AGREEMENT AND PLAN OF MERGER
BY AND AMONG
COWLITZ BANCORPORATION,
COWLITZ BANK
AND
NORTHERN BANK OF COMMERCE
DATED AS OF SEPTEMBER 14, 1999
1. DEFINITIONS.............................................. C-1
1.1 Defined Terms..................................... C-1
1.2 Other Definitional Provisions..................... C-3
2. THE MERGER............................................... C-3
2.1 The Merger........................................ C-3
2.2 Effective Time.................................... C-3
2.3 Effects of the Merger............................. C-3
2.4 Closing of the Merger............................. C-3
2.5 Conversion of Northern Common Stock............... C-4
2.6 Merger Consideration.............................. C-5
2.7 Cowlitz Stock; Cowlitz Bank Stock................. C-7
2.8 Options........................................... C-7
2.9 Charter........................................... C-7
2.10 Bylaws........................................... C-7
2.11 Board of Directors............................... C-7
2.12 Officers......................................... C-7
2.13 Offices.......................................... C-7
2.14 Stock Option Agreement........................... C-7
2.15 Tax Consequences................................. C-8
3. EXCHANGE OF SHARES....................................... C-8
3.1 Cowlitz to Make Shares Available.................. C-8
3.2 Exchange of Certificates.......................... C-8
4. REPRESENTATIONS AND WARRANTIES OF NORTHERN............... C-12
4.1 Corporate Organization............................ C-12
4.2 Capitalization.................................... C-12
4.3 Authority; No Violation........................... C-13
4.4 Consents and Approvals............................ C-13
4.5 Reports........................................... C-14
4.6 Financial Statements.............................. C-14
4.7 Broker's Fees..................................... C-15
4.8 Absence of Certain Changes or Events.............. C-15
4.9 Legal Proceedings................................. C-15
4.10 Taxes............................................ C-15
4.11 Employees; Employee Benefit Plans................ C-16
4.12 FDIC Reports..................................... C-18
4.13 Compliance with Applicable Law................... C-18
4.14 Certain Contracts................................ C-18
4.15 Agreements with Regulatory Agencies.............. C-19
4.16 Undisclosed Liabilities.......................... C-19
4.17 Anti-takeover Provisions......................... C-19
4.18 Northern Information............................. C-19
4.19 Title to Property................................ C-19
4.20 Insurance........................................ C-20
4.21 Environmental Liability.......................... C-20
4.22 Opinion of Financial Advisor..................... C-21
4.23 Patents, Trademarks, Etc......................... C-21
4.24 Loan Matters..................................... C-21
4.25 Powers of Attorney............................... C-22
4.26 Benefit Plans Invested in Common Stock........... C-22
4.27 Community Reinvestment Act Compliance............ C-22
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4.28 Year 2000 Compliance............................. C-22
4.29 Labor Matters.................................... C-22
5. REPRESENTATIONS AND WARRANTIES OF COWLITZ................ C-23
5.1 Corporate Organization............................ C-23
5.2 Capitalization.................................... C-23
5.3 Authority; No Violation........................... C-24
5.4 Consents and Approvals............................ C-25
5.5 Reports........................................... C-25
5.6 Financial Statements.............................. C-25
5.7 Broker's Fees..................................... C-26
5.8 Absence of Certain Changes or Events.............. C-26
5.9 Legal Proceedings................................. C-26
5.10 SEC Reports...................................... C-26
5.11 Compliance with Applicable Law................... C-26
5.12 Agreements with Regulatory Agencies.............. C-27
5.13 Cowlitz Information.............................. C-27
5.14 Year 2000 Compliance............................. C-27
5.15 Opinion of Financial Advisor..................... C-27
6. COVENANTS RELATING TO CONDUCT OF BUSINESS................ C-27
6.1 Conduct of Businesses Prior to the Effective
Time................................................. C-27
6.2 Northern Forbearances............................. C-28
6.3 No Fundamental Cowlitz Changes.................... C-30
7. ADDITIONAL AGREEMENTS.................................... C-31
7.1 Regulatory Matters................................ C-31
7.2 Access to Information............................. C-31
7.3 Stockholder Approval.............................. C-32
7.4 Legal Conditions to Merger........................ C-32
7.5 Affiliates........................................ C-32
7.6 Stock Listing..................................... C-33
7.7 Employees; Employee Benefit Plans................. C-33
7.8 Indemnification; Directors' and Officers'
Insurance............................................ C-33
7.9 Additional Agreements............................. C-33
7.10 Advice of Changes................................ C-34
7.11 Subsequent Interim and Annual Financial
Statements........................................... C-34
7.12 Disclosure Supplements........................... C-34
8. CONDITIONS PRECEDENT..................................... C-35
8.1 Conditions to Each Party's Obligation to Effect
the Merger........................................... C-35
8.2 Conditions to Obligations of Cowlitz.............. C-35
8.3 Conditions to Obligations of Northern............. C-37
9. TERMINATION AND AMENDMENT................................ C-37
9.1 Termination....................................... C-37
9.2 Effect of Termination............................. C-39
9.3 Amendment......................................... C-40
9.4 Extension; Waiver................................. C-40
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10. GENERAL PROVISIONS...................................... C-40
10.1 Nonsurvival of Representations, Warranties and
Agreements........................................... C-40
10.2 Expenses......................................... C-40
10.3 Notices.......................................... C-40
10.4 Interpretation................................... C-41
10.5 Counterparts..................................... C-42
10.6 Entire Agreement................................. C-42
10.7 Governing Law.................................... C-42
10.8 Severability..................................... C-42
10.9 Publicity........................................ C-42
10.10 Assignment; Third Party Beneficiaries........... C-42
EXHIBITS
Exhibit 2.14--Stock Option Agreement
Exhibit 3.2--Escrow Agreement
ANNEXES
Annex 2.6(d)--Loan Classifications
Annex 2.7--Surviving Bank's Capital
Annex 2.11--Surviving Bank's Directors
Annex 2.12--Surviving Bank's Officers
Annex 2.13--Surviving Bank's Offices
Annex 8.2(e)--Employment Agreement under
Section 8.2(e)
Annex 8.2(f)--Noncompetition and Option Agreements
under Section 8.2(f)
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of September 14, 1999 (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"), is entered into by and among COWLITZ BANCORPORATION, a Washington
corporation ("Cowlitz"), COWLITZ BANK, a corporation chartered under the banking
laws of the State of Washington ("Cowlitz Bank"), and NORTHERN BANK OF COMMERCE,
a corporation chartered under the banking laws of the State of Oregon
("Northern").
