MERGER AGREEMENT
This Merger Agreement ("Agreement") is entered into as of this 13th day
of October 1997, by and between ▇▇▇▇▇ Bancorp, Inc. (hereinafter called
"▇▇▇▇▇") and Chippewa Valley Bancshares, Inc. (hereinafter called "CVB").
RECITALS
A. Wayne is a corporation duly organized under the laws of the State of
Ohio. Its principal office is located at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇. As of the date hereof, ▇▇▇▇▇ had authorized capital stock consisting of
5,400,000 shares of common stock without par value ("▇▇▇▇▇ Common Stock")
of which a total of 3,935,512 shares were issued and outstanding and 380 shares
were held as treasury shares. ▇▇▇▇▇ owns all of the outstanding capital stock
of The ▇▇▇▇▇ County National Bank ("▇▇▇▇▇ Bank"), a national banking
association organized under the laws of the United States of America.
B. CVB is a corporation duly organized under the laws of the State of
Ohio. Its principal office is located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇. As of the date hereof, CVB had authorized capital stock consisting of
500,000 shares of common stock without par value ("CVB Common Stock"), of
which 448,000 shares were issued and outstanding and no shares were held as
treasury shares. CVB owns all of the outstanding capital stock of The Chippewa
Valley Bank (hereinafter referred to as the "Chippewa Bank"), a banking
corporation organized under the laws of the State of Ohio.
C. At least a majority of the entire Board of Directors of ▇▇▇▇▇ and at
least a majority of the entire Board of Directors of CVB, respectively, have
approved the entering into of this Merger Agreement and have authorized the
execution and delivery of this Merger Agreement. From and after the time the
merger of CVB into ▇▇▇▇▇ shall become effective, the "Merger" as defined in
Section 1 of this Merger Agreement, and as and when required by this Merger
Agreement, ▇▇▇▇▇ will issue shares of ▇▇▇▇▇ Common Stock in exchange for all
of the issued and outstanding shares of CVB Common Stock in accordance with
the provisions hereinafter set forth. It is understood by each of the parties
hereto that ▇▇▇▇▇ seeks to acquire CVB and all of the operating assets of CVB
including the Chippewa Bank and the entities and assets which CVB and the
Chippewa Bank may acquire prior to the time the Merger shall become effective,
through the Merger of CVB with and into ▇▇▇▇▇ under the charter of ▇▇▇▇▇ and
Chippewa Bank will, immediately after the effective date of the Merger, remain
an independent operating subsidiary of ▇▇▇▇▇. The parties will exert their best
efforts to obtain such regulatory approvals and to complete such other actions
as are necessary or appropriate to effect the Merger.
AGREEMENT
In consideration of mutual covenants and premises herein contained, ▇▇▇▇▇ and
CVB hereby make this Merger Agreement and prescribe the terms and conditions
of the Merger and the mode of carrying the Merger into effect as follows:
1. Merger. Subject to the terms and conditions hereinafter set forth, CVB
shall be merged with and into ▇▇▇▇▇ under the Articles of Incorporation of
▇▇▇▇▇ pursuant to and in accordance with the applicable provisions of the laws
of the State of Ohio ("Merger").
2. Name. The name of the surviving corporation (hereinafter called the
"Surviving Corporation" whenever reference is made to it as of the time the
Merger shall become effective, as hereinafter provided, or thereafter) shall be
"▇▇▇▇▇ Bancorp, Inc."
3. Business. The business of ▇▇▇▇▇ as the Surviving Corporation shall be
that of a bank holding company. The Surviving Corporation shall exist by
virtue of, and be governed by the laws of the State of Ohio and shall have its
principal office in Ohio at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
4. Effective Time of Merger: Articles of Merger. The Merger shall become
effective upon the date of the filing of the appropriate Certificate of Merger
with the Ohio Secretary of State (the "time the Merger shall become effective")
in accordance with applicable provisions of the laws of the State of Ohio.
The Articles of Incorporation of ▇▇▇▇▇ in effect immediately prior to the
time the Merger shall become effective, shall be the Articles of Incorporation
of the Surviving Corporation, and the Code of Regulations of ▇▇▇▇▇ in effect
immediately prior to the time the Merger shall become effective, shall be the
Code of Regulations of the Surviving Corporation.
5. Effect of Merger. At the time the Merger shall become effective, the
separate corporate existence of CVB shall, in accordance with applicable
provisions of the laws of the State of Ohio, be merged into and continued in
▇▇▇▇▇ as the Surviving Corporation, with the effect as provided by Section
1701.82 of the Ohio Revised Code.
6. Liabilities upon Merger. The Surviving Corporation shall be responsible
for all of the liabilities and obligations of each of the corporations so merged
in the same manner and to the same extent as if such single corporation had
itself incurred the same or contracted therefor, all in the manner and as
provided for by Sections 1701.82(A)(1),(2),(3),(4), and (5) of the Ohio Revised
Code.
7. Conversion of Shares.
(a) At the time the Merger shall become effective;
(i) All of the outstanding shares of CVB Common Stock shall
be converted by operation of law without any action by the holder
thereof and shall be exchanged for such number of shares of
▇▇▇▇▇ Common Stock equal to three hundred fifty Percent (350%)
of the "Adjusted Book Value" (as defined below) of a share of
CVB Common Stock divided by the "Market Value" ( as
defined below ) of ▇▇▇▇▇ Common Stock
which amount shall be herein referred to
as the "Exchange Ratio." "Adjusted Book Value" shall mean
the book value of a share of CVB Common Stock as of December
31, 1997, calculated in accordance with Generally Accepted
Accounting Principles, as adjusted for: (1) the impact of FASB
115; and (2) increased by the net write-off of goodwill during the
fourth quarter of 1997; and (3) increased by the net effect of
increasing CVB's loan loss reserve in the amount of $500,000
during the fourth quarter of 1997. The "Market Value" shall
represent the per share market value of the ▇▇▇▇▇ Bancorp
Common Stock at the Effective Date and shall be determined by
calculating the average of the closing bid and asked prices of the
Common Stock of ▇▇▇▇▇ as reported by the NASDAQ on each of
the ten (10) consecutive trading days ending on the trading day five
calendar days preceding the Effective Date. Regardless of the
Market Value, however, the maximum number of shares of ▇▇▇▇▇
Bancorp Common Stock to be issued in the Merger shall be
1,023,737 shares, and the minimum number of shares of ▇▇▇▇▇
Bancorp Common Stock to be issued in the Merger shall be
981,837, all of which calculations assume 448,000 shares of CVB
Common Stock outstanding.
(ii) The shares of ▇▇▇▇▇ Common Stock issued and
outstanding immediately prior to the time the Merger shall become
effective shall continue to be issued and outstanding shares of the
Surviving Corporation.
(iii) If prior to the Merger, shares of ▇▇▇▇▇ Common Stock
shall be changed into a different number of shares or a different
class of shares by reason of any reclassification, recapitalization,
split-up, combination, exchange of shares or readjustment, or there
occurs a distribution of warrants or rights with respect to the
▇▇▇▇▇ Common Stock or a stock dividend, stock split or other
general distribution of ▇▇▇▇▇ Common Stock is declared with a
record date prior to the effective time of the Merger, then in any
event the Exchange Ratio shall be appropriately adjusted.
(b) No fractional shares of ▇▇▇▇▇ Common Stock will be issued by
▇▇▇▇▇ in connection with the Merger, but in lieu thereof, holders of CVB
Common Stock shall, upon surrender of the certificate or certificates
formerly representing such CVB Common Stock be paid cash without
interest by ▇▇▇▇▇ for such fractional share(s). The cash paid for each
fractional share shall be the same fraction of the average bid and asked
closing price per share of ▇▇▇▇▇ Common Stock on the Closing Date.
(c) As soon as practicable, but not later than ten (10) days after the
time the Merger shall become effective, and subject to the provisions set
forth above relating to the fractional shares, ▇▇▇▇▇, or an Exchange Agent
designated thereby and approved by CVB, will distribute to the
former holders of CVB Common Stock in exchange for and upon
surrender for cancellation by such holders of a certificate or certificates
formerly representing shares of CVB Common Stock the
certificate(s) for shares of ▇▇▇▇▇ Common Stock in accordance with the
Exchange Ratio and any cash payment in lieu of fractional shares. Each
certificate formerly representing CVB Common Stock (other than
certificates representing shares of CVB Common Stock subject to the
rights of dissenting shareholders) shall be deemed for all purposes to
evidence the ownership of the number of whole shares of ▇▇▇▇▇ Common
Stock and cash for fractional share interests in ▇▇▇▇▇ Common Stock into
which such shares have been converted pursuant to the Exchange Ratio.
Until surrender of the certificate or certificates formerly representing
shares of CVB Common Stock, the holder thereof shall not be entitled to
receive any dividend or other payment or distribution payable to holders of
▇▇▇▇▇ Common Stock. Upon such surrender (or in lieu of surrender other
provisions reasonably satisfactory to ▇▇▇▇▇ as are made as set forth in the
next following paragraph), there shall be paid to the person entitled thereto
the aggregate amount of dividends or other payments or distributions (in
each case without interest) which became payable after the time the
Merger shall become effective on the whole shares of ▇▇▇▇▇ Common
Stock represented by the certificates issued upon such surrender and
exchange or in accordance with such other provisions, as the case may be.
After the time the Merger shall become effective, the holders of
certificates formerly representing shares of CVB Common Stock shall
cease to have rights with respect to such shares (except such rights, if any,
as a holder of certificates formerly representing shares of CVB Common
Stock may have as dissenting shareholders pursuant to the Ohio General
Corporation Law) and except as aforesaid, their sole rights shall be to
exchange said certificates for certificates for shares of ▇▇▇▇▇ Common
Stock in accordance with this Merger Agreement.
