Exhibit 2.01
STOCK PURCHASE AND MERGER AGREEMENT
among
FOURTH FINANCIAL CORPORATION, and
BANK IV OKLAHOMA, NATIONAL ASSOCIATION
as Purchasers
SECURITY BANK AND TRUST COMPANY
and
THE STOCKHOLDERS OF BLACKWELL
SECURITY BANCSHARES, INC.,
as Sellers
Dated as of June 23, 1994
TABLE OF CONTENTS
Page #
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ARTICLE I. Definitions. . . . . . . . . . . . . . . . .2
Section 1.1 Definitions. . . . . . . . . . . . . . . . .2
Section 1.2 Accounting Terms . . . . . . . . . . . . . .5
Section 1.3 Use of Defined Terms . . . . . . . . . . . .5
ARTICLE II. Sale and Transfer of Stock; Merger; Closing.6
Section 2.1 Sale of the Shares . . . . . . . . . . . . .6
Section 2.2 Purchase Price . . . . . . . . . . . . . . .6
Section 2.3 Closing. . . . . . . . . . . . . . . . . . .6
Section 2.4 Closing Deliveries . . . . . . . . . . . . .6
ARTICLE III. Agreements of the Parties. . . . . . . . . .7
Section 3.1 Agreements of Fourth and BANK IV . . . . . .7
Section 3.2 Agreements of Sellers. . . . . . . . . . . .8
Section 3.3 Divestiture of Real Property . . . . . . . 12
ARTICLE IV. Representations and Warranties . . . . . . 12
Section 4.1 Representations and Warranties of
Sellers and Bank . . . . . . . . . . . . . 12
Section 4.2 Representations and Warranties of
Fourth and BANK IV . . . . . . . . . . . . 22
ARTICLE V. Closing Conditions . . . . . . . . . . . . 24
Section 5.1 Conditions to Obligations of Fourth and
BANK IV. . . . . . . . . . . . . . . . . . 24
Section 5.2 Conditions to Obligations of Sellers and
Bank . . . . . . . . . . . . . . . . . . . 25
ARTICLE VI. Termination of Agreement . . . . . . . . . 26
Section 6.1 Mutual Consent; Termination Date . . . . . 26
Section 6.2 Election by Fourth and BANK IV . . . . . . 27
Section 6.3 Election by Sellers and Bank . . . . . . . 27
ARTICLE VII. Indemnification. . . . . . . . . . . . . . 27
Section 7.1 Effect of Closing. . . . . . . . . . . . . 27
Section 7.2 General Indemnification. . . . . . . . . . 28
Section 7.3 Procedure. . . . . . . . . . . . . . . . . 28
Section 7.4 Survival of Representations and
Warranties . . . . . . . . . . . . . . . . 29
Section 7.5 Several Liability of Sellers . . . . . . . 29
ARTICLE VIII. Escrow . . . . . . . . . . . . . . . . . . 30
ARTICLE IX. Delivery of Stock Certificates and
Appointment of Agents. . . . . . . . . . . 30
Section 9.1 Delivery of Stock Certificates . . . . . . 30
Section 9.2 Appointment of Agents. . . . . . . . . . . 30
Section 9.3 Replacement and Removal of Agents. . . . . 31
ARTICLE X. Miscellaneous. . . . . . . . . . . . . . . 32
Section 10.1 Expenses . . . . . . . . . . . . . . . . . 32
Section 10.2 Notices. . . . . . . . . . . . . . . . . . 32
Section 10.3 Effect of Fewer than All Sellers
Executing Agreement. . . . . . . . . . . . 32
Section 10.4 Life Insurance Policy. . . . . . . . . . . 32
Section 10.5 Lease of Office Space. . . . . . . . . . . 32
Section 10.6 Sale of Adjacent Property. . . . . . . . . 33
Section 10.7 Time . . . . . . . . . . . . . . . . . . . 33
Section 10.8 Law Governing. . . . . . . . . . . . . . . 33
Section 10.9 Entire Agreement; Amendment. . . . . . . . 33
Section 10.10 Successors and Assigns . . . . . . . . . . 33
Section 10.11 Cover, Table of Contents, and
Headings . . . . . . . . . . . . . . . . . 33
Section 10.12 Counterparts . . . . . . . . . . . . . . . 34
Section 10.13 Minimum Number of Sellers. . . . . . . . . 34
EXHIBITS
Exhibit "A" Agreement to Merge
Exhibit "B" Form of Crowe & Dunlevy legal opinion
Exhibit "C" Form of William W. Rodgers, Jr. Agreement
Exhibit "D" Form of James R. Rodgers Consulting and Marketing
Agreement
STOCK PURCHASE AND MERGER AGREEMENT
STOCK PURCHASE AND MERGER AGREEMENT, dated as of June 23,
1994, among FOURTH FINANCIAL CORPORATION, a Kansas corporation
("Fourth"); BANK IV OKLAHOMA, NATIONAL ASSOCIATION, a national
banking association ("BANK IV"); SECURITY BANK AND TRUST COMPANY,
an Oklahoma banking corporation ("Bank"); and the stockholders of
BLACKWELL SECURITY BANCSHARES, INC., an Oklahoma corporation
("BSB"), owning at least 90% of the capital stock of all classes of
BSB ("Sellers").
W I T N E S S E T H: That,
___________________
WHEREAS, Fourth is a bank holding company; and
WHEREAS, Fourth desires to acquire all, and not less than
all, of the issued and outstanding capital stock of all classes of
BSB subject to and pursuant to the terms of this Agreement; and
WHEREAS, BSB owns all of the issued and outstanding
capital stock of all classes of the Bank except for directors'
qualifying shares, all of which are subject to repurchase
agreements in favor of BSB; and
WHEREAS, the Sellers own an aggregate of at least 90% of
the issued and outstanding capital stock of all classes of BSB (the
"Shares"); and
WHEREAS, Fourth desires to merge the Bank into BANK IV,
a subsidiary of Fourth, immediately upon Fourth's acquisition of
the Shares; and
WHEREAS, each party hereto believes that the proposed
acquisition by Fourth of BSB and Bank pursuant to the terms and
conditions of this Agreement and the merger of the Bank into BANK
IV would be desirable and in their respective best interests;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties hereto, intending to be legally
bound, agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. The following terms as used in this
Agreement shall have the following meanings unless the context
otherwise requires.
"Agents" means William W. Rodgers, Jr. and James R.
Rodgers (or any person appointed as successor Agent) acting in
their capacity as Agents pursuant to Article IX of this Agreement,
and "Agent" refers to either of them.
"This Agreement" refers to this Stock Purchase and Merger
Agreement and all amendments and exhibits hereto.
"Bank" means the Security Bank and Trust Company, an
Oklahoma banking corporation and a party to this Agreement.
"BANK IV" means BANK IV Oklahoma, National Association,
a national banking association and a party to this Agreement.
"Bank Holding Company Act" means the federal Bank Holding
Company Act of 1956, as amended (12 U.S.C. Section 1841 et seq.),
or any successor federal statute, and the rules and regulations of
the Board promulgated thereunder, all as the same may be in effect
at the time.
"Bank Stock" refers to the common stock of the Bank, par
value $25.00 per share.
"Board" means the Board of Governors of the Federal
Reserve System or any successor governmental entity which may be
granted powers currently exercised by the Board of Governors.
"BSB" means Blackwell Security Bancshares, Inc., an
Oklahoma corporation.
"BSB Stock" means the common stock of BSB, par value
$1.00 per share.
"Closing" shall mean the purchase and sale of the Shares
and the consummation of the Merger pursuant to this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Comptroller" means the United States Comptroller of the
Currency or any successor governmental agency which may be granted
powers currently exercised by the Comptroller of the Currency.
"Corporations" refers collectively to BSB, the Bank, and
all Subsidiaries of either BSB or the Bank, and "Corporation"
refers to any one of them.
"Disclosure Statement" means the Disclosure Statement
prepared by the Sellers and the Bank and delivered by the Sellers
and the Bank to Fourth and BANK IV prior to the execution and
delivery of this Agreement by Fourth.
"Effective Time" means the date and time on which the
Purchase and Merger are effected as more fully defined in this
Agreement.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations promulgated
thereunder, all as the same may be in effect at the time.
"Escrow Agent" means the Bank, acting as Escrow Agent
hereunder pursuant to Article VIII.
"FDIC" means the Federal Deposit Insurance Corporation or
any successor governmental agency which may be granted powers
currently exercised by the FDIC.
"Federal Deposit Insurance Act" means the Federal Deposit
Insurance Act, as amended, and the rules and regulations
thereunder, all as the same may be in effect at the time.
"Financial Statements" refers to all of the financial
statements described in clause g of Section 4.1 of this Agreement.
"Fourth" means Fourth Financial Corporation, a Kansas
corporation and a party to this Agreement.
"GAAP" means generally accepted accounting principles,
applied on a consistent basis, set forth in Opinions of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and/or in statements of the Financial Accounting
Standards Board and/or their successors which are applicable in the
circumstances in question; and the requisite that such principles
be applied on a consistent basis means that the accounting
principles observed in a current period are comparable in all
material respects to those applied in a preceding period.
"Indemnifying Losses" shall have the meaning set forth in
Section 7.2 of this Agreement.
"Indemnitee" and "Indemnitees" shall have the meanings
set forth in Section 7.2 of this Agreement.
"Law" or "Laws" means all applicable statutes, laws,
ordinances, regulations, orders, writs, injunctions, or decrees of
the United States of America, any state or commonwealth, or any
subdivision thereof, or of any court or governmental department,
agency, commission, board, bureau, or other instrumentality.
"Litigation" means any proceeding, claim, lawsuit, and/or
investigation being conducted or, to the best of the knowledge of
the person or corporation making the representation, threatened
before any court or other tribunal, including, but not limited to,
proceedings, claims, lawsuits, and/or investigations, under or
pursuant to any occupational safety and health, banking, antitrust,
securities, tax, or other Laws, or under or pursuant to any
contract, agreement, or other instrument.
"Merger" means the merger of the Bank into BANK IV
pursuant to the Merger Agreement.
"Merger Agreement" means the Agreement to Merge,
substantially in the form of Exhibit "A" hereto.
"Permitted Contract" means a contract or agreement,
written or oral, between a Corporation, on the one hand, and a
person other than a customer of the Bank or another financial
institution, on the other hand, which (i) was entered into in the
ordinary course of business, (ii) may be terminated by Fourth or
BANK IV after the Effective Time on no more than 30 days' prior
notice, (iii) provides for a payment of no more than $500 in any
calendar month by a Corporation, and (iv) provides for no payment
upon termination in excess of $500.
"Purchase" means the purchase of Shares at the Closing
from Sellers by Fourth pursuant to this Agreement.
"Sellers" refers collectively to all of the persons
executing this Agreement at any time as Sellers, and "Seller"
refers to any one of them.
"Shares" means collectively all of the 216,701 issued and
outstanding shares of BSB Stock.
"Subsidiary" means any corporation fifty percent or more
of the common stock or other form of equity of which shall be
owned, directly or indirectly, by another corporation.
1.2. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
GAAP consistent with that applied in the preparation of the
financial statements submitted pursuant to this Agreement, and all
financial statements submitted pursuant to this Agreement shall be
prepared in all material respects in accordance with such
principles except as provided in Section 4.1g of this Agreement.
1.3. Use of Defined Terms. All terms defined in this
Agreement shall have the defined meanings when used in any other
agreement, document, or certificate made or delivered pursuant to
this Agreement, unless the context otherwise requires.
ARTICLE II
SALE AND TRANSFER OF STOCK; MERGER; CLOSING
2.1. Sale of the Shares. Subject to the terms and
conditions of this Agreement, at the Closing, Sellers shall sell,
transfer, and deliver to Fourth, and Fourth shall purchase, all of
the Shares of BSB Stock owned by them for the Stock Purchase Price.