The respective Boards of Directors of each of Cowlitz, Cowlitz Bank and
Northern have determined that it is in the best interests of their respective
companies and the stockholders to consummate the business combination
transaction provided for herein and have approved and adopted this Agreement. It
is the intention of the parties to this Agreement that the business combination
contemplated hereby be treated, if it so qualifies, as a "reorganization" and
that this Agreement be treated as a "plan of reorganization" within the meaning
of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code").
Therefore, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and intending to be legally bound
hereby, the parties agree as follows:
1. DEFINITIONS
1.1 DEFINED TERMS. The following terms shall have the meanings defined for
such terms in the Sections set forth below:
TERM SECTION
- ---- ---------
Agreement................................................... Preamble
Aggregate Cash Consideration................................ 3.1
Articles of Merger.......................................... 2.2
Base Value.................................................. 2.6(e)
BIF......................................................... 4.1
Business Day................................................ 2.4
Cash Consideration.......................................... 2.6(a)
Capitalization Adjustment Fraction.......................... 2.6(b)
Change of Control........................................... 9.1(h)
Closing..................................................... 2.4
Closing Date................................................ 2.4
Closing Escrow Amount....................................... 3.2(b)
Code........................................................ Preamble
Committee................................................... 3.2(b)
Common Certificates......................................... 2.5(b)
Confidentiality Agreement................................... 7.2(b)
Cowlitz..................................................... Preamble
Cowlitz Bank................................................ Preamble
Cowlitz Common Stock........................................ 2.5(c)
Cowlitz Disclosure Schedule................................. 5.2
Cowlitz Bank Members........................................ 3.2(b)
Cowlitz Preferred Stock..................................... 5.2
Cowlitz Reports............................................. 5.10
Cowlitz Y2K Plan............................................ 5.14
CRA......................................................... 4.27
Dissenting Shares........................................... 2.5(d)
DPC Shares.................................................. 2.5(c)
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TERM SECTION
- ---- ---------
Effective Date.............................................. 2.2
Effective Time.............................................. 2.2
Environmental Laws.......................................... 4.21
Equity Adjustment Amount.................................... 2.6(b)
ERISA....................................................... 4.11(a)
ERISA Affiliate............................................. 4.11(a)
Escrow...................................................... 3.2(b)
Escrow Agent................................................ 3.2(b)
Escrow Agreement............................................ 3.2(b)
Escrow Expiration Date...................................... 3.2(b)
Escrowed Funds.............................................. 3.2(b)
Exchange Act................................................ 4.6
Exchange Agent.............................................. 3.1
FDIC........................................................ 4.1
GAAP........................................................ 2.6(d)
Governmental Entity......................................... 4.4
Identified Loans............................................ 2.6(a)
Injunction.................................................. 8.1(e)
Liens....................................................... 4.3(b)
Loan Adjustment Factor...................................... 3.2(b)
Loan File................................................... 4.24(d)
Loans....................................................... 4.24(a)
Material Adverse Effect (Northern).......................... 4.1
Material Adverse Effect (Cowlitz)........................... 5.1(a)
Merger...................................................... 2.1
Merger Consideration........................................ 2.6(a)
Nasdaq...................................................... 4.4
Northern.................................................... Preamble
Northern Automated Systems.................................. 4.28
Northern Common Stock....................................... 2.5(a)
Northern Contract........................................... 4.14(a)
Northern Disclosure Schedule................................ 4.2(a)
Northern Members............................................ 3.2(b)
Northern Reports............................................ 4.12
Northern Stock Option Plan.................................. 2.8
Northern Y2K Plan........................................... 4.28
Orders...................................................... 6.2(o)
Oregon Articles of Merger................................... 2.2
Oregon Director............................................. 2.2
PBGC........................................................ 4.11(c)
Plans....................................................... 4.11(a)
Proxy Statement/Prospectus.................................. 4.4
Regulatory Agreement........................................ 4.15
Reimbursable Losses......................................... 3.2(b)
REO......................................................... 4.19(a)
Representatives............................................. 6.2(f)
Requisite Regulatory Approvals.............................. 8.1(c)
S-4......................................................... 4.4
SEC......................................................... 4.4
Securities Act.............................................. 4.12
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TERM SECTION
- ---- ---------
Stock Consideration......................................... 2.6(a)
Stock Exchange Fund......................................... 3.1
Stock Option Agreement...................................... 2.12
Subsidiary.................................................. 2.5(a)
Superior Proposal........................................... 9.1(h)
Surviving Bank.............................................. 2.1
Takeover Proposal........................................... 6.2(f)
Tax Returns................................................. 4.10(c)
Taxes....................................................... 4.10(b)
Threshold Amount............................................ 3.2(d)
Title 30.................................................... 2.1
Title 53.................................................... 2.1
Total Stockholders' Equity.................................. 2.6(b)
Trust Account Shares........................................ 2.5(c)
Washington Articles of Merger............................... 2.2
Washington Director......................................... 2.2
Washington Secretary........................................ 2.2
Year 2000 Problem........................................... 4.28
1.2 OTHER DEFINITIONAL PROVISIONS. The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of such
terms.
2. THE MERGER
2.1 THE MERGER. Subject to the terms and conditions of this Agreement, in
accordance with Title 30 of the Revised Code of Washington ("TITLE 30") and
Title 53 of the Oregon Revised Statutes ("TITLE 53") at the Effective Time (as
defined in Section 2.2 hereof), Northern shall merge (the "MERGER") with and
into Cowlitz Bank. Cowlitz Bank shall be the surviving bank (hereinafter
sometimes called the "SURVIVING BANK") in the Merger, and shall continue its
corporate existence under the laws of the State of Washington. The name of the
Surviving Bank shall be Cowlitz Bank. Upon consummation of the Merger, the
separate corporate existence of Northern shall terminate.