Certificates formerly representing shares of CVB Common Stock
surrendered for cancellation by each shareholder entitled to exchange
shares of CVB Common Stock for shares of ▇▇▇▇▇ Common Stock by
reason of the Merger shall be accompanied by such appropriate
instruments of transfer as ▇▇▇▇▇ may reasonably require, provided,
however, that if there be delivered to ▇▇▇▇▇ by any person who is unable
to produce any such certificate formerly representing shares of CVB
Common Stock for transfer (i) evidence to the reasonable satisfaction of
▇▇▇▇▇ that any such certificate has been lost, wrongfully taken or
destroyed, and (ii) such indemnity agreement and, at the discretion of
▇▇▇▇▇, an indemnity bond, as reasonably may be requested by ▇▇▇▇▇ to
save it harmless, and (iii) evidence to the reasonable satisfaction of ▇▇▇▇▇
that such person is the owner of the shares theretofore represented by each
certificate claimed by him to be lost, wrongfully taken or destroyed and
that he is the person who would be entitled to present each such certificate
and to receive shares of ▇▇▇▇▇ Common Stock pursuant to this Merger
Agreement, then ▇▇▇▇▇, in the absence of actual notice to it that any
shares theretofore represented by any such certificate have been acquired
by a bona fide purchaser, shall deliver to such person the certificate(s)
representing shares of ▇▇▇▇▇ Common Stock which such person would
have been entitled to receive upon surrender of each such lost, wrongfully
taken or destroyed certificate representing shares of CVB Common Stock.
8. Board of Directors. The Board of Directors of ▇▇▇▇▇ as constituted at the
time the Merger shall become effective shall serve as the Board of Directors of
▇▇▇▇▇ as the Surviving Corporation plus two additional members from CVB's
board of directors to be named by ▇▇▇▇▇.
9. Discussions with Others. On and after the date hereof, except with the
written consent of ▇▇▇▇▇, CVB shall not directly or indirectly solicit or
encourage (nor shall CVB permit any of its officers, directors, employees or
agents directly or indirectly to solicit or encourage), including by way of
furnishing information, any inquiries or proposals for a merger, consolidation,
share exchange or similar transaction involving CVB or Chippewa Bank or for the
acquisition of the stock or all or substantially all of the assets or business
of CVB or Chippewa Bank, or discuss with or enter into conversations with any
person, other than CVB stockholders or employees, concerning any such merger,
consolidation, share exchange, acquisition or other transaction, other than the
proposed transaction with ▇▇▇▇▇, provided, however, that CVB may
communicate information about any such proposals or inquiries to its
stockholders if and to the extent that it is required to do so in order to
reasonably comply with its legal obligations. CVB will promptly notify ▇▇▇▇▇
orally (to be confirmed in writing as soon as practicable thereafter) of all of
the relevant details relating to any inquiries or proposals that it may receive
relating to any such matters, including actions it intends to take with respect
to such matters. In order
to induce ▇▇▇▇▇ to enter into this Agreement and incur the substantial expenses
involved in effectuating the transactions contemplated herein, CVB agrees and
does hereby promise to pay to ▇▇▇▇▇ the sum of $500,000, upon Wayne's
demand therefor, in the event that the CVB shareholders fail to approve the
proposed transaction with ▇▇▇▇▇ and CVB approves an offers from and
negotiates with any party other than ▇▇▇▇▇ at any time within one (1) year of
the date hereof concerning such transaction. Further, CVB and ▇▇▇▇▇ each hereby
agree to enter into the Stock Option Agreement in the form attached hereto as
Exhibit A immediately upon the execution of this Agreement.
10. Undertakings of the Parties. ▇▇▇▇▇ and CVB further agree as follows:
(a) This Merger Agreement shall be submitted to the shareholders of
CVB and, if required by law, ▇▇▇▇▇ for approval and adoption at separate
meetings to be called and held in accordance with law and the Articles of
Incorporation and Code of Regulations of CVB and ▇▇▇▇▇.
(b) ▇▇▇▇▇ and CVB will cooperate in the preparation by ▇▇▇▇▇ of the
application to the Board of Governors of the Federal Reserve System (the
"Board") under the appropriate provisions of Section 3 of the Bank
Holding Company Act of 1956, as amended, and to any other state or
federal regulatory agency which may be required to facilitate the Merger.
▇▇▇▇▇ will file such applications within seventy-five (75) days after the
date of this Merger Agreement and shall forward a copy of such
applications to CVB and its counsel upon filing. ▇▇▇▇▇ and CVB will
cooperate in the preparation of proxy and registration statements under
federal and state securities laws so as to facilitate the exchange of shares as
contemplated by this Merger Agreement.
(c) Each party will assume and pay all of its fees and expenses
incurred by it incident to the negotiation, preparation and execution of this
Agreement, obtaining of the requisite regulatory and shareholder consents
and approvals and all other acts incidental to, contemplated by or in
pursuance of this Agreement. ▇▇▇▇▇ shall promptly prepare and file at no
expense to CVB: (i) any and all required regulatory applications necessary
in connection with the transactions contemplated by this Agreement; and
(ii) an S-4 Registration Statement to be filed with the Securities and
Exchange Commission to register the shares of ▇▇▇▇▇ Common Stock to
be issued in connection with the transactions contemplated by this
Agreement. Such registration statement will not cover resales by any
persons who may be considered "underwriters" under Rule 145(c) of the
Securities Act of 1933, as amended (the "1933 Act"). ▇▇▇▇▇ will also
take any action required to be taken under any applicable state securities or
"Blue Sky" laws in connection with the Merger. ▇▇▇▇▇ will provide CVB
and it counsel with a copy of the S-4 Registration Statement for review
and comment prior to filing with the Securities and Exchange
Commission.
(d) All information furnished by one party to another party in
connection with this Merger Agreement and the transactions contemplated
hereby will be kept confidential by such other party and will be used only
in connection with this Merger Agreement and the transactions
contemplated hereby, except to the extent that such information: (i) is
already known to such other party when received; (ii) thereafter becomes
lawfully obtainable from other sources; or (iii) is required to be disclosed
in any document filed with the Securities and Exchange Commission, the
Board, or any other governmental agency or authority (except under a
claim of confidentiality). In the event the Merger Agreement is
terminated, all such information shall be promptly returned by each party
to the other party or be destroyed.
(e) After: (i) receipt of the Federal Reserve Board's prior approval of
Wayne's acquisition of CVB; (ii) the approval of the shareholders of CVB
and, if required, ▇▇▇▇▇ as provided in Section 10(a) has occurred; and (iii)
all other regulatory approvals have been obtained and the regulatory
waiting period(s) have expired, ▇▇▇▇▇ shall designate the date as of which
▇▇▇▇▇ desires the Merger to become effective and shall file the
appropriate Certificate of Merger with the Ohio Secretary of State in
accordance herewith and the time the Merger shall become effective shall
occur at the time and on the date so designated, consistent with the terms
of Section 4 hereof. However, any date so specified shall not be later than
either (a) the first day of the month immediately following the month in
which the last of the events described above (i-iii) occurs if said event
occurs before the sixteenth day of such month or (b) the first day of the
second month immediately following such month if the last of the events
described above occurs after the sixteenth day of such month.
Notwithstanding the foregoing, in no event shall the Merger become
effective before March 31, 1998.
(f) Subject to the terms and conditions of this Merger Agreement,
▇▇▇▇▇ and CVB each agree that, subject to applicable laws and to the
fiduciary duties of its Directors, each will promptly take or cause to be
taken all action, and promptly do or cause to be done all things necessary,
proper or advisable under applicable laws and regulations to consummate
and make effective the Merger and other transactions contemplated by this
Merger Agreement.
(g) ▇▇▇▇▇ undertakes to cause, immediately after the effective date of
the Merger, the election as Directors of Chippewa Bank, all those persons
serving as Directors immediately prior to the effective time of the Merger
together with two additional persons to be selected by ▇▇▇▇▇.
(h) ▇▇▇▇▇, CVB, and their respective Directors and Executive
Officers shall not cause any trades, transfers or other transactions in
▇▇▇▇▇ Common Stock during the 20 business days immediately
preceding the effective date of the Merger.
11. Dissenting Shareholders. Holders of CVB Common Stock shall have the
rights accorded to dissenting shareholders under Section 1701.85 of the Ohio
Code, as amended.
12. Representations and Warranties of ▇▇▇▇▇. ▇▇▇▇▇ represents and
warrants to CVB as follows:
(a) ▇▇▇▇▇ is a corporation duly organized and validly existing under
the laws of the State of Ohio, is a registered bank holding company under
the Bank Holding Company Act of 1956, as amended, and is qualified to
do business and is in good standing in the State of Ohio, together with all
other jurisdictions where it is both required to so qualify and the failure to
so qualify would have material and adverse consequences to ▇▇▇▇▇.
▇▇▇▇▇ has full power and authority (including all licenses, franchises,
permits and other governmental authorizations which are legally
required) to engage in the businesses and activities now conducted by it.
As of the date of this Agreement, the authorized capital stock of ▇▇▇▇▇
consisted of 5,400,000 shares of common stock without par value of
which a total of 3,935,512 shares were issued and outstanding. All of
said shares of capital stock are fully paid and nonassessable and are not
issued in violation of the preemptive rights of any shareholder. ▇▇▇▇▇
owns all of the outstanding capital stock of ▇▇▇▇▇ Bank. There are no
outstanding options, warrants or commitments of any kind relating to the
issue or sale of Wayne's capital stock.
The corporate minute books of ▇▇▇▇▇ which will be made
available to CVB contain, in all material respects, records of all meetings
and other corporate actions of Wayne's shareholders, directors and
committees of directors. ▇▇▇▇▇ will deliver to CVB copies of the
Articles of Incorporation and Code of Regulations of ▇▇▇▇▇, including
all amendments thereto. ▇▇▇▇▇ Bank is a national banking association
duly organized and validly existing under the laws of the United States
and has the full power and authority, corporate or otherwise, to own its
property and to carry on its business activities as such activities are
presently conducted.
