EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
among
XXXXXX FINANCIAL CORPORATION
a Minnesota corporation
and
XXXXXX ACQUISITION CORPORATION
a Wisconsin corporation
and
NORTHWEST EQUITY CORP.
a Wisconsin corporation
February 16, 1999
TABLE OF CONTENTS
Recitals................................................................1
ARTICLE I. THE MERGER..................................................1
1.1 The Merger......................................................1
1.2 Closing.........................................................2
1.3 Effective Time..................................................2
1.4 Additional Actions..............................................2
1.5 Articles of Incorporation and By-Laws...........................2
1.6 Board of Directors and Officers.................................2
1.7 Conversion of Securities........................................2
1.8 Surrender of Certificates; Payment Procedures...................3
1.9 Seller Options..................................................5
1.10 Dissenting Shares...............................................6
1.11 Closing of Stock Transfer Books.................................6
1.12 Effect of the Merger............................................7
1.13 Reservation of Right to Revise Transaction......................7
1.14 Material Adverse Effect.........................................7
1.15 Determination Date Financial Statements.........................8
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER...................8
2.1 Organization and Authority......................................8
2.2 Subsidiaries....................................................9
2.3 Capitalization..................................................9
2.4 Authorization..................................................11
2.5 Seller Financial Statements....................................12
2.6 Seller Reports.................................................12
2.7 Title to and Condition of Assets...............................13
2.8 Real Property..................................................14
2.9 Taxes..........................................................15
2.10 Material Adverse Effect........................................15
2.11 Loans, Commitments and Contracts...............................15
2.12 Absence of Defaults............................................18
2.13 Litigation and Other Proceedings...............................19
2.14 Directors'and Officers'Insurance...............................19
2.15 Compliance with Laws...........................................19
2.16 Labor..........................................................21
2.17 Material Interests of Certain Persons..........................21
2.18 Allowance for Loan and Lease Losses; Non-Performing Assets;
Financial Assets...............................................21
2.19 Employee Benefit Plans.........................................22
2.20 Conduct of Seller to Date......................................24
2.21 Absence of Undisclosed Liabilities.............................25
2.22 Proxy Statement, Etc...........................................25
2.23 Registration Obligations.......................................26
2.24 Tax, Regulatory and Accounting Matters.........................26
2.25 Brokers and Finders............................................26
2.26 Investments....................................................26
2.27 Accuracy of Information........................................26
2.28 Year 2000 Compliance...........................................26
2.29 Insider Loans..................................................26
2.30 Wisconsin Takeover Statute; Rights of Dissenting Stockholders..27
2.31 Treatment of Outstanding Options...............................27
2.32 Opinion of Financial Advisor...................................27
2.33 Approvals......................................................28
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE BUYERS.............28
3.1 Organization and Authority.....................................28
3.2 Authorization..................................................28
3.3 Brokers and Finders............................................29
3.4 Accuracy of Information........................................29
3.5 No Violation...................................................29
3.6 Consents and Approvals.........................................30
3.7 Litigation.....................................................30
3.8 Financial Statements...........................................30
3.9 Community Reinvestment Act Compliance..........................31
3.10 Tax, Regulatory and Accounting Matters.........................31
3.11 Proxy Statement, Etc...........................................32
3.12 Approvals......................................................32
ARTICLE IV. CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME.........32
4.1 Conduct of Businesses Prior to the Effective Time..............32
4.2 Forbearances of Seller.........................................32
4.3 No Solicitation................................................34
ARTICLE V. ADDITIONAL AGREEMENTS......................................36
5.1 Access and Information.........................................36
5.2 Regulatory Matters.............................................37
5.3 Proxy Statement; Special Meeting...............................37
5.4 Current Information............................................38
5.5 Environmental Reports..........................................38
5.6 Expenses.......................................................39
5.7 Miscellaneous Agreements and Consents..........................39
5.8 Employee Agreements and Benefits...............................39
5.9 Publicity......................................................41
5.10 [RESERVED]....................................................41
5.11 Tax Returns....................................................42
5.12 Indemnification................................................42
5.13 Seller Employees...............................................43
5.14 Director Positions.............................................43
5.15 Articles of Incorporation......................................43
ARTICLE VI. CONDITIONS................................................43
6.1 Conditions to Each Party's Obligation To Effect the Merger.....43
6.2 Conditions to Obligations of Seller............................44
6.3 Conditions to Obligations of the Buyers........................45
ARTICLE VII. TERMINATION, AMENDMENT AND WAIVER........................46
7.1 Termination....................................................46
7.2 Effect of Termination..........................................47
7.3 Fees and Expenses..............................................48
7.4 Amendment......................................................48
7.5 Waiver.........................................................49
ARTICLE VIII. GENERAL PROVISIONS......................................49
8.1 Non-Survival of Representations, Warranties and Agreements.....49
8.2 Indemnification................................................49
8.3 No Assignment; Successors and Assigns..........................49
8.4 Interpretation and Severability................................50
8.5 No Implied Waiver..............................................50
8.6 Headings.......................................................50
8.7 Entire Agreement...............................................50
8.8 Counterparts...................................................50
8.9 Notices........................................................50
8.10 Governing Law..................................................51
8.11 Knowledge......................................................51
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), is made and entered into
as of February 16, 1999 by and among Xxxxxx Financial Corporation, a Minnesota
corporation ("BFC"), Xxxxxx Acquisition Corporation, a Wisconsin corporation
("Merger Sub" and, collectively, with BFC, the "Buyers"), and Northwest Equity
Corp., a Wisconsin corporation ("Seller").
WHEREAS, Merger Sub is a wholly-owned subsidiary of BFC, and BFC is a registered
bank holding company under the Bank Holding Company Act of 1956, as amended (the
"BHCA");
WHEREAS, Seller is registered as a bank holding company under the BHCA;
WHEREAS, the respective Boards of Directors of Seller, Merger Sub and BFC all
have approved the merger (the "Merger") of Merger Sub with and into Seller
pursuant to the terms and subject to the conditions contained in this Agreement;
WHEREAS, the parties desire to provide certain undertakings, conditions,
representations, warranties and covenants in connection with the transactions
contemplated by this Agreement;
WHEREAS, concurrently with the execution and delivery of this Agreement, and as
a condition of inducement to each of BFC's and Merger Sub's willingness to enter
into this Agreement, certain stockholders of Seller have entered into Voting
Agreements with BFC dated as of the date of this Agreement in the form attached
hereto as Exhibit A (the "Voting Agreements") pursuant to which such
stockholders have agreed, among other things, to vote all voting securities of
Seller beneficially owned by them in favor of approval and adoption of the
Agreement and the Merger; and
WHEREAS, concurrently with the execution and delivery of this Agreement, and as
a condition of inducement to each of BFC's and Merger Sub's willingness to enter
into this Agreement, certain employees of Seller and/or Northwest Savings Bank
have entered into the Amendment Agreement in the form attached hereto as Exhibit
B (the "Amendment Agreements") pursuant to which such employees have agreed,
among other things, to amend the terms and conditions of those certain
Employment Agreements entered into by them and Northwest Savings Bank;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this Agreement,
Merger Sub shall be merged with and into Seller in accordance with the
applicable provisions of the Wisconsin Business Corporation Law (the "WBCL"),
and the separate corporate existence of the Merger Sub shall cease. Seller shall
be the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation") and shall continue to be governed by the laws of
the State of Wisconsin.
1.2 Closing. The closing (the "Closing") of the Merger, unless the parties
hereto shall otherwise mutually agree, shall take place at the offices of
Winthrop & Weinstine, P.A., 00 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000 in St. Xxxx,
Minnesota, at 10:00 a.m., local time, on the date that the Effective Time (as
defined in Section 1.3) occurs (the "Closing Date").
1.3 Effective Time. The consummation of the Merger shall be effected as
promptly as practicable after the satisfaction or waiver of the conditions set
forth in Article VI of this Agreement. The Merger shall become effective on the
date and time specified in Articles of Merger to be filed with the Wisconsin
Department of Financial Institutions ("WDFI"). The date and time at which the
Merger shall become effective is referred to in this Agreement as the "Effective
Time." Unless otherwise mutually agreed in writing by Buyers and Seller, subject
to the terms and conditions of this Agreement, the Effective Time shall occur on
such date as Buyers shall notify Seller in writing (such notice to be at least
five business days in advance of the Effective Time). On the Closing Date, the
parties hereto will cause the Merger to be consummated by delivering to the
WDFI, for filing, Articles of Merger, in such form as required by, and executed
and acknowledged in accordance with, the relevant provisions of WBCL.
1.4 Additional Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any further deeds,
assignments or assurances in law or any other acts are necessary or desirable to
(a) vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Seller or Merger Sub, or (b) otherwise carry out the
purposes of this Agreement, Seller and its officers and directors shall be
deemed to have granted to the Surviving Corporation an irrevocable power of
attorney to execute and deliver all such deeds, assignments or assurances in law
and to do all acts necessary or proper to vest, perfect or confirm title to and
possession of such rights, properties or assets in the Surviving Corporation and
otherwise to carry out the purposes of this Agreement, and the officers and
directors of the Surviving Corporation are authorized in the name of Seller or
otherwise to take any and all such action.
1.5 Articles of Incorporation and By-Laws. The Articles of Incorporation
and By-Laws of Seller in effect immediately prior to the Effective Time shall be
the Articles of Incorporation and By-Laws of the Surviving Corporation following
the Merger, unless otherwise repealed or amended.
1.6 Board of Directors and Officers. At the Effective Time, the directors
and officers of Merger Sub immediately prior to the Effective Time shall be the
directors and officers, respectively, of the Surviving Corporation following the
Merger, and such directors and officers shall hold office in accordance with the
Surviving Corporation's By-Laws and applicable law.
1.7 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of the Buyers, Seller or the holder of
any of the following securities:
(a) Each share of the common stock, $1.00 per share par value, of
Merger Sub that is issued and outstanding immediately prior to the
Effective Time shall be converted into one share of common stock of
the Surviving Corporation and shall thereafter constitute all of
the issued and outstanding capital stock of the Surviving Corporation;
and
(b) Subject to Section 1.10, each share of common stock, $1.00
par value, of Seller ("Seller Common Stock") issued and outstanding
immediately prior to the Effective Time, other than Dissenting Shares,
if any (as defined in Section 1.10 hereof), shall cease to be
outstanding, and shall be converted into and become the right to
receive cash in the amount of $24.00 per share (the "Merger Per Share
Consideration") in the manner and form, and on the terms and
conditions, set forth in this Agreement. All such shares of Seller
Common Stock shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each certificate
previously representing any such shares shall thereafter represent the
right to receive cash at the rate of the Merger Per Share
Consideration. Each share of Seller Common Stock held in the treasury
of Seller or owned by Seller or any Seller Subsidiary (as hereinafter
defined) for its own account (other than shares of Seller Common Stock
held directly or indirectly in trust accounts, managed accounts, and
the like, or otherwise held in a fiduciary capacity beneficially owned
by third parties) immediately prior to the Effective Time shall be
canceled and extinguished without any conversion thereof, and no
payment shall be made with respect thereto. (c) At the Closing and
prior to the Effective Time, BFC shall deliver to BFC's duly appointed
exchange agent (the "Exchange Agent"), by a single wire transfer of
immediately available funds, to an account in the United States of
America designated by the Exchange Agent, an amount (the "Payment
Fund") equal to the product of the Merger Per Share Consideration and
the total number of shares of Seller Common Stock outstanding as of
the Closing Date.
1.8 Surrender of Certificates; Payment Procedures.
(a) As soon as practicable following the Effective Time, and in
no event later than five (5) business days after the Effective Time,
BFC shall mail or cause to be mailed to holders of record of
certificates formerly representing Seller Common Stock (the
"Certificates"), as identified on the Seller Stockholder List (as
provided pursuant to Section 1.11(b) hereof), letters advising them of
the effectiveness of the Merger and instructing them to tender such
Certificates to the Exchange Agent, or in lieu thereof, such evidence
of lost, stolen or mutilated Certificates and such surety bond or
other security as the Exchange Agent may reasonably require (the
"Required Documentation").
(b) Subject to Section 1.10, after the Effective Time, each
holder of a Certificate that surrenders such Certificate or in lieu
thereof, the Required Documentation, to the Exchange Agent, with a
properly completed and executed letter of transmittal with respect to
such Certificate, will be entitled to the Merger Per Share
Consideration into which the Certificate so surrendered shall have
been converted pursuant to this Agreement. The Merger Per Share
Consideration shall be delivered by the Exchange Agent to each such
holder as promptly as practicable after such surrender.
(c) Each outstanding Certificate, until duly surrendered to the
Exchange Agent, shall be deemed to evidence ownership of the Merger
Per Share Consideration into which the Seller Common Stock previously
represented by such Certificate shall have been converted pursuant to
this Agreement, and until the holder of a Certificate surrenders such
Certificate (or the Required Documentation) together with an executed
letter of transmittal as required pursuant to Section 1.8(b), the
holder of any such Certificate shall not receive the Merger Per Share
Consideration. No interest shall accrue or be payable with respect to
any amounts which any holder of Seller Common Stock or "Options" (as
defined in Section 1.9(a)) shall be entitled to receive pursuant to
this Agreement.
(d) After the Effective Time, holders of Certificates shall cease
to have rights with respect to the Seller Common Stock previously
represented by such Certificates, and their sole rights shall be to
exchange such certificates for the Merger Per Share Consideration to
which the shareholder may be entitled pursuant to the provisions of
Section 1.7 hereof. After the closing of the transfer books as
described in Section 1.11 hereof, there shall be no further transfer
of Certificates on the records of Seller, and if such Certificates are
presented to Seller for transfer, they shall be canceled against
delivery of the Merger Per Share Consideration. Neither Buyers nor the
Exchange Agent shall be obligated to deliver the Merger Per Share
Consideration until such holder surrenders the Certificates or
furnishes the Required Documentation as provided herein together with
the executed letter of transmittal required pursuant to Section
1.8(b). Neither BFC, the Exchange Agent nor any party to this
Agreement nor any affiliate thereof shall be liable to any holder of
Seller Common Stock represented by any Certificate for any Merger Per
Share Consideration payable in the Merger that is paid to a public
official pursuant to applicable abandoned property, escheat or similar
laws.
(e) Any portion of the Payment Fund which remains undistributed
to the shareholders of the Seller six (6) months after the Effective
Time shall be returned, at BFC's request, by the Exchange Agent to
BFC, and thereafter BFC shall act as Exchange Agent subject to the
rights of holders of unsurrendered Certificates under this Article I
and subject to applicable law.
(f) BFC shall be entitled to deduct and withhold from the Merger
Per Share Consideration otherwise payable pursuant to this Agreement
to any holder of Seller Common Stock such amounts as BFC is required
to deduct and withhold with respect to the making of such payment
under the Internal Revenue Code of 1986, as amended ("Code"), or any
provision of state, local or foreign tax law. To the extent that
amounts are so withheld by BFC, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder
of the Seller Common Stock in respect of which such deduction and
withholding was made by BFC.
1.9 Seller Options.
(a) Immediately before the Closing, each unexpired and
unexercised outstanding option, whether or not then vested or
exercisable in accordance with its terms, to purchase shares of Seller
Common Stock ("Option") previously granted by Seller under Seller's
Amended Northwest Equity Corp. 1995 Stock Option Plan (the "Seller
Stock Option Plan") will become exercisable in full. At or prior to
Closing, and before the Effective Time, the Seller or the Exchange
Agent shall pay to each holder of an Option in cancellation thereof an
amount (subject to applicable income tax withholding and employer
taxes) equal to the excess, if any, of the Merger Per Share
Consideration over the per share exercise price of such Option,
multiplied by the number of shares of Seller Common Stock subject to
such Option (the "Option Settlement Amount"). The Option Settlement
Amount shall be paid by the Seller or the Exchange Agent to each
holder of an Option in cash at Closing and before the Effective Time.
From and after the Effective Time, any and all Options shall represent
only the right of the holders of such Options to receive payment of
the Option Settlement Amount upon the surrender thereof. The
acceptance of the Option Settlement Amount in cancellation of an
Option shall constitute a release of any and all rights the holder had
or may have in respect of such Option. All agreements, plans, programs
or arrangements of Seller and the Seller Subsidiaries, including,
without limitation, the Seller Stock Option Plan, that provide for the
issuance or grant of Options or any other interest with respect to the
capital stock of Seller or capital stock of or other ownership
interest in any Seller Subsidiary shall terminate as of the Effective
Time. Seller shall take any and all actions necessary to ensure that,
following the Effective Time, no participant in any agreement, plan,
program or arrangement of Seller, including, without limitation, the
Seller Stock Option Plan, shall have any right thereunder to acquire
equity securities or other ownership interests of Seller, the
Surviving Corporation or any Subsidiary thereof and to terminate all
such plans.
(b) At least two (2) business days prior to the Closing, Seller
shall deliver to the Exchange Agent, by a single wire transfer of
immediately available funds, to an account in the United States of
America designated by the Exchange Agent, an amount equal to the
Option Settlement Amount for all holders of options who have signed a
Voting Agreement or have otherwise agreed to accept the Option
Settlement Amount as provided in Section 5.10 of this Agreement.
1.10 Dissenting Shares.
(a) "Dissenting Shares" means any shares of Seller Common Stock
owned by any holder who becomes entitled to payment of the fair value
of such shares under Sections 180.1301 through 180.1331 of the WBCL
(inclusive). Any holders of Dissenting Shares shall be entitled to
payment for such shares only to the extent permitted by and in
accordance with the provisions of the WBCL; provided, however, that
if, in accordance with the WBCL, any holder of Dissenting Shares shall
forfeit such right to payment of the fair value of such Dissenting
Shares, such shares shall thereupon be deemed to have been converted
into and to have become exchangeable for, as of the Effective Time,
the right to receive the Merger Per Share Consideration.
(b) Seller shall give to BFC (i) prompt notice of any written
objections to the Merger and/or any written demands for the payment of
the fair value of any shares of Seller Common Stock, withdrawals of
such demands, and any other documents or instruments served pursuant
to Sections 180.1301 through 180.1331 of the WBCL (inclusive) received
by Seller, and (ii) the opportunity to participate in all negotiations
and proceedings with respect to such demands under the WBCL. Seller
shall not voluntarily make any payment with respect to demands for
payment of fair value and shall not, except with the prior consent of
BFC, settle or offer to settle any such demands.
1.11 Closing of Stock Transfer Books.
(a) The stock transfer books of Seller shall be closed at the end
of business on the business day immediately preceding the Closing
Date. In the event of a transfer of ownership of Seller Common Stock
that is not registered in the transfer records prior to the closing of
such record books, the Merger Per Share Consideration issuable or
payable with respect to such Seller Common Stock may be delivered to
the transferee, if the Certificate or Certificates representing such
Seller Common Stock is presented to BFC accompanied by all documents
required to evidence and effect such transfer and all applicable stock
transfer taxes are paid.
(b) At the Effective Time, Seller shall provide Buyers with a
complete and verified list of registered holders of Seller Common
Stock based upon its stock transfer books or corporate records as of
the closing of said transfer books, including the names, addresses,
certificate numbers and taxpayer identification numbers of such
holders (the "Seller Stockholder List"). Buyers shall be entitled to
rely upon the Seller Stockholder List to establish the identity of
those persons entitled to receive the Merger Per Share Consideration,
which list shall be conclusive with respect thereto. If there is a
dispute with respect to ownership of stock represented by any
Certificate, Buyers shall be entitled to deposit any Merger Per Share
Consideration represented thereby in escrow with an independent third
party and thereafter be relieved with respect to any claims thereto.
1.12 Effect of the Merger.
(a) At the Effective Time, the effect of the Merger shall be as
provided in the WBCL, including the effects described in Sections
1.12(b) and 1.12(c) of this Agreement.
(b) The corporate identity, existence, purposes, powers,
franchises, privileges, assets, properties and rights of both Seller
and Merger Sub shall be merged into and continued in the Surviving
Corporation, and the Surviving Corporation shall be fully vested
therewith. Separate existence of Merger Sub, except insofar as
specifically provided by law, shall cease at the Effective Time,
whereupon Merger Sub and the Surviving Corporation shall be and become
one single corporation.