2.2 EFFECTIVE TIME. The Merger shall become effective as set forth in the
articles of merger (the "WASHINGTON ARTICLES OF MERGER") which shall be filed
with the Director of Financial Institutions of the State of Washington (the
"WASHINGTON DIRECTOR") and the Secretary of State of the State of Washington
(the "WASHINGTON SECRETARY") and in the articles of merger (the "OREGON ARTICLES
OF MERGER") which shall be filed with the Director of the Department of Consumer
and Business Services of the State of Oregon (the "OREGON DIRECTOR"), on the
Closing Date (as defined in Section 2.4(b) hereof). The term "EFFECTIVE TIME"
shall mean the date (the "EFFECTIVE DATE") and time when the Merger becomes
effective, as set forth in the Articles of Merger. The term "Articles of Merger"
shall mean the "WASHINGTON ARTICLES OF MERGER" and the "OREGON ARTICLES OF
MERGER". The filed Articles of Merger shall include this Agreement.
2.3 EFFECTS OF THE MERGER. At and after the Effective Time, the Merger
shall have the effects set forth in Chapter 49 of Title 30 and Chapter 711 of
Title 53.
2.4 CLOSING OF THE MERGER. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "CLOSING") will take place at
10:00 a.m. Pacific time, on a date to be specified by the parties, which shall
be the first Business Day following the later of (i) the date which is at least
five Business Days after the satisfaction or waiver (subject to applicable law)
of the latest to occur of the conditions set forth in Section 8 hereof, other
than conditions which by their terms are to be satisfied at Closing or (ii) in
the case that holders of more than 5% of the outstanding shares of Northern
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Common Stock have sent or delivered a notice of dissent or voted against the
Merger, 35 days following the meeting of the Northern Stockholders to be held
pursuant to Section 7.3, or such other date or time as the parties may mutually
agree (the "CLOSING DATE"). For purposes of this Agreement, a "BUSINESS DAY"
shall mean any day that is not a Saturday, a Sunday or other day on which the
office of the Washington Director, the Washington Secretary or the Oregon
Director is closed.
2.5 CONVERSION OF NORTHERN COMMON STOCK. At the Effective Time, without
any action on the part of Cowlitz, Cowlitz Bank, Northern or the holder of any
of the shares of common stock of Northern, the Merger shall be effected in
accordance with the following terms:
(a) Subject to Section 2.5(d), each share of the common stock, par value
$1.00 per share, of Northern (the "Northern Common Stock") issued and
outstanding immediately prior to the Effective Time (other than shares of
Northern Common Stock held (x) in Northern's treasury or (y) directly or
indirectly by Cowlitz or any of its Subsidiaries (as defined below) (except
for Trust Account Shares and DPC Shares, as such terms are defined below)),
shall be converted into the right to receive the Merger Consideration as
provided below, without interest thereon. For purposes of this Agreement,
"Subsidiary" means, with respect to any person, any corporation,
partnership, joint venture, limited liability company or other entity
controlled by such person directly or indirectly through one or more
intermediaries.
(b) All of the shares of Northern Common Stock converted into the right
to receive the Merger Consideration pursuant to this Section 2 shall no
longer be outstanding and shall automatically be canceled and shall cease to
exist as of the Effective Time, and each certificate (each a "COMMON
CERTIFICATE") previously representing any such shares shall thereafter
represent solely the right to receive the Merger Consideration. Common
Certificates previously representing shares of Northern Common Stock shall
be exchanged for the Merger Consideration upon the surrender of such Common
Certificates in accordance with Section 3.2 hereof, without any interest
thereon.
(c) At the Effective Time, all shares of Northern Common Stock that are
owned by Northern as treasury stock and all shares of Northern Common Stock
that are owned directly or indirectly by Cowlitz, Northern or a Subsidiary
of Cowlitz (other than shares of Northern Common Stock held directly or
indirectly in trust accounts, managed accounts and the like or otherwise
held in a fiduciary or nominee capacity that are beneficially owned by third
parties (any such shares, and shares of common stock, no par value per
share, of Cowlitz ("COWLITZ COMMON STOCK") which are similarly held, whether
held directly or indirectly by Cowlitz, Northern or a Subsidiary of Cowlitz,
as the case may be, being referred to herein as "TRUST ACCOUNT SHARES") and
other than any shares of Northern Common Stock held by Cowlitz, Northern or
any a Subsidiary of Cowlitz in respect of a debt previously contracted (any
such shares of Northern Common Stock, and shares of Cowlitz Common Stock
which are similarly held, whether held directly or indirectly by Cowlitz,
Northern or any a Subsidiary of Cowlitz, being referred to herein as "DPC
SHARES")) shall be canceled and shall cease to exist and no Merger
Consideration shall be delivered in exchange therefor.
(d) Notwithstanding anything in this Agreement to the contrary, shares
of Northern Common Stock issued and outstanding immediately prior to the
Effective Time held by holders (if any) who have voted against the Merger or
sent or delivered notices of dissent and who are eligible to and who have
demanded appraisal rights with respect thereto in accordance with Sections
711.175-.185 of Title 53 and, as of the Effective Time, shall not have
failed to perfect or shall not have effectively withdrawn or lost their
rights to appraisal and payment under Sections 711.175-.185 of Title 53 (the
"DISSENTING SHARES") shall not be converted into the right to receive the
Merger Consideration as described in Section 2.5(a), but holders of such
shares shall instead be entitled to receive payment of the fair value of
such Dissenting Shares in accordance with the provisions of Sections
711.175-.185 of Title 53, except that any Dissenting Shares held by a holder
which shall
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have failed to perfect or shall have effectively withdrawn or lost its right
to appraisal and payment under Sections 711.175-.185 of Title 53 shall
thereupon be deemed to have been converted into the right to receive the
Merger Consideration as described in Section 2.5(a), without interest
thereon. Northern shall give Cowlitz (i) prompt notice of any written
demands for appraisal of any shares, attempted withdrawals of such demands,
and any other instruments served pursuant to Sections 711.175-.185 of Title
53 received by Northern relating to stockholders' rights of appraisal and
(ii) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal under Sections 711.175-.185 of Title 53. Northern
shall not, except with the prior written consent of Cowlitz, voluntarily
make any payment with respect to any demands for appraisals of capital stock
of Northern, offer to settle or settle any such demands or approve any
withdrawal of any such demands.
