Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and among
HASTEN BANCSHARES,
an Indiana corporation,
AL ACQUISITION CORP.,
an Indiana corporation,
XXXXXXXXXX FINANCIAL GROUP, INC.,
an Indiana corporation,
and
XXXXXXX X. XXXXXXX
May 30, 2001
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; MERGER; CLOSING; EFFECTIVE TIME ......................... 1
1.1 Definitions .............................................. 1
1.2 The Merger ............................................... 7
1.3 Closing; Effective Time .................................. 8
1.4 Articles of Incorporation; Bylaws ........................ 8
1.5 Directors and Officers ................................... 8
ARTICLE II
CONVERSION OF SHARES IN THE MERGER; MAXIMUM MERGER CONSIDERATION ..... 9
2.1 Terms of Merger .......................................... 9
2.2 Payment for Shares ....................................... 9
2.3 Calculation of Total Shareholders' Equity ................ 10
2.4 Maximum Merger Consideration ............................. 11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY ........................ 11
3.1 Organization, Standing and Power ......................... 11
3.2 Capitalization ........................................... 12
3.3 Subsidiaries ............................................. 12
3.4 Company Financial Statements; Absence of Liabilities ..... 12
3.5 Authority of the Company; No Violation ................... 13
3.6 Insurance ................................................ 14
3.7 Books and Records ........................................ 14
3.8 Title to Assets .......................................... 14
3.9 Real Properties .......................................... 14
3.10 Litigation ............................................... 15
3.11 Taxes .................................................... 15
3.12 Compliance with Applicable Laws; Company Permits ......... 17
3.13 Performance of Obligations ............................... 17
3.14 Employees ................................................ 17
3.15 Material Contracts ....................................... 17
3.16 Absence of Certain Changes ............................... 18
3.17 Loans and Investments .................................... 20
3.18 Intellectual Properties .................................. 20
3.19 Company Benefit Plans .................................... 20
3.20 Regulatory Approvals ..................................... 24
3.21 Company Regulatory Reports ............................... 24
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3.22 Company Facilities ....................................... 24
3.23 Environmental Conditions ................................. 24
3.24 Proxy Statement .......................................... 26
3.25 Affiliate Transactions ................................... 26
3.26 Branch Sales ............................................. 27
3.27 Insider Interests ........................................ 27
3.28 Fairness Opinion ......................................... 27
3.29 Brokers and Finders ...................................... 27
3.30 State Takeover Statutes .................................. 27
3.31 Accuracy of Information Furnished ........................ 27
3.32 Minimum Shareholder Equity ............................... 27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER .......................... 28
4.1 Organization, Standing and Power ......................... 28
4.2 Authority; No Violation .................................. 28
4.3 Regulatory Approvals ..................................... 29
4.4 Litigation ............................................... 29
4.5 Adequate Funds ........................................... 29
4.6 Proxy Statement .......................................... 29
4.7 Accuracy of Information Furnished ........................ 29
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS .................................. 30
5.1 Conduct of Business by the Company ....................... 30
5.2 Filings and Approvals .................................... 33
5.3 Securities Reports ....................................... 33
5.4 No Acquisition Transaction ............................... 34
5.5 Notification of Certain Matters .......................... 34
5.6 Access to Information; Confidentiality ................... 35
5.7 Shareholder Approval ..................................... 36
5.8 Employee Benefits ........................................ 37
5.9 Company Incentive Plan ................................... 38
5.10 D&O Indemnification ...................................... 38
5.11 Further Assurances; Form of Transaction .................. 39
5.12 WARN Act ................................................. 40
5.13 Non-Compete .............................................. 40
5.14 Company Sales ............................................ 41
5.15 Name and Trademarks ...................................... 41
5.16 Resignations ............................................. 41
5.17 Transaction Liability Insurance .......................... 41
5.18 Estoppel Letters ......................................... 41
0.00 Xxxx Xxxxxx Mortgage Corp ................................ 42
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ARTICLE VI
CONDITIONS ........................................................... 42
6.1 Conditions to Obligations of Each Party .................. 42
6.2 Additional Conditions to Obligations of Company .......... 42
6.3 Additional Conditions to Obligations of Purchaser
and Merger Sub ........................................ 43
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER .................................... 45
7.1 Termination .............................................. 45
7.2 Effect of Termination .................................... 46
ARTICLE VIII
GENERAL PROVISIONS ................................................... 46
8.1 Publicity ................................................ 46
8.2 Expenses ................................................. 46
8.3 Survival ................................................. 47
8.4 Notices .................................................. 47
8.5 Amendment ................................................ 48
8.6 Waiver ................................................... 48
8.7 Interpretation ........................................... 48
8.8 Severability ............................................. 49
8.9 Miscellaneous ............................................ 49
8.10 Consent to Jurisdiction .................................. 49
8.11 Counterparts ............................................. 49
Exhibits
Exhibit A Form of Shareholder Voting Agreement
Exhibit B Form of Option Agreement
Exhibit C Form of Bank Merger Agreement
Exhibit D Form of License and Concurrent Use Agreement
Exhibit E Form of Assignment of Marks and Domain Names
Exhibit F Form of Tenant Estoppel
Exhibit G Form of Landlord Estoppel
Exhibit H Form of Legal Opinion of Vedder, Price, Xxxxxxx & Kammholz
Exhibit I Form of Legal Opinion of Xxxxxx, Xxxx & Xxxxxx LLP
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER ("Agreement") is entered into on May 30,
2001, by and among HASTEN BANCSHARES, an Indiana corporation ("Purchaser"), AL
ACQUISITION CORP., an Indiana corporation and wholly-owned subsidiary of
Purchaser ("Merger Sub"), XXXXXXXXXX FINANCIAL GROUP, INC., an Indiana
corporation (the "Company"), and Xxxxxxx X. Xxxxxxx (the "Majority
Shareholder").
WHEREAS, Purchaser and the Company desire to have Merger Sub merge with
and into the Company (the "Merger"), as the result of which the Company will be
the surviving corporate entity, with the Merger to be upon the terms and subject
to the conditions set forth herein;
WHEREAS, as an inducement to the willingness of Purchaser to enter into
this Agreement, the Majority Shareholder (together with certain other
shareholders of the Company) will, simultaneously with the execution and
delivery of this Agreement by the parties hereto, enter into a Shareholder
Voting Agreement in the form attached hereto as Exhibit A upon the terms and
conditions set forth therein;
WHEREAS, as an inducement to the willingness of Purchaser to enter into
this Agreement, the Company will, simultaneously with the execution and delivery
of this Agreement by the parties hereto, enter into an Option Agreement in an
amount up to 19.9% of the outstanding shares of Company Common Stock in the form
attached hereto as Exhibit B and
WHEREAS, the Boards of Directors of Purchaser, Merger Sub and the Company
have each duly approved this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
representations, warranties and agreements contained herein, Purchaser, Merger
Sub and the Company agree as follows:
ARTICLE I
DEFINITIONS; MERGER; CLOSING; EFFECTIVE TIME
1.1 Definitions. In addition to capitalized terms otherwise defined
herein, as used in this Agreement the following capitalized terms shall have the
meanings provided in this Section 1.1:
"Acquisition Transaction" means (i) a bona fide tender or exchange offer
for at least 10% of the then outstanding shares of any class of capital stock of
the Company by any Person other than Purchaser or an Affiliate of Purchaser,
(ii) a merger, consolidation or other business combination with the Company or
the Bank involving any Person other than Purchaser or an Affiliate of Purchaser,
(iii) except for the Company Sales (as defined herein), any sale, lease,
exchange, mortgage, pledge, transfer or other disposition (whether in one
transaction or a series of related transactions) involving a substantial part of
the Company's consolidated assets, including stock of any of the Company's
subsidiaries, to any Person other than Purchaser or an Affiliate of Purchaser,
(iv) the acquisition by any Person (other than Purchaser or an Affiliate of
Purchaser) of beneficial ownership (within the meaning of Rule 13d-3 under the
1934 Act, but including any shares that may be acquired pursuant to the exercise
of any right, option, warrant or other agreement regardless of when such
exercise may occur) of 10% or more of the then outstanding shares of any class
of capital stock of the Company, including shares of capital stock currently
owned by such Person, (v) any reclassification of securities or recapitalization
of the Company or other similar transaction that has the effect, directly or
indirectly, of increasing the proportionate share of any class of equity
security, including securities convertible into equity securities, of the
Company which is owned by any Person other than Purchaser or an Affiliate of
Purchaser, (vi) a public proxy or consent solicitation made to shareholders of
the Company seeking proxies or consents in opposition to any proposal relating
to any of the transactions contemplated by this Agreement that has been
recommended by the Board of Directors of the Company, (vii) the filing of an
application or notice with an Applicable Governmental Authority or any other
federal or state regulatory authority seeking approval to engage in one or more
of the transactions described in clauses (i) through (vi) above, or (viii) the
making of a bona fide proposal to the Company or its shareholders by public
announcement or written communication, that is or becomes the subject of public
disclosure, to engage in one or more of the transactions described in clauses
(i) through (vi) above;
"Action" means any action (at law or equity), claim, counterclaim, suit,
arbitration, inquiry, proceeding, administrative action or investigation by or
before any court, arbitration association or governmental authority initiated by
any Person, as defined below;
"Affiliate" of, or a person "Affiliated" with, a specific person is a
person that directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, the person
specified. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlled by" and "under common control with")
shall mean the possession, directly or indirectly, of the power to direct the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. For purposes of Section 5.13 hereof only,
Xxxxxxxxxx West Financial Group, Inc. and Xxxxx Xxxxxxx Associates, Inc. shall
not be deemed Affiliates of the Majority Shareholder;
"Applicable Governmental Authorities" means the Federal Reserve, OCC, OTS,
FDIC, U.S. Department of Justice, and any other federal or state governmental
authority having jurisdiction over the Merger and/or the transactions
contemplated herein;
"Bank" means Xxxxxxxxxx Bank, FSB, a federally-chartered stock savings
bank that is wholly-owned by the Company, with its principal office at 000 X.
Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxx;
"Bank Common Stock" shall have the meaning given such term in Section
3.2(b) hereof;
"Bank Merger" shall have the meaning given such term in Section 1.2(b),
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"BIF" means the Bank Insurance Fund administered by the FDIC;
"Branch Buyer" shall have the meaning given to such term in Section 3.26
hereof;
"Cancellation Agreements" shall have the meaning given such term in
Section 5.9 hereof;
"Closing" means the performance by the parties of all of the conditions
set forth in Article VI, which shall take place as provided in Section 1.3
hereof;
"Code" means the Internal Revenue Code of 1986, as amended;
"Company Benefit Plans" means the plans, programs, arrangements and
agreements described in Section 3.19(a) hereof;
"Company Certificate" means a stock certificate evidencing ownership of
shares of Company Common Stock;
"Company Common Stock" means the common stock, $0.125 par value per share,
of the Company;
"Company Disclosure Schedule" shall have the meaning given such term in
Section 3.1(b) hereof;
"Company Financial Statements" means the audited consolidated financial
statements of the Company and the Company Subsidiaries contained, or
incorporated by reference, in the Company's Annual Report on Form 10-K for the
year most recently ended, as filed with the SEC, and as updated by the unaudited
consolidated financial statements of the Company included as a part of the
Company's Quarterly Reports on Form I0-Q filed with the SEC subsequent thereto;
"Company Incentive Plan" means the Xxxxxxxxxx Financial Group, Inc.
Amended and Restated Stock Option Plan;
"Company Permits" shall have the meaning given such term in Section 3.12;
"Company Qualified Plans" shall have the meaning given to such term in
Section 3.19(b) hereof;
"Company Regulatory Reports" shall have the meaning given to such term in
Section 3.21 hereof;
"Company Report" shall have the meaning given to such term in Section
5.6(b) hereof;
"Company Sales" shall have the meaning given to such term in Section 3.25
hereof;
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"Company Sales Agreements" shall have the meaning given to such term in
Section 3.25 hereof;
"Company Sales Buyer" shall have the meaning given to such term in Section
3.25 hereof;
"Company Subsidiary" shall mean each of the Bank and any of the Non-Bank
Subsidiaries individually or collectively, the "Company Subsidiaries";
"Confidentiality Agreement" means that agreement dated February 6, 2001
between Purchaser and Xxxxx, Xxxxxxxx & Xxxxx, Inc., as agent for the Company;
"Cure Period" shall have the meaning given to such term in Section 5.5(b)
hereof;
"Disclosure Schedule Updates" shall have the meaning given such term in
Section 5.5(b) hereof;
"Effective Time" means the time at which the articles of merger relating
to the Merger to be filed pursuant to Section 1.3 hereof shall become effective
in accordance with the IBCL;
"Environmental Laws" means any and all federal, state and local statutes,
laws, regulations, ordinances, orders, policies, or decrees and the like,
whether now existing or subsequently enacted or amended, relating to public
health or safety, worker health or safety, pollution or protection of human
health or the environment, including natural resources, including but not
limited to the Clean Air Act, 42 U.S.C. ss. 7401 et seq., the Clean Water Act,
33 U.S.C. ss. 1251 et seq., the Resource Conservation Recovery Act ("RCRA"). 42
U.S.C. ss. 6901 et seq., the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et
seq., and the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), 42 U.S.C. ss. 9601 et seq. and any similar or implementing state
or local law, which governs: (1) the existence, clean-up, removal and/or remedy
of contamination or threat of contamination on or about real property; (2) the
emission or discharge of Hazardous Materials or contaminants into the
environment; (3) the control of Hazardous Materials or contaminants; or (4) the
use, generation, or transport, treatment, storage, disposal, removal, recycling,
handling, or recovery of Hazardous Materials;
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended;
"Exchange Agent" means American Stock Transfer & Trust Company, as agent
for the purpose of effectuating the exchange of Company Certificates for the
Merger Consideration in accordance with Article II hereof;
"FDIC" means the Federal Deposit Insurance Corporation;
"Federal Reserve" means the Board of Governors of the Federal Reserve
System;
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"FHLBI" means the Federal Home Loan Bank of Indianapolis;
"FICO" means the credit scoring system developed by Fair Xxxxxx;
"First National" shall have the meaning given such term in Section 1.2(b)
hereof;
"First National Common Stock" shall have the meaning given such term in
Section 4.1(c) hereof;
"GAAP" means generally accepted accounting principles consistently
applied;
"Hazardous Materials" means any material or substance: (1) which is or
becomes defined as a "hazardous substance", "pollutant" or "contaminant"
pursuant to CERCLA, or other Environmental Laws, and amendments thereto and
regulations promulgated thereunder; (2) containing gasoline, oil, diesel fuel or
other petroleum products, or fractions thereof; (3) which is or becomes defined
as a "hazardous waste" pursuant to RCRA and amendments thereto and regulations
promulgated thereunder; (4) containing polychlorinated biphenyls; (5) containing
asbestos; (6) which is radioactive; (7) which is biologically hazardous; (8) the
presence of which requires investigation or remediation under any federal,
state, or local statute, regulation, ordinance, policy or other Environmental
Laws; (9) which is defined as a "hazardous waste", "hazardous substance",
"pollutant" or "contaminant" or other such term used to defined a substance
having an adverse affect on the environment under Environmental Laws; or (10)
any toxic, explosive, dangerous, corrosive or otherwise hazardous substance,
material or waste, which is regulated by any federal, state or local
governmental authority;
"HOLA" means the Federal Home Owners' Loan Act, as amended;
"IBCL" means the Indiana Business Corporation Law, as amended;
"Immediate Family" means a person's spouse, parents, in-laws, children and
siblings;
"Intellectual Property" shall have the meaning given such term in Section
3.18 hereof;
"IRS" means the Internal Revenue Service;
"Kansas Branch" shall have the meaning given such term in Section 3.25
hereof;
"Knowledge" or "to the knowledge of" means to the knowledge of Xxxxxxx X.
Xxxxxxx, Xxxxxxx Xxxxxxx III, Xxxxx X. Xxxxx, Xxxxx X. Xxxxxxx, Xxxx X. Xxxxxxx,
Xxxx Xxxxxxx, Xxxxx Xxxxxxxxx, Xxx Xxxxxx, Xxx Xxxxx and Xxxxx Xxxxxxxxxx;
"Xxxx Agreements" shall have the meaning given such term in Section 5.15
hereof;
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"Material Adverse Effect" means, with respect to an entity, any condition,
event, change or occurrence that has or may reasonably be expected to have a
material adverse change on the business, operations, results of operations or
financial condition of such entity on a consolidated basis but shall not include
an adverse change with respect to, or effect on such entity resulting from (1)
reasonable expenses incurred in connection with the transactions contemplated
hereby, (2) changes in general economic conditions (including, without
limitation, increases or decreases in market rates of interest or in the prices
paid for shares of Company Common Stock or publicly-traded securities
generally), (3) any change in a law, rule or regulation generally applicable to
financial institutions, (4) any change in GAAP or regulatory accounting
principles, as such would apply to the financial statements of such entity or
(5) actions taken or to be taken by the Company, the Bank or any Non-Bank
Subsidiary of the Company or the Bank in accordance with the specific terms of
this Agreement or based upon the written request of Purchaser pursuant to this
Agreement;
"Merger" means the merger of Merger Sub with and into the Company pursuant
to Section 1.2(a) hereof;
"Merger Consideration" means the right to receive $12.4916 in cash per
share of Company Common Stock, into which shares of Company Common Stock shall
be converted in the Merger pursuant to Section 2.1(a) hereof; subject to the
right of option holders to receive the amount described in Section 2.1(c) below
and subject to the limitations of Section 2.3 below;
"Mortgaged Premises" shall mean each (1) real property interest (including
without limitation any fee or leasehold interest) which is encumbered or
affected by any mortgage, deed of trust, deed to secure debt or other similar
document or instrument granting to the Bank a lien on or security interest in
such real property interest and (2) any other real property interest upon which
is situated assets or other property affected or encumbered by any document or
instrument granting to the Bank a lien thereon or security interest therein;
"Non-Bank Subsidiary" means each corporation, partnership, limited
liability company or similar entity of which the Company or the Bank owns,
directly or indirectly, at least twenty-five percent (25%) of the issued and
outstanding voting stock, including without limitation, Xxxxxxxxxx Wealth
Management, an Indiana corporation; and Pine Tree Mortgage Corporation, a North
Carolina corporation;
"North Carolina Branch" shall have the meaning given such term in Section
3.25 hereof;
"OCC" means the Office of Comptroller of the Currency;
"Option Agreement" means that certain Option Agreement of even date
herewith pursuant to which the Company has granted Purchaser the right to
purchase from the Company shares of Company Common Stock, subject to certain
conditions precedent, and has granted to Purchaser certain other rights;
6
"OTS" means the Office of Thrift Supervision;
"PBGC" means the Pension Benefit Guaranty Corporation;
"Person" means any individual, corporation, association, partnership,
joint venture, other entity, government or governmental department or agency;
"Properties" means (1) the real estate owned or leased by the Company and
the Company Subsidiaries and used as a banking or mortgage-related facility; (2)
other real estate owned ("REO") by the Bank or any Non-Bank Subsidiary as
defined by any federal or state financial institution regulatory agency with
regulatory authority for the Bank; (3) real estate that is in the process of
pending foreclosure or forfeiture proceedings conducted by the Bank or any
Non-Bank Subsidiary; (4) real estate that is held in trust for others by the
Bank; (5) real estate owned or leased by the Company, the Bank or any Non-Bank
Subsidiary or owned or leased by a partnership or joint venture in which the
Company, the Bank or any Non-Bank Subsidiary has an ownership interest; and (6)
the Mortgaged Premises;
"Proxy Statement" means the proxy statement to be used by the Company in
connection with the solicitation by its Board of Directors of proxies for use at
the meeting of its shareholders to be convened for the purpose of voting on the
Merger, pursuant to Section 5.7 hereof;
"Regulatory Approvals" means the approval of the Merger and transactions
contemplated herein of the Applicable Governmental Authorities;
"SAIF" means the Savings Association Insurance Fund administered by the
FDIC;
"SEC" means the Securities and Exchange Commission;
"Surviving Corporation" shall have the meaning given such term in Section
1.2(a) hereof;
"Total Shareholders' Equity" means the capital stock, capital surplus and
retained earnings as determined under GAAP, provided, however, for purposes of
determining the Total Shareholders' Equity of the Company hereunder, such
calculation shall exclude: (i) any and all adjustments which would occur as a
result of payment for outstanding options by the Company pursuant to Section 5.9
hereof; (ii) any and all adjustments made pursuant to FAS 133; (iii) any and all
adjustments which would result from provisions to the allowance for loan and
lease losses for loans originated by the Bank (other than the Kansas Branch or
the North Carolina Branch) following the date hereof, and (iv) reasonable
expenses incurred in connection with the transactions contemplated hereby
including (A) audit and accounting fees, (B) short period tax return preparation
fees, (C) environmental assessment costs, (D) investment banking fees, (E) legal
fees and expenses, (F) Exchange Agent fees, (G) Fiserv deconversion costs, (H)
the bonus payments set forth on Schedule 3.19(a)(1) to the Company Disclosure
Schedule and (I) the severance payment set forth on Section 5.1(d) to the
7
Company Disclosure Schedule (such expenses not to exceed $920,000 in the
aggregate for purposes of this clause (iv));
"Voting Debt" shall have the meaning given such term in Section 3.2(a)
hereof; and
"1934 Act" means the Securities Exchange Act of 1934, as amended.