2.2. Purchase Price. (a) The total purchase price for
all of the Shares shall be the difference between $7,900,000 and
the aggregate after-tax cost of the environmental clean-up costs
described in Section 3.3; however, if the Closing has not occurred
on or before October 1, 1994, the purchase price will be increased
by the product of the average daily after-tax income of the Bank
for the three-month period ended September 30, 1994 (excluding the
effect of any accounting entries made in contemplation of the
Merger) multiplied by the number of days between October 1, 1994
and the date the Closing occurs.
(b) Merger. Subject to the terms and conditions of
this Agreement, at the Closing, the Merger shall be effected.
2.3. Closing. The Closing shall take place at the
offices of Foulston & Siefkin, 700 Fourth Financial Center,
Wichita, Kansas, at 10:00 a.m., or at such other time or place as
the parties may agree, on a date selected by Fourth upon giving
reasonable notice to Sellers, which, unless otherwise agreed, shall
be not later than 30 business days following the receipt of the
final regulatory approval required to effect the purchase of the
Shares and the expiration of all required waiting periods. The
parties agree to exert their best efforts to cause the Closing to
occur on or before October 31, 1994.
2.4. Closing Deliveries. At the Closing:
a. Sellers shall deliver to Fourth:
(i) certificates representing all of the
Shares, endorsed for transfer to Fourth, free and
clear of all encumbrances, liens, security
interests, claims, and equities whatsoever, duly
endorsed for transfer or accompanied by duly
executed stock powers or assignment forms;
(ii) such other documents including
officers' certificates as may be required by this
Agreement or reasonably requested by Fourth; and
(iii) the opinion of Crowe & Dunlevy,
counsel to Sellers and the Bank, substantially in
the form of Exhibit "B" hereto, with the opinion
of James R. Rodgers attached thereto.
b. Fourth shall deliver to the Sellers, by
delivery to the Agents, immediately available funds in
the total amount of the aggregate purchase price for all
of the Shares being purchased hereunder.
c. The Merger shall be consummated by the Bank
and BANK IV at the expense of BANK IV.
ARTICLE III
AGREEMENTS OF THE PARTIES
3.1. Agreements of Fourth and BANK IV.
a. Prior to the Effective Time, Fourth and BANK
IV, separately and with the other parties hereto, shall
use their best efforts in good faith to take or cause to
be taken as promptly as practicable all such steps as
shall be necessary to obtain (1) the prior approval of
the Board under the Bank Holding Company Act for the
acquisition by Fourth of direct or indirect ownership,
control or power to vote 100% of the voting shares of
the Bank, (2) the approval of the Comptroller to merge
the Bank into BANK IV, and (3) all other consents and
approvals of government agencies as are required by Law
or otherwise, and shall do any and all acts and things
deemed by Fourth to be necessary or appropriate in order
to cause the Purchase and the Merger to be consummated on
the terms provided herein as promptly as practicable.
3.2. Agreements of Sellers.
a. Prior to the Closing, Sellers shall not
permit any of the Corporations to, except with the prior
written consent of Fourth and BANK IV or as otherwise
provided in this Agreement:
(1) Amend its certificate of incorporation,
bylaws, or other charter documents, make any
change in its authorized, issued, or outstanding
capital stock, grant any stock options or right
to acquire shares of any class of its capital
stock or any security convertible into any class
of capital stock, purchase, redeem, retire, or
otherwise acquire (otherwise than in a fiduciary
capacity) any shares of any class of its capital
stock or any security convertible into any class
of its capital stock, or agree to do any of the
foregoing;
(2) Declare, set aside, or pay any dividend
or other distribution in respect of any class of
its capital stock;
(3) Adopt, enter into, or amend materially
any employment contract or any bonus, stock
option, profit sharing, pension, retirement,
incentive, or similar employee benefit program or
arrangement or grant any salary or wage increase,
except: (a) normal individual increases in
compensation to employees in accordance with
established employee procedures of the
Corporations; (b) bonuses in a maximum aggregate
amount of $50,000; and (c) payments in accordance
with the Fourth Financial Corporation Acquisition
Severance Schedule previously furnished to
Sellers;
(4) Incur any indebtedness for borrowed
money (except for federal funds, repurchase
agreements entered into in the ordinary and usual
course of business, deposits received by Bank,
endorsement, for collection or deposit, of
negotiable instruments received in the ordinary
and usual course of business, and issuance of
letters of credit by Bank in the ordinary and
usual course of business), assume, guarantee,
endorse, or otherwise as an accommodation become
liable or responsible for obligations of any
other individual, firm, or corporation;
(5) Pay or incur any obligation or
liability, absolute or contingent, other than
liabilities incurred in the ordinary and usual
course of business of the Corporations;
(6) Except for transactions in the ordinary
and usual course of business of Bank, mortgage,
pledge, or subject to lien or other encumbrance
any of its properties or assets;
(7) Except for transactions in the ordinary
and usual course of business of Bank (including,
without limitation, sales of assets acquired by
the Bank in the course of collecting loans),
sell, lease, or transfer any of its properties or
assets or cancel, release, or assign any
indebtedness owed to it or any claims held by it;
(8) Make any investment of a capital nature
in excess of $25,000 for any one item or group of
similar items either by the purchase of stock or
securities (not including bonds or collateralized
mortgage obligations purchased in the ordinary
and usual course of business by Bank),
contributions to capital, property transfers, or
otherwise, or by the purchase of any property or
assets of any other individual, firm, or
corporation;
(9) Enter into any other agreement not in
the ordinary and usual course of business;
(10) Merge or consolidate with any other
corporation, acquire any stock (except in a
fiduciary capacity), solicit any offers for any
Bank Stock, BSB Stock, or BSB preferred stock, or
a substantial portion of the assets of Bank or,
except in the ordinary course of business,
acquire any assets of any other person,
corporation, or other business organization, or
enter into any discussions with any person
concerning, or agree to do, any of the foregoing;
(11) Reduce the Bank's loan loss reserve for
any reason other than to reflect actual loan
losses; or
(12) Enter into any transaction or take any
action which would, if effected prior to the
Effective Time, constitute a breach of any of the
representations, warranties, or covenants
contained in this Agreement.
b. Prior to the Effective Time, Sellers shall
cause each of the Corporations to conduct its respective
business in the ordinary and usual course as heretofore
conducted and to use its best efforts (1) to preserve its
business and business organization intact, (2) to keep
available to Fourth and BANK IV the services of the
present officers and employees of the Bank, (3) to
preserve the good will of customers and others having
business relations with the Bank, (4) to maintain its
properties in customary repair, working order and
condition (reasonable wear and tear excepted), (5) to
comply with all Laws applicable to it and the conduct of
its businesses, (6) to keep in force at not less than
their present limits all existing policies of insurance,
(7) to make no material changes in the customary terms
and conditions upon which it does business, (8) to duly
and timely file all reports, tax returns, and other
documents required to be filed with federal, state,
local, and other authorities, and (9) unless it is
contesting the same in good faith and has established
reasonable reserves therefor, to pay when required to be
paid all taxes indicated by tax returns so filed or
otherwise lawfully levied or assessed upon it or any of
its properties and to withhold or collect and pay to the
proper governmental authorities or hold in separate bank
accounts for such payment all taxes and other assessments
which it believes in good faith to be required by law to
be so withheld or collected.
c. Prior to the Effective Time, Sellers shall
cause the Corporations, to the extent permitted by Law,
to give Fourth, BANK IV, and their counsel and
accountants full access, during normal business hours and
upon reasonable notice, to their respective properties,
books, and records, and to furnish Fourth and BANK IV
during such period with all such information concerning
their affairs as either of them may reasonably request.
Except for matters expressly disclosed in the Disclosure
Statement, the availability or actual delivery of
information about the Corporations to Fourth and BANK IV
shall not affect the covenants, representations, and
warranties of the Corporations contained in this
Agreement. Except for information disclosed in the
course of obtaining governmental approvals, Fourth and
BANK IV shall treat as confidential all such information
in the same manner as Fourth and BANK IV treat similar
confidential information of its own and, if this
Agreement is terminated, Fourth and BANK IV shall
continue to treat all such information obtained in such
investigation and not otherwise known to Fourth or BANK
IV, or already in the public domain, as confidential and
shall return such documents theretofore delivered by the
Corporations to Fourth and BANK IV as the Corporations
shall request.
d. Sellers shall cause BSB and the Bank,
separately and jointly with each other and with Fourth
and BANK IV, to each use its best efforts in good faith
to take or cause to be taken as promptly as practicable
all such steps as shall be necessary to obtain (1) the
prior approval of the Board under the Act for the
acquisition by Fourth of direct or indirect ownership,
control or power to vote 100% of the voting shares of the
Bank, (2) the prior approval of the Comptroller of the
Merger, and (3) all other consents and approvals of
government agencies as are required by Law or otherwise,
and shall do any and all acts and things reasonably
deemed by Fourth, BANK IV, or the Corporations to be
necessary or appropriate in order to cause the Purchase
and the Merger to be consummated on the terms provided
herein as promptly as practicable.
e. Each Seller agrees not to sell, pledge,
encumber, or otherwise hypothecate or transfer any shares
of BSB Stock prior to the Effective Time.
f. From the date hereof through the Effective
Time, Sellers shall cause the Bank to give BANK IV one
business day's advance notice by telephone or facsimile
to Robert Peterson, Assistant Vice President of BANK IV
Kansas, National Association, of all proposed securities
purchases or sales involving an aggregate price of
$100,000 or more. BANK IV shall not unreasonably object
to any such purchases or sales. If no objection is
received within such period of one business day, then the
Bank may proceed to make the proposed purchases or sales.
g. At or prior to the Effective Time, Sellers
shall cause BSB to acquire all shares of outstanding Bank
Stock not then owned by BSB, pursuant to existing
repurchase agreements.
3.3. Environmental Clean-Up; Divestiture of Real
Property. Immediately prior to the Closing, Sellers or their
designees shall purchase from the Bank the real property located at
Ninth and Doolin in Blackwell, Oklahoma, for a cash purchase price
in the amount of $90,000 (which is the book value of such property
as of May 31, 1994) plus the total after-tax amount the Bank shall
have spent on environmental remediation activities relating to such
property. At such time following the Closing as the Sellers or
their designees shall have remediated, in accordance with all
applicable Laws and to the reasonable, good faith satisfaction of
Fourth and BANK IV, any environmental contamination on such real
property resulting from the underground storage tanks located
thereon, including the removal of such underground storage tanks,
the Sellers or their designees shall sell to BANK IV, and BANK IV
shall purchase, such real property for a cash purchase price equal
to the then current book value of such property (not including any
amount spent before or after Closing on environmental remediation
activities) plus any after-tax non-environmental ownership
expenses, net of all income earned with respect to such property,
incurred by the Sellers or their designees between the Closing and
the date of purchase by BANK IV of such real property.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of Sellers and
Bank. Except as disclosed in the Disclosure Statement, Sellers and
Bank jointly and severally represent and warrant to Fourth and BANK
IV as follows:
a. Organization, Good Standing, and Authority.