2.6 MERGER CONSIDERATION.
(a) For purposes of this Agreement and subject to the provisions hereof,
the "MERGER CONSIDERATION" shall be $7.05 per share of Northern Common Stock
and shall consist of two components: the Stock Consideration and the Cash
Consideration. The "STOCK CONSIDERATION" shall be $5.42 per share of
Northern Common Stock and shall consist of Cowlitz Common Stock valued at
$6.563. The "CASH CONSIDERATION" shall be $1.63 per share of Northern Common
Stock, but shall be subject to certain loss indemnification provisions
described in Section 3.2(b). In addition, the Merger Consideration, the
Stock Consideration and the Cash Consideration are subject to possible
adjustment at the Effective Time pursuant to this Section 2.6.
(b) If the Base Value of Northern, as calculated in accordance with
Section 2.6(e) is less than $4,707,139 but at least $1,150,000, then the
Merger Consideration and Stock Consideration shall be adjusted as of the
Effective Time as follows:
(i) the Merger Consideration shall be reduced by an amount (the
"Equity Adjustment Amount") equal to the product of (A) 1.75 and (B) a
fraction the numerator of which is the difference between $4,707,139 and
the Base Value and the denominator of which is the number of issued and
outstanding shares of Northern Common Stock as of the date of this
Agreement; and
(ii) the Stock Consideration shall be reduced by the Equity
Adjustment Amount.
In such event, there shall be no adjustment made to the Cash Consideration.
(c) If the total number of issued and outstanding shares of Northern
Common Stock as of the Effective Time is greater than the total number of
issued and outstanding shares of Northern Common Stock as of the date of
this Agreement, then the Merger Consideration, Stock Consideration and Cash
Consideration (after making any adjustments required under (b) above, if
applicable) shall be adjusted as of the Effective Time as follows:
(i) the Merger Consideration shall be the amount per share equal to
the amount calculated pursuant to 2.6(a) and (b) multiplied by a fraction
(the "CAPITALIZATION ADJUSTMENT FRACTION"), the numerator of which is
equal to the total number of issued and outstanding shares of Northern
Common Stock as of the date of this Agreement and the denominator of
which is equal to the total number of issued and outstanding shares of
Northern Common Stock as of the Effective Time;
(ii) the Stock Consideration shall be the amount per share equal to
the amount calculated pursuant to 2.6(a) and (b) multiplied by the
Capitalization Adjustment Fraction; and
(iii) the Cash Consideration shall be the amount per share equal to
$1.63 per share multiplied by the Capitalization Adjustment Fraction.
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(d) No later than the date which Cowlitz, Cowlitz Bank and Northern in
good faith estimate to be forty-five (45) days prior to the Effective Time.
Cowlitz and Cowlitz Bank shall, at their expense, engage a Loan Examiner to
identify in writing the loans of Northern which in such Loan Examiner's
good-faith judgment should under standard commercial banking practice be
classified as Special Mention, Substandard, Doubtful or Loss (each as
defined on Annex 2.6(d) hereto). The identification and classification of
such loans (the "Identified Loans") shall be delivered by such Loan Examiner
to Cowlitz, Cowlitz Bank and Northern no later than fifteen (15) business
days after his engagement. If Northern does not deliver written notice to
Cowlitz of Northern's objection to such identification and classification of
Identified Loans within three (3) business days after receipt thereof, then
such identification and classification shall be deemed final and binding on
the parties. If Northern timely delivers written notice of its objection,
then Northern, Cowlitz and Cowlitz Bank shall negotiate in good faith for up
to three (3) business days thereafter to resolve such dispute. If such
dispute remains unresolved after such period, Northern, Cowlitz and Cowlitz
Bank shall promptly agree on another Loan Examiner to resolve such dispute.
The decision of such other Loan Examiner shall be final and binding on the
parties. The loans established as classified loans pursuant to this
Section 2.6(d) are sometimes herein referred to as the "Identified Loans."
As used herein, Loan Examiner shall mean Fred Singer or any loan examiner,
loan reviewer or loan auditor (other than a current employee, officer or
director of Cowlitz, Cowlitz Bank or Northern) with at least ten (10) years
experience in commercial lending, banking and/or bank examining, including
at least two (2) years as a loan examiner, loan reviewer or loan auditor.
Northern agrees to provide access for the Loan Examiners as provided in
Section 7.2(a) hereof. To the extent permitted by United States generally
accepted accounting principles ("GAAP"), Northern agrees that it will have
provided on its books prior to the Effective Time a reserve for each
Identified Loan at least equal to (A) 5% of the principal amount of each
Identified Loan classified as Special Mention, (B) 15% of the principal
amount of each Identified Loan classified as Substandard, (C) 50% of the
principal amount of each Identified Loan classified as Doubtful and
(D) 100% of each Identified Loan classified as Loss, as well as a general
reserve equal to 1 1/2% of the aggregate principal amounts of all
outstanding loans (including without limitation all Identified Loans).
Nothing in the immediately preceding sentence shall be deemed to preclude
Northern from establishing, to the extent permitted by GAAP, reserves
allocated to specific loans in amounts greater than set forth in such
preceding sentence.
(e) As used in this Agreement, "Base Value" shall mean difference
between (i) total stockholders' equity of Northern immediately prior to the
Effective Time as calculated in accordance with GAAP applied on a consistent
basis and (ii) an amount equal to the after-tax reduction in such equity
that would be necessary to reflect additional losses or reserves (to the
extent not taken by Northern prior to the Effective Time) so that, for each
Identified Loan, Northern would have a reserve at the Effective Time equal
to (A) 5% of the principal amount of each Identified Loan classified as
Special Mention, (B) 15% of the principal amount of each Identified Loan
classified as Substandard, (C) 50% of the principal amount of each
Identified Loan classified as Doubtful and (D) 100% of the principal amount
of each Identified Loan classified as Loss, as well as a general reserve of
1 1/2% equal to the aggregate principal amounts of all outstanding loans
(including without limitation all Identified Loans).
(f) If prior to the Effective Time the outstanding shares of Northern
Common Stock shall, with the prior written consent of Cowlitz required by
Section 6.2, have been increased, decreased, changed into or exchanged for a
different number or kind of shares or securities as a result of a
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split, or other similar change in Northern Common
Stock's capitalization, then an appropriate and proportionate adjustment
shall be made to the Merger Consideration.