1.2 The Merger. (a) Subject to the terms and conditions of this Agreement,
including the receipt of all requisite regulatory and shareholder approvals, the
Company and Merger Sub shall consummate the Merger, pursuant to which (i) Merger
Sub shall be merged with and into the Company and the separate corporate
existence of Merger Sub shall thereupon cease, (ii) the Company shall be the
surviving corporation in the Merger (the "Surviving Corporation") and shall
become a wholly-owned subsidiary of Purchaser, (iii) the Company shall continue
to be governed by the laws of the State of Indiana with all its rights,
privileges, powers and franchises unaffected by the Merger, and (iv) the
Surviving Corporation shall possess all assets and property of every
description, and every interest in the assets and property, contingent or
otherwise, wherever located, and the rights, privileges, immunities, powers,
franchises and authority, of a public as well as a private nature, of each of
the Company and Merger Sub, and all obligations belonging or due to each of the
Company or Merger Sub, all of which shall vest in the Surviving Corporation
without further act or deed.
(b) Following the consummation of the Merger, Purchaser shall cause
the Bank to be merged with and into First National Bank and Trust, a wholly
owned subsidiary of the Purchaser ("First National"), (the "Bank Merger")
pursuant to the terms of the Agreement of Merger, the form of which is attached
hereto as Exhibit C (the "Bank Merger Agreement"). Purchaser and the Company
shall take all necessary actions to permit the Bank Merger to occur immediately
following the consummation of the Merger.
(c) The Company will cooperate in the preparation by Purchaser and
Merger Sub of such applications to the Applicable Governmental Authorities and
any other regulatory authorities as may be necessary in connection with all
governmental approvals requisite to the consummation of the transactions
contemplated hereby. Purchaser and the Company will each cooperate in the
preparation of such applications, statements or materials as may be required to
be furnished to the shareholders of the Company or filed or submitted to
Applicable Governmental Authorities in connection with the Merger, the Bank
Merger and with solicitation of the approval by shareholders of the Company in
respect thereof.
1.3 Closing; Effective Time. The Closing of the Merger shall take place on
a date which (a) shall be no later than five (5) business days after (i) the
last of the conditions set forth in Sections 6.1(a), 6.1(b), 6.2(e) and 6.3(g)
has been fulfilled or waived, and (ii) the calculation of Total Shareholders'
Equity (pursuant to Section 2.3) has been completed and any disputes thereunder
resolved in accordance with Section 2.3, or (b) is mutually agreed upon by the
parties at 10:00 a.m. at the offices of Vedder, Price, Xxxxxxx & Kammholz, 000
Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx (or such other location or
time as mutually agreed upon by the parties).
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The Merger shall become effective upon the filing, on the day of Closing or as
soon thereafter as is practicable, of the articles of merger as provided in the
IBCL.
1.4 Articles of Incorporation; Bylaws. At the Effective Time, the Articles
of Incorporation and the Bylaws of Merger Sub, as in effect immediately prior to
the Effective Time, shall become the Articles of Incorporation and Bylaws,
respectively, of the Surviving Corporation.
1.5 Directors and Officers. The directors and officers of Merger Sub at
the Effective Time shall, from and after the Effective Time, be the directors
and officers, respectively, of the Surviving Corporation until their successors
have been duly elected or appointed in accordance with the Bylaws of the
Surviving Corporation.
ARTICLE II
CONVERSION OF SHARES IN THE MERGER; MAXIMUM MERGER
CONSIDERATION
2.1 Terms of Merger. Upon the Merger becoming effective:
(a) At the Effective Time, each share of Company Common Stock issued
and outstanding immediately prior to the Effective Time of the Merger, shall,
ipso facto and without any action on the part of the holder thereof; become and
be converted into the right to receive the Merger Consideration. The
certificates representing outstanding Company Common Stock shall, after the
Effective Time of the Merger, represent only the right to receive the Merger
Consideration from Purchaser. Each holder of Company Common Stock, upon
surrender to the Exchange Agent, in proper form for cancellation, of the Company
Certificate(s), shall be entitled to receive a check from the Exchange Agent in
an appropriate amount of Merger Consideration for such shares. Until so
presented and surrendered in exchange for the Merger Consideration, each
certificate which represented issued and outstanding Company Common Stock shall
be deemed for all purposes to evidence ownership of the Merger Consideration.
After the Effective Time, there shall be no transfer on the stock transfer books
of the Company of Company Common Stock. No interest shall accrue or be payable
with respect to the Merger Consideration.
(b) Each share of common stock of Merger Sub issued and outstanding
at the Effective Time of the Merger shall, ipso facto and without any action on
the part of the holder thereof; continue as one share of the common stock of the
Surviving Corporation and all of such shares of common stock of the Surviving
Corporation shall be owned by Purchaser. Outstanding certificates representing
shares of common stock of Merger Sub shall be deemed to represent an identical
number of shares of common stock of the Surviving Corporation.
(c) Each option granted under the Company Incentive Plan issued and
outstanding immediately prior to the Effective Time shall ipso facto and without
any action on the part of holders
9
thereof, become and be converted into the right to receive the difference
between the Merger Consideration and the applicable option exercise price.
2.2 Payment for Shares. At and from time to time after the Effective Time,
Purchaser shall make available or cause to be made available to the Exchange
Agent amounts sufficient in the aggregate to provide all funds necessary for the
Exchange Agent to make payments of the Merger Consideration hereof to holders of
the Company Common Stock issued and outstanding immediately prior to the
Effective Time. Purchaser shall use its best efforts to cause to be mailed,
within three (3) business days of the Effective Time, to each person who was, at
the Effective Time, a holder of record of issued and outstanding Company Common
Stock, a letter of transmittal and instructions for use in effecting the
surrender of the Company Certificate(s) which, immediately prior to the
Effective Time, represented such shares. Upon surrender to the Exchange Agent of
such certificates (or such documentation as is acceptable to and required by the
Exchange Agent with respect to lost certificates), together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, the Exchange Agent shall promptly cause to be paid to the Persons
entitled thereto a check in the amount to which such Persons are entitled, after
giving effect to any required tax withholdings. If payment is to be made to a
Person other than the registered holder of the Company Certificate(s)
surrendered, it shall be a condition of such payment that the Company
Certificate(s) so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of the Company Certificate(s) surrendered or established
to the satisfaction of Purchaser or the Exchange Agent that such tax has been
paid or is not applicable. One Hundred Eighty (180) days following the Effective
Time, Purchaser shall be entitled to cause the Exchange Agent to deliver to it
any funds (including any interest received with respect thereto) made available
to the Exchange Agent which have not been disbursed to holders of certificates
formerly representing Company Common Stock outstanding at the Effective Time,
and thereafter such holders shall be entitled to look to Purchaser only as a
general creditor thereof with respect to the cash payable upon due surrender of
their Company Certificates. Notwithstanding anything in this Article II or
elsewhere in this Agreement to the contrary, neither the Exchange Agent nor any
party hereto shall be liable to a former holder of Company Common Stock for any
cash delivered to a public official pursuant to applicable escheat or abandoned
property laws. The Exchange Agent shall also deliver to Purchaser a certified
list of the names and addresses of all former registered holders of Company
Common Stock who have not then surrendered their Company Certificates to receive
the Merger Consideration to which they are entitled.
2.3 Calculation of Total Shareholders' Equity. (a) Five (5) business days
prior to the scheduled Closing, the Company shall provide to the Purchaser a
calculation of the Total Shareholders' Equity as of a date not to exceed ten
(10) days prior to the scheduled Closing ("Total Shareholders' Equity
Statement"). Such Total Shareholders' Equity Statement shall be prepared by the
Company's regular, independent certified public accountant or a mutually agreed
independent certified public accountant.
10
(b) If Purchaser notifies the Company of its objection to the Total
Shareholders' Equity Statement within two (2) business days after receipt of the
Total Shareholders' Equity Statement from the Company, the Company and Purchaser
shall, within ten (10) days (or such longer period as the parties may agree)
following such notice (the "Resolution Period"), attempt to resolve their
differences, and any resolution by them as to any disputed amounts shall be
deemed to be mutually agreed upon by the Company and the Purchaser. If, at the
end of the Resolution Period, the amounts remaining in dispute ("Unresolved
Changes") are not agreed to by the Purchaser and the Company, the Unresolved
Changes shall be submitted to KPMG LLP (the "Neutral Auditors") within five (5)
days after the expiration of the Resolution Period. Each party agrees to
execute, if requested by the Neutral Auditors, a reasonable engagement letter.
All fees and expenses relating to the work, if any, to be performed by the
Neutral Auditors shall be borne and paid pro rata by the Company and the
Purchaser in proportion to the allocation of the dollar amount of the Unresolved
Changes between the Company and the Purchaser made by the Neutral Auditors such
that the party with whom the Neutral Auditors, in the aggregate, agree more
closely pays a lesser proportion of such fees and expenses. The Neutral
Auditors' resolution of Unresolved Changes, shall be made within 30 days of the
submission of the Unresolved Changes thereto, shall be set forth in a written
statement delivered to the Company and the Purchaser and shall be deemed to be
mutually agreed upon by the Company and the Purchaser. Any scheduled Closing
hereof shall be delayed to permit resolution of the Total Shareholders' Equity
Statement pursuant to this Section 2.3(b).
2.4 Maximum Merger Consideration. Notwithstanding anything contained
herein to the contrary, the maximum amount of Merger Consideration to be paid
for the Company Common Stock and the maximum amount to be paid for options
pursuant to Section 2.1(c) above shall, in the aggregate, equal Forty Million
Dollars ($40,000,000).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser that each of the
following statements is true and correct on the date hereof:
3.1 Organization, Standing and Power. (a) The Company is duly organized
and existing as a corporation under the laws of the State of Indiana and is
registered with the OTS as a savings and loan holding company. The Company has
all requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted.
Neither the scope of the business of the Company nor the location of any of its
properties requires that it be licensed to do business in any jurisdiction other
than the State of Indiana, the State of Kansas and the State of North Carolina.
The Company is properly licensed to do business in the States of Indiana and
Kansas. True and correct copies of the Company's Articles of Incorporation and
Bylaws, both as amended to the date hereof, have been delivered to Purchaser
prior to the date hereof.
11
(b) The Bank is duly organized and existing as a federally-chartered
stock savings bank under HOLA and is authorized by the OTS to conduct a savings
bank business. The Bank is a member of the FHLBI, and its deposits are insured
by the SAIF in the manner and to the extent provided by law. The Bank has all
requisite corporate power and authority to own, lease and operate its properties
and assets and to carry on its business as presently conducted. True and correct
copies of the Bank's Charter and Bylaws, both as amended to the date hereof, are
attached hereto as Schedule 3.1(b) to the Company's disclosure schedule attached
hereto and made a part hereof (together with all the other schedules, the
"Company Disclosure Schedules").
(c) Each Non-Bank Subsidiary is duly organized and existing as a
corporation under the laws of the state of its incorporation and is duly
qualified or licensed as a foreign corporation in each other state or
jurisdiction in which the ownership of property or the conduct of business
requires such licensing or qualification. Each Non-Bank Subsidiary has all
requisite corporate power and authority to own, lease and operate its properties
and assets and to carry on its business as presently conducted. True and correct
copies of the Certificate of Incorporation or Articles of Incorporation, as the
case may be, and Bylaws of each Non-Bank Subsidiary are attached hereto as
Schedule 3.1(c) to the Company Disclosure Schedule.
3.2 Capitalization. (a) The authorized capital stock of the Company
consists of (i) 10,000,000 shares of Company Common Stock, of which 3,129,670
shares were issued and outstanding as of the date hereof; and (ii) 5,000,000
shares of preferred stock, $1.00 par value per share, none of which are issued
and outstanding. All of the outstanding shares of Company Common Stock are
validly issued, fully paid and nonassessable. Except for the option granted to
Purchaser pursuant to the Option Agreement and except for stock options covering
209,900 shares of Company Common Stock granted pursuant to the Company Incentive
Plan and outstanding as of the date hereof, there are no outstanding options,
warrants or other rights in or with respect to the unissued shares of Company
Common Stock nor any securities convertible into such stock; and the Company is
not obligated to issue any additional shares of Company Common Stock or any
additional options, warrants or other rights in or with respect to the unissued
shares of Company Common Stock or any other securities convertible into Company
Common Stock. The Company does not have outstanding any indebtedness which
entitles the holder or holders thereof to exercise voting rights in connection
with the election of its directors ("Voting Debt"), nor does the Company have
outstanding any options, warrants, calls, rights, commitments or agreements of
any kind obligating the Company or any of its subsidiaries to issue or sell any
Voting Debt. There are no outstanding contractual obligations of the Company or
any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of
its capital stock.
(b) The authorized capital stock of the Bank consists solely of
1,500,000 shares of common stock, par value $1.00 per share ("Bank Common
Stock"), 486,293 of which are issued and outstanding. All of the outstanding
shares of the Bank Common Stock are validly issued, fully paid and nonassessable
and are owned by the Company, free and clear of all liens and encumbrances.
There are no outstanding options, warrants or other rights in or with respect to
the unissued shares of the Bank Common Stock nor any securities convertible into
such stock and the Bank is not
12
obligated to issue any additional shares of its common stock or any additional
options, warrants or other rights in or with respect to the unissued shares of
the Bank Common Stock or any other securities convertible into such common
stock.
(c) Except as set forth on Schedule 3.2(c) to the Company Disclosure
Schedule, all of the outstanding shares of common stock of each Non-Bank
Subsidiary are validly issued, fully paid and nonassessable and are owned by the
Company or the Bank, free and clear of all liens and encumbrances. There are no
outstanding options, warrants or other rights in or with respect to the unissued
shares of each Non-Bank Subsidiary's common stock nor any securities convertible
into such stock and no Non-Bank Subsidiary is obligated to issue any additional
shares of its common stock or any additional options, warrants or other rights
in or with respect to the unissued shares of its common stock or any other
securities convertible into such common stock.
3.3 Subsidiaries. Except for the Bank and the Non-Bank Subsidiaries, and
except as set forth on Schedule 3.3 to the Company Disclosure Schedule, neither
the Company nor the Bank owns or holds, directly or indirectly, any equity
interest in any Person that is not readily marketable on a nationally recognized
exchange or securities market.
3.4 Company Financial Statements; Absence of Liabilities. (a) There have
been delivered by the Company to Purchaser copies of the Company Financial
Statements. The Company Financial Statements: (i) fairly present the
consolidated financial condition of the Company and its subsidiaries as of the
respective dates indicated and its consolidated results of operations and the
consolidated changes in its shareholders' equity and cash flows for the
respective periods indicated, except for the unaudited consolidated financial
statements of the Company and the Company Subsidiaries, which are subject to
normal year-end adjustments; (ii) have been prepared in accordance with GAAP,
except as stated therein and except that unaudited consolidated financial
statements may not include all footnote disclosures required by GAAP; (iii) are
based on the books and records of the Company and the Company Subsidiaries; and
(iv) contain and reflect reserves for all material accrued liabilities as of the
date thereof and for all reasonably anticipated losses as of the date thereof,
including (but not limited to) adequate reserves for reasonably anticipated loan
and other losses.
(b) The Company has no liabilities or obligations, either accrued or
contingent, which are material to it and which have not been reflected or
disclosed in the Company Financial Statements other than liabilities and
obligations incurred subsequent to June 30, 2000 in the ordinary course of
business or as set forth on any Company Disclosure Schedule hereto. The Company
does not know of any basis for the assertion against it of any liability,
obligation or claim (including, without limitation, that of any regulatory
authority) that might result in or cause a Material Adverse Effect which is not
fairly reflected in the Company Financial Statements filed with the SEC
subsequent to the filing of the Company's most recent Annual Report on Form
10-K.
3.5 Authority of the Company; No Violation. (a) The Company has all
requisite corporate power and authority to enter into this Agreement and,
subject to approval by the majority of its shareholders, to consummate the
Merger and the transactions contemplated hereby and the
13
Bank has all requisite corporate power and authority to enter into the Bank
Merger Agreement and to consummate the Bank Merger and the transactions
contemplated thereby. The execution and delivery by the Company of this
Agreement, the execution and delivery by the Bank of the Bank Merger Agreement
and the consummation of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action on the part
of the Company (other than as described in the immediately preceding sentence)
and the Bank. and this Agreement and the Bank Merger Agreement have been duly
executed and delivered by the Company, and the Bank, respectively, and are valid
and binding obligations of the Company and the Bank, enforceable in accordance
with their respective terms except as such enforceability may be limited by (i)
bankruptcy, insolvency, moratorium, and other similar laws affecting creditors'
rights generally, and (ii) general principles of equity regardless of whether
asserted in a proceeding in equity or at law. All of the conditions specified in
the Company's Articles of Incorporation and Bylaws have been met, and approval
of this Agreement and the Merger by the shareholders of the Company requires
only the affirmative vote of a majority of the outstanding shares of Company
Common Stock entitled to vote at the meeting of shareholders to be held pursuant
to Section 5.7 hereof.
(b) Except as set forth on Schedule 3.5 to the Company Disclosure
Schedule, neither the execution and delivery by the Company of this Agreement,
the execution and delivery by the Bank of the Bank Merger Agreement, the
consummation of the transactions contemplated herein and therein, nor compliance
by the Company or the Bank with any of the provisions hereof or thereof will:
(i) conflict with or result in a breach of any provision of its Articles of
Incorporation or Charter (as applicable) or Bylaws; (ii) constitute a breach of
or result in a default, or give rise to any rights of termination, cancellation
or acceleration, or any right to acquire any securities, (other than the options
currently outstanding under the Company Incentive Plan), or assets, under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
franchise, license, permit, lease agreement or other instrument or obligation to
which the Company or any Company Subsidiary is a party, by which the Company or
any Company Subsidiary or any of their respective properties or assets is bound,
if in any such circumstances such event could have a Material Adverse Effect on
the Company or (iii) assuming that the consents and approvals set forth herein
are duly obtained, violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or any Company Subsidiary or any of their
respective properties or assets, the result of which could have a Material
Adverse Effect on the Company. Except as set forth on Schedule 3.5 to the
Company Disclosure Schedule, no consent of, approval of, notice to or filing
with any governmental authority having jurisdiction over any aspect of the
business or assets of the Company, and no consent of, approval of or notice to
or filing with any other Person is required in connection with the execution and
delivery by the Company of this Agreement, by the Bank of the Bank Merger
Agreement, or the consummation by the Company or the Bank of the transactions
contemplated hereby and thereby, except (A) the approval of this Agreement and
the transactions contemplated hereby by the shareholders of the Company, and (B)
such approvals of the Applicable Governmental Authorities that are required by
law or regulation to approve the transactions contemplated by this Agreement and
the Bank Merger Agreement.
