STOCK PURCHASE AGREEMENT
among
FOURTH FINANCIAL CORPORATION,
as Purchaser
and
LSB INDUSTRIES, INC.,
and
PRIME FINANCIAL CORPORATION,
as Sellers
Dated as of February 9, 1994
TABLE OF CONTENTS
Page #
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ARTICLE I. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . .1
Section 1.2 Accounting Terms . . . . . . . . . . . . . . . . . . . .8
Section 1.3 Use of Defined Terms . . . . . . . . . . . . . . . . . .8
ARTICLE II. Sale and Transfer of Stock; Closing. . . . . . . . . . . . . .8
Section 2.1 Sale of the Shares . . . . . . . . . . . . . . . . . . .8
Section 2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . .8
Section 2.3 Additional Adjustments to Purchase Price . . . . . . . 10
Section 2.4 Post-Closing Adjustments . . . . . . . . . . . . . . . 11
Section 2.5 Closing. . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.6 Closing Deliveries . . . . . . . . . . . . . . . . . . 12
Section 2.7 Option to Acquire Certain Loans. . . . . . . . . . . . 13
Section 2.8 Retained Assets and Retained Corporations
and Certain Loans. . . . . . . . . . . . . . . . . . . 13
ARTICLE III. Agreements of the Parties. . . . . . . . . . . . . . . 13
Section 3.1 Agreements of Fourth . . . . . . . . . . . . . . . . . 13
Section 3.2 Agreements of Sellers. . . . . . . . . . . . . . . . . 15
ARTICLE IV. Representations and Warranties . . . . . . . . . . . . . . . 20
Section 4.1 Representations and Warranties of Sellers. . . . . . . 20
Section 4.2 Representations and Warranties of Fourth . . . . . . . 30
ARTICLE V. Closing Conditions . . . . . . . . . . . . . . . . . . . . . 32
Section 5.1 Conditions to Obligations of Fourth. . . . . . . . . . 32
Section 5.2 Conditions to Obligations of Sellers . . . . . . . . . 34
ARTICLE VI. Termination of Agreement . . . . . . . . . . . . . . . . . . 35
Section 6.1 Mutual Consent; Termination Date . . . . . . . . . . . 35
Section 6.2 Election by Fourth . . . . . . . . . . . . . . . . . . 35
Section 6.3 Election by Sellers . . . . . . . . . . . . . . . . . 36
ARTICLE VII. Indemnification. . . . . . . . . . . . . . . . . . . . 36
Section 7.1 Effect of Closing. . . . . . . . . . . . . . . . . . . 36
Section 7.2 General Indemnification. . . . . . . . . . . . . . . . 37
Section 7.3 Procedure . . . . . . . . . . . . . . . . . . . . . . 38
Section 7.4 Survival of Representations and Warranties . . . . . . 38
Section 7.5 Special Indemnification. . . . . . . . . . . . . . . . 39
Section 7.6 Separate Indemnification for Environmental
Matters . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.7 Separate Indemnification for Barki
Litigation . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.8 Director and Officer Indemnification . . . . . . . . . 41
ARTICLE VIII. Miscellaneous. . . . . . . . . . . . . . . . . . . . . 42
Section 8.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.3 Time . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 8.4 Law Governing. . . . . . . . . . . . . . . . . . . . . 43
Section 8.5 Entire Agreement; Amendment. . . . . . . . . . . . . . 43
Section 8.6 Successors and Assigns . . . . . . . . . . . . . . . . 43
Section 8.7 Cover, Table of Contents, and Headings . . . . . . . . 43
Section 8.8 Counterparts . . . . . . . . . . . . . . . . . . . . . 43
Section 8.9 No Third Party Beneficiaries . . . . . . . . . . . . . 43
Section 8.10 Severability . . . . . . . . . . . . . . . . . . . . . 43
EXHIBITS
Exhibit "A" Form of Housley Goldberg & Kantarian, P.C. legal opinion
with attached opinion of David A. Shear
Exhibit "B" Form of Foulston and Siefkin legal opinion
Exhibit "C" Form of Lease - Equity Tower
Exhibit "D" Form of Real Estate Contract - Retained Assets
Exhibit "E" Form of Bank Merger Agreement
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of February 9, 1994, among
FOURTH FINANCIAL CORPORATION, a Kansas corporation ("Fourth"), LSB INDUSTRIES,
INC., a Delaware corporation ("LSB"), and PRIME FINANCIAL CORPORATION, an
Oklahoma corporation ("Prime").
W I T N E S S E T H: That,
-------------------
WHEREAS, Fourth desires to acquire all, and not less than all, of
the issued and outstanding capital stock of all classes of Equity Bank for
Savings, F.A. (the "Bank") and to simultaneously merge the Bank into Fourth's
subsidiary, BANK IV Oklahoma, National Association ("BANK IV") as permitted by
Section 501.1D of the Oklahoma Banking Code of 1965 as amended, subject to and
pursuant to the terms of this Agreement; and
WHEREAS, LSB owns all of the issued and outstanding capital stock
of all classes of Prime and Prime owns all of the issued and outstanding
capital stock of the Bank; and
WHEREAS, each party hereto believes that the proposed acquisition
by Fourth of Bank and the merger of the Bank into BANK IV pursuant to the
terms and conditions of this Agreement 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.
"This Agreement" refers to this Stock Purchase Agreement and all
exhibits hereto and all amendments hereto.
"Bank" means Equity Bank for Savings, F.A., a savings bank
organized under the laws of the United States.
"BANK IV" means BANK IV Oklahoma, National Association, a national
banking association.
"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 Merger Agreement" means the Agreement to Merge,
substantially in the form of Exhibit "E" hereto, pursuant to which the Bank
will be merged into BANK IV at the Closing simultaneously with the
consummation of the Purchase.
"Bank Stock" means common stock of the Bank, par value $.01 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.
"Closing" shall mean the purchase and sale of the Shares and the
simultaneous consummation of the Merger.
"Code" means the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder, all as the same may be in
effect at the time.
"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" means collectively the Bank and all of the
following of its Subsidiaries: Credit Card Center, Inc., Equity Financial
Service Corp., and United BankCard, Inc.; and "Corporation" means any one of
them.
"Disclosure Statement" means the Disclosure Statement prepared by
Sellers and delivered by Sellers to Fourth prior to the execution and delivery
of this Agreement by Fourth.
"Effective Time" means the date and time on which the Purchase is
effected as more fully defined in this Agreement.
"Environmental Liabilities" means all losses, costs, expenses,
claims, demands, liabilities, or obligations of whatever kind or otherwise,
based upon an Environmental Law relating to:
(i) any environmental matter or condition, including, but
not limited to, on-site or off-site contamination, and regulation
of chemical substances or products;
(ii) fines, penalties, judgments, awards, settlements,
legal or administrative proceedings, damages, losses, claims,
demands, and response, remedial or inspection costs and expenses
arising under Environmental Laws;
(iii) financial responsibility under any Environmental
Law for cleanup costs or corrective actions, including for any
removal, remedial or other response actions, and for any natural
resource damage; and
(iv) any other compliance, corrective, or remedial
action required under any Environmental Law.