(c) At the Effective Time, the Surviving Corporation shall
succeed to, without other transfer, and shall possess and enjoy, all
the rights, privileges, assets, properties, powers and franchises,
both of a public and private nature, and be subject to all the
restrictions, disabilities and duties of Seller and Merger Sub, and
all the rights, privileges, assets, properties, powers and franchises
of Seller or Merger Sub and all property, real, personal and mixed,
tangible or intangible, and all debts due to Seller or Merger Sub on
whatever account, shall be vested in the Surviving Corporation; and
all rights, privileges, assets, properties, powers and franchises, and
all and every other interest shall be thereafter as effectively the
property of the Surviving Corporation as they were of Seller or Merger
Sub; and the title to or any interest in any real estate vested by
deed or otherwise in Seller or Merger Sub shall not revert or be in
any way impaired by reason of the Merger; provided, however, that all
rights of creditors and liens upon any property of either Seller or
Merger Sub shall be preserved and unimpaired, and all debts,
liabilities and duties of Seller or Merger Sub shall thenceforth
attach to the Surviving Corporation and may be enforced against the
Surviving Corporation to the same extent as if said debts, liabilities
and duties have been incurred, or contracted by, the Surviving
Corporation.
1.13 Reservation of Right to Revise Transaction. Buyers may at any time
(change the method of effecting the acquisition of Seller by Buyers including,
without limitation, the provisions of this Article I) if and to the extent
Buyers deem such change to be desirable, including, without limitation, to
provide for (i) a merger of Seller with and into Merger Sub, in which Merger Sub
is the surviving corporation, or (ii) a merger of Seller directly into BFC, in
which BFC is the surviving corporation; provided, however, that no such change
shall (A) alter or change the amount or kind of the Merger Per Share
Consideration to be received by the holders of Seller Common Stock, (B)
materially impede or delay receipt of any approvals referred to in Section
6.1(b) or the consummation of the transactions contemplated by this Agreement,
or (C) alter the tax treatment of the consideration to be received in the Merger
by holders of the Seller Common Stock.
1.14 Material Adverse Effect. As used in this Agreement, the term "Material
Adverse Effect" with respect to an entity means any condition, event, change or
occurrence that has or may reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), properties, business or
results of operations, of such entity and its "Subsidiaries" (as such term is
defined in Section 2.2(a)), taken as a whole as reflected in the "Seller
Financial Statements" (as such term is defined in Section 2.5(b)) with respect
to the Seller, and as reflected in the "Buyer Financial Statements" (as such
term is defined in Section 3.8(a)) with respect to the Buyer; it being
understood that a Material Adverse Effect shall not include: (i) a change with
respect to, or effect on, such entity and its Subsidiaries resulting from a
change in law, rule, regulation, generally accepted accounting principles or
regulatory accounting principles; or (ii) a change with respect to, or effect
on, such entity and its Subsidiaries resulting from any other matter affecting
depository institutions generally including, without limitation, changes in
general economic conditions and changes in prevailing interest and deposit
rates.
1.15 Determination Date Financial Statements. For purposes of this
Agreement, the Determination Date shall be the last day of the calendar month
prior to the Closing Date, unless the Closing Date occurs on or before the 20th
day of any month, in which case the Determination Date will be the last day of
the calendar month prior to the most recent month end prior to the Closing Date.
For example, if the Closing Date occurs on May 1, 1999, the Determination Date
would be March 31, 1999. The Seller shall prepare and deliver consolidated
financial statements of the Seller (including, without limitation, a balance
sheet and income statement of the Seller) as of the Determination Date that have
been reviewed by the Seller's regularly employed accountants in accordance with
the requirements for a review contained in the Statements on Standards for
Accounting and Review Services of the American Institute of Certified Public
Accountants (the "Determination Date Financial Statements"). The Determination
Date Financial Statements shall be prepared in accordance with generally
accepted accounting principles and consistent with past practices. A copy of the
Determination Date Financial Statements shall be provided to BFC as soon as
available and in no event less than five (5) days prior to the Closing Date. Any
disputes regarding the Determination Date Financial Statements shall be
submitted to an independent accounting firm mutually agreeable to BFC and the
Seller for a binding resolution. The cost of retaining the independent
accounting firm shall be borne 50 percent by Buyers and 50 percent by the
Seller.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
In connection with and as inducement to Buyers to enter into and be bound by the
terms of the Agreement, Seller hereby represents and warrants to the Buyers as
follows:
2.1 Organization and Authority. Seller is a corporation duly organized,
validly existing and in good standing (meaning that it has filed its most recent
requested annual report and has not filed articles of dissolution, and that all
of its franchise taxes due and owing have been paid) under the laws of the State
of Wisconsin, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified, except where the failure of Seller to
so qualify would not have a Material Adverse Effect on Seller and the Seller
Subsidiaries (as defined in Section 2.2(a)), taken as a whole, and has the
corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted. Seller is a registered bank holding
company with the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board") under the BHCA. True and complete copies of the Articles of
Incorporation and By-Laws of Seller as in effect on the date of this Agreement
have been provided to BFC prior to the date hereof.
2.2 Subsidiaries.
(a) Schedule 2.2 sets forth a complete and correct list of all of
Seller's "Subsidiaries" (as defined in Section 225.2(o) of Regulation
Y promulgated by the Federal Reserve Board; each a "Seller Subsidiary"
and, collectively, the "Seller Subsidiaries"), and all outstanding
Equity Securities (as defined in Section 2.3) of each Seller
Subsidiary, all of which are owned directly or indirectly by Seller.
Except as disclosed in Schedule 2.2, all of the outstanding shares of
capital stock of the Seller Subsidiaries owned directly or indirectly
by Seller are validly issued, fully paid and nonassessable (subject to
a limitation with respect to common stock of the Seller Subsidiaries
which are Wisconsin corporations contained in Section 180.0622(2)(b)
of the WBCL, as judicially interpreted, which provides that
shareholders of Wisconsin corporations may be personally liable for
all debts owing to employees of the corporation for services performed
for the corporation for up to six months in any one case, but not in
an amount greater than the consideration paid for each such share) and
are owned free and clear of any lien, claim, charge, option,
encumbrance, agreement, mortgage, pledge, security interest or
restriction (a "Lien" and, collectively, "Liens") with respect
thereto. Each of the Seller Subsidiaries is a corporation, bank or
savings bank duly incorporated or organized and validly existing under
the laws of its jurisdiction of incorporation or organization, and has
corporate power and authority to own or lease its properties and
assets and to carry on its business as it is now being conducted. Each
of the Seller Subsidiaries is duly qualified to do business in each
jurisdiction where its ownership or leasing of property or the conduct
of its business requires it so to be qualified, except where the
failure to so qualify would not have a Material Adverse Effect on
Seller and the Seller Subsidiaries. Except as set forth in Schedule
2.2, neither Seller nor any Seller Subsidiary owns beneficially,
directly or indirectly, any shares of any class of Equity Securities
(as defined in Section 2.3) or similar interests of any corporation,
bank, business trust, association or organization, or any interest in
a partnership or joint venture of any kind, other than those
identified as Seller Subsidiaries in Schedule 2.2 hereof. True and
correct copies of the Articles of Incorporation or Certificate of
Incorporation and Bylaws for each of the Seller Subsidiaries as in
effect as of the date of this Agreement have been provided to BFC
prior to the date hereof.
(b) Northwest Savings Bank, a Seller Subsidiary, is a stock
savings bank duly organized and validly existing under the laws of the
State of Wisconsin.
2.3 Capitalization. As of the date of this Agreement, the authorized capital
stock of Seller consists of (i) 4,000,000 shares of Seller Common Stock, of
which 1,032,517 shares are issued and 825,301 shares are outstanding, with
207,216 shares of Seller Common Stock held in treasury, and (ii) 2,000,000
shares of preferred stock, $1.00 par value per share, of which no shares are
issued or outstanding. As of the date of this Agreement, the issued and
outstanding shares of Seller Common Stock include 100,071 shares held by the
Northwest Savings Bank Employee Stock Ownership Plan ("ESOP") and 41,300 shares
issued under the Northwest Equity Corp. Incentive Plan ("Incentive Plan"). As of
the date of this Agreement, Seller had reserved no shares of Seller Common Stock
for issuance under the Seller Stock Option Plan, pursuant to which Options
covering 100,980 shares of Seller Common Stock were outstanding. As of the date
of this Agreement, the Seller Stock Option Plan, the agreements evidencing
Options granted thereunder, and the ESOP are the only plans, agreements,
programs or arrangements of Seller and Seller Subsidiaries that provide for the
issuance or grant of Options, warrants or any other rights to acquire capital
stock of the Seller or capital stock of a Seller Subsidiary. "Equity Securities"
of an issuer means capital stock or other equity securities of such issuer,
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into,
shares of any capital stock or other equity securities of such issuer, or
contracts, commitments, understandings or arrangements by which such issuer is
or may become bound to issue additional shares of its capital stock or other
equity securities of such issuer, or options, warrants, scrip or rights to
purchase, acquire, subscribe to, calls on or commitments for any shares of its
capital stock or other equity securities. Except as set forth above, the Seller
has no other class of stock and there are no other Equity Securities of Seller
outstanding. All of the issued and outstanding shares of Seller Common Stock are
validly issued, fully paid and nonassessable (subject to a limitation with
respect to Seller Common Stock contained in Section 180.0622(2)(b) of the WBCL,
as judicially interpreted, which provides that shareholders of Wisconsin
corporations may be personally liable for all debts owing to employees of the
corporation for services performed for the corporation for up to six months in
any one case, but not in an amount greater than the consideration paid for each
such share) and have not been issued in violation of any preemptive right of any
stockholder of Seller.
2.4 Authorization.
(a) Seller has the corporate power and authority to enter into
this Agreement and, subject to the approval of this Agreement by the
stockholders of Seller and the "Regulatory Authorities" and
"Additional Regulatory Authorities" (as such terms are defined in
Section 2.6), to carry out its obligations hereunder. The only
stockholder vote required for Seller to approve this Agreement is the
affirmative vote of the holders of a majority of the outstanding
shares of Seller Common Stock entitled to vote at a meeting of
Seller's stockholders called for such purpose or any adjournment
thereof ("Special Meeting"). The execution, delivery and performance
of this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby in accordance with and subject to the
terms of this Agreement have been duly authorized by the Board of
Directors of Seller. Subject to the approval of Seller's stockholders
and subject to the receipt of such approvals of the Regulatory
Authorities and Additional Regulatory Authorities as may be required
by statute or regulation, this Agreement is a valid and binding
obligation of Seller enforceable against Seller in accordance with its
terms, except as (i) the enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, and similar laws now or
hereafter in effect relating to the enforcement of creditors' remedies
generally and except to the extent equitable principles may limit the
right to specific performance or other equitable remedies, and (ii)
considerations of public policy may affect the enforceability of the
indemnification provisions thereof.
(b) Except as disclosed on Schedule 2.4(b), neither the
execution, delivery nor performance by Seller of this Agreement, nor
the consummation by Seller of the transactions contemplated hereby,
nor compliance by Seller with any of the provisions hereof, will (i)
violate, conflict with, or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result
in a right of termination or acceleration of, or result in the
creation of, any Lien upon any of the properties or assets of Seller
or any of the Seller Subsidiaries under any of the terms, conditions
or provisions of (x) Seller's or any of Seller Subsidiaries' Articles
of Incorporation, charter or By-Laws or (y) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Seller or any of the Seller
Subsidiaries is a party or by which it may be bound, or to which
Seller or any of the Seller Subsidiaries or any of the properties or
assets of Seller or any of the Seller Subsidiaries may be subject,
other than those as to which any such violation, conflict, breach,
event, termination, acceleration or creation would not have or be
reasonably likely to have a Material Adverse Effect on Seller or (ii)
subject to compliance with the statutes and regulations referred to in
Section 2.4(c), violate any judgment, ruling, order, writ, injunction,
decree, statute, rule or regulation applicable to Seller or any of the
Seller Subsidiaries or any of their respective properties or assets;
other than violations, conflicts, breaches, defaults, terminations,
accelerations or liens which would not have or be reasonably likely to
have a Material Adverse Effect on Seller.
(c) Other than in connection or in compliance with the provisions
of the WBCL or the Securities Act of 1933, as amended, and the rules
and regulations thereunder (collectively, the "Securities Act"), the
Securities Exchange Act of 1934 and the rules and regulations
thereunder (collectively, the "Exchange Act"), the securities or blue
sky laws of the various states or filings, consents, reviews,
authorizations, approvals or exemptions required under the BHCA, or
any required approvals of the Federal Reserve Board, the Federal
Deposit Insurance Corporation ("FDIC") or other governmental agencies
or governing boards having regulatory authority over Seller or any
Seller Subsidiary, no consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency, commission, banking authority or other governmental authority
or instrumentality ("Governmental Entity") is required by or with
respect to Seller or any of the Seller Subsidiaries in connection with
the execution or delivery of this Agreement or the consummation by
Seller of the transactions contemplated by this Agreement.
2.5 Seller Financial Statements.
(a) Attached hereto as Schedule 2.5(a) are copies of the
following documents filed by the Seller with the Securities and
Exchange Commission ("SEC"): (i) Seller's Annual Report on Form 10-KSB
for the fiscal years ended March 31, 1997 and 1998; (ii) Seller's
Quarterly Reports on Form 10-QSB for the quarters ended June 30, 1998,
September 30, 1998 and December 31, 1998; (iii) any of Seller's
Current Reports on Form 8-K filed with the SEC since March 31, 1998;
(iv) Seller's Annual Report to Shareholders for its fiscal year ending
March 31, 1998; (v) Seller's proxy statements and any related proxy
materials delivered to Seller's shareholders in connection with any
shareholders' meetings held after March 31, 1998; and (vi) any
amendments or supplements to such documents and reports.
(b) The financial statements contained in the documents
referenced in Schedule 2.5(a) and the Determination Date Financial
Statements are referred to collectively as the "Seller Financial
Statements." Except as referenced in Schedule 2.5(b), the Seller
Financial Statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied during
the periods involved, and present fairly the consolidated financial
position of Seller and the Seller Subsidiaries, taken as a whole, at
the dates thereof and the consolidated results of operations, changes
in stockholders' equity and cash flows, as applicable, of Seller and
the Seller Subsidiaries for the periods stated therein.
c) Except as referenced in Schedule 2.5(b), Seller and the
Seller Subsidiaries each has prepared, kept and maintained through the
date hereof financial books and records maintained in all material
respects in accordance with GAAP and all other applicable accounting
requirements and which fairly reflect their respective financial
conditions, results of operations, changes in stockholders' equity and
cash flows.
2.6 Seller Reports. Since August 5, 1994, each of Seller and the Seller
Subsidiaries has timely filed any and all reports, registrations and statements,
together with any required amendments thereto, that it was required to file with
(i) the SEC, including, but not limited to, Forms 00-XXX, Xxxxx 00-XXX xxx Xxxxx
0-X, (xx) the Federal Reserve Board, (iii) the FDIC; and (iv) the WDFI (the
entities in the foregoing clauses (i) through (iv) being referred to herein
collectively as the "Regulatory Authorities" and individually as a "Regulatory
Authority"). Seller and Seller Subsidiaries have filed all material reports,
registrations and statements, together with any required amendments thereto,
with any and all federal, state, municipal or local government, securities,
banking, savings and loan, environmental, insurance and other governmental or
regulatory authority, and the agencies and staffs thereof having jurisdiction
over the affairs of it (collectively, the "Additional Regulatory Authorities"
and, individually, the "Additional Regulatory Authority"). All such reports and
statements filed with any Regulatory Authority or Additional Regulatory
Authority are collectively referred to herein as the "Seller Reports." As of
each of their respective dates, the Seller Reports complied in all material
respects with all the rules and regulations promulgated by the applicable
Regulatory Authority or Additional Regulatory Authority. With respect to Seller
Reports filed with the Regulatory Authorities or Additional Regulatory
Authorities, there is no unresolved violation, criticism or exception by any
Regulatory Authority or Additional Regulatory Authority with respect to any
report or statement filed by, or any examinations of, Seller or any of the
Seller Subsidiaries.
2.7 Title to and Condition of Assets.
(a) Except as set forth in Schedule 2.7(a), and except as may be
reflected in the Seller Financial Statements and with the exception of
all "Real Property" (which is the subject of Section 2.8 hereof),
Seller and the Seller Subsidiaries have, and at the Closing Date will
have, good and marketable title to their owned properties and assets,
including, without limitation, those reflected in the Seller Financial
Statements (except those disposed of in the ordinary course of
business since the date thereof), free and clear of any Lien, except
for Liens for (i) taxes, assessments or other governmental charges not
yet delinquent, (ii) as set forth or described in the Seller Financial
Statements, and (iii) pledges to secure deposits and other Liens
incurred in the ordinary course of business.
(b) Except as set forth in Schedule 2.7(b), no material
properties or assets that are reflected as owned by Seller or any of
the Seller Subsidiaries in the Seller Financial Statements as of
September 30, 1998 have been sold, leased, transferred, assigned or
otherwise disposed of since such date, except in the ordinary course
of business.
(c) Except as set forth in Schedule 2.7(c), all furniture,
fixtures, vehicles, machinery and equipment and computer software
owned or used by Seller or the Seller Subsidiaries, including any such
items leased as a lessee (taken as a whole as to each of the foregoing
with no single item deemed to be of material importance) are in good
working order and free of known defects, subject only to normal wear
and tear. The operation by Seller or the Seller Subsidiaries of such
properties and assets is in compliance in all material respects with
all applicable laws, ordinances and rules and regulations of any
governmental authority having jurisdiction over such use.
2.8 Real Property.
(a) A list of each parcel of real property owned by Seller or any
of the Seller Subsidiaries (other than real property acquired in
foreclosure or in lieu of foreclosure in the course of the collection
of loans and being held by Seller or a Seller Subsidiary for
disposition as required by law) is set forth in Schedule 2.8(a) under
the heading "Owned Real Property" (such real property being herein
referred to as the "Owned Real Property"). A list of each parcel of
real property leased by Seller or any of the Seller Subsidiaries is
also set forth in Schedule 2.8(a) under the heading "Leased Real
Property" (such real property being herein referred to as the "Leased
Real Property"). Collectively, the Owned Real Property and the Leased
Real Property are herein referred to as the "Real Property."
(b) There is no pending action involving Seller or any of the
Seller Subsidiaries as to the title of or the right to use any of the
Real Property.
(c) Except as disclosed on Schedule 2.8(c), neither Seller nor
any of the Seller Subsidiaries has any interest in any real property
other than as described above in Section 2.8(a) except interests as a
mortgagee, any real property acquired in foreclosure or in lieu of
foreclosure and being held for disposition as required by law and
property held by any Seller Subsidiary in its capacity as trustee.
(d) To the best knowledge of Seller, none of the buildings,
structures or other improvements located on the Real Property
encroaches upon or over any adjoining parcel of real estate or any
easement or right-of-way or "setback" line, and all such buildings,
structures and improvements are located and constructed in conformity
with all applicable zoning ordinances and building codes.
(e) None of the buildings, structures or improvements located on
the Owned Real Property is the subject of any official complaint or
notice by any governmental authority of violation of any applicable
zoning ordinance or building code, and there is no zoning ordinance,
building code, use or occupancy restriction or condemnation action or
proceeding pending, or, to the best knowledge of Seller, threatened,
with respect to any such building, structure or improvement. The Owned
Real Property is in generally good condition for its intended purpose,
ordinary wear and tear excepted, and has been maintained in accordance
with reasonable and prudent business practices applicable to like
facilities.
(f) Except as may be reflected in the Seller Financial Statements
or with respect to such easements, Liens, defects or encumbrances as
do not individually or in the aggregate materially adversely affect
the use or value of the parcel of Owned Real Property, Seller and the
Seller Subsidiaries have, and at the Closing Date will have, good and
marketable title to their respective Owned Real Properties or will
have maintained insurance in sufficient amounts against any such
defect in title.
(g) Neither Seller nor any of the Seller Subsidiaries has caused
or allowed the generation, treatment, storage, disposal or release at
any Real Property of any Toxic Substance (as such term is hereinafter
defined), except for Toxic Substances of the types and in the
quantities typically associated with Seller's or Seller Subsidiaries'
businesses and in accordance in all material respects with all
applicable federal, state and local laws and regulations. "Toxic
Substance" means any hazardous, toxic or dangerous substance,
pollutant, waste, gas or material, including, without limitation,
petroleum and petroleum products, metals, liquids, semi-solids or
solids, that are regulated under any federal, state or local statute,
ordinance, rule, regulation or other law pertaining to environmental
protection, contamination, quality, waste management or cleanup.
Neither Seller nor any Seller Subsidiary has knowledge of any
underground storage tanks located on, in or under any Owned Real
Property or Leased Real Property.
