EXHIBIT 2.1
PLAN AND AGREEMENT OF MERGER
AMONG
FIRST COMMERCIAL CORPORATION;
TYLER BANK AND TRUST, N.A., TYLER TEXAS;
AND
CITY NATIONAL BANK, WHITEHOUSE, TEXAS
Providing for the merger of
City National Bank, Whitehouse, Texas
with and into
Tyler Bank and Trust, N.A., Tyler, Texas
Under the Charter and Charter Number and Title of
"Tyler Bank and Trust, N.A., Tyler, Texas"
Date: May 9, 1996
TABLE OF CONTENTS
Page
ARTICLE I
THE PLAN OF MERGER
Section 1.01. Tyler Bank and Trust, N.A. . . . . . . . . . 2
Section 1.02. The Merger . . . . . . . . . . . . . . . . . 2
Section 1.03. Effect of the Merger . . . . . . . . . . . . 2
Section 1.04. Consummation of the Merger . . . . . . . . . 3
Section 1.05. Articles of Association; Bylaws;
Directors and Officers . . . . . . . . . . . 3
Section 1.06. Merger Consideration; Conversion
of Securities; Rights of Dissenting
Shareholders . . . . . . . . . . . . . . . . 3
Section 1.07. Exchange of Certificates . . . . . . . . . . 4
Section 1.08. Rights of CNB Shareholders to Dividends . . 5
ARTICLE II
APPROVAL OF MERGER
Section 2.01. Shareholder Approval . . . . . . . . . . . . 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of CNB . . . 5
(a) Authority for Transaction . . . . . . . 5
(b) Organization and Capitalization . . . 6
(c) Financial Statements . . . . . . . . 6
(d) Dividends . . . . . . . . . . . . . . 7
(e) Loans . . . . . . . . . . . . . . . . 7
(f) Taxes . . . . . . . . . . . . . . . . 7
(g) Litigation and Regulatory Matters . . 8
(h) Compliance . . . . . . . . . . . . . 8
(i) Properties and Other Assets . . . . . 8
(j) Agreement Does Not Violate Other
Instruments . . . . . . . . . . . . . 9
(k) Insurance and Fidelity Bonds . . . . 10
(l) Retirement Plans . . . . . . . . . . 11
(m) Employee Relations . . . . . . . . . 12
(n) No Material Events . . . . . . . . . 12
(o) Liabilities . . . . . . . . . . . . . 13
(p) Marketability of Securities . . . . . 13
(q) Interested Party Transactions . . . . 14
(r) Material Contracts . . . . . . . . . 14
(s) Environmental Matters . . . . . . . . 15
(t) Property Sites Owned by CNB . . . . . 16
(u) Representations Not Misleading . . . 16
Section 3.02. Representations and Warranties of First
Commercial . . . . . . . . . . . . . . . . . 16
(a) Organization and Capitalization of First
Commercial . . . . . . . . . . . . . 16
(b) Organization of TBT . . . . . . . . 17
(c) Authority for Transaction . . . . . . 17
(d) Agreements Do Not Violate
Other Instruments . . . . . . . . . . 17
(e) Representations Not Misleading . . . 18
(f) Financial Statements . . . . . . . . 18
(g) Litigation and Regulatory Matters . . 19
(h) Compliance . . . . . . . . . . . . . 19
(i) No Material Events . . . . . . . . . 20
(j) Taxes . . . . . . . . . . . . . . . . 20
(k) Insurance . . . . . . . . . . . . . . 20
(l) ERISA Plans . . . . . . . . . . . . . 20
(m) Employee Relations . . . . . . . . . 21
(n) Properties and Other Assets . . . . . 21
(o) Environmental Matters . . . . . . . . 21
ARTICLE IV
COVENANTS
Section 4.01. Covenants of CNB . . . . . . . . . . . . . . 21
(a) Approval of Transaction and Consents 21
(b) Access to Corporate Records . . . . . 22
(c) Monthly Financial Statements . . . . 22
(d) Closing Financial Statements . . . . 22
(e) Conduct of Business . . . . . . . . . 23
(f) Cooperation and Furnishing
Information . . . . . . . . . . . . . . . 24
(g) Related Party Transactions . . . . . 24
(h) Notice of Changes . . . . . . . . . . 24
(i) Limit on CNB's Attorneys' Fees . . . 24
(j) Completion and Delivery of CNB Disclosure
Statement . . . . . . . . . . . . . . 24
Section 4.02. Covenants of First Commercial . . . . . . . 25
(a) Consents and Approvals . . . . . . . 25
(b) Quarterly Reports; Current Reports . 25
(c) Conduct of Business . . . . . . . . . 25
(d) Notice of Changes . . . . . . . . . . 26
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01. Conditions Precedent to Obligation of First
Commercial . . . . . . . . . . . . . . . . . 26
(a) Performance of Covenants . . . . . . 26
(b) Representations True at Closing . . . 26
(c) Changes in Financial Condition . . . 26
(d) Certified Resolutions . . . . . . . . 26
(e) Government Approvals; Other Consents 27
(f) No Injunction . . . . . . . . . . . . 27
(g) Litigation . . . . . . . . . . . . . 27
(h) No Misstatements or Omissions . . . . 27
(i) Opinion of CNB's Counsel . . . . . . 27
(j) Financial Confirmation . . . . . . . 27
(k) Audit of CNB Financial Statements . . 28
(l) Title Opinion . . . . . . . . . . . . 28
(m) Pooling of Interests Opinion . . . . 28
(n) Delivery of Continuity of Interest Letters
28
(o) Tax Opinion . . . . . . . . . . . . . 29
(p) Due Diligence Review . . . . . . . . 29
Section 5.02. Conditions Precedent to Obligation of CNB . 29
(a) Performance of Covenants . . . . . . 29
(b) Representations True at Closing . . . 29
(c) Changes in Financial Condition . . . 30
(d) Certified Resolutions . . . . . . . . 30
(e) No Injunction . . . . . . . . . . . . 30
(f) No Misstatements or Omissions . . . . 30
(g) Opinion of First Commercial's Counsel 30
(h) Tax Opinion . . . . . . . . . . . . . 31
(i) Securities Registration Opinion . . . 31
(j) No Adverse Change in Market Price
for First Commercial Stock . . . . . 31
ARTICLE VI
TERMINATION
Section 6.01. Procedure for Termination . . . . . . . . . 31
Section 6.02. Termination by Mutual Agreement . . . . . . 33
Section 6.03. Effect of Termination for Non-Willful Breach 33
Section 6.04. Effect of Termination for Willful Breach . . 33
Section 6.05. Enforcement Expenses . . . . . . . . . . . 33
ARTICLE VII
BROKERS AND EXPENSES
Section 7.01. Brokers . . . . . . . . . . . . . . . . . . 33
Section 7.02. Expenses . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Announcements . . . . . . . . . . . . . . . 34
Section 8.02. Notices . . . . . . . . . . . . . . . . . . 34
Section 8.03. Binding Effect . . . . . . . . . . . . . . . 34
Section 8.04. Headings . . . . . . . . . . . . . . . . . . 34
Section 8.05. Counterparts . . . . . . . . . . . . . . . . 35
Section 8.06. Integration of Agreement . . . . . . . . . . 35
Section 8.07. Amendments; Waivers . . . . . . . . . . . . 35
Section 8.08. Governing Law . . . . . . . . . . . . . . . 35
Section 8.09. Incorporation by Reference . . . . . . . . . 35
Section 8.10. Confidentiality of Information . . . . . . . 35
Section 8.11. No Assignment . . . . . . . . . . . . . . . 35
Section 8.12. Severability . . . . . . . . . . . . . . . . 35
Section 8.13. Survival of Representations and Warranties . 36
List of Exhibits:
A Form of Opinion of Tom Tatum, Attorney-at-Law (Delivered
Pursuant to Section 5.01(i))
B Form of Opinion of Friday, Eldredge & Clark (Delivered
Pursuant to Section 5.02(g)
DEFINITIONS
Acquisition . . . . . . . . . . . . . . . . . . . . . . . 23
CNB . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CNB Audit . . . . . . . . . . . . . . . . . . . . . . . . 28
CNB Balance Sheet . . . . . . . . . . . . . . . . . . . 7
CNB Disclosure Statement . . . . . . . . . . . . . . . . 6
CNB Financial Statements . . . . . . . . . . . . . . . 6
CNB Stock . . . . . . . . . . . . . . . . . . . . . . . . 1
Closing . . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing Date . . . . . . . . . . . . . . . . . . . . . . 3
Closing Financial Statements . . . . . . . . . . . . . . 23
COBRA . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Code . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Dissenting Shares . . . . . . . . . . . . . . . . . . . . 3
Effective Time . . . . . . . . . . . . . . . . . . . . . 3
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . 8
First Commercial . . . . . . . . . . . . . . . . . . . . 1
First Commercial Banks . . . . . . . . . . . . . . . . . 18
First Commercial Financial Statements . . . . . . . . . . 18
First Commercial Stock . . . . . . . . . . . . . . . . . 1
Insurance Policies . . . . . . . . . . . . . . . . . . . 10
Merger . . . . . . . . . . . . . . . . . . . . . . . . . 1
Merger Consideration . . . . . . . . . . . . . . . . . 4
Monthly Financial Statements . . . . . . . . . . . . . . 22
Pension Plan . . . . . . . . . . . . . . . . . . . . . . 11
Plan . . . . . . . . . . . . . . . . . . . . . . . . . 11
SFAS . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Surviving Bank . . . . . . . . . . . . . . . . . . . . . 2
TBT . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PLAN AND AGREEMENT OF MERGER
AMONG
FIRST COMMERCIAL CORPORATION;
TYLER BANK AND TRUST, N.A., TYLER TEXAS;
AND
CITY NATIONAL BANK, WHITEHOUSE, TEXAS
Providing for the merger of
City National Bank, Whitehouse, Texas
with and into
Tyler Bank and Trust, N.A., Tyler, Texas
Under the Charter and Charter Number and Title of
"Tyler Bank and Trust, N.A., Tyler, Texas"
This PLAN AND AGREEMENT OF MERGER is made as of this 9th
day of May, 1996, among FIRST COMMERCIAL CORPORATION, an
Arkansas corporation having its principal office in Little
Rock, Arkansas ("First Commercial"), TYLER BANK AND TRUST,
N.A., Tyler, Texas, a national banking association organized
under the laws of the United States of America and subsidiary
of First Commercial having its principal office in Tyler,
Texas ("TBT"), and CITY NATIONAL BANK, Whitehouse, Texas, a
national banking association organized under the laws of the
United States of America having its principal office in
Whitehouse, Texas ("CNB").
W I T N E S S E T H:
WHEREAS, for good and sound reasons germane to the
business of the parties hereto, the Boards of Directors of
First Commercial, TBT and CNB have each determined that it
would be in the best interests of such corporations and banks,
their respective shareholders, subsidiaries and customers and
the communities they serve for CNB to be merged with and into
TBT, with the stockholders of CNB receiving shares of common
stock of First Commercial, par value $3.00 per share ("First
Commercial Stock") in exchange for the outstanding shares of
common stock of CNB, par value $5.00 per share ("CNB Stock"),
owned by the stockholders of CNB (the "Merger"); and
WHEREAS, the Boards of Directors of First Commercial, TBT
and CNB have, or will have prior to consummation of the
transactions contemplated hereby, adopted resolutions
approving the Merger upon the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, in consideration of these premises and
the mutual promises, representations, covenants and actions
hereinafter set forth, the parties hereto, each intending to
be legally bound hereby, agree as follows:
ARTICLE I
THE PLAN OF MERGER
Section 1.01. Tyler Bank and Trust, N.A.. TBT is a
duly organized national banking association and currently is
an indirect subsidiary of First Commercial but will be, prior
to consummation of the Merger, a wholly-owned direct
subsidiary of First Commercial. First Commercial shall not
permit TBT to conduct any business operations that would
impair or adversely affect the consummation of the Merger.