"Environmental Law" means any provision of Law relating to any
environmental matters or conditions, Hazardous Materials, pollution, or
protection of the environment, including, but not limited to, on-site and
off-site contamination, and regulation of chemical substances or products,
emissions, discharges, release, or threatened release of contaminants,
chemicals, or industrial, toxic, radioactive, or Hazardous Materials or wastes
into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
Hazardous Materials, pollutants, contaminants, chemicals, or industrial,
toxic, radioactive, or hazardous substances or wastes.
"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.
"Facilities" means any real property, leaseholds, or other
interests owned by the Bank or any of the Corporations and/or any buildings,
plants, structures, or equipment of any of the Corporations, but shall not
include any real property, leaseholds, or other interests owned by any of the
Retained Corporations nor any of the Retained Assets other than the Equity
Tower.
"Federal Deposit Insurance Act" means the Federal Deposit
Insurance Act, as amended, and the rules and regulations promulgated
thereunder, all as the same may be in effect at the time.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor agency.
"Financial Statements" refers to all of the financial statements
described in clause h of Section 4.1 and clause h of Section 5.1 of this
Agreement.
"GAAP" means generally accepted accounting principles, applied on
a consistent basis.
"Hazardous Materials" means and includes: (i) any hazardous
substance or toxic material (excluding any lawful product in customary
quantities for use in the Bank's or other occupant's ordinary course of
business which contains such substance or material), pollutant, contaminant,
toxic material, or hazardous waste as defined in any state, federal, or local
Environmental Law; (ii) waste oil and petroleum products; and (iii) any
asbestos, asbestos containing material, urea formaldehyde or material which
contains urea formaldehyde.
"Indemnifying Losses" has 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.
"LSB" means LSB Industries, Inc., a Delaware corporation.
"Merger" means the merger of the Bank into BANK IV at the Closing
immediately following the Purchase.
"OREO Properties" means any interest in any real or personal
property owned by the Bank or any other Corporation acquired through
foreclosure or otherwise in connection with collecting a loan or lease.
"OTS" means the Office of Thrift Supervision of the United States
Treasury and any successor agency which may be granted powers currently
exercised by the Office of Thrift Supervision.
"Permitted Contract" means a contract or agreement, written or
oral, between the Bank or another of the Corporations, 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 the Bank after the Effective Time on no more than 60
days' prior notice, (iii) provides for a payment of no more than $5,000 in any
calendar month by the Bank or a Corporation, and (iv) provides for no payment
upon termination in excess of $5,000.
"Permitted Encumbrances" means with respect to any asset:
(a) liens for taxes not past due;
(b) mechanics' and materialmen's liens for services
or materials for which payment is not past due; and
(c) minor defects, encumbrances, and irregularities
in title which do not, in the aggregate, materially diminish the
value of an asset or materially impair the use of an asset for the
purposes for which it is or is intended to be used.
"Purchase" means the purchase at the Closing of all of the Shares
from Sellers by Fourth pursuant to this Agreement.
"Purchase Price" has the meaning set forth in Section 2.2 of this
Agreement as adjusted in accordance with this Agreement.
"Required Approvals" means the approval, consent, or
non-objection, as the case may be, of the Board, the OTS, the Comptroller, and
all other governmental or self-governing agencies, boards, departments, and
bodies whose approval, consent, or non-action is required in order to
consummate the Purchase and the Merger and the retention by BANK IV of all of
the Corporations engaged in banking or thrift-related activities and their
operations in substantially their present form except as specifically
otherwise provided in this Agreement, which approvals, consents, and
non-objections shall have become final and nonappealable without any appeal or
other form of review having been initiated and as to which all required
waiting periods shall have expired.
"Retained Assets" means collectively (i) the loan and all related
rights and agreements on the books of the Bank secured by the Equity Tower
building (the "Equity Tower"), (ii) all OREO Properties, (iii) receivables
sold to the Bank pursuant to various purchase agreements dated March 8, 1988,
and (iv) such other assets that Sellers elect to acquire from the Bank
pursuant to the provisions of Section 2.7 hereof; and "Retained Asset" means
any one of the Retained Assets.
"Retained Corporations" means all of the following wholly owned
Subsidiaries of the Bank all of the capital stock of each of which is to be
purchased by LSB or Prime prior to the Effective Time: Northwest Financial
Corporation, Northwest Energy Enterprises, Inc., and Northwest Capital
Corporation; and "Retained Corporation" means any one of them.
"Securities Portfolio" means (i) all equity securities other than
investments in Subsidiaries, (ii) all mortgage-backed securities (as defined
by Section 5(c)(1)(R) of the Home Owners' Loan Act), (iii) all government
securities (as defined by Section 5(c)(1)(F) of the Home Owners' Loan Act),
and (iv) all obligations of or fully insured as to principal and interest by
the United States, owned by the Bank as of the Effective Time, whether held
for sale or otherwise.
"Sellers" means LSB and Prime collectively.
"Shares" means collectively all of the 100,000 shares of Bank
Stock being purchased and sold pursuant to this Agreement.
"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.
"Tangible Book Value of the Bank" means the aggregate consolidated
stockholders' equity of the Bank, calculated in accordance with GAAP, less the
amounts in the following accounts: purchased mortgage servicing rights
(account number 1797), goodwill (account number 1799), and United BankCard
goodwill (account number 1305), net of accumulated amortization (account
number 1310).
"Time Deposits" means all deposit liabilities shown on the Bank's
records as time deposits.
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.
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; 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 for the Purchase
Price.
2.2. Purchase Price. (a) The Purchase Price for all of the
Shares shall be the sum of:
(i) the Tangible Book Value of the Bank at the
Effective Time;
(ii) $9,300,000 with respect to the Bank's credit
card receivables;
(iii) one percent of the aggregate unpaid principal
balance at the Effective Time of loans secured by fixed-rate
mortgages having fully amortizing original terms of 15 years or
less, excluding loans originated after October 31, 1993;
(iv) six percent of the aggregate unpaid principal
balance at the Effective Time of loans secured by fixed-rate
mortgages having fully amortizing original terms of more than 15
years but not more than 30 years, excluding loans originated after
October 31, 1993;
(v) two percent of the aggregate unpaid principal
balance at the Effective Time of loans secured by variable rate
mortgages, excluding loans originated after October 31, 1993;
(vi) the amount of unamortized discount on the
mortgages included in (iii), (iv), and (v) above;
(vii) 0.65% of the aggregate unpaid principal balance
at the Effective Time of loans serviced by Bank prior to March 1,
1993 on which the Bank performs mortgage servicing (other than
loans serviced for the account of Bank), one percent of such
balance on such loans originated on or after March 1, 1993 secured
by fixed or adjustable rate mortgages of fully amortizing original
terms of at least ten but not more than 15 years, and 1.25% of
such balance on such loans originated on or after March 1, 1993,
secured by fixed or adjustable rate mortgages having original
fully amortizing terms of more than 15 but not more than 30 years;
(viii) the remainder obtained by subtracting the
Required Reserve (as hereinafter defined) from the Bank's actual
loan loss reserve account (including its unallocated loan loss
reserve) at the Effective Time. "Required Reserve" means
$2,700,000 as adjusted by the amount by which the Bank's loan loss
reserve account (including its unallocated loan loss reserve)
would have to be adjusted at the Effective Time under normal
prudent banking practice to reflect aggregate changes of at least
$500,000 occurring subsequent to October 31, 1993 in the quality
of commercial and energy loans held by the Bank on October 31,
1993 or originated since October 31, 1993 and not reviewed in
advance by Fourth; provided, that no such change in the quality of
a loan shall be included in this calculation to the extent such
change has been reflected in the calculation of the Tangible Book
Value of the Bank at the Effective Time, or if such change is less
than $25,000;
(ix) to the extent not otherwise reflected in the
calculations of the Tangible Book Value of the Bank, the amount,
either positive (if the aggregate fair market value exceeds book
value) or negative (if the aggregate fair market value is less
than book value), by which the aggregate fair market value of the
Bank's Securities Portfolio at the Effective Time differs from the
aggregate book value of the Securities Portfolio on such date;
(x) $11,000,000, with respect to the Bank's deposit
balances;
(xi) $10,500,000, with respect to the Bank's net
operating loss carryforward at the Effective Time;
(xii) the difference, positive (in the case of a rise
in the yield curve) or negative (in the case of a decline in the
yield curve), between the aggregate book value of all of the
Bank's Time Deposits at the Effective Time and the aggregate value
of such deposits after repricing them to the Treasury yield curve
at the Effective Time; and
(xiii) $1,400,000, representing the aggregate premiums
attributable to the Sayre, Clinton, Thomas, and Beaver branches of
the Bank.