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2.7 COWLITZ STOCK; COWLITZ BANK STOCK. At and after the Effective Time,
each share of Cowlitz Common Stock and each share of any preferred stock of
Cowlitz issued and outstanding immediately prior to the Effective Time shall
remain an issued and outstanding share of common stock or preferred stock, as
the case may be, of Cowlitz and shall not be affected by the Merger. Each of the
issued and outstanding shares of common stock of Cowlitz Bank immediately prior
to the Effective Time shall remain issued and outstanding after the Merger as
shares of the Surviving Bank, which shall thereafter constitute all of the
issued and outstanding shares of common stock of the Surviving Bank. No capital
stock of Cowlitz Bank will be issued or used in the Merger. The amount of
capital of the Surviving Bank, the number of shares of the Surviving Bank's
capital stock and the par value thereof are set forth on Annex 2.7.
2.8 OPTIONS. The parties acknowledge and agree that Section 7.1.1 of the
Northern 1994 Stock Option Plan (the "NORTHERN STOCK OPTION PLAN") governs with
respect to the effect of the Merger on each option granted thereunder by
Northern to purchase shares of Northern Common Stock. In accordance with the
Northern Stock Option Plan, holders of such options shall have the right
immediately prior to the Effective Time to exercise such option to the extent
the vesting requirements set forth in the option agreement with respect to such
option have been satisfied. At the Effective Time, each option (vested or
unvested) granted by Northern to purchase shares of Northern Common Stock,
whether under the Northern Stock Option Plan or otherwise, which is outstanding
and unexercised immediately prior thereto shall cease to represent a right to
acquire shares of Northern Common Stock, shall automatically terminate and no
Merger Consideration or any other consideration shall be delivered in exchange
therefor.
2.9 CHARTER. At the Effective Time, the Charter of Cowlitz Bank, as in
effect at the Effective Time, shall be the Charter of the Surviving Bank, until
thereafter amended in accordance with applicable law.
2.10 BYLAWS. At the Effective Time, the Bylaws of Cowlitz Bank, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Bank until thereafter amended in accordance with applicable law.
2.11 BOARD OF DIRECTORS. At the Effective Time, Cowlitz and Cowlitz Bank
shall take all action necessary to appoint William Spicer to the Surviving
Bank's Board of Directors. Except for such appointment, the directors of Cowlitz
Bank immediately prior to the Effective Time shall continue to be the directors
of the Surviving Bank, each to hold office in accordance with the Charter and
Bylaws of the Surviving Bank, until their respective successors are duly elected
or appointed (as the case may be) and qualified. The names and addresses of the
directors of Cowlitz Bank, as well as the address of Mr. Spicer, are set forth
on Annex 2.11
2.12 OFFICERS. The officers of Cowlitz Bank immediately prior to the
Effective Time shall continue to be officers of the Surviving Bank, each to hold
office in accordance with the Charter and Bylaws of the Surviving Bank and the
terms of their appointment by the Board of Directors. The names and addresses of
the senior officers of Cowlitz Bank are set forth on Annex 2.12.
2.13 OFFICES. The name and location of each office of Cowlitz Bank and
Northern are set forth on Annex 2.13. These will become offices of the Surviving
Bank at the Effective Time. The principal office of Cowlitz Bank will be the
principal office of the Surviving Bank.
2.14 STOCK OPTION AGREEMENT. As an inducement to Cowlitz to continue to
pursue the transactions contemplated by this Agreement, Northern will grant to
Cowlitz an option pursuant to the Stock Option Agreement, substantially in the
form of Exhibit 2.14 hereto (the "STOCK OPTION AGREEMENT")
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2.15 TAX CONSEQUENCES. It is intended that, to the extent they so qualify,
the Merger shall constitute a reorganization within the meaning of
Section 368(a) of the Code and this Agreement shall constitute a "plan of
reorganization" as that term is used in Section 354 of the Code.
3. EXCHANGE OF SHARES
3.1 COWLITZ TO MAKE SHARES AVAILABLE. At or prior to the Effective Time,
Cowlitz shall deposit, or shall cause to be deposited, with a bank or trust
company of recognized standing, or Cowlitz's transfer agent (the "EXCHANGE
AGENT"), for the benefit of the holders of Common Certificates, for exchange in
accordance with this Section 3, (i) certificates representing the shares of
Cowlitz Common Stock and an estimated amount of cash that may be payable in lieu
of any fractional shares (such cash, and certificates for shares of Cowlitz
Common Stock, together with any dividends or distributions with respect thereto,
being hereinafter referred to as the "STOCK EXCHANGE FUND") to be issued
pursuant to Section 2.5 and paid pursuant to Section 3.2(a) in exchange for
outstanding shares of Northern Common Stock and (ii) cash in an amount (the
"AGGREGATE CASH CONSIDERATION") equal to the product of the Cash Consideration
and the number of shares of Northern Common Stock outstanding at the Effective
Time to be paid pursuant to and in the manner set forth in Section 3.2(b) in
exchange for outstanding shares of Northern Common Stock.
3.2 EXCHANGE OF CERTIFICATES.
(a) As soon as practicable after the Effective Time, the Exchange Agent
shall mail to each holder of record of a Common Certificate or Certificates
a form of letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Common Certificates shall pass,
only upon delivery of the Common Certificates to the Exchange Agent) and
instructions for use in effecting the surrender of the Common Certificates
in exchange for the Merger Consideration, into which the shares of Northern
Common Stock represented by such Common Certificate or Certificates shall
have been converted pursuant to this Agreement. Subject to Section 2.5(d),
upon proper surrender of a Common Certificate for exchange and cancellation
to the Exchange Agent, together with such properly completed letter of
transmittal, duly executed, the holder of such Common Certificate shall be
entitled to receive in exchange therefor, as applicable, (i) a certificate
representing that number of shares of Cowlitz Common Stock to which such
holder of Northern Common Stock shall have become entitled pursuant to the
provisions of Section 2 hereof, and (ii) a check representing the amount of
cash payable in lieu of fractional shares of Cowlitz Common Stock, if any,
which such holder has the right to receive in respect of the Common
Certificate surrendered pursuant to the provisions of this Section 3, and
the Common Certificate so surrendered shall forthwith be canceled. No
interest will be paid or accrued on the cash payable in lieu of fractional
shares.