Prior to consummation of the Merger, First Commercial shall,
and shall cause TBT to, take all necessary and appropriate
action to ratify, approve and adopt this Agreement and to
undertake the performance of all the terms and conditions of
this Agreement to be performed by TBT.
Section 1.02. The Merger. At the Effective Time (as
defined in Section 1.04 hereof) in accordance with this
Agreement and the provisions of the Act of November 7, 1918,
as amended (12 U.S.C. Section 215a), CNB shall be merged with
and into TBT pursuant to this Agreement, the separate
existence of CNB shall cease, and TBT shall continue as the
surviving national banking association under the corporate
name it possesses immediately prior to the Effective Time.
TBT hereinafter may sometimes be referred to as the "Surviving
Bank." The business of the Surviving Bank shall be that of a
national banking association, and the business shall be
conducted at its main office, which shall be located at 100
East Ferguson, Tyler, Texas 75702. The authorized capital
stock and the number of shares of outstanding capital stock of
TBT immediately prior to the Merger shall be the same for TBT
following the Merger.
Section 1.03. Effect of the Merger. At and from and
after the Effective Time the effect of the Merger shall be
that (i) the Surviving Bank shall possess all the rights,
privileges and franchises possessed by each of TBT and CNB,
(ii) all of the property and assets of whatsoever kind or
description of each of TBT and CNB, and all debts due on
whatever account to any of them, including subscriptions for
shares or other choses in action belonging to any of them,
shall be taken and be deemed to be transferred to, and vested
in, the Surviving Bank without further act or deed, and (iii)
the Surviving Bank shall be responsible for all of the
liabilities and obligations of each of TBT and CNB, as
provided by applicable law, in the same manner as if the
Surviving Bank had itself incurred such liabilities or
obligations; but the liabilities of TBT and CNB, or of their
shareholders, directors or officers, shall not be affected,
nor shall the rights of the creditors thereof, or of any
persons dealing with such corporations be impaired by the
Merger, and any claim existing, or action or proceeding
pending, by or against either of TBT or CNB may be prosecuted
to judgment as if the Merger had not taken place, or the
Surviving Bank may be proceeded against, or substituted, in
place of TBT or CNB, as the case may be.
Section 1.04. Consummation of the Merger. The Merger
shall become effective at the time specified in an approval of
merger issued by the Comptroller of the Currency of the United
States. A closing (the "Closing") will be held on the date of
the effective time specified in the approval of merger issued
by the Comptroller of the Currency of the United States,
subject to the fulfillment of each condition set forth in
Article V herein ("Closing Date"). The parties hereto will
use their best efforts to accomplish the Closing before
December 31, 1996. The "Effective Time" shall be 5:00 p.m.,
Little Rock time, on the Closing Date. The Closing will take
place on the Closing Date at the offices of Friday, Eldredge &
Clark in Little Rock, Arkansas, or at such other mutually
agreeable place.
Section 1.05. Articles of Association; Bylaws; Directors
and Officers. The Articles of Association of TBT, as in
effect immediately prior to the Effective Time, shall be the
Articles of Association of the Surviving Bank after the
Effective Time until thereafter amended as provided therein
and under national banking laws. The Bylaws of TBT, as in
effect immediately prior to the Effective Time, shall be the
Bylaws of the Surviving Bank after the Effective Time until
thereafter amended as provided therein and under national
banking laws. The directors and officers of TBT immediately
prior to the Effective Time shall be the directors and
officers of the Surviving Bank after the Effective Time until
their successors are elected and qualified; additionally, Jess
Odom, who currently serves on the Board of Directors of CNB,
will serve as a director after the Effective Time until his
successor is elected and qualified; others currently serving
on the CNB Board may also serve as directors of the Surviving
Bank, however the identity of such individuals has not yet
been determined.
Section 1.06. Merger Consideration; Conversion of
Securities; Rights of Dissenting Shareholders. At the
Effective Time, by virtue of the Merger and without any action
on the part of First Commercial, TBT, CNB or the holders of
any of the securities of such corporations or banks:
(a) Each share of CNB Stock issued and outstanding
immediately prior to the Effective Time (other than shares as
to which dissenters' rights have been perfected and not
withdrawn or otherwise forfeited under 12 U.S.C. Section
215a(b), (c) and (d) ("Dissenting Shares")) shall be canceled
and extinguished and be converted into the right to receive
that number of shares of First Commercial Stock equal to the
result obtained by dividing (Y) 174,492 (the number of shares
of First Commercial Stock to be issued in the Merger), subject
to adjustment as hereinafter provided, by (Z) the number of
outstanding shares of CNB Stock on the Closing Date (such
consideration, as well as any payment due in lieu of
fractional shares of First Commercial Stock as hereinafter
provided being herein referred to as the "Merger
Consideration"); provided, however, that in the event
after the date hereof the shares of First Commercial Stock at
any time outstanding shall be subdivided, by reclassification,
recapitalization, stock dividend, or otherwise, into a greater
number of shares without the actual receipt by First
Commercial of consideration (at least equal to book value) for
the additional number of shares so issued, or the number of
shares of First Commercial Stock at any time outstanding shall
be reduced, by reclassification, recapitalization, reduction
of capital stock, or otherwise, or the outstanding shares of
First Commercial Stock shall be reclassified or changed other
than in such manner, then the number of shares of First
Commercial Stock to be issued in the Merger shall be adjusted
up or down, as appropriate.
(b) No fractional shares of First Commercial Stock shall
be issued as part of the Merger, and in lieu of fractional
shares, First Commercial shall pay a sum in cash equal to the
value of any such fractional share of First Commercial Stock
to which any holder of CNB Stock shall be entitled determined
on the basis of the last reported sales price on the Closing
Date for shares of First Commercial Stock on the Nasdaq
National Market.
(c) At and after the Effective Time, there shall be no
transfers on the stock transfer books of CNB with respect to
shares of CNB Stock issued and outstanding immediately prior
to the Effective Time. If, after the Effective Time,
certificates formerly representing shares of CNB Stock are
presented to First Commercial or its transfer agent, they
shall be canceled and exchanged for the Merger Consideration
as provided in Section 1.07 following, subject to applicable
law in the case of Dissenting Shares.
(d) The rights of holders of Dissenting Shares shall be
governed by 12 U.S.C. Section 215a(b), (c) and (d).
Section 1.07. Exchange of Certificates. From and after
the Effective Time, all certificates representing shares of
CNB Stock, with the exception of certificates representing
Dissenting Shares or shares of CNB Stock held by First
Commercial, shall represent the right to receive shares of
First Commercial Stock on the basis set forth above, and the
right to receive cash in lieu of fractional shares in exchange
therefor, upon the terms and conditions of this Agreement,
subject to applicable abandoned property, escheat and similar
laws. Upon delivery of certificates representing shares of
CNB Stock to the transfer agent of First Commercial, First
Commercial shall cause the transfer agent to issue
certificates representing the requisite number of shares of
First Commercial Stock for each share of CNB Stock represented
by the certificates therefor properly delivered, and First
Commercial shall pay by certified or cashier's check the
amount entitled to be received in lieu of fractional shares.
Notwithstanding the foregoing, neither First Commercial's
transfer agent nor any party hereto shall be liable
to a holder of shares of CNB Stock for any of the Merger
Consideration delivered to a public official pursuant to
applicable abandoned property, escheat and similar laws.
Section 1.08. Rights of CNB Shareholders to Dividends.
Holders of CNB Stock on the Closing Date shall be entitled to
receive, subject to applicable abandoned property, escheat and
similar laws, payment of dividends declared by First
Commercial on or subsequent to the Closing Date, but delivery
of payment of such dividends will not be required of First
Commercial until such persons have delivered their
certificates representing shares of CNB Stock in exchange for
certificates representing shares of First Commercial Stock in
accordance with the provisions of Section 1.07 above.
Notwithstanding the foregoing, First Commercial shall not be
liable to a holder of shares of CNB Stock for any such
dividends delivered to a public official pursuant to any
abandoned property, escheat and similar laws.
ARTICLE II
APPROVAL OF MERGER
Section 2.01. Shareholder Approval. The shareholders
owning at least two-thirds of the capital stock outstanding of
CNB and the sole shareholder of TBT shall approve the Merger
in accordance with applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of CNB. No
representations or warranties are made by any director,
officer, employee or shareholder of CNB as an individual. CNB
represents and warrants to First Commercial the following,
each of which representations and warranties shall be mutual
and continuing and shall be true as of the date of this
Agreement and on the Closing Date:
(a) Authority for Transaction. The Board of Directors
of CNB has duly approved this Agreement and the transactions
contemplated hereby, and upon the execution of this Agreement
by a duly authorized officer of CNB and the approval of this
Agreement and such transactions by the stockholders of CNB and
the appropriate regulatory authorities, this Agreement will
constitute the valid and binding obligation of CNB enforceable
in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time
in effect which affect creditors' rights generally and by
legal and equitable limitations on the availability of
injunctive relief, specific performance and other equitable
remedies which are available only in the discretion of the
court. CNB has full corporate
power, authority and legal right to enter into this Agreement
and, upon approval thereof by its stockholders and by
appropriate regulatory authorities, to consummate the
transactions contemplated hereby.
(b) Organization and Capitalization.
(i) CNB has delivered to First Commercial complete
and correct copies of the Articles of Association, and all
amendments thereto, and Bylaws of CNB as in effect on the date
hereof. CNB is a national banking association duly organized
and validly existing in good standing under the laws of the
United States of America, with full corporate power and
authority to carry on its business as and where it is now
being conducted and to own and lease its properties and assets
in the places where such properties and assets are now or will
be owned or leased. As of the date of this Agreement, the
authorized capital stock of CNB consists of 187,500 shares of
CNB Stock, of which 172,500 shares are issued and outstanding.
All such issued and outstanding shares of CNB Stock have been
fully paid, are validly authorized and duly issued and are
non-assessable, and such shares of CNB Stock have not been
issued in violation of any preemptive rights of stockholders.
There shall be 172,500 shares of CNB Stock outstanding at the
Closing; and such shares shall be delivered to First
Commercial free of any liens or other encumbrances. Except as
set forth in Schedule 3.01(b) to the disclosure statement
delivered by CNB pursuant to Section 4.01(j) hereof (the "CNB
Disclosure Statement"), CNB does not have outstanding any
subscriptions, options or other arrangements or commitments
obligating it to issue or dispose of, and it is not obligated
to issue, any shares of CNB Stock or other securities.
(ii) CNB has no direct or indirect subsidiary.
(c) Financial Statements. CNB has delivered to First
Commercial the following financial statements: the
consolidated balance sheets of CNB as of December 31, 1995 and
1994, together with the consolidated statements of income,
stockholders' equity and cash flow of CNB for the periods then
ended, accompanied by the notes thereto for each of such
years, and the financial statements of CNB dated March 31,
1996 (collectively, the "CNB Financial Statements").
Contemporaneously with its execution and delivery hereof, CNB
will also deliver to First Commercial copies of all of the
periodic reports filed by CNB with banking regulators and
agencies since January 1, 1994. The CNB Financial Statements
were prepared from the books and records of CNB and fairly
present the financial condition, results of operations and
changes in capital accounts and undivided profits of CNB at
the dates and for the periods to which they relate and were
prepared in accordance with generally accepted accounting
principles and general practices within the banking industry
consistently applied. Except as set forth in Schedule 3.01(c)
to the CNB Disclosure Statement, there are no material
obligations or liabilities of CNB, whether absolute, accrued
or contingent (including, without limitation, unfunded
obligations under employee benefit plans or arrangements or
liabilities for federal, state, local or foreign taxes or
assessments) which, in accordance with generally accepted
accounting principles, were required to be reflected or
disclosed in the CNB Financial
Statements and which were not so reflected or disclosed
therein.
(d) Dividends. Since December 31, 1995, no dividend has
been declared or paid on any equity securities of CNB, nor has
CNB purchased or redeemed any of its equity securities, except
as disclosed in Schedule 3.01(d) to the CNB Disclosure
Statement.