14
3.6 Insurance. The Company and each Company Subsidiary have in full force
and effect policies of insurance (including, without limitation, a blanket bond,
fire, third-party liability, use and occupancy), with respect to their assets
and business, against such casualties and contingencies and in such amounts,
types and forms as are appropriate for their business, operations, properties
and assets and as are usual and customary in the industry of which they are a
part.
3.7 Books and Records. The minute books of the Company and each Company
Subsidiary contain, in all material respects, true and accurate records of all
meetings and actions taken by their Boards of Directors, any committee thereof
and their shareholders, and the books and records of the Company and each
Company Subsidiary truly and accurately reflect in all material respects their
respective businesses and affairs.
3.8 Title to Assets. The Company and each Company Subsidiary have good and
marketable title to all properties and assets, other than real property, owned
or stated to be owned by them, free and clear of all mortgages, liens,
encumbrances, pledges or charges of any kind or nature except for: (a)
encumbrances reflected in the Company Financial Statements or described in the
notes thereto; (b) liens for current taxes not yet due; (c) liens incurred in
the ordinary course of business; or (d) encumbrances, if any, which are not
substantial in character, amount or extent or which do not materially detract
from the value, or interfere with present use of the property subject thereto or
affected thereby, or otherwise materially impair the conduct of business of the
Company or the Company Subsidiaries.
3.9 Real Properties. Schedule 3.9 to the Company Disclosure Schedule
contains a list of real properties owned or leased by the Company or any Company
Subsidiary and contains, among other things, an accurate summary of all material
commitments which the Company or any Company Subsidiary have to improve real
estate owned by them. True, correct and complete copies of all leases in which
the Company or any Company Subsidiary is either a lessor or a lessee is set
forth in Schedule 3.9. The Company and each Company Subsidiary have good and
marketable title to all the real properties, and valid leasehold interests in
the leaseholds, described in Schedule 3.9 to the Company Disclosure Schedule,
free and clear of all mortgages, covenants, conditions, restrictions, easements,
liens, security interests, charges, claims, assessments and encumbrances, except
for: (a) rights of lessors, co-lessees or sublessees in such matters which are
reflected in the lease; (b) current taxes not yet due and payable; (c) such
imperfections of title and encumbrances, if any, as do not materially detract
from the value of or materially interfere with the present use of such property;
and (d) except as described in Schedule 3.9 to the Company Disclosure Schedule.
3.10 Litigation. Except as set forth on Schedule 3.10 to the Company
Disclosure Schedule, there is no Action pending or, to the knowledge of the
Company, threatened against the Company or any Company Subsidiary, or against
any of their respective directors or officers relating to the performance of
their duties in such capacities. No Action described on Schedule 3.10 to the
Company Disclosure Schedule would, if adversely determined, have a Material
Adverse Effect on the Company or any Company Subsidiary or could reasonably be
expected to involve a payment by the Company or any Company Subsidiary of more
than $25,000 in excess of applicable insurance
15
coverage currently in effect. Except as set forth on Schedule 3.10 to the
Company Disclosure Schedule, there are no material judgments, decrees,
stipulations or orders against the Company or any Company Subsidiary enjoining
them or any of their directors or officers in respect of, or the effect of which
is to prohibit, any business practice or the acquisition of any property or the
conduct of business in any area.
3.11 Taxes (a) The Company and each Company Subsidiary has filed all
federal and all state and local tax returns required to be filed by it (all such
returns being accurate and complete in all material respects) including, but not
limited to, returns relating to income tax, franchise tax, real and personal
property tax, sales and use tax, premium tax, excise tax and other tax returns
of every character required to be filed by it and has paid (where payment is
required to have been made) all taxes, together with any interest and penalties
owing in connection therewith, shown on such returns to be due in respect of the
periods covered by such returns, other than taxes which are being contested in
good faith and for which adequate reserves have been established and reflected
on the books and records of the Company and the Company Subsidiaries. Without
limiting the foregoing, the Company and each Company Subsidiary has filed all
required payroll tax returns, has fulfilled all tax withholding obligations and
has paid over to the appropriate governmental authorities the proper amounts
with respect to the foregoing to the extent such amounts are due. The tax and
audit positions taken by the Company and each Company Subsidiary in connection
with the tax returns described in the preceding sentences were reasonable and
asserted in good faith. Adequate provision has been made in the books and
records of the Company and each Company Subsidiary and, to the extent required
by GAAP, reflected in the Company Financial Statements, for all tax liabilities,
including interest or penalties, whether or not due and payable and whether or
not disputed, with respect to any and all federal, foreign, state, local and
other taxes of any kind or nature for the periods covered by the Company
Financial Statements and for all prior periods. The IRS has examined, or the
statute of limitations has expired with respect to, the federal tax returns of
the Company and each Company Subsidiary (to the extent not filed as part of a
consolidated return of the Company) for all taxable years ending prior to and
including June 30, 1994. Schedule 3.11 to the Company Disclosure Schedule sets
forth (a) the date or dates through which any federal, state, local or other
taxing authority has examined any other tax returns of the Company or the
Company Subsidiaries; (b) a complete list of each year for which any federal,
state or local tax authority has obtained or has requested an extension of the
statute of limitations from the Company or the Company Subsidiaries and lists
each tax case of the Company or the Company Subsidiaries currently pending in
audit, at the administrative appeals level or in litigation; and (c) the date
and issuing authority of each statutory notice of deficiency, notice of proposed
assessment and revenue agent's report issued to the Company within the last 12
months. Schedule 3.11 to the Company Disclosure Schedule also identifies any
examination by taxing authorities of the federal, state or local tax returns of
the Company or the Company Subsidiaries which have taken place since July 1,
1997, and which have not been closed and completed without unresolved matters.
To the knowledge of the Company, neither the IRS nor any state, local or other
taxing authority is now asserting or threatening to assert any deficiency or
claim for additional taxes (or interest thereon or penalties in connection
therewith) except as set forth in Schedule 3.11 to the Company Disclosure
Schedule. All taxes which the Company or any Company Subsidiary has been
required to collect or withhold (other than backup
16
withholdings pursuant to Section 3406 of the Code) have been duly withheld or
collected and, to the extent required, have been paid to the proper taxing
authority. With respect to backup withholdings, the Company and each Company
Subsidiary have exercised the degree of care required under Section 6724 of the
Code to avoid the imposition of any penalties for failure to obtain certified
and correct taxpayer identification numbers from payees or for failure to make
backup withholdings.
(b) Set forth on Schedule 3.11 to the Company Disclosure Schedule is
a complete list of all material tax elections made by the Company or any Company
Subsidiary on any income tax return filed during the past five years which have
the effect of deferring the realization of an item of income to a period after
the period for which such item of income was reported on the financial
statements of the Company or any Company Subsidiary, or accelerating an item of
deduction to a period prior to the period for which the corresponding item of
loss or expense was reported on the financial statements. Neither the Company
nor any Company Subsidiary is a party to, has any liability under or is bound
by, any tax indemnity, tax sharing or tax allocation agreement other than as
described in Schedule 3.11 to the Company Disclosure Schedule. There are no
liens for taxes (other than for current taxes not yet due and payable) upon the
assets of the Company or any Company Subsidiary. The Company has never been a
member of an affiliated group of corporations, within the meaning of Section
1504 of the Code ("Affiliated Group"), other than as a common parent
corporation, and, except for those Non-Bank Subsidiaries, that have been
acquired by the Company, no Company Subsidiary has ever been a member of an
Affiliated Group except where the Company was the common parent of the
Affiliated Group. To the knowledge of the Company, neither the Company nor any
Company Subsidiary has any liability for the taxes of any person, corporation,
association, partnership, limited liability company, or other entity (other than
the Company and the Company Subsidiaries) under Treasury Regulation ss.1.1502-6
(or any similar provision of state, local, or foreign law) as a transferee or
successor, by contract or otherwise.
(c) Neither the Company nor any Company Subsidiary has agreed to, or
to the knowledge of the Company is required to, make any adjustments under
Section 481(a) of the Code by reason of a change in accounting method or
otherwise. Neither the Company nor any Company Subsidiary is a "United States
Real Property Holding Corporation" as defined in Section 897 of the Code.
Neither the Company nor any Company Subsidiary has filed a consent under Section
341(f) of the Code.
3.12 Compliance with Applicable Laws; Company Permits. The Company and
each Company Subsidiary holds all permits, licenses, variances, exemptions,
orders and approvals of all governmental entities which are necessary for the
operation of the businesses of the Company and each Company Subsidiary (the
"Company Permits"). All of the material Company Permits are listed on Schedule
3.12 to the Company Disclosure Schedule. The Bank is an approved seller-servicer
for the Federal National Mortgage Association ("FNMA") and as such holds all
necessary permits, authorizations or approvals of FNMA necessary to carry on a
mortgage banking business with such governmental agencies. The Bank is qualified
to originate loans insured by the Federal Housing Administration and the
Veteran's Administration. The Company and the Company Subsidiaries are
17
in compliance in all material respects with the terms of the Company Permits and
all applicable laws and regulations.
3.13 Performance of Obligations. The Company and each Company Subsidiary
have performed in all material respects all material obligations required to be
performed by them to date and are not in material default under or in material
breach of any term or provision of any covenant, contract, lease, loan servicing
agreement or arrangement, indenture or any other covenant to which they are a
party, are subject or are otherwise bound, and no event has occurred which, with
the giving of notice or the passage of time or both, would constitute such
default or breach. Except for loans and leases made in the ordinary course of
business, to the knowledge of the Company, no party with whom the Company or a
Company Subsidiary has an agreement which is of material importance to the
business of the Company or a Company Subsidiary is in material default
thereunder.
3.14 Employees. There are no controversies pending or threatened between,
or related to, the Company or any Company Subsidiary and any of their employees
which could have consequences that may reasonably be expected to have a Material
Adverse Effect on the Company or impair the ability of the Company to perform
its obligations hereunder. Except as disclosed in the Company Financial
Statements, all material sums due for employee compensation and benefits have
been duly and adequately paid or accrued on its books in accordance with GAAP.
Neither the Company nor any Company Subsidiary is a party to any collective
bargaining agreement with respect to any of its employees or any labor
organization to which its employees or any of them belong.
3.15 Material Contracts. (a) Except as described on Schedule 3.15 to the
Company Disclosure Schedule, neither the Company nor any Company Subsidiary is a
party to any agreement or understanding described below:
(i) any agreement, arrangement or commitment not made in the
ordinary course of business consistent with past practices that is
material to the Company on a consolidated basis, or any contract,
agreement or understanding relating to the sale or disposition by the
Company or any Company Subsidiary or any significant assets or businesses
of the Company or any Company Subsidiary;
(ii) any material agreement, indenture, credit agreement or
other instrument relating to the borrowing of money by the Company or any
Company Subsidiary (other than certificates of deposit and customary
deposit instruments) or the guarantee by the Company or any such Company
Subsidiary of any such obligation;
(iii) any contract containing covenants which limit the
ability of the Company or any Company Subsidiary to compete in any line of
business or with any person or which involve any restriction in the
geographical area in which, or method by which, the Company and the
Company Subsidiaries may carry on their respective businesses (other than
as may be required by law or applicable regulatory authority);
18
(iv) any other contract or agreement that would be required to
be disclosed as an exhibit to the Company's Annual Report on Form 10-K and
which has not been so disclosed;
(v) any agreement or understanding which obligates the Company
or any Company Subsidiary for a period in excess of one year, which has a
value in excess of $25,000, to purchase, sell or provide services,
materials, supplies, merchandise, facilities or equipment and which is not
terminable without penalty on not more than thirty (30) days notice;
(vi) any agreement or understanding of any kind, except for
deposit relationships or loans made prior to July 1, 2000, made in the
ordinary course of business with any current director or executive officer
of the Company or any Company Subsidiary or with any Affiliate thereof or
any member of the Immediate Family of any such director or executive
officer; or
(vii) any material agreement or understanding which would be
terminable by any other party other than the Company, the Bank or any
Non-Bank Subsidiary as a result of the consummation of the transactions
contemplated by this Agreement.
(b) True and correct copies of all documents identified in Schedule
3.15 to the Company Disclosure Schedule are attached hereto as Schedule 3.15 to
the Company Disclosure Schedule.
3.16 Absence of Certain Changes. Except as set forth in Schedule 3.16 to
the Company Disclosure Schedule, since June 30, 2000, the business of the
Company and the Bank (inclusive of the activities and operations of the Non-Bank
Subsidiaries) has been conducted diligently and only in the ordinary course, in
the same manner as theretofore conducted, and there has not been:
(a) any change in the financial condition, results of operations, or
business of the Company and the Bank, taken as a whole, which has had a Material
Adverse Effect on the Company;
(b) any damage, destruction or loss (whether or not covered by
insurance) individually or in the aggregate which has had a Material Adverse
Effect on the Company;
(c) any material contract, agreement, license or understanding which
the Company or any Company Subsidiary has entered into or to which the Company
or any Company Subsidiary is a party which has been terminated or amended other
than in the ordinary course of business;
(d) except for supplies or equipment purchased in the ordinary
course of business, any capital expenditure exceeding individually or in the
aggregate $25,000;
19
(e) any labor trouble, dispute or problem of any character involving
employees of the Company;
(f) any change in accounting methods or practices by the Company or
any Company Subsidiary, except as required by the rules of the American
Institute of Certified Public Accountants ("AICPA"), the Financial Accounting
Standards Board ("FASB"), the Applicable Governmental Authorities or GAAP;
(g) any write-down of any asset in excess of $25,000 by the Company
or any Company Subsidiary;
(h) any increase in the salary schedule, compensation, rate, fee or
commission of the Company or any Company Subsidiary employees, officers or
directors, or the declaration, commitment or obligation of any kind for the
payment by the Company or any Company Subsidiary of a bonus or other additional
salary, compensation, fee or commission to any Person, except increases made in
the ordinary course of business and consistent with past practices;
(i) any sale, assignment or transfer of any assets in excess of
$25,000 other than in the ordinary course of business or pursuant to a contract
or agreement disclosed on Schedule 3.15 to the Company Disclosure Schedule;
(j) any mortgage, pledge or encumbrance of any asset of the Company
or any Company Subsidiary other than liens for taxes not yet due, except in the
ordinary course of business and except as set forth in Sections 3.8 and 3.9
hereof;
(k) any waiver or release of any material right or claim of the
Company or any Company Subsidiary except in the ordinary course of business; and
(l) except for the declaration or payment of regular quarterly cash
dividends not in excess of $0.03 per share of Company Common Stock, any
declaration, setting aside or payment of any dividend or distribution with
respect to the Company Common Stock or the issuance of any shares of Company
Common Stock or any other securities of the Company or any Company Subsidiary,
except for stock options granted pursuant to the Company Incentive Plan and
shares issued upon exercise thereof.
3.17 Loans and Investments. All loans and investments of the Company and
each Company Subsidiary are legal and enforceable in accordance with the terms
thereof, except as may be limited by any bankruptcy, insolvency, moratorium or
other laws affecting creditors' rights generally or by the exercise of judicial
discretion. Except as set forth in Schedule 3.17 to the Company Disclosure
Schedule, no loans or investments held by the Company or a Company Subsidiary
with outstanding principal balances in excess of $50,000 are as of March 31,
2001(a) more than 90 days past due with respect to any scheduled payment of
principal or interest, (b) classified as "loss," "doubtful," "substandard" or
"special mention" by any federal regulators or by the Company's or a Company
20
Subsidiary's internal credit review system, (c) on a non-accrual status in
accordance with the Company's or a Company Subsidiary's loan review procedures
or (d) "renegotiated loans," as that term is defined in Financial Accounting
Standards No. 15.
3.18 Intellectual Properties. Schedule 3.18 to the Company Disclosure
Schedule sets forth a complete and correct list of all material trademarks,
trade names, service marks and copyrights owned by or licensed to the Company or
any Company Subsidiary for use in their respective businesses, and all licenses
and other agreements relating thereto and all agreements relating to third party
Intellectual Property that the Company or any Company Subsidiary is licensed or
authorized to use in their businesses, including without limitation, any
software licenses (collectively, the "Intellectual Property"). Except as set
forth on Schedule 3.18 to the Company Disclosure Schedule, with respect to each
item of Intellectual Property owned by the Company or any Company Subsidiary,
the Company, or such Company Subsidiary possesses all right, title and interest
in and to the item, free and clear of any lien, claim, royalty interest or
encumbrance. With respect to each item of Intellectual Property that the Company
or such Company Subsidiary is licensed or authorized to use, the license,
sublicense, agreement or permission covering such item is legal, valid, binding,
enforceable and in full force and effect and, to the knowledge of the Company,
has not been breached by any party thereto. Neither the Company nor any Company
Subsidiary has ever received (or to the knowledge of the Company, is threatened)
any charge, complaint, claim, demand or notice alleging any interference,
infringement, misappropriation or violation with or of any intellectual property
rights of a third party (including any claims that the Company or any Company
Subsidiary must license or refrain from using any intellectual property rights
of a third party). To the knowledge of the Company, neither of the Company nor
any Company Subsidiary has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any intellectual property rights of third
parties and no third party has interfered with, infringed upon, misappropriated
or otherwise come into conflict with any intellectual property rights of the
Company or any Company Subsidiary.
3.19 Company Benefit Plans. (a) Schedule 3.19(a)(1) to the Company
Disclosure Schedule contains a list of each compensation, consulting,
employment, termination or collective bargaining agreement, and each stock
option, stock purchase, stock appreciation right, recognition and retention,
life, health, accident or other insurance, bonus, deferred or incentive
compensation, severance or separation plan or any agreement providing any
payment or benefit resulting from a change in control, profit sharing,
retirement, employee stock ownership plan, or other employee benefit plan,
practice, policy or arrangement of any kind, oral or written, covering
employees, former employees, directors or former directors of the Company or any
Company Subsidiary or their respective beneficiaries, including, but not limited
to, any employee benefit plans within the meaning of Section 3(3) of ERISA,
which the Company or any Company Subsidiary maintains, to which the Company or
any Company Subsidiary contributes, or under which any employee, former
employee, director or former director of the Company or any Company Subsidiary
is covered or has benefit rights and pursuant to which any liability of the
Company or any Company Subsidiary exists or is reasonably likely to occur (the
"Company Benefit Plans"). Except as set forth on Schedule 3.l9(a)(2) to the
Company Disclosure Schedule, neither the Company nor any Company Subsidiary
maintains or has entered into any Company Benefit Plan or other document, plan
or agreement which contains any change in
21
control provisions which would cause an increase or acceleration of benefits or
benefit entitlements to employees or former employees of the Company or any
Company Subsidiary or their respective beneficiaries, or other provisions which
would cause an increase in the liability to the Company or any Company
Subsidiary or to Purchaser as a result of the transactions contemplated by this
Agreement or any related action thereafter including, but not limited to,
termination of employment or directorship (a "Change in Control Benefit"). The
term "Company Benefit Plans" as used herein refers to all plans contemplated
under the preceding sentences of this Section 3.19, provided that the term
"Plan" or "Plans" is used in this Agreement for convenience only and does not
constitute an acknowledgment that a particular arrangement is an employee
benefit plan within the meaning of Section 3(3) of ERISA. Except as disclosed in
Schedule 3.19(a)(3) to the Company Disclosure Schedule, no Company Benefit Plan
is a multiemployer plan within the meaning of Section 3(37) of ERISA and neither
the Company nor any Company has since June 30, 1996 maintained, sponsored or had
an obligation to contribute to any such multiemployer plan. Except as disclosed
on Schedule 3.19(a)(4) to the Company Disclosure Schedule, neither the Company
nor any Company Subsidiary has been notified by any Applicable Governmental
Authority that any payments or other compensation paid or payable by the Company
or any Company Subsidiary under this Agreement, any Company Benefit Plan or
otherwise, to or for the benefit of any employee or director of the Company or
any Company Subsidiary, is not in compliance with all applicable rules,
regulations and bulletins promulgated by the Applicable Governmental Authorities
and, to the best knowledge of the Company or any Company Subsidiary, all such
payments are in compliance with all applicable rules, regulations and bulletins
promulgated by the Applicable Governmental Authorities.
