searcy
Dear Lynn:
This letter is to memorialize our agreement to extend the period for filing
regulatory applications as set forth in Section 4.5 of the respective agreements
is hereby extended by three weeks, thereby extending the filing deadline from
May 5, 1997 to May 26, 1997. We will continue our diligence in the preparation
of these filings and will file same as soon as is reasonably possible, but in
any event before the extended deadline.
Sincerely,
/S/ J. Thomas May
J. Thomas May, Chairman and CEO
Accepted and agreed to this 30th day of April, 1997.
FIRST COMMERCIAL CORPORATION
By /S/ J. Lynn Wright
J. Lynn Wright, Chief Financial Officer
EXHIBIT 2 (iv)
[Logo] SIMMONS FIRST NATIONAL CORPORATION
August 1, 1997
Mr. Lynn Wright
First Commercial Corporation
400 West Capitol Ave
Little Rock, Arkansas 72203
Re: Acquisition of First Bank of Arkansas, Russellville ("FBAR")
Dear Lynn:
This letter is to memorialize our agreement concerning separation of
accounts and loans relating to the West Main branch (coded as branch 7) and the
Dover branch (coded as branch 1) and the retention by FBAR of the Trust accounts
and Trust personnel.
I. Loans and Deposits
The general rules for the allocation of loans and deposits which have a
relationship to the West Main and Dover branches ("Transferred Branches"), as
discussed in Section 4.6 of the Stock Purchase Agreement ("Agreement") by and
between First Commercial Corporation and Simmons First National Corporation,
dated March 21, 1997, are as follows:
1. Deposits of a customer are allocated to the same entity as are the
customer's loans.
2. If a customer has only one loan with FBAR, then the loan and all
deposits shall be allocated to the Transferred Branches, if the loan is coded to
either branch 1 or 7; otherwise, the loan and all deposits shall be retained by
FBAR.
3. If a customer has more than one loan from FBAR, then all loans and all
deposits shall be allocated to the Transferred Branches, if the most recent loan
is coded to either branch 1 or 7; otherwise, all loans and all deposits shall be
retained by FBAR.
4. If a customer has no loans with FBAR, then all deposits shall be
allocated to the Transferred Branches, if the most recently opened checking
account is coded to either branch 1 or 7; otherwise, all deposits shall be
retained by FBAR.
5. If a customer has only certificates of deposit, then all certificates of
deposits shall be allocated to the Transferred Branches, if any Certificate of
Deposit is coded to either branch 1 or 7; otherwise, all certificates of deposit
shall be retained by FBAR.
Based upon the information developed and furnished to us, this allocation
mechanism would affect the branch relationship of approximately 1,085 accounts.
The estimated aggregate affect of the proposed allocation was summarized in a
letter from Mr. Charles Blanchard to Mr. Barry Crow, dated May 5, 1997, to be as
follows:
Allocations of deposits and loans coded to the Transferred Branches to be
allocated to FBAR:
Deposits $8,065,423 Loans $ 482,625
Allocations of deposits and loans not coded to the Transferred Branches to
be allocated to the Transferred Branches:
Deposits $7,083,047 Loans $ 281,575
The foregoing deposit and loan balances are illustrative of the result of the
allocation as of the date of the computations in such letter. The parties
acknowledge that all such deposits and loans in their then current balance were
allocated and transferred as of the close of business on July 18, 1997 as
reflected on the settlement sheet attached hereto.
The following exceptions to the above stated general allocation rules shall
apply:
a. All Employee loans and deposits shall be allocated to the entity
employing the employee after the consummation of the transfer of the Transferred
Branches.
b. Each Girl Scout account shall be allocated to the branch to which
such account is coded.
c. The Boyd Freeman personal loans and deposits are allocated to the
Transferred Branches, but the Boyd Freeman and Bill Mitchner loan as well as the
Freeman Industries loans and deposits are allocated to FBAR.
d. The Joyce Churchill family accounts are allocated to the Transferred
Branches.
e. The Johnson County Regional Medical Center accounts are allocated as
follows:
Checking Accounts -- Transferred Branches
CD ($140,918) -- Transferred Branches
CD ($495,630) -- FBAR
f. The A. G. and Betty Barton loans and deposits are allocated to the
Transferred Branches.
g. The Alan Boatright loans and deposits are allocated to the
Transferred Branches.
h. All accounts of the Pope County Library are allocated to the
Transferred Branches.