(e) Loans. CNB has delivered to First Commercial a
complete and correct copy of CNB's most current written
policies relating to the making, collection, classification
and charge off of loans and other evidence of indebtedness.
CNB has no loans or other evidences of indebtedness in its
loan portfolio that (i) are considered nonperforming or have
been placed on a nonaccrual status in accordance with the
policies of CNB; (ii) are classified by CNB as other loans
especially mentioned, substandard, doubtful, or loss loans;
(iii) are sixty (60) days or more past due; (iv) are in excess
of $50,000 principal amount for any such loans individually
and have been renegotiated as to payment terms or collateral
because of credit risks associated with such loans; or (v) to
its knowledge are subject to any defenses, offsets or
counterclaims that may be asserted against the present holder
thereof, except in each case as disclosed in Schedule 3.01(e)
to the CNB Disclosure Statement.
(f) Taxes. CNB has timely filed returns for all
federal, state and local taxes of CNB to the extent such
filings and payments were required to be made prior to the
date of this Agreement. Such returns are true and correct in
all material respects. CNB has not had any tax deficiencies
proposed or assessed against it nor has CNB executed any
waiver of or extended the statute of limitations on the audit
of any tax return or the assessment or collection of any tax.
To its knowledge, all taxes which CNB is required by law to
pay, and governmental charges levied or assessed against the
property or the business of CNB, have been paid in full, other
than taxes or charges the payment of which is not yet due or
which, if due, are not yet delinquent or are being contested
in good faith or have not been finally determined. Except as
has been indicated to First Commercial in the CNB Disclosure
Statement, the amount to be set up as accruals for taxes on
the December 31, 1995, balance sheet for CNB ("CNB Balance
Sheet") is sufficient in all material respects for the payment
of all unpaid taxes and governmental charges of all kinds,
applicable to the property or
business of CNB for the period ended on December 31, 1995, and
all periods prior thereto. Except as disclosed in Schedule
3.01(f) to the CNB Disclosure Statement, no tax returns or
reports of CNB have been audited by the Internal Revenue
Service or any state taxing authority within the past five
years.
(g) Litigation and Regulatory Matters. CNB has
disclosed in Schedule 3.01(g) to the CNB Disclosure Statement
all material actions, suits, proceedings and investigations
pending or threatened in writing against or affecting CNB or
any property or rights of CNB, or its officers or directors
(in their capacity as such) at law or in equity, or before or
by any court or other governmental instrumentality. Except to
the extent so disclosed in Schedule 3.01(g) to the CNB
Disclosure Statement, none of such actions, suits, proceedings
or investigations, either (i) involves a claim for an amount
exceeding the amount recoverable under any applicable
insurance policies, subject to the deductible amounts under
such policies, (ii) resulted or would result, if adversely
determined, in any material adverse change in the business,
operations, prospects or assets or the condition, financial or
otherwise, of CNB or (iii) would prevent the CNB stockholders
from approving and consummating the transactions contemplated
herein. Except as so disclosed in Schedule 3.01(g) to the CNB
Disclosure Statement, CNB is not subject to any continuing
court or administrative order, writ, injunction, decree,
agreement, memorandum or letter applicable specifically to it
or to its business, property or employees, and is not in
default with respect to any material order, writ, injunction,
decree, agreement, memorandum or letter of any court or other
governmental instrumentality.
(h) Compliance. To the best of its knowledge, CNB has
complied in all material respects with, and CNB is not in
default in any material respect under, any law, ordinance,
requirement, rule, regulation or order applicable to its
business or to the assets owned, used or occupied by it
(including, without limitation, the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), licensing
requirements with respect to its personnel and all federal and
state consumer credit laws, rules and regulations), and CNB
has filed with the proper authorities all statements and
reports required by the laws, regulations, licensing
requirements and orders to which it or any of its employees
(because of their activities on behalf of CNB) are subject,
and CNB possesses all licenses, franchises, permits and
governmental authorizations necessary to conduct its business
in the manner in which and in the jurisdictions and places
where such business is now conducted.
(i) Properties and Other Assets. CNB has good and
indefeasible fee simple title to, or, as the case may be,
valid and subsisting leasehold interests in, all its
properties, interests in properties and other assets, real and
personal, (i) reflected on the CNB Balance Sheet (except for
capitalized lease
properties) or (ii) acquired since the date thereof, except
to the extent such properties and assets are or were
thereafter disposed of for fair value in the ordinary course
of business. Except as set forth in Schedule 3.01(i) to the
CNB Disclosure Statement, all such properties and assets are
free and clear of all liens, charges and encumbrances, except
(i) those set forth or reflected in the CNB Balance Sheet (ii)
liens for taxes not yet due and payable or being contested in
good faith and (iii) defects in title and liens, charges and
encumbrances, if any, as do not materially detract from the
value, or materially interfere with the present or proposed
use, of the property or asset subject thereto or affected
thereby or as do not otherwise materially impair business
operations of CNB. The operation of the properties and
business of CNB in the manner in which it is now operated does
not violate any zoning ordinances or municipal regulations in
such a way as could, if such ordinances or regulations were
enforced, result in any material impairment of the uses of its
properties for the purposes for which they are now operated.
Except as set forth in Schedule 3.01(i) to the CNB Disclosure
Statement, no asset included in the CNB Balance Sheet was
valued in excess of its original cost less accumulated
depreciation or, in the case of investment securities and
loans purchased at a discount or premium, in excess of
original cost, adjusted for amortization of premiums or
accretion of discounts, with the exception of securities
classified as available for sale in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 115, which are
carried at fair market value. There are no (i) patents,
trademarks, trade names or copyrights or applications therefor
owned by or registered in the name of CNB, or in which CNB has
rights, which have not been disclosed in the CNB Disclosure
Statement (other than rights held by CNB as a secured party in
the ordinary course of its lending business), (ii) license
agreements to which CNB is a party, either as a licensor or
licensee, with respect to any patents, trademarks, tradenames
or copyrights which have not been disclosed in the CNB
Disclosure Statement or (iii) claims that in the conduct of
its business, as now conducted, CNB is infringing on any
patents, trademarks, trade names or copyrights of others which
have not been disclosed in the CNB Disclosure Statement. CNB
has obtained all necessary permits and certificates for the
use and occupancy of the real estate owned, leased or used by
it and the improvements thereon and systems therein, and such
use and occupancy is in full compliance with all federal,
state and local laws, rules and regulations. To the best of
CNB's knowledge, no material fact or condition exists which
would result in the termination or impairment in the
furnishing of any water, sewer, gas, electricity, telephone,
drainage or other services and equipment to the real estate
owned, leased or used by CNB.
(j) Agreement Does Not Violate Other Instruments.
Subject to obtaining any required consents and approvals
(which consents and approvals are disclosed in Schedule
3.01(j) to the CNB
Disclosure Statement and which CNB will use its reasonable
best efforts to obtain prior to Closing), the execution and
delivery of this Agreement by CNB does not, and the
consummation of the transactions contemplated hereby will not,
to the best of CNB's knowledge, (i) violate any provision of
the Articles of Association or Bylaws of CNB, as in effect
immediately prior to the execution hereof, (ii) violate any
provision of, or result in any breach or termination of, or
constitute a default under, or constitute an event which with
notice or lapse of time, or both, would become a default
under, or result in the creation of any material lien,
security interest, charge or encumbrance upon any property of
CNB under, any material lease, indenture, or other agreement
or instrument to which CNB is a party or by which CNB may be
bound or affected or under which CNB receives benefits, (iii)
violate any law, rule, regulation, order, writ, injunction or
decree or administrative memorandum, agreement or letter
applicable to CNB or (iv) result in the loss or material
adverse modification of any license, franchise, permit or
other authorization granted to or otherwise held by CNB.
(k) Insurance and Fidelity Bonds.
(i) CNB carries fire, liability and other insurance
with respect to its property and business in such amounts and
against such risks as is customary, usual and prudent for a
company of its size and as its management reasonably believes
to be adequate for the business conducted by it. Schedule
3.01(k) to the CNB Disclosure Statement sets forth a complete
and accurate schedule, including the type of policy, policy
number, the limits of coverage, the insurance carrier, the
insurance agent or broker and the expiration date, of all
insurance policies, letters of credit, performance bonds and
fidelity bonds at any time held by, for the benefit of, or
issued to CNB and now in force (collectively, the "Insurance
Policies"). Except as disclosed in Schedule 3.01(k) to the
CNB Disclosure Statement, CNB has not forfeited or waived any
claim under any Insurance Policy and CNB has, to the best of
its knowledge, fully complied with the material terms and
conditions thereof. Schedule 3.01(k) to the CNB Disclosure
Statement sets forth all property damage and personal injury
claims asserted against CNB during the past five (5) years, or
otherwise still pending. Except as otherwise set forth in
Schedule 3.01(k) to the CNB Disclosure Statement, all of such
claims have been or are being defended by insurance carriers
without reservation and are or will be covered by the
Insurance Policies. CNB has not received a notification from
any insurance carrier denying or disputing any claim made by
it, denying or disputing any coverage for any such claim,
denying or disputing the amount of any claim, or regarding the
possible termination, cancellation or amendment of or premium
increases with respect to any of the Insurance Policies. CNB
does not have any claims pending or anticipated against any of
the insurance carriers under any of such Insurance Policies
and there has been no actual or alleged occurrence of any kind
which may give rise to any such claim.
(ii) Since January 1, 1991, CNB has continuously
maintained fidelity bonds insuring it against acts of
dishonesty by its employees in such amounts as is deemed
prudent by management. Since January 1, 1991, there have been
no claims under such bonds, except as disclosed in Schedule
3.01(k) to the CNB Disclosure Statement, and CNB is not aware
of any facts that would form the basis of a claim under such
bonds.
(l) Retirement Plans. CNB has disclosed in Schedule
3.01(l) to the CNB Disclosure Statement each employee benefit
plan (as defined in Section 3(3) of ERISA) or other plan
maintained for its employees or under which any one of them
has any present or future liability (each a "Plan"), and true
and complete copies of all Plans will be delivered to First
Commercial, together with the most recent Internal Revenue
Service determination letters, annual reports (Form 5500
Series) and accompanying schedules, summary plan descriptions,
certified financial statements (if available) and actuarial
reports related thereto, within five (5) business days
following the execution and delivery hereof by CNB. With
respect to each Plan for which an annual report has been
filed, no material adverse change has occurred with respect to
the matters covered by the annual report since the date
thereof, except as has been disclosed in writing to First
Commercial. There are no unfunded vested benefits under any
Plan which are subject to the vesting and funding standards of
ERISA, and none of the Plans is a multiemployer plan within
the meaning of Section 3(37) of ERISA. Each of the Plans
covered by ERISA (i) has been operated in all material
respects in accordance with ERISA, (ii) has not engaged in any
"prohibited transaction" (as such term is defined in Section
4975 of the Internal Revenue Code of 1986, as amended (the
"Code") or in Section 406 of ERISA) which would result in a
material penalty, and (iii) has met the minimum funding
standards of Section 412 of the Code, if applicable. Each of
the Plans which is an employee pension benefit plan (as
defined in Section 3(2) of ERISA) ("Pension Plan") that is
intended to "qualify" under Section 401(a) of the Code, is
qualified within the meaning of Section 401 (a) of the Code,
except as heretofore disclosed in writing to First Commercial,
and a favorable determination letter has been issued by the
Internal Revenue Service with respect to each such qualified
Pension Plan. No Pension Plan has been amended since issuance
of the most recent determination letter by the Internal
Revenue Service with respect thereto, except as disclosed in
Schedule 3.01(l) to the CNB Disclosure Statement. Each
Pension Plan has been administered in accordance with Section
401(a) of the Code, where applicable. No Reportable Event
(within the meaning of Section 4043 of ERISA) has occurred
with respect to any Plan which would result in material
liability to CNB. Since the enactment of ERISA, CNB has not
completely or partially terminated any employee pension
benefit plan or withdrawn from any multiemployer pension plan.