2.9 Taxes. Seller and each Seller Subsidiary have timely filed or will timely
file (including extensions) all tax returns required to be filed at or prior to
the Closing Date ("Seller Returns"). Each of Seller and the Seller Subsidiaries
has paid, or set up adequate reserves on the Seller Financial Statements for the
payment of, all taxes required to be paid in respect of the periods covered by
such Seller Returns and has set up adequate reserves on the most recent Seller
Financial Statements for the payment of all taxes anticipated to be payable in
respect of all periods up to and including the latest period covered by such
Seller Financial Statements. Neither Seller nor any Seller Subsidiary has or, to
the best knowledge of Seller, will have any material liability for any such
taxes in excess of the amounts so paid or reserves so established, and no
material deficiencies for any tax, assessment or governmental charge has been
proposed, asserted or assessed in writing (tentatively or definitely) against
Seller or any of the Seller Subsidiaries which have not been settled or would
not be covered by existing reserves. Except as set forth in Schedule 2.9,
neither Seller nor any of the Seller Subsidiaries is delinquent in the payment
of any tax, assessment or governmental charge, nor has it requested any
extension of time within which to file any tax returns in respect of any fiscal
year which have not since been filed and no requests for waivers of the time to
assess any tax are pending. Except as set forth on Schedule 2.9, no federal or
state income tax return of Seller or any Seller Subsidiaries has been audited by
the Internal Revenue Service (the "IRS") or any state tax authority for the
seven most recent full fiscal years of Seller. Except as set forth on Schedule
2.9, there is no deficiency or refund litigation or, to the best knowledge of
Seller, matter in controversy with respect to Seller Returns. Except as set
forth on Schedule 2.9 hereof, neither Seller nor any of the Seller Subsidiaries
has extended or waived any statute of limitations on the assessment of any tax
due that is currently in effect.
2.10 Material Adverse Effect. Since September 30, 1998, there has been no
Material Adverse Effect on Seller.
2.11 Loans, Commitments Contracts.
(a) Schedule 2.11(a) contains a complete and accurate listing of
(i) all contracts entered into with respect to deposits and repurchase
agreements of $1,000,000 or more, by account, as of September 30,
1998, (ii) all loan agreements, notes, security agreements, bankers'
acceptances, outstanding letters of credit, participation agreements,
and other documents relating to or involving extensions of credit by
Seller or any of the Seller Subsidiaries in excess of $250,000 to
which Seller or any of the Seller Subsidiaries is a party or by which
it is bound, by account, as of January 26, 1999, and (iii) all loan
commitments and commitments to issue letters of credit and other
commitments to extend credit with respect to any one entity or related
group of entities in excess of $250,000 to which Seller or any of the
Seller Subsidiaries is a party or by which it is bound, by account, as
of December 30, 1998. The Seller hereby represents that during the
period from January 26, 1999 to and including the date of this
Agreement, there have been no extensions of credit of the type
described in Section 2.11(a)(ii), and that during the period from
December 31, 1998 to and including the date of this Agreement, there
have been no commitments of the type described in Section
2.11(a)(iii). After the date of this Agreement, the Seller shall
promptly inform Buyers of any extensions of credit described in
Section 2.11(a)(ii) or commitments described in Section 2.11(a)(iii)
that arise or are entered into or that have arisen or been entered
into after January 26, 1999 and December 31, 1998, respectively.
(b) Except for the contracts and agreements required to be listed
on Schedule 2.11(a) and the loans required to be listed on Schedule
2.11(f), and except as otherwise listed on Schedule 2.11(b), neither
Seller nor any of the Seller Subsidiaries is a party to or is bound by
any:
(i) agreement, contract, arrangement, understandin or
commitment with any labor union;
(ii) material franchise or license agreement, excluding
software license agreements entered into in the ordinary
course of business;
(iii) written employment, severance, termination pay,
agency, consulting or similar agreement or commitment in
respect of personal services;
(iv) material agreement, arrangement or commitment (A)
not made in the ordinary course of business, and (B)
pursuant to which Seller or any of the Seller Subsidiaries
is or may become obligated to invest in or contribute to any
Seller Subsidiary other than pursuant to Seller Employee
Plans (as that term is defined in Section 2.19 hereof) or
agreements relating to joint ventures or partnerships set
forth in Schedule 2.2, true and complete copies of which
have been furnished to Buyers;
(v) agreement, indenture or other instrument not
disclosed in the Seller Financial Statements relating to the
borrowing of money by Seller or any of the Seller
Subsidiaries or the guarantee by Seller or any of the Seller
Subsidiaries of any such obligation (other than trade
payables or instruments related to transactions entered into
in the ordinary course of business by Seller or any of the
Seller Subsidiaries, such as deposits, Federal Home Loan
Bank ("FHLB") and Federal Funds borrowings and repurchase
and reverse repurchase agreements);
(vi) contract containing covenants which limit the
ability of Seller or any of the Seller Subsidiaries to
compete in any line of business or with any person or which
involves any restrictions on the geographical area in which,
or method by which, Seller or any of the Seller Subsidiaries
may carry on their respective businesses (other than as may
be required by law or any applicable Regulatory Authority or
Additional Regulatory Authority);
(vii) contract or agreement which is a "material
contract" within the meaning of Item 601(b)(10) of
Regulation S-K as promulgated by the SEC to be performed
after the date of this Agreement that has not been filed or
incorporated by reference in the Seller Reports;
(viii) lease with annual rental payments aggregating
$10,000 or more;
(ix) loans or other obligations payable or owing to any
officer, director or employee except (A) salaries, wages and
directors' fees or other compensation incurred and accrued
in the ordinary course of business and (B) obligations due
in respect of any depository accounts maintained by any of
the foregoing with Seller or any of the Seller Subsidiaries
in the ordinary course of business; or
(x) other agreement, contract, arrangement,
understanding or commitment involving an obligation by
Seller or any of the Seller Subsidiaries of more than
$10,000 and extending beyond six months from the date hereof
that cannot be canceled without cost or penalty upon notice
of thirty (30) days or less, other than contracts entered
into in respect of deposits, loan agreements and
commitments, notes, security agreements, repurchase and
reverse repurchase agreements, Treasury, tax and loan notes,
bankers' acceptances, outstanding letters of credit and
commitments to issue letters of credit, participation
agreements and other documents relating to transactions
entered into by Seller or any of the Seller Subsidiaries in
the ordinary course of business and not involving extensions
of credit with respect to any one entity or related group of
entities in excess of $250,000.
(c) Seller and/or the Seller Subsidiaries carry property,
liability, director and officer, errors and omissions, products
liability and other insurance coverage as set forth in Schedule
2.11(c) under the heading "Insurance."
(d) True, correct, and complete copies of the agreements,
contracts, leases and other documents referred to in Section 2.11(b)
have been included with Schedule 2.11(b) hereto. True, correct and
complete copies of the agreements, contracts, leases, insurance
policies and other documents referred to in Schedules 2.11(a) and (c)
have been or shall be furnished or made available to Buyers.
(e) Each of the agreements, contracts, leases, insurance policies
and other documents referred to in Schedules 2.11(a), (b) and (c) is a
valid, binding and enforceable obligation of the parties sought to be
bound thereby, except as the enforceability thereof against the
parties thereto (other than Seller or any of the Seller Subsidiaries)
may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws now or hereafter in effect relating to the enforcement
of creditors' rights generally, and except that equitable principles
may limit the right to obtain specific performance or other equitable
remedies.
(f) Except as set forth on Schedule 2.11(f), as of January 31,
1999, neither the Seller nor any of the Seller Subsidiaries was a
party to any written or oral loan agreement, note or borrowing
arrangement (including, without limitation, leases, credit
enhancements, commitments, guarantees and interest-bearing assets)
(collectively, "Loans"), other than Loans the unpaid principal balance
of which did not exceed $50,000, under the terms of which the obligor
was, as of January 31, 1999, over ninety (90) days delinquent in
payment of principal or interest or in default under any other
provision. After the date of this Agreement, the Seller shall promptly
deliver to Buyers, as soon as they become available, Seller's monthly
scheduled items reports which shall set forth any Loans, other than
Loans the unpaid principal balance of which did not exceed $50,000,
under the terms of which the obligor has become, since January 31,
1999, over ninety (90) days delinquent in payment of principal or
interest or in default under any other provision. Schedule 2.11(f)
sets forth each of the Loans of Seller or any of the Seller
Subsidiaries with an unpaid principal amount in excess of $50,000 and
that as of the date of this Agreement are internally classified as (i)
"Substandard," "Doubtful," "Loss" or "Classified," (ii) "Criticized,"
"Other Loans Especially Mentioned" or "Special Mention," or (iii)
"Credit Risk Assets," "Concerned Loans," "Watch List" or words of
similar import, in each case together with the unpaid principal amount
of and any accrued and unpaid interest on each of such Loans and the
identity of the borrower thereunder; together with the aggregate
principal amount of and accrued and unpaid interest on all such Loans
by category. After the date of this Agreement, the Seller shall
promptly inform Buyers of any Loans that become classified since
January 31, 1999 in the manner described in the previous sentence, or
any Loans the classification of which is changed at any time after
January 31, 1999. The Seller and its Subsidiaries have internally
classified, in the manner described above, all Loans that any auditor
or government examiner has criticized or classified, and the internal
classification of such Loan is at least as strict as the criticism or
classification thereof by the auditor or government examiner. Schedule
2.11(f) also sets forth, as of January 31, 1999, by account, each
borrower, customer or other party which has notified Seller or any of
the Seller Subsidiaries during the past twelve months of, or has
asserted against Seller or any of the Seller Subsidiaries, in each
case in writing, any "lender liability" or similar claim, and, to the
best knowledge of Seller, each borrower, customer or other party which
has given Seller or any of the Seller Subsidiaries any oral
notification of, or orally asserted to or against Seller or any of the
Seller Subsidiaries, any such claim. After the date of this Agreement,
the Seller shall promptly inform Buyers of any lender liability or
similar claim made or asserted in writing of the type described in the
immediately preceding sentence that has arisen since January 31, 1999.
2.12 Absence of Defaults. Neither Seller nor any of the Seller Subsidiaries
is in violation of its charter documents or By-Laws or in default under any
material agreement, commitment, arrangement, lease, insurance policy or other
instrument, whether entered into in the ordinary course of business or otherwise
and whether written or oral, and there has not occurred any event that, with the
lapse of time or giving of notice or both, would constitute such a default,
except in all cases where such default would not have a Material Adverse Effect
on Seller.
2.13 Litigation and Other Proceedings. Except as set forth on Schedule 2.13
or otherwise disclosed in the Seller Financial Statements, neither Seller nor
any of the Seller Subsidiaries is a party to any pending or, to the best
knowledge of Seller, threatened claim, action, suit, investigation or
proceeding, or is subject to any order, judgment or decree including, without
limitation, any such claim, action, suit, investigation or proceeding involving
any state or federal bank regulatory agency, whether of a formal or informal
nature. Without limiting the generality of the foregoing, there are no actions,
suits or proceedings pending or, to the best knowledge of Seller, threatened
against Seller or any of the Seller Subsidiaries or any of their respective
officers or directors by any stockholder of Seller or any of the Seller
Subsidiaries (or any former stockholder of Seller or any of the Seller
Subsidiaries) or involving claims under the Community Reinvestment Act of 1977,
as amended, and the regulations promulgated thereunder ("CRA"), the Bank Secrecy
Act, the fair lending laws or any other similar laws.
2.14 Directors' and Officers' Insurance. Each of Seller and the Seller
Subsidiaries has taken or will take all requisite action (including, without
limitation, the making of claims and the giving of notices) pursuant to its
directors' and officers' liability insurance policy or policies in order to
preserve all rights thereunder with respect to all matters (other than matters
arising in connection with this Agreement and the transactions contemplated
hereby) occurring prior to the Effective Time that are known to Seller.
2.15 Compliance with Laws
(a) Seller and each of the Seller Subsidiaries have all permits,
licenses, authorizations, orders and approvals of, and have made all
filings, applications and registrations with, all Regulatory
Authorities and Additional Regulatory Authorities that are required in
order to permit them to own or lease their respective properties and
assets and to carry on their respective businesses in all material
respects as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and
effect and, to the best knowledge of Seller, no suspension or
cancellation of any of them is threatened; and all such filings,
applications and registrations are current; in each case except for
permits, licenses, authorizations, orders, approvals, filings,
applications and registrations the failure to have (or have made)
would not have a Material Adverse Effect on Seller and the Seller
Subsidiaries.
(b) (i) Each of Seller and the Seller Subsidiaries has complied
in all material respects with all laws, regulations and orders
(including, without limitation, zoning ordinances, building codes, and
securities, tax, environmental, civil rights, and occupational health
and safety laws and regulations including, without limitation, in the
case of Seller or any Seller Subsidiary that is a savings bank or
savings association, banking organization, banking corporation or
trust company, all statutes, rules, regulations and policy statements
pertaining to the conduct of a banking, deposit-taking, lending or
related business, or to the exercise of trust powers) and governing
instruments applicable to it and to the conduct of its business, and
(ii) neither Seller nor any of the Seller Subsidiaries is in material
default under, and no event has occurred which, with the lapse of time
or notice or both, could result in the material default under, the
terms of any judgment, order, writ, decree, permit, or license of any
Regulatory Authority, Additional Regulatory Authority or court,
whether federal, state, municipal or local, and whether at law or in
equity.
(c) Except as set forth on Schedule 2.15(c), neither Seller nor
any of the Seller Subsidiaries is subject to or, to the best knowledge
of Seller, reasonably likely to incur a liability as a result of its
ownership, operation, or use of any Property (as defined below) of
Seller (whether directly or as a consequence of such Property being
acquired in foreclosure or in lieu of foreclosure or being part of the
investment portfolio of Seller or any of the Seller Subsidiaries) (A)
that is contaminated by or contains any Toxic Substance (as defined in
Section 2.8(g)), including, without limitation, petroleum and
petroleum products, asbestos, PCBs, pesticides, herbicides and any
other substance or waste that is hazardous to human health or the
environment and regulated by federal, state or local law, or (B) on
which any Toxic Substance has been stored, disposed of, placed or used
at the Property or in the construction of structures thereon.
"Property" shall include all property (real or personal, tangible or
intangible) owned or controlled by Seller or any of the Seller
Subsidiaries, including, without limitation, property acquired under
foreclosure or in lieu of foreclosure, property in which any venture
capital or similar unit of Seller or any of the Seller Subsidiaries
has an interest and property held by Seller or any of the Seller
Subsidiaries in its capacity as a trustee. No claim, action, suit or
proceeding is pending or, to the best knowledge of Seller, threatened,
and no claim has been asserted against Seller or any of the Seller
Subsidiaries relating to Property of Seller or any of the Seller
Subsidiaries before any court or other Regulatory Authority or
Additional Regulatory Authority or arbitration tribunal relating to
Toxic Substances, pollution or the environment, and there is no
outstanding judgment, order, writ, injunction, decree or award against
or affecting Seller or any of the Seller Subsidiaries with respect to
the same.
(d) Neither Seller nor any of the Seller Subsidiaries has
received any notification or communication that has not been finally
resolved from any Regulatory Authority or Additional Regulatory
Authority (i) asserting that the Seller or any of the Seller
Subsidiaries or any Property is not in substantial compliance with any
of the statutes, regulations or ordinances that such Regulatory
Authority or Additional Regulatory Authority enforces, (ii)
threatening to revoke any license, franchise, permit or governmental
authorization, including, without limitation, such company's status as
an insured depository institution under the Federal Deposit Insurance
Act, as amended (the "FDI Act"), or (iii) requiring or threatening to
require Seller or any of the Seller Subsidiaries, or indicating that
Seller or any of the Seller Subsidiaries may be required, to enter
into a cease and desist order, agreement or memorandum of
understanding or any other agreement restricting or limiting or
purporting to direct, restrict or limit in any manner the operations
of Seller or any of the Seller Subsidiaries, including, without
limitation, any restriction on the payment of dividends. No such cease
and desist order, agreement or memorandum of understanding or other
agreement is currently in effect.
(e) Neither Seller nor any of the Seller Subsidiaries is required
by Section 32 of the FDI Act to give prior notice to any federal
banking agency of the proposed addition of an individual to its board
of directors or the employment of an individual as a senior executive
officer.
2.16 Labor. No work stoppage involving Seller or any of the Seller
Subsidiaries is pending or, to the best knowledge of Seller, threatened. Except
as set forth on Schedule 2.16, neither Seller nor any of the Seller Subsidiaries
is involved in, or, to the best knowledge of Seller, threatened with or affected
by, any labor dispute, arbitration, lawsuit or administrative proceeding that
reasonably could be expected to have a Material Adverse Effect on the Seller.
None of the employees of Seller or the Seller Subsidiaries is represented by any
labor union or any collective bargaining organization.
2.17 Material Interests of Certain Persons. Except as set forth in Seller's
Annual Report on Form 10-K for the fiscal year ended March 31, 1998 and/or in
its proxy statement and other proxy solicitation materials for Seller's annual
stockholders' meeting held in fiscal 1999, and except as set forth in Schedule
2.17, no officer or director of Seller or any of the Seller Subsidiaries, or any
"associate" (as such term is defined in Rule 14a-1 under the Exchange Act) of
any such officer or director, has any interest in any contract or property (real
or personal, tangible or intangible), used in, or pertaining to the business of,
Seller or any of the Seller Subsidiaries, which in the case of Seller and each
of the Seller Subsidiaries would be required to be disclosed by Item 404 of
Regulation S-K promulgated by the SEC.
2.18 Allowance for Loan and Lease Losses; Non-Performing Assets; Financial
Assets.
(a) Except as set forth on Schedule 2.18(a), all of the accounts,
notes and other receivables that are reflected in the Seller Financial
Statements as of September 30, 1998, were acquired in the ordinary
course of business and were collectible in full in the ordinary course
of business, except for possible loan and lease losses that are
adequately provided for in the allowance for loan and lease losses
reflected in such Seller Financial Statements, and the collection
experience of Seller and the Seller Subsidiaries since September 30,
1998 to the date hereof has not deviated in any material and adverse
manner from the credit and collection experience of Seller and the
Seller Subsidiaries, taken as a whole, for the six months ended
September 30, 1998.
(b) The allowances for loan losses contained in the Seller
Financial Statements were established in accordance with the past
practices and experiences of Seller and the Seller Subsidiaries, and
the allowance for loan and lease losses shown on the consolidated
balance sheet of Seller and the Seller Subsidiaries as of the
Determination Date will be adequate under the requirements of GAAP, or
regulatory accounting principles, as the case may be, to provide for
possible losses on loans and leases (including, without limitation,
accrued interest receivable) and credit commitments (including,
without limitation, stand-by letters of credit) as of the date of such
balance sheet.
(c) Schedule 2.18(c) sets forth as of the date of this Agreement
all assets classified by Seller as real estate acquired through
foreclosure or repossession, including foreclosed assets.
(d) As of September 30, 1998, the aggregate amount of all
Non-Performing Assets (as defined below) on the books of Seller and
the Seller Subsidiaries did not exceed 1.71% of total assets.
"Non-Performing Assets" shall mean (i) all loans (A) that are
contractually past due 90 days or more in the payment of principal
and/or interest, (B) that are on nonaccrual status, (C) that have been
classified "doubtful," "loss" or the equivalent thereof by any
Regulatory Agency or (D) where the interest rate terms have been
reduced and/or the maturity dates have been extended subsequent to the
agreement under which the loan was originally created due to concerns
regarding the borrower's ability to pay in accordance with such
initial terms, and (ii) all assets classified by Seller as real estate
acquired through foreclosure or in lieu of foreclosure, including
in-substance foreclosures, and all other assets acquired through
foreclosure or in lieu of foreclosure.
(e) All loans receivable (including discounts) and accrued
interest entered on the books of Seller and the Seller Subsidiaries,
to the extent unpaid on the Closing Date, arose out of bona fide
arm's-length transactions, were made for good and valuable
consideration in the ordinary course of Seller's or the appropriate
Seller Subsidiary's respective business, and the notes or other
evidences of indebtedness with respect to such loans or discounts are
true and genuine and are what they purport to be. To the best
knowledge of Seller, the loans, discounts and the accrued interest
reflected on the books of Seller and the Seller Subsidiaries are
subject to no defenses, set-offs or counterclaims (including, without
limitation, those afforded by usury or truth-in-lending laws), except
as may be provided by bankruptcy, insolvency or similar laws affecting
creditors' rights generally or by general principles of equity. All
such loans are owned by Seller or the appropriate Seller Subsidiary
free and clear of any liens, restrictions or encumbrances.
(f) The notes and other evidences of indebtedness evidencing the
loans described in Section 2.18(e) above, and all pledges, mortgages,
deeds of trust and other collateral documents or security instruments
relating thereto are and will be, in all material respects, valid,
true, genuine and enforceable, and what they purport to be. Seller and
each of the Seller Subsidiaries has good and valid title to the
investment securities shown on the Seller Financial Statements. A
complete and accurate list of such investment securities as of
September 30, 1998 is attached as Schedule 2.18(f).