(b) ▇▇▇▇▇ has furnished to CVB and its counsel copies of the
following financial statements relating to ▇▇▇▇▇ and its consolidated
subsidiaries: (i) the audited Consolidated Balance Sheet of ▇▇▇▇▇ as of
December 31, 1996 and 1995 and the Consolidated Statements of
Income, Shareholders' Equity and Statements of Cash Flows for the years
then ended, together with the notes and report of ▇▇▇▇▇, ▇▇▇▇▇▇ &
Company LLP thereto. Each of the aforementioned financial statements
is true and correct in all material respects and together present fairly the
consolidated financial position and results of operations of ▇▇▇▇▇ as of
the dates and for the periods therein set forth in conformity with generally
accepted accounting principles ("GAAP"). Such financial statements do
not, as of the dates thereof, include any material asset or omit any
material liability, absolute or contingent, or other fact, the inclusion or
omission of which renders such financial statements, in light of the
circumstances under which they were made, misleading in any material
respect. Since December 31, 1996, there has not been any material
adverse change in the financial condition, results of operations, business
or prospects of ▇▇▇▇▇ and its subsidiaries on a consolidated basis.
(c) The Board of Directors of ▇▇▇▇▇ has authorized execution of this
Merger Agreement and approved the merger of CVB and ▇▇▇▇▇ as
contemplated by said Merger Agreement. ▇▇▇▇▇, subject to approval of
its shareholders, has all requisite power and authority to enter into this
Merger Agreement and ▇▇▇▇▇ has the authority to consummate the
transactions contemplated hereby. This Merger Agreement constitutes
the valid and legally binding obligation of ▇▇▇▇▇ and this Merger
Agreement and the consummation hereof has been duly authorized and
approved on behalf of ▇▇▇▇▇ by all requisite corporate action. Provided
the required approvals are obtained from the Federal Reserve Board and
any other necessary regulatory agencies, neither the execution and
delivery of this Merger Agreement nor the consummation of the Merger
will conflict with, result in the breach of, constitute a default under or
accelerate the performance provided by the terms of any law, or any rule
or regulation of any governmental agency or authority or any judgment,
order or decree of any court or other governmental agency to which
▇▇▇▇▇ may be subject, any contract, agreement or instrument to which
▇▇▇▇▇ is a party or by which ▇▇▇▇▇ is bound or committed, or the
Articles of Incorporation or Code of Regulations of ▇▇▇▇▇ or the Articles
of Association or Bylaws of ▇▇▇▇▇ Bank, or constitute an event which,
including with the lapse of time or action by a third party, could, to the
best of Wayne's knowledge, result in the default under any of the
foregoing or result in the creation of any lien, charge or encumbrance
upon any of the assets or properties of ▇▇▇▇▇ or any of its subsidiaries or
upon any of the stock of ▇▇▇▇▇ or any of its subsidiaries, except,
however, in the case of contracts, agreements or instruments, such
defaults, conflicts or breaches which either (i) will be cured or waived
prior to the time the Merger becomes effective, or (ii) if not so cured or
waived would not, in the aggregate, have any material adverse effect on
the financial condition, results of operations or business of ▇▇▇▇▇ on a
consolidated basis.
(d) There is no litigation, action, suit, investigation or proceeding
pending or, to the best of the knowledge after due inquiry of ▇▇▇▇▇ and
its executive officers, threatened, against ▇▇▇▇▇ or its subsidiaries or
involving any of their respective properties or assets, at law or in equity,
before any federal, state, municipal, local or other governmental
authority, involving a material amount which, if resolved adversely to the
interest of ▇▇▇▇▇ or its subsidiaries, would materially affect the financial
condition or operations of ▇▇▇▇▇ or its subsidiaries on a consolidated
basis and/or Wayne's ability to perform under this Merger Agreement,
and to the best of the knowledge and belief after due inquiry of ▇▇▇▇▇
and its executive officers, no one has asserted and no one has reasonable
or valid grounds on which it reasonably can be expected that anyone will
assert any such claims against ▇▇▇▇▇ or its subsidiaries based upon the
wrongful action or inaction of ▇▇▇▇▇ or its subsidiaries or any of their
respective officers, directors or employees.
(e) At the time the Merger shall become effective and on such
subsequent date when the former shareholders of CVB surrender their
CVB share certificates for cancellation, the shares of ▇▇▇▇▇ Common
Stock to be received therefore will have been duly authorized and validly
issued by ▇▇▇▇▇ and will be fully paid and nonassessable and be issued
free of preemptive rights.
(f) ▇▇▇▇▇ has timely filed all reports and registration statements
(collectively, "SEC Documents") required to be filed by it pursuant to the
Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, and such SEC Documents complied in all material
respects with the Securities Act of 1933 and the Securities Exchange Act
of 1934 and all applicable rules and regulations promulgated thereunder
(the "SEC Laws"). ▇▇▇▇▇ has delivered to CVB copies of the Annual
Report on Form 10-K filed with the Securities and Exchange Commission
by ▇▇▇▇▇ for its fiscal year ended December 31, 1996, including exhibits
and all documents incorporated by reference therein, and the proxy
materials disseminated by ▇▇▇▇▇ to its shareholders in connection with
the 1997 Annual Meeting of Shareholders of ▇▇▇▇▇. Such Annual Report
and proxy materials and the SEC Documents do not misstate a material
fact or omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which
they are made, not misleading.
(g) Since December 31, 1996: (i) each of ▇▇▇▇▇ and its subsidiaries
has conducted business in the ordinary course, and has preserved its
corporate existence, business and goodwill intact; (ii) there has been no
material adverse change in the assets, liabilities, business or operations of
▇▇▇▇▇ or its subsidiaries; and (iii) there has been no damage, destruction,
loss, or which in the aggregate has had or might reasonably be expected to
have a material adverse effect on the business or operations of ▇▇▇▇▇ or
any of its subsidiaries.
(h) To the best of the knowledge after due inquiry of ▇▇▇▇▇ and its
executive officers, ▇▇▇▇▇ and ▇▇▇▇▇ Bank have complied with all laws,
regulations and orders applicable to ▇▇▇▇▇ and ▇▇▇▇▇ Bank and to the
conduct of their businesses, including without limitation, all statutes, rules
and regulations pertaining to the conduct of banking activities except for
possible technical violations which together with any penalty which results
therefrom do not or will not have a material adverse effect on the financial
condition, results of operations or business of ▇▇▇▇▇ and ▇▇▇▇▇ Bank on
a consolidated basis. Neither ▇▇▇▇▇ nor ▇▇▇▇▇ Bank are in default
under, and no event has occurred which, with the lapse of time or action
by a third party, could, to the best of Wayne's knowledge after due inquiry,
result in the default under the terms of any judgment, decree, order, writ,
rule or regulation of any governmental authority or court, whether federal,
state or local and whether at law or in equity, where the default(s) could
reasonably be expected to have a material adverse effect on the financial
conditions, results of operations or business of ▇▇▇▇▇ and ▇▇▇▇▇ Bank
on a consolidated basis.
(i) ▇▇▇▇▇ has duly and timely filed all federal, state, county and local
income, excise, real and personal property and other tax returns and
reports (including, but not limited to, social security, withholding,
unemployment insurance, and sales and use taxes) required to have been
filed by ▇▇▇▇▇ up to the date hereof. To the best of the knowledge and
belief of ▇▇▇▇▇ all such returns are true and correct in all material
respects, and ▇▇▇▇▇ has paid or, prior to the time the Merger shall become
effective, will pay all taxes, interest and penalties shown on such return or
reports or claimed (other than those claims being contested in good faith)
to be due to any federal, state, county, local or other taxing authority, and
there is, and at the time the Merger shall become effective will be, no basis
for any additional claim or assessment which might materially and
adversely affect ▇▇▇▇▇ or ▇▇▇▇▇ Bank, and for which an adequate
reserve has not been established. To the best of its knowledge and belief,
▇▇▇▇▇ has paid or made adequate provision in its financial statements or
its books and records for all taxes payable in respect of all periods ending
as of the date thereof. To the best of its knowledge and belief ▇▇▇▇▇ has,
or at the time the Merger shall become effective will have, no material
liability for any taxes, interest or penalties of any nature whatsoever,
except for those taxes which may have arisen up to the time the Merger
shall become effective in the ordinary course of business and are properly
accrued on the books of ▇▇▇▇▇ as of the time the Merger shall become
effective.
(j) The deposits of ▇▇▇▇▇ Bank are insured by the Federal Deposit
Insurance Corporation and ▇▇▇▇▇ Bank has paid all premiums and
assessments with respect to such deposit insurance.
(k) ▇▇▇▇▇ has no knowledge of any hazardous substances, hazardous
waste, pollutant or contaminant, including, but not limited to, asbestos
(except as previously disclosed to CVB in a letter of even date herewith),
PCB's or urea formaldehyde, having been generated, released into, stored
or deposited over, upon or below (in storage tanks or otherwise) the
premises of ▇▇▇▇▇ or ▇▇▇▇▇ Bank or any other real property owned or
leased by ▇▇▇▇▇ or ▇▇▇▇▇ Bank, or into any water systems on or below
the surface of ▇▇▇▇▇ or ▇▇▇▇▇ Bank premises or any other real property
owned or leased by ▇▇▇▇▇ or ▇▇▇▇▇ Bank in violation of any law,
regulation or requirement or in any manner which could result in a
material adverse impact on the value of the premises or property or present
a threat to human health or the environment. As used in this Merger
Agreement, the terms "hazardous substance," "hazardous waste,
"pollutant" and "contaminant" mean any substance, waste, pollutant or
contaminant included within such terms under any applicable Federal,
state or local statute or regulation.