Provided, however, that no allocation of deposits and loans shall be allowed
that would result in First Commercial Corporation failing to retain at least
seventy percent of the consolidated assets of Southwest Bancshares, Inc. and
thereby threaten the pooling-of-interests accounting treatment of the merger of
Southwest Bancshares, Inc. into First Commercial Corporation. The 70% figure
cited in the previous sentence may be varied by as a result of the transfer to
SFNC of not more than approximately $60 million aggregate amount of public funds
and certain large deposits.
II. Trust Accounts and Trust Personnel.
First Commercial Corporation and Simmons First National Corporation agree
that FBAR shall retain all trust accounts and associated liabilities held by
FBAR and are permitted to retain Steve Jackson and Terri Cothren as employees of
FBAR and will assume the responsibilities of their respective Employee Severance
Agreements in the same fashion as with other employees of FBAR.
In order to implement the foregoing, the Agreement is hereby amended as
follows:
1. Section 4.6(c) is deleted in its entirety. Any reference to Section
4.6(c) in any other section of the Agreement is hereby deleted.
2. Section 6.8 is amended by deleting the following language therefrom,
"or in connection with FBAR's trust operations"
3. Section 7.1 is amended by deleting the following language therefrom,
"(i) by reason of the claim shown as #2 on Schedule 2.9, or (ii)" and inserting
the following sentence at the end of that section: "Seller shall have no
obligation to defend, indemnify or hold harmless FBAR or SFNC as a result of the
claim shown as #2 on Schedule 2.9.".
III. Post Closing Competition. The terms of this letter are intended to
implement the method of allocation of deposits and loans related to the
Transferred Branches for the consummation of the stock purchase transaction and
to amend the Agreement to eliminate transfer of the trust accounts and trust
personnel from FBAR to First National Bank of Russellville. This letter is not
intended to and shall not be deemed to have any effect on the ability or right
of any parties or their affiliates or subsidiaries to compete in the marketplace
for the customers whose business is herein allocated or any other customers.
Nothing herein shall be construed as a covenant not to compete or in anyway
restrict the right, power or authority of any of the parties, their affiliates
or subsidiaries to fully and freely conduct its business in the marketplace.
Sincerely,
/s/ J. Thomas May
J. Thomas May, Chairman and CEO
Accepted and agreed to this 1st day of August, 1997.
FIRST COMMERCIAL CORPORATION
By /s/ J. Lynn Wright
J. Lynn Wright, Chief Financial Officer
<TABLE>
First Bank to First National
Loan and Deposit Transfer Settlement
July 21, 1997
<CAPTION>
Assets Transferred (not including Fixed Assets)
<S> <C> <C>
Loan - Principal
1410 Personal Loans 5,451,093.68
1450 Business Loans 6,306,290.03
1470 R/E Loans 6,421,340.47
Commercial Participations 12,896,734.00
(Charge-off principal of 14,325.38
also moved) -------------
Loan Principal 30,076,458.18
Loan Accruals
AIR - Personal & Business 128,958.10
AIR - ARMs 9,523.07
AIR - Commercial Participations 130,511.05
Accr. Late Chgs-Personal& Business 10,184.82
Accr. Late Chgs-ARMs 377.59
(Non-Accrual Interest of 820.45
also transferred) -------------
Loan Accruals 279,554.63
Cash
Wire Transfer to FNB Russellville 8,709,120.79
-------------
Total Assets transferred (not including Fixed Assets) 39,064,133.60
=============
Liabilities Transferred
Deposits - IPC, MMDA, NOW
2021 Regular Checking 2,383,709.67
2121 Now Accounts 3,874,917.14
2121 Super Now Accounts 775,198.02
2141 MMDA 1,828,785.80
Public Funds 116,145.01
Less Overdrafts -23,596.56
-------------
Total Demand 8,955,159.08
Deposits - Savings
2141 Regular Savings 1,283,338.75
Less Overdrafts -0.84
------------
Total Savings 1,283,337.91
Time Deposits
2161 CD's 24,539,293.96
2161 CD's over 100M 1,409,786.01
2162 IRA's 2,712,366.28
-------------
Total Time 28,661,448.25
Deposit Accruals
AIP - CD's & IRA's 164,190.36
-------------
Deposit Accruals 164,190.36
-------------
Total Liabilities Transferred 39,064,133.60
=============
Loan & Deposit Wire 8,709,120.79
Fixed Assets -651,134.42
-------------
Net Wire 8,057,986.37
=============
</TABLE>