2.19 Employee Benefit Plans.
(a) Schedule 2.19(a) lists all pension, retirement, supplemental
retirement, stock option, stock purchase, stock ownership,
savings, stock appreciation right, profit sharing, deferred
compensation, consulting, bonus, medical, disability,
workers' compensation, vacation, group insurance, severance
and other employee benefit, incentive and welfare policies,
contracts, plans and arrangements, and all trust agreements
related thereto, maintained by or contributed to by the
Seller or any of the Seller Subsidiaries as of the date
hereof in respect of any of the present or former directors,
officers, or other employees of and/or consultants to the
Seller or any of the Seller Subsidiaries (collectively
"Seller Employee Plans"). The Sellers have furnished the
Buyers with the following documents with respect to each
Seller Employee Plan: (i) a true and complete copy of all
written documents comprising such Seller Employee Plan
(including amendments and individual agreements relating
thereto) or, if there is no such written document, an
accurate and complete description of the Seller Employee
Plan; (ii) the most recently filed Form 5500 or Form
5500-C/R (including all schedules thereto), if applicable;
(iii) the most recent financial statements and actuarial
reports, if any; (iv) the summary plan description currently
in effect and all material modifications thereof, if any;
and (v) the most recent IRS determination letter, if any.
The Incentive Plan was terminated effective as of October
10, 1998, and there are no further rights, obligations, or
liabilities that exist or will exist under the Incentive
Plan.
(b) All Seller Employee Plans have been maintained and operated
in all material respects in accordance with their terms and
are in all material respects in compliance with the
requirements of all applicable statutes, orders, rules and
final regulations, including, without limitation, to the
extent applicable, the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and the Code. All
contributions required to be made to the Seller Employee
Plans have been made or reserved.
(c) With respect to each of the Seller Employee Plans which is a
"pension plan" (as that term is defined in Section 3(2) of
ERISA) (the "Pension Plans"): (i) each Pension Plan which is
intended to be "qualified" within the meaning of Section
401(a) of the Code has been determined to be so qualified by
the IRS, and the Seller has no knowledge of any
circumstances that might result in the revocation of any
such qualification, and each related trust is exempt from
taxation under Section 501(a) of the Code; (ii) the present
value of all benefits vested and all benefits accrued under
each Pension Plan which is subject to Title IV of ERISA did
not, in each case, as of the last applicable annual
valuation date (as indicated on Schedule 2.19(a)), exceed
the value of the assets of the Pension Plan allocable to
such vested or accrued benefits; (iii) the Seller has no
knowledge of and has not engaged in any "prohibited
transaction," as such term is defined in Section 4975 of the
Code or Section 406 of ERISA, which could subject any
Pension Plan or associated trust, or the Seller or any of
the Seller Subsidiaries, to any material tax or penalty;
(iv) no defined benefit Pension Plan or any trust created
thereunder has been terminated, nor has there been any
notice of any "reportable event" (as that term is defined in
Section 4043 of ERISA) that has been required to be filed
with respect to any Pension Plan during the three (3) years
preceding the date of this Agreement; and (v) no Pension
Plan or any trust created thereunder has incurred any
"accumulated funding deficiency," as such term is defined in
Section 302 of ERISA (whether or not waived). No Pension
Plan is a "multiemployer plan," as that term is defined in
Section 3(37) of ERISA.
(d) Except as disclosed in Schedule 2.19(d) or as reflected on
the Seller Financial Statements or the notes thereto,
neither the Seller nor any of the Seller Subsidiaries has
any liability for any post-retirement health, medical or
similar benefit of any kind whatsoever, except as required
by statute or regulation.
(e) Neither the Seller nor any of the Seller Subsidiaries has
any material liability under ERISA or the Code as a result
of its being a member of a group described in Sections
414(b), (c), (m) or (o) of the Code.
(f) Except as disclosed in Schedule 2.19(f), neither the
execution nor delivery of this Agreement, nor the
consummation of any of the transactions contemplated hereby,
will (i) result in any payment (including, without
limitation, severance, unemployment compensation or golden
parachute payment) becoming due to any director or employee
of the Seller or any of the Seller Subsidiaries from any of
such entities, (ii) increase any benefit otherwise payable
under any of the Seller Employee Plans or (iii) result in
the acceleration of the time of payment of any such benefit.
The Seller shall use its best efforts to insure that no
amounts paid or payable by the Seller, the Seller
Subsidiaries or Buyers to or with respect to any employee or
former employee of the Seller or any of the Seller
Subsidiaries will, taken by itself, fail to be deductible
for federal income tax purposes by reason of Section 280G of
the Code.
(g) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
been duly authorized by all requisite action and do not and
will not (i) violate the terms of any of the Seller's
Pension Plans; (ii) violate any provision of ERISA or the
Code including, but not limited to, Code Section 409(e);
(iii) constitute a "prohibited transaction," as such term is
defined in Section 4975 of the Code or Section 406 of ERISA,
for which there is no exemption available to Seller; or (iv)
cause any Pension Plan to cease to be "qualified" within the
meaning of Section 401(a) of the Code.
2.20 Conduct of Seller to Date. Except as set forth in Schedule 2.20, from
and after September 30, 1998 through the date of this Agreement: (i) Seller and
the Seller Subsidiaries have conducted their respective businesses in the
ordinary and usual course consistent with past practices; (ii) neither Seller
nor any of the Seller Subsidiaries has issued, sold, granted, conferred or
awarded any of its Equity Securities, or any corporate debt securities which
would be classified under GAAP as long-term debt on the balance sheets of Seller
or the Seller Subsidiaries; (iii) Seller has not effected any stock split or
adjusted, combined, reclassified or otherwise changed its capitalization; (iv)
Seller has not declared, set aside or paid any dividend (other than its regular
quarterly dividends) or other distribution in respect of its capital stock, or
purchased, redeemed, retired, repurchased or exchanged, or otherwise acquired or
disposed of, directly or indirectly, any of its Equity Securities, whether
pursuant to the terms of such Equity Securities or otherwise; (v) neither Seller
nor any of the Seller Subsidiaries has incurred any obligation or liability
(absolute or contingent), except liabilities incurred in the ordinary course of
business or in connection with the transactions contemplated by this Agreement,
or subjected to Lien any of its assets or properties other than in the ordinary
course of business consistent with past practice; (vi) neither Seller nor any of
the Seller Subsidiaries has discharged or satisfied any Lien or paid any
obligation or liability (absolute or contingent), other than in the ordinary
course of business; (vii) neither Seller nor any of the Seller Subsidiaries has
sold, assigned, transferred, leased, exchanged, or otherwise disposed of any of
its properties or assets other than for a fair consideration in the ordinary
course of business; (viii) except as required by contract or law, neither Seller
nor any of the Seller Subsidiaries has (A) increased the rate of compensation
of, or paid any bonus to, any of its directors, officers, or other employees,
except in accordance with existing policy, (B) entered into any new, or amended
or supplemented any existing, employment, management, consulting, deferred
compensation, severance, or other similar contract, (C) entered into,
terminated, or substantially modified any of the Seller Employee Plans or (D)
agreed to do any of the foregoing; (ix) neither Seller nor any Seller Subsidiary
has suffered any material damage, destruction, or loss, whether as the result of
fire, explosion, earthquake, accident, casualty, labor trouble, requisition, or
taking of property by any Regulatory Authority or Additional Regulatory
Authority, flood, windstorm, embargo, riot, act of God or the enemy, or other
casualty or event, and whether or not covered by insurance; (x) neither Seller
nor any of the Seller Subsidiaries has canceled or compromised any debt, except
for debts charged off or compromised in accordance with the past practice of
Seller and the Seller Subsidiaries; and (xi) neither Seller nor any of the
Seller Subsidiaries has entered into any material transaction, contract or
commitment outside the ordinary course of its business, except in connection
with the transactions contemplated by this Agreement.
2.21 Absence of Undisclosed Liabilities. Except as set forth on Schedule
2.21(a), neither Seller nor any of the Seller Subsidiaries has any debts,
liabilities or obligations, whether accrued, absolute, contingent or otherwise
and whether due or to become due, which would be required to be reflected in the
Seller Financial Statements or the notes thereto in accordance with GAAP,
except:
(a) debts, liabilities or obligations reflected on the Seller
Financial Statements and the notes thereto;
(b) operating leases reflected on Schedule 2.11(b); and
(c) debts, liabilities or obligations incurred in the ordinary
and usual course of their respective businesses, which are not for
breach of contract, breach of warranty, torts, infringements or
lawsuits and which do not have a Material Adverse Effect on Seller.
2.22 Proxy Statement, Etc. None of the information regarding Seller or any
of the Seller Subsidiaries to be supplied by Seller for inclusion or included in
(i) the proxy statement to be mailed to Seller's stockholders in connection with
the Special Meeting to be called to consider this Agreement and the Merger, as
such Proxy Statement may be amended or supplemented (the "Proxy Statement"), or
(ii) any other documents to be filed with any Regulatory Authority or Additional
Regulatory Authority in connection with the transactions contemplated hereby, at
the respective times such documents are filed with any Regulatory Authority or
Additional Regulatory Authority and, with respect to the Proxy Statement, when
mailed, will contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading or, in the case
of the Proxy Statement, at the time of the Special Meeting of Seller's
stockholders referred to in Section 5.3, will contain any untrue statement of a
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Special Meeting. All documents which Seller or any of the Seller
Subsidiaries are responsible for filing with any Regulatory Authority or
Additional Regulatory Authority in connection with the Merger will comply as to
form in all material respects with the provisions of applicable law.
2.23 Registration Obligations. Neither Seller nor any of the Seller
Subsidiaries is under any obligation, contingent or otherwise, which will
survive the Effective Time, by reason of any agreement to register any
transaction involving any of its securities under the Securities Act.
2.24 Tax, Regulatory and Accounting Matters. Neither Seller nor any of the
Seller Subsidiaries has taken or agreed to take any action or has any knowledge
of any fact or circumstance that would materially impede or delay receipt of any
approval referred to in Section 6.1(b) or the consummation of the transactions
contemplated by this Agreement.
2.25 Brokers and Finders. Except for ABN AMRO Incorporated, neither Seller
nor any of the Seller Subsidiaries nor any of their respective officers,
directors or employees has employed any broker or finder or incurred any
liability for any financial advisory fees, brokerage fees, commissions or
finder's fees, and no broker or finder has acted directly or indirectly for
Seller or any of the Seller Subsidiaries in connection with this Agreement or
the transactions contemplated hereby.
2.26 Investments. All investment securities owned by the Seller and any of
the Seller Subsidiaries are suitable investments under the Federal Financial
Institutions Examination Council ("FFIEC") Supervisory Policy statement on
securities activities.
2.27 Accuracy of Information. The statements contained in this Agreement,
the Schedules and any other written document executed and delivered by or on
behalf of Seller pursuant to the terms of this Agreement are true and correct as
of the date hereof or as of the date delivered in all material respects, and
such statements and documents do not omit to state a material fact necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.
2.28 Year 2000 Compliance. Both Seller and the Seller Subsidiaries have
complied with regulatory bulletins issued through October 31, 1998 by the FFIEC
on the subject of Year 2000 Compliance. The Seller and the Seller Subsidiaries
have exercised ordinary care in assessing Year 2000 Compliance status of all
material computer software, firmware and hardware used in the ordinary course of
business as set forth on Schedule 2.28.
2.29 Insider Loans. Set forth on Schedule 2.29 is a list of any and all
outstanding notes or other evidences of indebtedness executed and delivered by
insiders of the Seller or the Seller Subsidiaries to the Seller or the Seller
Subsidiaries (as the term "insiders" is hereinafter defined). On the Closing
Date, the Sellers shall also provide BFC with a list of insider loans
outstanding as of the Closing Date. For purposes of this Section 2.29, "insider"
shall mean any officer or director of the Seller or any of the Seller
Subsidiaries or any shareholder of the Seller owning 5% or more of the Seller's
stock or any members of the immediate families or related interests of such
officers, directors or shareholders, as the terms "immediate families" and
"related interests" are defined in Sections 215.2(g) and (n) of Regulation O
promulgated by the Federal Reserve Board (12 C.F.R. Sections 215.2(g) and (n)).
2.30 Wisconsin Takeover Statute; Rights of Dissenting Stockholders.
(a) As of the date hereof, and at all times on or prior to the
Effective Date: (i) Sections 180.1140 through 180.1144 of the WBCL
(inclusive) are, and shall be, inapplicable to the Merger and the
transactions contemplated by this Agreement based on BFC's
representation to Seller that BFC does not meet the definition of an
"interested shareholder" under Section 180.1140(8) of the WBCL and the
Merger and the transactions contemplated by this Agreement do not
constitute a "business combination" under Section 180.1140(4) of the
WBCL; (ii) Section 180.1150 of the WBCL is, and shall be, inapplicable
to the Merger and the transactions contemplated by this Agreement
because the Merger and the transactions contemplated by this Agreement
qualify as a merger under Section 180.1101 of the WBCL; and (iii)
Chapter 552 of the Wisconsin Statutes is, and shall be, inapplicable
to the Merger and the transactions contemplated by this Agreement.
(b) As of the date hereof, no holder of Seller Common Stock or
Options has any rights under Sections 180.1301 through 180.1331
(inclusive) of the WBCL to dissent from the Merger and to obtain the
fair value of their shares of Seller Common Stock.
2.31 Treatment of Outstanding Options. Set forth on Schedule 2.31 is a list
of Options outstanding as of the date of this Agreement showing the number of
shares of Seller Common Stock underlying each Option and identifying the person
holding such Option. With respect to the Options outstanding as of the date of
this Agreement, all of such Options, whether or not then vested or exercisable
in accordance with their terms, will become exercisable in full at or
immediately before the Effective Time. With respect to employees of the Seller
who hold Options and who receive Option Settlement Amounts as provided in
Section 5.11, the Option Settlement Amounts will be reportable on a Form W-2 to
be filed with the IRS, and, with respect to non-employees of the Seller who hold
Options and who receive Option Settlement Amounts as provided in Section 5.11,
the Option Settlement Amounts will be reportable on a Form 1099 filed with the
IRS. There are no "limited rights" outstanding under the Seller Stock Option
Plan, as such term is defined in the Seller Stock Option Plan.
2.32 Opinion of Financial Advisor. Seller has received the opinion of ABN
AMRO Incorporated dated the date of this Agreement, to the effect that, subject
to the terms, conditions and qualifications set forth therein, the consideration
set forth herein to be received in the Merger by the shareholders of the Seller
is fair to the shareholders of the Seller from a financial point of view.
2.33 Approvals. To the best knowledge of Seller, it is not aware of any
reason why the Regulatory Authorities or any Additional Regulatory Authority
whose approval is required would not provide the approvals necessary to permit
Seller and Buyers to consummate the Merger and the other transactions
contemplated hereunder in the manner provided herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYERS
As an inducement to Seller to enter into and perform its obligations under this
Agreement, the Buyers hereby represent and warrant to Seller as follows:
3.1 Organization and Authority. BFC and Merger Sub are each corporations
duly organized, validly existing and in good standing under the laws of the
State of Minnesota and Wisconsin, respectively, are each qualified to do
business and are each in good standing in all jurisdictions where its ownership
or leasing of property or the conduct of its business requires it to be so
qualified, except where the failure to be so qualified would not have a Material
Adverse Effect on BFC or the Merger Sub, and each has the corporate power and
authority to own its properties and assets and to carry on its business as it is
now being conducted. BFC is registered as a bank holding company with the
Federal Reserve Board under the BHCA.
3.2 Authorization.
(a) BFC and Merger Sub each has the corporate power and authority
to enter into this Agreement and to carry out their respective
obligations hereunder. The execution, delivery and performance of this
Agreement by BFC and Merger Sub and the consummation by BFC and Merger
Sub of the transactions contemplated hereby have been duly authorized
by all requisite corporate action of BFC and Merger Sub. Subject to
the receipt of such approvals of the Regulatory Authorities and the
Additional Regulatory Authorities as may be required by statute or
regulation, this Agreement is a valid and binding obligation of BFC
and Merger Sub enforceable against each in accordance with its terms,
except as (i) the enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, and similar laws now or
hereafter in effect relating to the enforcement of creditors' remedies
generally and except to the extent equitable principles may limit the
right to specific performance or other equitable remedies, and (ii)
considerations of public policy may affect the enforceability of the
indemnification provisions thereof. The execution, delivery and
performance of this Agreement by Buyers and the consummation by Buyers
of the transactions contemplated hereby in accordance with and subject
to the terms of this Agreement have been duly authorized by the
respective Boards of Directors of BFC and Merger Sub. BFC is not
required under applicable law to submit the Merger and the Merger
Agreement to its stockholders for approval.
(b) Neither the execution, delivery and performance by BFC and
Merger Sub of this Agreement, nor the consummation by BFC and Merger
Sub of the transactions contemplated hereby, nor compliance by BFC and
Merger Sub with any of the provisions hereof, will (i) violate,
conflict with or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) or result in the termination of,
or accelerate the performance required by, or result in a right of
termination or acceleration of, or result in the creation of, any Lien
upon any of the properties or assets of BFC or Merger Sub under any of
the terms, conditions or provisions of (x) their respective Articles
of Incorporation or By-Laws, or (y) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which BFC or Merger Sub is a party or by
which they may be bound, or to which BFC or Merger Sub or any of their
respective properties or assets may be subject, or (ii) subject to
compliance with the statutes and regulations referred to in Section
3.2(c), violate any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to BFC or Merger Sub or any of
their respective properties or assets; other than violations,
conflicts, breaches, defaults, terminations, accelerations or Liens
which would not have a Material Adverse Effect on BFC.
(c) Other than in connection with or in compliance with the
provisions of the WBCL, the Securities Act, the Exchange Act, the
securities or blue sky laws of the various states or filings,
consents, reviews, authorizations, approvals or exemptions required
under the BHCA, the FDI Act or any required approvals of the Federal
Reserve Board, the FDIC or any other Regulatory Authority or
Additional Regulatory Authority, no notice to, filing with, exemption
or review by, or authorization, consent or approval of, any public
body or authority is necessary for the consummation by BFC and Merger
Sub of the transactions contemplated by this Agreement.
3.3 Brokers and Finders. Neither BFC, Merger Sub nor any of their
respective officers, directors or employees has employed any broker or finder or
incurred any liability for any financial advisory fees, brokerage fees,
commissions or finder's fees, and no broker or finder has acted directly or
indirectly for BFC or Merger Sub in connection with this Agreement or the
transactions contemplated hereby.
3.4 Accuracy of Information. The statements contained in this Agreement,
the Schedules and any other written document executed and delivered by or on
behalf of Buyers pursuant to the terms of this Agreement are true and correct as
of the date hereof in all material respects, and such statements and documents
do not omit to state a material fact necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
3.5 No Violation. Except as set forth on Schedule 3.5, neither the
execution and delivery of this Agreement by the Buyers, the consummation by
Buyers of the transactions contemplated hereby, nor compliance by the Buyers
with any of the terms or provisions hereof, will (a) violate any provision of
the respective Articles of Incorporation or Bylaws of Buyers, or (b) assuming
that the consents and approvals referred to in Section 3.6 hereof are duly
obtained, (i) violate any statute, code, ordinance, rule, regulation, judgment,
order, writ, decree or injunction applicable to Buyers, other than violations
that would not have a Material Adverse Effect on Buyers, or (ii) violate,
conflict with, result in a breach of any material provision of or the loss of
any material benefit, 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 material Lien upon any
of the respective properties or assets of Buyers or any of their Subsidiaries
under any of the material terms, conditions or provision of any material note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which either of Buyers is a party, except for such
violations, conflicts, breaches, defaults, terminations, cancellations,
accelerations, or creations which, either individually or in the aggregate,
would not have or be reasonably likely to have a Material Adverse Effect on
Buyers.
3.6 Consents and Approvals. Except for (a) the filing of applications,
notices or other documents necessary to obtain, and the receipt of, regulatory
approvals, (b) the filing with the SEC of any necessary registration statement,
(c) the filing of Articles of Merger with the WDFI pursuant to the provisions of
the WBCL, (d) the approval of the Merger, the Merger Agreement and any and all
transactions thereunder by Seller's Board of Directors and the holders of the
requisite number of shares of the Seller Common Stock, (e) the filing by Seller
of its proxy materials with the SEC and the successful conclusion of the review
of Seller's proxy materials by the SEC, and (f) such filing, authorizations or
approvals as may be set forth on Schedule 3.6, no consents or approvals of or
filings or registrations with any governmental entity or with any third party
are necessary in connection with the execution and delivery by Buyers of this
Agreement, or the consummation by Buyers of the transactions contemplated
herein.