(l) ▇▇▇▇▇ and ▇▇▇▇▇ Bank have in effect insurance coverage with
reputable insurers, which in respect of amounts, premiums, types and risks
insured, constitutes reasonably adequate coverage against all risks
customarily insured against by companies comparable in size and
operation to ▇▇▇▇▇ or ▇▇▇▇▇ Bank.
13. Representations and Warranties of CVB. CVB represents and warrants to
▇▇▇▇▇ as follows:
(a) CVB is a corporation duly organized and validly existing under the
laws of the State of Ohio, and is a registered bank holding company under
the Bank Holding Company Act of 1956, as amended. CVB has full
power and authority (including all licenses, franchises, permits and other
governmental authorizations which are legally required which, if not
obtained or possessed, would have a materially adverse effect on the
business and operations of CVB) to engage in the businesses and activities
now conducted by it. As of the date of this Merger Agreement, the
authorized capital stock of CVB consists of 500,000 shares of common
stock without par value, of which a total of 448,000 shares are issued and
outstanding and no shares are held as treasury shares. All of said shares of
capital stock are fully paid and nonassessable and were not issued in
violation of the preemptive rights of any shareholder. There are no
outstanding options, warrants or commitments of any kind relating to
CVB's authorized but unissued capital stock except as disclosed in the
letter to ▇▇▇▇▇ of even date herewith.
(b) CVB has furnished to ▇▇▇▇▇ copies of the following financial
statements relating to CVB and its consolidated subsidiaries: (i) the
audited Consolidated Balance Sheets of CVB as of December 31, 1996
and 1995 and the Consolidated Statements of Income, Changes in
Shareholders' Equity and Statements of Cash Flows for the years then
ended, together with the notes and report of S. R. ▇▇▇▇▇▇▇▇▇, ▇.▇. thereto,
(ii) copies of all reports of CVB and Chippewa Bank as filed with the
appropriate regulatory agencies, as of and for the years ended December
31, 1996 and 1995 and through the date hereof. Each of the
aforementioned financial statements is true and correct in all material
respects and together present fairly in all material respects the consolidated
financial position and results of operations of CVB as of the dates and for
the periods therein set forth in conformity with GAAP. Such financial
statements do not, as of the dates thereof, include any material asset or
omit any material liability, absolute or contingent, or other fact, required
to be included or omitted as the case may be, by GAAP. Since December
31, 1996, there has not been any material adverse change in the financial
condition, results of operations, or business of CVB and Chippewa Bank
on a consolidated basis.
(c) The Board of Directors of CVB has authorized execution of this
Merger Agreement. Subject to the approval by the shareholders of CVB,
CVB has all requisite power and authority to enter in this Merger
Agreement. CVB owns all of the shares of Chippewa Bank and CVB has
the authority to consummate the transactions contemplated hereby so that,
provided all required corporate and regulatory approvals are obtained and
all conditions to CVB's obligations as set forth in this Merger Agreement
are satisfied, neither the execution and delivery of this Merger Agreement
nor the consummation of the Merger will conflict with, result in the breach
of, constitute a default under or accelerate the performance provided by
the terms of any law, or any rule or regulation of any governmental agency
or authority or any judgment, order or decree of any court or other
governmental agency to which CVB may be subject, any contract,
agreement or instrument to which CVB is a party or by which CVB is
bound or committed, or the Articles of Incorporation or Code of
Regulations of CVB or Chippewa Bank, or constitute an event which with
the lapse of time or action by a third party, could, to the best of CVB's
knowledge, result in the default under any of the foregoing or result in the
creation of any lien, charge, encumbrance upon any of the assets, property
or capital stock of CVB, except, however, in the case of contracts,
agreements or instruments, such defaults, conflicts or breaches which
either (i) will be cured or waived prior to the time the Merger becomes
effective, or (ii) if not so cured or waived would not, in the aggregate,
have any material adverse effect on the financial condition, results of
operations or business of CVB and Chippewa Bank on a consolidated
basis.
(d) There is no litigation, action, suit, investigation or proceeding
pending or, to the best of their knowledge after due inquiry of CVB and its
executive officers, overtly threatened, against CVB or Chippewa Bank or
involving any of their respective properties or assets, at law or in equity,
before any federal, state, municipal, local or other governmental authority,
involving a material amount which, if resolved adversely to the interest of
CVB or Chippewa Bank would materially affect the financial condition or
operations of CVB and Chippewa Bank on a consolidated basis and/or
CVB's ability to perform under this Merger Agreement. To the best
knowledge after due inquiry of CVB and its executive officers, no one has
asserted and no one has reasonable or valid ground on which it reasonably
can be expected that anyone will assert any such claims against CVB or
Chippewa Bank or be based upon the wrongful action or inaction of CVB
or Chippewa Bank or any of their respective officers, directors or
employees.
(e) CVB and Chippewa Bank have good and marketable title to all
assets and properties, whether real or personal, tangible or intangible,
including without limitation the capital stock of Chippewa Bank, reflected
in CVB's Balance Sheet of December 31, 1996 or acquired subsequent
thereto (except to the extent that such assets and properties have been
disposed of for fair value in the ordinary course of business since
December 31, 1996) subject to no liens, mortgages, security interests,
encumbrances, pledges or charges of any kind, except: (i) those items that
secure liabilities that are reflected in said Balance Sheet; (ii) statutory
liens for taxes not yet delinquent; (iii) minor defects and irregularities in
title and encumbrances which do not materially impair the use thereof for the
purposes for which they are held; (iv) pledges or liens required to be
granted in connection with the acceptance of government deposits or
granted in connection with repurchase agreements; and (v) easements,
encumbrances, liens, mortgages and security interests of record which do
not impair the use thereof for the purposes intended and such liens,
mortgages, security interests, encumbrances and charges are not in the
aggregate, material to the assets and properties of CVB. CVB or
Chippewa Bank have as lessee the contractual right under valid leases to
occupy, use, possess and control all material property leased by CVB or
Chippewa Bank.
(f) To the best of the knowledge after due inquiry of CVB and its
executive officers, CVB and Chippewa Bank have complied with all laws,
regulations and orders applicable to CVB and Chippewa Bank and to the
conduct of their businesses, including without limitation, all statutes, rules
and regulations pertaining to the conduct of banking activities except for
possible technical violations which together with any penalty which results
therefrom do not or will not have a material adverse effect on the financial
condition, results of operations or business of CVB and Chippewa Bank
on a consolidated basis. Neither CVB nor Chippewa Bank are in default
under, and no event has occurred which, with the lapse of time or action
by a third party, could, to the best of CVB's knowledge after due inquiry,
result in the default under the terms of any judgment, decree, order, writ,
rule or regulation of any governmental authority or court, whether federal,
state or local and whether at law or in equity, where the default(s) could
reasonably be expected to have a material adverse effect on the financial
conditions, results of operations or business of CVB and Chippewa Bank
on a consolidated basis.
(g) Except as disclosed in CVB's letter to ▇▇▇▇▇ of even date
herewith, CVB and Chippewa Bank have not, since December 31, 1996 to
the date hereof: (i) issued or sold any of its capital stock or any issued any
corporate debt securities other than in the ordinary course of its banking
business; (ii) granted any option for the purchase of capital stock; (iii)
declared or set aside or paid any dividend or other distribution in respect
of its capital stock except as permitted pursuant to Section 14(a) hereof or,
directly or indirectly, purchased, redeemed or otherwise acquired any
shares of such stock; (iv) incurred any obligation or liability (absolute or
contingent), except for obligations reflected in this Merger Agreement,
and except for obligations or liabilities incurred in the ordinary course of
business, or mortgaged, pledged or subjected to lien or encumbrance
(other than statutory liens for taxes not yet delinquent or other than in the
ordinary course of business) any of its assets or properties; (v) discharged
or satisfied any lien or encumbrance or paid any obligation or liability
(absolute or contingent), other than the current portion of any long term
liabilities which become due after December 31, 1996, business, liabilities
incurred in carrying out the transactions contemplated by this Merger
Agreement and obligations and liabilities paid in the ordinary course of
business; (vi) sold, exchanged or otherwise disposed of any of its material
capital assets outside the ordinary course of business; (vii) made any
extraordinary officers' salary increase or wage increase, entered into any
employment contract with any officer or salaried employee or, instituted
any employee welfare, bonus, stock option, profit-sharing, retirement or
similar plan or arrangement; (viii) suffered any damage, destruction or
loss, whether or not covered by insurance, materially and adversely
affecting its business, property or assets or waived (except for fair
consideration) any rights of value which are material in the aggregate,
considering CVB's business taken as a whole; or (ix) entered or agreed to
enter into any agreement or arrangement granting any preferential right to
purchase any of its assets, properties or rights or requiring the consent of
any party to the transfer and assignment of any such assets, properties or
rights.