BSB is a bank holding company duly registered pursuant to
the Bank Holding Company Act. Each of the Corporations
(other than Blackwell Security Business Trust) is a
corporation or bank duly organized, validly existing, and
in good standing under the laws of the jurisdiction of
its incorporation, and each has all requisite corporate
power and authority to conduct its business as it is now
conducted, to own its properties and assets, and to lease
properties used in its business. Blackwell Security
Business Trust is a business trust duly organized,
validly existing, and in good standing under the laws of
the State of Oklahoma and has full power and authority to
conduct its business as it is now conducted, to own its
properties and assets, and to lease property used in its
business. None of the Corporations has any Subsidiaries
except: (i) Bank and Blackwell Security Business Trust
are subsidiaries of BSB;, and (ii) Blackwell Security
Insurance Agency, Inc. is a Subsidiary of Blackwell
Security Business Trust. None of the Corporations is in
violation of its charter documents or bylaws, or of any
applicable Law in any material respect, or in default in
any material respect under any material agreement,
indenture, lease, or other document to which it is a
party or by which it is bound. The deposits of Bank are
insured by the FDIC to the extent provided by the Federal
Deposit Insurance Act and Bank has paid all assessments
and filed all reports required to be filed under the
Federal Deposit Insurance Act.
b. Binding Obligations; Due Authorization. This
Agreement constitutes the valid and binding obligations
of each Seller and Bank, and the Merger Agreement
constitutes the valid and binding obligation of Bank,
each enforceable against each of them in accordance with
the terms hereof and thereof, except as limited by
applicable bankruptcy, insolvency, reorganization,
moratorium, or other similar laws and equitable
principles affecting creditors' rights generally.
c. Absence of Default. The execution and the
delivery of this Agreement and the Merger Agreement, the
sale of the Shares, the Merger, and the consummation of
the other transactions contemplated hereby and thereby,
and the fulfillment of the terms hereof and thereof, will
not (1) conflict with, or result in a breach of the
terms, conditions, or provisions of, or constitute a
default under the organizational documents or bylaws of
any of the Corporations or under any agreement or
instrument under which any of the Corporations or any of
the Sellers is obligated, or (2) violate any Law to which
any of the Corporations or any of the Sellers is subject.
d. Capitalization. BSB is authorized to issue:
(i) 500,000 shares of common stock, par value $1.00 per
share, of which 216,701 shares are validly issued and
outstanding and 23,299 shares are held as treasury
shares; and (ii) 10,000 shares of preferred stock, par
value $52.50 per share, none of which is issued. The
Bank is authorized to issue 48,000 shares of capital
stock, par value $25.00 per share, all of which is issued
and outstanding. Blackwell Security Insurance Agency,
Inc. is authorized to issue 3,000 shares of common stock,
par value $1.00 per share, of which 500 shares are
validly issued and outstanding. Blackwell Security
Business Trust is authorized to issue 750 shares of
beneficial interest, par value $1.00 per share, of which
500 shares are validly issued and outstanding. BSB is
the owner, free and clear of all encumbrances, liens,
security interests, and claims whatsoever, of all 48,000
shares of Bank Stock, except for 280 shares of directors'
qualifying shares, all of which are subject to repurchase
agreements in favor of BSB, and all 750 shares of
beneficial interest of Blackwell Security Business Trust.
Blackwell Security Business Trust is the owner of all 500
shares of common stock of Blackwell Security Insurance
Agency, Inc., free and clear of all encumbrances, liens,
security interests, and claims whatsoever.
e. Charter Documents. True and correct copies
of the charter documents and bylaws of each of the
Corporations, with all amendments thereto, are included
in the Disclosure Statement as Exhibits "E-1" to "E-8."
f. Options, Warrants, and Other Rights. None of
the Corporations has outstanding any options, warrants,
or rights of any kind requiring it to sell or issue to
anyone any capital stock of any class and none of the
Corporations has agreed to issue or sell any additional
shares of its capital stock.
g. Financial Statements. Included in the
Disclosure Statement as Exhibits "G-1" through "G-4" are
true and complete copies of the following financial
statements, all of which are true and complete in all
material respects and have been prepared in all material
respects in accordance with GAAP and all applicable
regulatory accounting principles consistently followed
throughout the periods indicated, subject in the case of
interim financial statements, to normal recurring year-
end adjustments (the effect of which will not,
individually or in the aggregate, be materially adverse)
and the absence of notes (which if presented would not
differ materially from those included in the most recent
year-end financial statements):
(1) Unaudited Financial Statements of BSB
as of December 31, 1993, and 1992, and for the
fiscal years then ended and notes thereto;
(2) Unaudited financial statements of
Bank, as of December 31, 1993, and 1992, and for
the fiscal years then ended;
(3) Consolidated Reports of Condition and
Income as of March 31, June 30, September 30, and
December 31, 1993, and March 31, 1994, as filed
by the Bank with the FDIC; and
(4) Annual Reports on Form FR Y-6 filed by
BSB with the Board for the years ended December
31, 1992 and 1993.
As soon as practicable between the date hereof and the
Effective Time, the Corporations will deliver to Fourth
copies of monthly operating statements and monthly
securities inventory reports of Bank and of all reports
filed by any of them with any regulatory agencies. The
books of account of each of the Corporations and each of
the Financial Statements fairly and correctly reflect
and, when delivered, will reflect in all material
respects in accordance with GAAP and all applicable rules
and regulations of regulatory agencies applied on a
consistent basis, the respective incomes, expenses,
assets, and liabilities, absolute or contingent, of each
of the Corporations (except for the absence in the
monthly operating statements of the Bank of certain
information and footnotes normally included in financial
statements prepared in accordance with GAAP). There have
been, and prior to the Effective Time there will be, no
material changes in the financial condition of Bank or
BSB from December 31, 1993, other than changes made in
the usual and ordinary conduct of the businesses of the
Corporations, none of which has been or will be
materially adverse and all of which have been or will be
recorded in the books of account of the Corporations; and
except as specifically permitted by this Agreement, there
have been, and prior to the Effective Time there will be,
no substantial changes in the respective businesses,
assets, properties, or liabilities, absolute or
contingent, of any of the Corporations, or in their
respective condition, financial or otherwise, from the
date of the most recent of the Financial Statements that
has been delivered to Fourth and BANK IV on the date
hereof other than changes occurring in the usual and
ordinary conduct of the business of the Corporations,
none of which has been or will be materially adverse and
all of which have been or will be recorded in the
respective books of account of the Corporations. None of
the Corporations has any contingent liabilities, other
than letters of credit and similar obligations of the
Bank incurred in the ordinary course of business, that
are not described in or reserved against in the Financial
Statements listed above.
h. Properties. Exhibit "H" to the Disclosure
Statement is a complete list of all real estate owned or
leased by any of the Corporations. Bank has good and
marketable title in fee simple to all lands and buildings
described in the Disclosure Statement as being owned by
it, free and clear of all liens, encumbrances, and
charges, except for current taxes and assessments not
delinquent and liens, encumbrances, and charges shown in
its records and books of account which are not
substantial in character or amount in the aggregate and
in the aggregate do not materially detract from the value
or materially interfere with the use of the properties
subject thereto or affected thereby. All leases of real
property to which Bank is a party as lessee, complete
copies of each of which with all amendments thereto are
included in Exhibit "H" to the Disclosure Statement, are
each valid and enforceable in accordance with their
respective terms except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, or
similar Laws and equitable principles affecting
creditors' rights generally, and there has been no
material default by any party thereto. No zoning
ordinance prohibits, interferes with, or materially
impairs the usefulness of any of the real property and
buildings thereon owned or used by Bank for the purposes
for which it is now being used; and all the premises
owned or leased by Bank are in good operating condition
and repair, normal wear and tear excepted.
i. Personal Property. Bank has good and
marketable title to all of the machinery, equipment,
materials, supplies, and other property of every kind,
tangible or intangible, contained in its offices and
other facilities or shown as assets in its records and
books of account, free and clear of all liens,
encumbrances, and charges. All leases of personal
property to which any of the Corporations is a party as
lessee are valid and enforceable in accordance with their
terms, and there has been no material default by any
party thereto. All of such personal property owned or
leased by any of the Corporations is in good operating
condition, normal wear and tear excepted.
j. Taxes. The Corporations have filed all tax
returns and reports required to be filed with the United
States Government and with all states and political
subdivisions thereof where any such returns or reports
are required to be filed and where the failure to file
such return or report would subject any of the
Corporations to any material liability or penalty. All
taxes imposed by the United States, or by any foreign
country, or by any state, municipality, subdivision, or
instrumentality of the United States or of any foreign
country, or by any other taxing authority, which are due
and payable by any of the Corporations have been paid in
full or adequately provided for by reserves shown in the
records and books of account of the Corporations and in
the Financial Statements. No extension of time for the
assessment of deficiencies for any years is in effect.
None of the Corporations has any knowledge of any
unassessed tax deficiency proposed or threatened against
any of them.
k. Contracts. Other than Permitted Contracts
and agreements with customers of the Bank and with
financial institutions entered into by the Bank in the
ordinary course of its banking business, attached to the
Disclosure Statement as Exhibit "K" is a list of all
material contracts and other agreements and arrangements,
both written and oral, to which any Corporation is a
party and which involve $10,000 or more, which affect or
pertain to the operation of their respective businesses.
To the best knowledge of Sellers, all parties thereto
have in all material respects performed, and are in good
standing with respect to, all the material obligations
required to be performed under all such contracts and
other agreements and arrangements, and no obligation with
respect thereto is overdue. All of the material
agreements of the Corporations, including without
limitation the agreements disclosed in writing pursuant
to this clause (k), are valid, binding, and enforceable
in accordance with their terms, except as limited by
applicable bankruptcy, insolvency, reorganization,
moratorium, or similar Laws and equitable principles
affecting creditors' rights generally. Except as
otherwise noted in Exhibit "K" to the Disclosure
Statement, no contract, lease, or other agreement or
arrangement to which a Corporation is a party or as to
which its assets is subject requires the consent of any
third party in connection with this Agreement. Except as
described in Exhibit "K" to the Disclosure Statement,
neither any Corporation nor any Seller has any knowledge
of any threatened cancellation of, any outstanding
disputes or default under, or of any basis for any claim
of breach or default of, any lease, contract, or other
agreement or arrangement to which any of the Corporations
is a party. Except for Permitted Contracts and except as
set forth in Exhibits "K" and "L-2" to the Disclosure
Statement, no Corporation is a party to:
(1) Any contract for the purchase or sale
of any materials, or supplies which contains any
escalator, renegotiation, or redetermination
clause or which commits it for a fixed term;
(2) Any contract of employment with any
officer or employee not terminable at will
without liability on account of such termination;
(3) Any management or consultation
agreement not terminable at will without
liability on account of such termination;
(4) Any license, royalty, or union
agreement, or loan agreement in which a
Corporation is the borrower;
(5) Any contract, accepted order, or
commitment for the purchase or sale of materials,
services, or supplies having a total remaining
contract price in excess of $10,000;
(6) Any contract containing any
restrictions on any party thereto competing with
any Corporation or any other person;
(7) Any other agreement which materially
affects the business, properties, or assets of
any Corporation or which was entered into other
than in the ordinary and usual course of
business; or
(8) Any letter of credit or commitment to
make any loan or group of loans to related
parties in an amount in excess of $100,000.
None of the Corporations' agreements described in this
clause "k" is reasonably anticipated by either Bank or
BSB to result in a loss to any of the Corporations.
l. Labor Relations; Employees; ERISA. None of
the Corporations is a party to or affected by any
collective bargaining agreement, nor is any Corporation
a party to any pending or, to the best knowledge of
Sellers, threatened labor dispute, organizational
efforts, or labor negotiations. Each of the Corporations
has complied in all material respects with all applicable
Laws relating to the employment of labor, including, but
not limited to, the provisions thereof relating to wages,
hours, collective bargaining, payment of social security
taxes, and equal employment opportunity, the violation of
which would have a materially adverse impact on their
respective businesses. None of the Corporations is
liable for any arrears of wages or any taxes or penalties
for failure to comply with any of the foregoing. Except
for a noncontributory defined contribution profit sharing
plan (the "Profit Sharing Plan") a true and complete copy
of which, with all amendments thereto, is Exhibit "L-1"
to the Disclosure Statement, none of the Corporations has
any written or oral retirement, pension, profit sharing,
stock option, bonus, or other employee benefit plan or
practice other than group health and accident insurance.
The Profit Sharing Plan is in material compliance with
ERISA and the Code and is the subject of a determination
by the Internal Revenue Service that it is a "qualified
plan" within the meaning of Section 401(a) of the Code,
and that the trust thereunder is a trust exempt from tax
under Section 501 of the Code. None of the Corporations
nor any Seller knows of any facts or circumstances that
could adversely affect the status of the Profit Sharing
Plan as such a plan or the trust as such a trust. All
accrued contributions and other payments required to be
made by the Bank under such plan have been made or
reserves adequate for such purposes have been set aside
therefor. None of the Corporations has violated in any
material respect any of the provisions of ERISA, and none
of them has engaged in any "prohibited transactions" as
such term is defined in Section 406 of ERISA. There is
no employee of any of the Corporations whose employment
is not terminable at will without severance pay or other
penalty or compensation other than the Agreement, dated
October 10, 1984, between the Bank and William W.