No proceeding by the Pension
Benefit Guaranty Corporation has been instituted or threatened
to terminate, pursuant to Subtitle C of Title IV of ERISA, any
Plan. There is no suit, action or proceeding pending or
threatened against or affecting or likely to have a material
adverse impact on any Plan. One or more of the Plans may be
covered by the Consolidated Omnibus Budget Reconciliation Act
of 1986 ("COBRA"). If so, each such plan has been operated
in, and is in, compliance with COBRA. All notices required to
be given under COBRA have been timely and properly given in
accordance with COBRA, and the rules and regulations
promulgated thereunder, and no employee, former employee or
"qualified beneficiary" (as defined in COBRA) has any claim or
contingent claim against CNB for failure to comply with COBRA
or the rules and regulations promulgated thereunder. Schedule
3.01(l) to the CNB Disclosure Statement lists all persons
currently eligible for benefits under COBRA.
(m) Employee Relations.
(i) No employee of CNB is a party to a collective
bargaining agreement. There are no pending or threatened
labor disputes with any of the employees of CNB. Schedule
3.01(m) to the CNB Disclosure Statement discloses the names of
all personnel employed by CNB whose total annual compensation
(including bonuses and the like) from CNB exceeds Twenty-Five
Thousand Dollars ($25,000) and the total annual compensation
of each. CNB has no knowledge of any facts that would
indicate that any employee will not continue in his current
employment, subject to normal turnover, except as disclosed in
Schedule 3.01(m) to the CNB Disclosure Statement.
(ii) CNB has not entered into or agreed to enter
into any employment agreement or covenant not to compete
agreement, granted or agreed to grant any increase in the
wages, salaries or other compensation of any of its employees
or directors, paid or agreed to pay any bonus to any of its
employees, directly or indirectly paid or made a commitment to
pay any severance or termination payment to any of its
employees or entered into or agreed to enter into any
consulting agreement or other agreement for the purchase of
services, except as disclosed in Schedule 3.01(m) to the CNB
Disclosure Statement.
(n) No Material Events. Except as disclosed in Schedule
3.01(n) to the CNB Disclosure Statement, or in the cases of
clauses (i), (ii), (iii) and (iv) below, except for
transactions in the ordinary course of business consistent
with past practices, since December 31, 1995, CNB has not (i)
incurred or become subject to, or agreed to incur or become
subject to, any material obligation or liability, absolute or
contingent; (ii) discharged or satisfied or agreed to
discharge or satisfy any lien or encumbrance or paid any
obligation or liability, absolute or contingent; (iii)
canceled or agreed to cancel any material debts or claims or
waived any material right; (iv) made or permitted or agreed to
make or permit any material amendment
or termination of any material contract, lease, arrangement,
license or other instrument to which it is a party; (v) made
any material change in its method of accounting; (vi) made any
material capital expenditures or entered into commitments
therefor; (vii) made or agreed to make any loan or loans to
any one person that would cause such person to have
outstanding loans from CNB exceeding in the aggregate One
Hundred Thousand Dollars ($100,000) (The term "person," for
purposes of this clause, shall include, in addition to an
individual, the persons specified in Rule 144(a)(2) under the
Securities Act of 1933.); (viii) purchased or sold or agreed
to purchase or sell any tax-exempt bonds; (ix) made, renewed
or extended or agreed to make, renew or extend any
nonadjustable rate loans with maturities exceeding sixty (60)
months; (x) repossessed or purchased in a foreclosure action
any personal or real property in an amount exceeding $25,000;
(xi) charged any loan to the reserve for loan and lease losses
or established any special allocation thereto; (xii) sold or
transferred or agreed to sell or transfer any loans or other
real estate owned; (xiii) mortgaged or pledged any of its
material assets, tangible or intangible, or permitted any of
its material assets, tangible or intangible, to become
subjected to any lien, charge or other encumbrance (other than
liens for real estate taxes not yet due and payable and
mechanics', materialmen's and similar liens imposed by statute
that are being contested in good faith); (xiv) sold, assigned
or transferred any material asset or property of any nature
whatsoever, whether real, personal or mixed, tangible or
intangible; or (xv) made any material change in its business
or operations or entered into any other material transaction.
(o) Liabilities. The liabilities on the CNB Balance
Sheet consist solely of obligations and liabilities incurred
by CNB in the ordinary and regular course of its business. As
of December 31, 1995, CNB had no material and adverse
liabilities or obligations of any nature whatsoever,
including, without limitation, fixed or contingent, accrued,
absolute, matured or unmatured, or any "loss contingencies"
considered "probable" or "reasonably estimable" within the
meaning of the Financial Accounting Standards Board's SFAS No.
5, which were not recorded on the CNB Balance Sheet. CNB is
not obligated to make any material investment, directly or
indirectly, in any person, corporation, association,
partnership, joint venture, trust or other entity, except for
investments in investment securities and other evidences of
indebtedness made in the ordinary course of business
consistent with past practices.
(p) Marketability of Securities. Except for pledges to
secure public and trust deposits and repurchase agreements,
which are disclosed in Schedule 3.01(p) to the CNB Disclosure
Statement, none of the investments reflected in the CNB
Balance Sheet under the heading "Investment Securities" and
none of the investments made since such date is subject to any
"investment" or other restriction, whether contractual or
statutory, which
materially impairs the ability of the holder thereof to freely
dispose of such investment in the open market at any time.
(q) Interested Party Transactions. Except as set forth
in Schedule 3.01(q) to the CNB Disclosure Statement, CNB is
not a party to, and none of its property is bound or affected
by, nor does CNB receive benefits under, any written or oral
or express or implied contract or other arrangement in which a
material interest is held by an officer or director of CNB or
any "associate" of any such officer or director, as that term
is defined in Rule 14a-1 under the Securities Exchange Act of
1934, as amended, which is not on substantially the same terms
(including, without limitation, in the case of lending
transactions, interest rates, maturity schedule and
collateral) as those prevailing at the time for comparable
transactions with unrelated parties or which involves more
than normal risk of collectibility or which involves other
unfavorable features. Schedule 3.01(q) to the CNB Disclosure
Statement contains (i) a list of all amounts paid or to be
paid by CNB to, or received or to be received by CNB from, any
officer or director of CNB or any "associate" of any such
officer or director during the current and the last fiscal
year for products or services, not including employee
services, and (ii) a description of all loans from CNB to any
of such persons outstanding at any time after January 1, 1991.
(r) Material Contracts. Schedule 3.01(r) to the CNB
Disclosure Statement contains a list of all written, and a
brief description of all oral, material contracts, agreements,
leases, commitments, licenses, instruments or obligations not
listed in another exhibit hereto to which CNB is a party or by
which any of its assets is bound. CNB is not a party to, and
none of its property is bound or affected by, and CNB does not
receive benefits under, any written or oral or express or
implied contract or other arrangement which is not in the
ordinary course of business consistent with its past
practices, except as has been disclosed in Schedule 3.01(r) to
the CNB Disclosure Statement. CNB has, in all material
respects, performed all of the obligations required to be
performed by it to date and it is not in default in any
material respect under any material contract, lease, insurance
policy, commitment or arrangement to which it is a party or by
which it or its property may be bound or affected or under
which it or its property receives benefits, and there has not
occurred any event which with the lapse of time or giving of
notice or both would constitute such a default. All such
contracts, leases, insurance policies and other instruments
are in full force and effect, are binding obligations of the
respective parties thereto in accordance with their terms,
except that the enforceability of such obligations may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws from time to time in effect
that affect creditors' rights generally and by legal and
equitable limitations on the availability of injunctive
relief, specific performance and other equitable
remedies which are available only in the discretion of the
court, and there are no defenses, offsets or counterclaims
thereto which may be made by any party thereto other than CNB,
and CNB has not waived any substantial rights thereunder. CNB
is not a party to or otherwise bound by any contract,
agreement, plan, lease, license, commitment or undertaking
which is materially adverse, materially onerous, or materially
harmful to any material aspect of the business or prospects of
CNB.
(s) Environmental Matters. To the best of CNB's
knowledge, except as disclosed in Schedule 3.01(s) to the CNB
Disclosure Statement, none of the properties owned by CNB
contains hazardous materials, waste or substances that cannot
be easily removed and cleaned up, and, in the case of
asbestos, completely abated. For purposes of this provision,
a hazardous material, waste or substance is deemed easily
removed and cleaned up, and, in the case of asbestos,
completely abated, if the cost of such removal, clean-up,
remediation, restoration of natural resources, or abatement
does not exceed Fifty Thousand Dollars ($50,000) in the
aggregate and if such removal, clean-up, remediation,
restoration of natural resources, or abatement does not
materially interfere with the day-to-day operations of CNB.
Except as disclosed in Schedule 3.01(s) to the CNB Disclosure
Statement, CNB has no knowledge that any of the outstanding
loans of CNB are secured by properties that contain hazardous
materials, wastes, or substances that cannot be removed and
cleaned up, and, in the case of asbestos, completely abated,
at an expense not exceeding ten percent (10%) of the fair
market value of such properties. As used herein, "hazardous
substance" or "hazardous material" means substances subject to
reporting under Title III of the Superfund Amendments and
Reauthorization Act of 1986, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act, as
amended, or the Resource Conservation and Recovery Act, as
amended; petroleum; petroleum products; substances regulated
by the Toxic Substance Control Act, as amended; substances
regulated by the Federal Insecticide, Fungicide, and
Rodenticide Act, as amended; or any hazardous, toxic, or
dangerous waste, substance, or material defined as such in the
above-referenced Acts, or any federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability standards of
conduct concerning any hazardous, toxic or dangerous waste,
substance, or material as now or at any time hereafter in
effect. To CNB's knowledge, it has not loaned money against
the securities or assets of any company or other association
that it knows has failed to obtain all permits, licenses,
approvals, and other authorizations that are required under
federal, state and local laws and regulations relating to
emissions, discharges, wetlands, releases, or threatened
releases of pollutants, contaminants or hazardous or toxic
materials or waste into ambient air, surface water, ground
water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, release, discharge,
emission, storage, disposal, transport or handling of
pollutants, contaminants or hazardous or toxic materials or
waste. To CNB's knowledge, it has not loaned money against
the securities or assets of any company or other association,
and it has not at any time owned property, that is presently
or that CNB has knowledge may in the future potentially be
subject to any claim, action, suit, proceeding, hearing,
investigation, injunction, notice of violation, consent
administrative order, or penalty arising out of or relating to
the manufacture, presence, processing, distribution, use,
treatment, release, discharge, emission, storage, disposal,
transport or handling of any pollutant, contaminant, or
hazardous or toxic material or waste.
(t) Property Sites Owned by CNB. Set forth on Schedule
3.01(t) is a complete and accurate list of locations
(identified by address, owner/operator, type of facilities
located on the property, and period of time owned, leased or
used by CNB) of all real estate that CNB presently owns or
leases.
(u) Representations Not Misleading. No representation
or warranty by CNB in this Agreement or in any exhibit
attached hereto or in the CNB Disclosure Statement, nor any
statement or disclosure furnished to First Commercial by or on
behalf of CNB under and pursuant to this Agreement, knowingly
contains or will knowingly contain any untrue statement of a
material fact or knowingly omits or will knowingly omit to
state a material fact necessary to make the statements
contained herein or therein not misleading.
Section 3.02. Representations and Warranties of First
Commercial. No representations or warranties are made by any
director, officer, employee or shareholder of First Commercial
as an individual. First Commercial represents and warrants to
CNB, for itself and on behalf of TBT, the following, each of
which representations and warranties shall be mutual and
continuing and shall be true as of the date of this Agreement
and on the Closing Date:
(a) Organization and Capitalization of First Commercial.