2.3. Additional Adjustments to Purchase Price. (a) The
percentages specified in subparagraphs (iii) and (iv) of Section 2.2 were
calculated using the following yields and spreads as of August 31, 1993:
15 year 30 year
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Bank's average portfolio yield 7.44% 8.79%
FNMA required 30-day yield 6.19% 6.66%
------- -------
Spread 1.25% 2.13%
If, at the Effective Time, either of such spreads has fluctuated by more than
0.25%, the applicable percentages in subparagraphs (iii) and (iv) of Section
2.2(a) will be adjusted up (if the spread has widened) or down (if the spread
has narrowed) by 1/4 of one percent for each full 1/8 of one percent change in
the spread, in the case of loans with an original term of 15 years or less,
and by 3/8 of one percent for each full 1/8 of one percent change in the
spread, in the case of loans with an original term of more than 15 but not
more than 30 years.
(b) The amount of the Purchase Price will be increased by the
aggregate amount, if any, the Tangible Book Value of the Bank at the Effective
Time has been reduced by any restructuring charge or charges that the Bank
shall have recorded on its books as the result of the anticipated effects of
the Purchase, none of which the Bank shall be obligated to take, and all of
which shall have been approved in advance in writing by Fourth to the extent
permitted by Law.
2.4. Post-Closing Adjustments. (a) Unless otherwise
specifically provided herein, each component of the Purchase Price shall be
calculated as of the Effective Time; provided, however, that if any element of
the Purchase Price cannot be calculated accurately as of the Effective Time,
such items shall be calculated as of the end of the month preceding the
Effective Time. Any element of the Purchase Price so calculated shall be
adjusted to reflect the accurate amount as of the Effective Time and Sellers
and Fourth agree to enter into mutually agreeable arrangements for the final
adjustment and the payment or repayment of the net amount thereof with
interest from the Effective Time at four percent per year within five business
days after Sellers deliver to Fourth a written statement setting forth in
reasonable detail all proposed price adjustments and the basis of calculating
each.
(b) Upon completion of the 1994 consolidated corporate income
tax return of LSB, LSB shall notify Fourth of the amount of the final net
operating loss carryforward of the Bank at the Effective Time. To the extent
any payment shall be owing to Fourth pursuant to the formula set forth in
clause (ii) and the second sentence of Section 7.5(a) and regardless of
whether Sellers exercise the option referred to in Section 7.5(c), LSB shall
make such payment to Fourth no later than the due date of LSB's 1994
consolidated federal income tax return (including extensions).
2.5. 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 on the 15th day (or the closest Friday if the 15th
is not a Friday) of the month in which the final Regulatory Approval is
obtained and in which all required waiting periods expire if such earliest
legal closing date is during the first 15 days of the month and on the last
business day of the month if the earliest legal closing date occurs after
the 15th day of a month. The parties agree to exert their best efforts to
cause the Closing to occur on or before June 30, 1994.
2.6. 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;
(ii) such other documents including
officers' certificates as may be required by this
Agreement or reasonably requested by Fourth; and
(iii) the opinion of Housley Goldberg &
Kantarian, P.C., counsel to Sellers and the Bank,
substantially in the form of Exhibit "A" hereto.
b. Fourth shall deliver to Sellers:
(i) immediately available funds in the
total amount of the Purchase Price;
(ii) such documents including officers'
certificates as may be required by this Agreement or
reasonably requested by Sellers; and
(iii) the opinion of Foulston & Siefkin,
counsel to Fourth, substantially in the form of Exhibit
"B" hereto.
c. BANK IV and Northwest Tower Limited Partnership
shall execute and deliver a real estate lease substantially in the
form of Exhibit "C" hereto pursuant to which Bank will lease from
Northeast Tower Limited Partnership certain first-floor and other
space in the Equity Tower in Oklahoma City for a ten-year term,
with renewal options and options to rent additional space in such
building.
Contemporaneously with the Purchase, the Bank shall be
merged into BANK IV pursuant to the Bank Merger Agreement.
2.7. Option to Acquire Certain Loans. Sellers shall have the
option, but not the obligation, to acquire any loan owned by the Bank that has
been charged off or written down for a purchase price equal to the net book
value of each loan that has been written down and for a purchase price of
$1.00 in the case of each loan that has been charged off.
2.8. Retained Assets, Retained Corporations, and Certain
Loans. Subject to all of the closing conditions set forth in Sections 5.1 and
5.2 having occurred and continuing in effect, Sellers shall purchase the
Retained Assets from the Bank at the Effective Time for the aggregate book
value thereof as of the Effective Time (or $1.00 in the case of each loan that
has been charged off), and Sellers shall purchase all of the capital stock of
all of the Retained Corporations from the Bank not later than the business day
immediately preceding the Effective Time for the aggregate book value thereof
as of such date. Each such purchase shall be effected by the payment to the
Bank of immediately available funds. All sales by the Bank of OREO Properties
shall be pursuant to a real estate contract substantially in the form of
Exhibit "D" hereto.