Rodgers, Jr., a true and complete copy of which is
Exhibit "L-2" to the Disclosure Statement.
m. Government Authorizations. Each of the
Corporations has all permits, charters, licenses, orders,
and approvals of every federal, state, local, or foreign
governmental or regulatory body required in order to
permit it to carry on its business substantially as
presently conducted. All such licenses, permits,
charters, orders, and approvals are in full force and
effect, and, to the knowledge of BSB, the Sellers, or
any Corporation, no suspension or cancellation of any of
them is threatened and none of the Corporations knows of
any fact or circumstance that will interfere with or
adversely affect the renewal of any of such licenses,
permits, charters, orders, or approvals; and none of such
permits, charters, licenses, orders, and approvals will
be affected by the consummation of the transactions
contemplated by this Agreement.
n. Insurance. Exhibit "N" to the Disclosure
Statement is a complete list of all insurance policies
presently in effect and in effect during the past three
years. All the insurance policies and bonds currently
maintained by any of the Corporations are in full force
and effect.
o. Litigation. Exhibit "O" to the Disclosure
Statement contains a true and complete list and brief
description of all pending or, to the knowledge of any of
the Corporations or Sellers, threatened, Litigation to
which any of the Corporations is or would be a party or
to which any of their assets is or would be subject.
Except as described on Exhibit "O" to the Disclosure
Statement, none of the Corporations is a party to any
Litigation other than routine litigation commenced by
Bank to enforce obligations of borrowers in which no
counterclaims for any material amounts of money have been
asserted or, to the knowledge of the Corporations,
threatened.
p. Brokers or Finders. No broker, agent,
finder, consultant, or other party (other than legal and
accounting advisors) has been retained by any of the
Corporations or is entitled to be paid based upon any
agreements, arrangements, or understandings made by any
of the Corporations or any Seller in connection with any
of the transactions contemplated by this Agreement.
q. Stockholder Matters. Exhibit "Q" to the
Disclosure Statement accurately sets forth after the name
of each Seller the number of shares of BSB Stock being
sold by such Seller, in each case owned by such Seller,
free and clear of all liens, encumbrances, claims, and
equities which would impair the right of the Seller to
sell such shares to Fourth under this Agreement;
provided, however, that no Seller makes any
representation or warranty as to the shares of BSB Stock
owned by any other Seller.
r. Environmental Compliance. Each of the
Corporations is in material compliance with all relevant
Laws concerning conservation and protection of the
environment. Except as described in Exhibit "R" to the
Disclosure Statement, no real or personal property owned
or leased by any of the Corporations at any time is now
being used or has at any time in the past ever been used
for the storage (whether permanent or temporary), by any
of the Corporations, or to the knowledge of Sellers, by
third parties, disposal, or handling of any hazardous
materials, hazardous waste, hazardous substance,
contaminant, or pollutant, nor are any such materials,
waste, substance, contaminant, or pollutant located in,
on, under, or at the real or personal property owned,
leased, or used by any of the Corporations.
s. Employment of Aliens. Bank is in material
compliance with the Immigration and Control Act of 1986.
t. Notes and Leases. All promissory notes and
leases owned by the Bank at the Effective Time will
represent bona fide indebtedness or obligations to the
Bank and are and will be fully enforceable in accordance
with their terms without valid set-offs or counterclaims,
except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws and equitable
principles affecting creditors' rights generally;
provided, however, no representation or warranty is made
in this Agreement as to the collectibility of such notes
and leases.
u. No Misrepresentations. Neither this
Agreement, the Disclosure Statement, the Financial
Statements, nor any other letter, certificate, statement,
or document furnished or to be furnished to Fourth or
BANK IV by or on behalf of the Sellers or Bank, or any of
them, pursuant to or in connection with this Agreement
and the transactions contemplated hereby, when considered
in conjunction with all other information and documents
furnished to Fourth and BANK IV hereunder, contains or
will contain any misstatement of a material fact or omits
or will omit to state a material fact necessary to make
the statements contained herein or therein not
misleading.
v. Updating of Representations and Warranties.
Between the date hereof and the Effective Time, the
Sellers and Bank will promptly disclose to Fourth and
BANK IV in writing any information of which any of them
has actual knowledge (1) concerning any event that would
render any representation or warranty of the Sellers or
Bank untrue in any material respect if made as to the
date of such event, (2) which renders any information set
forth in the Agreement or the Disclosure Statement no
longer correct in all material respects, or (3) which
arises after the date hereof and which would have been
required to be included in this Agreement or Disclosure
Statement if such information had existed on the date
hereof.
w. True at Effective Time. Except as otherwise
specifically provided in this Agreement, all of the
representations and warranties set forth above will be
true and correct at the Effective Time with the same
force and effect as though such representations and
warranties had been made at the Effective Time.
4.2. Representations and Warranties of Fourth and
BANK IV. Fourth and BANK IV jointly and severally represent and
warrant to the Sellers and Bank, and each of them, as follows:
a. Organization, Good Standing, and Authority.
Fourth is a bank holding company duly registered pursuant
to the Bank Holding Company Act. Each of Fourth and BANK
IV is a corporation or bank duly organized, validly
existing, and in good standing under the laws of the
jurisdiction of its incorporation, and each has all
requisite corporate power and authority to conduct its
business as it is now conducted, to own its properties
and assets, and to lease properties used in its business.
Neither Fourth nor BANK IV is in violation of its charter
documents or bylaws, or of any applicable Law in any
material respect, or in default in any material respect
under any material agreement, indenture, lease, or other
document to which it is a party or by which it is bound.
b. Binding Obligations; Due Authorization. This
Agreement and the Merger Agreement constitute the valid
and binding obligations of Fourth and BANK IV, each
enforceable against each of them in accordance with its
terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar
laws and equitable principles affecting creditors' rights
generally. The execution, delivery, and performance of
this Agreement and the Merger Agreement and the
transactions contemplated hereby and thereby have been
duly authorized by the boards of directors of Fourth and
BANK IV.
c. Absence of Default. None of the execution or
the delivery of this Agreement or the Merger Agreement,
the consummation of the transactions contemplated hereby
or thereby, or the fulfillment of the terms hereof or
thereof, will (1) conflict with, or result in a breach of
the terms, conditions, or provisions of, or constitute a
default under the charter documents or bylaws of Fourth
or BANK IV or under any agreement or instrument under
which Fourth or BANK IV is obligated, or (2) violate any
Law to which either of them is subject.
d. Brokers or Finders. No broker, agent,
finder, consultant, or other party (other than legal and
accounting advisors) has been retained by Fourth or BANK
IV or is entitled to be paid based upon any agreements,
arrangements, or understandings made by Fourth or BANK IV
in connection with any of the transactions contemplated
by this Agreement.
ARTICLE V
CLOSING CONDITIONS
5.1. Conditions to Obligations of Fourth and BANK IV.
The obligations of Fourth and BANK IV to purchase any of the Shares
or to effect the Merger shall be subject to the following
conditions which may, to the extent permitted by Law, be waived by
Fourth and BANK IV at their option:
a. Absence of Litigation. No order, judgment,
or decree shall be outstanding restraining or enjoining
consummation of the purchase of the Shares or the Merger;
and no Litigation shall be pending or threatened in which
it is sought to restrain or prohibit the purchase of the
Shares or the consummation of the Merger or to obtain
substantial monetary or other relief against one or more
of the parties hereto in connection with this Agreement.
b. Regulatory Approvals. All required
governmental consents and approvals, including those of
the Board and the Comptroller, shall have been procured
(and shall continue to be in effect) and all other
requirements prescribed by Law shall have been satisfied,
which are necessary for (1) the consummation of the
purchase of the Shares, the Merger, and the other
transactions contemplated hereby; (2) the continuation,
directly or indirectly, by BANK IV of the business of
Bank after the Effective Time as such business is carried
on immediately prior to the Effective Time; and (3) BANK
IV to have and exercise the full right of ownership with
respect to all property owned by Bank which is material
to the operations of Bank.
c. Minimum Net Worth of BSB. Fourth shall be
reasonably satisfied that the consolidated stockholder's
equity of BSB as of the end of the month immediately
preceding the Effective Time, computed in accordance with
GAAP, excluding any effect of the application of F.A.S.
115 and with an adequate loan loss reserve, shall be not
less than $6,800,000.
d. Opinion of Counsel. Fourth and BANK IV shall
have received the opinion of Crowe & Dunlevy, counsel to
Bank and the Sellers, substantially in the form of
Exhibit "B" hereto.
e. Representations and Warranties; Covenants.
The representations and warranties of Bank and of the
Sellers contained in Section 4.1 of this Agreement shall
have been true and correct in all material respects on
the date made and shall be true and correct in all
material respects at the Effective Time as though made at
such time, excepting any changes occurring in the
ordinary course of business, none of which shall have
been materially adverse, and excepting any changes
contemplated or permitted by this Agreement. Sellers and
Bank shall each have performed all of their obligations
under this Agreement and the Merger Agreement.
f. Certificates. Sellers and Bank shall have
delivered to Fourth and BANK IV a certificate, in form
and substance satisfactory to Fourth and BANK IV, dated
the Effective Time and signed by the chief executive
officer and chief financial officer of BSB and the Bank,
certifying in such detail as Fourth and BANK IV may
reasonably request the fulfillment of the foregoing
conditions.
g. Resignations. Sellers shall have delivered
to Fourth and BANK IV the written resignations, effective
at the Effective Time, of those officers and directors of
the Corporations as Fourth and BANK IV shall have
requested at least two business days prior to the
Effective Time.
h. Agreements. William W. Rodgers and James R.
Rodgers shall have entered into an Agreement and a
Consulting and Marketing Agreement, substantially in the
form of Exhibits "C" and "D" hereto, respectively.
5.2. Conditions to Obligations of Sellers and Bank.
The obligation of Sellers to sell the Shares and to consummate the
transactions contemplated hereby, and the obligation of the Bank to
consummate the Merger shall both be subject to the following
conditions which may, to the extent permitted by Law, be waived by
Sellers (by the Agents acting for all Sellers jointly) or Bank, as
the case may be, at their option:
a. General. Each of the conditions specified in
clauses a and b of Section 5.1 shall have occurred and be
continuing.
b. Representations and Warranties; Covenants.
The representations and warranties of Fourth and BANK IV
contained in Section 4.2 of this Agreement shall have
been true and correct in all material respects on the
date made and shall be true and correct in all material
respects at the Effective Time as though made at such
time. Fourth and BANK IV shall each have duly performed
all of its obligations under this Agreement.
c. Agreements. BANK IV shall have executed and
delivered an Agreement and a Consulting and Marketing
Agreement, substantially in the form of Exhibits "C" and
"D" hereto, respectively.
ARTICLE VI
TERMINATION OF AGREEMENT
6.1. Mutual Consent; Termination Date. This Agreement
and the Merger Agreement shall terminate at any time when the
parties hereto mutually agree in writing. This Agreement and the
Merger Agreement may also be terminated at the election of either
Sellers and Bank (by the Agents acting for all Sellers and Bank
jointly) or Fourth and BANK IV, upon written notice from the party
electing to terminate this Agreement and the Merger Agreement to
the other party if, without fault on the part of the party electing
to terminate this Agreement and the Merger Agreement, there has
been a denial of a requisite governmental approval or consent
required to effect the purchase of the Shares and the Merger and
consummate the transactions contemplated hereby and by the Merger
Agreement except upon terms reasonably deemed onerous by Fourth and
BANK IV. Unless extended by written agreement of the parties, this
Agreement and the Merger Agreement shall terminate if all
conditions to the obligations of the parties hereto have not
occurred on or before November 30, 1994.