First Commercial has delivered to CNB complete and correct
copies of the Second Amended and Restated Articles of
Incorporation, as amended, and Bylaws of First Commercial as
in effect on the date of such delivery. First Commercial is
an Arkansas corporation duly organized and validly existing
and in good standing under the laws of Arkansas, with full
corporate power and authority to carry on its business as and
where conducted and to own and lease its properties and assets
in the places where such properties and assets are now or will
be owned or leased. As of the date of this Agreement, the
authorized capital stock of First Commercial consists of
34,000,000 shares of First Commercial Common Stock, of which
27,315,448 shares are outstanding, and 400,000 shares of
preferred stock, each $1.00 par value, of which no shares are
outstanding. All issued and
outstanding shares of First Commercial Common Stock are, and
all shares of First Commercial Common Stock to be issued to
the stockholders pursuant to this Agreement will be, validly
authorized, duly issued, fully paid and nonassessable shares
of First Commercial Common Stock, and such shares have not
been, or will not be, issued in violation of any preemptive
rights of stockholders. Except as described in the financial
information provided to CNB by First Commercial, First
Commercial does not have outstanding any subscriptions,
options or other arrangements or commitments obligating First
Commercial to issue or dispose of, and it is not obligated to
issue, any shares of First Commercial Common Stock or other
securities. Since April 1, 1996, no dividends have been
declared or paid on any equity securities of First Commercial,
nor has First Commercial purchased or redeemed any of its
equity securities, except, in both instances, as disclosed in
the First Commercial Financial Statements (as hereinafter
defined) or in writing to CNB.
(b) Organization of TBT. First Commercial has delivered
to CNB complete and correct copies of the Articles of
Association and Bylaws of TBT, as in effect on the date of
such delivery. TBT is a national banking association duly
organized and validly existing and in good standing under the
laws of the United States of America, with full corporate
power and authority to carry on its business as and where
conducted and to own or lease properties and assets in the
places where such properties or assets are now owned or
leased.
(c) Authority for Transaction. The Boards of Directors
of First Commercial and TBT have, or will have prior to
consummation of the transactions contemplated hereby, approved
this Agreement and the transactions contemplated hereby, and
this Agreement constitutes the valid and binding obligation of
First Commercial and TBT enforceable in accordance with its
terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws from time to time in effect which affect
creditors' rights generally and by legal and equitable
limitations on the availability of injunctive relief, specific
performance and other equitable remedies which are available
only in the discretion of the court. First Commercial and TBT
have full corporate power and authority and legal right to
execute and deliver this Agreement and, upon approval thereof
by the necessary regulatory authorities, to consummate the
transactions contemplated hereby. First Commercial agrees
that it will vote the stock of TBT in favor of this Agreement
and the transactions contemplated hereby.
(d) Agreements Do Not Violate Other Instruments.
Subject to obtaining any required consents and approvals
(which consents and approvals have been disclosed in writing
to CNB and which will be obtained by First Commercial and TBT
prior to Closing) the execution and delivery of this Agreement
by First Commercial does not, and the consummation of the
transactions contemplated
by this Agreement will not, (i) violate any provision of the
Second Amended and Restated Articles of Incorporation, as
amended, or Bylaws of First Commercial or the Articles of
Association or Bylaws of TBT, (ii) violate any provision of,
or result in any breach or termination of, or constitute a
default under, or constitute an event which with notice or
lapse of time, or both, would become a default under, any
material lease, indenture or other agreement (written or oral)
or other instrument to which First Commercial or TBT is a
party or by which First Commercial or TBT may be bound or
affected, (iii) violate any material law, rule, regulation,
order, writ, injunction or decree or administrative
memorandum, agreement or letter to which First Commercial or
TBT is a party or by which First Commercial or TBT may be
bound or affected, or (iv) result in the material loss or
material adverse modification of any material license,
franchise, permit or other authorization granted to or held by
First Commercial or TBT.
(e) Representations Not Misleading. No representation
or warranty by First Commercial in or required by this
Agreement, nor any statement, exhibit or disclosure furnished
to CNB by or on behalf of First Commercial under and pursuant
to this Agreement, knowingly contains or will knowingly
contain any untrue statement of a material fact or knowingly
omits or will knowingly omit to state a material fact
necessary to make the statements contained herein or therein
not misleading.
(f) Financial Statements. First Commercial has
delivered to CNB the following financial statements: the
consolidated balance sheets of First Commercial as of December
31, 1995 and 1994, together with the consolidated statements
of income, stockholders' equity and cash flow of First
Commercial for the periods then ended, accompanied by the
notes thereto, and an unqualified audit report of Ernst &
Young for such years (the "First Commercial Financial
Statements"). First Commercial has also made available to CNB
copies of all periodic reports and proxy statements filed by
First Commercial with the Securities and Exchange Commission
since January 1, 1994, and copies of all of the periodic
public reports filed by the banking subsidiaries of First
Commercial (the "First Commercial Banks") with the Arkansas
State Bank Department, the Office of the Comptroller of the
Currency or the Federal Deposit Insurance Corporation since
January 1, 1995. The First Commercial Financial Statements
are complete and correct and have been prepared from the books
and records of First Commercial and the First Commercial
Banks, which accurately and fairly reflect the transactions
and dispositions of assets of First Commercial and the First
Commercial Banks and fairly present the financial condition,
results of operations and changes in capital accounts and
undivided profits of First Commercial and the First Commercial
Banks at their respective dates and for the periods to which
they relate except as may be disclosed in writing to CNB. The
First Commercial Financial Statements were prepared in
accordance with generally accepted accounting principles and
general practices within the banking industry consistently
applied. There are no material obligations or liabilities of
First Commercial or the First Commercial Banks, whether
absolute, accrued or contingent (including, without
limitation, unfunded obligations under employee benefit plans
or arrangements or liabilities for federal, state, local or
foreign taxes or assessments) which, in accordance with
generally accepted accounting principles, were required to be
reflected or disclosed in the First Commercial Financial
Statements and which are not so reflected or disclosed
therein, except as disclosed in writing to CNB. The
allowances for loan losses of the First Commercial Banks, as
reflected in the First Commercial Financial Statements, are
adequate as determined by generally accepted accounting
principles.
(g) Litigation and Regulatory Matters. First Commercial
and the First Commercial Banks have disclosed in writing to
CNB all material actions, suits, proceedings and
investigations pending or, to the knowledge of First
Commercial or any First Commercial Bank, threatened against or
affecting First Commercial or any First Commercial Bank or any
property or rights of First Commercial or any First Commercial
Bank, or their respective officers or directors (in their
capacity as such) at law or in equity, or before or by any
court or other governmental instrumentality. Except to the
extent so disclosed to CNB, none of such actions, suits,
proceedings or investigations, in the opinion of First
Commercial and the First Commercial Banks, either (i) involves
a claim for an amount exceeding the amount recoverable by
First Commercial or any First Commercial Bank under any
applicable insurance policies, subject to the deductible
amounts under such policies, (ii) resulted or will result, if
adversely determined, in any material adverse change in the
business, operations, prospects or assets or the condition,
financial or otherwise, of First Commercial or any First
Commercial Bank or (iii) would prevent First Commercial, as
the sole shareholder of TBT, from approving and consummating
the transactions contemplated herein. Except as so disclosed
to CNB, neither First Commercial nor any First Commercial Bank
is subject to any continuing court or administrative order,
writ, injunction or decree, applicable specifically to it or
to its business, property or employees, and neither First
Commercial nor any First Commercial Bank is in default with
respect to any order, writ, injunction or decree of any court
or other governmental instrumentality.
(h) Compliance. To the best of their knowledge, First
Commercial and the First Commercial Banks have complied in all
material respects with, and they are not in default in any
material respect under, any law, ordinance, requirement, rule,
regulation or order applicable to their businesses or to the
assets owned, used or occupied by them, and First Commercial
and the First Commercial Banks possess all licenses,
franchises, permits and governmental authorizations necessary
to conduct
their respective businesses in the manner in which and in the
jurisdictions and places where such businesses are now
conducted.
(i) No Material Events. Except as reflected in the
First Commercial Financial Statements or as may be disclosed
in writing to CNB and except for transactions in the ordinary
course of business consistent with past practices of First
Commercial, since December 31, 1995, First Commercial has not
experienced any material adverse changes in the condition
(financial or otherwise) of its properties, assets,
liabilities, business, operations or prospects.
(j) Taxes. First Commercial and the First Commercial
Banks have timely filed returns for all federal, state and
local taxes of First Commercial and the First Commercial Banks
to the extent such filings and payments were required prior to
the date of this Agreement, and such returns are true and
correct in all material respects. Neither First Commercial
nor the First Commercial Banks has had any tax deficiencies
proposed or assessed against them and neither First Commercial
nor the First Commercial Banks has executed any waiver of or
extended the statute of limitations on the audit of any tax
return or the assessment or collection of any tax. All taxes
and governmental charges levied or assessed against the
property or the business of First Commercial or the First
Commercial Banks have been paid in full, other than taxes or
charges the payment of which is not yet due or which, if due,
is not yet delinquent or is being contested in good faith or
has not been finally determined. Except as indicated in
writing to CNB, the amount to be set up as accruals for taxes
on the December 31, 1995, balance sheet for First Commercial
is sufficient in all material respects for the payment of all
unpaid taxes and governmental charges of all kinds, applicable
to the property or business of First Commercial and the First
Commercial Banks for the period ended on December 31, 1995,
and all periods prior thereto.
(k) Insurance. During each of the past three calendar
years First Commercial and its properties have been insured
for customary risks, all with limits, deductibles, and
exclusions as are customary in the banking industry. Such
insurance protection continues in effect, and First Commercial
is not aware of any facts or events relating to its operations
or financial condition which reasonably can be expected to
increase materially the premiums or reduce the coverage under
any of such policies, except as has been indicated in writing
to CNB.
(l) ERISA Plans. No ERISA Plans of First Commercial,
nor any trustee, administrator or fiduciary thereof, has
engaged in a "prohibited transaction," as such term is defined
in Section 4974 of the Code or Title I of ERISA, which could
subject the ERISA Plans, or any of them, or any trustee,
administrator, or fiduciary thereof, or any party dealing with
the ERISA Plans, or any such trust, to any material tax or
penalty on prohibited
transactions imposed by Section 4975 of the Code or liability
under Title I of ERISA. The execution and delivery of this
Agreement and consummation of the transactions contemplated
herein will not involve any transaction prohibited by ERISA or
by Section 4975 of the Code. None of the ERISA Plans of First
Commercial has been terminated nor have any proceedings to
terminate such plans been instituted, nor have there been any
"reportable events," as that term is defined in Section 4043
of ERISA, since the effective date of ERISA that have not
already been reported by the filing of appropriate Form 5500
in accordance with ERISA requirements.
(m) Employee Relations. Neither First Commercial nor
the First Commercial Banks has agreements with any labor or
other organization representing employees for collective
bargaining or other labor relations purposes.
(n) Properties and Other Assets. First Commercial and
the First Commercial Banks have good and marketable fee simple
title to, or, as the case may be, valid and enforceable
leasehold interest in, all their respective properties,
interests in properties and other assets, real and personal,
(i) reflected on the First Commercial Financial Statements or
(ii) acquired since the date thereof, except to the extent
such properties and assets are or were thereafter disposed of
for fair value in the ordinary course of business. All such
properties and assets are free and clear of all liens, charges
and encumbrances, except (X) those set forth or reflected in
the First Commercial Financial Statements, (Y) liens for taxes
not yet due and payable or being contested in good faith and
(Z) defects in title and liens, charges and encumbrances, if
any, as do not materially detract from the value, or
materially interfere with the present or proposed use, of the
property or assets subject thereto or affected thereby or as
do not otherwise materially impair business operations of
either First Commercial or the First Commercial Banks.
(o) Environmental Matters. To the best of its knowledge
and except as identified in writing to CNB, neither First
Commercial nor any of its subsidiaries has any present or past
environmental condition under which First Commercial has or
may become materially liable to any person or by reason of
which any First Commercial assets may be subjected to any
material lien, or by reason of which First Commercial may
materially violate any environmental law or order.