(b) ESCROW.
(i) In order to ensure that Cowlitz Bank shall be properly reimbursed
for certain losses, the Exchange Agent shall, promptly upon receipt of
the Aggregate Cash Consideration, deliver an amount (the "ESCROWED
FUNDS") equal to the product of (A) the Cash Consideration and (B) the
total number of issued and outstanding shares of Northern Common Stock as
of the Effective Time (excluding all Dissenting Shares), to an escrow
agent (the "ESCROW AGENT") to be held in escrow (the "ESCROW") pursuant
to an escrow agreement in substantially the form attached hereto as
Exhibit 3.2, with such changes as may be reasonably requested by the
Escrow Agent and subject to the addition of Schedule 2 to the Escrow
Agreement in accordance with this Section 3.2(b) (the "ESCROW
AGREEMENT"). The Escrow Agent shall be a bank, trust company or other
entity mutually agreed upon by Cowlitz and Northern.
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(ii) A committee (the "COMMITTEE") shall be appointed by Northern and
Cowlitz Bank to deliver instructions to the Escrow Agent with respect to
the disbursement of the Escrowed Funds. Northern hereby appoints John
Walrod and Kurt Wollenberg to serve on the Committee as representatives
of the holders of Northern Common Stock (the "NORTHERN MEMBERS") and
Cowlitz Bank hereby appoints Charles Jarrett and Larry Ellis to serve on
the Committee as representatives of Cowlitz Bank (the "COWLITZ BANK
MEMBERS"). Cowlitz Bank shall have the right, from time to time and in
its sole discretion, to appoint a substitute Cowlitz Bank Member upon
written notice to the Escrow Agent and the Northern Members. If a
Northern Member should prior to the Effective Time become unable or
unwilling to serve on the Committee, such Northern Member shall give
Northern and Cowlitz prompt prior written notice thereof, and Northern
shall have the right, in its sole discretion, to appoint a substitute
Northern Member no later than the earlier of (A) the Effective Time or
(B) five (5) business days after delivery of such notice. If a Northern
Member should after the Effective Time become unable or unwilling to
continue to serve on the Committee after the Effective Time, such
Northern Member shall give Cowlitz Bank prior written notice thereof, and
within five (5) business days after delivery of such notice, the
remaining Northern Member shall have the right, in his or her sole
discretion, to appoint a substitute Northern Member; PROVIDED, that such
Substitute Northern Member (x) must have been a Stockholder at the
Effective Time, (y) (1) must have been a director or officer of Northern
at the Effective Time or (2) in the remaining Northern Member's
reasonable judgment, must be a sophisticated financial investor and
(z) is not a director, officer or employee of Cowlitz or Cowlitz Bank.
The parties agree that no Northern Member or Cowlitz Bank Member shall
have any liability to any party hereto or any holder of Northern Common
Stock with respect to acts or omissions in his or her capacity as a
member of the Committee, unless it is established in a final judicial
determination by clear and convincing evidence that any decision or
action was undertaken with deliberate intent to injure the holders of
Northern Common Stock or with reckless disregard for the best interest of
such holders, and in any event, the liability shall be limited to actual,
proximate, quantifiable damages.
(iii) The purpose of the Escrow shall be to ensure that Cowlitz Bank
is reimbursed for losses relating to the Identified Loans. Schedule 2 to
the Escrow Agreement shall be completed prior to the Effective Time by
listing thereon each Identified Loan (as determined pursuant to
Section 2.6(d)) and the Threshold Amount for each Identified Loan. Except
as provided in the immediately succeeding sentence, the "Threshold
Amount" shall mean for each Identified Loan the lesser of (A) the
difference between (i) the reserve for such Identified Loan on the books
of Northern immediately prior to the Effective Time (excluding any
portion of the general reserve for all oustanding loans) and (ii) the
Loan Adjustment Factor and (B) (i) 5% of the outstanding principal amount
if the Identified Loan is classified as Special Mention pursuant to the
procedure set forth in Section 2.6(d), less the Loan Adjustment Factor,
(ii) 15% of the principal amount if the Identified Loan is classified as
Substandard, less the Loan Adjustment Factor, (iii) 50% of the principal
amount if the Identified Loan is classified as Doubtful, less the Loan
Adjustment Factor, and (iv) 100% of the principal amount if the
Identified Loan is classified as Loss, less the Loan Adjustment Factor.
Notwithstanding the preceding sentence, if the Base Value exceeds
$4,707,139 and the amount determined pursuant to clause (A) of the
preceding sentence for an Identified Loan exceeds the amount determined
pursuant to clause (B) for such Identified Loan, then the Threshold
Amount for such Identified Loan shall equal the amount determined
pursuant to clause (A) above. "Loan Adjustment Factor" will be $0 if
Northern has on its books immediately prior to the Effective Time a
general reserve equal to at least 1 1/2% of the aggregate principal
amounts of all outstanding loans (including without limitation all
Identified Loans). If such general reserve is less than 1 1/2%, then the
Loan Adjustment Factor will equal
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the different between (i) 1 1/2% and (ii) the percentage of the remaining
general reserve that would be applicable to the Identified Loans after
moving sufficient general reserves to the non-Identified Loans so that
all non-Identified Loans would have a general reserve of 1 1/2%.
(iv) Reimbursements shall be made only for such losses identified
during the period from the Effective Date to the date (the "ESCROW
EXPIRATION DATE") which is 24 months after the Effective Date. Cowlitz
Bank shall be entitled to be reimbursed for any loss on an Identified
Loan to the extent that such loss exceeds the Threshold Amount for such
Identified Loan ("REIMBURSABLE LOSSES"); PROVIDED, HOWEVER, that the
aggregate of all of such reimbursements shall not exceed the Escrowed
Funds. The amount of Reimbursable Losses shall be calculated in the
manner set forth in the Escrow Agreement. Interest earned on the
Aggregate Cash Consideration while held in the Escrow shall remain in the
Escrow and shall not be available to reimburse Cowlitz Bank for
Reimbursable Losses. Fees and any other amounts owed to the Escrow Agent
shall be paid, first, out of the interest earned on the Escrowed Funds
and, second, out of the Escrowed Funds.