ARTICLE III
AGREEMENTS OF THE PARTIES
3.1. Agreements of Fourth.
a. Prior to the Effective Time, Fourth,
separately and with Sellers, shall 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 all of the Required Approvals.
b. Fourth shall promptly prepare and file all
applications necessary to obtain the Required Approvals
and shall afford Sellers at least four days'
opportunity to review and comment upon the drafts of
such applications prior to the filing thereof.
c. Fourth shall observe the confidentiality
obligations set forth in Section 3.2.c, below.
d. Fourth shall consult with Sellers prior to
issuing any press release or other planned public
statement regarding the subject matter of this
Agreement or the termination thereof as to the contents
of such press release or statement.
e. Fourth agrees to take such action as may
be necessary to cause BANK IV to be well capitalized
upon the consummation of the transactions contemplated
by this Agreement at and immediately following the
Effective Time.
f. Fourth agrees to provide such information
as LSB may reasonably request in connection with the
preparation of material for the conduct of a meeting of
LSB's stockholders to approve this Agreement, and such
information furnished by Fourth will not contain any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or
necessary in order to make the statements therein, in
light of the circumstances under which they were made,
not misleading.
g. Following the Closing, in the event
Sellers or any of their Subsidiaries, officers,
directors, or affiliates shall be called upon to
provide an indemnity pursuant to the provisions of this
Agreement, or should otherwise be called upon to take
or defend against legal action with respect to matters
occurring prior to the Effective Time, Fourth shall
permit Sellers to examine (subject to reasonable
limitations) the former records of the Bank or the
Corporations.
h. BANK IV shall reimburse LSB for all out-of-
pocket COBRA liabilities incurred by LSB with respect
to employees of the Bank at the Effective Time who are
terminated after the Effective Time by BANK IV to the
extent not paid or reimbursed by re-insurance or stop
loss coverage; provided, however that such
reimbursement shall be net of all COBRA premiums paid
by such employees after the Effective Time and net of
the aggregate amount of all Bank employee forfeitures
under the Bank's cafeteria plan.
3.2. Agreements of Sellers.
a. Prior to the Closing, except with respect
to those commitments binding as of the date of this
Agreement described in an exhibit to the Disclosure
Statement, or as otherwise provided in this Agreement,
Sellers shall not, without the prior written consent of
Fourth which shall not unreasonably be withheld, permit
any of the Corporations to:
(1) Amend its articles or 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) the Fourth Financial
Corporation Acquisition Severance Schedule
previously furnished to Seller; and (c)
severance agreements to be performed by Sellers
without any obligation of the Bank or Fourth;
(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
the 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 the 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 the
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 the
Bank (including, without limitation, sales of
assets acquired by the Bank in the course of
collecting loans) or as permitted by this
Agreement, sell 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 the
Bank), contributions to capital, property
transfers, or otherwise, or by the purchase of
any property or assets of any other individual,
firm, or corporation other than certain planned
improvements being made to the Bank's Classen
and Portland branches;
(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, or a substantial portion of the
assets of any of the Corporations 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) Own at the Effective Time any bonds,
notes, loans, or other investment securities of
any kind which are not expressly enumerated in
the definition of "Securities Portfolio" in
Section 1.1 of this Agreement other than Bank's
investments in the other Corporations; or
(12) Except as permitted or contemplated by
this Agreement, enter into any transaction or
take any action which would, if effected prior
to the Effective Time, constitute a material
breach of any of the representations,
warranties, or covenants contained in this
Agreement.
b. Except as otherwise provided in this
Agreement, prior to the Effective Time, each Seller
shall use its reasonable best efforts to cause each of
the Corporations to conduct its respective business in
the ordinary and usual course as heretofore conducted
and to use its reasonable best efforts (1) to preserve
its business and business organization intact, (2) to
keep available to 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 in
all material respects 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 continue its current practice of
selling loans secured by fixed rate mortgages on a
servicing-retained basis, (9) to duly and timely file
all reports, tax returns, and other material documents
required to be filed with federal, state, local and
other authorities, and (10) unless it is contesting the
same in good faith and has established reasonable
reserves therefor, to pay when required to be paid all
material 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 and its counsel and accountants full
access, during normal business hours and upon
reasonable notice, to their respective properties,
books, and records, and to furnish Fourth during such
period with all such information concerning their
affairs as Fourth may reasonably request. Except for
matters expressly disclosed in the Disclosure
Statement, the availability or actual delivery of
information about the Corporations to Fourth shall not
affect the covenants, representations, and warranties
of Sellers contained in this Agreement. Except for
information disclosed in the course of obtaining
Required Approvals, Fourth shall treat as confidential
all confidential information disclosed to it by Sellers
or the Corporations in the same manner as Fourth treats
similar confidential information of its own and, if
this Agreement is terminated, Fourth shall continue to
treat all such confidential information obtained
through such disclosure and not otherwise known to
Fourth or already in the public domain, as confidential
and shall return such documents theretofore delivered
by Sellers to Fourth as Sellers shall request.
d. Sellers shall cause the Corporations,
separately and jointly with each other and with Fourth,
to each use reasonable efforts in good faith to take or
cause to be taken as promptly as practicable all such
steps as shall be necessary to obtain all Required
Approvals as promptly as practicable.
e. Sellers agree not to sell, pledge,
encumber, or otherwise hypothecate or transfer any
shares of Bank Stock prior to the Effective Time.
f. At the Closing, BANK IV, as lessee, and
Northwest Tower Limited Partnership, as lessor, shall
execute and deliver a real estate lease substantially
in the form of Exhibit "C," to this Agreement. No
party hereto shall be liable to any other party if such
lessor fails to execute such lease.
g. Sellers agree to cause the Corporations to
cooperate with Fourth in Fourth's efforts to obtain
current title evidence or insurance, environmental
assessment reports, and surveys on such of the
Corporations' real properties as Fourth may desire.
h. Sellers will take, and will cause the Bank
to take, all such corporate action as may be required
to authorize, execute, and perform the Bank Merger
Agreement.
i. LSB agrees:
(1) To file all required federal, state,
and local income tax returns in a timely manner
for 1993 and 1994 or obtain appropriate
extensions for such filings and to pay, when
due, all income taxes due for such periods;
(2) To give Fourth written notice promptly
of any issues raised by any taxing authorities
which might reasonably result in an increase in
the income tax liabilities of the Bank for any
period in which it is or was a member of the
"Group" defined in Section 4.1.k of this
Agreement or which might reasonably affect the
amount of the Bank's net operating loss;
(3) To consult with Fourth and BANK IV
about the resolution of any such issues and not
to settle any such issues without giving Fourth
an opportunity to assume responsibility for the
resolution of such issues, at Fourth's expense,
if the effect of such settlement would be to
increase the liability of Fourth or any of its
affiliates for any tax for any period beginning
after the Effective Time or affect the amount of
the Bank's net operating loss unless Sellers
agree to pay and do pay to Fourth the full
amount of such increase in liability grossed up
for any federal or state tax attributable to
such payment; and
(4) That all existing income tax sharing
or allocation agreements or arrangements of any
kind between the Corporations and LSB or any
other member of such Group, whether or not in
writing, shall automatically be terminated at
the Effective Time and no further payments shall
be made by Bank thereunder except to the extent
the amount thereof has been taken into account
in calculating the Tangible Book Value of the
Bank.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of Sellers.
Except as expressly disclosed in the Disclosure Statement,
Sellers jointly and severally represent and warrant to Fourth as
follows:
a. Organization, Good Standing, and Authority.
Each Seller is a savings and loan holding company duly
registered pursuant to the federal Home Owners' Loan
Act. Each of the Corporations is a corporation or
savings 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. 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 the Bank are insured by the
FDIC to the extent provided by the Federal Deposit
Insurance Act and the Bank has paid all assessments and
filed all reports required to be filed under the
Federal Deposit Insurance Act of which failure to do so
would have a material adverse effect upon the Bank.
b. Binding Obligations; Due Authorization.