6.2. Election by Fourth and BANK IV. This Agreement
and the Merger Agreement shall terminate at Fourth's and BANK IV's
joint election, upon written notice from Fourth and BANK IV to
Sellers and Bank if any one or more of the following events shall
occur and shall not have been remedied to the satisfaction of
Fourth and BANK IV within 30 days after written notice is delivered
to Sellers and Bank: (a) there shall have been any material breach
of any of the obligations, covenants, or warranties of any of the
Sellers or Bank hereunder; or (b) there shall have been any written
representation or statement furnished by the Sellers or Bank
hereunder which at the time furnished is false or misleading in any
material respect in relation to the size and scope of the
transactions contemplated by this Agreement.
6.3. Election by Sellers and Bank. This Agreement and
the Merger Agreement shall terminate at the joint election of
Sellers (by the Agents acting for all Sellers jointly) and Bank
upon written notice from Sellers and Bank to Fourth and BANK IV if
any one or more of the following events shall occur and shall not
have been remedied to their satisfaction within 30 days after
written notice is delivered to Fourth and BANK IV: (a) there shall
have been any material breach of any of the obligations, covenants,
or warranties of Fourth and BANK IV hereunder; or (b) there shall
have been any written representation or statement furnished by
Fourth or BANK IV hereunder which at the time furnished is false or
misleading in any material respect in relation to the size and
scope of the transactions contemplated by this Agreement.
ARTICLE VII
INDEMNIFICATION
7.1. Effect of Closing. Except as provided in this
Section, closing of the transactions contemplated by this Agreement
and the Merger Agreement shall not prejudice any claim for damages
which any of the parties hereto may have hereunder in law or in
equity, due to a material default in observance or the due and
timely performance of any of the covenants and agreements herein
contained or for the material breach of any warranty or
representation hereunder, unless such observance, performance,
warranty, or representation is specifically waived in writing by
the party making such claim. In the event any warranty or
representation contained herein is or becomes untrue or breached in
any material respect (other than by reason of any willful
misrepresentation or breach of warranty) and such breach or
misrepresentation is promptly communicated to Fourth and BANK IV in
writing prior to the Effective Time, Fourth and BANK IV shall have
the right, at their sole option, either to waive such
misrepresentation or breach or to terminate this Agreement and the
Merger Agreement, but in either such event, none of the Sellers
shall be liable to Fourth or BANK IV for any such damages, costs,
expenses, or otherwise by reason of such breach or
misrepresentation. In the event Fourth and BANK IV elect to close
the transactions contemplated by this Agreement and the Merger
Agreement notwithstanding the written communication of such breach
or misrepresentation to Fourth and BANK IV, Fourth and BANK IV
shall be deemed to have waived such breach or misrepresentation in
writing.
7.2. General Indemnification. Subject to the
limitations on the liability of Sellers contained in Sections 7.1
and 7.5, Sellers shall be liable for, and shall defend, save,
indemnify, and hold harmless Fourth, BANK IV, the Bank, and their
respective officers, directors, employees, and agents, and each of
them (hereinafter individually referred to as an "Indemnitee" and
collectively as "Indemnitees") against and with respect to any
losses, liabilities, claims, diminution in value, litigation,
demands, damages, costs, charges, reasonable legal fees, suits,
actions, proceedings, judgments, expenses, or any other losses
(herein collectively referred to as "Indemnifying Losses") that may
be sustained, suffered, or incurred by, or obtained against, any
Indemnitee arising from or by reason of the breach or
nonfulfillment of any of the warranties, agreements, or
representations made by the Sellers, or any of them, in this
Agreement; provided, however that the liability of Sellers to
defend, save, indemnify, and hold harmless any of the Indemnitees
for any liabilities, claims, or demands indemnified under this
Section 7.2 or any damages, costs, charges, reasonable legal fees,
suits, actions, proceedings, or judgments received, incurred,
filed, or entered thereon, shall be limited to the amount by which
all such liabilities, claims, and demands so discovered or made,
and all damages, costs, charges, reasonable legal fees, suits,
actions, proceedings, judgments, expenses, and other losses
recovered, incurred, filed, or entered thereon or in connection
therewith, exceed $150,000 in the aggregate, net of income tax
effect.
7.3. Procedure. If any claim or demand shall be made
or liability asserted against any Indemnitee, or if any Litigation,
suit, action, or administrative or legal proceedings shall be
instituted or commenced in which any Indemnitee is involved or
shall be named as a defendant either individually or with others,
and if such Litigation, claim, demand, liability, suit, action, or
proceeding, if successfully maintained, will result in any
Indemnifying Losses as defined in Section 7.2, Fourth and BANK IV
shall give Sellers written notice thereof within 20 days after it
acquires knowledge thereof. If, within 20 days after the giving of
such notice, Fourth and BANK IV receive written notice from Sellers
(by the Agents acting for all Sellers) stating that Sellers dispute
or intend to defend against such claim, demand, liability, suit,
action, or proceeding, then Sellers shall have the right to select
counsel of their choice and to dispute or defend against or settle
such claim at their expense, and the Indemnitees shall fully
cooperate with Sellers in such dispute or defense or settlement so
long as Sellers are conducting such dispute or defense diligently
and in good faith. If no such notice of intent to dispute or
defend is received by Fourth and BANK IV within the aforesaid 20-
day period, or if such diligent and good faith defense is not
being, or ceases to be, conducted, Fourth and BANK IV shall have
the right, directly or through one or more of the Indemnitees, to
dispute and defend against the claim, demand, or other liability at
the cost and expense of Sellers, to settle such claim, demand, or
other liability, together with interest or late charges thereon,
and in either event to be indemnified as provided in this Agreement
so long as Fourth or BANK IV conducts such defense diligently and
in good faith. If any event shall occur that would entitle
Indemnitees to a right of indemnification hereunder, any loss,
damage, or expense subject to indemnification shall be the after-
tax net loss to the Indemnitees (in excess of $150,000, as provided
in the preceding section) after due allowance for the income tax
effect, if any, of amounts to be received by the Indemnitees
hereunder, insurance, or offsetting income or assets resulting
therefrom.
7.4. Survival of Representations and Warranties.
Notwithstanding any rule of law or provision of this Agreement to
the contrary, the representations and warranties of Sellers and
Bank contained in this Agreement shall survive the Closing and the
Merger and the closing of the transactions described in this
Agreement and the Merger Agreement; provided, however, that no
claim for indemnification or breach of warranty under this
Agreement shall be valid unless an Indemnitee shall have given
written notice of its assertion or claim to Sellers within two
years from the Effective Time (three years in the case of a claim
for breach of any representation or warranty contained in 4.1j).
7.5. Several Liability of Sellers. The liability of
the Sellers hereunder shall not be joint, but rather shall be
several in proportion to the aggregate amount of cash each such
Seller receives for the BSB Stock being sold pursuant to this
Agreement as compared to the total amount of cash being received by
all Sellers. The liability of each such Seller hereunder shall be
limited to the total amount of cash received by such Seller under
this Agreement in exchange for his, her, or its BSB Stock.
ARTICLE VIII
ESCROW
The Bank, as Escrow Agent, shall hold all of the stock
certificates representing the Shares being sold hereunder, together
with duly executed stock powers assigning all of the Shares to
Fourth, and shall deliver such certificates and stock powers to
Fourth at the Closing upon the instructions of the Agents, or
either of them. The Agents, and each of them, are hereby expressly
authorized, on behalf of each Seller, to execute and deliver to the
Escrow Agent appropriate escrow instructions which shall supplement
and be a part of this Agreement.
ARTICLE IX
DELIVERY OF STOCK CERTIFICATES AND APPOINTMENT OF AGENTS
9.1. Delivery of Stock Certificates. Each Seller has
delivered or shall forthwith deliver to the Escrow Agent: (i) all
of the stock certificates representing all of the Shares being sold
by such Seller hereby; and (ii) duly executed stock powers or
assignment forms with signatures guaranteed by a financial
institution that is a member of a recognized Medallion Signature
Guarantee Program (but not the Bank), assigning and transferring
all of such Shares to Fourth.
9.2. Appointment of Agents. Each Seller irrevocably
appoints William W. Rodgers, Jr. and James R. Rodgers the agents
and attorneys-in-fact of such Seller, each with the power to act
alone, for the purposes of acting in the name and in the stead of
such Seller in: (i) giving and receiving all notices permitted or
required by this Agreement; (ii) delivering the stock certificates
evidencing the Shares being sold hereby and any and all assignments
and stock powers relating thereto; (iii) receiving and disbursing
the cash payments to be made pursuant to this Agreement, including
the payment for the real estate described in Section 3.3; (iv)
agreeing with Fourth and BANK IV as to any amendments to this
Agreement or the Merger Agreement which the Agents, or any of them,
may deem advisable or appropriate, including but not limited to the
extension of time in which to consummate the transaction
contemplated by this Agreement and the Merger Agreement and the
waiver of any closing conditions; (v) employing legal counsel; (vi)
paying legal, accounting, and any other fees and expenses incurred
by the Agents in consummating the transaction contemplated by this
Agreement or the Merger Agreement; and (vii) making, executing,
acknowledging, and delivering all such contracts, orders, receipts,
notices, requests, instructions, certificates, applications,
letters, and other writings, and in general doing all things and in
taking all actions which the Agents, in his or their sole
discretion may consider necessary or proper in connection with or
to carry out the terms of this Agreement or the Merger Agreement,
as fully as if such Seller was personally present and acting. This
power of attorney and all authority conferred hereby is granted and
conferred subject to the interest of Fourth, BANK IV, and the other
Sellers who are a party to this Agreement, and in consideration of
those interests and for the purpose of completing the transactions
contemplated hereby, this power of attorney and all authority
conferred hereby shall be irrevocable and shall not be terminated
by any Seller or by operation of law, whether by the death,
incompetency, or incapacity of the Sellers, or any of them, or by
the occurrence of any other event. If any Seller should die or
become incompetent or incapacitated, or if any other such event
should occur before the delivery of the Shares pursuant to this
Agreement, certificates for such Shares shall be delivered by or on
behalf of such Seller in accordance with the terms and conditions
of this Agreement, and all actions taken by the Agents pursuant to
this Agreement shall be as valid as if such death, incompetence, or
incapacity or other event had not occurred, regardless of whether
or not Fourth, BANK IV, or the Agents shall have received notice of
such death, incompetence, or incapacity or other event. Each
Seller agrees to hold the Agents free and harmless from any and all
loss, damage, expense, or liability which they may sustain or incur
as a result of any action taken in good faith hereunder.
9.3. Replacement and Removal of Agents. A majority in
interest of Sellers may, at any time and from time to time, remove
any one or more of the Agents and may appoint successor Agents in
the event of the death, disability, resignation, or removal of an
Agent.
ARTICLE X
MISCELLANEOUS
10.1. Expenses. Whether or not the Purchase or the
Merger is effected, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expense.
10.2. Notices. All notices or other communications
required or permitted hereunder shall be sufficiently given if
personally delivered or if sent by certified or registered mail,
postage prepaid, return receipt requested, addressed as follows:
(a) If to Fourth or BANK IV, addressed to Darrell G. Knudson,
Chairman of the Board, Fourth Financial Corporation, Post Office
Box 4, Wichita, Kansas 67201; and (b) if to the Sellers, addressed
to William W. Rodgers, Jr., 101 North Main, Blackwell, Oklahoma
74631, or to such other person or such other address as shall have
been furnished in writing in the manner provided herein for giving
notice.
10.3. Effect of Fewer than All Sellers Executing
Agreement. It is the intention and expectation of the parties that
all holders of BSB Stock will execute and deliver this Agreement.
Each Seller acknowledges and agrees, however, that execution and
delivery of this Agreement by any other Seller or group of Sellers
is not a condition to such Seller being obligated hereunder and
that such Seller would have executed and delivered this Agreement
had he, she, or it known the correct identities of the parties and
the total number of shares of BSB Stock owned by the parties
actually executing this Agreement as Sellers. The execution and
delivery hereof by any other Seller or group of Sellers is,
therefore, hereby waived by each Seller.
10.4. Life Insurance Policy. On or before the Closing,
William W. Rodgers, Jr. may purchase the policy of life insurance
on his life held by the Bank in consideration of the payment by him
of an amount equal to the cash surrender value of the policy on the
date of purchase and the cancellation of the deferred compensation
plan to which such policy relates.