(h) Except as set forth in CVB's letter to ▇▇▇▇▇ of even date herewith,
neither CVB nor Chippewa Bank is a party to or bound by any written or,
to the best of its knowledge after due inquiry, oral: (i) employment or
consulting contract which is not terminable by CVB or Chippewa Bank on
60 days or less notice, (ii) employee bonus, deferred compensation,
pension, stock bonus or purchase, profit-sharing, retirement or stock
option plan, (iii) other employee benefit or welfare plan, or (iv) other
executory material agreements which in any case obligate CVB or
Chippewa Bank to make any payment(s) which in the aggregate exceed
$25,000 per year except for contracts terminable on 60 days' notice. All
such pension, stock bonus or purchase, profit-sharing, defined benefit and
retirement plans set forth under the caption "Qualified Plans" in the CVB
letter (hereinafter referred to collectively as the "plans") are qualified plans
under Section 401(a) of the Internal Revenue Code and in compliance in
all material respects with ERISA. All material notices, reports and other
filings required under applicable law to be given or made to or with any
governmental agency with respect to the plans have been timely filed or
delivered where failure to file could result in a penalty of $25,000 and/or
result in disqualification of the plan. CVB has no knowledge either of any
circumstances which would adversely affect the qualification of the plans
or their compliance with ERISA, or of any unreported "reportable event"
(as such term is defined in Section 4043(b) of ERISA) or, except as
indicated in the CVB letter to ▇▇▇▇▇ of even date herewith, any
"prohibited transaction" (as such term is defined in Section 406 of ERISA
and Section 4975(c) of the Internal Revenue Code) which has occurred
since the date on which said sections became applicable to the plans. No
such plan is subject to the minimum funding standards set forth in the
Code and ERISA.
(i) CVB has duly filed all federal, state, county and local income,
excise, real and personal property and other tax returns and reports
(including, but not limited to, social security, withholding, unemployment
insurance, and sales and use taxes) required to have been filed by CVB up
to the date hereof. Except as set forth in CVB's letter to ▇▇▇▇▇ of even
date herewith, to the best of the knowledge and belief of CVB all such
returns are true and correct in all material respects, and CVB has paid or,
prior to the time the Merger shall become effective, will pay all taxes,
interest and penalties shown on such return or reports or claimed (other
than those claims being contested in good faith and which have been
disclosed to ▇▇▇▇▇) to be due to any federal, state, county, local or other
taxing authority, and there is, and at the time the Merger shall become
effective will be, no basis for any additional claim or assessment which
might materially and adversely affect CVB or Chippewa Bank and for
which an adequate reserve has not been established. To the best of its
knowledge and belief, CVB has paid or made adequate provision in its
financial statements or its books and records for all taxes payable in
respect of all periods ending as of the date thereof. To the best of its
knowledge and belief, CVB has, or at the time the Merger shall become
effective will have, no material liability for any taxes, interest or penalties
of any nature whatsoever, except for those taxes which may have arisen up
to the time the Merger shall become effective in the ordinary course of
business and are properly accrued on the books of CVB as of the time the
Merger shall become effective.
(j) CVB has no knowledge of any hazardous substances, hazardous
waste, pollutant or contaminant, including, but not limited to, asbestos
except as disclosed to ▇▇▇▇▇ in the CVB letter of even date herewith,
PCB's or urea formaldehyde, having been generated, released into, stored
or deposited over, upon or below (in storage tanks or otherwise) the
Chippewa Bank premises or any other real property owned or leased by
CVB or Chippewa Bank, or into any water systems on or below the
surface of the Chippewa Bank premises or any other real property owned
or leased by CVB or the Chippewa Bank in violation of any law,
regulation or requirement or in any manner which could result in a
material adverse impact on the value of the premises or property or present
a threat to human health or the environment. As used in this Merger
Agreement, the terms "hazardous substance," "hazardous waste,
"pollutant" and "contaminant" mean any substance, waste, pollutant or
contaminant included within such terms under any applicable Federal,
state or local statute or regulation.
(k) CVB or Chippewa Bank has in effect insurance coverage with
reputable insurers, which in respect of amounts, premiums, types and risks
insured, constitutes reasonably adequate coverage against all risks
customarily insured against by companies comparable in size and
operation to CVB or Chippewa Bank.
(l) Other than as previously disclosed to ▇▇▇▇▇, in writing, with
respect to the fairness opinion relating to the Merger and other than
professional fees and disbursements of its accountants and attorneys, CVB
has not incurred and will not incur any liability for brokerage, finders',
agents', or investment bankers' fees or commissions in connection with
this Merger Agreement or the transactions contemplated hereby.
14. Action by CVB Pending Effective Time. CVB agrees that from the date
of this Merger Agreement until the time the Merger shall become effective, or
until this Merger Agreement is terminated as provided for herein, except with
prior written permission of ▇▇▇▇▇:
(a) Beginning with the date hereof and until such time as the Merger
shall become effective, CVB will not declare or pay any dividends (cash
or stock) or make any distributions other than its ordinary and normal cash
dividend at the rate of $0.32 per share per year for the year ended
December 31, 1997.
(b) CVB will not issue, sell, grant any option for, or acquire for value
any shares of its capital stock or otherwise effect any change in connection
with its capitalization.
(c) Except as set forth in or contemplated by this Merger Agreement,
CVB and Chippewa Bank will carry on their respective businesses in
substantially the same manner as on the date hereof, keep in full force and
effect insurance comparable in amount and scope of coverage to that now
maintained by it and use its best efforts to maintain and preserve its
business organization intact.
(d) CVB and Chippewa Bank will not: (i) enter into any transaction
other than in the ordinary course of business or incur or agree to incur any
obligation or liability except liabilities incurred and obligations entered
into in the ordinary course of business; (ii) change Chippewa Bank's
lending, investment, liability management and other material banking
policies in any material respect; (iii) except as committed for adjustment
as of the date hereof and consistent with prior practice, grant any general
or uniform increase in the rates of pay of employees; (iv) incur or commit
to any capital expenditures other than in the ordinary course of business
(which in no event shall include the establishment of new branches and
such other facilities) or any capital expenditures for any purpose which
exceed $50,000 in the aggregate, or (v) except as provided in Section 9
hereof, merge into, consolidate with or sell its assets to any other
corporation or person, or permit any other corporation to be merged or
consolidated with it or acquire all of the assets of any other corporation or
person.
(e) CVB will not change its or Chippewa Bank's methods of
accounting in effect at December 31, 1996 except as required by changes
in generally accepted accounting principles and concurred in by CVB's
independent auditors, and except for the adjustments required as of
December 31, 1997 pursuant to paragraph 7(a) hereof, or change any of its
methods of reporting income and deductions for Federal income tax
purposes from those employed in the preparation of CVB's Federal income
tax returns for the taxable year ending December 31, 1996, except for
changes required by law.
(f) CVB will afford ▇▇▇▇▇, its officers and other authorized
representatives, subject to the confidentiality requirements of Section
10(d) hereof, such access to all books, records, tax returns, leases,
contracts and documents of CVB or Chippewa Bank and will furnish to
▇▇▇▇▇ such information with respect to the assets and business of CVB
and Chippewa Bank as ▇▇▇▇▇ may from time to time reasonably request
in connection with this Merger Agreement and the transactions
contemplated hereby.
(g) CVB will promptly ▇▇▇▇▇▇▇ ▇▇▇▇▇ with copies of all interim
financial statements of CVB as they become available, and keep ▇▇▇▇▇
fully informed concerning all developments which in the opinion of CVB
may have a material effect upon the business, properties or condition
(either financial or otherwise) of CVB.
15. Action by ▇▇▇▇▇ Pending Effective Time. ▇▇▇▇▇ agrees that from the
date of this Agreement until the time the Merger shall become effective or until
this Merger Agreement is terminated as provided for herein:
(a) ▇▇▇▇▇ will carry on its business in substantially the same manner
as heretofore except as otherwise set forth in or contemplated by this
Merger Agreement, and ▇▇▇▇▇ will keep in full force and effect insurance
comparable in amount and scope of coverage to that now maintained by it
and use its best efforts to maintain and preserve its business organization
intact. CVB acknowledges that, in the ordinary course of its business as a
bank holding company, ▇▇▇▇▇ from time-to-time, enters into an
agreement(s) to acquire by merger, stock purchase or like means, another
financial institution or its holding company.
(b) ▇▇▇▇▇ will not change its methods of accounting in effect at
December 31, 1996, except as required by changes in generally accepted
accounting principles as concurred in by Wayne's independent auditors, or
change any of its methods of reporting income and deductions for Federal
income tax purposes from those employed in the preparation of the
Federal income tax returns of ▇▇▇▇▇ Bank for the taxable year ending
December 31, 1996, except for changes required by law or take any action
which could jeopardize the tax free nature of the Merger or the pooling of
interests accounting treatment for the Merger.
(c) ▇▇▇▇▇ will promptly furnish CVB with copies of press releases,
interim financial statements of ▇▇▇▇▇ and all reports, schedules and
statements filed by or delivered to ▇▇▇▇▇ pursuant to the Securities and
Exchange Act of 1934 and the rules and regulations promulgated
thereunder, as they become available.
(d) ▇▇▇▇▇ will afford CVB, its officers and other authorized
representatives, subject to the confidentiality requirements of Section
10(d) hereof, such access to all books, records, tax returns, leases,
contracts and documents of ▇▇▇▇▇ and will furnish to CVB such
information with respect to the assets and business of ▇▇▇▇▇ as CVB may
from time to time reasonably request in connection with this Merger
Agreement and the transactions contemplated hereby.
16. Conditions to Obligations of ▇▇▇▇▇. The obligations of ▇▇▇▇▇ under this
Merger Agreement are subject, unless waived by ▇▇▇▇▇, to the satisfaction of the
following conditions on or prior to the time the Merger shall become effective:
(a) ▇▇▇▇▇, and its attorneys, accountants, financial advisers and
agents shall have completed a due diligence investigation of the books,
records, assets and liabilities of CVB and Chippewa Bank within sixty
(60) days of the date hereof, which due diligence investigation shall be
satisfactory to ▇▇▇▇▇, in its sole and absolute discretion. In addition,
prior to the time the Merger shall become effective, and after the
conclusion of the initial due diligence investigation, ▇▇▇▇▇ shall not have
been deprived of adequate opportunity to conduct such further review and
examination of the business, properties, and condition (financial or
otherwise) of CVB and Chippewa Bank as ▇▇▇▇▇ shall have deemed
prudent, and such review and examination subsequent to the date of the
initial due diligence investigation shall not have disclosed matters which
are inconsistent in any material respect with any of the representations and
warranties of CVB contained in this Merger Agreement.