This Agreement constitutes the valid and binding
obligation of each Seller, enforceable against it in
accordance with the terms hereof, 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, the sale of the Shares, and
the consummation of the other transactions contemplated
hereby, and the fulfillment of the terms hereof 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
either Seller is obligated, or (2) violate any Law to
which any of the Corporations or any Seller is subject.
d. Subsidiaries. LSB is the owner of all of
the issued and outstanding capital stock of all classes
of Prime. The only Subsidiaries of the Bank are the
following:
Name State of Incorporation
---- -----------------------
Northwest Financial Corporation Oklahoma
Northwest Energy Enterprises, Inc. Oklahoma
Credit Card Center, Inc. Oklahoma
Equity Financial Service Corp. Oklahoma
United BankCard, Inc. Oklahoma
Northwest Capital Corporation Oklahoma
e. Capitalization. The Bank is authorized to
issue 1,000,000 shares of capital stock, par value $.01
per share, of which 100,000 shares are issued and
outstanding. Prime is the owner, free and clear of all
encumbrances, liens, security interests, and claims
whatsoever, of all 100,000 shares of Bank Stock. The
capitalization of each of the Bank's Subsidiaries
excluding the Retained Corporations, is as follows:
Number of Shares
----------------
Name Par Value Issued Outstanding
---- --------- ------ -----------
Credit Card Center, Inc. $ 10.00 6,700 5,200
Equity Financial Service
Corp. 1.00 1,000 1,000
United BankCard, Inc. 1,000.00 250 250
f. 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."
g. 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.
h. Financial Statements. Included in the
Disclosure Statement as Exhibits "H-1" through "H-6"
are 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) Audited Consolidated Financial
Statements of the Bank as of December 31, 1992,
and 1991, and for the fiscal years then ended
with auditors' report thereon and notes thereto,
which have been examined by Ernst & Young,
independent certified public accountants;
(2) Thrift Financial Reports filed by the
Bank with the OTS for the quarters ended
December 31, 1992, March 31, 1993, June 30,
1993, and September 30, 1993; and
(3) Unaudited financial statements of the
Bank as of October 31, 1993 and for the period
then ended.
As soon as practicable between the date hereof and the
Effective Time, Sellers will deliver to Fourth copies
of monthly operating statements of the Bank and of all
reports filed by any of the Corporations 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 financial conditions and results of
operations 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 finan#ial statements prepared in accordance with
GAAP). There have been, and prior to the Effective
Time there will be, no material adverse changes in the
financial condition of the Corporations from December
31, 1992, 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 adverse 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 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.
i. Real Properties. Exhibit "I" to the
Disclosure Statement is a complete list of all real
estate owned or leased by any of the Corporations.
Each Corporation 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 Permitted Encumbrances. All leases of real
property to which any of the Corporations is a party as
lessee, complete copies of each of which with all
amendments thereto are included in Exhibit "I" 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 Facilities owned or used by any
Corporation for the purposes for which it is now being
used; and all the Facilities owned or leased by any of
the Corporations are in good operating condition and
repair, normal wear and tear excepted.
j. Personal Property. Except for leased
properties, each of the Corporations 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. The material items of personal
property owned or leased by any of the Corporations are
generally in good operating condition, normal wear and
tear excepted.
k. Taxes. LSB, Prime, the Bank, the
Corporations, and the Retained Corporations are members
of the same "affiliated group" (the "Group"), as
defined in Section 1504(a)(1) of the Code. Each member
of the Group has filed or caused to be filed, or a
filing was made on its behalf, all tax returns and
reports required to have been filed by or for it, and
all material information set forth in such returns or
reports is accurate and complete. Each member of the
Group has paid or made adequate provision for all
taxes, additions to tax, penalties, and interest for
all periods covered by those returns or reports. There
are no material unpaid taxes, additions to tax,
penalties, or interest due and payable by any member of
the Group, except for taxes and any such related
liabilities being contested in good faith and disclosed
in Exhibit "K" to the Disclosure Statement. Each
member of the Group has collected or withheld all
amounts required to be collected or withheld by it for
any taxes, and all such amounts have been paid to the
appropriate governmental agencies or set aside in
appropriate accounts for future payment when due. Each
member of the Group is in material compliance with, and
its records contain all information and documents
(including, without limitation, IRS Forms W-9)
necessary to comply in all material respects with
applicable information reporting and tax withholding
requirements under federal, state, and local laws,
rules, and regulations, and such records identify with
specificity all accounts subject to backup withholding.
The Financial Statements fully and properly reflect, as
of the dates thereof, the accrued taxes, additions to
tax, penalties, and interest. No extension of time for
the assessment of deficiencies for any years is in
effect. No member of the Group has any knowledge of
any unassessed tax deficiency proposed or threatened
against any of them.
l. 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 "L" is a list of
all material contracts and other agreements and
arrangements, both written and oral, to which Bank or
any of the other Corporations is a party and which
involve $10,000 or more, which affect or pertain to the
operation of their respective businesses. To the
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 (l), 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 "L" to the Disclosure
Statement, no material contract, lease, or other
agreement or arrangement to which either Bank or one of
the other Corporations is a party or as to which any of
their assets is subject requires the consent of any
third party in connection with this Agreement. Except
as described in Exhibit "L" 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 material
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 Exhibit
"L" to the Disclosure Statement, neither the Bank nor
any of the other Corporations is a party to:
(1) Any contract for the purchase or sale
of any materials or supplies having an aggregate
purchase or sale price in excess of $10,000
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 or royalty agreement
having an aggregate future commitment to pay at
least $10,000, or union agreement, or loan
agreement in which any of the Corporations 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
the Bank, any of the other Corporations, or any
other person in the business of banking or
activities relating to banking;
(7) Any other agreement which materially
affects the business, properties, or assets of
either Bank or one of the other Corporations, 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 $500,000.
None of LSB, Prime, or any of the Corporations has any
knowledge based upon which it has formed a conclusion
that a material loss is reasonably anticipated with
respect to any of the agreements described in clause
"l."
m. 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 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 in an amount which would have a material
adverse effect on the Bank or any of the Corporations.
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 except that
Bank employees participate in Bank's and LSB's
cafeteria plans, which include health, disability
insurance (long and short term), life insurance, and
supplemental life insurance, and LSB's 401(k) plan, and
thirteen employees in the United BankCard division of
the Bank participate in a "frozen" 401(k) plan. The
Bank is in the process of attempting to terminate this
"frozen" plan. None of the Corporations has violated
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 in an amount which
would have a material adverse effect on the Bank or the
Corporations. There is no employee of any of the
Corporations whose employment is governed by a written
or oral employment agreement for a specific term of
employment.
n. 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 except where the
absence thereof would not have a material adverse
effect on the Bank or the affected Corporation. All
such licenses, permits, charters, orders, and approvals
are in full force and effect, and, to the knowledge of
the Corporations and Seller, no suspension or
cancellation of any of them is threatened and none of
the Corporations knows of any fact or circumstance that
will materially interfere with or materially 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.
o. Insurance. Exhibit "O" 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.
p. Litigation. Exhibit "P" 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 any Seller, 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 "P" to the
Disclosure Statement, none of the Corporations is a
party to any Litigation other than routine litigation
commenced by the 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 or any Seller, threatened.