10.5. Lease of Office Space. Prior to the Closing, the
Bank and James R. Rodgers may enter into a one-year lease covering
the office space Mr. Rodgers is now leasing from the Bank. Any
such lease, which shall be in form and substance satisfactory to
Fourth and BANK IV, shall provide for market-rate rental and may
contain up to three one-year renewal options.
10.6. Sale of Adjacent Property. Sellers may cause Bank
to sell the property owned by it adjacent to the Bank's main
banking facility to James R. Rodgers for such purchase price as the
Bank deems to be fair market value; provided, any gain, loss, or
expense (including taxes) attributable to such sale shall be
recorded on the books and records of the Bank prior to the
calculation of the purchase price of the Shares.
10.7. Time. Time is of the essence of this Agreement.
10.8. Law Governing. This Agreement shall, except to
the extent federal law is applicable, be construed in accordance
with and governed by the laws of the State of Kansas, without
regard to the principles of conflicts of laws thereof.
10.9. Entire Agreement; Amendment. This Agreement and
the Merger Agreement contain and incorporate the entire agreement
and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior negotiations, agreements,
letters of intent, and understandings. This Agreement may only be
amended by an instrument in writing duly executed by Fourth, BANK
IV, Bank, and Sellers (by the Agents acting for all Sellers
jointly) and all attempted oral waivers, modifications, and
amendments shall be ineffective.
10.10. Successors and Assigns. The rights and
obligations of the parties hereto shall inure to the benefit of and
shall be binding upon the heirs, personal representatives,
successors and permitted assigns of each of them; provided,
however, that this Agreement or any of the rights, interests, or
obligations hereunder may not be assigned by any of the parties
hereto without the prior written consent of the other parties
hereto.
10.11. Cover, Table of Contents, and Headings. The
cover, table of contents, and the headings of the sections and
subsections of this Agreement are for convenience of reference only
and shall not be deemed to be a part hereof or thereof or taken
into account in construing this Agreement.
10.12. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original
but which together shall constitute but one agreement.
10.13. Minimum Number of Sellers. This Agreement will
not be binding upon Fourth or BANK IV until it has been duly
executed by stockholders of BSB owning at least 90% of BSB's issued
and outstanding common stock.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed.
FOURTH FINANCIAL CORPORATION
By__________________________________________
Ronald L. Baldwin, Executive Vice President
"Fourth"
BANK IV OKLAHOMA, NATIONAL ASSOCIATION
By __________________________________________
Edward F. Keller, Chairman of the Board
"BANK IV"
SECURITY BANK AND TRUST COMPANY
By __________________________________________
"Bank"
[signatures continued]
Number of Shares
Name of Seller Being Sold
- --------------
____________________________ ______________
____________________________ ______________
___________________________ ______________
____________________________ ______________
____________________________ ______________
"Sellers"
Exhibit "A"
AGREEMENT TO MERGE
between
BANK IV OKLAHOMA, NATIONAL ASSOCIATION
and
SECURITY BANK AND TRUST COMPANY
under the charter of
BANK IV OKLAHOMA, NATIONAL ASSOCIATION
under the title of
BANK IV OKLAHOMA, NATIONAL ASSOCIATION
THIS AGREEMENT made between BANK IV Oklahoma, National
Association (hereinafter referred to as "BANK IV"), a banking
association organized under the laws of the United States, being
located at 515 South Boulder, City of Tulsa, County of Tulsa, in
the State of Oklahoma, with a capital of $166,825,000 divided into
5,720,647 shares of common stock, each of $5.00 par value, and
surplus of $133,050,000 and undivided profits, including capital
reserves, of $5,483,000 as of March 31, 1994, and Security Bank and
Trust Company (hereinafter referred to as "Security"), a banking
corporation organized under the laws of the State of Oklahoma,
being located at 101 N. Main, Blackwell, Kay County, in the State
of Oklahoma, with a capital of $5,794,000, divided into 48,000
shares of common stock, each of $25.00 par value, and surplus and
undivided profits of approximately $4,545,000 as of March 31, 1994,
each acting pursuant to a resolution of its board of directors,
adopted by the vote of a majority of its directors, pursuant to the
authority given by and in accordance with the provisions of the Act
of November 7, 1918, as amended (12 USC 215a).
W I T N E S S E T H: That,
Section 1. Security shall be merged into BANK IV under
the charter of the latter.
Section 2. The name of the receiving association
(hereinafter referred to as the "Association") shall be BANK IV
Oklahoma, National Association.
Section 3. The business of the Association shall be that
of a national banking association. This business shall be
conducted by the Association at its main office which shall be
located at 515 South Boulder, Tulsa, Oklahoma, and at its legally
established branches.
Section 4. The amount of capital stock of the
Association shall be $29,803,235 divided into 5,960,647 shares of
common stock, each of $5.00 par value, and at the time the merger
shall become effective, the Association shall have a surplus of
$134,250,355.55, and undivided profits, including capital reserves,
which when combined with the capital and surplus will be equal to
the combined capital structures of the merging banks as stated in
the preamble of this Agreement, adjusted, however, for normal
earnings and expenses (and if applicable, purchase accounting
adjustments) between March 31, 1994, and the effective time of the
merger. The amount of capital stock of the Association and its
surplus and undivided profits at the time the merger becomes
effective shall also be adjusted to reflect the effect of all
mergers of other banks into the Association, if any, between March
31, 1994 and the effective time of the merger.
Section 5. All assets as they exist at the effective
time of the merger shall pass to and vest in the Association
without any conveyance or other transfer. The Association shall be
responsible for all of the liabilities of every kind and
description, including liabilities arising from the operation of a
trust department, of Security existing as of the effective time of
the merger.
Section 6. Of the capital stock of the Association, the
presently outstanding 5,720,647 shares of common stock, each of
$5.00 par value, the two holders of it, Fourth Financial
Corporation and IV Commercial Acquisition, Inc., shall retain their
present rights. In addition, Fourth Financial Corporation shall
receive by reason of the merger an additional 240,000 shares of
common stock, par value $5.00 per share of the Association. All of
the stockholders of the sole shareholder of Security, Blackwell
Security Bancshares, Inc. ("BSB"), are parties to a Stock Purchase
and Merger Agreement, among Fourth Financial Corporation, BANK IV,
Security, and the stockholders of BSB, dated as of June 23, 1994
(the "Agreement"), pursuant to which the stockholders of BSB are
receiving full payment for the value of all of the issued and
outstanding capital stock of BSB, so no separate consideration is
to be paid to Security or any of its shareholders in such capacity
by reason of the merger effected hereby.
Section 7. Except as expressly permitted in the
Agreement, Security shall not (i) declare or pay any dividend to
its shareholders, (ii) dispose of any of its assets in any other
manner except in the normal course of business and for adequate
value, or (iii) take any other action which would violate the terms
of the Agreement.
Section 8. The present board of directors and officers
of BANK IV shall continue to serve as the board of directors and
officers of the Association until the next annual meeting or until
such time as their successors have been elected and have qualified.
Section 9. Effective as of the time this merger shall
become effective as specified in the merger approval to be issued
by the Comptroller of the Currency, the articles of association of
the resulting bank shall be the Articles of Association of BANK IV.
Section 10. This Agreement may be terminated as provided
in the Agreement. Notwithstanding the approval of this Agreement
by any shareholder group, this Agreement shall automatically
terminate upon the termination of the Agreement for any reason, and
in no event shall the merger of Security into BANK IV occur prior
to the Purchase as such term is defined in the Agreement, it being
the agreement and intention of the parties that the merger of
Security into BANK IV shall occur simultaneously with the Purchase.
Section 11. This Agreement shall be ratified and
confirmed by the affirmative vote of shareholders of each of the
merging banks owning at least two-thirds of its capital stock
outstanding, at a meeting to be held on the call of the directors;
and the merger shall become effective at the time specified in a
merger approval to be issued by the Comptroller of the Currency of
the United States.
WITNESS, the signatures and seals of said merging banks
this ___ day of ________, 1994, each set by its chairman of the
board, president, or a vice president and attested to by its
cashier or secretary, pursuant to a resolution of its board of
directors, acting by a majority:
BANK IV OKLAHOMA,
NATIONAL ASSOCIATION
Attest:
By_________________________
_____________________ Edward F. Keller
Lisa R. Carr, Secretary Chairman of the Board
and President
[Seal of Bank]
Security Bank and Trust Company
Attest:
By____________________________
___________________________ William W. Rodgers, Jr.
Brad E. Evans, Secretary Chairman of the Board and
President
[Seal of Bank]
STATE OF OKLAHOMA )
) SS:
TULSA COUNTY )
On this ______ day of ________, 1994, before me, a notary
public for this state and county, personally came Edward F. Keller,
Chairman of the Board and President, and Lisa R. Carr as Secretary,
of BANK IV Oklahoma, National Association, and each in his/her
capacity acknowledged this instrument to be the act and deed of the
association and the seal affixed to it to be its seal.
WITNESS my official seal and signature this day and year.
____________________________
My Appointment Expires: Notary
__________________________
STATE OF OKLAHOMA )
) SS:
KAY COUNTY )
On this _____ day of ________, 1994, before me, a notary
public for this state and county, personally came William W.
Rodgers, Jr., as Chairman of the Board and President, and Brad E.
Evans as Secretary, of Security Bank and Trust Company, an Oklahoma
banking corporation, and each in his/her capacity acknowledged this
instrument to be the act and deed of the association and the seal
affixed to it to be its seal.
WITNESS my official seal and signature this day and year.
_________________________
My Appointment Expires: Notary Public
___________________________
Exhibit "B"
_______, 1994
Board of Directors
Fourth Financial Corporation
100 North Broadway
Wichita, Kansas 67202
Board of Directors
BANK IV Oklahoma, National Association
515 South Boulder, Tulsa, Oklahoma 74103
Gentlemen:
We have acted as special counsel to the shareholders
(collectively the "Sellers") of Blackwell Security Bancshares, Inc.
("BSB") and Security Bank and Trust Company (the "Bank"), in
connection with the preparation of the Stock Purchase and Merger
Agreement, dated as of June 23, 1994, among Fourth Financial
Corporation ("Fourth"), BANK IV Oklahoma, National Association
("BANK IV"), the Bank, and Sellers (the "Agreement"). This Opinion
Letter is provided to you at the request of the Sellers and the
Bank pursuant to Section 5.1d of the Agreement. Except as
otherwise indicated herein, capitalized terms used in this Opinion
Letter are defined in the Agreement or the Accord described below.
This Opinion Letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage, and other
limitations, all as more particularly described in the Accord, and
this Opinion Letter should be read in conjunction therewith. The
law covered by the opinions expressed herein is limited to the
Federal Law of the United States and the Law of the State of
Oklahoma.
For purposes of this Opinion Letter, we have relied upon
factual representations made by the Sellers and the Bank in Section
4.1 of the Agreement, and we have assumed that the Agreement has
been duly executed and delivered by each of the Sellers. In
addition, the opinions as to (a) due organization of BSB in
Paragraph 1 of the Opinion Letter, (b) absence of default contained
in Paragraph 3 of the Opinion Letter, and, (c) capitalization of
BSB and the Bank and lack of encumbrances, liens, and security
interests relating to the Bank Stock owned by BSB in Paragraph 4 of
the Opinion Letter are given in reliance on the opinion of James R.
Rodgers, Esq., an executed copy of which is attached hereto.
Based upon and subject to the foregoing, we are of the
opinion that:
1. Organization, Good Standing, and Authority.
BSB is a bank holding company duly registered pursuant to
the Bank Holding Company Act. BSB and the Bank are each
a corporation or bank duly organized, validly existing,
and in good standing under the laws of the jurisdiction
of its incorporation.
2. Binding Obligations. The Agreement is
enforceable against Bank and each of the Sellers. The
Merger Agreement is enforceable against the Bank.