ARTICLE IV
COVENANTS
Section 4.01. Covenants of CNB. CNB hereby covenants and
agrees that between the date hereof and the Effective Date:
(a) Approval of Transaction and Consents. CNB will
submit this Agreement and the transactions contemplated hereby
to its
shareholders for their approval, and CNB will recommend
approval of this Agreement and such transactions, with
shareholder approval to be evidenced by written consent or by
the vote of the requisite number of its shareholders at a
meeting thereof to be duly called, properly noticed and held
as soon as practicable. CNB shall use its best efforts to
obtain all licenses, approvals and consents of any federal,
state or other regulatory agency having jurisdiction and of
any other party to the extent that such licenses, approvals or
consents are required of CNB to effect the Merger and the
transactions contemplated hereby, or are required pursuant to
Section 3.01(j) hereof.
(b) Access to Corporate Records. To the extent
permitted by law, until the Closing Date, CNB will upon
reasonable notice afford to First Commercial and its
employees, agents and representatives, including its
accountants, Ernst & Young LLP, reasonable access during
normal business hours to all of the offices, property,
documents, contracts, books and records of CNB and such
additional information with respect to the business affairs
and properties of CNB as First Commercial from time to time
may reasonably request. CNB will make their stock transfer
records available to the extent necessary to effectuate the
intent of this Agreement. Upon the request of First
Commercial, CNB will furnish abstracts of title or title
insurance policies to real property owned (other than other
real estate owned) or leased by CNB, current as of a date at
or after the acquisition of ownership or possession thereof,
as applicable, and copies of any unrecorded leases to which
either is a party.
(c) Monthly Financial Statements. CNB shall promptly
provide First Commercial with copies of all the monthly
financial statements for CNB ("Monthly Financial Statements")
for each of the monthly periods ending between the date of
this Agreement and the Closing Date. The Monthly Financial
Statements shall be accompanied by a certificate of the
President or Chief Financial Officer of CNB to the effect that
the Monthly Financial Statements fairly reflect in all
material respects the transactions and dispositions of assets
of CNB and the financial condition and results of operations
of CNB at the dates and for the periods to which they relate,
subject to normal year-end audit adjustments. In addition,
the Monthly Financial Statements shall be prepared in
accordance with generally accepted accounting principles and
general practices within the banking industry consistently
applied, except as otherwise set forth in the President's or
Chief Financial Officer's certificates. CNB shall also
promptly provide to First Commercial copies of all reports and
correspondence filed by CNB during such period with banking
regulators and agencies or received by CNB from same to the
extent permitted by law.
(d) Closing Financial Statements. At the Closing, CNB
shall deliver to First Commercial a balance sheet and
statement of income of CNB dated as of the last day of the
month
immediately preceding the month in which the Closing occurs
(the "Closing Financial Statements"), which shall be certified
by the President or Chief Financial Officer of CNB as being
true and correct in all material respects and as fairly
reflecting in all material respects the financial condition
and results of operations of CNB at the date and for the
period to which they relate, except as specifically disclosed
in the President's or Chief Financial Officer's certificates.
(e) Conduct of Business. CNB shall conduct its business
in the ordinary course so as to maintain its properties and
business and to preserve its business organization and the
goodwill of its employees, depositors, customers and others
having dealings with it and to maintain its books and records
in the usual, ordinary and normal course. Without the prior
written consent of First Commercial, CNB shall not (i) declare
or distribute any cash or stock dividend, authorize a stock
split, or authorize, issue or make any distribution of its
capital stock or any security convertible into or exercisable
for CNB Stock or pledge or otherwise encumber any of its
capital stock or any security convertible into or exercisable
for CNB Stock; (ii) open or acquire any new branch office;
(iii) make any direct or indirect redemption, purchase or
other acquisition of any of its capital stock; (iv) except in
the ordinary course of its business, incur any liability or
obligation, make any commitment or disbursement, acquire or
dispose of any property or asset, make any contract or
agreement, subject any of its properties or assets to any
lien, claim, charge, option or encumbrance or engage in any
transaction; (v) except in the ordinary course of its
business, increase or decrease the rate of compensation of any
director or employee or enter into any agreement to increase
or decrease the rate of compensation of any director or
employee; (vi) create or modify any pension or profit sharing
plan, bonus, deferred compensation, death benefit, or
retirement plan, or the level of benefits under any such plan
or increase or decrease any severance or termination pay
benefit or any other fringe benefit; (vii) amend its articles
of association or bylaws except as may be necessary to carry
out this Agreement or as required by law; or (viii) directly
or indirectly encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information
to, any corporation, partnership, person or other entity or
group (other than First Commercial or an affiliate of First
Commercial) concerning any merger, sale of assets, sale of
shares of capital stock or similar transaction involving CNB
(an "Acquisition"). CNB represents that as of the date hereof
it has ceased all prior activities, and it has no present
intention to engage in activities, of the type contemplated by
clause
(viii) with respect to an Acquisition (other than with First
Commercial or an affiliate of First Commercial). CNB shall
advise First Commercial in writing of (X) the institution of
any litigation or proceedings of any kind whatsoever against
CNB, (Y) the happening of any event which would have a
material adverse effect on the financial condition, business,
prospects or affairs of CNB, and (Z) the occurrence of any
event that would cause any of the representations or
warranties set forth in Section 3.01 hereof to be inaccurate
if made as of a date subsequent to such activity or
transaction. Without the prior written consent of First
Commercial, CNB shall not engage in any activity or enter into
any transaction that would cause any of the representations or
warranties set forth in Section 3.01(n)(v), (vi), (xiii),
(xiv), (xv), (xvi) or (xvii) hereof to be inaccurate if made
as of a date subsequent to such activity or transaction and
CNB shall conduct its business in such a manner as to maintain
the accuracy thereof. CNB will not do anything or fail to do
anything that would cause a breach of or default in any other
contract, agreement, commitment or obligation to which CNB is
a party or by which it may be bound.
(f) Cooperation and Furnishing Information. CNB agrees
to cooperate with First Commercial in furnishing such
information concerning the business and affairs of CNB as is
reasonably necessary or requested by First Commercial in order
to prepare and file any application for regulatory or
government approvals required for consummation of the
transactions contemplated by this Agreement. All such
information shall be true and correct in all material respects
and shall not omit any material fact necessary to make such
information not misleading.
(g) Related Party Transactions. Without the prior
written consent of First Commercial, CNB shall not enter into
any transaction, other than those in the ordinary course of
business, with any of its officers, directors or any of such
person's associates, or with any five percent (5%) or more
shareholder of CNB or any of such person's associates, or with
any business of which an officer or director of CNB is an
officer, director, employee or ten percent (10%) or more
equity owner.
(h) Notice of Changes. Until the Closing Date, CNB
shall give First Commercial prompt written notice of (i) the
occurrence of any event or the failure of any event to occur
that results in a breach by CNB of any representation or
warranty contained herein or a failure by CNB to comply with
any covenant, condition or agreement contained herein, or (ii)
any change to, or any inaccuracies in, any information or data
previously given or made available to First Commercial
pursuant to this Agreement.
(i) Limit on CNB's Attorneys' Fees. CNB agrees that any
fees and expenses it will pay to attorneys in connection with
this Agreement and the transactions contemplated herein shall
not exceed $25,000.00.
(j) Completion and Delivery of CNB Disclosure Statement.
CNB shall have completed and delivered to First Commercial the
CNB Disclosure Statement on or before the date of execution of
this Agreement. The information contained in the CNB
Disclosure Statement delivered pursuant to this Agreement
shall constitute representations and warranties of CNB
pursuant to Section 3.01 of this Agreement, which shall be
continuing and shall be true as of the date of this Agreement
and on the Closing Date. Pursuant to Section 4.01(h), CNB
shall give First Commercial prompt written notice of any
inaccuracies in any information or data set forth in the CNB
Disclosure Statement or of the occurrence of any event or the
failure of any event to occur which results in any change in
the information and data set forth in the CNB Disclosure
Statement. Any such inaccuracy or change in the information
or data set forth in the CNB Disclosure Statement shall
constitute a failure of the conditions precedent set forth in
Section 5.01(b) of this Agreement, unless waived by First
Commercial.
Section 4.02. Covenants of First Commercial. First
Commercial, on behalf of itself and TBT, hereby covenants and
agrees that between the date hereof and the Closing Date:
(a) Consents and Approvals. First Commercial and TBT
agree to cooperate with CNB in furnishing such information
concerning the business and affairs of First Commercial and
TBT and their directors and officers as is reasonably
necessary or requested in order to prepare and file such
applications for approvals required to be obtained by CNB in
connection with carrying out the transactions contemplated by
this Agreement. First Commercial will use its best efforts to
obtain all licenses, approvals and consents of any federal,
state or other regulatory agency having jurisdiction and of
any other party to the extent that such licenses, approvals or
consents are required to effect the transactions contemplated
hereby, or are required pursuant to Section 3.02(d) hereof.
All such information shall be true and correct in all material
respects and shall not omit any material fact necessary to
make such information not misleading.
(b) Quarterly Reports; Current Reports. First
Commercial shall promptly provide CNB with copies of all
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
filed by First Commercial with the Securities and Exchange
Commission between the date of this Agreement and the Closing
Date.
(c) Conduct of Business. First Commercial will, and
will cause TBT to, conduct its business so as to maintain its
corporate existence in good standing, preserve its business
organization and the goodwill of its employees, depositors,
customers and others having dealings with it and comply with
all material obligations and duties imposed on it by all laws,
governmental regulations, rules and ordinances, and judicial
orders, judgments and decrees applicable to it, its business
or properties. First Commercial will, and will cause TBT to,
maintain its books and records in the usual, ordinary and
normal course. First Commercial will promptly advise CNB in
writing of (i) the institution of any material litigation
against First Commercial or its subsidiaries and (ii) the
happening of any event that would have a material adverse
effect on the financial condition, business or affairs of
First Commercial.
(d) Notice of Changes. Until the Closing Date, First
Commercial will give CNB prompt written notice of (i) the
occurrence of any event or the failure of any event to occur
that results in a breach of any representation or warranty by
First Commercial or a failure by First Commercial to comply
with any covenant, condition or agreement contained herein, or
(ii) any other changes to, or any inaccuracies in, any data
previously given or made available to CNB pursuant to this
Agreement.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01. Conditions Precedent to Obligation of
First Commercial. The obligation of First Commercial to
consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction, on or before the Closing
Date, of each and every one of the following conditions, all
or any of which may be waived, in whole or in part, by First
Commercial, in its sole and absolute discretion:
(a) Performance of Covenants. Each of the acts and
undertakings of CNB to be performed on or before the Closing
Date shall have been performed in all material respects and
the President of CNB shall have executed and delivered to
First Commercial a certificate, dated as of the Closing Date,
to the effect that the foregoing condition has been fulfilled.
(b) Representations True at Closing. The
representations and warranties made by CNB herein shall be
true and correct in all material respects on the Closing Date
hereunder with the same force and effect as though such
representations and warranties had been made on and as of such
time (except that such representations and warranties may be
untrue or incorrect as a result of actions or transactions
contemplated or permitted by this Agreement or actions or
transactions of CNB made with the written consent of First
Commercial), and the President of CNB shall have executed and
delivered to First Commercial a certificate, dated as of the
Closing Date, to the effect that the foregoing condition has
been fulfilled.
(c) Changes in Financial Condition. Since December 31,
1995, there shall not have occurred any material adverse
change
in the assets, financial condition, operations, business or
prospects of CNB, taken as a whole, regardless of the cause.
(d) Certified Resolutions. CNB shall furnish to First
Commercial certified copies of resolutions duly adopted by the
Board of Directors and the shareholders of CNB authorizing the
Merger.
(e) Government Approvals; Other Consents. First
Commercial shall have received in form and substance
satisfactory to First Commercial and its counsel all necessary
federal and state governmental and regulatory approvals for
the transactions contemplated by this Agreement (including,
but not limited to, the Office of the Comptroller of the
Currency and the Texas Department of Banking, if required),
and CNB shall have received any and all consents required
pursuant to Section 3.01(j) hereof.
(f) No Injunction. No proceeding shall have been
instituted or threatened before any court, governmental agency
or legislative body to enjoin, restrain or prohibit, or to
obtain substantial damages in respect of, or which is related
to or arises out of, this Agreement or the consummation of the
transactions contemplated hereby, which, in the reasonable
judgment of First Commercial, would make it inadvisable to
consummate such transactions.