(b) Except as disclosed on Schedule 3.19(b) to the Company
Disclosure Schedule, each of the Company Benefit Plans that is intended to be a
pension, profit sharing, stock bonus, thrift, savings or employee stock
ownership plan that is qualified under Section 401(a) of the Code (the "Company
Qualified Plans") has been determined by the IRS to qualify under Section 401(a)
of the Code, or an application for determination of such qualification has been
or will be timely made to the IRS prior to the end of the applicable remedial
amendment period under Section 401(b) of the Code (a copy of each such
determination letter or pending application has been provided to Purchaser by
the Company), and, to the knowledge of the Company, there exist no circumstances
that may adversely affect the qualified status of any such Company Qualified
Plan. All such Company Qualified Plans established or maintained by the Company
or the Company Subsidiaries or to which the Company or the Company Subsidiaries
contribute are in compliance in all material respects with all applicable
requirements of ERISA, and are in compliance in all material respects with all
applicable requirements (including qualification and nondiscrimination
requirements in effect as of the Effective Time) of the Code for obtaining the
tax benefits the Code thereupon permits with respect to such Company Qualified
Plans. All accrued contributions and other payments required to be made by the
Company or any Company Subsidiary to any Company Benefit Plan through March 31,
2001, have been made or reserves adequate for such purposes as of March 31,
2001, have been set aside therefor and reflected in the Company Financial
Statements dated as of March 31, 2001. Neither the Company nor any Company
Subsidiary is in material default in performing any of its respective
contractual obligations under any of the Company Benefit Plans or any related
trust agreement or insurance contract, and there are no material outstanding
liabilities of any such Plan other than
22
liabilities for benefits to be paid to participants in such plan and their
beneficiaries in accordance with the terms of such Plan.
(c) There is no pending or, to the Company's knowledge, threatened
litigation or pending claim (other than benefit claims made in the ordinary
course) by or on behalf of or against any of the Company Benefit Plans (or with
respect to the administration of any of such Plans) now or heretofore maintained
by Company or any Company Subsidiary which alleges violations of applicable
state or federal law which are reasonably likely to result in a liability on the
part of the Company or any Company Subsidiary or any such Plan, and to the
Company's knowledge there is no basis for any such claim.
(d) The Company and the Company Subsidiaries and all other persons
having fiduciary or other responsibilities or duties with respect to any Company
Benefit Plan are, and since the inception of each such plan have been, in
substantial compliance with, and each such plan is and has been operated in
substantial accordance with, its provisions and in substantial compliance with
the applicable laws, rules and regulations governing such plan, including,
without limitation, the rules and regulations promulgated by the United States
Department of Labor, the PBGC and the IRS under ERISA, the Code or any other
applicable law. To the knowledge of the Company, no "reportable event" (as
defined in Section 4043(b) of ERISA) has occurred with respect to any Company
Benefit Plan. To the knowledge of the Company, no Company Benefit Plan has
engaged in or been a party to a "prohibited transaction" (as defined in Section
406 of ERISA or Section 4975(c) of the Code) without an exemption thereto under
Section 408 of ERISA or 4975(d) of the Code. All Company Benefit Plans that are
group health plans have been operated in compliance with the group health plan
continuation requirements of Section 4980B of the Code and Section 601 of ERISA.
(e) No Company Benefit Plan is or has ever been subject to Title IV
of ERISA or Section 412 of the Code.
(f) Except as disclosed on Schedule 3.19(f) to the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary has made any
payments, or is a party to any agreement or any Company Benefit Plan that under
any circumstances could obligate it, any Company Subsidiary, or any successor of
either of them, to make any payment for which the deductibility for federal
income tax purposes by the Company, any Company Subsidiary or any successor to
the Company or any Company Subsidiary is or will be limited because of Section
162(m) or Section 280G of the Code.
(g) Set forth on Schedule 3.19(g) of the Company Disclosure Schedule
are copies of (i) each Company Benefit Plan (or a description with respect to
any oral employee benefit plan, practice, policy or arrangement) and all
amendments thereto, (ii) current summary plan descriptions of each Company
Benefit Plan, (iii) each trust agreement, insurance policy or other instrument
relating to funding of any Company Benefit Plan, (iv) the three most recent
Annual Reports (Form 5500 series) and accompanying schedules filed with the IRS
or the United States Department of Labor with respect to each Company Benefit
Plan, (v) the most recent determination letter issued
23
by the IRS with respect to each Company Qualified Plan and/or the pending
application for a determination letter, (vi) the most recent available financial
statements for each Company Benefit Plan that has assets, (vii) the most recent
actuarial report for any Company Pension Plan and any other Company Benefit Plan
that is a defined benefit pension plan (including, but not limited to, any
nonqualified or supplemental plan), and if any such plan has been amended or
been party to a plan merger subsequent to the date of such report, information
substantially describing the financial effects of such amendment or plan merger,
(viii) the most recent audited financial statements for each Company Benefit
Plan for which audited financial statements are required by ERISA, (ix) a
listing of stock options awarded under the Company Incentive Plan, showing with
respect to each holder thereof, the number of shares, the exercise price per
share and a copy of the form of option agreements relating thereto, and (x) each
officer or director for whom a deferred compensation or supplemental retirement
benefit is maintained, showing the amounts due thereunder and the payment
schedule thereof, and the respective amounts accrued in the Company Financial
Statements dated June 30, 2000 and March 31, 2001.
(h) Schedule 3.19(h) to the Company Disclosure Schedule describes
any obligation that the Company or any Company Subsidiary has to provide health
or welfare benefits to retirees or other former employees, directors or their
dependents (other than rights under Section 4980B of the Code or Section 601 of
ERISA), including information as to the number of retirees, other former
employees or directors and dependents entitled to such coverages and their ages.
(i) Schedules 3.19(i)(1) and (2) to the Company Disclosure Schedule
list: (1) each officer of the Company and any Company Subsidiary and each
director of Company and any Company Subsidiary who is eligible to receive a
Change in Control Benefit, showing the estimated amount of each such Change in
Control Benefit and the basis of the calculation thereof, estimated compensation
for 2001 based upon compensation received to the date of this Agreement, the
individual's rate of compensation in effect on the date of this Agreement, the
individual's participation in any Company Benefit Plan (including the Company
Incentive Plans) and such individual's compensation from Company or any Company
Subsidiary for each of the calendar years 1996 through 2000 as reported, and for
calendar year 2001 as estimated to be reported, by the Company or an Company
Subsidiary on Form W-2 or Form 1099; and (2) each other employee of Company or
the Company Subsidiaries who may be eligible for a Change in Control Benefit,
showing an estimated amount of each such Change in Control Benefit and the basis
of the calculation thereof.
(j) The Company and the Company Subsidiaries have filed or caused to
be filed, and will continue to file or cause to be filed, in a timely manner all
filings pertaining to each Company Benefit Plan with the IRS, the PBGC and the
United States Department of Labor, as prescribed by the Code or ERISA, or
regulations issued thereunder. All such filings, as amended, were and will be
complete and accurate in all material respects as of the dates of such filings.
3.20 Regulatory Approvals. To the knowledge of the Company, no fact or
condition exists (other than a fact or condition relating solely to the
Purchaser or First National) which the Company has reason to believe will
prevent it, the Bank, the Purchaser or First National from obtaining
24
approval of the Applicable Governmental Authorities to consummate the Merger,
the Bank Merger and the transactions contemplated herein.
3.21 Company Regulatory Reports. The Company has filed on a timely basis
all proxy statements, reports and other documents required to be filed by it
under the 1934 Act or HOLA after December 31, 1997 (collectively, the "Company
Regulatory Reports"), and the Company has furnished Purchaser copies of its
Annual Report on Form 10-K for the fiscal year ended June 30, 2000, and all
quarterly and periodic reports and proxy statements filed under the 1934 Act by
the Company after such date, each as filed with the SEC. Each Company Regulatory
Report was in compliance in all material respects with the requirements of its
respective report form and did not on the date of filing contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.22 Company Facilities. To the knowledge of the Company, all
"alterations" (as such term is defined in the Americans with Disabilities Act
and the regulations issued thereunder (collectively, the "ADA")) to the
respective business of the Company, and each Company Subsidiary, including,
without limitation, automated teller machines (collectively, the "Company
Facilities") undertaken after January 26, 1992, are in compliance in all
material respects with the ADA and any other local, state or federal law
concerning accessibility for individuals with disabilities. To the knowledge of
the Company, there are no investigations, proceedings or complaints, formal or
informal, pending or overtly threatened against the Company, the Bank or any
Non-Bank Subsidiary in connection with the Company Facilities under ADA, or any
other local, state or federal law concerning accessibility for individuals with
disabilities.
3.23 Environmental Conditions. (a) Except as disclosed in Schedule 3.23 to
the Company Disclosure Schedule, neither the Company nor a Company Subsidiary
has received notice, or have any information which indicates that the Company or
a Company Subsidiary will be receiving notice, of proceedings, claims or losses
related to alleged violations of any Environmental Laws relating to the
Properties or relating to the presence, discharge, release or disposal of
Hazardous Materials on the Properties, or any property adjoining or adjacent to
the Properties;
(b) Neither the Company nor any Company Subsidiary has received
notice as a potentially responsible party for any facility, site or location
pursuant to CERCLA or other similar Environmental Law relating to the
Properties;
(c) The Company, and each Company Subsidiary, are, and to the
knowledge of the Company have been, in compliance with all applicable
limitations, restrictions, conditions, standards, prohibitions, requirements and
obligations established under the requirements of the Environmental Laws
relating to the Properties, including, but not limited to:
(i) timely filing all notices, reports and other submissions
required under all Environmental Laws;
25
(ii) timely applying for, obtaining, and maintaining
compliance with all permits, certificates, approvals, licenses and other
authorizations required under all Environmental Laws and, to the knowledge
of the Company, its predecessors in interest have had all such required
permits, and other authorizations and have been in compliance therewith;
(iii) Neither the Company or the Company Subsidiaries nor any
predecessor in interest has ever caused or suffered any Hazardous Material
to be disposed onto or into soils of the Properties;
(iv) No Hazardous Materials were disposed onto or into soils
of the Properties; and
(v) There is no contamination or Hazardous Material in soils
or groundwater of or beneath the Properties above levels that exceed
remediation standards based on regulations, guidance or risk-based
criteria or Environmental Laws warranting studies or remediation or both
and no conditions exist at or on or under the Properties which constitute
a violation of any Environmental Laws.
(d) To the knowledge of the Company, there are no active underground
storage tanks, or abandoned underground storage tanks, on or under the
Properties;
(e) To the knowledge of the Company, any underground storage tanks,
previously active or abandoned, on or under the Properties have been removed
together with any associated contaminated media in accordance with requirements
applicable as of the date of this Agreement;
(f) There are no liens under Environmental Laws on the Properties
(exclusive of the Mortgaged Premises), and to the Company's knowledge, no
government actions have been taken or are in process which could subject the
Properties to such liens;
(g) To the Company's knowledge, there have been no environmental
investigations, audits, reviews or assessments of the Properties; and
(h) Without limiting the generality of the foregoing, and subject to
the foregoing, to the knowledge of the Company, there are no other facts, events
or conditions relating to the past or present operations or facilities on the
Properties which would give rise to any liability or investigatory, corrective
or remedial obligation under any Environmental Laws or the common law.
3.24 Proxy Statement. None of the information to be supplied by the
Company for inclusion or incorporation by reference in the Company's Proxy
Statement as of the time of its mailing and as of the time of the meeting of the
Company's shareholders in connection therewith, and as amended or supplemented
by the Company, will contain any untrue statement of a material fact or
26
omit to state a material fact required to be stated therein or necessary in
order to make the statements contained therein not misleading; in no event,
however, shall the Company be liable for any untrue statement of a material fact
or omission to state a material fact in the Company's Proxy Statement made in
reliance upon, and in conformity with, written information concerning Purchaser
or Merger Sub furnished by Purchaser specifically for use in the Proxy
Statement. The Proxy Statement will comply as to form in all material respects
with the requirements of the 1934 Act and the rules and regulations thereunder.
3.25 Affiliate Transactions. Prior to the Effective Time, the Company will
cause the sale of: (i) the Bank branch located at Suite 271, The Europa Center
in Chapel Hill, North Carolina (the "North Carolina Branch"); (ii) the Bank
branch located at 0000 Xxxx Xxxx in Shawnee Mission, Kansas (the "Kansas
Branch"); and (iii) the Company's fifty-one percent (51%) ownership interest in
Xxxxxxxxxx Wealth Management Company (collectively, the "Company Sales") to a
Person or Persons affiliated with the Company through common ownership, or to
one or more Persons unaffiliated with the Company (each, a "Company Sales
Buyer"). The sale of the Kansas Branch and North Carolina Branch shall be,
collectively, for at least a $7,000,000 deposit premium. The sale of the
ownership interest in Xxxxxxxxxx Wealth Management Company shall occur for an
amount equal to at least its current carrying value as of the closing of such
sale. Schedule 3.25 to the Company Disclosure Schedule contains true, correct
and complete copies of the executed agreements including, but not limited to,
the stock purchase agreement (in the case of the Company Sale of Xxxxxxxxxx
Wealth Management), the applicable purchase and assumption agreement and loan
sale agreement (in the case of each of the Company Sales of the Kansas Branch
and North Carolina branch) and the Xxxx Agreements (along with all schedules,
exhibits and attachments thereto) (collectively, the "Company Sales Agreements")
with respect to the Company Sales. The Company Sales shall be conducted on an
"as is, where is" basis so that each Company Sales Buyer shall have no recourse
against the Company or any Company Subsidiary or officer, director or employee
thereof for any matters pertaining to the sale or operations of the assets so
sold. In connection with the Company Sales involving the North Carolina Branch
and the Kansas Branch, (a) all of the respective assets (under GAAP) of each
such branch including, but not limited to, any and all leases, contracts,
agreements, other real estate owned, customer accounts, loans, xxxxxx, swaps,
cash on hand and records are being purchased by the applicable Company Sales
Buyer pursuant to the applicable Company Sales Agreement and (b) all of the
respective liabilities (under GAAP) of each such branch including, but not
limited to, any deposits, retail purchase accounts, leases, contractual
obligations and all other obligations related to the assets are being assumed by
the Company Sales Buyer pursuant to the applicable Company Sales Agreement.
Following the Closing, neither the Company, the Bank nor the Purchaser shall be
liable or have any obligations whatsoever in connection with, or relating to,
the operations of the North Carolina Branch, the Kansas Branch or Xxxxxxxxxx
Wealth Management.
3.26 Branch Sales. In connection with the sale of the Bank branches
located at 0000 Xxxx Xxxxxxxx Xxxx and 0000 Xxxx Xxxx 00 Xxxx xx Xxxxxxxxxxxx,
Xxxxxxx to Union Bank & Trust Company of Indiana ("Branch Buyer"), the Company
has not received from Branch Buyer any notice
27
of any claim for indemnification, and no basis for any such claim exists nor has
the Branch Buyer indicated its intention to pursue such claim.
3.27 Insider Interests. No officer, director, or related interest (as
defined in 12 C.F.R. ss.215) of such persons, of the Company or Company
Subsidiary has any loan, credit or other contractual arrangement outstanding
with the Company or Company Subsidiary which does not conform to applicable
rules and regulations of the OTS and the Federal Reserve. No officer, director,
or a related interest of such persons, of the Company or Company Subsidiary has
any material interest in any property, real or personal, tangible or intangible,
used in or pertaining to the business of the Company or any Company Subsidiary.
3.28 Fairness Opinion. The Board of Directors of the Company has received
the written opinion of Xxxxx, Xxxxxxxx & Xxxxx, Inc., to the effect that, as of
the date of this Agreement, the Merger Consideration to be received by
shareholders of the Company in the Merger is fair to such shareholders from a
financial point of view.
3.29 Brokers and Finders. Except for the Company's agreement with Xxxxx,
Xxxxxxxx & Xxxxx, Inc., a copy of which has been furnished to Purchaser prior to
the execution hereof, neither the Company nor a Company Subsidiary is a party to
any agreement with any broker, finder or investment banker relating to the
transactions contemplated hereby, and neither the execution of this Agreement
nor the consummation of the transactions provided for herein will result in any
liability to any broker or finder. Except for the fee payable to Xxxxx, Xxxxxxxx
& Xxxxx, Inc., the Company agrees to indemnify and hold Purchaser, Merger Sub
and their Affiliates harmless with respect to any broker, finder or investment
banker fee which any Person may claim or assert arising from any express or
implied agreement or engagement by the Company or a Company Subsidiary.
3.30 State Takeover Statutes. No state takeover statute or similar statute
or regulation applies or purports to apply to the Merger, the Agreement, and the
transactions contemplated by this Agreement.
3.31 Accuracy of Information Furnished. The representations and warranties
made by the Company in this Agreement and in the Company Disclosure Schedules do
not contain any untrue statement of a material fact or omit to state any
material fact which is necessary under the circumstances in order to make the
statements contained herein or therein not misleading.
3.32 Minimum Shareholder Equity. At the Effective Date, the Total
Shareholders' Equity of the Company shall be not less than Twenty-One Million
Seven Hundred Ninety-Five Thousand Dollars ($21,795,000).
28
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company that each of the
following statements is true and correct on the date hereof:
4.1 Organization, Standing and Power. (a) Each of Purchaser and Merger Sub
is duly organized and existing as a corporation under the laws of the State of
Indiana. Purchaser is registered with the Federal Reserve as a bank holding
company. Each of Purchaser and Merger Sub has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as presently conducted and each of Purchaser and Merger Sub is
licensed to do business in each jurisdiction in which its ownership of property
or the conduct of its business requires such licensing, except (i) where the
failure to be so licensed would not have a material adverse effect on the
ability of Purchaser and First National to consummate the transactions
contemplated by this Agreement and (ii) where such failure will not have any
financial penalties or consequences. Merger Sub was formed for the purpose of
engaging in the Merger and has not engaged in any activities other than those
necessary to effectuate the terms of this Agreement.
(b) First National is duly organized and existing as a national
banking association and is authorized by the OCC to conduct a commercial banking
business. The deposits of First National are insured by BIF in the manner and to
the extent provided by law. First National has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as presently conducted.
(c) The authorized capital stock of First National consists solely
of 1,300,000 shares of common stock, par value $10.00 per share ("First National
Common Stock"), 1,211,400 of which are issued and outstanding. All of the issued
and outstanding shares of First National Common Stock are validly issued, fully
paid and nonassessable and are owned by the Purchaser, free and clear of all
liens and encumbrances.
4.2 Authority; No Violation. (a) Each of Purchaser and Merger Sub has all
requisite corporate power and authority to enter into this Agreement and to
consummate the Merger and the transactions contemplated hereby and First
National has all requisite corporate power and authority to enter into the Bank
Merger Agreement and to consummate the Bank Merger and the transactions
contemplated thereby. The execution and delivery by Purchaser and Merger Sub of
this Agreement, and the execution and delivery by First National of the Bank
Merger Agreement, and the consummation of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary corporate
action on the part of Purchaser, Merger Sub and First National and this
Agreement, and the Bank Merger Agreement have been duly executed and delivered
by Purchaser, Merger Sub, and First National, respectively, and constitutes the
valid and binding obligations of Purchaser, Merger Sub and First National,
enforceable against each of Purchaser, Merger Sub and First National in
accordance with their respective terms except as such enforceability
29
may be limited by (i) bankruptcy, insolvency, moratorium, and other similar laws
affecting creditors' rights generally, and (ii) general principles of equity
regardless of whether asserted in a proceeding in equity or at law.