3.7 Litigation. As of the date of this Agreement, except as set forth on
Schedule 3.7 or otherwise disclosed in BFC's Annual Report on Form 10-K for the
year ended December 31, 1997 as filed with the SEC (the "1997 Annual Report") or
its Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 1998 as filed with the SEC (collectively, the "1998 Quarterly
Reports"), there are no legal, administrative or other actions, suits,
proceedings or investigations of any kind or nature pending or, to the best
knowledge of BFC, threatened against Buyers that challenge the validity or
propriety of the transactions contemplated by this Agreement or which would have
a Material Adverse Effect on BFC. Neither BFC nor its Subsidiaries is subject
to, or in default with respect to, nor are any of its or their assets subject
to, any outstanding judgment, order or decree of any court or of any
governmental agency or instrumentality that has or is reasonably expected to
have a Material Adverse Effect on BFC.
3.8 Financial Statements.
(a) BFC has furnished to the Seller true, correct and complete
copies of the audited Consolidated Statement of Financial Condition of
BFC as of the fiscal year ended December 31, 1997 and the related
Consolidated Statements of Income, Consolidated Statements of Changes
in Shareholders' Equity and the Consolidated Statements of Cash Flows
for the fiscal year ended December 31, 1997, including the respective
notes thereto, together with the reports of its accountants relating
thereto (the "Buyer Financial Statements"). Such Buyer Financial
Statements fairly represent the consolidated financial position of BFC
as of and for the periods ended on their respective dates and the
consolidated operating results and changes in financial position of
BFC for the indicated periods in conformity with GAAP applied on a
consistent basis.
(b) BFC has furnished to the Seller copies of its 1997 Annual
Report and 1998 Quarterly Reports and will furnish to the Seller
copies of its Annual Report on Form 10-K as filed with the SEC for the
year ended December 31, 1998 and its Quarterly Reports on Form 10-Q as
filed with the SEC for each quarterly period subsequent to December
31, 1998 until the Closing Date ("Subsequent Buyer Financial
Statements"). Since September 30, 1998, to the best knowledge of BFC,
there have not been any material adverse changes in BFC's consolidated
financial condition, assets, liabilities or business, other than
changes in the ordinary course of business.
(c) All of the Buyer Financial Statements have been, and, with
respect to the Subsequent Buyer Financial Statements, will be,
prepared in accordance with GAAP, utilizing accounting practices
consistent with prior years except as otherwise disclosed, and comply
or will comply with applicable accounting requirements and with the
rules and regulations of the SEC with respect thereto. All of the
Buyer Financial Statements present fairly, and all of the Subsequent
Buyer Financial Statements will present fairly, the financial position
of BFC and its Subsidiaries taken as a whole and the results of its
and their operations and changes in its and their financial position
as of and for the periods ending on their respective dates. The books
and records of BFC and its Subsidiaries have been and are being
maintained in all material respects in accordance with GAAP and all
other applicable legal and accounting requirements and reflect only
actual transactions. Except with respect to this Agreement and the
transactions contemplated herein, there are, and with respect to the
Subsequent Buyer Financial Statement will be, no agreements, contracts
or other instruments to which BFC or its Subsidiaries are a party or
by which it or they or (to the best knowledge of BFC) any of the
officers, directors, employees or shareholders of the Buyers or its
Subsidiaries have rights which would have a Material Adverse Effect on
the consolidated financial position of BFC or the financial position
of its Subsidiaries which are not disclosed herein or reflected in the
Buyer Financial Statements and the Subsequent Buyer Financial
Statements.
3.9 Community Reinvestment Act Compliance. Except as set forth on Schedule
3.9, BFC and BFC's Subsidiaries that are banks are in compliance, in all
material respects, with the applicable provisions of the CRA. There is no bank
Subsidiary of BFC which has, as of the date of this Agreement, a CRA rating
which is less than "satisfactory." BFC is not aware of any facts or
circumstances related to any planned or threatened CRA protest of the
transactions contemplated by this Agreement.
3.10 Tax, Regulatory and Accounting Matters. BFC has not taken or agreed to
take any action and, except as Buyers may have otherwise disclosed to Seller in
writing as of or prior to the date of this Agreement, does not have knowledge of
any fact or circumstance that would materially impede or delay receipt of any
approval referred to in Section 6.1(b) or the consummation of the transactions
contemplated by this Agreement.
3.11 Proxy Statement, Etc. None of the information regarding BFC or any of
its Subsidiaries to be supplied by BFC for inclusion or included in (i) the
Proxy Statement or (ii) any other documents to be filed with any Regulatory
Authority or Additional Regulatory Authority in connection with the transactions
contemplated hereby, at the respective times such documents are filed with any
Regulatory Authority or Additional Regulatory Authority and, with respect to the
Proxy Statement, when mailed, will contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading or, in the case of the Proxy Statement, at the time of the
Special Meeting of Seller's stockholders referred to in Section 5.3, will
contain any untrue statement of a material fact, or omit to state a material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of any proxy for the Special Meeting. All documents
which BFC or any of its Subsidiaries are responsible for filing with any
Regulatory Authority or Additional Regulatory Authority in connection with the
Merger will comply as to form in all material respects with the provisions of
applicable law.
3.12 Approvals. To the best knowledge of Buyers, and except as Buyers may
have otherwise disclosed to Seller in writing as of or prior to the date of this
Agreement, they are not aware of any reason why the Regulatory Authorities or
any Additional Regulatory Authority whose approval is required would not provide
the approvals necessary to permit Seller and Buyers to consummate the Merger and
the other transactions contemplated hereunder in the manner provided herein.
ARTICLE IV
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Businesses Prior to the Effective Time. During the period
from the date of this Agreement to the Effective Time, Seller and each of the
Seller Subsidiaries shall conduct their respective businesses according to the
ordinary and usual course consistent with past and current practices and shall
use their best efforts to maintain and preserve their business organization,
employees and advantageous business relationships and retain the services of
their officers and key employees.
4.2 Forbearances of Seller. Except as set forth in Schedule 4.2, without
the prior written consent of Buyers (unless otherwise specifically noted in this
Section 4.2), during the period from the date of this Agreement to the Effective
Time, Seller shall not and shall not permit any of the Seller Subsidiaries to:
(a) declare, set aside or pay any dividends or other
distributions, directly or indirectly, in respect of its capital stock
(other than dividends from any of the Seller Subsidiaries to Seller or
to another of the Seller Subsidiaries), except that between the date
of this Agreement and the Closing Date, Seller may declare and pay
regular cash dividends of not more than $0.17 per share on the Seller
Common Stock on each of January 28, 1999, April 22, 1999 and July 29,
1999 (but only if such dates occur before the Closing Date);
(b) enter into or amend any employment, severance or similar
agreement or arrangement with any director, officer or employee, or
materially modify any of the Seller Employee Plans or grant any salary
or wage increase or materially increase any employee benefit
(including incentive or bonus payments), except (i) normal individual
increases in compensation to employees consistent with past practice,
(ii) subject to the limitation of Section 5.8(b), discretionary
contributions to the ESOP made solely for the purpose of retiring the
ESOP loan to the Seller, or (iii) as required by law or contract;
(c) authorize, recommend, propose or announce an intention to
authorize, recommend or propose, or enter into an agreement in
principle with respect to, any merger, consolidation or business
combination (other than the Merger), any acquisition of a material
amount of assets or securities, any disposition of a material amount
of assets or securities or any release or relinquishment of any
material contract rights;
(d) propose or adopt any amendments to its Certificate or
Articles of Incorporation or other charter document or By-Laws or to
the Certificate or Articles of Incorporation or other charter document
or By-Laws of any of the Seller Subsidiaries;
(e) issue, sell, grant, confer or award any of its Equity
Securities (except that the Seller may issue up to 7,635 shares of
Seller Common Stock upon exercise of the Seller Stock Options
outstanding on the date of this Agreement) or effect any stock split
or stock dividend or adjust, combine, reclassify or otherwise change
its capitalization as it existed on the date of this Agreement;
(f) purchase, redeem, retire, repurchase or exchange, or
otherwise acquire or dispose of, directly or indirectly, any of its
Equity Securities, whether pursuant to the terms of such Equity
Securities or otherwise;
(g) make or commit to make a loan or grant an extension of credit
to any borrower (including any renewals of existing loans or
additional advances on loans to existing borrowers of the Seller or
any of the Seller Subsidiaries) which will result in the principal
balance owing to the Seller or any of the Seller Subsidiaries in the
aggregate to exceed $150,000 for any secured loan or extension of
credit or $25,000 for any unsecured loan or extension of credit;
(h) take any action that has the reasonable and foreseeable
likelihood of materially impeding or delaying the consummation of the
transactions contemplated by this Agreement or the ability of Buyers
or Seller to obtain any approval of any Regulatory Authority or
Additional Regulatory Authority required for the transactions
contemplated by this Agreement or to perform its covenants and
agreements under this Agreement;
(i) obtain any advances from the FHLB of Chicago with maturities
in excess of ninety (90) days or, other than in the ordinary course of
business consistent with past practice, incur any other indebtedness
for borrowed money or assume, guarantee, endorse or otherwise as an
accommodation become responsible or liable for the obligations of any
other individual, corporation or other entity;
(j) except as provided in Schedule 4.2(j) in connection with
Seller's continuation of its practice of selling fixed rate loans that
are generated by the Seller Subsidiaries, sell any portion or all of
the Seller's or any of the Seller Subsidiaries' loan or investment
portfolios, it being understood that there have been no sales of all
or any portion of the loan or bond portfolios from September 30, 1998
to the date hereof; or invest any of the Seller's or any of the Seller
Subsidiaries' assets in any marketable securities other than U.S.
Treasury or U.S. Agency securities with a maturity of two years or
less or GNMA adjustable rate mortgage securities purchased at a dollar
price not to exceed 101% of par value;
(k) make loans to "insiders," as that term is defined in Section
2.29, except for renewals of outstanding indebtedness in the ordinary
course of business;
(l) fail to recognize loan losses or fund any of the Seller
Subsidiaries' loan loss reserve or allowance except (i) in the
ordinary course of business, consistent with past practices and the
policies of the Seller and the Seller Subsidiaries, (ii) in accordance
with GAAP and (iii) in accordance with regulatory guidelines, policies
and regulations or as required pursuant to any regulatory examination
of any of the Seller Subsidiaries;
(m) fail to accrue income and expenses on the Seller's and any of
the Seller Subsidiaries' books in the ordinary course of business and
in accordance with GAAP;
(n) fail to disclose in writing to BFC any facts or circumstances
which cause the risk rating for any extension of credit or
participation owned by the Seller or any of the Seller Subsidiaries
with a principal balance outstanding in excess of $100,000 to be
adversely affected;
(o) make any capital expenditures or commitment for capital
expenditures for the Seller and the Seller Subsidiaries, except in the
ordinary course of business which individually exceed $20,000 or, in
the aggregate, exceed $50,000;
(p) enter into or amend any other contract, agreement,
understanding, arrangement or commitment not already described or
addressed in this Section 4.2 involving an obligation by Seller or any
of the Seller Subsidiaries of more than $25,000, other than contracts
entered into in respect of deposit agreements; or
(q) agree in writing or otherwise to take any of the foregoing
actions or engage in any activity, enter into any transaction or
intentionally take or omit to take any other act which would make any
of the representations and warranties in Article II of this Agreement
untrue or incorrect in any material respect if made anew after
engaging in such activity, entering into such transaction, or taking
or omitting such other act.
4.3 No Solicitation.
(a) Seller shall not, directly or indirectly, through any
officer, director, employee, financial advisor, representative or
agent of such party (i) solicit, initiate, or encourage any inquiries
or proposals that constitute, or could reasonably be expected to lead
to, a proposal or offer for a merger, consolidation, business
combination, sale of substantial assets, sale of shares of capital
stock (including, without limitation, by way of a tender offer) or
similar transaction involving Seller or any Seller Subsidiaries, other
than the transactions contemplated by this Agreement (any of the
foregoing inquiries or proposals being referred to in this Agreement
as an "Acquisition Proposal"), (ii) engage in negotiations or
discussions with any person (or any group of persons) other than BFC
or its affiliates (a "Third Party") concerning, or provide any
non-public information to any person or entity relating to, any
Acquisition Proposal, or (iii) agree to or recommend any Acquisition
Proposal. However, nothing contained in this Agreement shall prevent
Seller or its Board of Directors from (A) furnishing non-public
information to, or entering into discussions and negotiations with,
any person or entity in connection with an unsolicited bona fide
written proposal for an Alternative Transaction (as defined below) by
such person or entity or modifying or withdrawing its recommendation
with respect to the transactions contemplated hereby or recommending
an unsolicited bona fide written proposal for an Alternative
Transaction to the stockholders of Seller, if (1) a Third Party has
made a written proposal to the Board of Directors of Seller to
consummate an Alternative Transaction, which proposal identifies a
price or range of values to be paid for the outstanding securities or
substantially all of the assets of Seller, (2) the Board of Directors
of Seller believes in good faith, after consultation with its
financial advisor, that such Alternative Transaction is reasonably
capable of being completed on the terms proposed and would, if
consummated, result in a transaction more favorable than the
transaction contemplated by this Agreement (a "Superior Proposal"),
(3) the Board of Directors of Seller determines in good faith, based
on the advice of outside legal counsel, that the failure to take such
action would be inconsistent with its fiduciary duties under
applicable law, and (4) prior to furnishing such non-public
information to, or entering into discussions and negotiations with,
such person or entity, Seller's Board of Directors receives from such
person or entity an executed confidentiality and standstill agreement
with material terms no less favorable to such party than those
contained in the Confidentiality Agreement dated July 20, 1998 between
BFC and Seller (the "Confidentiality Agreement"); or (B) complying
with Rule 14e-2 under the Exchange Act with regard to an Acquisition
Proposal. Seller agrees not to release any Third Party from, or waive
any provision of any confidentiality and standstill agreement between
it and another person who has made, or who may reasonably be
considered likely to make, an Acquisition Proposal, unless the Board
of Directors of Seller determines in good faith, based on the written
advice of outside legal counsel, that the failure to take such action
would be inconsistent with its fiduciary duties under applicable law.
(b) Seller shall notify BFC immediately after receipt by Seller
or any of its advisors of any Acquisition Proposal or any request for
non-public information in connection with an Acquisition Proposal or
for access to the properties, books or records of such party by any
person or entity that informs such party that it is considering
making, or has made, an Acquisition Proposal. Such notice shall be
made orally and in writing and shall indicate the identity of the
offeror and the terms and conditions of such proposal, inquiry or
contact. Notwithstanding the foregoing, Seller shall not accept or
enter into any agreement concerning a Superior Proposal for a period
of at least ten (10) business days after BFC's receipt of the
notification of the terms thereof pursuant to the first sentence of
this Section 4.3(b), during which period BFC shall have the
opportunity to match the terms and conditions contained in such
Superior Proposal.
(c) As used in this Agreement, the term "Alternative Transaction"
means (i) a transaction pursuant to which any Third Party acquires
more than 30% of the outstanding shares of Seller Common Stock
pursuant to a tender offer or exchange offer or otherwise, (ii) a
merger or other business combination involving Seller pursuant to
which any Third Party (or the stockholders of a Third Party) acquires
more than 30% of the outstanding shares of Seller Common Stock, as the
case may be, or the entity surviving such merger or business
combination, or (iii) any other transaction pursuant to which any
Third Party acquires control of assets (including, for this purpose,
the outstanding Equity Securities of the Seller Subsidiaries and the
entity surviving any merger or business combination) of Seller having
a fair market value (as determined by the Board of Directors of
Seller, in good faith) equal to more than 30% of the fair market value
of all of the assets of Seller and the Seller Subsidiaries, taken as a
whole, immediately prior to such transaction.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Access and Information. Seller shall afford BFC and BFC's accountants,
counsel and other representatives, upon reasonable notice, full access during
normal business hours, during the period prior to the Effective Time, to all the
properties, books, contracts, commitments and records of Seller and the Seller
Subsidiaries and, during such period, each shall furnish promptly to BFC (i) a
copy of each report, schedule and other document filed or received by it during
such period pursuant to the requirements of federal and state securities laws
and (ii) all other information concerning its business, properties and personnel
as BFC may reasonably request. BFC shall, and shall cause its advisors and
representatives and Merger Sub to, (A) hold confidential all information
obtained in connection with any transaction contemplated hereby with respect to
the Seller which is not otherwise public knowledge, (B) in the event of a
termination of this Agreement, return all documents (including copies thereof)
obtained hereunder from the Seller or any of the Seller Subsidiaries to the
Seller or the Seller Subsidiaries and (C) use its best efforts to cause all
information obtained pursuant to this Agreement or in connection with the
negotiation of this Agreement to be treated as confidential and not use, or
knowingly permit others to use, any such information unless such information
becomes generally available to the public.
5.2 Regulatory Matters.
(a) Within forty-five (45) days of the date of this Agreement,
BFC shall file an application for approval of the Merger with the
Federal Reserve Board and such additional regulatory authorities as
may require an application.
(b) Seller and Buyers shall cooperate and use their respective
best efforts to prepare all documentation, to effect all filings and
to obtain all permits, consents, approvals and authorizations of all
third parties, Regulatory Authorities and Additional Regulatory
Authorities necessary to consummate the transactions contemplated by
this Agreement and, as and if directed by BFC, to consummate such
other transactions by and among BFC's Subsidiaries and the Seller
Subsidiaries concurrently with or following the Effective Time;
provided, however, that such actions do not (i) materially impede or
delay the receipt of any approval referred to in Section 6.1(b); or
(ii) materially impede or delay the consummation of the transactions
contemplated by this Agreement.
5.3 Proxy Statement; Special Meeting.
(a) As promptly as practical after the execution of this
Agreement, Seller shall prepare and file with the SEC the Proxy
Statement under the Exchange Act, and it then shall use its reasonable
best efforts to have the Proxy Statement cleared by the SEC as soon as
practical after such filing. The Buyers and Seller shall cooperate
with each other in preparing the Proxy Statement, and Seller shall
promptly notify BFC of the receipt of any comments of the SEC with
respect to the Proxy Statement and of any requests by the SEC for any
amendment or supplement thereto or for additional information and
shall promptly provide to BFC copies of all correspondence between the
Seller or any representative of the Seller and the SEC. Seller shall
give BFC and its counsel the opportunity to review the Proxy Statement
prior to its being filed with the SEC and shall give BFC and its
counsel the opportunity to review all amendments and supplements to
the Proxy Statement and all responses to requests for additional
information and replies to comments prior to their being filed with,
or sent to, the SEC. Each of the Buyers and Seller agrees to use all
reasonable best efforts, after consultation with the other parties
hereto, to respond promptly to any and all such comments of and
requests by the SEC and to cause the Proxy Statement and all required
amendments and supplements thereto to be mailed to the holders of
shares of Seller Common Stock entitled to vote at the Special Meeting.
(b) Subject to the provisions of Section 4.3, the Proxy Statement
shall include the recommendation of the Board of Directors of Seller
in favor of adoption of this Agreement and the Merger; provided that
the Board of Directors of Seller may modify or withdraw such
recommendation if Seller's Board of Directors believes in good faith,
based on the advice of outside legal counsel, that the failure to
modify or withdraw such recommendation would be inconsistent with its
fiduciary duties to Seller's stockholders under applicable law.
(c) Seller shall call the Special Meeting of its stockholders to
be held as promptly as practicable for the purpose of voting upon this
Agreement and the Merger. Subject to Sections 4.3 and 5.3(b), Seller
shall, through its Board of Directors, recommend to its stockholders
adoption of this Agreement and the Merger and approval of such matters
and shall use its best efforts to hold the Special Meeting as soon as
practicable after the date hereof. Seller shall use its best efforts
to solicit from its stockholders proxies in favor of such matters
unless doing so would be inconsistent with the Seller Board of
Directors' fiduciary duties to its stockholders under applicable law
based on the advice of outside legal counsel.
5.4 Current Information. During the period from the date of this Agreement
to the Closing Date, (i) Seller will promptly furnish BFC with copies of all
monthly and other interim financial statements as the same become available and
shall cause one or more of its designated representatives to confer on a regular
and frequent basis with representatives of BFC and (ii) BFC shall promptly
furnish to the Seller copies of all filings by BFC with the Federal Reserve
Board. Each party shall promptly notify the other party of the following events
immediately upon learning of the occurrence thereof, describing the same and, if
applicable, the steps being taken by the affected party with respect thereto:
(A) the occurrence of any event which could cause any representation or warranty
of such party or any schedule, statement, report, notice, certificate or other
writing furnished by such party to be untrue or misleading in any material
respect; or (B) any Material Adverse Effect.