(g) Litigation. On the Closing Date, there shall not be
pending or threatened against CNB or its officers or directors
in their capacity as such, any suit, action or proceeding
which, if successful, would have a material adverse effect on
the financial condition, operations, business or prospects of
CNB.
(h) No Misstatements or Omissions. First Commercial
shall not have discovered in any of the information provided
by CNB that is contained in any application or report to any
governmental agency or authority relating to the transactions
contemplated by this Agreement any untrue statement of a
material fact or any omission to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(i) Opinion of CNB's Counsel. An opinion of Counsel for
CNB, dated the Closing Date, in substantially the form
attached hereto as Exhibit A, shall have been delivered to
First Commercial. In rendering the opinions contained
therein, such counsel may rely as to factual matters upon
certificates of one or more officers of CNB and of public
officials and, as to litigation in which such counsel is not
counsel, on opinions of counsel handling such litigation,
copies of which opinions shall be delivered to First
Commercial.
(j) Financial Confirmation. The President or Chief
Financial Officer of CNB shall have furnished to First
Commercial a certificate, dated the Closing Date, in form and
substance satisfactory to First Commercial, to the effect that
nothing has come to his attention that would indicate that (a)
during the period from December 31, 1995, to the Closing Date
there was any change in the capitalization of CNB, other than
as described in or contemplated by this Agreement, (b) any
material adjustments need to be made to the financial
statements for the period ending at the end of the most recent
month prior to the Closing Date in order for them to be in
conformity with generally accepted accounting principles
applied on a consistent basis with that of prior periods, or
(c) since December 31, 1995, there has occurred or there is
threatened to occur a matter that would have a material
adverse effect on the business, financial condition,
operations, results of operations or prospects of CNB.
(k) Audit of CNB Financial Statements. First Commercial
shall have the right to conduct, at its sole expense, an audit
of the CNB Financial Statements to the extent First Commercial
shall deem necessary (the "CNB Audit"). The CNB Audit shall
not have indicated any matter that may have a material adverse
effect on the business, financial condition, operations,
results of operations or prospects of CNB or that may
materially impair the contemplated benefits to First
Commercial of the transactions contemplated by this Agreement.
(l) Title Opinion. First Commercial shall have received
in form and substance satisfactory to its counsel an
attorney's opinion and/or title policy or policies issued by a
title insurance company acceptable to First Commercial
relating to all of the real property, except for other real
estate owned or leased by CNB or any CNB subsidiary.
(m) Pooling of Interests Opinion. Ernst & Young LLP,
certified public accountants, shall have delivered to First
Commercial, dated the Closing Date and satisfactory in form
and substance to First Commercial and its counsel, an opinion
to the effect that the transactions contemplated by this
Agreement shall be recorded on the books and records of First
Commercial and shall be reported in the financial statements
of First Commercial by the pooling of interest method of
accounting under generally accepted accounting principles, as
defined in APB Opinion No. 16, together with such additional
letters of assurance regarding the financial condition of CNB
as First Commercial shall reasonably request.
(n) Delivery of Continuity of Interest Letters.
(i) Each shareholder of CNB who is an executive
officer, director, or beneficial owner of ten percent (10%) or
more of CNB Stock shall have delivered to First Commercial a
letter representing and warranting that he will not sell,
transfer or in any way reduce his risk with respect to the
First
Commercial Stock received in connection with the Merger until
such time as First Commercial shall have published financial
results covering at least thirty (30) days of post-transaction
combined operations.
(ii) Each shareholder of CNB who is the beneficial
owner of five percent (5%) or more of CNB Stock shall have
delivered to First Commercial a letter representing and
warranting that (or, if such shareholder is delivering a
letter pursuant to Section 5.01(n)(i) above, include a
statement in such letter to the effect that) he has no present
intent to sell, transfer or otherwise dispose of any of the
First Commercial Stock to be received by him in connection
with the Merger nor will he sell, transfer or otherwise
dispose of more than fifty percent (50%) of such stock for a
period of at least one (1) year following the Closing.
(o) Tax Opinion. First Commercial shall have received a
favorable opinion of Friday, Eldredge & Clark, its counsel, to
the effect that the transactions contemplated herein will be
treated for federal income tax purposes as a tax-free
corporate reorganization within the meaning of Section
368(a)(1)(A) of the Code. The parties agree to utilize their
reasonable best efforts to consummate the transaction
described herein in a manner which will qualify as a tax-free
corporate reorganization within the meaning of the foregoing
provisions.
(p) Due Diligence Review. A comprehensive review of the
assets, books and records of CNB by First Commercial and its
counsel or agents shall not have indicated any matter that may
have a material adverse effect on the business, financial
condition, operations, results of operations or prospects of
CNB or that may materially impair the contemplated benefits to
First Commercial of the transactions contemplated by this
Agreement.
Section 5.02. Conditions Precedent to Obligation of CNB.
The obligation of CNB to consummate the transactions
contemplated by this Agreement shall be subject to the
satisfaction, on or before the Closing Date, of each and every
one of the following conditions, all or any of which may be
waived, in whole or in part, by CNB in its sole and absolute
discretion:
(a) Performance of Covenants. Each of the acts and
undertakings of First Commercial and TBT to be performed on or
before the Closing Date shall have been duly performed, and an
authorized officer of First Commercial and TBT shall have
executed and delivered to CNB a certificate, dated as of the
Closing Date, to the effect that this condition has been
fulfilled.
(b) Representations True at Closing. The
representations and warranties made by First Commercial and
TBT pursuant to and
in this Agreement shall be true and correct in all material
respects on the date hereof and shall be true and correct in
all material respects on the Closing Date hereunder with the
same force and effect as though such representations and
warranties had been made on and as of such time (except that
such representations and warranties may be untrue or incorrect
as a result of actions or transactions contemplated or
permitted by this Agreement or actions or transactions of
First Commercial made with the written consent of CNB), and an
authorized officer of First Commercial and TBT shall have
executed and delivered to CNB a certificate, dated as of the
Closing Date, to the effect that this condition has been
fulfilled.
(c) Changes in Financial Condition. Since December 31,
1995, there shall not have occurred any material adverse
change in the assets, financial condition, operations,
business or prospects of First Commercial and the First
Commercial Banks, taken as a whole, regardless of the cause.
(d) Certified Resolutions. First Commercial and TBT
shall have furnished to CNB a certified copy of resolutions
duly adopted by the Boards of Directors and stockholders, if
applicable, of First Commercial and TBT authorizing the
transactions contemplated by this Agreement.
(e) No Injunction. No action, proceeding, regulation or
legislation shall have been instituted or threatened before
any court, governmental agency or legislative body to enjoin,
restrain or prohibit, or to obtain substantial damages in
respect of, or which is related to or arises out of, this
Agreement or the consummation of the transactions contemplated
hereby, which, in the reasonable judgment of CNB, would make
it inadvisable to consummate such transactions (it being
understood and agreed that a written request by governmental
authorities for information with respect to this Agreement or
the transactions contemplated herein may not be deemed by CNB
to be a threat of material litigation or proceeding,
regardless of whether such request is received before or after
execution of this Agreement). CNB shall have received all
necessary federal and state governmental and regulatory
approvals for the transaction contemplated by this Agreement.
(f) No Misstatements or Omissions. CNB shall not have
discovered in any certificate or information furnished to CNB
hereunder or in any application or report to any governmental
agency or authority relating to the transactions contemplated
by this Agreement any untrue statement of a material fact or
any omission to state a material fact necessary in order to
make the statements made therein, in the light of the
circumstances under which they were made, not misleading, and
such fact shall be certified to CNB by First Commercial.
(g) Opinion of First Commercial's Counsel. An opinion
of
Friday, Eldredge & Clark, counsel for First Commercial and
TBT, dated as of the Closing Date, in substantially the form
attached hereto as Exhibit B, shall have been delivered to
CNB. In rendering the opinions contained therein, such
counsel may rely as to factual matters upon certificates of
officers of First Commercial and its subsidiaries and of
public officials and, as to litigation in which they are not
counsel, on opinions of counsel handling such litigation,
copies of which opinions shall be delivered to CNB.
(h) Tax Opinion. CNB shall have received a favorable
opinion of Friday, Eldredge & Clark, counsel to First
Commercial, to the effect that the transactions contemplated
herein will be treated for federal income tax purposes as a
tax-free corporate reorganization within the meaning of
Section 368(a)(1)(A) of the Code. The parties agree to
utilize their reasonable best efforts to consummate the
transaction described herein in a manner which will qualify as
a tax-free corporate reorganization within the meaning of the
foregoing provisions.
(i) Securities Registration Opinion. CNB shall have
received an opinion of Friday, Eldredge & Clark, counsel to
First Commercial, to the effect that the shares of First
Commercial Stock issued to the shareholders of CNB pursuant to
this Agreement have been registered with the Securities and
Exchange Commission pursuant to Section 5 of the Securities
Act of 1933, as amended (the "Act"), and may be sold or
transferred by the shareholders of CNB without further
registration under Section 5 of the Act, except as may
otherwise be provided by Rules 144 and 145 promulgated under
the Act and the terms of the continuity of interest letters to
be delivered by certain shareholders of CNB pursuant to
Section 5.01(n) of this Agreement.
(j) No Adverse Change in Market Price for First
Commercial Stock. The average of the bid and asked prices of
First Commercial Stock on the Nasdaq National Market for the
twenty (20) business days preceding the Closing Date, based on
the average of such prices as calculated for each such date,
shall not be less than eighty-five percent (85%) of the
average of the bid and asked price on the date hereof, subject
to such adjustment as provided in Section 1.06 hereof.
ARTICLE VI
TERMINATION
Section 6.01. Procedure for Termination. This Agreement
may be terminated and abandoned at any time prior to the
Closing, whether before or after approval of the Merger by
First Commercial or by the stockholders of CNB, upon the
occurrence of any of the following by written notice from
First Commercial to
CNB (authorized by the Boards of Directors of First Commercial
and TBT), or by written notice from CNB to First Commercial
and TBT (authorized by the Board of Directors of CNB), as the
case may be:
(a) If any condition to the obligations of First
Commercial set forth in Section 5.01 is not satisfied at the
time or times contemplated thereby and such condition is not
waived by First Commercial or if any condition to the
obligations of CNB as set forth in Section 5.02 is not
satisfied at the time or times contemplated thereby and such
condition is not waived by CNB, it being understood that each
party's right to terminate under this Section 6.01(a) shall
relate only to conditions to that party's obligations;
(b) In the event of a material breach by the other
of any representation, warranty or agreement contained in this
Agreement that is not cured within 20 days of the time that
written notice of such breach is received by such other party
from the party giving notice (except that any such notice
shall not have the effect of extending the time for
termination set forth in Section 6.01(c) hereof);
(c) By either CNB or First Commercial if the
Closing Date shall not have occurred, for reasons other than a
breach of this Agreement by the party seeking termination, on
or before December 31, 1996, or such later date agreed to in
writing by the parties; or
(d) By First Commercial if there shall have been
any action taken, or any statute, rule or regulation proposed
or enacted, by any federal, state or foreign government or
governmental or administrative agency that would (i) render
First Commercial unable to satisfy its obligations hereunder,
(ii) in the sole, but reasonable, judgment of First
Commercial, prohibit or delay for four months after the
decision to terminate, or longer, consummation of the
transactions contemplated by this Agreement, or (iii)
materially impair the contemplated benefits to First
Commercial of the transactions contemplated by this Agreement
by limiting the location at which or manner in which First
Commercial presently conducts its business or by requiring
First Commercial, TBT or CNB to undertake any material changes
in personnel, organizational structure, internal controls,
accounting systems, operations or policies, or otherwise.
(e) By First Commercial if there shall have
occurred:
(i) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the
United States,
(ii) a commencement of a war or national
calamity involving the United States, or
(iii) a material change in the United States or
any other currency exchange rates or a suspension of, or
limitation on, the markets thereof;
or, in the case of any of the foregoing existing at the time
of this Agreement, a material acceleration or worsening
thereof.