(b) Neither the execution and delivery by Purchaser or Merger Sub of
this Agreement, the execution and delivery by First National of the Bank Merger
Agreement, the consummation of the transactions contemplated herein and therein,
nor compliance by Purchaser, Merger Sub or First National with any of the
provisions hereof or thereof, will: (i) conflict with or result in a breach of
any provision of its Articles of Incorporation or Charter (as applicable) or
Bylaws; (ii) constitute a breach of or result in a default, or give rise to any
rights of termination, cancellation or acceleration under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, franchise,
license, permit, agreement or other instrument or obligation to which Purchaser,
Merger Sub or First National is a party, or by which Purchaser, Merger Sub or
First National or any of their respective properties or assets is bound, if in
any such circumstances such event could have a material adverse effect on
Purchaser; or (iii) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Purchaser, Merger Sub or First National or any of
their respective properties or assets, the result of which could have a material
adverse effect on Purchaser. No consent of, approval of, notice to or filing
with any governmental authority having jurisdiction over any aspect of the
business or assets of Purchaser, and no consent of, approval of or notice to or
filing with any other Person is required in connection with the execution and
delivery by Purchaser or Merger Sub of this Agreement, by First National of the
Bank Merger Agreement, or the consummation by Purchaser, Merger Sub or First
National of the transactions contemplated hereby, except for the Regulatory
Approvals.
4.3 Regulatory Approvals. To the knowledge of Purchaser, no fact or
condition exists (other than a fact or condition relating solely to the Company
or the Bank) which Purchaser has reason to believe will prevent it, the Company,
the Bank or First National from obtaining any of the Regulatory Approvals.
4.4 Litigation. There is no Action pending or threatened, or which
reasonably should be expected to be commenced, against Purchaser, its
subsidiaries or against any of their directors or officers that would impair the
ability of Purchaser to perform its obligations hereunder.
4.5 Adequate Funds. At the Effective Time, Purchaser will have sufficient
finds and capital to carry out its obligations under this Agreement.
4.6 Proxy Statement. None of the information to be supplied by Purchaser
for inclusion in the Proxy Statement as of the time of its mailing and as of the
time of the meeting of the Company's shareholders in connection therewith, and
as amended or supplemented by Purchaser, will contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements contained therein not misleading.
30
4.7 Accuracy of Information Furnished. The representations and warranties
made by Purchaser in this Agreement do not contain any untrue statement of a
material fact or omit to state a material fact which is necessary in order to
make the statements contained herein not misleading.
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
5.1 Conduct of Business by the Company. From the date of this Agreement to
the Effective Time, the Company will operate its business and cause each Company
Subsidiary to operate its business in the ordinary course and consistent with
past practices, except as contemplated in Section 3.25. The Company will use all
reasonable efforts to preserve intact the present business organizations of the
Company, the Bank and each Non-Bank Subsidiary and maintain in effect all
material licenses, permits and approvals of governmental authorities and
agencies necessary for the conduct of its present business. Except as otherwise
contemplated by this Agreement or as otherwise consented to or approved by
Purchaser in writing, none of the Company, the Bank or any Non-Bank Subsidiary
shall:
(a) issue, sell, purchase or redeem or commit or agree to issue,
sell, purchase or redeem any shares of its capital stock other than shares
issued pursuant to the exercise of stock options outstanding on the date hereof,
or any Voting Debt; or issue or create or grant any options, warrants or rights
to purchase shares of its common stock; or issue, sell or authorize the issuance
or sale of securities of any kind convertible into or exchangeable for shares of
its capital stock or any Voting Debt; or declare, set aside or pay any dividend
or make any distribution in respect of its capital stock except that (i) if
funds are legally available therefor, the Company may declare and pay regular
quarterly cash dividends at a rate per share of Company Common Stock not in
excess of $0.03 per share, and (ii) the Bank and the Non-Bank Subsidiaries may
pay dividends to the Company in amounts sufficient to enable the Company to pay
its ordinary operating expenses and its accrued liabilities, including (but not
limited to) accounting, legal, printing, investment banking, environmental
testing and regulatory application fees, expenses and costs relating to the
transactions contemplated hereby, provided, however, that no dividend shall be
paid by the Bank or any Non-Bank Subsidiary if it is necessary for such entity
to borrow funds to pay the dividend;
(b) amend its Certificate or Articles of Incorporation (in the case
of the Company or any Company Subsidiary), Charter (in the case of the Bank) or
Bylaws;
(c) except as set forth on Schedule 5.1(c) to the Company Disclosure
Schedule, or as may be required pursuant to binding commitments existing as of
the date hereof and set forth on Schedule 5.1(c) to the Company Disclosure
Schedule, make any general or unusual increase in compensation or rate of
compensation payable or to become payable to hourly, salaried or commissioned
employees or officers, except for those which are normal, reasonable and
consistent with past practices, nor enter into any written or oral employment
agreement which by its terms cannot be terminated on thirty (30) days' notice or
less without penalty;
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(d) except as set forth on Schedule 5.1(d) to the Company Disclosure
Schedule, accrue, set aside, or pay to any officer or employee any bonus,
profit-sharing, severance, retirement, insurance, death, fringe benefit, or
other extraordinary compensation (except pursuant to pension, profit-sharing,
bonus and other fringe benefit plans, agreements and arrangements presently in
effect and in accordance with past practices) or adopt or amend any employee
benefit plan;
(e) except as set forth on Schedule 5.1(e) to the Company Disclosure
Schedule, commit to purchase, sell, unwind, purchase or otherwise acquire or
dispose of any derivative or synthetic mortgage product or enter into any
interest rate swap transaction; provided, however, that Purchaser shall be
deemed to have consented to any such purchase, sale or other transaction if it
has not objected thereto within five (5) business days after receiving written
notice thereof;
(f) except for (i) conforming loans secured by one-to-four family
residences in amounts less than $200,000, (ii) commercial loans originated in
accordance with the Bank's underwriting standards as of the date hereof in
amounts less than $100,000 per loan and $300,000 in the aggregate, (iii) home
equity loans with a FICO score of not less than 625 and a loan to value ratio
not in excess of 85%, (iv) home equity loans with a FICO score of not less than
650 and a loan to value ratio between 85% and 100%, (v) secured consumer loans
with a FICO score of not less than 650, and (vi) unsecured consumer loans with a
FICO score of 675, make any loan, loan commitment or renewal or extension
thereof to any Person; provided, however, that Purchaser shall be deemed to have
consented to any such loan or commitment if it has not objected thereto (A) in
the case of any consumer loan, within three (3) business days after receiving
written notice and reasonable detail thereof, and (B) in the case of all other
loans, within five (5) business days after receiving written notice and
reasonable detail thereof. Notwithstanding the foregoing, Purchaser's consent
shall not be deemed necessary with respect to loans originated in the ordinary
course of business and consistent with past practices at the Kansas Branch or
North Carolina Branch; provided, however, Purchaser shall promptly receive
written notice and reasonable detail of such loans and all such loans shall be
transferred to a Company Sales Buyer pursuant to a Company Sales Agreement;
(g) acquire any business entity or assets thereof, except as it
relates to a foreclosure or other exercise of creditor's rights in the usual and
ordinary course of its business;
(h) enter into any contract or agreement to buy, sell, exchange or
otherwise deal in any assets or series of assets in a single transaction in
excess of $25,000 in aggregate value (including, but not limited to, options or
commodities or any tangible real or personal properties of the Company or any
Company Subsidiary), including, but not limited to, the purchase and sale of
mortgage loans and loan participations and the purchase and sale of readily
marketable investment securities;
(i) make any one capital expenditure or any series of related
capital expenditures (other than emergency repairs and replacements), the amount
or aggregate amount of which (as the case may be) is in excess of $25,000;
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(j) file any applications to relocate operations from existing
locations;
(k) create or incur any liabilities in excess of $25,000, other than
the taking of deposits and other liabilities incurred in the ordinary course of
business and consistent with past practices or as contemplated or permitted by
or in connection with this Agreement and the consummation of the Merger;
(l) except that the Company may offer (A) three concurrent
certificate of deposit promotions with rates not to exceed the comparable
maturity of the then current LIBOR rate (as determined by reference to The Wall
Street Journal for the date of such promotion) on an annual percentage yield
basis for maturities one year and under or the then current Federal Home Loan
Bank advance rate for maturities over one year and (B) other certificates of
deposits or other premiums on deposits with rates not to exceed the comparable
maturity U.S. Treasury Note yield on an annual percentage yield basis as
published by Bloomberg information services (Xxxxxxxxx.xxx); provided, however,
the Kansas Branch and the North Carolina Branch shall be permitted to offer
premiums on deposits in the ordinary course of business and consistent with past
practices it being understood that all deposits at the Kansas Branch and the
North Carolina Branch shall be transferred to a Company Sales Buyer pursuant to
a Company Sales Agreement;
(m) except as set forth on Schedule 5.1(m) to the Company Disclosure
Schedule, create or incur or suffer to exist any mortgage, lien, pledge,
security interest, charge, encumbrance or restriction of any kind against or in
respect of any property or right of the Company or any Company Subsidiary
securing any obligation in excess of $100,000, except for pledges or security
interests given in connection with the acceptance of repurchase agreements or
government deposits or Federal Home Loan Bank borrowings;
(n) make or become a party to any contract or commitment in excess
of $25,000, or renew, extend, amend or modify any contract or commitment in
excess of $25,000, except in the usual and ordinary course of business or as
otherwise contemplated or permitted by this Agreement;
(o) discharge or satisfy any mortgage, lien, charge or encumbrance
other than as a result of the payment of liabilities in accordance with the
terms thereof, or except in the ordinary course of business, if the cost to the
Company or any Company Subsidiary to discharge or satisfy any such mortgage,
lien, charge or encumbrance is in excess of $25,000, unless such discharge or
satisfaction is covered by general or specific reserves;
(p) pay any obligation or liability, absolute or contingent, in
excess of $25,000 except liabilities shown on the Company Financial Statements
or except in the usual and ordinary course of business or in connection with the
transactions contemplated hereby;
(q) institute, settle or agree to settle any claim, action or
proceeding, whether or not initiated in a court of law, involving an expenditure
in excess of $25,000;
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(r) invest in any real estate, except for investments in REO as a
result of foreclosure or deed in lieu of foreclosure;
(s) enter into or amend any continuing contract or series of related
contracts in excess of $25,000 for the purchase of materials, supplies,
equipment or services which cannot be terminated without cause with less than
thirty (30) days' notice and without payment of any amount as a penalty, bonus,
premium or other compensation for such termination except as contemplated or
permitted by this Agreement;
(t) enter into or amend any contract, agreement or other
transaction, with any officer, director or principal shareholder of the Company
or any Affiliate of such person on terms that are less favorable to the Company
than could be obtained from an unrelated third party on an arms' length basis;
(u) change any basic policies and practices with respect to
liquidity management and cash flow planning, marketing, deposit origination,
lending, budgeting, profit and tax planning, personnel practices, accounting or
any other material aspect of its business or operations, except for such changes
as may be required in the opinion of management of the Company to respond to
then current market or economic conditions or as may be required by the rules of
the AICPA, the FASB or by applicable governmental authorities;
(v) default under the terms of any agreement or understanding to
which the Company or any Company Subsidiary is a party, and which, individually
or together with other agreements or understandings with respect to which a
default exists, would have a Material Adverse Effect on the Company; or
(w) amend or modify any of the Company Sales Agreements.
5.2 Filings and Approvals. Each party will use all reasonable efforts and
will cooperate with the other parties in the preparation and filing, as soon as
practicable, of all applications or other documents required to obtain the
Regulatory Approvals and approval and/or consents from any other applicable
governmental or regulatory authorities for approval of the Merger and the Bank
Merger contemplated by this Agreement, and provide copies of such applications,
filings and related correspondence to the other parties. Prior to filing each
application, registration statement or other document with the applicable
regulatory authority, each party will provide the other parties with a
reasonable opportunity to review and comment on the non-confidential portions of
each such application, registration statement or other document. Each party will
use all reasonable efforts and will cooperate with the other party in taking any
other actions necessary to obtain such regulatory or other approvals and
consents at the earliest practicable time, including participating in any
required hearings or proceedings. Subject to the terms and conditions herein
provided, each party will use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective as promptly as practicable the
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transactions contemplated by this Agreement. In addition, the parties will use
all reasonable efforts and cooperate with each other to obtain any consents or
waivers from third parties that Purchaser reasonably deems to be necessary under
any contract or agreement to which the Company or any Company Subsidiary is a
party in order to prevent any breach or default from arising thereunder.
5.3 Securities Reports. As soon as reasonably available, the Company shall
deliver to Purchaser complete copies of all Quarterly Reports on Form l0-Q, all
Current Reports on Form 8-K or any proxy materials filed hereafter with the SEC
pursuant to the 1934 Act. The financial statements contained in such reports
will be prepared in accordance with GAAP (except that the unaudited financial
statements may not include all footnote disclosures required by GAAP and except
for changes required by Applicable Governmental Authorities or by GAAP) and will
present fairly the consolidated financial condition of the Company and each
Company Subsidiary as of the dates indicated and for the periods then ended.
5.4 No Acquisition Transaction. The Company will not, and will cause the
Company Subsidiaries and its and the Company Subsidiaries' respective officers,
directors, employees, agents and Affiliates not to, directly or indirectly,
solicit, authorize, initiate or encourage submission of, any proposal, offer,
tender offer or exchange offer from any Person relating to any Acquisition
Transaction, or, except to the extent required under applicable law for the
discharge of the fiduciary duties of the Board of Directors of the Company, as
advised in writing by counsel, participate in any negotiations in connection
with or in furtherance of any Acquisition Transaction or permit any person other
than Purchaser and its representatives to have any access to the facilities of,
or furnish to any person other than Purchaser and its representatives any
non-public information with respect to, the Company or any of the Company
Subsidiaries in connection with or in furtherance of any of the foregoing. The
Company shall immediately cease and cause to be terminated any existing
activities, discussions, or negotiations with any parties (other than the
Purchaser) conducted heretofore with respect to any of the foregoing. The
Company shall immediately provide to Purchaser telephone notice of any such
proposal or offer and shall promptly provide Purchaser with the name of the
party seeking to engage in such discussions or negotiations, or requesting such
information, and, after receipt of a written offer or proposal from such party,
copies of any written offers, proposals, agreements or other documents with
respect to such offer or proposal.
5.5 Notification of Certain Matters. (a) Each party shall give prompt
notice to the other parties of (i) the occurrence or failure to occur of any
event or the discovery of any information, which occurrence, failure or
discovery would be likely to cause any representation or warranty on its part
contained in this Agreement to be untrue, inaccurate or incomplete after the
date hereof or, in case of any representation or warranty given as of a specific
date, would be likely to cause any such representation on its part contained in
this Agreement to be untrue, inaccurate or incomplete in any material respect as
of such specific date and (ii) any material failure of such party to comply with
or satisfy any covenant or agreement to be complied with or satisfied by it
hereunder.
(b) From and after the date hereof to the Effective Time and at and
as of the Effective Time, the Company shall supplement or amend any of its
representations and warranties
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which apply to the period after the date hereof by delivering monthly updates to
the Company Disclosure Schedule ("Disclosure Schedule Updates") to Purchaser
with respect to any matter hereafter arising which, in the good faith judgment
of the Company, would render any such representation or warranty after the date
of this Agreement materially inaccurate or incomplete as a result of such matter
arising. The Disclosure Schedule Updates shall be provided to Purchaser on or
before the 25th day of each calendar month. Within twenty (20) days after
receipt of any Disclosure Schedule Update (or if cure is promptly commenced by
the Company, but is not effected within thirty (30) days after receipt of any
Disclosure Schedule Update (the "Cure Period")), Purchaser may exercise its
right to terminate this Agreement pursuant to Section 7.1(f) hereof, if the
information in such Disclosure Schedule Update together with the information in
any or all of the Disclosure Schedule Updates previously provided by the Company
indicates that the Company, in the good faith judgment of the Purchaser, has
suffered or is reasonably likely to suffer a Material Adverse Effect which has
not or cannot be cured within the Cure Period.
(c) It is understood and agreed that any references in the
Disclosure Schedule and Disclosure Schedule Updates to matters, items,
contracts, assets, liabilities, litigation, benefits, obligations or operations
of the North Carolina Branch, the Kansas Branch or Xxxxxxxxxx Wealth Management
Company are disclosed for purposes of reference only and shall be transferred or
assumed, as the case may be, to the applicable Company Sales Buyer under the
applicable Company Sales Agreement.
5.6 Access to Information; Confidentiality. (a) Between the date hereof
and the Effective Time, the Company will afford, and will cause each Company
Subsidiary to afford, to the officers, accountants, attorneys and authorized
representatives of Purchaser reasonable access during normal business hours to
the banking offices, personnel, advisors, consultants, properties, examination
reports (subject to regulatory approval), contracts, commitments, books and
records of the Company, the Company Subsidiary, whether such documents are
located on the premises of the Company or elsewhere. The Company shall furnish
Purchaser with all such statements (financial and otherwise), records,
examination reports (to the extent permitted or authorized by the OTS) and
documents or copies thereof, and other information concerning the business and
affairs of the Company, the Company Subsidiary as Purchaser shall from time to
time reasonably request. The Company further agrees to cause its accountants,
attorneys and such other persons as the parties shall mutually agree upon to
fully cooperate with Purchaser and its representatives in connection with the
right of access granted herein. The Company also agrees to cooperate with
Purchaser and its representatives in arranging access to lessors and lessees of
real property owned or leased by the Company or any Company Subsidiary.
(b) The Company will promptly furnish to Purchaser (i) a copy of
each material report filed by it with any governmental authority, including
without limitation, any federal, state or local taxing authority and any federal
or state bank regulatory or securities authority (each a "Company Report")
during the period after the date hereof and prior to the Effective Time, and
(ii) all other information concerning its business, properties and personnel as
Purchaser may reasonably request. Each financial statement set forth in a
Company Report so filed and each financial statement
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provided by the Company to Purchaser pursuant to the next following sentence,
together with any notes or schedules thereto, will present fairly in all
material respects the information purported to be set forth therein for the
period specified therein (subject, in the case of unaudited statements, to
normal year-end adjustments and any other adjustments described therein or the
applicable principles with respect thereto), in each case in accordance with
GAAP (except that the unaudited financial statements may not include all
footnote disclosures required by GAAP) during the periods involved or applicable
regulatory principles, as the case may be, in each case except as otherwise
provided herein, stated therein or in the notes thereto. Throughout the period
after the date hereof and prior to the Effective Time, the Company will provide
to Purchaser, on or before the 25th day of each calendar month, (i) the reports
of management of the Company and each Company Subsidiary to the Board of
Directors of the Company and each Company Subsidiary, respectively, for the most
recently available month, including to the extent available, delinquency
schedules, addition to loan loss reserves, and payroll reports, (ii) monthly
financial statements prepared by the Company for the preceding month, and (iii)
a description of any material changes with respect to the representations and
warranties of the Company or in any of the lists provided therewith. Throughout
the period after the date hereof and prior to the Effective Time, the Company
will cause one or more of its designated representatives to confer on a regular
and frequent basis with representatives of Purchaser and to report the general
status of the ongoing operations of the Company and each Company Subsidiary.