5.5 Environmental Reports. Buyers may retain an environmental consultant
to perform, at the Seller's expense, as soon as reasonably practicable, but not
later than thirty (30) days after the date hereof, a phase one environmental
investigation by any firm designated by Buyers, or any of them, (the
"Environmental Firm") on all real property owned, leased or operated by Seller
or any of the Seller Subsidiaries as of the date hereof, including, without
limitation, other real estate owned. Within one week of Buyers' receipt of the
phase one report, Buyers shall provide a copy of the full report to the Seller.
If the results of the phase one investigation indicate, in Buyers' reasonable
opinion, that additional investigation is warranted, Buyers may perform a phase
two subsurface investigation or investigations by the Environmental Firm on
properties deemed to warrant such additional study. The cost of any such phase
two investigation shall be paid 50 percent by Seller and 50 percent by Buyers.
Buyers shall perform any such phase two investigation as soon as reasonably
practicable after receipt of the phase one report(s) for such properties and, in
any event, shall notify Seller and the Environmental Firm within fifteen (15)
days after receipt of the phase one report that the Environmental Firm should
promptly commence any such phase two investigation. Within one week of Buyers'
receipt of the phase two report, Buyers shall deliver a copy of the full report
to Seller. If, based on the results of the phase two report, the cost of taking
all remedial or other corrective actions and measures (i) required by applicable
law or (ii) recommended by the Environmental Firm in such phase one or two
report or reports, in the aggregate, and after reduction to reflect any federal
and Wisconsin PECFA financial contribution to the expense, exceed the sum of
$300,000, as reasonably estimated by the Environmental Firm, or if the costs of
such actions or measures cannot be so reasonably estimated by the Environmental
Firm to be such amounts or less with any reasonable degree of certainty, Buyers
shall have the right pursuant to Section 7.1(h) hereof, for a period of fifteen
(15) business days following receipt from the Environmental Firm of such
estimate or indication that the cost of such actions and measures cannot be so
reasonably estimated, to terminate this Agreement.
5.6 Expenses. Unless otherwise specifically provided herein, each party
hereto shall pay all of its own fees and expenses incident to the negotiation,
preparation, execution and performance of this Agreement and all applications
filed in connection with seeking regulatory approval of the Agreement and the
filings associated with the Proxy Statement and Special Meeting held pursuant to
the Agreement, including the fees and expenses of their own counsel,
accountants, investment bankers and other experts, whether or not the
transactions contemplated by this Agreement are consummated. Buyers shall be
responsible for fees and expenses related to the services of the Exchange Agent
in connection with the exchange of shares and Options pursuant to Article I
hereof. Seller shall be responsible for payment to ABN AMRO, Inc. for services
rendered as financial advisor to Seller in connection with the transactions
contemplated herein pursuant to its letter agreement dated April 14, 1998.
Seller has or shall establish fee arrangements with all outside counsel,
accountants and other independent experts and advisors, including any proxy
solicitation firm engaged consistent with its obligations under Section 5.3 of
the Agreement, that it has or plans to use in connection with the transactions
contemplated in this Agreement, which agreements provided that such attorneys,
accountants, independent experts, advisors and proxy solicitors will be
compensated only at their normal hourly or per diem rates plus reasonable
out-of-pocket expenses. Seller shall pay all printing expenses and filing fees
incurred in connection with this Agreement and the Proxy Statement and any
materials accompanying the Proxy Statement.
5.7 Miscellaneous Agreements and Consents. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
respective best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement as expeditiously as possible, including, without
limitation, using its respective best efforts to lift or rescind any injunction
or restraining order or other order adversely affecting the ability of the
parties to consummate the transactions contemplated hereby. Each party shall,
and shall cause each of its respective Subsidiaries to, use its best efforts to
obtain consents of all third parties and Regulatory Authorities necessary or, in
the opinion of the parties, desirable for the consummation of the transactions
contemplated by this Agreement.
5.8 Employee Agreements and Benefits.
(a) Stock Options. As provided in Section 1.9, the provisions of
the Seller Stock Option Plan and any other plan, program or
arrangement providing for the issuance or grant of any other interest
in respect of the Equity Securities of Seller or any of the Seller
Subsidiaries shall be deleted and terminated as of the Effective Time.
(b) ESOP. Immediately prior to the Effective Time, Seller shall
make to the ESOP the largest contribution permitted by Section 415 of
the Code, which shall be allocated for the plan year in which the
contribution is made. If the Effective Time is after March 31, 1999,
Seller shall also make the largest contribution permitted by Section
415 of the Code for the year ended March 31, 2000. However, (i) the
amount of the contributions made pursuant to the preceding two
sentences shall be used by the ESOP only to make payments on the then
remaining unpaid loan balance owed by the ESOP only to the Seller,
(ii) the amount of the foregoing contributions shall in no event
exceed the then remaining unpaid loan balance, and (iii) amounts
payable under the Amendment Agreements shall not be considered for the
purpose of calculating the amount of the foregoing contributions. The
ESOP shall receive the Merger Per Share Consideration in exchange for
its shares of Seller Common Stock. As of the Effective Time, the ESOP
shall be terminated as BFC and the Seller shall mutually determine,
and the remaining unpaid loan balance, if any, between Seller and the
ESOP shall be repaid in full with consideration received by the ESOP
with respect to unallocated shares of Seller Common Stock held in
suspense account under the ESOP. Any cash consideration received with
respect to such Seller Common Stock held in the suspense account under
the ESOP remaining after such repayment shall be allocated to the ESOP
accounts of those employees of Seller and the Seller Subsidiaries who
are ESOP participants and beneficiaries ("ESOP participants") in
proportion to their ESOP account balances and in accordance with the
terms of the ESOP as amended as hereinafter provided with respect to
such termination. The ESOP shall be amended to provide that
participation in the ESOP shall be limited to those who are ESOP
participants as of the Effective Date. All ESOP participants shall
fully vest and have a nonforfeitable interest in their accounts under
the ESOP, determined as of the Effective Time. As soon as practicable
after the receipt of a favorable determination letter from the IRS as
to the tax qualified status of the ESOP upon its termination under
Sections 401(a) and 4975(e) of the Code (the "Final Determination
Letter"), distribution of the benefits under the ESOP shall be made to
ESOP participants. From and after the date of this Agreement, and in
anticipation of such determination and distribution, BFC, Seller and
their respective representatives, prior to the Effective Time, and BFC
and its representatives, after the Effective Time, shall use their
best efforts to apply for and obtain such favorable Final
Determination Letter from the IRS. If BFC, Seller and their respective
representatives, prior to the Effective Time, and BFC and its
representatives, after the Effective Time, reasonably determine that
the ESOP cannot obtain a favorable Final Determination Letter, or that
the amounts held therein cannot be so applied, allocated or
distributed without causing the ESOP to lose its tax qualified status,
the Seller, prior to the Effective Time, and BFC, after the Effective
Time, shall take such action as they may determine with respect to the
distribution of benefits to the ESOP participants, provided that the
assets of the ESOP shall be held or paid for the benefit of the ESOP
participants, and provided further that in no event shall any portion
of the amounts held in the ESOP revert, directly or indirectly, to the
Seller or any affiliate thereof or to BFC or any affiliate or
Subsidiary thereof in a manner contrary to the Code and ERISA.
(c) Seller Pension Plan. All participants in the Northwest
Savings Bank Money Purchase Pension Plan ("Seller Pension Plan") shall
be fully vested as of the Effective Time in their accrued benefits
thereunder, and all amounts contributed by the Seller to the Seller
Pension Plan prior to the Effective Time shall be applied to provide
benefits to participants. As of the Effective Time, the Seller's
participation in the Seller Pension Plan shall terminate.
(d) Benefit Plans. At the Effective Time, each employee of the
Seller and the Seller Subsidiaries (the "Seller Employees") shall
immediately become entitled to participate in each of the Buyers'
employee benefit plans ("Buyers' Plans"), including, without
limitation, any group hospitalization, medical, life and disability
insurance plans, severance plans, qualified retirement, employee stock
ownership and savings plans, stock option plans, and management
recognition plans, in which similarly situated employees of BFC and
its Subsidiaries participate and to the same extent as such employees
of BFC and its Subsidiaries. The period of employment and compensation
of each Seller Employee with the Seller and the Seller Subsidiaries
shall be counted for all purposes (except for purposes of benefit
accrual) under the Buyers' Plans, including, without limitation, for
purposes of vesting and eligibility. Any expenses incurred by a Seller
Employee under the Seller's welfare benefits plans (such as
deductibles or co-payments) shall be counted for all purposes under
the Buyers' Plans. Buyers shall waive any preexisting condition
exclusions for conditions existing on the Effective Time and actively
at work requirements for periods ending on the Effective Time
contained in the Buyers' Plans as they apply to Seller Employees and
former employees and their dependents; provided that the Buyers'
waiver of preexisting conditions shall not extend to any condition
which has prevented a Seller Employee's coverage under comparable
benefit plans of the Seller or the Seller Subsidiaries.
Notwithstanding anything in this Section 5.8 to the contrary, the
participation by the Seller Employees in any of the Buyers' Plans with
respect to which the eligibility of employees of Buyers to participate
is at the sole discretion of BFC and its Subsidiaries, shall be at the
sole discretion of BFC and its Subsidiaries applied in the same manner
as such discretion is applied to similarly situated employees of BFC
and its Subsidiaries. Also, notwithstanding anything in this Section
5.8 to the contrary, BFC shall have sole discretion with respect to
the determination as to whether to terminate, merge or continue any
employee benefit plan or program of the Seller or any of the Seller
Subsidiaries (other than the ESOP or the Seller Pension Plan);
provided, however, that BFC shall continue to maintain the Seller
Employee Plans other than stock-based incentive plans and the tax
qualified plans of the Seller until the Seller Employees are permitted
to participate in similar Buyers' Plans. At the Effective Time, BFC or
a Subsidiary thereof shall be substituted for the Seller as the
sponsoring employer under those Employee Plans with respect to which
the Seller or a Seller Subsidiary is a sponsoring employer immediately
prior to the Effective Time, and which Employee Plan is assumed by BFC
or its Subsidiary pursuant to the terms of this Agreement, and BFC or
a Subsidiary thereof shall assume and be vested with all of the
powers, rights, duties, obligations, and liabilities previously vested
in the Seller or a Seller Subsidiary with respect to each such plan.
(e) Successors of BFC. The provisions of this Section 5.8 shall
be binding upon and inure to the benefit of any successor to BFC and
its Subsidiaries.
5.9 Publicity. BFC and Seller shall agree on the form and content of the
initial press release regarding the transactions contemplated hereby and
thereafter shall consult with each other before issuing, and use all reasonable
efforts to agree upon, any press release or other public statement with respect
to any of the transactions contemplated hereby and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by law.
5.10 [RESERVED.]
5.11 Tax Returns. The Seller agrees that it will not endeavor to prepare or
file any income tax returns for the Seller or Seller Subsidiaries for any such
income tax returns which have a filing deadline or any extension of such filing
deadline which occurs after the Closing Date.
5.12 Indemnification. It is understood and agreed that after the Effective
Time, BFC shall (and shall cause the Surviving Corporation to) indemnify and
hold harmless, as and to the fullest extent required by Wisconsin law and the
Articles of Incorporation or Bylaws of Seller or any of Seller Subsidiaries, as
applicable and in effect as of the date of this Agreement (the "Indemnification
Provisions"), any individual who is now, or has been at any time prior to the
date of this Agreement, or who becomes prior to the Effective Time, a director
or officer or employee of the Seller or any of the Seller Subsidiaries (the
"Seller Indemnified Parties"), against any losses, claims, damages, liabilities,
costs, expenses (including payment of reasonable attorneys' fees and expenses
and other costs in advance of the final disposition of any claim, suit,
proceeding or investigation incurred by each Seller Indemnified Party to the
fullest extent required by the Indemnification Provisions upon receipt of any
undertaking required by the Indemnification Provisions), judgments, fines and
amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, proceeding or investigation pertaining to any matter
existing or occurring at or prior to the Effective Time and, in the event of any
such threatened or actual claim, action, suit, proceeding or investigation
(whether asserted before or after the Effective Time), the Seller Indemnified
Parties may retain counsel reasonably satisfactory to them after consultation
with the Surviving Corporation; provided, however, (A) Buyers shall have the
right to assume the defense thereof and, upon such assumption, Buyers shall not
be liable to any Seller Indemnified Party for any legal expenses of other
counsel or any other expenses subsequently incurred by any Seller Indemnified
Party in connection with the defense thereof, except that if Buyers elect not to
assume such defense, the Seller Indemnified Parties may retain counsel
reasonably satisfactory to them after consultation with Buyers and Buyers shall
pay the reasonable fees and expenses of such counsel for the Seller Indemnified
Parties, (B) Buyers shall be obligated pursuant to this paragraph to pay for
only one firm of counsel for all Seller Indemnified Parties, unless a Seller
Indemnified Party shall have reasonably concluded, based on an opinion of
counsel, that there is a material conflict of interest between the interests of
such Seller Indemnified Party and the interests of one or more other Seller
Indemnified Parties and that the interests of such Seller Indemnified Party will
not be adequately represented unless separate counsel is retained, in which case
Buyers shall be obligated to pay such separate counsel, (C) Buyers shall not be
liable for any settlement effected without their prior written consent (which
consent shall not be unreasonably withheld) and (D) Buyers shall have no
obligation hereunder to any Seller Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and such determination shall
have become final and nonappealable, that indemnification of such Seller
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law. Any Seller Indemnified Party wishing to claim indemnification under this
Section, upon learning of any such claim, action, suit, proceeding or
investigation, shall notify BFC thereof, provided that the failure to so notify
shall not affect the obligations of Buyers under this Section, except to the
extent such failure to notify materially prejudices Buyers. Buyers' obligations
under this Section shall continue in full force and effect for the period of the
applicable statute of limitations; provided, however, that all rights to
indemnification hereunder in respect of any claim (a "Claim") asserted or made
within such period shall continue until the final disposition of such Claim.
Nothing in this Section 5.12 shall be deemed or construed to limit the
discretion of BFC or the Surviving Corporation to indemnify and hold harmless
any Seller Indemnified Party as and to the fullest extent permitted by Wisconsin
law and the Articles of Incorporation or Bylaws of Seller or any of the Seller
Subsidiaries.
5.13 Seller Employees. If Buyers, subsequent to the Effective
Date, reduce or eliminate employment positions of Seller Employees, Buyers will
endeavor to offer such Seller Employees similar positions with Xxxxxx Bank,
National Association, Menomonie, Wisconsin ("Xxxxxx Bank Wisconsin") or
elsewhere within BFC's system. If acceptable positions are not available for
Seller Employees, such Seller Employees will be entitled to receive severance
packages based upon Buyers' then current severance policies, which policies
shall take into consideration each Seller Employee's years of service and grade
levels with Seller prior to the Effective Time as well as any additional service
with Buyers following consummation of the transactions contemplated by this
Agreement. A copy of Buyers' current severance policies is set forth in Schedule
5.13.
5.14 Director Positions. After the Effective Time, BFC will offer positions
on the Board of Directors of Xxxxxx Bank Wisconsin to not fewer than two members
of the Board of Directors of the Seller as it exists as of the Effective Time
and, if such individuals accept such offer, will appoint them to the Board of
Directors of Xxxxxx Bank Wisconsin to serve in such capacities until their
respective resignation, removal or death or until the next meeting of
shareholders of Xxxxxx Bank Wisconsin at which directors are elected.
5.15 Articles of Incorporation. At or prior to the Effective Time, Seller
shall cause Northwest Savings Bank to restate its Articles of Incorporation in
the form of Articles of Incorporation provided by Buyer to Seller.
ARTICLE VI
CONDITIONS
6.1 Conditions to Each Party's Obligation To Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. The approval of this Agreement and the
Merger shall have received the requisite vote of stockholders of
Seller at the Special Meeting of stockholders called pursuant to
Section 5.3 hereof.
(b) Regulatory Approval. This Agreement and the transactions
contemplated hereby shall have been approved by the Federal Reserve
Board and any other federal and/or state regulatory agencies
(including the FDIC and WDFI) whose approval is required for
consummation of the transactions contemplated hereby, and all
requisite waiting periods imposed by the foregoing shall have expired
and such approvals and the transactions contemplated thereby shall not
have been contested by any federal or state governmental authority.
(c) No Judicial Prohibition. Neither Seller, BFC nor Merger Sub
shall be subject to any order, decree or injunction of a court or
agency of competent jurisdiction which enjoins or prohibits the
consummation of the Merger.
6.2 Conditions to Obligations of Seller. The obligations of Seller to
effect the Merger shall be subject to the fulfillment or waiver at or prior to
the Effective Time of the following additional conditions:
(a) Representations and Warranties. The representations and
warranties of Buyers set forth in Article III of this Agreement shall
be true and correct in all material respects as of the date of this
Agreement and as of the Effective Time (as though made on and as of
the Effective Time, except (i) to the extent such representations and
warranties are by their express provisions made as of a specific date
or period, (ii) where the facts which caused the failure of any
representation or warranty to be so true and correct have not
resulted, and are not likely to result, in a Material Adverse Effect
on BFC, and (iii) for the effect of transactions contemplated by this
Agreement), and Seller shall have received a certificate of the Chief
Executive Officer, the Chief Financial Officer, or any Executive Vice
President of BFC, signing solely in his capacity as an officer of BFC,
to such effect.
(b) Performance of Obligations. Buyers shall have performed in
all material respects all obligations, agreements or covenants
required to be performed by them under this Agreement prior to the
Effective Time, and Seller shall have received a certificate of any
Executive Vice President of BFC, signing solely in his capacity as an
officer of BFC, to that effect.
(c) Permits, Authorizations, etc. Buyers shall have obtained any
and all material permits, authorizations, consents, waivers and
approvals required for the lawful consummation by them of the Merger.
(d) No Material Adverse Effect. Since the date of this Agreement,
there shall have been no Material Adverse Effect on BFC.
(e) Opinion of Counsel. BFC shall have delivered to Seller an
opinion of BFC's counsel dated as of the Closing Date or a mutually
agreeable earlier date in substantially the form set forth as Exhibit
C to this Agreement.
(f) Fair Value Opinion. Seller shall have received an opinion
from ABN AMRO, Inc., dated as of the date of this Agreement and
supplemented as necessary as of the date of the Proxy Statement, to
the effect that, subject to the terms, conditions, and qualifications
set forth therein, the consideration as set forth herein to be
received by the shareholders of Seller pursuant to this Agreement is
fair to such shareholders from a financial point of view.
(g) Litigation. No action, suit, proceeding or claim shall have
been instituted or made relating to this Agreement or the validity or
propriety of the transactions contemplated hereby which would render
completion of the Merger inadvisable in the reasonable opinion of
Seller.
6.3 Conditions to Obligations of the Buyers. The obligations of the Buyers
to effect the Merger shall be subject to the fulfillment at or prior to the
Effective Time of the following additional conditions:
(a) Representations and Warranties. The representations and
warranties of Seller set forth in Article II of this Agreement shall
be true and correct in all material respects as of the date of this
Agreement and as of the Effective Time (as though made on and as of
the Effective Time, except (i) to the extent such representations and
warranties are by their express provisions made as of a specific date
or period, (ii) where the facts which caused the failure of any
representation or warranty to be so true and correct have not
resulted, and are not likely to result, in a Material Adverse Effect
on Seller, and (iii) for the effect of transactions contemplated by
this Agreement) and Buyers shall have received a certificate of the
Chief Executive Officer and Chief Accounting Officer of Seller,
signing solely in their capacities as officers of Seller, to such
effect.
(b) Performance of Obligations. Seller shall have performed in
all material respects all obligations agreements or covenants required
to be performed by it under this Agreement prior to the Effective
Time, and Buyers shall have received a certificate of the Chief
Executive Officer and Chief Accounting Officer of Seller, signing
solely in their capacities as officers of Seller, to that effect.
(c) Permits, Authorizations, etc. Seller shall have obtained any
and all material permits, authorizations, consents, waivers and
approvals required for the lawful consummation by it of the Merger.
(d) No Material Adverse Effect. Since the date of this Agreement,
there shall have been no Material Adverse Effect on Seller.
(e) Opinion of Counsel. Seller shall have delivered to Buyers an
opinion of Seller's counsel dated as of the Closing Date or a mutually
agreeable earlier date in substantially the form set forth as Exhibit
D to this Agreement.
(f) Minimum Financial Requirements. The Determination Date
Financial Statements shall reflect that Seller has (i) stockholders'
equity in an amount equal to or greater than $11,700,000 (exclusive of
any accrual for payment of Option Settlement Amounts and the financial
advisory fee paid or due to ABN AMRO, Inc.); (ii) loans receivable in
an amount equal to or greater than $70,000,000 and (iii) savings
accounts in an amount equal to or greater than $55,000,000.