(b) There shall not have been any material adverse change or
discovery of a condition or the occurrence of an which has or is likely to
result in such a material adverse change, in the financial condition,
aggregate net assets, shareholders' equity, business or operating results of
CVB on a consolidated basis from December 31, 1996 to the time the
Merger shall become effective.
(c) All representations by CVB contained in this Merger Agreement
shall be true in all material respects at, or as of, the time the Merger shall
become effective as though such representations were made at and as of
said date, except for changes contemplated by the Merger Agreement and
except also for representations as of a specified time other than the time
the Merger shall become effective, which shall be true in all material
respects at such specified time.
(d) ▇▇▇▇▇ and CVB shall have entered into the Stock Option
Agreement in the form of Exhibit A attached hereto as of the date hereof.
(e) ▇▇▇▇▇ shall have received the opinion of legal counsel for CVB,
dated the time the Merger shall become effective, substantially to the
effect set forth in Exhibit B hereto.
(f) CVB shall have performed or satisfied in all material respects all
agreements and conditions required by this Merger Agreement to be
performed or satisfied by it at or prior to the time the Merger shall become
effective.
(g) At the time the Merger shall become effective, no suit, action or
proceeding shall be pending or overtly threatened before any court or other
governmental agency of the federal or state government in which it is
sought to restrain or prohibit the consummation of the Merger, and no
other suit, action or proceeding shall be pending or overtly threatened and
no liability or claim shall have been asserted against CVB or Chippewa
Bank which ▇▇▇▇▇ shall in good faith determine, with advice of counsel:
(i) has a reasonable likelihood of being successfully prosecuted and (ii) if
successfully prosecuted, would materially and adversely affect the
financial condition, results of operations or shareholders' equity of CVB
on a consolidated basis.
(h) The number of shares as to which shareholders of CVB have
exercised their dissenters' rights of appraisal pursuant to the provisions of
Section 1701.85 of the Ohio Revised Code does not exceed 10 percent
(10%) of the outstanding shares of CVB Common Stock.
(i) CVB shall have furnished ▇▇▇▇▇ certificates, signed on its behalf
by the Chairman or President and the Secretary or an Assistant Secretary
of CVB and dated the time the Merger shall become effective, to the effect
that to the best of their knowledge, after due inquiry, the conditions
described in Paragraphs (b), (c), (f) and (g) of this Section 16 have been
fully satisfied.
(j) Austin Associates, Inc. ("AAI") shall have issued its written
fairness opinion stating that the terms of the Merger are fair and
equitable to the shareholders of ▇▇▇▇▇ from a financial perspective.
Such written fairness opinion shall be: (a) in form and substance
reasonably satisfactory to ▇▇▇▇▇; (b) dated as of a date not later than the
mailing date of the Proxy Statement/Prospectus relating to the Merger to
be mailed to ▇▇▇▇▇ shareholders; (c) included in the Proxy
Statement/Prospectus; and (d) confirmed by AAI as of the time the
Merger shall become effective that the terms of the Merger continue to
be fair and equitable to the shareholders of CVB from a financial
perspective.
(k) ▇▇▇▇▇ shall have received assurances, satisfactory to it, that the
Merger will be accounted for as a pooling of interests transaction.
(l) CVB shall have taken action necessary to cause the adjustments
described in paragraph 7(a) hereof related to FASB 115, the write-off of
intangibles and the increase in the loan loss reserve effective as of
December 31, 1997.
(m) ▇▇▇▇▇ shall have been afforded the opportunity to conduct a phase
I environmental audit of any real property owned by CVB or its
subsidiaries. In the event a matter is discovered which if known by CVB
as of the date of this Agreement would have violated the representation
contained in paragraph 13(j) hereof, involves an amount in excess of
$50,000, and CVB shall fail to remedy such matter to the reasonable
satisfaction of ▇▇▇▇▇, then ▇▇▇▇▇ may terminate this Agreement and
neither party shall thereafter have any liability resulting from this
Agreement or the transactions contemplated thereby. ▇▇▇▇▇ shall
complete any phase I examination within 90 days of this Agreement.
(n) The members of the Board of Directors of CVB shall have
executed this Agreement stating that they shall vote their shares of CVB in
favor of the Merger and shall recommend approval of the Merger to the
CVB shareholders.
17. Conditions to Obligations of CVB. The obligations of CVB under this
Merger Agreement are subject, unless waived by CVB, to the satisfaction on or
prior to the time the Merger shall become effective of the following conditions:
(a) There shall not have been any material adverse change or
discovery of a condition or the occurrence of an event which has or is
likely to result in such a material adverse change, in the financial
condition, aggregate net assets, shareholders' equity, business, or
operating results of ▇▇▇▇▇ on a consolidated basis from December 31,
1996 to the time the Merger shall become effective.
(b) All representations and warranties by ▇▇▇▇▇ contained in this
Merger Agreement shall be true in all material respects at, or as of, the
time the Merger shall become effective as though such representations
and warranties were made at and as of said date, except for changes
contemplated by this Merger Agreement, and except also for
representations as of a specified time other than the time the Merger
shall become effective, which shall be true in all material respects at
such specified time.
(c) CVB shall have received the opinion of Counsel for ▇▇▇▇▇ dated
the time the Merger shall become effective substantially to the effect set
forth in Exhibit C hereto.
(d) ▇▇▇▇▇ shall have performed or satisfied in all material respects all
agreements and conditions required by this Merger Agreement to be
performed or satisfied by it at or prior to the time the Merger shall
become effective.
(e) At the time the Merger shall become effective, no suit, action or
proceeding shall be pending or overtly threatened before any court or
other governmental agency of the federal or state government in which it
is sought to restrain, prohibit or set aside consummation of the Merger
and no other suit, action or proceeding shall be pending or overtly
threatened and no liability or claim shall have been asserted against
▇▇▇▇▇ or ▇▇▇▇▇ Bank which CVB shall in good faith determine, with
advice of counsel: (i) has a reasonable likelihood of being successfully
prosecuted and (ii) if successfully prosecuted, would materially and
adversely affect the financial condition, results of operations or
shareholders' equity of ▇▇▇▇▇, on a consolidated basis.
(f) ▇▇▇▇▇ shall have furnished CVB a certificate, signed by the
Chairman or President and by the Secretary or Assistant Secretary of
▇▇▇▇▇ and dated the time the Merger shall become effective to the
effect that to the best of their knowledge after due inquiry the conditions
described in Paragraphs (a), (b), (d) and (e) of this Section 17 have been
fully satisfied.
(g) Prior to the time the Merger shall become effective, CVB shall not
have been deprived of adequate opportunity to conduct such review and
examination of the business, properties and condition (financial or
otherwise) of ▇▇▇▇▇ and its subsidiaries as CVB shall have deemed
prudent, and such review and examination shall not have disclosed
matters which are inconsistent in any material respect with any of the
representations and warranties of ▇▇▇▇▇ contained in this Merger
Agreement.
(h) ▇▇▇▇ ▇▇▇▇▇ and Associates ("Young") or such other financial
advisor acceptable to CVB shall have issued its written fairness opinion
stating that the terms of the Merger are fair and equitable to the
shareholders of CVB from a financial perspective. Such written fairness
opinion shall be: (a) in form and substance reasonably satisfactory to
CVB; (b) dated as of a date not later than the mailing date of the Proxy
Statement/Prospectus relating to the Merger to be mailed to CVB
shareholders; (c) included in the Proxy Statement/Prospectus; and (d)
confirmed by Young as of the time the Merger shall become effective
that the terms of the Merger continue to be fair and equitable to the
shareholders of CVB from a financial perspective.
18. Conditions to Obligations of All Parties. In addition to the provisions of
Sections 16 and 17 hereof, the obligations of ▇▇▇▇▇ and CVB to cause the
transactions contemplated herein to be consummated shall be subject to the
satisfaction of the following conditions on or prior to the time the Merger
shall become effective:
(a) The parties hereto shall have received all necessary approvals of
governmental agencies and authorities of the transactions contemplated by
this Merger Agreement and each of such approvals shall remain in full
force and effect at the time the Merger shall become effective and such
approvals and the transactions contemplated thereby shall not have been
contested by any federal or state governmental authority by formal
proceeding, or contested by any other third party by formal proceeding
which the Board of Directors of the party asserting a failure of a condition
under this Section 18(a) shall in good faith determine, with the advice of
counsel: (i) has a reasonable likelihood of being successfully prosecuted
and (ii) if successfully prosecuted, would materially and adversely affect
the benefits hereunder intended for such party. It is understood that, if any
contest as aforesaid is brought by formal proceedings, ▇▇▇▇▇ may, but
shall not be obligated to, answer and defend such contest. ▇▇▇▇▇ shall
notify CVB promptly upon receipt of all necessary governmental
approvals.
(b) The registration statement required to be filed by ▇▇▇▇▇ pursuant
to Section 10(c) of this Merger Agreement shall have become effective by
an order of the Securities and Exchange Commission, the shares of ▇▇▇▇▇
Common Stock to be exchanged in the Merger shall have been qualified or
exempted under all applicable state securities laws, and there shall have
been no stop order issued or threatened by the Securities and Exchange
Commission that suspends or would suspend the effectiveness of the
registration statement, and no proceeding shall have been commenced,
pending or overtly threatened for such purpose.
(c) This Merger Agreement shall have been duly adopted, ratified and
confirmed by the requisite affirmative votes of the shareholders of CVB
and, if required, ▇▇▇▇▇.