Any party desiring to terminate this Agreement pursuant
to any of the foregoing clauses shall give notice of such
termination to the other party in accordance with Section
8.02.
Section 6.02. Termination by Mutual Agreement. This
Agreement may be terminated and abandoned (whether before or
after approval of the Merger by the shareholder of TBT or by
the stockholders of CNB) by mutual written consent of CNB and
First Commercial and authorized by their respective Boards of
Directors.
Section 6.03. Effect of Termination for Non-Willful
Breach. In the event of termination of this Agreement caused
otherwise than by a willful breach of this Agreement by any of
the parties hereto, this Agreement shall cease and terminate,
the acquisition of CNB as provided herein shall not be
consummated, and none of CNB, First Commercial, or TBT shall
have any liability to any other party under this Agreement of
any nature whatever, provided, however, that the duties of the
parties with respect to confidential information as set forth
in Section 8.10 shall survive any such termination.
Section 6.04. Effect of Termination for Willful Breach.
If termination of this Agreement shall have been caused by
willful breach of this Agreement, then, in addition to other
remedies as may be available at law or equity for breach of
this Agreement, the party so found to have willfully breached
this Agreement shall indemnify the other parties for their
respective costs, fees and expenses of their counsel,
accountants and other experts and advisors, as well as fees
and expenses incident to negotiation, preparation and
execution of this Agreement, and all parties shall be bound by
the confidentiality obligations provided in Section 8.10 of
this Agreement.
Section 6.05. Enforcement Expenses. The prevailing
party in any suit or action to enforce this Agreement or to
obtain any remedy which may be available as a result of a
breach of any representation, warranty or covenant contained
herein prior to Closing shall be entitled to recover its court
costs and reasonable attorneys' fees, including costs and
attorneys' fees on appeal from any such suit or action.
ARTICLE VII
BROKERS AND EXPENSES
Section 7.01. Brokers. CNB represents and warrants that
no broker or finder has acted for it in connection with the
execution and delivery of this Agreement or the transactions
contemplated hereby.
Section 7.02. Expenses. Each party hereto will pay all
attorneys' and accountants' fees and all other costs and
expenses incurred by it in connection with this Agreement and
the transactions contemplated hereby, except as provided in
Article VI hereof, and except as limited by Section 4.01(i).
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Announcements. Neither First Commercial
nor CNB will make any press release or other announcement to
the public concerning the transactions contemplated by this
Agreement without the prior written consent of the other
party, except upon the written opinion of counsel to the
effect that public disclosure is required by law.
Section 8.02. Notices. All notices, requests, demands,
and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered or sent
by first class registered or certified mail, postage prepaid,
with return receipt requested, or by recognized overnight
courier as follows:
(a) If to CNB to:
City National Bank
1125 Highway 110 North
Whitehouse, Texas 75791
Attention: Mr. Tom Tatum
(b) If to First Commercial, to:
First Commercial Corporation
400 West Capitol Avenue
Little Rock, Arkansas 72201
Attention: Mr. J. Lynn Wright
with copy to:
John Clayton Randolph
Friday, Eldredge & Clark
400 West Capitol Avenue, Suite 2000
Little Rock, Arkansas 72201
or to such other address as any person may designate in
writing to the other persons at the addresses listed above, in
accordance with this Section 8.02.
Section 8.03. Binding Effect. All of the terms and
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns.
Section 8.04. Headings. The Article, Section, paragraph
and other headings in this Agreement are inserted solely as a
matter of convenience and for reference and are not a part of
this Agreement.
Section 8.05. Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute
one and the same instrument.
Section 8.06. Integration of Agreement. This Agreement,
including the Exhibits hereto, constitutes the entire
understanding of the parties with respect to the subject
matter hereof and supersedes all prior agreements,
arrangements or communications, oral or written, between the
parties hereto with respect to the subject matter hereunder.
Section 8.07. Amendments; Waivers. Any of the terms or
conditions of this Agreement may be waived, but only in
writing of the party against which the enforcement of such
waiver is sought, and any such terms or conditions of this
Agreement may be amended or modified in whole or in part at
any time by agreement in writing, executed in the same manner
as this Agreement.
Section 8.08. Governing Law. This Agreement shall be
governed by and construed under the laws of the State of
Arkansas and applicable laws of the United States of America.
Section 8.09. Incorporation by Reference. Any and all
exhibits attached hereto are incorporated herein by reference
thereto as though fully set forth at the point referred to in
this Agreement.
Section 8.10. Confidentiality of Information. Until the
Closing Date, or in the event of termination of this Agreement
without consummation of the transactions contemplated hereby,
First Commercial, TBT and CNB hereby covenant and agree that
each of them and their respective agents shall keep
confidential any information (unless readily ascertainable
from public or published information or sources) obtained from
the other parties or their agents, except for disclosures of
information expressly allowed by such other party. In the
event this Agreement is terminated, then promptly after such
termination
First Commercial, TBT or CNB (as the case may be) and their
respective agents shall return to the other party hereto all
documents, work papers and other written material obtained
from such other party or its agents in connection with this
Agreement and not theretofore made public (including all
copies thereof).
Section 8.11. No Assignment. Neither this Agreement nor
any rights or obligations of any party hereunder or
thereunder, may be assigned by the parties, by operation of
law or otherwise, except with the written consent of the other
party.
Section 8.12. Severability. If any portion or provision
of this Agreement is determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any
jurisdiction, such portion or provision shall be ineffective
as to that jurisdiction to the extent of such invalidity,
illegality or unenforceability, without affecting in any way
the validity or enforceability of the remaining portions or
provisions in such jurisdiction or rendering that or any other
portions or provisions of this Agreement invalid, illegal or
unenforceable in any other jurisdiction.
Section 8.13. Survival of Representations and
Warranties. None of the representations, warranties,
obligations, covenants and agreements contained in this
Agreement, or in any instrument or other document delivered
pursuant to this Agreement, shall survive the Closing.
IN WITNESS WHEREOF, the parties hereof have caused this
Agreement to be executed and delivered in counterparts as of
the date first above written.
FIRST COMMERCIAL CORPORATION
By: /s/ J. Lynn Wright
Title: Chief Financial Officer
ATTEST:
/s/ Donna B. Rogers
Secretary
TYLER BANK AND TRUST, N.A.
TYLER, TEXAS
By: /s/ Neil S. West
Title: Chief Executive Officer
ATTEST:
/s/ Dana Gregory
Secretary
CITY NATIONAL BANK,
WHITEHOUSE, TEXAS
By: /s/ Clyde A. Weaver
Title: Chairman of the Board
ATTEST:
/s/ Nancy Duress
Secretary
EXHIBIT A
Substantive Provisions of CNB's Counsel
The opinion of Tom Tatum, Attorney-at-Law, Counsel for
CNB, shall be dated the Closing Date and shall opine, in
substance, as follows:
1. CNB has been duly organized and is a national
banking association validly existing in good standing under
the laws of the United States of America. CNB has full
corporate power to own its property and assets and to carry on
its business as presently conducted.
2. CNB has full corporate power to execute and deliver
this Agreement. All corporate action of CNB required to duly
authorize and execute this Agreement has been taken. This
Agreement is valid and binding on CNB and is enforceable in
accordance with its terms, subject, as to the enforcement of
remedies, to applicable bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors'
rights generally and to legal and equitable limitations on the
availability of injunctive relief, specific performance and
other equitable remedies, which are available only in the
discretion of a court.
3. All shares of CNB Stock issued and outstanding as of
the Closing Date are duly authorized, validly issued, fully
paid and not subject to assessment. None of such shares have
been issued in violation of any preemptive rights of
shareholders. To the knowledge of such counsel, CNB has no
outstanding and is not obligated to issue subscriptions,
options or other arrangements or commitments obligating it to
issue or dispose of any shares of its common stock.
4. The consummation of the Merger will not violate any
provision of CNB's Articles of Association or Bylaws, or
violate any provision of, or result in the acceleration of any
material obligation under, any mortgage, loan agreement,
order, judgment, law or decree known to such counsel to which
CNB is a party or by which it is bound, and will not violate
or conflict with any other material restriction of any kind or
character known to such counsel to which CNB is subject.
5. To the knowledge of such counsel, without
independent verification, CNB has all licenses, permits,
approvals and other authorizations from Federal and state
agencies and authorities having jurisdiction in the premises
required in the conduct of its business as presently being
conducted.
6. To the knowledge of such counsel, there is no claim,
action, suit or proceeding pending or threatened against CNB
which, if adversely determined, would have a material adverse
effect on the business, assets, operations or financial
condition of CNB, taken as a whole, would question the
validity of the Agreement or would prevent, hinder or delay
consummation of the transactions contemplated by the
Agreement.
7. To the best of such counsel's knowledge, CNB is, in
the conduct of its business, in material compliance with all
applicable Federal, state and local laws, statutes, ordinances
and regulations, the failure to comply with which would
materially adversely affect its business or the aggregate
value of its properties or assets.
In rendering such opinions, such counsel may rely as to
factual matters upon certificates of one or more officers of
CNB and of public officials and, as to litigation where they
are not counsel of record, on opinions of counsel handling
such litigation, copies of which opinions shall be delivered
to First Commercial.
EXHIBIT B
Substantive Provisions of First Commercial
Counsel's Opinion
The opinion of Friday, Eldredge & Clark, Counsel for
First Commercial, shall be dated the Closing Date and shall
opine, in substance, as follows:
1. First Commercial and TBT have been duly organized
and are a corporation and national banking association,
respectively, validly existing in good standing under the laws
of the State of Arkansas and the laws of the United States of
America, respectively. Each of First Commercial and TBT has
full corporate power to own its property and assets and to
carry on its business as presently conducted.
2. All corporate action of First Commercial and TBT
required to effectuate the Merger contemplated by the
Agreement has been taken. The Agreement is valid and binding
on First Commercial and TBT and is enforceable in accordance
with its terms, subject as to the enforcement of remedies, to
applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally
and to legal and equitable limitations on the availability of
injunctive relief, specific performance and other equitable
remedies, which are available only in the discretion of a
court.
3. The consummation of the Merger will not violate any
provision of the Articles of Incorporation or Association or
Bylaws of First Commercial or of TBT or violate any provision
of, or result in the acceleration of any material obligation
under, any mortgage, loan agreement, order, judgment, law or
decree known to such counsel to which First Commercial or TBT
is a party or by which either is bound, and will not violate
or conflict with any other material restriction of any kind or
character known to such counsel to which First Commercial or
TBT is subject.
4. To the knowledge of such counsel, there is no claim,
action, suit or proceeding pending or threatened against First
Commercial or TBT which, if adversely determined, would
question the validity of the Agreement or would prevent,
hinder or delay consummation of the transactions contemplated
by the Agreement.
5. No facts have come to such counsel's attention that
lead them to believe that the Joint Proxy Statement/Prospectus
included within the Registration Statement on Form S-4 filed
in connection with this Agreement (other than the financial
and statistical data contained or incorporated in such Joint
Proxy Statement/Prospectus, as to which such counsel need not
express
any opinion or belief) contains as of the Closing Date any
untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
6. The shares of First Commercial Stock to be issued to
the shareholders of CNB following the Closing will be fully
paid, validly authorized and duly issued and are not subject
to assessment and are not issued in violation of any
preemptive rights of First Commercial's shareholders. Such
shares have been registered with the Securities and Exchange
Commission pursuant to Section 5 of the Securities Act of
1933, as amended (the "Act"), and may be sold or transferred
by the shareholders of CNB without further registration under
Section 5 of the Act except as may otherwise be provided by
Rules 144 and 145 promulgated under the Act and the terms of
the continuity of interest letters delivered by certain
stockholders of CNB pursuant to Section 5.01(n) of the
Agreement.
In rendering such opinions, such counsel may rely as to
factual matters upon certificates of officers of First
Commercial and of public officials and, as to litigation where
they are not counsel of record, on opinions of counsel
handling such litigation, copies of which opinions shall be
delivered to CNB.