(g) Voting Agreements and Amendment Agreements. The Voting
Agreements and the Amendment Agreements shall have been fully
executed, remain enforceable by the parties thereto and shall not have
been amended or modified since the date of this Agreement.
(h) Litigation. No action, suit, proceeding or claim shall have
been instituted or made relating to this Agreement or the validity or
propriety of the transactions contemplated hereby which would render
completion of the Merger inadvisable in the reasonable opinion of BFC.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time (with respect to Sections 7.1(b) through 7.1(h), inclusive, by
written notice by the terminating party to the other party), whether before or
after approval of the matters presented in connection with the Merger by the
stockholders of Seller:
(a) by mutual written consent of the Board of Directors of BFC
and the Board of Directors of Seller; or
(b) by either BFC or Seller if the Merger shall not have been
consummated by July 31, 1999 (provided that (i) if the Merger shall
not have been consummated because the requisite approval of the
Federal Reserve Board and/or federal or state regulatory agencies
required under Section 6.1(b) of this Agreement shall not have been
obtained and are still being pursued, either BFC or Seller may extend
such date to August 31, 1999 by providing written notice thereof to
the other party on or prior to July 31, 1999 and (ii) the right to
terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose failure to fulfill any obligation within
that party's reasonable control under this Agreement has been the
cause of or resulted in the failure of the Merger to occur on or
before such date);
(c) by either BFC or Seller if a court of competent jurisdiction
or Governmental Entity shall have issued a nonappealable final order,
decree or ruling or taken any other unappealable final action, in each
case having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger;
(d) by either BFC or Seller if, at the Special Meeting (including
any adjournment or postponement thereof), the requisite vote of the
stockholders of Seller in favor of the approval and adoption of this
Agreement and the Merger shall not have been obtained;
(e) by BFC, if (i) the Board of Directors of Seller shall have
withdrawn or modified its recommendation of this Agreement or the
Merger in accordance with Sections 4.3, 5.3(b) and 5.3(c) (provided
that BFC's right to terminate this Agreement under this clause (i)
shall not be available if at such xxxx Xxxxxx would be entitled to
terminate this Agreement under Section 7.1(b) or (g)); (ii) after the
receipt by Seller of a proposal for an Alternative Transaction, BFC
requests in writing that the Board of Directors of Seller reconfirm
its recommendation of this Agreement and Merger to the Stockholders of
Seller and the Board of Directors of Seller fails to do so within ten
(10) business days after its receipt of BFC's request; (iii) the Board
of Directors of Seller shall have recommended to the stockholders of
Seller, or entered into a definitive agreement with respect to, an
Alternative Transaction; or (iv) for any reason Seller fails to call
and hold the Special Meeting by July 31, 1999 (provided that BFC's
right to terminate this Agreement under this clause (iv) shall not be
available if at such xxxx Xxxxxx would be entitled to terminate this
Agreement under Section 7.1(b) or (g));
(f) by Seller, prior to the approval of this Agreement by its
stockholders, if, as a result of a Superior Proposal received by
Seller from a Third Party, the Board of Directors of Seller determines
in good faith, based on advice of outside legal counsel, and after
allowing BFC ten (10) business days to match the terms and conditions
of such Superior Proposal pursuant to Section 4.3(b), that the failure
to accept such Superior Proposal would be inconsistent with its
fiduciary duties to stockholders under applicable law; provided,
however, that no termination shall be effective pursuant to this
Section 7.1(f) under circumstances in which a termination fee is
payable by Seller pursuant to Section 7.3(b)(iv), unless concurrently
with such termination, such termination fee is paid in full by Seller
in accordance with Section 7.3(b)(iv);
(g) by BFC or Seller, if there has been a breach of any
representation, warranty, covenant or agreement on the part of the
other party set forth in this Agreement, which breach will cause the
conditions set forth in Section 6.2(a) or (b) (in the case of
termination by Seller) or 6.3(a) or (b) (in the case of termination by
BFC) not to be satisfied which breach is not cured within thirty (30)
calendar days after written notice thereof if given to the breaching
party by the non-breaching party or is not waived by the non-breaching
party during such period;
(h) by the Board of Directors of BFC pursuant to and in
accordance with Section 5.5; or
(i) by the Board of Directors of BFC if dissenters' rights are
available under applicable provision of the WBCL and shareholders
holding 10% or more of the outstanding shares of Seller Common Stock
satisfy the requirements of Wisconsin Statutes, Section 180.1321(l)
relating to the assertion of dissenters' rights under the WBCL.
7.2 Effect of Termination. In the event of termination of this Agreement
as provided in Section 7.1 above, this Agreement shall immediately become void,
and there shall be no liability on the part of Buyers or Seller or their
respective officers, directors, stockholders or affiliates (as the term
"affiliates" is used in Rule 144 under the Securities Act) except as set forth
in the second sentence of Section 5.1 and in Sections 5.6, 7.3 and 8.2; and
except that no termination of this Agreement pursuant to Section 7.1(g) shall
relieve the breaching party of any liability to the non-breaching party hereto
arising from the intentional, deliberate or willful breach of any
representation, warranty, covenant or agreement contained herein.
7.3 Fees and Expenses.
(a) Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring
such expenses, whether or not the Merger is consummated.
(b) Seller shall pay BFC a termination fee of $500,000 upon the
earliest to occur of the following events:
(i) the termination of this Agreement by BFC or Seller
pursuant to Section 7.1(d), if a proposal for an Alternative
Transaction involving Seller shall have been publicly
announced prior to the Special Meeting and either a
definitive agreement for an Alternative Transaction is
entered into, or an Alternative Transaction is consummated,
within one year of such termination;
(ii) the termination of this Agreement by BFC pursuant
to Section 7.1(e)(iii);
(iii) the termination of this Agreement by BFC pursuant
to Section 7.1(e)(i) or (ii), and either a definitive
agreement for an Alternative Transaction is entered into, or
an Alternative Transaction is consummated, within one year
of such termination; or
(iv) the termination of this Agreement by Seller
pursuant to Section 7.1(f).
Seller's payment of a termination fee pursuant to this Section
shall be the sole and exclusive remedy of BFC against Seller and any
of the Seller Subsidiaries and their respective directors, officers,
employees, agents, advisors or other representatives with respect to
the occurrences giving rise to such payment; provided that this
limitation shall not apply in the event of a willful breach of this
Agreement by Seller.
(c) The fees payable pursuant to Section 7.3(b) shall be paid in
immediately available funds within five (5) business days after
delivery of notice of entitlement by BFC to Seller following the first
to occur of the events described in Section 7.3(b)(i), (ii) or (iii),
and, in the event of the termination of this Agreement by Seller
pursuant to Section 7.1(f) as described in Section 7.3(b)(iv),
concurrently with such termination.
7.4 Amendment. This Agreement and the Exhibits and the Schedules hereto
may be amended by the parties hereto, by action taken by or on behalf of their
respective Boards of Directors, at any time before or after approval of this
Agreement and the Merger by the stockholders of Seller; provided, however, that
after any such approval by the stockholders of Seller, no such modification
shall be made which (i) alters or changes the amount or kind of Merger
Consideration to be received by holders of Seller Common Stock as provided in
this Agreement, (ii) alters the tax treatment of the consideration to be
received by holders of Seller Common Stock, or (iii) which by law requires
further approval by the Seller's stockholders, in each case without such further
approval. This Agreement and the Exhibits and the Schedules hereto may not be
amended except by an instrument in writing signed on behalf of each of Buyers
and Seller.
7.5 Waiver. Any term, condition or provision of this Agreement may be
waived in writing at any time by the party which is, or whose shareholders or
stockholders, as the case may be, are, entitled to the benefits thereof.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Survival of Representations, Warranties and Agreements. No
investigation by the parties hereto made heretofore or hereafter shall affect
the representations and warranties of the parties which are contained herein,
and each such representation and warranty shall survive such investigation.
Except as set forth below in this Section 8.1, all representations, warranties
and agreements in this Agreement of Buyers and Seller or in any instrument
delivered by Buyers or Seller pursuant to or in connection with this Agreement
shall expire at the Effective Time or upon termination of this Agreement in
accordance with its terms. In the event of consummation of the Merger, the
agreements contained in or referred to in Sections 1.5 through 1.12 (inclusive),
5.6, 5.7, 5.8(b), 5.11, 5.12 and 7.3 shall survive the Effective Time. In the
event of termination of this Agreement in accordance with its terms, the
agreements contained in or referred to in the second sentence of Section 5.1 and
in Sections 5.6, 7.3 and 8.2 shall survive such termination.
8.2 Indemnification. Buyers and Seller(hereinafter, in such capacity being
referred to as the "Indemnifying Party") agree to indemnify and hold harmless
each other and their officers, directors and controlling persons (each such
other party being hereinafter referred to, individually and/or collectively, as
the "Indemnified Party") against any and all losses, claims, damages or
liabilities, joint or several, to which the Indemnified Party may become subject
under the Securities Act, the Exchange Act or other federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof): (a) arise primarily out of any
information furnished to the Indemnified Party by the Indemnifying Party and
included in the Proxy Statement, or in any amendment therefor or supplement
thereof, or are based primarily upon any untrue statement or alleged untrue
statement of a material fact contained in the Proxy Statement, or in any
amendment therefor or supplement thereof, and provided for inclusion thereof by
the Indemnifying Party or (b) arise primarily out of or are based primarily upon
the omission or alleged omission by the Indemnifying Party to state in the Proxy
Statement, or in any amendment therefor or supplement thereof, a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances in which they were made, not misleading, and
agrees to reimburse each such Indemnified Party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action.
8.3 No Assignment; Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors (including any corporation deemed to be a successor corporation of
any of the parties by operation of law) and assigns. Neither this Agreement nor
any right or obligation set forth in any provision hereof may be transferred or
assigned (except by operation of law) by any party hereto without the prior
written consent of all other parties, and any purported transfer or assignment
in violation of this Section 8.3 shall be void and of no effect. There shall not
be any third party beneficiaries of any provisions hereof.
8.4 Interpretation and Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remaining provisions of this Agreement.
8.5 No Implied Waiver. No failure or delay on the part of any party hereto
to exercise any right, power or privilege hereunder or under any instrument
executed pursuant hereto shall operate as a waiver nor shall any single or
partial exercise of any right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
8.6 Headings. Article, section, subsection and paragraph titles, captions
and headings herein are inserted only as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof.
8.7 Entire Agreement. This Agreement and the Schedules and Exhibits hereto
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior negotiations, representations, warranties,
commitments, offers, letters of interest or intent, proposal letters, contracts,
writings or other agreements or understandings with respect thereto. No waiver,
and no modification or amendment, of any provision of this Agreement, shall be
effective unless specifically made in writing and duly signed by all parties
thereto.
8.8 Counterparts. This Agreement may be executed in one or more
counterparts, and any party to this Agreement may execute and deliver this
Agreement by executing and delivering any of such counterparts, each of which
when executed and delivered shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
8.9 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to be duly received (a) on the date given if
delivered personally or by cable, telegram, telex or facsimile (which is
confirmed) or (b) on the date received if mailed by registered or certified mail
(return receipt requested), to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(i) if to the Buyers, to:
Xxxxxx Financial Corporation
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Copy to:
Winthrop & Weinstine, P.A.
3000 Xxxx Xxxxxxxx Plaza
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(ii) if to Seller, to:
Northwest Equity Corp.
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to:
Xxxxxxx & Xxxxxxxxx, S.C.
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000; direct dial (000) 000-0000
Facsimile: (000) 000-0000; (000) 000-0000
8.10 Governing Law. This Agreement shall be governed by and controlled as
to validity, enforcement, interpretation, effect and in all other respects by
the internal laws of the State of Wisconsin applicable to contracts made in that
state without regard to any applicable conflict of law.
8.11 Knowledge. "Knowledge" or "best knowledge" when used with respect to a
person shall mean those facts that are known by the executive officers of such
person.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective officers thereunto duly authorized, all as of the date first
written above.
XXXXXX FINANCIAL CORPORATION
By _/s/ Xxxxx Cummings_____
Signature
_Terry Cummings____________
Name Typed or Printed
Its:_Chairman______________
Title Typed or Printed
XXXXXX ACQUISITION CORPORATION
By _/s/ Xxxxxx X. Buck_____
Signature
_Robert B. Buck____________
Name Typed or Printed
Its:_President_____________
Title Typed or Printed
NORTHWEST EQUITY CORP.
By _/s/ Xxxxx X. Beadle____
Signature
_Brian L. Beadle___________
Name Typed or Printed
Its:_President_____________
Title Typed or Printed
MPL1: 264665-8
SCHEDULES
Schedule 2.2 - Seller's Subsidiaries
Schedule 2.4(b) - Authorization
Schedule 2.5(a) - Seller's Financial Statements
Schedule 2.5(b) - Exception to GAAP
Schedule 2.7(a) - Title to and Condition of Assets
Schedule 2.7(b) - Material Properties and Assets
Schedule 2.7(c) - Furniture, Fixture, Vehicles, Machinery and
Equipment and Computer Software
Schedule 2.8(a) - Owned and Leased Real Property
Schedule 2.8(c) - Other Real Property
Schedule 2.9 - Taxes
Schedule 2.11(a) - Loans, Deposits, Repurchase Agreements
Schedule 2.11(b) - Contracts
Schedule 2.11(c) - Insurance
Schedule 2.11(f) - Loans
Schedule 2.13 - Litigation and Other Proceedings
Schedule 2.15(c) - Compliance with Law
Schedule 2.16 - Labor
Schedule 2.17 - Material Interests
Schedule 2.18(a) - Allowance for Loan and Lease Losses
Schedule 2.18(c) - Real Estate Assets
Schedule 2.18(f) - Investment Securities
Schedule 2.19(a) - Retirement Plans
Schedule 2.19(d) - Post-Retirement Plans
Schedule 2.19(f) - Modifications to Certain Benefits due Directors and
Officers
Schedule 2.20 - Conduct of Seller
Schedule 2.21(a) - Undisclosed Liabilities
Schedule 2.28 - Year 2000 Compliance
Schedule 2.29 - Insider Loans
Schedule 2.31 - Options Outstanding
Schedule 3.5 - No Violation
Schedule 3.6 - Consents and Approvals
Schedule 3.7 - Litigation
Schedule 3.9 - Community Reinvestment Act Compliance
Schedule 4.2 - Forbearances of Seller
Schedule 4.2(j) - Sale of Fixed Rate Loans
Schedule 5.13 - Severance Policies
EXHIBITS
Exhibit A - Voting Agreement
Exhibit B - Amendment Agreement
Exhibit C - Seller Opinion of Counsel
Exhibit D Buyer Opinion of Counsel
VOTING AGREEMENT
THIS VOTING AGREEMENT, dated as of February 16th, 1999 ("Agreement"),
by ___________________ ("Stockholder") to and for the benefit of Xxxxxx
Financial Corporation, a Minnesota corporation ("BFC"). Capitalized terms used
and not otherwise defined herein shall have the respective meanings assigned to
them in the Merger Agreement referred to below.
WHEREAS, as of the date hereof, Stockholder owns of record and
beneficially _____________ shares of common stock, par value $1.00 per share
("Seller Common Stock"), including, without limitation, any shares held for the
benefit of the Stockholder by the Northwest Savings Bank Employee Stock
Ownership Plan ("ESOP") (all of such shares, together with any other voting or
equity securities of Northwest Equity Corp., a Wisconsin corporation ("Seller"),
hereafter acquired by or allocated to Stockholder prior to the termination of
this Agreement, being referred to herein collectively as the "Shares");
WHEREAS, concurrently with the execution of this Agreement, BFC, Xxxxxx
Acquisition Corporation, a Wisconsin corporation and a wholly-owned subsidiary
of BFC ("Merger Sub"), and Seller are entering into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), pursuant to which,
upon the terms and subject to the conditions thereof, Merger Sub will be merged
with and into Seller such that Seller will become a wholly-owned subsidiary of
BFC (the "Merger");
WHEREAS, Stockholder is the holder of Options ("Stockholder Options")
to acquire ___________ shares of Seller Common Stock granted to him under the
Seller Stock Option Plan; and
WHEREAS, as a condition to the willingness of Seller, BFC and Merger
Sub to enter into the Merger Agreement, BFC has requested that the Stockholder
agree, and in order to induce BFC and Merger Sub to enter into the Merger
Agreement, the Stockholder is willing to agree, to vote in favor of adopting the
Merger Agreement and approving the Merger and to accept an Option Settlement
Amount in lieu of exercising his Stockholder Options, upon the terms and subject
to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereby agree, severally and not jointly, as follows:
Section 1. Voting of Shares. Until the termination of this Agreement in
accordance with the terms hereof, Stockholder hereby agrees that, at the Special
Meeting or any other meeting of the stockholders of Seller, however called, and
in any action by written consent of the stockholders of Seller, Stockholder will
vote all of his respective Shares, and cause the Trustee(s) of the ESOP to vote
any Shares held for the benefit of the Stockholder in the ESOP, (a) in favor of
adoption of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement, and (b) in favor of any other
matter necessary to the consummation of the transactions contemplated by the
Merger Agreement and considered and voted upon by the stockholders of Seller (or
any class thereof). Stockholder acknowledges that he has received and examined a
copy of the Merger Agreement.
Section 2. Transfer of Shares. Until the termination of this Agreement in
accordance with the terms hereof, Stockholder will not, directly or indirectly,
(a) sell, assign, transfer, pledge, encumber or otherwise dispose of any of the
Shares or the Stockholder Options, (b) deposit any of the Shares into a voting
trust or enter into a voting agreement or arrangement with respect to the Shares
or grant any proxy or power of attorney with respect thereto which is
inconsistent with this Agreement, or (c) enter into any contract, option or
other arrangement or undertaking with respect to the direct or indirect sale,
assignment, transfer (including by merger, testamentary disposition,
interspousal disposition pursuant to a domestic relations proceeding or
otherwise by operation of law) or other disposition of any Shares; provided,
however, that Stockholder may (i) transfer the Shares to family members or to a
trust so long as such trust or family member takes the Shares subject to the
obligations and restrictions contained in this Agreement; (ii) transfer the
Shares by will or by operation of law so long as the transferee takes the Shares
subject to the obligations and restrictions contained in this Agreement; (iii)
sell, assign, or transfer the Shares as necessitated by hardship, but only with
the prior written consent of BFC and only if the transferee takes the Shares
subject to the obligations and restrictions contained in this Agreement; or (iv)
transfer the Shares as BFC may otherwise agree in writing before any such
transfer or agreement to transfer takes place.
Section 3. Acceptance of Option Settlement Amount. The Stockholder hereby
agrees to accept, in lieu of exercising the Stockholder Options, the Option
Settlement Amount, which shall be paid by Seller or the Exchange Agent in cash
at the Closing. The Stockholder hereby represents that he is responsible for
understanding the tax effects to him under the Code and applicable state tax
laws of accepting the Option Settlement Amount. The Stockholder agrees that his
acceptance of the Option Settlement Amount is a release of any and all rights
the Stockholder has or may have in respect of the Stockholder Options.
Section 4. Representations and Warranties of Stockholder. Stockholder
hereby represents and warrants to BFC with respect to himself and his ownership
of the Shares and/or the Stockholder Options as follows:
(a) Ownership of Shares and Stockholder Options. On the date hereof,
the Stockholder owns the Shares and the Stockholder Options, beneficially
and of record, free and clear of all liens, encumbrances, restrictions and
claims ("Liens"), except those Liens described on Exhibit A hereto and
except restrictions on transferability imposed by federal and state
securities law. Immediately prior to and as of the Closing and the
Effective Time of the Merger, the Stockholder will own the Shares
beneficially and of record free and clear of all Liens, including those
described on Exhibit A. Stockholder has sole voting power, without
restrictions, with respect to all of the Shares.
(b) Power, Binding Agreement. Stockholder has the legal capacity,
power and authority to enter into and perform all of his obligations under
this Agreement. The execution, delivery and performance of this Agreement
(2-12-99)
by Stockholder will not violate any other agreement to which Stockholder is
a party, including, without limitation, the agreement governing the
Stockholder Options or any voting agreement, shareholders' agreement,
partnership agreement or voting trust. This Agreement has been duly and
validly executed and delivered by Stockholder and constitutes a valid and
binding obligation of Stockholder, enforceable against Stockholder in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(c) No Conflicts. The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated hereby will not,
conflict with or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, any provision of any loan or credit agreement,
note, bond, mortgage, indenture, lease, or other agreement, instrument,
permit, concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Stockholder or any of his
properties or assets, other than such conflicts, violations or defaults or
terminations, cancellations or accelerations which individually or in the
aggregate do not materially impair the ability of Stockholder to perform
his obligations hereunder. No consent, approval, order or authorization of,
or registration, declaration, or filing with, any governmental entity is
required by or with respect to the execution and delivery of this Agreement
by Stockholder and the consummation by Stockholder of the transactions
contemplated hereby.