During such period, the Company promptly will notify Purchaser of any change in
the ordinary course of business or in the operation of the properties of the
Company or any Company Subsidiary or any breach by the Company of any
representation, warranty, covenant or agreement set forth in this Agreement, and
will keep Purchaser promptly and fully informed of such events. During such
period, the Company will consult with Purchaser before taking any steps to
comply with suggestions made by any bank regulatory authority which could
reasonably be considered to be material to the Company. The Company shall allow
a representative of Purchaser to attend as an observer the Board of Directors',
and committees thereof, meetings of the Company and each Company Subsidiary;
provided, however, such representative of Purchaser shall not attend any such
Board or committee meeting (or applicable portion thereof) if, in the reasonable
judgment of such Board of Directors, the matter or matters to be discussed at
such meeting (or portion thereof) are determined to require confidentiality. The
Company shall give reasonable notice to Purchaser of any such meeting and, if
known, the agenda for or business to be discussed at such meeting. The Company
shall also provide to Purchaser all written agendas and meeting or written
consent materials (other than in connection with the matters subject to Section
5.4 hereof) provided to the directors of the Company and each Company Subsidiary
in connection with Board and committee meetings. All information obtained by
Purchaser at these meetings shall be treated in confidence as provided in this
Section 5.6.
(c) All information and documents to which Purchaser is given access
pursuant hereto shall be subject to the Confidentiality Agreement. All
information furnished by the Company or any Company Subsidiary to Purchaser
pursuant hereto shall be treated as the sole property of the Company until
consummation of the Merger contemplated hereby and, if such Merger shall not
occur, Purchaser shall at the request of the Company, (i) return to the Company
or any Company Subsidiary or (ii) provide written confirmation of the
destruction of, all documents or other materials containing, reflecting or
referring to such information (and all copies thereof), shall use its best
efforts to keep
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confidential all such information, and shall not directly or indirectly use such
information for any competitive or other commercial purpose. The obligation to
keep such information confidential shall continue for the longer of such time as
may be required by law or two (2) years from the date the proposed Merger is
abandoned, but shall not apply to (i) any information which was already in the
possession of Purchaser prior to disclosure thereof by the Company or any
Company Subsidiary, (ii) information which was then generally known to the
public, information which became known to the public through no fault of
Purchaser or its agents, or (iii) information disclosed in accordance with an
order of any Applicable Governmental Authority or a court of competent
jurisdiction.
5.7 Shareholder Approval. The Company will take all steps necessary to
duly call, give notice of, convene and hold a meeting of its shareholders, as
soon as practicable, but in no event later than forty-five (45) days after the
date the SEC clears the Proxy Statement, for the purpose of obtaining
shareholder approval of this Agreement and the Merger; provided, however that
the Proxy Statement shall not be mailed to the holders of Company Common Stock
until Xxxxx, Xxxxxxxx & Xxxxx, Inc. has delivered to the Board of Directors of
the Company for inclusion in the Proxy Statement an opinion, dated the mailing
date, to the effect that the Merger Consideration is fair to the shareholders of
the Company from a financial point of view in standard industry form with
respect to transactions of this nature. The Company will take all reasonable
steps necessary to submit the Proxy Statement to the SEC within thirty (30) days
after the date of this Agreement. The Proxy Statement will satisfy all
requirements of the 1934 Act and the rules and regulations promulgated
thereunder and, except to the extent legally required for the discharge by the
Board of Directors of its fiduciary duties (as advised in writing by counsel),
will include a recommendation by the Board of Directors of the Company that the
shareholders of the Company approve this Agreement and the Merger. Purchaser
shall furnish such information concerning Purchaser as is necessary in order to
cause the Proxy Statement, insofar as it relates to Purchaser, to be prepared in
accordance with all applicable requirements of the 1934 Act and the rules and
regulations promulgated thereunder. Purchaser agrees promptly to advise the
Company if at any time prior to such Company shareholder meeting any information
provided by Purchaser in the Proxy Statement becomes incorrect or incomplete in
any material respect, and to provide to the Company the information needed to
correct such inaccuracy or omission.
5.8 Employee Benefits. The Company and Purchaser shall cooperate in
effecting the following treatment of the Company Benefit Plans, except as
mutually agreed upon by Purchaser and the Company prior to the Effective Time:
(a) At the Effective Time, Purchaser or any subsidiary of Purchaser
shall, to the extent required by Purchaser, be substituted for the Company or
any Company Subsidiary as the sponsoring employer under those Company Benefit
Plans with respect to which Company or any Company Subsidiary is a sponsoring
employer immediately prior to the Effective Time, and shall assume and be vested
with all of the powers, rights, duties, obligations and liabilities previously
vested in Company or Company Subsidiary with respect to each such plan. Except
as otherwise provided herein, each such plan and any Company Benefit Plan
sponsored by the Company or any Company Subsidiary shall be continued in effect
by Purchaser or any applicable subsidiary of Purchaser after
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the Effective Time without a termination or discontinuance thereof as a result
of the Merger, subject to the power reserved to Purchaser or any applicable
subsidiary of Purchaser under each such plan to subsequently amend or terminate
the plan, which amendments or terminations shall be limited by and otherwise
comply with the terms of such plan and applicable law. The Company, each Company
Subsidiary and Purchaser will use all reasonable efforts (i) to effect said
substitutions and assumptions, and such other actions contemplated under this
Agreement, and (ii) to amend such plans as to the extent necessary to provide
for said substitutions and assumptions, and such other actions contemplated
under this Agreement.
(b) After the Effective Time, to the extent the Purchaser makes
available one or more of its employee benefit plans or programs (the "Purchaser
Benefit Plans") to employees of the Company or any Company Subsidiary as of the
Effective Time ("Company Employees") it shall (i) grant credit for service with
the Company or any Company Subsidiary under the Purchaser Benefit Plans with
respect to the participation of such employees in such Purchaser Benefit Plans,
and (ii) waive waiting periods and preexisting condition exclusions under the
Purchaser Benefit Plans; provided, however, that for any Company Employee
terminated by the Purchaser within six (6) months after the Effective Time,
severance benefits will be paid in accordance with the terms set forth on
Schedule 5.8(b) to the Company Disclosure Schedule. Nothing in the preceding
sentence shall obligate Purchaser to provide or cause to be provided any
benefits duplicative to those provided under any Company Benefit Plan continued
pursuant to subparagraph (a) above. Except as otherwise provided in this
Agreement, the power of Purchaser or Company or any subsidiary of Purchaser to
amend or terminate any benefit plan or program, including any Company Benefit
Plan, shall not be altered or affected, but shall remain subject to any
limitations provided in such plans or under applicable law.
(c) Nothing in this Section 5.8 is intended, nor shall it be
construed, to confer any express or implied third party beneficiary rights in
any person including present or former employees of the Company or any Company
Subsidiary and any beneficiaries or dependents thereof.
5.9 Company Incentive Plan. The Company shall terminate the Company
Incentive Plan and cancel and terminate each outstanding option thereunder,
effective prior to the Effective Time. The Company shall use its best efforts to
receive prior to the Effective Time a cancellation agreement from each option
holder in form and substance satisfactory to Purchaser ("Cancellation
Agreements"), acknowledging such cancellation and termination of options. The
Cancellation Agreements shall provide that in consideration for the cancellation
of such options, the Company shall pay to such holders, not more than two (2)
days prior to the Effective Time, an amount (less any applicable withholding and
employment taxes) equal to the amount by which the Merger Consideration exceeds
the exercise price per share of Company Common Stock under the outstanding
options held by such holder, multiplied by the number of shares of Company
Common Stock covered by such options. All options held by a person who does not
deliver a Cancellation Agreement to the Company prior to the Effective Time
shall be converted as provided in Section 2.1(c) hereof, and Purchaser shall pay
to such holders, not more than five (5) days after the receipt of a Cancellation
Agreement, an amount (less any applicable withholding and employment taxes)
equal to the amount
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by which the Merger Consideration exceeds the exercise price per share of
Company Common Stock under the outstanding options held by such holder,
multiplied by the number of shares of Company Common Stock covered by such
options.
5.10 D&O Indemnification. (a) Purchaser and Merger Sub hereby agree that
for five (5) years after the Effective Time, Purchaser and the Surviving
Corporation shall cause to be maintained in effect the Company's current policy
of officers' and directors' liability insurance with respect to actions and
omissions occurring on or prior to the Closing; provided, however, that the
Surviving Corporation may substitute therefor policies of at least the same
coverage containing terms and conditions which are no less advantageous to the
covered persons, consistent with what is generally available in the marketplace,
and provided that such substitution shall not result in any lapses in coverage
with respect to matters occurring on or prior to the Effective Time; provided,
further, that the Surviving Corporation shall not be required to pay an annual
premium in excess of 150% of the last annual premium paid by the Company prior
to the date hereof (which premium is disclosed in the Schedule 5.10 to the
Company Disclosure Schedule) and if the Surviving Corporation is unable to
obtain the insurance required by this Section 5.10, it shall obtain as much
comparable insurance as possible for an annual premium equal to such maximum
amount.
(b) From and after the Effective Time through the fifth anniversary
of the Effective Time, the Purchaser and First National (each an "Indemnifying
Party" and together the "Indemnifying Parties") agree to indemnify and hold
harmless each present director, officer, employee or agent of the Company or a
Company Subsidiary, determined as of the Effective Time (the "Indemnified
Parties"), against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative ("Costs"), arising out of matters
involving the Company and the Bank (other than Costs which occur as a result of
or arise out of the operations or business of the Kansas Branch, the North
Carolina Branch or Xxxxxxxxxx Wealth Management Company) existing or occurring
at or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, only and to the fullest extent to which the Company or
the applicable Company Subsidiary is or was required by law or their respective
Articles of Incorporation and Bylaws to indemnify such Indemnified Parties and
in the manner to which it could indemnify such parties under the Articles of
Incorporation and Bylaws of such entity, in each case as in effect on the date
hereof; provided, however, that all rights to indemnification in respect of any
claim asserted or made within such period shall continue until the final
disposition of such claim.
(c) Any Indemnified Party wishing to claim indemnification under
Section 5.10(b), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the appropriate Indemnifying Party thereof,
but the failure to so notify shall not relieve the Indemnifying Party of any
liability it may have to such Indemnified Party if such failure does not
prejudice the Indemnifying Party. In the event of any such claim, action, suit
proceeding or investigation (whether arising before or after the Effective
Time), (i) the Indemnifying Party shall have the right to assume the defense
thereof and the Indemnifying Party shall not be liable to such Indemnified Party
for any legal expenses of other counsel or any other expenses subsequently
incurred by such Indemnified
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Parties in connection with the defense thereof, except that if the Indemnifying
Party elects not to assume such defense, the Indemnified Parties may retain
counsel which is reasonably satisfactory to the Indemnifying Party, and the
Indemnifying Party shall pay, promptly as statements therefore are received, the
reasonable fees and expenses of such counsel for the Indemnified Parties (which
may not exceed one firm in any jurisdiction); (ii) the Indemnified Parties will
cooperate in the defense of any such matter; and (iii) the Indemnifying Party
shall not be liable for any settlement effected without its prior written
consent.
(d) The provisions of this Section 5.10 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Person and his or her
heirs, beneficiaries and representatives.
5.11 Further Assurances; Form of Transaction. (a) Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its best
efforts to take, or cause to be taken, all action 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. In case at any time after the Effective Time any further action
is necessary or desirable to carry out the purposes of this Agreement, the
proper officers and directors of each party to this Agreement shall take all
such necessary action.
(b) If necessary to expedite the Closing of the Merger, the Bank
Merger and any other transactions contemplated by this Agreement, the parties
agree that each will take or perform any additional reasonably necessary or
advisable steps to restructure the transactions contemplated hereby; provided,
however, that any such restructuring will not result in any change in the Merger
Consideration, or result in any adverse consequences to the Purchaser, the
Company or the shareholders of the Company.
5.12 WARN Act. The Company agrees that, if requested by Purchaser, it
shall, on behalf of Purchaser or any subsidiary of Purchaser, issue such notices
as are required under the Worker Adjustment and Retraining Notification Act of
1988 (the "WARN Act") or any similarly applicable state or local law. Such
request by Purchaser shall be given in time to permit the Company to issue
notices sufficiently in advance of any time of closing of such offices so that
Purchaser or any subsidiary of Purchaser shall not be liable under the WARN Act
for any penalty or payment in lieu of notice to any employee or governmental
entity. Purchaser and the Company shall cooperate in the preparation and giving
of such notices, and no such notices shall be given without the approval of
Purchaser.
5.13 Non-Compete. (a) For a period of three (3) years from the Effective
Time, the Majority Shareholder shall not and shall not permit any of his
Affiliates to (a) engage in a banking or mortgage origination business in
Xxxxxxxx, Xxxxx or Xxxxxx County, Indiana (the "Geographic Area"), or (b)
acquire, enter into an agreement to acquire or enter into a joint venture or
other business combination with, any corporation or other business entity
engaged in the banking or mortgage origination business in the Geographic Area.
It is understood and agreed that this non-
41
compete clause is a material inducement for Purchaser entering into this
Agreement and consummating the Merger; provided, however, for purposes of this
Section 5.13, the Majority Shareholder and his Affiliates may maintain passive
investments not in excess of fifteen percent (15%) of the capital stock of any
Person if the Majority Shareholder or Affiliate does not "control" (as defined
in the definition of Affiliate) such Person.
(b) In the event that any court shall hold that the time, Geographic
Area or any other restriction stated in Section 5.13(a) above constitutes an
unreasonable restriction upon the Majority Shareholder, the Majority Shareholder
hereby expressly agrees that the provisions of Section 5.13(a) shall not be
rendered void, but shall apply as to such time and to such extent as such court
may judicially determine or indicate constitutes a reasonable restriction under
the circumstances involved. The parties hereto desire that such provisions shall
be enforced as if they were drawn to the extent providing the maximum legal
protection to the Purchaser.
(c) It is acknowledged and agreed that all customer lists,
proprietary business information and all materials regarding the business of the
Company and the Bank which are not a matter of public knowledge will not be used
by the Majority Shareholder or any Affiliate for any purpose and shall be deemed
confidential and proprietary information. Any and all copies of such
confidential information in the possession of the Majority Shareholder or any
Affiliate shall be turned over to the Company prior to the Closing.
5.14 Company Sales. The Company shall consummate the Company Sales prior
to the earlier of (i) the Closing, or (ii) December 15, 2001, in accordance with
Section 3.25 above and all legal requirements (including appropriate
applications to and approvals by the necessary federal and state bank regulatory
authorities) and on an "as is, where is" basis, to a Company Sales Buyer. The
Company shall structure the Company Sales so that neither the Company nor any
Company Subsidiary provides any indemnification to any Company Sales Buyer, and
any and all representations, warranties and covenants regarding the sale
transaction or the assets sold shall not survive the closing of such Company
Sale.
5.15 Name and Trademarks. The Company shall grant to (a) the applicable
Company Sales Buyer of the Kansas Branch (i) a perpetual license to use the name
"Xxxxxxxxxx" in its banking business in the State of Kansas, and, except as set
forth below, in any other State except for the State of Indiana, and the Company
Sales Buyer of the Kansas Branch shall be entitled to sub-license its license to
the Company Sales Buyer of the North Carolina Branch, (ii) ownership in the
domain name "xxxxxxxxxx-xx.xxx" effective at the closing of the Company Sales
Agreement, and (iii) ownership in certain other marks and domain names relating
to the "Xxxxxxxxxx" name effective December 31, 2006, and (b) Xxxxxxxxxx Wealth
Management Company a perpetual license to use the name "Xxxxxxxxxx" in its asset
management business; provided, however, in no event shall the "Xxxxxxxxxx" name
be permitted by any Company Sales Buyer or Xxxxxxxxxx Wealth Management Company
to be used by a financial institution in the State of Indiana for a period of
five (5) years. In return for the grant of such license, Xxxxxxxxxx Wealth
Management Company shall agree not to use, and to destroy upon the Effective
Time, any existing customer list of the Bank. The terms of this Section 5.15
shall
42
be memorialized and evidenced by that certain License and Concurrent Use
Agreement and that certain Assignment of Marks and Domain Names in form and
substance attached hereto as Exhibits D and E, respectively (the "Xxxx
Agreements").
5.16 Resignations. The Company shall use its commercially reasonable
efforts to procure and deliver to Purchaser the resignations, together with a
release of claim, of each officer and director of the Company and each Company
Subsidiary as shall have been specified by the Purchaser not more than thirty
(30) days from the date of this Agreement.
5.17 Transaction Liability Insurance. The Company shall obtain, prior to
the Closing, transaction liability insurance for the benefit of Purchaser from
an insurer acceptable to Purchaser, covering certain risks in connection with
the transactions contemplated herein determined appropriate by Purchaser. The
cost of the transaction liability insurance shall be borne by the Company, with
such cost not to exceed $200,000. All costs and expenses relating to the
transaction liability insurance shall be paid by the Company prior to the
Closing.
5.18 Estoppel Letters. The Company shall use its best efforts to obtain
and deliver to Purchaser at the Closing with respect to all real estate (i)
owned by the Company or any Company Subsidiary and used as a banking or
mortgage-related facility, an estoppel letter dated as of the Closing Date in
the form of Exhibit F from all tenants, and (ii) leased by the Company or any
Company Subsidiary, an estoppel letter dated as of the Closing Date in the form
of Exhibit G from all lessors.
0.00 Xxxx Xxxxxx Mortgage Corp. Pine Street Mortgage Corp. shall be
dissolved and all liabilities related thereto fully discharged and satisfied
prior to the Closing.
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligations of Each Party. The respective obligations of
each party to effect the transactions contemplated hereby shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) Regulatory Approvals. The Regulatory Approvals necessary for the
consummation of the transactions contemplated hereby shall have been obtained
(including, but not limited to, the Merger and the Bank Merger), and none of
such approvals shall contain or be subject to any terms or conditions that
individually or in the aggregate would so materially reduce the economic or
business benefit of the transactions contemplated by this Agreement such that
had such terms or conditions been known, the Purchaser and the Company would not
have entered into this Agreement, and all applicable statutory or regulatory
waiting periods shall have lapsed.
43
(b) No Adverse Proceedings. There shall not be threatened,
instituted or pending any action or proceeding before any court or governmental
authority or agency, domestic or foreign, challenging or seeking to make illegal
or to delay or otherwise directly or indirectly to restrain or prohibit, the
consummation of the transactions contemplated hereby or seeking to obtain
material damages in connection with the transactions contemplated hereby. No
injunction or other order entered by a state or federal court of competent
jurisdiction shall have been issued and remain in effect which would prohibit or
make illegal the consummation of the transactions contemplated hereby.
6.2 Additional Conditions to Obligations of Company. The obligation of the
Company to consummate the transactions contemplated hereby in accordance with
the terms of this Agreement is also subject to the following conditions:
(a) Representations; Performance. The material representations and
warranties of Purchaser set forth in Article IV shall have been true and correct
in all material respects as of the date hereof and shall be true and correct in
all material respects as of the Effective Time as though made on and as of the
Effective Time (or on the date when made in the case of any representation and
warranty which specifically relates to an earlier date). Purchaser shall in all
material respects have performed each material obligation and agreement and
complied in all material respects with each covenant to be performed as set
forth in Article V and as otherwise provided hereunder at or prior to the
Effective Time.
(b) Officers' Certificate. Purchaser shall have furnished to the
Company a certificate of an Executive Officer and the Chief Financial Officer of
Purchaser dated as of the Effective Time, in which such officers shall certify
to their best knowledge that they have no reason to believe that the conditions
set forth in Section 6.2(a) above have not been fulfilled.
(c) Secretary's Certificate. Purchaser shall have furnished to the
Company (i) copies of the text of the resolutions by which the corporate action
on the part of Purchaser and Merger Sub necessary to approve this Agreement and
the transactions contemplated hereby were taken, (ii) certificates dated as of
the Effective Time executed on behalf of Purchaser and Merger Sub by their
respective corporate secretaries or one of their respective assistant corporate
secretaries certifying to the Company that such copies are true, correct and
complete copies of such resolutions and that such resolutions were duly adopted
and have not been amended or rescinded, and (iii) an incumbency certificate
dated as of the Effective Time executed on behalf of each of Purchaser and
Merger Sub by their respective corporate secretary or one of its assistant
corporate secretaries certifying the signature and office of each officer of
Purchaser and of Merger Sub executing this Agreement or any other agreement,
certificate or other instrument executed pursuant hereto by Purchaser or Merger
Sub, as the case may be.