(d) ▇▇▇▇▇ and CVB shall have received the opinion and there shall
exist as of, at or immediately prior to the time the Merger shall become
effective no facts or circumstances which would render such opinion
inapplicable in any respect to the transactions to be consummated
hereunder of ▇▇▇▇▇▇ & Blank Co., LPA substantially to the effect that:
(i) The statutory merger of CVB with and into ▇▇▇▇▇ will
constitute a reorganization within the meaning of Section
368(a)(1)(A) of the Internal Revenue Code;
(ii) No gain or loss will be recognized by CVB or ▇▇▇▇▇ as a
consequence of the transactions herein contemplated;
(iii) No gain or loss will be recognized by the shareholders of
CVB on the exchange of their shares of CVB Common Stock for
shares of ▇▇▇▇▇ Common Stock (disregarding for this purpose
any cash received for fractional share interests to which they may
be entitled);
(iv) The federal income tax basis of the ▇▇▇▇▇ Common Stock
received by the shareholders of CVB Common Stock for their
shares of CVB Common Stock will be the same as the federal
income tax basis of the CVB Common Stock surrendered in
exchange therefor; and
(v) The holding period of the ▇▇▇▇▇ Common Stock received
by a shareholder of CVB for his shares of CVB Common Stock
will include the period for which the CVB Common Stock
exchanged therefor was held, provided the exchanged CVB
Common Stock was held as a capital asset by such shareholder on
the date of the exchange.
19. Nonsurvival of Representations and Warranties and Survival of Certain
Covenants. The respective representations and warranties of ▇▇▇▇▇ and CVB set
forth in Sections 12 and 13 shall not survive the time the Merger shall become
effective.
20. Governing Law. This Merger Agreement shall be construed and
interpreted according to the applicable laws of the State of Ohio.
21. Assignment. This Merger Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Merger Agreement
nor any of the rights, interests, or obligations hereunder shall be assigned by
either of the parties hereto without the prior written consent of the other
party.
22. Satisfaction of Conditions; Termination.
(a) ▇▇▇▇▇ agrees to use its best effort to obtain satisfaction of the
conditions insofar as they relate to ▇▇▇▇▇, and CVB agrees to use its best
efforts to obtain the satisfaction of the conditions insofar as they relate to
CVB. If any condition to the obligations of ▇▇▇▇▇ set forth in Section 16
or 18 is not substantially satisfied at the time or times contemplated
thereby and such condition is not waived by ▇▇▇▇▇, or if any condition to
the obligations of CVB set forth in Section 17 or 18 is not substantially
satisfied at the time or times contemplated thereby and such condition is
not waived by CVB, or if at any time prior to the time the Merger shall
become effective, it shall become reasonably certain that such condition
will not be substantially satisfied and such condition is not waived by
▇▇▇▇▇ or CVB, as the case may be, either ▇▇▇▇▇ or CVB may terminate
this Merger Agreement by written notice to the other party after the
expiration of fifteen (15) days written notice to the other party during
which time such other party shall have an opportunity to cure such defect
in said condition. This Merger Agreement may be terminated and
abandoned (either before or after the meetings of shareholders
contemplated hereby) by mutual written consent of ▇▇▇▇▇ and CVB
authorized by their respective Boards of Directors. In the event of such
termination caused otherwise than by breach of this Merger Agreement by
any of the parties hereto, this Merger Agreement shall cease and terminate,
the acquisition of CVB as provided herein shall not be consummated, and
neither ▇▇▇▇▇ nor CVB shall have any further liability under this Merger
Agreement of any nature whatever, including any liability for damages. In
the event this Merger Agreement is terminated, the duties of both parties
with respect to confidential information set forth in Sections 10(d) shall
survive any such termination. In addition to the other grounds for
termination of this Merger Agreement set forth herein, this Merger
Agreement can be terminated by written notice by either party to the other,
in each case authorized by its Board of Directors, if the Merger shall not
have been consummated by September 30, 1998 or the date of such notice,
whichever is later.
(b) If termination of this Merger Agreement shall be judicially
determined to have been caused by breach of this Merger Agreement, then,
in addition to other remedies at law or equity for breach of this Merger
Agreement, the party so found to have breached this Merger Agreement
shall indemnify the other parties for their respective costs, fees and
expenses of its counsel, accountants and other experts and advisors as well
as fees and expenses incident to negotiation, preparation and execution of
this Merger Agreement and related actions and its shareholders' meetings
and actions.
23. Waivers Amendments. Any of the provisions of this Merger Agreement
may be waived at any time by the party which is, or the shareholders of which
are, entitled to the benefit thereof, by such party. This Merger Agreement may
be amended or modified in whole or in part by an agreement in writing executed
in the same manner (but not necessarily by the same person) as this Merger
Agreement and which makes reference to this Merger Agreement, pursuant to a
resolution, adopted by the Boards of Directors of the respective parties,
provided, however, such amendment or modification may be made in this manner by
the respective Boards of Directors of ▇▇▇▇▇ and CVB at any time prior to a
favorable
vote of such party's shareholders, but may be made after a favorable vote by the
shareholders of such party, only if, in the opinion of its Board of Directors,
such amendment or modification will not have any material adverse effect on the
benefits intended under this Merger Agreement for the shareholders of such party
and will not require resolicitation of any proxies from such shareholders or
further shareholder approval is obtained.
24. Entire Agreement. This Agreement supersedes any other agreement,
whether written or oral, that may have been made or entered into by ▇▇▇▇▇ and
CVB or by any officer or officers of such parties relating to the acquisition of
the business or the capital stock of CVB by ▇▇▇▇▇. Except for the letters
specified in this Merger Agreement and of even date herewith, this Agreement and
the Exhibits thereto constitute the entire agreement by the parties, and there
are no agreements or commitments except as set forth herein and therein.
25. Captions; Counterparts. The captions in this Merger Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Merger Agreement.
This Merger Agreement may be executed in several counterparts, each of which
shall constitute one and the same instrument.
26. Notices. All notices and other communications hereunder shall be deemed
to have been duly given if forwarded by a nationally recognized overnight
courier
service. All notices and other communications hereunder given to any party
shall
be communicated to the remaining party to this Merger Agreement by mail in the
same manner as herein provided.
(a) If to ▇▇▇▇▇, to:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Chairman, President and CEO
▇▇▇▇▇ Bancorp, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
With copies to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & Blank Co., L.P.A.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
(b) If to CVB, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and CEO
Chippewa Valley Bancshares, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
With copies to:
27. Undertakings of Affiliates. ▇▇▇▇▇ shall have received undertakings in
writing from each of such persons, if any, as counsel for ▇▇▇▇▇ believes might
reasonably be considered "affiliates" of CVB within the meaning of Rule 145 of
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
in each case in form and substance satisfactory to counsel for ▇▇▇▇▇, to the
effect that so long as ▇▇▇▇▇ continues to file all "current public information"
concerning ▇▇▇▇▇, any disposition made by such person of any share of ▇▇▇▇▇
Common Stock received by such person pursuant to this Merger Agreement shall
be made within the limits and in accordance with the applicable provisions of
said Rule 145, as such Rule may be amended from time to time, and (ii) such
person will not sell, assign or transfer any of such ▇▇▇▇▇ Common Stock until
▇▇▇▇▇ shall have published financial results including the combined operations
of ▇▇▇▇▇ and CVB for a period of at least 30 days following the time the Merger
shall become effective.
28. Publicity. ▇▇▇▇▇ and CVB agree to consult with and obtain the consent
of the other, prior to any media release or other public disclosures as to the
matters covered by this Agreement, except as may be required by law.
{SIGNATURES ON FOLLOWING PAGE}
IN WITNESS WHEREOF, this Merger Agreement has been executed the day and year
first above written.
ATTEST: ▇▇▇▇▇ Bancorp, Inc.
By: By:
▇▇▇▇▇ ▇. ▇▇▇▇▇, DavidL.ChristopherChairman,
Vice President & CFO President, and CEO
ATTEST: Chippewa Valley Bancshares, Inc.
By: By: _________
________________________
DIRECTORS UNDERTAKING
Pursuant to the provisions of Sections 16(n) and 27 hereof, each of the
undersigned, being a Director of CVB, hereby agrees to vote shares of CVB
owned by them or over which they exercise voting control in favor of the Merger,
to support the Merger and to the undertakings set forth in Section 27.
EXHIBIT A
__________, 1998
▇▇▇▇▇ Bancorp, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as special counsel to Chippewa Valley Bancshares, Inc.
("CVB"), an Ohio corporation and bank holding company, solely in connection
with certain transactions contemplated by the Agreement of Merger (the
"Agreement of Merger"), dated October 13, 1997, by and between CVB and
▇▇▇▇▇ Bancorp, Inc. ("▇▇▇▇▇"), an Ohio corporation and bank holding company.
This opinion is furnished to you pursuant to Section 16(e) of the Merger
Agreement.
You have requested our opinion regarding certain matters in connection with the
Agreement. In our capacity as special counsel for CVB and Chippewa Bank, we
have examined the originals or copies of such certificates, documents and
corporate records upon which we have relied regarding our opinion expressed
below. We have assumed the genuineness of all signatures, the authenticity of
all items submitted to us as certified or photostatic copies and the
authenticity of the
originals of such copies. We have further assumed the due authorization of such
documents by all parties other than CVB and Chippewa Bank and the taking of all
requisite action respecting such documents, the due execution and delivery of
such documents by each party and have additionally assumed that all agreements
are the valid and binding agreement of all parties to such agreements, other
than CVB and Chippewa Bank.
Wherever a statement herein is qualified by "to the best of our knowledge," or a
similar phrase, it is intended to indicate that, during the course of our
representation of CVB and Chippewa Bank, no information has been provided to
those partners in this firm who have had substantive involvement in rendering
legal services in connection with the representation described in the
introductory paragraph of this opinion letter that would give us knowledge of
the inaccuracy of such statement.