q. Brokers or Finders. Except for an
agreement with Lazard Freres & Co., whose fee will be
paid by LSB, no broker, agent, finder, consultant, or
other party (other than legal and accounting advisors)
has been retained by either of the Sellers or any of
the Corporations or is entitled to be paid based upon
any agreements, arrangements, or understandings made by
either of the Sellers or any of the Corporations in
connection with any of the transactions contemplated by
this Agreement.
r. Environmental Compliance. Except as
disclosed in Exhibit "R", to Sellers' knowledge, each
of the Corporations is in material compliance with all
relevant Environmental Laws and none of the
Corporations has any material Environmental
Liabilities. None of the Facilities is now being used
or, to either Seller's knowledge, 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 either Seller, by third parties,
disposal, or handling of any Hazardous Materials, nor
are any Hazardous Materials located in, on, under, or
at any of the Facilities. No Corporation has received
any notice of material violation of any Environmental
Law, or any notice of any material potential
Environmental Liabilities with respect to any of the
Facilities or to any other properties and assets in
which any Corporation has had an interest.
s. Employment of Aliens. Each Corporation 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 or any other Corporation 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. Updating of Representations and Warranties
. Between the date hereof and the Effective Time,
Sellers will promptly disclose to Fourth in writing
any information of which either of them has actual
knowledge (1) concerning any event that would render
any representation or warranty of Sellers untrue if
made as to the date of such event, (2) which renders
any information set forth in this 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.
v. True at Effective Time. Except as
otherwise specifically provided in this Agreement, all
of the representations and warranties of Sellers 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.
Fourth represents and warrants to Sellers as follows:
a. Organization, Good Standing, and Authority.
Fourth is a corporation duly organized, validly
existing, and in good standing under the laws of the
State of Kansas, and 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. Fourth is not
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 constitutes the valid and binding
obligations of Fourth, enforceable against it 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 transactions contemplated hereby have been
duly authorized by the board of directors of Fourth.
c. Absence of Default. None of the execution
or the delivery of this Agreement, the consummation of
the transactions contemplated hereby, or the
fulfillment of the terms hereof, 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 under any
agreement or instrument under which Fourth is
obligated, or (2) violate any Law to which it 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
is entitled to be paid based upon any agreements,
arrangements, or understandings made by Fourth in
connection with any of the transactions contemplated by
this Agreement.
e. Required Approvals. Fourth knows of no
reason that would preclude obtaining the Required
Approvals in a timely manner, but various persons have
the right to object to the granting of Required
Approvals and the various governmental agencies
involved can be expected to conduct various types of
economic and other analysis, any one of which may cause
a delay or denial of a requested approval.
f. Capitalization of the Bank. Fourth will
contribute such additional capital to BANK IV as may be
necessary in order for BANK IV to be well capitalized
following consummation of the Purchase, the Merger, and
the other transactions contemplated or permitted by
this Agreement. Fourth has sufficient capital
resources to be able to make such additional capital
contribution and to perform its obligations under this
Agreement.
ARTICLE V
CLOSING CONDITIONS
5.1. Conditions to Obligations of Fourth. The
obligations of Fourth to purchase the Shares shall be subject to
the following conditions which may, to the extent permitted by
Law, be waived by Fourth at its option:
a. Absence of Litigation. No order, judgment,
or decree shall be outstanding restraining or enjoining
consummation of the purchase of the Shares, the Merger,
or any of the other transactions permitted or
contemplated by this Agreement; and no Litigation
shall be pending or threatened in which it is sought to
restrain or prohibit the purchase of the Shares, the
Merger, or any of the other transactions permitted or
contemplated by this Agreement or to obtain other
substantial monetary or other relief against one or
more of the parties hereto in connection with this
Agreement.
b. Regulatory Approvals. All Required
Approvals shall have been procured (and shall continue
to be in effect) and all other requirements prescribed
by Law shall have been satisfied.
c. Minimum Tangible Book Value of Bank. The
Tangible Book Value of the Bank as of the Effective
Time, without taking into account any restructuring
charges described in Section 2.3(b) of this Agreement,
shall be not less than $41,000,000. Such amount shall
be substantiated by the total consolidated
stockholder's equity of the Bank as reflected in the
books of record and balance sheets of the Bank.
d. Opinion of Counsel. Fourth shall have
received the opinion of Housley Goldberg & Kantarian,
P.C., counsel to the Corporations and Sellers,
substantially in the form of Exhibit "A" hereto.
e. Representations and Warranties; Covenants.
The representations and warranties of the Sellers
contained in 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 shall have
performed all of their obligations under this
Agreement.
f. Certificates. Sellers shall have delivered
to Fourth a certificate, in form and substance
satisfactory to Fourth, dated the Effective Time and
signed by the chief executive officer and chief
financial officer of each of the Corporations,
certifying in such detail as Fourth may reasonably
request the fulfillment of the foregoing conditions.
g. Resignations. Sellers shall have delivered
to Fourth the written resignations, effective at the
Effective Time, of those officers and directors of the
Bank and the other Corporations as Fourth shall have
requested at least two business days prior to the
Effective Time.
h. 1993 Audit Report. Seller shall have
delivered to Fourth a copy of the Bank's audited
consolidated Financial Statements as of December 31,
1993 and for the year then ended, with auditor's report
thereon and notes thereto.
i. Lease of Equity Tower. Northwest Tower
Limited Partnership shall have entered into a lease as
lessor of the Equity Tower, substantially in the form
of Exhibit "C" hereto.
j. Satisfactory Environmental Reports. Fourth
shall have received environmental assessment reports
covering all of the Facilities, in form and substance
reasonably satisfactory to Fourth, which do not cause
Fourth reasonably to conclude that there are any
material Environmental Liabilities associated with any
of the Facilities.
5.2. Conditions to Obligations of Sellers. The
obligation of Sellers to sell the Shares and to consummate the
transactions contemplated hereby shall be subject to the
following conditions which may, to the extent permitted by Law,
be jointly waived by Sellers 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 contained
in 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
shall have duly performed all of its obligations under
this Agreement.
c. Minimum Purchase Price. The Purchase Price
shall be not less than $92,000,000, which minimum
amount shall be reduced by the amount of the option
price described in clause c of Section 7.5 if such
option has been exercised by Sellers.
d. Fairness Opinion. LSB shall have received
by February 10, 1994, a written opinion from Lazard
Freres & Co. to the effect that the Purchase Price is
fair to Sellers from a financial point of view.
e. Opinion of Counsel. Sellers shall have
received the opinion of Foulston & Siefkin, counsel to
Fourth, substantially in the form of Exhibit "B"
hereto.
f. Certificates. Fourth shall have delivered
to Sellers a certificate, in form and substance
reasonably satisfactory to Sellers, dated the Effective
Time and signed by the chief executive officer and
chief financial officer of Fourth, certifying in such
detail as Sellers may reasonably request, the accuracy
of the representations and warranties and the
fulfillment of the covenants of Fourth hereunder.
g. LSB's Stockholder Approval. The
stockholders of LSB shall have approved this Agreement
and the Purchase.
h. Change in Treasury Regulations. The United
States Department of the Treasury shall not have
finally adopted the proposed changes to the Treasury
Regulations, at Sec. 1.1502-33 (56 FR 47379, Sept. 19,
1991, revised 57 FR 53550, Nov. 12, 1992, revised, 57
FR 62251, Dec. 30, 1992), nor shall have any other
change in the Law occurred with the effect, in the
reasonable judgment of Sellers based upon the advice of
their tax advisors, that the tax basis of LSB or Prime
in the Bank Stock shall be significantly reduced.
i. Conveyance of Retained Corporations and
Retained Assets. On or before the Effective Time, all
of the Retained Assets and all of the Bank's interests
in the Retained Corporations shall have been
transferred to Sellers or their designee or designees
as provided in this Agreement.