(d) Opinion of Counsel. The Company shall have received an opinion
letter dated as of the Effective Time addressed to the Company from Vedder,
Price, Xxxxxxx & Kammholz,
44
counsel to Purchaser, substantially in the form previously attached hereto as
Exhibit H delivered and agreed upon.
(e) Shareholder Approval. This Agreement and the Merger shall have
been approved by the affirmative vote of the holders of the percentage of the
Company's capital stock required for such approval under the provisions of the
Company's Articles of Incorporation and applicable law.
6.3 Additional Conditions to Obligations of Purchaser and Merger Sub. The
obligation of Purchaser and Merger Sub to consummate the transactions
contemplated hereby in accordance with the terms of this Agreement is also
subject to the following conditions:
(a) Representations; Performance. The material representations and
warranties of the Company set forth in Article III shall have been true and
correct in all material respects as of the date hereof and shall be true and
correct in all material respects as of the Effective Time as though made on and
as of Effective Time (or on the date when made in the case of any representation
and warranty which specifically relates to an earlier date), as updated pursuant
to Section 5.5 hereof, and the Company shall in all material respects have
performed each material obligation and agreement and complied in all material
respects with each covenant to be performed as set forth in Article V and as
otherwise provided hereunder at or prior to the Effective Time.
(b) Officers' Certificate. The Company shall have furnished to
Purchaser a certificate of the Chief Executive Officer and the Chief Financial
Officer of the Company, dated as of the Effective Time, in which such officers
shall certify to their best knowledge that they have no reason to believe that
the conditions set forth in Section 6.3(a) above have not been fulfilled.
(c) Secretary's Certificate. The Company shall have furnished to
Purchaser (i) copies of the text of the resolutions by which the corporate
action on the part of the Company necessary to approve this Agreement and the
transactions contemplated hereby were taken, (ii) a certificate dated as of the
Effective Time executed on behalf of the Company by its corporate secretary or
an assistant corporate secretary certifying to Purchaser that such copies are
true, correct and complete copies of such resolutions and that such resolutions
were duly adopted and have not been amended or rescinded and (iii) an incumbency
certificate dated as of the Effective Time executed on behalf of the Company by
its corporate secretary or an assistant corporate secretary certifying the
signature and office of each officer of the Company executing this Agreement or
any other agreement, certificate or other instrument executed pursuant hereto by
the Company.
(d) Opinion of Counsel. Purchaser shall have received an opinion
letter dated as of the Effective Time addressed to Purchaser from Xxxxxx, Xxxx &
Xxxxxx LLP, counsel to the Company, and Indiana counsel to Purchaser (which
Indiana counsel shall be reasonably acceptable to Purchaser), substantially in
the form attached hereto as Exhibit I.
45
(e) No Material Adverse Effect. Since the date of this Agreement,
the Company shall not have suffered or experienced a Material Adverse Effect;
provided, however, that this Section 6.3(f) shall not apply to matters properly
disclosed to Purchaser by the Company in a Disclosure Schedule Update and cured
by the Company within the applicable Cure Period for which Purchaser has a
specific right of termination under Section 7.1(f) hereof.
(f) Minimum Shareholder Equity. At the Effective Date, the Total
Shareholders' Equity of the Company shall be not less than Twenty-One Million
Seven Hundred Ninety-Five Thousand Dollars ($21,795,000).
(g) Affiliate Transaction. Purchaser shall have received evidence,
satisfactory to Purchaser, that the Company Sales have been completed pursuant
to the Company Sales Agreements and at least thirty (30) days have elapsed
subsequent to the closing of the Company Sales Agreements.
(h) Bank Branch Materials. The Company shall have caused to be
delivered to the Richmond, Indiana branch of the Bank all records and documents
relating to the Indiana operations of the Company or the Bank including, but not
limited to, any such records and documents located in the North Carolina Branch
or Kansas Branch.
46
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated prior to the Effective
Time:
(a) by mutual consent of the Boards of Directors of Purchaser and
the Company; or
(b) by either Purchaser or the Company, if any of the conditions to
such party's obligation to consummate the transactions contemplated in this
Agreement shall have become impossible to satisfy if, but only if, such party
has used its best efforts and acted in good faith in attempting to satisfy all
such conditions and if such party is not then in breach or default in any
respect of this Agreement; or
(c) by the Board of Directors of Purchaser if (i) there has been a
breach or default in any material respect by the Company of any representation
or warranty or in the observance of its covenants and agreements contained in
this Agreement of which notice has been given in writing by Purchaser and which
has not been cured within thirty (30) days of receipt of such notice; or (ii)
the Effective Time has not occurred prior to January 31, 2002, without fault on
the part of Purchaser; or (iii) a public announcement with respect to a
proposal, plan or intention to effect an Acquisition Transaction shall have been
made by any Person other than Purchaser or an Affiliate of Purchaser and the
Board of Directors of the Company shall have (A) failed to publicly reject or
oppose such proposed Acquisition Transaction within ten (10) days of the public
announcement of such proposal, plan or intention or (B) shall have modified,
amended or withdrawn its recommended approval of this Agreement and the Merger
to the Company's shareholders; or (iv) the Board of Directors of the Company
shall fail to recommend that the shareholders of the Company approve this
Agreement and the Merger; or
(d) by the Board of Directors of the Company if (i) there has been a
breach or default in any material respect by Purchaser of any representation or
warranty or in the observance of its covenants and agreements contained in this
Agreement of which notice has been given in writing by the Company and which has
not been cured within thirty (30) days of receipt of such notice; or (ii) the
Effective Time has not occurred prior to January 31, 2002, without fault on the
part of the Company; or
(e) by the Board of Directors of either Purchaser or the Company at
any time after the date that (i) the shareholders of the Company fail to approve
this Agreement and the Merger by an affirmative vote of at least a majority of
the outstanding shares of the Company Common Stock at a meeting held for such
purpose; or (ii) if any one of the Applicable Governmental Authorities has
denied approval for the Merger and, if such denial is appealable, neither
Purchaser nor the Company has filed a petition seeking review of such order of
denial or taken other similar action under
47
applicable law, within thirty (30) days after the issuance or entry by the
governmental agency of such order of denial; or
(f) by Purchaser pursuant to Section 5.5(b).
7.2 Effect of Termination. (a) If this Agreement is terminated for any
reason, no party shall have any further liability hereunder to the other
parties, provided, however, that notwithstanding the foregoing, (i) Section
7.2(a) shall not preclude liability from attaching to a party who has caused the
termination hereof by either performing or failing to perform an act in
violation of this Agreement; and (ii) the termination of this Agreement shall
not affect the provisions of this Agreement in Section 5.6(c) (with respect to
confidentiality), Section 7.2(b), Section 7.2(c) or Section 9.2 (with respect to
the payment of expenses).
(b) If this Agreement is terminated by the Purchaser pursuant to
Section 7.1(c)(i), 7.1(c)(iii), 7.1(c)(iv), or 7.1(e)(i), then in such case the
Company shall pay to Purchaser in immediately available funds not later than two
(2) business days after demand therefor an amount equal to Two Million Dollars
($2,000,000) plus all costs and expenses incurred by the Purchaser in connection
with this Agreement or the Merger.
(c) If (i) the Purchaser fails to consummate the transactions
contemplated hereby, when it is otherwise obligated to do so under this
Agreement and all of the conditions to the Purchaser's obligations to consummate
such transactions under Article VI hereof have been satisfied, because of
Purchaser's inability to obtain sufficient funds and/or capital (regulatory or
otherwise) as of the Effective Date to carry out its obligations under this
Agreement, or (ii) this Agreement is terminated by the Company pursuant to
Section 7.1(d)(i), the Purchaser shall pay to the Company in immediately
available funds not later than two (2) business days after demand therefor an
amount equal to Two Million Dollars ($2,000,000) plus all costs and expenses
incurred by the Company in connection with this Agreement or the Merger.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Publicity. Neither the Company nor Purchaser shall make any public
announcement or statement with respect to the Merger, this Agreement or any
related transactions without the approval of the other parties; provided,
however, that either Purchaser or the Company may, upon reasonable notice to the
other party, make any public announcement or statement that it believes is
required by federal securities law. To the extent practicable, each of the
Company and Purchaser will consult with the other with respect to any such
public announcement or statement.
48
8.2 Expenses. The costs and expenses of Purchaser and the Company shall be
allocated as follows:
(a) Purchaser shall bear all fees and expenses of its counsel and
accountants and all other costs and expenses incurred by it in the preparation
of this Agreement, the investigation of the Company, the preparation and
prosecution of its application for regulatory approval, and all costs and
expenses of any appeals therefrom.
(b) The Company or the Bank shall bear all fees and expenses of its
counsel, accountants and investment bankers, all filing fees to be paid to the
SEC in connection with the Proxy Statement, the costs of printing and mailing
the Proxy Statement for use at the meeting of Company shareholders to consider
the Merger, and all other costs and expenses incurred by such persons or firms
in the preparation of this Agreement, the calling, noticing and holding of a
meeting of shareholders to consider and act upon the Merger and the furnishing
of information or other cooperation to Purchaser in connection with the
preparation of regulatory applications.
8.3 Survival. The representations and warranties of the parties hereto
shall expire at the Effective Time and shall not survive the consummation of the
Merger. All covenants and agreements contemplated to be performed prior to the
Effective Time shall expire at the Effective Time and shall not survive the
consummation of the Merger, and all covenants and agreements of Purchaser
contemplated to be performed, partially or in full, after the Effective Time,
shall survive the Effective Time and the consummation of the transactions
contemplated hereby.
8.4 Notices. All notices and other communications hereunder shall be in
writing and shall be sufficiently given if made by hand delivery, by fax, by
telecopies, by overnight delivery service, or by registered or certified mail
(postage prepaid and return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by it by
like notice):
If to Purchaser or to Merger Sub:
Hasten Bancshares
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx
Telecopy:(000) 000-0000
Attention: Xxxx X. Xxxxxx, Chairman
Xxxx Xxxxxx, President
49
with a copy to:
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
If to the Company, addressed to:
Xxxxxxxxxx Financial Group, Inc.
00000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx
President & Chief Executive Officer
with a copy to:
Xxxxxx, Xxxx & Xxxxxx LLP
0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxx, Esq.
If to the Majority Shareholder, addressed to:
Xxxxxxx X. Xxxxxxx
Xxxxx Xxxxxxx Associates, Inc.
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
All such notices and other communications shall be deemed to have been
duly given as follows: when delivered by hand, if personally delivered; when
received, if delivered by registered or certified mail (postage prepaid and
return receipt requested); when receipt acknowledged, if faxed or telecopied;
and the next day delivery after being timely delivered to a recognized overnight
delivery service.
8.5 Amendment. This Agreement may not be amended except by an instrument
in writing approved by the parties to this Agreement and signed on behalf of
each of the parties hereto.
50
8.6 Waiver. At any time prior to the Effective Time, any party hereto may
extend the time for the performance of any of the obligations or other acts of
the other party hereto or waive compliance with any of the agreements of the
other party or with any conditions to its own obligations, in each case only to
the extent such obligations, agreements and conditions are intended for its
benefit.
8.7 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
Sections and Articles of this Agreement unless otherwise stated. Words such as
"herein," "hereinafter," "hereof," "hereto," "hereby" and "hereunder," and words
of like import, unless the context requires otherwise, refer to this Agreement
(including the Company Disclosure Schedule hereto). As used in this Agreement,
the masculine, feminine and neuter genders shall be deemed to include the others
if the context requires.
8.8 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, and the parties shall negotiate
in good faith to modify this Agreement and to preserve each party's anticipated
benefits under this Agreement.
8.9 Miscellaneous. This Agreement and all other documents and instruments
referred to herein: (i) constitute the entire agreement, and supersede all other
prior agreements and undertakings, both written and oral, among the parties,
with respect to the subject matter hereof; (ii) shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Indiana, without giving effect to the principles of conflict of laws
thereof, and by the laws of the United States where applicable; and (iii) shall
not be assigned by operation of law or otherwise.
8.10 Consent to Jurisdiction. Each of the parties hereto agree that any
suit, action or proceeding instituted by or against such party under or in
connection with this Agreement shall be brought in the United States District
Court for the Southern District of the State of Indiana located in Xxxxxx
County, Indiana. By its execution hereof, each party hereto irrevocably waives
any objection to, and any right of immunity on the grounds of, improper venue,
the convenience of the forum, the personal jurisdiction of such court or the
execution of judgments resulting therefrom. Each party hereto hereby irrevocably
accepts and submits to the exclusive jurisdiction of such court in any such
action, suit or proceeding.
8.11 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together
51
shall constitute but one agreement. A facsimile copy of a counterpart signature
page of this Agreement shall be deemed an original instrument.
[SIGNATURE PAGE FOLLOWS]
52
IN WITNESS WHEREOF, the Company, Purchaser, Merger Sub and the Majority
Shareholder have caused this Agreement and Plan of Merger to be executed on the
date first written above.
HASTEN BANCSHARES
/s/ Xxxx Xxxxxx
---------------------------------------------
By: Xxxx Xxxxxx
Its: President
AL ACQUISITION CORP.
/s/ Xxxxxxx Xxxxxx
---------------------------------------------
By: Xxxxxxx Xxxxxx
Its: President
XXXXXXXXXX FINANCIAL GROUP, INC.
/s/ Xxxxx X. Xxxxx
---------------------------------------------
By: Xxxxx X. Xxxxx
Its: President and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
XXXXXXX X. XXXXXXX
53
Exhibit A
SHAREHOLDER VOTING AGREEMENT
SHAREHOLDER VOTING AGREEMENT (this "Voting Agreement"), dated as of May
30, 2001, by and among Hasten Bancshares, an Indiana corporation ("Purchaser"),
AL Acquisition Corp., an Indiana corporation and wholly-owned subsidiary of
Purchaser ("Merger Sub"), and the other parties signatory hereto (each, a
"Shareholder").
RECITALS
WHEREAS, concurrently herewith, Purchaser, Merger Sub, Xxxxxxxxxx
Financial Group, Inc., an Indiana corporation (the "Company"), and Xxxxxxx X.
Xxxxxxx entered into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"), pursuant to which Purchaser agreed to acquire
the common stock, par value $0.125 per share (the "Common Stock"), of the
Company pursuant to a merger (the "Merger") of Merger Sub with and into the
Company.
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Purchaser has required that each Shareholder agree, and each
Shareholder has agreed, among other things, to vote in favor of the Merger with
respect to the number of shares of Common Stock of such Shareholder set forth
hereto, and any shares hereafter acquired (referred to herein as the "Shares"),
on the terms and conditions provided for herein.
WHEREAS, the Board of Directors of the Company has approved this Voting
Agreement, the Merger Agreement and the transactions contemplated hereby and
thereby. Capitalized terms used but not separately defined herein shall have the
meanings given to such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants,
representations, warranties and agreements contained herein, Purchaser, Merger
Sub and Shareholders agree as follows:
1. Each Shareholder hereby agrees that at any meeting of the shareholders
of the Company however called, and in any action by written consent of the
shareholders of the Company, such Shareholder shall vote the Shares (a) in favor
of the Merger and the transactions contemplated by the Merger Agreement; and (b)
against any action or agreement which would result in a material breach of any
covenant, representation or warranty or any other obligation of the Company
under the Merger Agreement.
2. Each party shall execute and deliver such additional instruments and
documents and shall take such further action as may be necessary to effectuate
and comply with their respective obligations under this Voting Agreement.
3. Prior to the Effective Time (as defined in of the Merger Agreement),
Shareholder will not sell, assign, transfer or otherwise dispose of, or permit
to be sold, assigned, transferred or otherwise disposed of, any Shares owned of
record or beneficially by such Shareholder, whether such shares of Common Stock
are owned of record or beneficially by such Shareholder on the date of this
Voting Agreement or are subsequently acquired, except (i) for transfers by will
or operation of law (in which case this Voting Agreement shall bind the
transferee); (ii) for charitable donations in amounts not exceeding the greater
of (A) 5,000 shares or (B) 5% of such Shareholder's aggregate holdings of Common
Stock (in each such case provided such transferee agrees to be bound by the
terms of this Voting Agreement); (iii) for sales, assignments, transfers or
other dispositions necessitated by hardship with the prior written consent of
Purchaser provided that such transferee agrees to be bound by the terms hereof;
or (iv) as Purchaser may otherwise agree in writing.
4. Shareholder represents that (i) Shareholder has the complete and
unrestricted power and the unqualified right to enter into and perform the terms
of this Voting Agreement and the Voting Agreement does not conflict with the
terms of any agreement, understanding or document to which Shareholder is a
party; (ii) this Voting Agreement constitutes a valid and binding agreement with
respect to Shareholder, enforceable against such Shareholder in accordance with
its terms; and (iii) such Shareholder has sole and unrestricted voting power
with respect to such Shares.
5. It is a condition to the effectiveness of this Voting Agreement that
the Merger Agreement shall have been executed and delivered.
6. Subject to Section 5 above, notwithstanding anything herein to the
contrary, this Voting Agreement shall remain in full force and effect until and
shall terminate upon the earlier of (i) the consummation of the Merger; or (ii)
the termination of the Merger Agreement in accordance with Article VII of the
Merger Agreement.
7. The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Voting Agreement were not performed by
the Shareholder in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that Purchaser shall be entitled to seek such
an injunction or injunctions to prevent breaches of this Voting Agreement by the
Shareholder and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having competent jurisdiction, this
being in addition to any other remedy to which it is entitled at law or in
equity.
8. Notices may be provided to Purchaser in the manner specified in Section
8.4 of the Merger Agreement.
9. This Voting Agreement is to be governed by and construed in accordance
with the laws of the State of Indiana. If any provision hereof is deemed
unenforceable, the enforceability of the other provisions shall not be affected.
2
IN WITNESS WHEREOF, this Voting Agreement has been executed by or on
behalf of each of the parties hereto, all as of the date first above written.
================================================================================
HASTEN BANCSHARES AL ACQUISITION CORP.
By: By:
-------------------------------- ---------------------------------
Name: Xxxx Xxxxxx Name: Xxxxxxx Xxxxxx
Title: President Title: President
================================================================================
SHAREHOLDERS: Number of Shares of Common Stock,
subject to this Voting Agreement:
------------------------------------- 1,546,711
Xxxxxxx X. Xxxxxxx
================================================================================
------------------------------------- 206,472
Xxxxx X. Xxxxx
================================================================================
------------------------------------- 37,170
Xxxxxxx Xxxxxxx III
================================================================================
------------------------------------- 199,119
Xxxxxxx X. Xxxxxx
================================================================================
------------------------------------- 13,559
Xxxxxx X. Xxxxxxxxxx
================================================================================
------------------------------------- 21,092
Xxxxx X. Xxxxxx
================================================================================
------------------------------------- 17,924
Xxxxxxx X. Xxx
================================================================================
------------------------------------- 23,092
Xxxx XxXxxxxxx
================================================================================
3
Exhibit B
OPTION AGREEMENT
This OPTION AGREEMENT (the "Agreement") is entered into on May 30, 2001,
by and between Xxxxxxxxxx Financial Group, Inc., an Indiana corporation
("Company"), and Hasten Bancshares, an Indiana corporation ("Purchaser").
WHEREAS, Company, Purchaser, Al Acquisition Corp., an Indiana corporation
and wholly-owned subsidiary of Purchaser ("Merger Sub"), and Xxxxxxx X. Xxxxxxx,
have entered into an Agreement and Plan of Merger of even date herewith (the
"Merger Agreement") providing for, among other things, the merger ("Merger") of
Company with and into Merger Sub with Company as the surviving corporation. In
connection with the Merger, each share of outstanding common stock of Company,
$0.125 par value per share ("Common Stock"), would be converted into the right
to receive the Merger Consideration. Purchaser and Merger Sub have expressly
indicated to Company that it would be unwilling to enter into the Merger
Agreement and consummate the transactions contemplated thereby without the
benefit of this Option Agreement. In order to encourage Purchaser and Merger Sub
to proceed with the Merger and to prepare required federal and state
applications for approvals from the Applicable Governmental Authorities and to
incur substantial expense in connection therewith, Company has determined that
it is in its best interests to grant to Purchaser an option to purchase
additional shares of its authorized but unissued Common Stock. Capitalized terms
not otherwise defined herein shall have the meanings given to them in the Merger
Agreement.