(v) The Escrow shall terminate upon the later to occur of (x) the
Escrow Expiration Date and (y) the proper reimbursement to Cowlitz Bank
of the Reimbursable Losses. Upon termination of the Escrow, the Escrow
Agent shall deliver all amounts then in Escrow (after deduction for
expenses and costs) to the Exchange Agent (the "CLOSING ESCROW AMOUNT").
Subject to Section 2.5(d), the Exchange Agent shall promptly pay, to each
holder of record of a Common Certificate who has properly surrendered
such Common Certificate as provided in Section 3.2(a), an amount for each
share of Northern Common Stock represented by such Common Certificate
equal to (A) the Closing Escrow Amount divided by (B) the number of
shares of Northern Common Stock outstanding at the Effective Time
(vi) The Cowlitz Members shall not have any duty to represent the
interests of stockholders of Northern and shall have no liability
whatsoever to such stockholders. The Northern Members will represent the
interests of stockholders of Northern, but no Northern Member shall have
any liability to any holder of Northern Common Stock with respect to his
or her capacity as a member of the Committee, unless it is established in
a final judicial determination by clear and convincing evidence that any
decision or action was undertaken with deliberate intent to injure the
holders of Northern Common Stock or with reckless disregard for the best
interests of such holders, and in any event, the liability shall be
limited to actual, proximate, quantifiable damages.
(c) No dividends or other distributions with a record date after the
Effective Time with respect to Cowlitz Common Stock shall be paid to the
holder of any unsurrendered Common Certificate entitled to receive shares of
Cowlitz Common Stock hereunder until the holder thereof shall surrender such
Common Certificate in accordance with this Section 3. After the surrender of
a Common Certificate in accordance with this Section 3, the record holder
thereof shall be entitled to receive any such dividends or other
distributions, without any interest thereon, which theretofore had become
payable with respect to shares of Cowlitz Common Stock represented by such
Common Certificate.
(d) If any certificate representing shares of Cowlitz Common Stock is to
be issued in the name of or cash is to be paid to a person other than the
registered holder of the Common Certificate surrendered in exchange
therefor, it shall be a condition of the issuance thereof that the Common
Certificate so surrendered shall be properly endorsed (or accompanied by an
appropriate instrument of transfer) and otherwise in proper form for
transfer, and that the person requesting such exchange shall pay to the
Exchange Agent in advance any transfer or other taxes required by reason of
the issuance of a certificate representing shares of Cowlitz Common Stock in
the name of and payment of cash to any person other than the registered
holder of the Common
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Certificate surrendered, or required for any other reason, or shall
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not payable.
(e) At or after the Effective Time, there shall be no transfers on the
stock transfer books of Northern of the shares of Northern Common Stock
which were issued and outstanding immediately prior to the Effective Time.
If, after the Effective Time, Common Certificates representing such shares
are presented for transfer to the Exchange Agent, they shall be canceled and
exchanged for certificates representing shares of Cowlitz Common Stock and
payment of cash as provided in this Section 3.
(f) Notwithstanding anything to the contrary contained herein, no
certificates or scrip representing fractional shares of Cowlitz Common Stock
shall be issued upon the surrender for exchange of Common Certificates, no
dividend or distribution with respect to Cowlitz Common Stock shall be
payable on or with respect to any fractional share, and such fractional
share interests shall not entitle the owner thereof to vote or to any other
rights of a stockholder of Cowlitz. In lieu of the issuance of any such
fractional share, Cowlitz shall pay to each former holder of Northern Common
Stock who otherwise would be entitled to receive such fractional share an
amount in cash determined by multiplying (i) the Market Value of Cowlitz
Common Stock as of the Effective Date by (ii) the fraction of a share of
Cowlitz Common Stock to which such holder would otherwise be entitled to
receive pursuant to Section 2.5 hereto. For purposes of determining any such
fractional share interests, all shares of Northern Common Stock owned by any
Northern stockholder shall be combined so as to calculate the maximum number
of shares of Cowlitz Common Stock issuable to such holder of Northern Common
Stock and no such holder shall receive cash in an amount equal to or greater
than the Stock Consideration per share.
(g) Any portion of the Stock Exchange Fund that remains unclaimed by the
stockholders of Northern for twelve months after the Effective Time shall be
paid, at the request of Cowlitz, to Cowlitz. Any stockholders of Northern
who have not theretofore complied with this Section 3 shall thereafter look
only to Cowlitz for payment of the shares of Cowlitz Common Stock, cash in
lieu of any fractional shares and unpaid dividends and distributions on the
Cowlitz Common Stock deliverable in respect of each share of Northern Common
Stock held by such stockholder at the Effective Time as determined pursuant
to this Agreement, in each case, without any interest thereon. After the
Exchange Agent has received the Closing Escrow Amount and made the payments
to former holders of Northern Common Stock as required by Section 3(b), any
unpaid amounts shall promptly be delivered by the Exchange Agent to Cowlitz.
Any holders of Northern Common Stock who have not theretofore complied with
this Section 3 shall thereafter look only to Cowlitz for payment of the Cash
Consideration (as adjusted by the amounts paid to Cowlitz Bank from the
Escrow with respect to Reimbursable Losses) to which they are entitled
pursuant to this Agreement, without any additional interest thereon.
Notwithstanding anything to the contrary contained herein, none of Cowlitz,
Northern, the Exchange Agent or any other person shall be liable to any
former holder of shares of Northern Common Stock for any amount properly
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
(h) In the event any Common Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person
claiming such Common Certificate to be lost, stolen or destroyed and, if
required by Cowlitz, the posting by such person of a bond in such amount as
Cowlitz may determine is reasonably necessary as indemnity against any claim
that may be made against it with respect to such Common Stock Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Common Certificate the shares of Cowlitz Common Stock and cash (including
cash in lieu of fractional shares) deliverable in respect thereof pursuant
to this Agreement.