ARTICLE VI
TERMINATION OF AGREEMENT
6.1. Mutual Consent; Termination Date. This
Agreement shall terminate at any time when the parties hereto
mutually agree in writing. This Agreement may also be terminated
at the election of either Sellers (acting jointly) or Fourth,
upon written notice from the party electing to terminate this
Agreement to the other party if, without fault on the part of the
party electing to terminate this Agreement, there has been a
denial of a Required Approval or the imposition of one or more
terms (not including a requirement to divest a single branch of
the Bank not located in Oklahoma City) reasonably deemed onerous
by Fourth or Sellers as a condition to obtaining a Regulatory
Approval. Unless extended by written agreement of the parties,
this Agreement shall terminate if all conditions to the
obligations of the parties hereto have not occurred on or before
June 30, 1994.
6.2. Election by Fourth. This Agreement shall
terminate at Fourth's election, upon written notice from Fourth
to Sellers if any one or more of the following events shall occur
and shall not have been remedied to the satisfaction of Fourth
within 30 days after written notice is delivered to Seller: (a)
there shall have been any uncured material breach of any of the
obligations, covenants, or warranties of the Sellers hereunder;
or (b) there shall have been any written representation or
statement furnished by the Sellers 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. This Agreement shall
terminate at the election of Sellers (acting jointly) upon
written notice from Sellers to Fourth if any one or more of the
following events shall occur and shall not have been remedied to
its satisfaction within 30 days after written notice is delivered
to Fourth: (a) there shall have been any uncured material breach
of any of the obligations, covenants, or warranties of Fourth
hereunder; or (b) there shall have been any written
representation or statement furnished by Fourth 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 shall not prejudice any claim for damages which any of
the parties hereto may have hereunder in law or in equity, due to
an uncured 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. If 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 the other parties in writing prior to
the Effective Time, such non-breaching parties shall have the
right (jointly in the case of Sellers), at their sole option,
either to waive such misrepresentation or breach in writing or to
terminate this Agreement, but in either such event, the breaching
parties shall not be liable to the other parties for any such
damages, costs, expenses, or otherwise by reason of such breach
or misrepresentation. If such non-breaching parties elect to
close the transactions contemplated by this Agreement
notwithstanding the written communication of such breach or
misrepresentation, they shall be deemed to have waived such
breach or misrepresentation in writing. Similarly, if Fourth
receives an environmental assessment report on the Facilities
pursuant to Section 5.1(j) indicating the existence of any
Environmental Liability and elects to close the transactions
contemplated by this Agreement, it shall be deemed to have waived
all right to indemnification with respect thereto.
7.2. General Indemnification. Subject to the
limitations on the liability of Sellers contained in Section 7.1
and this Section 7.2, Sellers shall be jointly and severally
liable for, and shall defend, save, indemnify, and hold harmless
Fourth, BANK IV, the Corporations, and their respective
successors, 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 material uncured
breach or nonfulfillment of any of the warranties, agreements, or
representations made by the Sellers, 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 (but not
under Section 7.5, 7.6, or 7.7) 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 $1,000,000 in the
aggregate, net of income tax effect and such liability shall not
exceed $25,000,000. Indemnitees shall be obligated to exhaust
all reasonably available remedies as a condition to being
indemnified hereunder but not as a condition to giving notice
pursuant to Sections 7.3 and 7.4. It is agreed that the
indemnification obligations of Sellers hereunder shall be solely
for the benefit of the Indemnitees and may not be enforced by any
insuror under any subrogation or similar agreement or arrangement
or by any governmental agency except as a receiver for an
Indemnitee.
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 shall give Sellers written notice thereof as soon as
practicable but within 20 days (ten days in the case of legal
process) after it acquires knowledge thereof. If the
Indemnifying Loss arises otherwise, Fourth shall give notice to
Sellers within 20 days of the discovery of the basis therefor.
If, within 20 days after the giving of such notice, Fourth
receives written notice from Sellers stating that Sellers dispute
or intend to defend against or prosecute, as the case may be,
such claim, demand, liability, suit, action, or proceeding, then
Sellers shall have the joint right to select counsel of their
choice and to dispute or defend against, prosecute, or settle
such claim at their expense, and the Indemnitees shall fully
cooperate with Sellers in such dispute, prosecution, defense or
settlement so long as Sellers are conducting such dispute,
defense, or prosecution diligently and in good faith. If no such
notice of intent to dispute or defend is received by Fourth
within the aforesaid 20-day period, of if such diligent and good
faith defense is not being, or ceases to be, conducted, Fourth
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 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 $1,000,000 but not to exceed
$25,000,000, 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
contained in this Agreement shall survive the Closing and the
Purchase and the closing of the transactions described in this
Agreement; provided, however, that (except for the
indemnification obligations contained in Sections 7.6 and 7.7
hereof, as to which there shall be no time limit) 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 Seller:
(a) within three years from the Effective Time
in the case of a claim for breach of any representation
or warranty contained in Section 4.1.k of this
Agreement;
(b) by the earlier of October 31, 1998 or 30
days after the date on which the Internal Revenue
Service completes its examination of Fourth's 1994
federal income tax return and gives Fourth written
notice of any proposed adjustments (provided that both
such periods shall be extended by a period of time
equal to 30 days plus the length of in each case any
periods for which LSB shall have agreed to a tolling of
any limitation period applicable to the assertion
against LSB or any member of the Group described in
Section 4.1.k of any deficiency by the Internal Revenue
Service) in the case of a claim under Section 7.5 of
this Agreement; and
(c) within two years of the Effective Time in
all other cases.
7.5. Special Indemnification.
(a) Separate and apart from the indemnification
provisions in the preceding sections of this Article
VII, and not subject to the deductibility and maximum
liability provisions contained in Section 7.2, Sellers
jointly and severally agree to indemnify BANK IV and
Fourth from any reduction in the aggregate amount of
the Bank's net operating loss carryforward for federal
income tax purposes (to the extent an adjustment has
not already been made pursuant to Section 2.4(b)),
below $64,000,000; provided, however, that such
reduction results from either (i) a reduction required
by final action related to an audit or adjustment by
the Internal Revenue Service and made retroactive to
the period prior to the Effective Time or (ii) a
reduction in the net operating loss carryforward of the
Bank at the Effective Time attributable to the
consolidated taxable income of LSB (after taking into
account the taxable income or loss of each member of
the consolidated group contained in the consolidated
return of LSB and taking into account the allocations
of consolidated income, gain, and loss affecting such
net operating loss carryforward), including the effects
of the sale of the Retained Assets and Retained
Corporations to Sellers and all extraordinary items.