3. Absence of Default. None of the execution or
the delivery of the Agreement or the Merger Agreement,
the consummation of the transactions contemplated
thereby, or the fulfillment of the terms thereof, will
(a) violate the Constituent Documents of BSB or the Bank
or any agreement or instrument under which BSB, the Bank,
or any of the Sellers is obligated of which we have
Actual Knowledge, or (b) violate applicable provisions of
any statutory law or regulation to which BSB or the Bank
is subject.
4. Capitalization. The statements contained in
Section 4.1d as to the capitalization of the Corporations
and ownership of their shares of capital stock are true
and correct.
5. Options. To our Actual Knowledge, none of the
Corporations has outstanding any options, warrants, or
rights of any kind requiring it to sell or issue to
anyone any capital stock of any class and none of the
Corporations has agreed to sell any shares of its capital
stock.
6. Governmental Approvals. The execution,
delivery, and performance of the Agreement and the Merger
Agreement by Sellers and the Bank do not require any
approval, authorization, consent, exemptions, notices of
intent not to disapprove, or other action of any
regulatory body, administrative agency, or any other
governmental body or any filing with any governmental
body to which Sellers, BSB, or the Bank are subject,
other than approvals of or filings with the Board, the
Comptroller, and the Oklahoma Banking Commissioner. All
such requisite approvals, authorizations, consents,
exemptions, and notices have been taken by the
appropriate governmental bodies.
7. Merger. Upon the final approval of the Merger
by the Comptroller, the Merger will be effected in
accordance with all applicable Laws and BANK IV shall
succeed to all of the assets and liability of the Bank.
We hereby confirm to you that there are no actions or
proceedings against any of the Corporations, pending or overtly
threatened in writing, before any court, governmental agency or
arbitrator which (i) seek to affect the enforceability of the
Agreement or (ii) seek damages in excess of $10,000.
The phrase "Primary Lawyer Group", as used in the Accord,
is hereby modified and, for the purposes of applying the Accord to
this Opinion Letter, the Primary Lawyer Group means only the
lawyers in this firm who have given substantive legal attention to
representation of BSB, the Bank, and Sellers in connection with the
Transaction.
This Opinion Letter may be relied upon by you only in
connection with the Transaction and may not be used or relied upon
by you or any other person for any purpose whatsoever, except to
the extent authorized in the Accord, without in each instance our
prior written consent.
Very truly yours,
Crowe & Dunlevy
A Professional Corporation
_______, 1994
Board of Directors
Fourth Financial Corporation
100 North Broadway
Wichita, Kansas 67202
Board of Directors
BANK IV Oklahoma, National Association
515 South Boulder, Tulsa, Oklahoma 74103
Gentlemen:
I have acted as counsel to the shareholders (collectively
the "Sellers") of Blackwell Security Bancshares, Inc. ("BSB") and
Security Bank and Trust Company (the "Bank"), in connection with
the preparation of the Stock Purchase and Merger Agreement, dated
as of June 23, 1994, among Fourth Financial Corporation ("Fourth"),
BANK IV Oklahoma, National Association ("BANK IV"), the Bank, and
Sellers (the "Agreement"). This Opinion Letter is provided to you
at the request of the Sellers and the Bank pursuant to Section 5.1d
of the Agreement. Except as otherwise indicated herein,
capitalized terms used in this Opinion Letter are defined in the
Agreement or the Accord described below.
This Opinion Letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage, and other
limitations, all as more particularly described in the Accord, and
this Opinion Letter should be read in conjunction therewith. The
law covered by the opinions expressed herein is limited to the
Federal Law of the United States and the Law of the State of
Oklahoma.
For purposes of this Opinion Letter, I have relied upon
factual representations made by the Sellers and the Bank in Section
4.1 of the Agreement, and I have assumed that the Agreement has
been duly executed and delivered by each of the Sellers. In
addition, the opinions as to (a) due organization of BSB in
Paragraph 1 of the Opinion Letter, (b) capitalization of BSB and
the Bank and lack of encumbrances, liens, and security interests
relating to the Bank Stock owned by BSB in Paragraph 4 of the
Opinion Letter are based solely on my review of the Constituent
Documents, minute books, and stock records and certificates of BSB
and the Bank.
Based upon and subject to the foregoing, I am of the
opinion that:
1. Organization, Good Standing, and Authority.
BSB and the Bank are each a corporation or bank duly
organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation.
2. Absence of Default. None of the execution or
the delivery of the Agreement or the Merger Agreement,
the consummation of the transactions contemplated
thereby, or the fulfillment of the terms thereof, will
(a) violate the Constituent Documents of BSB or the Bank
or any agreement or instrument under which BSB, the Bank,
or any of the Sellers is obligated of which I have Actual
Knowledge, or (b) violate applicable provisions of any
statutory law or regulation to which BSB or the Bank is
subject.
3. Capitalization. The statements contained in
Section 4.1d as to the capitalization of the Corporations
and ownership of their shares of capital stock are true
and correct.
4. Options. To my Actual Knowledge, none of the
Corporations has outstanding any options, warrants, or
rights of any kind requiring it to sell or issue to
anyone any capital stock of any class and none of the
Corporations has agreed to sell any shares of its capital
stock.
I hereby confirm to you that there are no actions or
proceedings against any of the Corporations, pending or overtly
threatened in writing, before any court, governmental agency or
arbitrator which (i) seek to affect the enforceability of the
Agreement or (ii) seek damages in excess of $10,000.
I hereby consent to Crowe & Dunlevy relying on this
Opinion in the opinion such firm is rendering to you pursuant to
Section 5.1d of the Agreement.
This Opinion Letter may be relied upon by you only in
connection with the Transaction and may not be used or relied upon
by you or any other person for any purpose whatsoever, except to
the extent authorized in the Accord, without in each instance my
prior written consent.
Very truly yours,
Exhibit "C"
AGREEMENT
This Agreement entered into the ___ day of
________________, 1994, between BANK IV OKLAHOMA, NATIONAL
ASSOCIATION, Tulsa, Oklahoma, hereinafter called the Employer and
WILLIAM W. RODGERS, JR., hereinafter called the Employee.
RECITALS
--------
A. Employee is a party to that certain Stock Purchase
and Merger Agreement (the "Agreement") dated as of June 23, 1994,
among Fourth Financial Corporation, Employer, Security Bank and
Trust Company ("Security"), and certain stockholders of Blackwell
Security Bancshares, Inc., an Oklahoma corporation ("BSB").
B. The Agreement provides for the sale of all of the
capital stock of BSB to Fourth Financial Corporation and the merger
of Security into Employer so that Employee is selling the goodwill
of the business of Security and BSB within the meaning of 15 O.S.
Section 218.
C. The Agreement provides that Employee and Employer
will enter into an agreement substantially in the form of this
Agreement.
1. Employment. Employer hereby employs Employee and
Employee hereby accepts employment under the terms and conditions
hereinafter set forth.
2. Term. The term of this Agreement shall begin on the
date hereof and may be terminated as provided herein. Employee is
employed on an "at will" basis to serve at the pleasure of
Employer.
3. Compensation. For all services rendered by the
Employee under this Agreement, the Employer shall pay the Employee:
(i) an initial cash bonus of $100,000, payable on the date hereof;
(ii) a salary (initially $115,000 per year) comparable to that paid
by Employer to its other officers employed in similar capacities;
and (iii) subject to the provisions of Paragraph 10 hereof, $9,200
per month as supplemental salary for a period of 48 months
commencing on the date hereof.
4. Other Compensation. The Employee shall share
equitably in all other compensation and fringe benefits enjoyed by
a majority of the corporate officers of the Employer, including
incentive compensation plans.
5. Duties. The Employee is engaged as President of
Employer's Ponca City market-based "bank", to supervise and direct
the business of the Employer in such territory. The precise
services of the Employee may be defined, from time to time, at the
direction of the Chief Executive Officer of the Employer.
6. Extent of Services. The Employee shall devote his
entire time, attention, and energies to the business of the
Employer, and shall not during the term of this Agreement be
engaged in any other business activity whether or not such business
is pursued for gain, profit or other pecuniary advantage, unless
approval for such activity is given to the Employee by the Chief
Executive Officer of the Employer; but this shall not be construed
as to prevent the Employee from investing his assets in such form
or manner as will not require any services on the part of the
Employee in the operation of the businesses in which such
investments are made.
7. Vacations. The Employee shall be entitled each year
that this Agreement is in effect to a vacation of four weeks,
during which time his compensation shall be paid in full. If the
Employee shall be terminated by the Employer during the term of
this Agreement, Employer shall pay Employee for a pro-rata share of
any accrued but unused vacation time at the per-diem rate of his
regular compensation in addition to all other compensation herein
provided.
8. Disability. If the Employee is unable to perform
his services by reason of illness or incapacity for a period of
more than four consecutive weeks, the compensation otherwise
provided to him during the continued period of such illness or
incapacity shall be reduced by fifty percent (50%), until such time
as Employee qualifies for the receipt of disability benefits under
Employer's group disability insurance plan, it being the intent of
the parties that the Employee will look solely to such insurance
plan for receipt of disability benefits upon qualification
therefor. The Employee's full compensation shall be reinstated
upon his return to employment and the discharge of his full duties
hereunder. Notwithstanding anything to the contrary, the Employer
may terminate this Agreement at any time after the Employee shall
be absent from his employment, for whatever cause, for a continuous
period of six months, and all obligations of the Employer hereunder
shall cease upon any such termination.
9. Termination. Without cause, the Employer may
terminate this Agreement at any time upon 60 days' written notice
to the Employee. In such event, the Employee shall continue to
render his services up to the date of termination. Without cause,
the Employee may terminate this Agreement upon 60 days' written
notice to the Employer. In such event, the Employee shall continue
to render his services up to the date of termination. Employer may
also terminate this Agreement without prior notice to Employee for
"cause" as defined in the next sentence. Termination for "cause"
shall mean termination because of the Employee's embezzlement of
funds, willful violation of any state or federal laws constituting
a felony, material breach of any provision of this Agreement, or
commission of some other wrongful act that could reasonably be
expected to have a material adverse impact on Employer or its
reputation.
10. Compensation Upon Termination. If, prior to the
expiration of 48 months from the date hereof: (a) this Agreement
is terminated by the Employer without cause, or (b) the Employee
elects to terminate this Agreement but is willing to provide advice
and perform such consulting services on an exclusive basis in Kay,
County, Oklahoma as may be mutually agreed upon in good faith by
the Chief Executive Officer of Employer and Employee, Employee
shall continue to receive the monthly supplementary salary payments
described in Paragraph 3 for the balance of the 48-month period.
If this Agreement is terminated by the Employer with cause or by
the Employee without Employee having agreed to provide such
services, the Employee shall receive his compensation and fringe
benefits to the effective date of termination and the Employee
shall have no right to receive any compensation or other benefits
for any period after termination except for vested rights of the
Employee.
11. Relationship of Confidence and Trust. Employee
acknowledges that during his term of employment by Security he has
acquired, and during his employment by Employer he will continue to
acquire, valuable and confidential information, trade secrets, and
relationships with respect to Security's and Employer's successful
business practices and operations not generally known to the
public, including, by way of illustration and not of limitation,
knowledge of Employer's customers, rates, selling techniques,
marketing plans, costs, and future plans (collectively
"Confidential Information"). In addition, Employee has developed
and maintained on behalf of Security and will develop and maintain
on behalf of Employer, a personal acquaintance with various
persons, including, but not limited to, customers and suppliers,
which acquaintances may constitute Employer's only or principal
contact with such persons. As a consequence of the foregoing,
Employee occupies and will occupy a position of trust and
confidence with respect to Employer's affairs. In view of the
foregoing, Employee agrees that it is reasonable and necessary for
the protection of the goodwill and business of Employer, that
Employee make the covenants contained in Paragraphs 12 and 13
regarding his conduct, and that Employer will suffer irreparable
injury if Employee engages in conduct prohibited thereby. The
covenants contained in Paragraphs 12 and 13 shall each be construed
to be a separate agreement independent of any other provisions of
this Agreement, and the existence of any claim or cause of action
of Employee against Fourth Financial Corporation or Employer,
predicated on this Agreement, or otherwise, shall not constitute a
defense to the enforcement by Employer of any of said covenants.