This Opinion Letter is governed by, and shall be interpreted in accordance with,
the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this Opinion Letter should be
read in conjunction therewith. The law addressed by this opinion is limited to
the law of the State of Ohio and the federal law of the United States of
America.
The opinions hereinafter expressed are subject to the following qualifications,
notwithstanding anything herein to the contrary:
(a) Our opinions in paragraphs (1) and (4) below as to the valid
existence CVB and Chippewa Bank are based solely upon certificates from public
officials as to valid existence, copies of which certificates are attached
hereto.
(b) Our opinions below are limited to the matters expressly set forth in
this opinion letter, and no opinion is to be implied or may be inferred beyond
the matters expressly so stated. Without limiting the foregoing, we express no
opinion as to the antifraud provisions of federal and state securities laws.
(c) We disclaim any obligation to update this opinion letter for events
occurring after the date of this opinion letter.
(d) Our opinions below are limited to the effect of the laws of Ohio
and the federal laws of the United States of America. We express no opinion
with respect to the effect of the laws of any other jurisdiction on the
transactions contemplated by the Agreement.
(e) In rendering this opinion, we have relied as to all matters of fact on
certificates or responsible officers of CVB and Chippewa Bank and of public
officials, copies of which are attached hereto.
Based upon and subject to the foregoing and in reliance thereon, and
subject to the assumptions, exceptions and qualifications set forth herein, it
is our opinion that:
1. CVB is a corporation validly existing and in good standing under the laws of
the State of Ohio and has the requisite corporate power and authority to own its
properties and to carry on the business in which it is now engaged. CVB owns
all of the capital stock of Chippewa Bank free and clear of all liens and
security interests.
2. All necessary corporate proceedings of CVB have been duly taken to
authorize the execution, delivery and performance of the Agreement by CVB and
the consummation of the transactions contemplated by the Agreement, subject in
all events to any conditions stated in said Agreement. The Agreement constitutes
the legal, valid and binding obligation of CVB, enforceable in accordance with
its terms, except:
a. as such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting creditors'
rights; and
b. that the remedy of specific performance and injunctive and other forms of
equitable relief are subject to certain equitable defenses and to the discretion
of the court before which any proceedings may be brought.
3. The execution, delivery and performance of the Agreement by CVB will not
violate or result in a breach of any term of CVB's Articles of Incorporation or
Code of Regulations, or violate, result in a breach of, or constitute a default
under any term of any material agreement known to us to which CVB is a party.
4. Chippewa Bank is a banking corporation validly existing under the laws of the
State of Ohio, is a member of the Federal Reserve System and has the requisite
corporate power and authority to own its properties and carry on the business in
which it is now engaged.
5. The authorized capital stock of CVB consists of 500,000 shares of
common stock without par value 448,000 of which are outstanding To our
knowledge, there are no outstanding options, warrants, or other rights to
acquire, or securities convertible into any capital stock of CVB. The
outstanding shares of common stock of CVB validly authorized and issued, and
non-assessable, and not, to the best of our knowledge, issued in violation of
the pre-emptive rights of any person.
6. To our knowledge, except as disclosed herein, there is no litigation, action,
suit, investigation or proceeding pending or, to the best of our knowledge after
due inquiry of CVB and its executive officers, overtly threatened against or
affecting CVB or involving any of its respective properties or assets, at law or
in equity, before any federal, state, municipal, local or other governmental
authority.
7. All consents or approvals of any regulatory authority having jurisdiction
over CVB or its subsidiaries that are required to be obtained in connection with
the Merger and the transactions contemplated by the Agreement have been
obtained.
This opinion is solely for the benefit of the addressee hereof and may not be
relied upon by any other person or party or in any other context without our
prior written consent. This opinion is delivered as of the date hereof, and we
expressly disclaim any undertaking to update it.
Very truly yours,
___________________
EXHIBIT C
Chippewa Valley Bancshares, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇ Bancorp, Inc.
Gentlemen:
We have acted as special counsel to ▇▇▇▇▇ Bancorp, Inc. ("▇▇▇▇▇") an Ohio
corporation, in connection with the contemplated Merger Agreement dated
______, 1998 (the "Agreement") between Chippewa Valley Bancshares, Inc.
("CVB") and ▇▇▇▇▇. This Opinion Letter is rendered to you pursuant to Section
17(c) of the Agreement. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Agreement.
You have requested our opinion regarding certain matters in connection with the
Agreement. In our capacity as special counsel for ▇▇▇▇▇ and ▇▇▇▇▇ Bank, we
have examined the originals or copies of such certificates, documents and
corporate records upon which we have relied regarding our opinion expressed
below. We have assumed the genuineness of all signatures, the authenticity of
all items submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. We have further assumed the due
authorization of such documents by all parties other than ▇▇▇▇▇ and ▇▇▇▇▇ Bank
and the taking of all
requisite action respecting such documents, the due execution and delivery of
such documents by each party and have additionally assumed that all agreements
are the valid and binding agreement of all parties to such agreements, other
than ▇▇▇▇▇ and ▇▇▇▇▇ Bank.
Wherever a statement herein is qualified by "to the best of our knowledge," or a
similar phrase, it is intended to indicate that, during the course of our
representation of ▇▇▇▇▇ and ▇▇▇▇▇ Bank, no information has been provided to
those partners in this firm who have had substantive involvement in rendering
legal services in connection with the representation described in the
introductory paragraph of this opinion letter that would give us knowledge of
the inaccuracy of such statement.
This Opinion Letter is governed by, and shall be interpreted in accordance with,
the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this Opinion Letter should be
read in conjunction therewith. The law addressed by this opinion is limited
to the law of the State of Ohio and the federal law of the United States of
America.
The opinions hereinafter expressed are subject to the following qualifications,
notwithstanding anything herein to the contrary:
(a) Our opinions in paragraphs (1) and (4) below as to the valid
existence of ▇▇▇▇▇ and ▇▇▇▇▇ Bank are based solely upon certificates from
public officials as to valid existence, copies of which certificates are
attached hereto.
(b) Our opinions below are limited to the matters expressly set forth in
this opinion letter, and no opinion is to be implied or may be inferred beyond
the matters expressly so stated. Without limiting the foregoing, we express no
opinion as to the antifraud provisions of federal and state securities laws.
(c) We disclaim any obligation to update this opinion letter for events
occurring after the date of this opinion letter.
(d) Our opinions below are limited to the effect of the laws of Ohio
and the federal laws of the United States of America. We express no opinion
with respect to the effect of the laws of any other jurisdiction on the
transactions contemplated by the Agreement.
(e) In rendering this opinion, we have relied as to all matters of fact on
certificates or responsible officers of ▇▇▇▇▇ and ▇▇▇▇▇ Bank and of public
officials, copies of which are attached hereto.
Based upon and subject to the foregoing and in reliance thereon, and
subject to the assumptions, exceptions and qualifications set forth herein, it
is our opinion that:
1. ▇▇▇▇▇ is a corporation validly existing and in good standing under the laws
of the State of Ohio and has the requisite corporate power and authority to own
its properties and to carry on the business in which it is now engaged. ▇▇▇▇▇
owns all of the capital stock of ▇▇▇▇▇ Bank free and clear of all liens and
security interests.
2. All necessary corporate proceedings of ▇▇▇▇▇ have been duly taken to
authorize the execution, delivery and performance of the Agreement by ▇▇▇▇▇
and the consummation of the transactions contemplated by the Agreement, subject
in all events to any conditions stated in said Agreement. The Agreement
constitutes the legal, valid and binding obligation of ▇▇▇▇▇, enforceable in
accordance with its terms, except:
a. as such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting creditors'
rights; and
b. that the remedy of specific performance and injunctive and other forms of
equitable relief are subject to certain equitable defenses and to the discretion
of the court before which any proceedings may be brought.
3. The execution, delivery and performance of the Agreement by ▇▇▇▇▇ will not
violate or result in a breach of any term of Wayne's Articles of Incorporation
or Code of Regulations, or violate, result in a breach of, or constitute a
default under any term of any material agreement known to us to which ▇▇▇▇▇ is
a party.
4. ▇▇▇▇▇ Bank is a national banking association validly existing under the laws
of the United States of America and has the requisite corporate power and
authority to own its properties and carry on the business in which it is now
engaged.
5. The authorized capital stock of ▇▇▇▇▇ consists of 5,400,000, shares of
common stock without par value 3,935,512of which are outstanding To our
knowledge, there are no outstanding options, warrants, or other rights to
acquire, or securities convertible into any capital stock of ▇▇▇▇▇. The
outstanding shares of common stock of ▇▇▇▇▇ are, and the shares to be issued in
accordance with the Agreement will be, validly authorized and issued, and
non-assessable, and not, to the best of our knowledge, issued in violation of
the pre-emptive rights of any person.
6. To our knowledge, except as disclosed herein, there is no litigation, action,
suit, investigation or proceeding pending or, to the best of our knowledge after
due inquiry of ▇▇▇▇▇ and its executive officers, overtly threatened against or
affecting ▇▇▇▇▇ or involving any of its respective properties or assets, at law
or in equity, before any federal, state, municipal, local or other governmental
authority.
7. All consents or approvals of any regulatory authority having jurisdiction
over ▇▇▇▇▇ or its subsidiaries that are required to be obtained in connection
with the Merger and the transactions contemplated by the Agreement have been
obtained.
8. The Registration Statement on Form S-4 filed by ▇▇▇▇▇ pursuant to the
Agreement has become effective and no stop order revoking such effectiveness
has been issued or has been threatened.
This opinion is solely for the benefit of the addressee hereof and may not be
relied upon by any other person or party or in any other context without our
prior written consent. This opinion is delivered as of the date hereof, and we
expressly disclaim any undertaking to update it.
Very truly yours,
▇▇▇▇▇▇ & Blank Co. L.P.A.
Draft of September 26, 1997