The payment to be made by Sellers shall be equal to the
product of (a) the dollar amount of the reduction
required in (i) above and/or the reduction determined
in (ii) above, and (b) a fraction, the numerator of
which shall be $10,500,000, and the denominator of
which shall be $64,000,000. However, to the extent
that an adjustment merely postpones the related tax
benefit to BANK IV or Fourth to a later, reasonably
ascertainable period, then such adjustment shall not be
subject to this special indemnification.
(b) If there is an audit or similar inquiry of
the Internal Revenue Service of any tax return which
may have the effect of reducing the Bank's net
operating loss as of or for a period prior to the
Closing, all parties to this Agreement shall cooperate
with each other as to the determination of the
adjustments under such audit, shall make available to
each other as may reasonably be requested all
information, records, and documents until the
expiration of any applicable statute of limitations or
extensions thereof.
(c) Sellers shall have the right and option,
exercisable at any time prior to the business day next
preceding the Effective Time, by giving written notice
to Fourth, to elect to have the Purchase Price reduced
by $600,000 in consideration of the termination of
Section 7.5(a) of this Agreement, in which event the
provisions of Section 7.5(a) shall thereupon be of no
further force and effect.
7.6. Separate Indemnification for Environmental
Matters. Separate and apart from the indemnification provided in
the preceding sections of this Article VII, and not subject to
the $1,000,000 deductibility and $25,000,000 maximum liability
provisions contained in Section 7.2, Sellers shall be jointly and
severally liable for, and shall forever defend, save, indemnify,
and hold harmless Fourth, Bank, and BANK IV from and against, any
and all Environmental Liabilities that may be incurred or
sustained by, or rendered against Fourth, Bank, or BANK IV
arising in any manner out of the direct or indirect ownership or
operation at any time by the Bank or by any of its current or
former Subsidiaries of any current or former Non-Bank Facility
(as hereinafter defined). "Non-Bank Facility" means any interest
in real property, building, plant, structure, or equipment which
is not (i) currently or formerly owned or operated by the Bank in
the ordinary course of its banking business as a banking facility, (ii) the
Equity Tower, (iii) property located at Coffee Creek Road and Kelly
Avenue, Edmond, Oklahoma, (iv) an OREO Property, or (v)
collateral held as security for loans or participations.
7.7. Separate Indemnification for Barki Litigation,
COMAC, and 401(k) Plan. Separate and apart from the
indemnification provided in the preceding sections of this
Article VII, and not subject to the $1,000,000 deductibility and
$25,000,000 maximum liability provisions contained in Section
7.2, Sellers shall be jointly severally liable for, and shall
forever defend, save, indemnify, and hold harmless Fourth, BANK
IV, and Bank from and against any and all losses, expenses
(including amounts reasonably paid in settlement), liabilities,
costs, penalties, damages, and judgments that may be incurred or
sustained by, or rendered against, Fourth, BANK IV, or Bank
arising out of or associated in any manner with (i) the United
BankCard division "frozen" 401(k) plan described in Section
4.1(m) of this Agreement, (ii) Mai-Li Barki vs. Equity Bank for
Savings, F.A. et al., Case No. CJ-91-90852, filed in the District
Court of Oklahoma County, Oklahoma or otherwise out of the claims
contained in such case, or (iii) the pending Internal Revenue
Service examination of COMAC Financial Services Ltd Partnership
described in Exhibit "K" to the Disclosure Statement; provided,
however, BANK IV shall be responsible for the payment of one-half
of the out-of-pocket attorneys' fees and costs incurred in
connection with the Barki litigation. Sellers shall have the
right to defend the Barki action in accordance with the
provisions of Section 7.2 of this Agreement.
7.8. Director and Officer Indemnification. From and
after the Effective Time, Fourth shall indemnify, defend, and
hold harmless each person who is now, or has been at any time
prior to the date hereof or who becomes prior to the Effective
Time, an officer, director, or employee of any of the
Corporations (the "Bank Indemnified Parties") against all losses,
claims, damages, costs, expenses (including attorney's fees),
liabilities, or judgments or amounts that are paid in settlement
(which settlement shall require the prior written consent of
Fourth, which consent shall not be unreasonably withheld) of or
in connection with any claim, action, suit, proceeding, or
investigation (each a "Claim") in which a Bank Indemnified Party
is, or is threatened to be made, a party based in whole or in
part on or arising in whole or in part out of the fact that such
person is or was a director, officer, or employee of a
Corporation if such Claim pertains to any matter or fact arising,
existing, or occurring prior to the Effective Time (but excluding
the transactions expressly contemplated by this Agreement),
regardless of whether such Claim is asserted or claimed prior to,
or at or after, the Effective Time (the "Indemnified
Liabilities") to the full extent required under applicable law in
effect as of the date hereof or as amended applicable to a time
prior to the Effective Time or as required under the Bank's
charter and bylaws (and Fourth shall pay expenses in advance of
the final disposition of any such action or proceeding to each
Bank Indemnified Party to the full extent permitted by
applicable law in effect as of the date hereof or as amended
applicable to a time prior to the Effective Time upon receipt of
any undertaking required by applicable law). Any Bank
Indemnified Party wishing to claim indemnification under this
Section 7.8 upon learning of any Claim, shall notify Fourth (but
the failure so to notify Fourth shall not relieve Fourth from any
liability which it may have under this Section 7.8 except to the
extent such failure materially prejudices Fourth) and shall
deliver to Fourth copies of all demand letters, notices,
summonses, pleadings, and other documents which such party may
have received relating to such Claim. The obligations of Fourth
described in this Section 7.8 continue in full force and effect,
without any amendment thereto, for a period of three years from
the Effective Time; provided, however, that all rights to
indemnification in respect of any Claim asserted or made within
such period shall continue until the final disposition of such
Claim.
ARTICLE VIII
MISCELLANEOUS
8.1. Expenses. Whether or not the Purchase is
effected and whether or not this Agreement is terminated, all
costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party
incurring such expense.
8.2. 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, addressed to Ronald L. Baldwin, Executive Vice
President, Post Office Box 2360, Tulsa, Oklahoma 74101-2360; and
(b) if to the Sellers, addressed to Tony M. Shelby, Senior Vice
President, Post Office Box 754, 16 South Pennsylvania, Oklahoma
City, Oklahoma 73107, or to such other person or such other
address as shall have been furnished in writing in the manner
provided herein for giving notice.
8.3. Time. Time is of the essence of this Agreement.
8.4. 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.
8.5. Entire Agreement; Amendment. This Agreement
contains and incorporates 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 and Sellers
and all attempted oral waivers, modifications, and amendments
shall be ineffective.
8.6. Successors and Assigns. The rights and
obligations of the parties hereto shall inure to the benefit of
and shall be binding upon the 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.
8.7. 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.
8.8. 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.
8.9. No Third Party Beneficiaries. Except as
specifically provided herein, nothing in this Agreement shall
entitle any person other than Sellers and Fourth to any claim,
cause of action, remedy, or right of any kind.
8.10. Severability. Whenever possible, each provision
of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of
this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed.
FOURTH FINANCIAL CORPORATION
By
-----------------------
Darrell G. Knudson,
Chairman of the Board
"Fourth"
PRIME FINANCIAL CORPORATION LSB INDUSTRIES, INC.
By By
------------------------- -----------------------
"Prime" "LSB"
"Sellers"