(d) Short Swing Profit Sales. Stockholder either (i) is not a person
required to file reports under Section 16(a) of the Securities Exchange Act
of 1934, as amended ("Exchange Act") with respect to Equity Securities of
Seller or (ii) has not made any sales of, or any other transactions in,
Equity Securities of the Seller that must be "matched," under Section 16(b)
of the Exchange Act, to the acceptance by Stockholder of the Option
Settlement Amount for his Stockholder Options.
Section 5. No Solicitation. Prior to the termination of this Agreement in
accordance with its terms, Stockholder agrees that (a) he will not, nor will he
authorize or permit any of his employees, agents and representatives to,
directly or indirectly, initiate or solicit any inquiries or the making of any
Acquisition Proposal and (b) he will notify BFC as soon as possible if any such
inquiries or proposals are received by, any information or documents is
requested from, or any negotiations or discussions are sought to be initiated or
continued with, him or any of his "affiliates" (as such term is used in Rule 144
under the federal Securities Act of 1933, as amended).
Section 6. Termination. This Agreement shall terminate upon the earliest to
occur of (a) the Effective Time or (b) any termination of the Merger Agreement
in accordance with the terms thereof; provided, that the provisions of Section 9
hereof shall survive any termination of this Agreement, and provided further
that no such termination shall relieve any party of liability for a breach
hereof prior to termination.
(2-12-99)
Section 7. Specific Performance. The parties hereto agree that irreparable
damage would occur if any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or in equity.
Section 8. Fiduciary Duties. Notwithstanding anything in this Agreement to
the contrary, the covenants and agreements set forth herein shall not prevent
Stockholder from serving on Seller's Board of Directors and from taking any
action, subject to the applicable provisions of the Merger Agreement, while
acting in such designee's capacity as a director or officer of Seller.
Section 9. Miscellaneous.
(a) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matters hereof and supersedes
any and all prior agreements and understandings, both written and oral,
between the parties with respect thereto. This Agreement may not be
amended, modified or rescinded except by an instrument in writing signed by
each of the parties hereto.
(b) If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon any such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in a mutually
acceptable manner in order that the terms of this Agreement remain as
originally contemplated to the fullest extent possible.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Wisconsin without regard to the principles of
conflicts of law thereof.
(d) This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one
and the same instrument.
(e) Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Merger Agreement. With respect to any
conflict or ambiguity between a term defined herein and the same term
defined in the Merger Agreement, the definition used in the Merger
Agreement shall govern.
(The remainder of this page was intentionally left blank.)
(2-12-99)
IN WITNESS WHEREOF, each of the parties hereto has signed this
Agreement, or has caused this Agreement to be signed by their respective duly
authorized officers, as of the date first written above.
STOCKHOLDER
__________________________________
Signature
__________________________________
Name Typed or Printed
Agreed and Acknowledged:
XXXXXX FINANCIAL CORPORATION NORTHWEST EQUITY CORP.
_________________________________ __________________________________
Signature Signature
_________________________________ __________________________________
Name Typed or Printed Name Typed or Printed
Its______________________________ Its_______________________________
Title Typed or Printed Title Typed or Printed
MPL1: 265526-4
(2-12-99)
Exhibit A to Voting Agreement
Description of Liens
(2-12-99)
Exhibit B
AMENDMENT AND
TERMINATION AGREEMENT
This Amendment and Termination Agreement, made and entered into this ___ day of
__________, 1999, by and between Northwest Savings Bank, its successors and
assigns, a state chartered savings bank (the "Bank") and _______________ (the
"Executive").
RECITALS:
WHEREAS, the parties hereto have entered into that certain Employment Agreement
executed by the parties _______________ (the "Employment Agreement"); and
WHEREAS, Xxxxxx Financial Corporation, Xxxxxx Acquisition Corporation and
Northwest Equity Corp. have concurrently herewith entered into that certain
Agreement and Plan of Merger dated _____________, 1999, (the "Plan of Merger")
providing for the merger of Xxxxxx Acquisition Corporation with and into
Northwest Equity Corp. (the "Merger"); and
WHEREAS, the parties hereto desire to amend and terminate the Employment
Agreement effective as of the Effective Time (as defined in the Plan of Merger)
pursuant to the terms of this Amendment and Termination Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below:
1. Termination of Employment Agreement. Executive hereby agrees that as of
the Effective Time, the Employment Agreement shall automatically
terminate and be of no further force and effect and the Bank shall have
no further obligation or liability to Executive under the Employment
Agreement. Further, the Executive hereby releases the Bank, its
successors and assigns, from any and all claims related to the
Employment Agreement, including, without limitation, Section 5 of the
Employment Agreement.
2. Settlement of Obligations. In consideration for the termination of the
Employment Agreement as set forth in Section 1 hereof and in full
settlement of all obligations of the Bank under the terms and
conditions of the Employment Agreement (including, without limitation,
all compensation, bonuses and other benefits which may have been
payable to Executive under the Employment Agreement) at the Effective
Time, the Bank shall pay Executive $____________ in immediately
available funds, provided, however the Bank shall be entitled to
withhold from the amount to be paid to Executive under this Agreement
any required federal, state or local withholding or other taxes or
charges which are, from time to time, required to be withheld.
3. Resignation of Executive. Concurrently with the payment of
consideration to Executive pursuant to Section 2 above, Executive shall
immediately resign as an officer and a director of Northwest Savings
Bank and all affiliated entities.
4. Miscellaneous. No provision of this Agreement may be amended, waived
or discharged unless such amendment, waiver or discharge is (i) agreed
to in writing and signed by Executive and such Bank officer as may be
specifically designated by the Board and (ii) consented and agreed to
in writing by Xxxxxx Financial Corporation. No waiver by either party
hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of
Wisconsin.
5. Termination. This Agreement shall automatically terminate in the event
the Plan of Merger is terminated pursuant to Section 7.1 of the Plan of
Merger without consummation of the Merger. Except for the termination
provision of the preceding sentence, this Agreement shall not be
terminated without the written consent of Xxxxxx Financial Corporation.
6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all
together constitute one and the same agreement. Each and any person
named a party hereto may execute this Agreement by signing any such
counterpart.
7. Third Party Beneficiary. Xxxxxx Financial Corporation shall be deemed a
third party beneficiary of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
NORTHWEST SAVINGS BANK
By_________________________________
Its________________________________
____________________________________
____________________________________
MPL1: 278559-2
Exhibit C
ABN AMRO Incorporated
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
(000)000-0000
February 16, 1999
Board of Directors
Northwest Equity Corp.
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx, Xxxxxxxxx 00000
Members of the Board:
We understand that Northwest Equity Corp. ("NWEQ") and Xxxxxx Financial
Corporation ("Xxxxxx") propose to enter into an Agreement and Plan of Merger
dated February 16, 1999 (the "Agreement") pursuant to which NWEQ will be merged
with and into a first-tier subsidiary of Xxxxxx in a transaction (the "Merger")
in which each issued and outstanding share of common stock of NWEQ, $1.00 par
value per share ("NWEQ Common Stock"), will be converted into the right to
receive cash consideration equal to $24.00 (the "Consideration").
You have asked us whether, in our opinion, the Consideration to be received
by the holders of NWEQ Common Stock in the Merger is fair to such stockholders
from a financial point of view.
In connection with this opinion, we have reviewed the Agreement and certain
related documents and held discussions with certain senior officers, directors
and other representatives and advisers of NWEQ concerning the business,
operations and prospects of NWEQ. We have examined certain publicly available
business and financial information relating to NWEQ and Xxxxxx. We have also
examined certain financial information and other data for NWEQ and certain
financial information and other data related to Xxxxxx which were provided to or
otherwise discussed with us by the respective management of NWEQ and Xxxxxx. We
have reviewed the financial terms of the Merger as set forth in the Agreement in
relation to: (1) current and historical market prices and trading volumes of
NWEQ Common Stock; (ii) NWEQ's financial and other operating data; and (iii) the
capitalization and financial condition of NWEQ. We have also considered, to the
extent publicly available, the financial terms of certain other thrift-industry
transactions recently effected which we considered relevant in evaluating the
Merger. We have also analyzed certain financial, stock market and other publicly
available information relating to the businesses of other companies whose
operations we considered relevant in evaluating those of NWEQ. In connection
with our engagement, and upon your request, we approached and held discussions
with certain third parties to solicit indications of interest in a possible
transaction with NWEQ.
In rendering our opinion, we have assumed and relied upon the accuracy and
completeness of the financial and other information reviewed by us and we have
not made or obtained or assumed any responsibility for independent verification
of such information. In addition, we have not made an independent evaluation
or appraisal of the assets and liabilities of NWEQ or any of its
subsidiaries. With respect to the financial data of NWEQ, we have assumed
ABN-AMRO Incorporated
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
(000)000-0000
Board of Directors
February 16, 1999
Page 2
that it has been reasonably prepared on bases reflecting the best currently
available estimates and judgements of the management of NWEQ as to the future
financial performance of NWEQ. We have assumed that the Merger will be
consummated in accordance with the terms of the Agreement.
ABN AMRO Incorporated ("ABN AMRO"), as part of its investment banking
business, is continually engaged in the valuation of businesses in connection
with mergers and acquisitions, as well as initial and secondary offerings of
securities and valuations for other purposes. We have acted as financial adviser
to the Board of Directors of NWEQ in connection with this transaction and will
receive a fee for our services, including rendering this opinion, a significant
portion of which is contingent upon the consummation of the Merger. ABN AMRO
acts as a market maker in NWEQ Common Stock. In the ordinary course of our
business, ABN AMRO and its affiliates may actively trade securities of NWEQ for
their own account and for the accounts of customers and,accordingly, may at any
time hold a long or short position in such securities.
It is understood that this letter is for the benefit and use of the Board
of Directos of NWEQ in its consideration of the Merger and may not be used for
any other purpose. This letter may not be reproduced, disseminated, quoted or
referred to at any time, in any manner or for any purpose without our prior
written consent, except that this letter may be used as part of any proxy
statement relating to the Merger. This letter does not address NWEQ's underlying
business decision to enter into the Merger or constitute a recommendation to any
stockholder as to how such stockholder should vote with respect to the proposed
Merger. Finally, our opinion is necessarily based on economic, monetary, market
and other conditions as in effect on, and the information made available to us,
as of the date hereof, and we assume no responsibility to update or revise our
opinion based upon circumstances or events occurring after the date hereof.
Based upon and subject to the foregoing, we are of the opinion that, as of
the date hereof, the Consideration to be received by NWEQ stockholders pursuant
to the Merger is fair to such stockholders from a financial point of view.
Sincerely,
_/s/_ABN AMRO INCORPORATED___________________
ABN AMRO INCORPORATED
Exhibit D
Minneapolis
(000) 000-0000
____________, 1999
Northwest Equity Corp.
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx, Xxxxxxxxx 00000
Re: Northwest Equity Corp. Acquisition
Ladies and Gentlemen:
We have acted as counsel for Xxxxxx Financial Corporation ("BFC"), a Minnesota
corporation, for the purpose of rendering this opinion to you solely in
connection with the acquisition of Northwest Equity Corp. (the "Company"), in
accordance with the terms of that certain Agreement and Plan of Merger dated
February 17, 1999 (the "Agreement") by and among the Company, BFC and Xxxxxx
Acquisition Corporation ("Merger Sub") (the "Merger"). This opinion is being
delivered pursuant to Section 6.2(e) of the Agreement. Capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in the
Agreement.
In our capacity as counsel to BFC, we have reviewed and examined the following
documents:
1. The Agreement;
2. BFC's and Merger Sub's Articles of Incorporation and Bylaws;
3. BFC's Certificate of Good Standing issued by the Minnesota
Secretary of State dated ____________, 1999 (the "BFC Good Standing
Certificate");
4. Merger Sub's Certificate of Good Standing issued by the
Wisconsin Secretary of State dated ____________, 1999 (the "Merger Sub
Good Standing Certificate");
5. The Resolutions adopted by the Board of Directors of BFC in
connection with the Merger and the transactions contemplated thereby;
Exhibit D
6. The Consent Resolutions of the Board of Directors and Sole
Shareholder of Merger Sub adopted in connection with the Merger and
the transactions contemplated thereby; and
7. The Officer's Certificates of BFC and Merger Sub dated
__________, 1999 (the "Certificates").
We have also examined the originals, or copies certified to our satisfaction, of
such other corporate records of BFC and Merger Sub, certificates of public
officials and of officers of BFC and Merger Sub, agreements, instruments and
other documents, and we have made such examination of the law, as we have deemed
necessary as a basis for the opinions expressed below. However, as to factual
matters: (i) we have reviewed no documents other than the documents listed in
paragraphs 1 through 7 above; (ii) we have made no independent factual
investigations or inquiries; and (iii) where our opinions herein are based on
the existence or absence of facts or our actual knowledge, our opinions are
based upon and limited to the conscious awareness of facts by Xxxxxxx X.
Xxxxxxxxxxxx, Xxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxx. We have assumed: (i) the
due execution and delivery, pursuant to due authorization, of the Agreement by
all parties thereto other than BFC and Merger Sub; and (ii) that the Agreement
constitutes a valid and binding obligation of all parties thereto other than BFC
and Merger Sub enforceable against each of such other parties in accordance with
its terms.
Based on the foregoing and subject to the limitations, qualifications and
assumptions hereafter set forth, it is our opinion that as of the date hereof:
1. BFC and Merger Sub (i) are corporations duly organized,
validly existing and based solely on the BFC Good Standing Certificate
and the Merger Sub Good Standing Certificate, in good standing under
the laws of the State of Minnesota and Wisconsin, respectively, (ii)
to our actual knowledge, are each duly qualified to do business and,
to our actual knowledge, are each in good standing, in all
jurisdictions where the failure to qualify would prevent or materially
impair their ability to own or lease their respective properties or
operate their respective businesses. BFC is a registered bank holding
company with the Board of Governors of the Federal Reserve System
under the Bank Holding Company Act of 1956, as amended.
2. BFC and Merger Sub possess all corporate power to own and
operate their respective properties and to carry out their respective
businesses as and where the same are now being conducted.
3. BFC and Merger Sub each have the corporate power and
authority to enter into and deliver the Agreement and to
carry out their espective obligations thereunder.
4. The Agreement has been duly authorized by all necessary
corporate action of BFC and Merger Sub, respectively, and such
Agreement constitutes a valid and binding obligation of BFC and Merger
Sub that is enforceable against BFC and Merger Sub, as the case may
be, in accordance with its terms.
Exhibit D
5. The execution, delivery and performance by BFC and Merger Sub
of the Agreement, or the consummation of the Merger, or compliance by
BFC or Merger Sub with any of the provisions of the Agreement will not
(i) result in any violation of any provision of the Articles of
Incorporation or Bylaws of BFC or Merger Sub, as applicable, or (ii)
to our actual knowledge, result in any violation or breach of,
constitute a default under, or require any notice under any of the
terms, conditions, or provisions of, any agreement, instrument, or
other arrangement to which BFC or Merger Sub is a party or by which
they or any of their business, properties or assets is bound or
subject, or (iii) to our actual knowledge, violate any judgment,
ruling, order, writ, injunction or decree in which BFC or Merger Sub
is named or to which either of them is a party, or (iv) to our actual
knowledge, violate any statute, rule or regulation, which, in our
experience, would normally apply to transactions of the type
contemplated by the Agreement; other than violations, conflicts,
breaches, defaults, terminations, accelerations or Liens that would
not have a Material Adverse Effect on BFC and its subsidiaries, taken
as a whole.
6. Except as received prior to the date hereof, no notice to,
filing with, exemptions or review by or authorization, consent or
approval of, any public body or authority is necessary for the
consummation by BFC or Merger Sub of the Merger as contemplated by the
Agreement, other than the filing of Articles of Merger and a Plan of
Merger with the Wisconsin Department of Financial Institutions of the
State of Wisconsin, and the issuance of a Certificate of Merger by the
Wisconsin Department of Financial Institutions of the State of
Wisconsin.
7. To our actual knowledge, there is no litigation, proceeding
or controversy before any court or governmental agency, whether
federal, state or local, pending or threatened, that is likely to
have a Material Adverse Effect on BFC and its subsidiaries, taken as a
whole.
SCOPE OF OPINION
In addition to any limitations, assumptions, qualifications and other
matters set forth elsewhere herein, the opinions set forth above are subject to
the following:
A. For the purposes of this opinion, we have assumed
that (i) all natural persons have legal capacity, (ii) all
items submitted to us as originals are authentic and all
signatures on such items are genuine and (iii) all items
submitted to us as certified, photostatic or conformed
copies conform to the respective originals thereof and each
such original or copy is complete.
B. Our opinions as they relate to the validity and
enforceability of the Agreement are subject to the
limitations that might result from the Uniform Fraudulent
Transfer Act, the Uniform Fraudulent Conveyance Act,
bankruptcy, insolvency, reorganization, moratorium, and
similar laws relating to or affecting the rights or remedies
of creditors generally, now or hereafter in effect.
Exhibit D
C. Our opinions as they relate to the validity and
enforceability of the Agreement are subject to principles of
equity (including equitable subordination) that might affect
any parties' rights or remedies and the qualification that
the availability of the remedies of specific performance or
injunctive relief, or any other equitable remedy, is subject
to the discretion of the court before which a proceeding
therefor may be brought and the application of general
principles of equity, including (without limitation)
concepts of materiality, reasonableness, good faith and fair
dealing (regardless of whether considered in a proceeding in
equity or at law).
D. The validity and enforceability of the Agreement is
subject to the applicable statute of limitations.
E. The provisions of the Agreement specifying that the
Agreement may only be amended or waived in writing may not
be enforceable to the extent that an oral agreement or an
implied agreement by trade practice or course of conduct has
been created modifying any provision thereof. F. Our
opinions contained herein are limited exclusively to the
laws of the State of Minnesota, Wisconsin and, where
expressly referenced herein, the United States of America.
G. We express no opinion with respect to:
1. The validity or enforceability of any
indemnification provision contained in the Agreement to the
extent such provisions are determined to be against public
policy;
2. The truth, accuracy or completeness of any of the
representations, warranties or other statements of BFC or
Merger Sub contained in the Agreement or any exhibit or
schedule attached thereto, in each case except for those
matters as to which an opinion is expressly rendered herein;
3. Any tax effect or tax implication of the
transactions contemplated by the Agreement or any documents
related thereto;
4. The truth, accuracy, or completeness of any of the
representations, warranties, or other statements of BFC or
Merger Sub contained in the Certificate;
5. The violation of any antifraud provisions of any
federal or state securities laws;
6. The rights of BFC or Merger Sub in or to the title
to any of their respective assets, real or personal,
tangible or intangible;
7. The validity or enforceability of any power of
attorney granted to you (i) in the Agreement or (ii) any
document or instrument deemed executed or delivered
Exhibit D
by BFC or Merger Sub pursuant thereto, to the extent such
power of attorney grants to you rights which contradict or
violate Minnesota law or any other applicable state law; or
8. The validity or enforceability of provisions of the
Agreement to the extent it contains: (i) any cumulative
remedy provision; (ii) waivers by BFC or Merger Sub of any
constitutional rights or remedies; or (iii) any choice of
law or governing law provisions.
This opinion speaks only as of __________, 1999 and, notwithstanding anything to
the contrary contained herein, we render no opinion as to what other facts or
circumstances might subsequently arise or what other actions or omissions might
hereafter be taken by you, BFC, Merger Sub or any third party that, if so
arising or so taken, would affect any of the opinions rendered hereby. We
undertake no duty or obligation to advise you as to the occurrence of any such
facts or circumstances or to otherwise update or reaffirm this opinion. This
opinion is based on existing facts, statutes, rules and regulations, and
judicial rulings and is subject to changes thereto. We do not, however,
undertake to advise you with respect to such future changes that affect this
opinion.
We do not purport to express any opinion herein concerning any law other than
the laws of the State of Minnesota, Wisconsin or the United States of America.
We assume no responsibility as to the applicability or effect of the laws of any
other domestic or foreign jurisdiction on the subject transactions.
The opinions expressed herein are solely for the benefit of the Company. This
opinion may not be used or relied upon by any other persons or entities or for
any other purpose without our express written permission.
Very truly yours,
WINTHROP & WEINSTINE, P.A.
STP1: 484012-2