The covenants contained in Paragraphs 12 and 13 shall survive the
termination of this Agreement for any reason.
12. Disclosure of Information and Trade Secrets.
Employee recognizes and acknowledges that all of the Confidential
Information, as the same may exist from time to time, are the
valuable, special, and unique assets of Employer. Employee
therefore agrees that he will never, during or after the term of
his employment by Employer, disclose any Confidential Information
to any person, firm, corporation, bank, association, or other
entity for any reason or purpose whatsoever, except for disclosures
he is required by law to make or which has become publicly
available by any means other than by Employee in breach of his
obligations hereunder, nor will he remove or copy any files,
memoranda, correspondence, notebooks, binders, record, plan, or
device from the offices of Employer. In the event of a breach or
threatened breach by Employee of any of the provisions of this
Paragraph 12, Employer shall be entitled to injunctive or other
equitable relief enjoining and restraining Employee from
disclosing, in whole or in part, any Confidential Information.
Nothing contained herein shall be construed as prohibiting Employer
from pursuing any other remedies available to it for such breach or
threatened breach.
13. Restrictive Covenant. In consideration of the
payment by Employer to Employee of the sum of $450,000 on the date
hereof, for a period of five years from the termination for any
reason of Employee's employment by Employer, Employee will not,
within Kay County, Oklahoma, or any county contiguous thereto,
without the prior written consent of Employer, directly or
indirectly, own, manage, operate, consult with, be employed by,
provide services for, solicit business for, or be connected with
the ownership, management, operation, or control of any commercial
bank, savings and loan, credit union, or other business engaged in
a business activity competitive to any business activity then
engaged in by Employer. Employee agrees that, in addition to all
other remedies otherwise available to Employer, Employer shall have
the right to injunctive relief to restrain and enjoin any actual or
threatened breaches of this provision and that if in any litigation
that might arise of the provisions contained in this paragraph, a
court should determine that the restrictions contained in this
paragraph are too broad, or too long in duration, or too broad in
geographic scope to be enforceable in equity, such provisions as
such court might find unenforceable are amended only so much as
shall be necessary in order for the restrictions contained herein
to be enforceable and, as so amended, shall be enforced by such
court.
14. Termination of Existing Agreements. All existing
employment and benefit agreements between Security and Employee,
oral or written, express or implied, including without limitation
that certain Agreement, dated October 10, 1984, are hereby
terminated and cancelled as of the date hereof.
15. Reimbursement. Employer has requested Employee to
move to Ponca City, Oklahoma. Employer agrees to reimburse
Employee for the difference, if any, between the amount he receives
from the sale of his current residence, after deducting all costs
reasonably incurred by him in preparing the property for sale,
sales expenses, and commissions, and $245,000 up to a maximum
reimbursement of $50,000.
16. Arbitration. Any controversy or claim arising out
of, or relating to, this Agreement, or the breach thereof, shall be
settled by arbitration in the City of Tulsa in accordance with the
Oklahoma Uniform Arbitration Act and judgement upon the award
rendered may be entered in any court having jurisdiction thereof.
17. Notices. Any notice or election required or
permitted to be given under this Agreement shall be sufficient if
in writing, and if sent by registered mail to the residence of the
Employee, or to the principal office of the Employer.
18. Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
19. Assignment. The rights and obligations of the
Employer under this Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns of the Employer.
20. Entire Agreement. This instrument contains the
entire Agreement of the parties on the subject matter hereof. This
Agreement may not be changed orally but only by an agreement in
writing signed by each party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
BANK IV OKLAHOMA,
NATIONAL ASSOCIATION
By______________________________
"Employer"
________________________________
WILLIAM W. RODGERS, JR.
"Employee"
Exhibit "D"
CONSULTING AND MARKETING
AGREEMENT
This Agreement, made and entered into the __ day of
______, 1994, between BANK IV OKLAHOMA, NATIONAL ASSOCIATION,
Tulsa, Oklahoma, (hereinafter called "BANK IV"), and JAMES R.
RODGERS, (hereinafter called "Rodgers").
RECITALS
--------
A. Rodgers is a party to that certain Stock Purchase
and Merger Agreement (the "Agreement") dated as of June 23, 1994,
among Fourth Financial Corporation, BANK IV, Security Bank and
Trust Company ("Security"), and the stockholders of Blackwell
Security Bancshares, Inc., an Oklahoma corporation ("BSB").
B. The Agreement provides for the sale of all of the
capital stock of BSB to Fourth Financial Corporation and the
merger of Security into BANK IV so that Rodgers is selling the
goodwill of the business of Security and BSB within the meaning
of 15 O.S. Section 218.
C. The Agreement provides that Rodgers and BANK IV
will enter into an agreement substantially in the form of this
Agreement.
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Agreement to Perform Services. Rodgers agrees
that during the term of this Agreement he will perform the
following services for BANK IV within Kay County, Oklahoma:
a. Legal. Subject to his right to refuse to
accept employment in any matter in which Rodgers may
believe he has an ethical restriction or which he in
good faith does not believe he can accept, Rodgers will
accept representation of BANK IV as its attorney in
such matters as BANK IV may request from time to time
and will endeavor to refrain from accepting employment
in matters that he might reasonably anticipate will
prevent him from representing BANK IV during the term
of this Agreement. Rodgers will be entitled to be paid
for all legal services performed by him during the term
of this Agreement at his then usual and regular rates
for similar services.
b. Consulting. During the term of this
Agreement, Rodgers shall make himself reasonably
available in Blackwell, Oklahoma, to consult with
officers of BANK IV about matters pertaining to
Security's former banking operations and BANK IV's
existing and proposed banking operations in Kay County,
Oklahoma.
c. Marketing. During the term of this
Agreement, Rodgers shall provide the following part-
time marketing services to BANK IV:
(i) Provide BANK IV with information about
potential new accounts and problems that may come to
his attention about dissatisfied customers;
(ii) Make marketing calls as may be requested
from time to time by BANK IV; and
(iii) Generally act as a goodwill ambassador of
BANK IV in the community.
All of such services may be performed by Rodgers at such
times as shall be reasonably convenient to him and as shall not
conflict with his legal practice and are subject to his ethical
obligations as an attorney.
2. Term. The term of this Agreement shall begin on the
date hereof and, subject to the termination provisions set forth
below, shall continue for three years.
3. Compensation. For all services other than legal
services rendered by Rodgers under this Agreement, BANK IV shall
pay Rodgers $4,208.33 per month commencing on the date hereof.
Rodgers is retained as an independent contractor and shall not be
entitled to receive any other compensation or to participate in
any of BANK IV's health insurance, life insurance, pension,
option, incentive, or other benefit plans of any kind.
4. Termination by Rodgers. Rodgers may terminate this
Agreement for any reason upon 60 days' written notice to BANK IV.
In such event, Rodgers shall continue to render his services up
to the date of termination.
5. Termination by BANK IV. BANK IV may terminate this
Agreement only for "cause" as defined in the next sentence.
Termination for "cause" shall mean termination because of
Rodgers' willful violation of any state or federal laws
constituting a felony, material breach of any provision of this
Agreement, or commission of some other wrongful act that could
reasonably be expected to have a material adverse impact on BANK
IV or its reputation.
6. Relationship of Confidence and Trust. Rodgers
acknowledges that during his term of affiliation with Security he
has acquired, and during his affiliation with BANK IV he will
continue to acquire, valuable and confidential information, trade
secrets, and relationships with respect to Security's and BANK
IV's successful business practices and operations not generally
known to the public, including, by way of illustration and not of
limitation, knowledge of BANK IV's customers, rates, selling
techniques, marketing plans, costs, and future plans
(collectively "Confidential Information"). In addition, Rodgers
has developed and maintained on behalf of Security and will
develop and maintain on behalf of BANK IV, a personal
acquaintance with various persons, including, but not limited to,
customers and suppliers, which acquaintances may constitute BANK
IV's only or principal contact with such persons. As a
consequence of the foregoing, Rodgers occupies and will occupy a
position of trust and confidence with respect to BANK IV's
affairs. In view of the foregoing, Rodgers agrees that it is
reasonable and necessary for the protection of the goodwill and
business of BANK IV, that Rodgers make the covenants contained in
Paragraphs 7 and 8 regarding his conduct, and that BANK IV will
suffer irreparable injury if Rodgers engages in conduct
prohibited thereby. The covenants contained in Paragraphs 7 and
8 shall each be construed to be a separate agreement independent
of any other provisions of this Agreement, and the existence of
any claim or cause of action of Rodgers against Fourth Financial
Corporation or BANK IV, predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by
BANK IV of any of said covenants. The covenants contained in
Paragraphs 7 and 8 shall survive the termination of this
Agreement for any reason.
7. Disclosure of Information and Trade Secrets. Rodgers
recognizes and acknowledges that all of the Confidential
Information, as the same may exist from time to time, are the
valuable, special, and unique assets of BANK IV. Rodgers
therefore agrees that he will never, during or after the term of
this Agreement, disclose any Confidential Information to any
person, firm, corporation, bank, association, or other entity for
any reason or purpose whatsoever, except for disclosures he is
required by law to make or which has become publicly available by
any means other than by Rodgers in breach of his obligations
hereunder, nor will he remove or copy any files, memoranda,
correspondence, notebooks, binders, record, plan, or device from
the offices of BANK IV unless authorized by BANK IV in connection
with his legal representation of BANK IV. In the event of a
breach or threatened breach by Rodgers of any of the provisions
of this Paragraph 7, BANK IV shall be entitled to injunctive or
other equitable relief enjoining and restraining Rodgers from
disclosing, in whole or in part, any Confidential Information.
Nothing contained herein shall be construed as prohibiting BANK
IV from pursuing any other remedies available to it for such
breach or threatened breach.
8. Restrictive Covenant. In consideration of the payment
by BANK IV to Rodgers of the sum of $250,000 on the date hereof,
for a period of five years from the termination for any reason of
this Agreement, Rodgers will not, within Kay County, Oklahoma, or
any county contiguous thereto, without the prior written consent
of BANK IV, directly or indirectly, own, manage, operate, consult
with, be employed by, provide services for, solicit business for,
or be connected with the ownership, management, operation, or
control of any commercial bank, savings and loan, credit union,
or other business engaged in a business activity competitive to
any business activity then engaged in by BANK IV. Rodgers agrees
that, in addition to all other remedies otherwise available to
BANK IV, BANK IV shall have the right to injunctive relief to
restrain and enjoin any actual or threatened breaches of this
provision and that if in any litigation that might arise of the
provisions contained in this paragraph, a court should determine
that the restrictions contained in this paragraph are too broad,
or too long in duration, or too broad in geographic scope to be
enforceable in equity, such provisions as such court might find
unenforceable are amended only so much as shall be necessary in
order for the restrictions contained herein to be enforceable
and, as so amended, shall be enforced by such court.
9. Termination of Existing Agreements. All existing
employment and benefit agreements between Security and Rodgers,
oral or written, express or implied are hereby terminated and
cancelled as of the date hereof.
10. Arbitration. Any controversy or claim arising out of,
or relating to, this Agreement, or the breach thereof, shall be
settled by arbitration in the City of Tulsa in accordance with
the Oklahoma Uniform Arbitration Act and judgement upon the award
rendered may be entered in any court having jurisdiction thereof.
11. Notices. Any notice or election required or permitted
to be given under this Agreement shall be sufficient if in
writing, and if sent by registered mail to the residence of
Rodgers, or to the principal office of BANK IV.
12. Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
13. Assignment. The rights and obligations of BANK IV
under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of BANK IV.
14. Entire Agreement. This instrument contains the entire
Agreement of the parties on the subject matter hereof. This
Agreement may not be changed orally but only by an agreement in
writing signed by each party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
BANK IV OKLAHOMA,
NATIONAL ASSOCIATION
By______________________________
"BANK IV"
________________________________
JAMES R. RODGERS
"Rodgers"