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4. REPRESENTATIONS AND WARRANTIES OF NORTHERN
Northern hereby represents and warrants to Cowlitz and Cowlitz Bank as
follows:
4.1 CORPORATE ORGANIZATION. Northern is a banking corporation duly
organized and validly existing under the laws of the State of Oregon. Northern
has the corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted, and is duly
licensed or qualified to do business in each jurisdiction in which the nature of
the business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not have nor
reasonably be expected to have a Material Adverse Effect (as defined below) on
Northern. As used in this Agreement, the term "MATERIAL ADVERSE EFFECT" means,
with respect to Northern, a material adverse effect on the business, results of
operations, financial condition or prospects of Northern or a material adverse
effect on Northern's ability to consummate the transactions contemplated hereby
on a timely basis; PROVIDED, HOWEVER, that a Material Adverse Effect on Northern
shall not be deemed to have occurred as a result of (i) any changes in laws,
regulations or GAAP or (ii) any changes in general economic conditions affecting
commercial banking businesses generally. The deposits of Northern are insured by
the Federal Deposit Insurance Corporation (the "FDIC") through the Bank
Insurance Fund (the "BIF") to the fullest extent permitted by law. The copies of
the Charter and Bylaws of Northern which have previously been made available to
Cowlitz are true, complete and correct copies of such documents as in effect as
of the date of this Agreement. Northern has no Subsidiaries.
4.2 CAPITALIZATION.
(a) The authorized capital stock of Northern consists of 10,000,000
shares of Northern Common Stock and no shares of preferred stock. At the
close of business on August 31, 1999, there were 1,225.597 shares of
Northern Common Stock outstanding and no shares of Northern Common Stock
held in Northern's treasury. As of September 13, 1999, no shares of Northern
Common Stock were reserved for issuance, except for 868,032 shares of
Northern Common Stock reserved for issuance upon the exercise of stock
options pursuant to the Northern Stock Option Plan, 738,211 shares of
Northern Common Stock reserved for issuance upon exercise of the stock
options set forth in Section 4.2(a) of the disclosure schedule of Northern
delivered to Cowlitz concurrently herewith (the "NORTHERN DISCLOSURE
SCHEDULE"), and 243,893 shares of Northern Common Stock reserved for
issuance upon exercise of the Option (as defined in the Stock Option
Agreement). All of the issued and outstanding shares of Northern Common
Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. As of the date of this Agreement, except
(i) as set forth in Section 4.2(a) of the Northern Disclosure Schedule,
(ii) the Option and (iii) as set forth elsewhere in this Section 4.2(a),
Northern does not have and is not bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling
for the purchase or issuance of any shares of Northern Common Stock or
Northern Preferred Stock or any other equity securities of Northern or any
securities representing the right to purchase or otherwise receive any
shares of Northern Common Stock or Northern Preferred Stock. Except as set
forth in Section 4.2(a) of the Northern Disclosure Schedule, since
August 31, 1999, Northern has not issued any shares of its capital stock or
any securities convertible into or exercisable for any shares of its capital
stock, other than the exercise of employee stock options granted prior to
such date and as disclosed in Section 4.2(a) of the Northern Disclosure
Schedule. Northern has no stockholder rights plan, anti-takeover plan,
"poison pill" or other similar plan.
(b) Except as disclosed in Section 4.2(b) of the Northern Disclosure
Schedule, Northern does not beneficially own or control, directly or
indirectly, any shares of stock or other equity interest in
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any depository institution (as defined in 12 U.S.C. Section1813(c)),
corporation, firm, partnership, joint venture or other entity.
4.3 AUTHORITY; NO VIOLATION.
(a) Northern has full corporate power and authority to execute and
deliver this Agreement and the Stock Option Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Stock Option Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
approved by the Board of Directors of Northern. The Board of Directors of
Northern has directed that this Agreement and the Merger be submitted to
Northern's stockholders for approval at a meeting of such stockholders and,
except for the approval of this Agreement and the Merger by the affirmative
vote of the holders of two-thirds of the voting power represented by the
outstanding shares of Northern Common Stock, no other corporate proceedings
on the part of Northern are necessary to approve this Agreement or the Stock
Option Agreement or to consummate the transactions contemplated hereby and
thereby. This Agreement and the Stock Option Agreement have been duly and
validly executed and delivered by Northern and (assuming due authorization,
execution and delivery by Cowlitz and Cowlitz Bank) each constitutes a valid
and binding obligation of Northern, enforceable against Northern in
accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity
and by bankruptcy, insolvency, fraudulent transfer, receivership, or
conservatorship and similar laws affecting creditors' rights and remedies
generally.
(b) Except as set forth in Section 4.3(b) of the Northern Disclosure
Schedule, neither the execution and delivery of this Agreement or the Stock
Option Agreement by Northern nor the consummation by Northern of the
transactions contemplated hereby or thereby, nor compliance by Northern with
any of the terms or provisions hereof or thereof, will (i) violate any
provision of the Charter or Bylaws of Northern or (ii) assuming that the
consents and approvals referred to in Section 4.4 are duly obtained,
(x) violate any statute, code, ordinance, rule, regulation, judgment, order,
writ, decree or injunction applicable to Northern or any of its properties
or assets, or (y) violate, conflict with, result in a breach of any
provision of or the loss of any benefit under, constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of or a right of termination or
cancellation under, accelerate the performance required by, or result in the
creation of any liens, charges, pledges, encumbrances, mortgages, adverse
rights or claims, or security interests whatsoever ("LIENS") upon any of the
properties or assets of Northern under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which Northern is a
party, or by which Northern or any of its properties or assets may be bound
or affected, except (in the case of clause (y) above) for such violations,
conflicts, breaches or defaults which, either individually or in the
aggregate, will not have and would not reasonably be expected to have a
Material Adverse Effect on Northern.
4.4 CONSENTS AND APPROVALS. Except for (i) the approval of this Agreement
and the Merger by the FDIC, the Washington Director and the Oregon Director,
(ii) approval of the listing of Cowlitz Common Stock to be issued in the Merger
on The Nasdaq National Market ("NASDAQ"), (iii) the filing with the Securities
and Exchange Commission (the "SEC") and the FDIC of a proxy statement in
definitive form relating to the meetings of Northern's and Cowlitz's
stockholders to be held to vote on approval of this Agreement and the Merger
(the "PROXY STATEMENT/PROSPECTUS") and the filing and declaration of
effectiveness of the registration statement on Form S-4 (the "S-4") in which the
Proxy Statement/Prospectus will be included as a prospectus and any filings or
approva