In consideration of the premises and the respective representations,
warranties, covenants and agreements set forth herein, and intending to be
legally bound hereby, Company and Purchaser agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth herein,
Company hereby grants to Purchaser an option (the "Option") to purchase up to
19.9% of the fully paid and nonassessable shares (the "Option Shares") of Common
Stock on a when-issued basis at a purchase price of $8.00 per share (such price,
as adjusted if applicable, the "Purchase Price"). Notwithstanding anything
contained herein or in the Merger Agreement to the contrary, the amount that
Purchaser (including any successor-in-interest, Affiliate or transferee) shall
be entitled to receive, whether as (a) consideration for the Option Shares or
the Option (including, without limitation, any payments in the form of
Repurchase Consideration) from any Person, including Company (whether in a
single transaction or a series of transactions), less any Purchase Price
actually paid by Purchaser, or (b) reimbursement amounts paid to Purchaser
pursuant to Section 7.2(b) of the Merger Agreement shall not exceed Two Million
Dollars ($2,000,000) in the aggregate plus all costs, fees and expenses incurred
by Purchaser in connection with the Merger Agreement and the transactions
contemplated thereby (the "Limit"). In the event that Purchaser receives or is
entitled to receive consideration
and/or payments described in (a) and (b) above in excess of the Limit, such
excess amount shall be deemed to be held in constructive trust by Purchaser for
the benefit of Company and shall be immediately paid by Purchaser to Company at
the time and in the form such amount is received by Purchaser. Each certificate
evidencing Option Shares issued to Purchaser upon exercise of the Option shall
bear a legend in form and substance acceptable to Company to the effect that
such shares are subject to the foregoing restrictions. The foregoing
restrictions with respect to the Limit shall expire and be of no further force
and effect on the day after the second anniversary of the occurrence of a
Triggering Event (as defined below).
2. Exercise of Option.
(a) The Option may be exercised in whole or in part prior to the
termination of this Agreement and after the occurrence of a Triggering Event, as
defined in Section 4 hereof. In the event that Purchaser desires to exercise the
Option at any time, Purchaser shall notify Company as to the number of shares of
Common Stock it wishes to purchase and a place and date, not less than 2
business days nor more than 10 business days after the date such notice is given
(the "Closing Date"), for the closing of such purchase; provided, however, that
notwithstanding the establishment of such Closing Date, the consummation of the
exercise of the Option may take place only after all regulatory or supervisory
agency approvals required by any applicable law, rule or regulation shall have
been obtained and each such approval shall have become final. Company shall
fully cooperate with Purchaser in the filing of the required notice or
application for approval and the obtaining of any such approval.
(b) On the Closing Date, Purchaser shall (i) pay to Company, in
immediately available funds by wire transfer to a bank account designated by
Company, an amount equal to the Purchase Price multiplied by the number of
Option Shares to be purchased on the Closing Date, and (ii) present and
surrender this Agreement to Company at the address of Company specified in
Section 11(f) hereof.
(c) On the Closing Date, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 2(b)
above, (i) Company shall deliver to Purchaser a certificate or certificates
representing the Option Shares to be purchased at such Closing, which Option
Shares shall be free and clear of all liens, claims, charges and encumbrances of
any kind whatsoever, and, if the Option is exercised in part only, an executed
new agreement with the same terms as this Agreement evidencing the right to
purchase the balance of the Option Shares hereunder, and (ii) Purchaser shall
deliver to Company a letter agreeing that Purchaser shall not offer to sell or
otherwise dispose of the Option Shares in violation of the provisions of this
Agreement.
(d) Certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS
2
AMENDED, STATE SECURITIES LAWS AND PURSUANT TO THE TERMS OF AN OPTION
AGREEMENT DATED MAY 30, 2001. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO
THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY XXXXXXXXXX FINANCIAL
GROUP, INC. OF A WRITTEN REQUEST THEREFOR.
The above legend shall be removed by delivery of substitute certificate(s)
without the legend if Purchaser shall deliver to Company a copy of a letter from
the staff of the Securities and Exchange Commission, or an opinion of counsel in
form and substance reasonably satisfactory to Company and its counsel, to the
effect that the legend is not required for purposes of the Securities Act of
1933, as amended (the "1933 Act").
(e) Upon the giving of written notice of exercise by Purchaser to Company
and the tender of the applicable purchase price in immediately available funds,
Purchaser shall be deemed to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding that the stock transfer books
of Company shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to Purchaser. Company shall
pay all expenses, and any and all federal, state and local taxes and other
charges that may be payable in connection with the preparation, issue and
delivery of stock certificates under this Section 2 in the name of Purchaser or
its assignee, transferee or designee.
3. Termination of Option. The Option shall terminate and be of no further
force and effect upon the earliest to occur of: (i) the Effective Time (as
defined in the Merger Agreement), (ii) fifteen (15) months after the occurrence
of a Triggering Event (as defined below), (iii) termination of the Merger
Agreement by reason of wrongful termination thereof by Purchaser, by reason of
an uncured breach or default thereof on the part of Purchaser or by mutual
agreement of the parties, or (iv) twelve (12) months after the termination of
the Merger Agreement for any other reason.
4. Conditions to Exercise. Purchaser may exercise the Option, in whole or
in part, at any time prior to its termination following the occurrence of a
Triggering Event. The term "Triggering Event" shall mean the occurrence of any
of the following events:
(a) if the Board of Directors of Company shall withdraw its support
of the Merger by resolution or by authorization of specific action
inconsistent with consummation of the Merger, or if it fails to recommend
approval of the Merger;
(b) a Person (as defined by Section 13(d)(3)(e) of the 1934 Act),
other than Purchaser or an Affiliate of Purchaser:
(i) acquires beneficial ownership (as such term is defined in
Rule 13d-3 as promulgated under the Securities and Exchange Act of
1934, as amended (the "Exchange Act")) of ten percent (10%) or more
of the then outstanding Common Stock of Company or securities
representing, or the right or option to acquire
3
beneficial ownership of, or to vote securities representing, ten
percent (10%) or more of the then outstanding Common Stock of
Company, and after the occurrence of such acquisition the Board of
Directors of Company (A) recommends such acquisition to its
shareholders for acceptance, or (B) fails to recommend, or withdraws
its approval of, the Merger Agreement to the shareholders of
Company;
(ii) enters into any binding or non-binding letter of intent
or agreement with Company pursuant to which such Person or any
affiliate of such Person would (A) merge or consolidate, or enter
into any similar transaction, with Company or (B) acquire all or
substantially all of the assets of Company; or
(iii) makes a bona fide proposal (a "Proposal") for any
merger, consolidation or acquisition of all or substantially all the
assets of Company or other business combination involving Company,
and thereafter, but before such Proposal has been Publicly
Withdrawn, (as defined below), Company willfully commits any
material breach of any covenant of the Merger Agreement and such
breach (A) would entitle Purchaser to terminate the Merger Agreement
without regard to the cure periods provided for therein, (B) is not
cured and (C) would materially interfere with Company's ability to
consummate the Merger or materially reduce the value of the
transaction to Purchaser; or
(c) if the shareholders of the Company shall fail to approve the
Merger.
The phrase "Publicly Withdrawn" for purposes of clause (iii) above shall mean an
unconditional bona fide withdrawal of the Proposal or a formal rejection of such
Proposal by Company in writing. Company shall notify Purchaser promptly in
writing of the occurrence of any of the events set forth in paragraphs (b)(i),
(ii), or (iii) above, it being understood that the giving of such notice by
Company shall not be a condition to the right of Purchaser to transfer or
exercise the Option.
5. Representations and Warranties of Company. Company hereby represents
and warrants to Purchaser as follows:
(a) Company has all requisite corporate power and authority to enter into
this Agreement and, subject to any approvals referred to herein (including,
without limitation, the approval of Board of Governors of the Federal Reserve
("FRB"), if necessary), to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Company. This Agreement has been duly executed
and delivered by Company.
(b) Company has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and, at all times from the date
hereof until the obligation to deliver the Option Shares upon the exercise of
the Option terminates, will have reserved for issuance, upon exercise of the
Option, shares of Common Stock necessary for Purchaser to exercise the Option,
and
4
Company will take all necessary corporate action to authorize and reserve for
issuance all additional shares of Common Stock or other securities which may be
issued upon exercise of the Option. The Option Shares, including all additional
shares of Common Stock or other securities which may be issuable pursuant to
Section 7 hereof, upon issuance pursuant hereto and payment therefor, shall be
duly and validly issued, fully paid and nonassessable, and shall be delivered
free and clear of all liens, claims, charges and encumbrances of any kind or
nature whatsoever, including any preemptive rights of any stockholder of
Company.
(c) The execution, delivery and performance of this Agreement does not or
will not, and the consummation by Company of any of the transactions
contemplated hereby will not, constitute or result in (i) a breach or violation
of, or a default under, its articles of incorporation or bylaws, or the
comparable governing instruments of any of its subsidiaries, or (ii) a breach or
violation of, or a default under, any agreement, lease, contract, note,
mortgage, indenture, arrangement or other obligation of it or any of its
subsidiaries (with or without the giving of notice, the lapse of time or both)
or under any law, rule, ordinance or regulation or judgment, decree, order,
award or governmental or nongovernmental permit or license to which it or any of
its subsidiaries is subject, that would, in any case referred to in this clause
(ii), give any other person the ability to prevent or enjoin Company's
performance under this Agreement.
(d) Company agrees: (i) that it will not, by amendment to its article of
incorporation or through reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants, stipulations or conditions to
be observed or performed hereunder by Company except pursuant to the Merger;
(ii) promptly to take all action as may from time to time be required (including
(x) complying with all premerger notification, reporting and waiting period
requirements specified in 15 U.S.C. section 18a and regulations promulgated
thereunder and (y) in the event, under the Change in Bank Control Act of 1978,
as amended, or any state banking law, prior approval of or notice to the FRB, or
to any federal or state regulatory authority is necessary before the Option may
be exercised, cooperating fully with Purchaser in preparing such applications or
notices and providing such information to the FRB or such regulatory authority
as they may require) in order to permit Purchaser to exercise the Option and
Company duly and effectively to issue shares of Common Stock pursuant hereto;
and (iii) promptly to take all action provided herein to protect the rights of
Purchaser against dilution on or prior to the Closing Date.
6. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Company that:
(a) Purchaser has all requisite corporate power and authority to enter
into this Agreement and, subject to any approvals or consents referred to
herein, to consummate the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Purchaser.
(b) The Option is not being, and any Option Shares or other securities
acquired by Purchaser upon exercise of the Option will not be, acquired with a
view to the public distribution
5
thereof and will not be transferred or otherwise disposed of except in a
transaction registered or exempt from registration under the 1933 Act, as
amended.
7. Adiustment upon Changes in Capitalization; Repurchase of Option.
(a) In the event of any change in Common Stock by reason of a stock
dividend, stock split, split-up, recapitalization, combination, exchange of
shares or similar transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction so that Purchaser shall receive, upon exercise of the Option,
the number and class of shares or other securities or property that Purchaser
would have received in respect of Common Stock if the Option had been exercised
immediately prior to such event, or the record date therefor, as applicable. If,
prior to the exercise of the Option, any additional shares of Common Stock are
issued after the date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 7(a)), the number of shares of
Common Stock subject to the Option shall be adjusted so that, after such
issuance, it, together with any shares of Common Stock previously issued
pursuant hereto, equals 19.9% of the number of shares of Common Stock then
issued and outstanding, without giving effect to any shares subject to or issued
pursuant to the Option.
(b) If a Triggering Event described in Section 4(b)(i) or 4(b)(ii) above
shall occur and the transaction that is the subject of such Triggering Event is
consummated, or if any Person other than Purchaser or an Affiliate of Purchaser
acquires beneficial ownership of 50% or more of the then outstanding shares of
Common Stock, Company, if requested by Purchaser, shall pay to Purchaser, in
lieu of delivery of the Option Shares an amount in cash equal to the Spread (as
defined below) multiplied by the total number of Option Shares for which the
Option is exercisable (such aggregate amount is referred to as the "Repurchase
Consideration").
(c) As used herein, "Spread" shall mean the excess, if any, over the
Purchase Price (as defined in Section 1) of the higher of (i) highest closing
price per share of Common Stock as reported on the NASDAQ within six months
immediately preceding the date that Purchaser requests cash in lieu of shares
pursuant to this Section (the "Request Date"), (ii) the price per share of
Common Stock at which a tender offer or an exchange offer therefor has been
made, (iii) the price per share of Common Stock to be paid to any third party
pursuant to an agreement with Company, or (iv) in the event of a sale of all or
a substantial portion of Company's assets the sum of the price paid in such sale
for such assets and the current market value of the remaining assets of Company
determined by a nationally recognized investment banking firm mutually selected
by Purchaser, on the one hand, and Company, on the other, divided by the number
of shares of Common Stock of Company outstanding at the time of such sale. In
determining the Repurchase Consideration, the value of consideration other than
cash shall be determined by a nationally recognized investment banking firm
mutually selected by Purchaser, on the one hand, and Company on the other.
(d) Upon exercise of its right to receive cash pursuant to this Section,
any and all obligations of Purchaser to make payment pursuant to Section 2(b)
and all obligations of Company
6
to deliver a certificate or certificates representing shares of Common Stock
pursuant to Section 2(c) shall be terminated. If Purchaser exercises its rights
under this Section 7, Company shall, within 2 business days after the Request
Date, pay the Repurchase Consideration to Purchaser in immediately available
funds, and Purchaser shall surrender to Company the Option. Notwithstanding the
foregoing, to the extent that prior notification to or approval of the FRB or
other regulatory authority is required in connection with the payment of all or
any portion of the Repurchase Consideration, Purchaser shall have the ongoing
option to revoke its request for repurchase pursuant to Section 7(b) or to
require that Company deliver from time to time that portion of the Repurchase
Consideration that it is not then so prohibited from paying and promptly file
the required notice or application for approval and expeditiously process the
same (and Company shall cooperate with Purchaser in the filing of any such
notice or application and the obtaining of any such approval). If the FRB or any
other regulatory authority disapproves of any part of Company's proposed
repurchase pursuant to Section 7(b), Company shall promptly give notice of such
fact to Purchaser and Purchaser shall have the right to exercise the Option as
to the number of Option Shares for which the Option was exercisable at the
Request Date.
8. Registration Rights.
(a) Upon the occurrence of a Triggering Event and at the written demand of
Purchaser, the Company shall, within four (4) months following such demand,
promptly prepare, file and keep current a registration statement under the 1933
Act covering any shares issued or issuable pursuant to this Option and shall use
its best efforts to cause such registration statement to become effective as
soon as practicable after filing and to remain effective for up to 180 days from
the day such registration statement first becomes effective or such shorter time
as may be reasonably necessary in order to permit the sale or other disposition
of any shares of Common Stock issued upon total or partial exercise of this
Option in accordance with any plan of disposition requested by Purchaser.
Purchaser shall have the right to demand two such registrations. Purchaser will
provide such information as may be necessary for Company's preparation of such a
registration statement, and any such information will not contain any statement
which, at the time and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact nor will such information
omit to state any material facts with respect to Purchaser or its intended plan
of disposition of Option Shares. The foregoing notwithstanding, if, at the time
of any request by Purchaser for registration of Option Shares as provided above,
Company is in registration with respect to an underwritten public offering of
shares of Common Stock, and if in the good faith reasonable judgment of the
managing underwriter or managing underwriters, or, if none, the sole underwriter
or underwriters, of such offering the inclusion of Purchaser's Option or Option
Shares would interfere with the successful marketing of the shares of Common
Stock offered by Company, the number of Option Shares otherwise to be covered in
the registration statement contemplated hereby may be reduced ("Underwriter
Reduction"); provided, however, that after any such required reduction, the
number of Option Shares to be included in such offering for the account of
Purchaser shall constitute at least 25% of the total number of shares to be sold
by Purchaser and Company in the aggregate; provided, further, however, that if
such reduction occurs, then Company shall file a registration statement for the
balance as promptly as practical and no reduction shall thereafter occur.
7
If requested by Purchaser in connection with such registration, Company shall
become a party to any underwriting agreement relating to the sale of such
shares, but only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements customarily
included in such underwriting agreements for Company.
(b) If after the occurrence of a Triggering Event, Company effects a
registration under the Securities Act of Company Common Stock for its own
account or for any other stockholders of Company (other than on Form S-4 or Form
S-8, or any successor forms or any form with respect to a dividend reinvestment
or similar plan), it shall allow Purchaser the right to participate in such
registration, and such participation shall not affect the obligation of Company
to effect a registration statement for Purchaser under Section 8(a); provided,
however, that if the circumstances give rise to an Underwriter Reduction as
provided in 8(a) above then the procedure set forth in Section 8(a) governing
the number of Option Shares to be included in such registration shall apply.
(c) In connection with any registration pursuant to this Section 8,
Company and Purchaser shall provide each other and any underwriter of the
offering with customary representations, warranties, covenants, indemnification
and contribution in connection with such registration. Any registration
statement prepared and filed under this Section 8 and any sale covered thereby
shall be at Company's expense except for underwriting discounts or commissions,
brokers' fees, taxes and the fees and disbursements of Purchaser's counsel
related thereto.
9. (a) In the event that prior to the termination of the Option, Company
shall enter into an agreement (i) to consolidate with or merge into any person,
other than Purchaser or one of its subsidiaries, and shall not be the continuing
or surviving corporation of such consolidation or merger, (ii) to permit any
person, other than Purchaser or one of its subsidiaries, to merge into Company
and Company shall be the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other person or cash or
any other property or the then outstanding shares of Common Stock shall after
such merger represent less than 50% of the outstanding shares and share
equivalents of the merged company, or (iii) to sell or otherwise transfer all or
substantially all of its assets to any person, other than Purchaser or one of
its subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provision so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option (the "Substitute
Option"), at the election of Purchaser, of either (x) the Acquiring Corporation
(as hereinafter defined) or (y) any person that controls the Acquiring
Corporation.
(b) The following terms have the meanings indicated:
(1) "Acquiring Corporation" shall mean (i) the continuing or
surviving corporation of a consolidation or merger with Company (if other
than Company), (ii) Company in a merger in which Company is the continuing
or surviving person, and (iii) the transferee of all or substantially all
of Company's assets.
8
(2) "Substitute Common Stock" shall mean the shares of capital stock
(or similar equity interest) with the greatest voting power in respect of
the election of directors (or other persons similarly responsible for
direction of the business and affairs) of the issuer of the Substitute
Option.
(3) "Assigned Value" shall mean the highest of (i) the price per
share of common stock at which a tender offer or exchange offer therefor
has been made, (ii) the price per share of common stock to be paid by any
third party pursuant to an agreement with Company, or (iii) in the event
of a sale of all or substantially all of Company's assets, the sum of the
price paid in such sale for such assets and the current market value of
the remaining assets of Company as determined by a nationally recognized
investment banking firm selected by Purchaser divided by the number of
shares of Common Stock of Company outstanding at the time of such sale. In
determining the market/offer price, the value of consideration other than
cash shall be determined by a nationally recognized investment banking
firm selected by Purchaser.
(4) "Average Price" shall mean the average closing price of a share
of the Substitute Common Stock for the six months immediately preceding
the consolidation, merger or sale in question, but in no event higher than
the closing price of the shares of Substitute Common Stock on the day
preceding such consolidation, merger or sale; provided, however, that if
Company is the issuer of the Substitute Option, the Average Price shall be
computed with respect to a share of common stock issued by the person
merging into Company or by any company which controls or is controlled by
such person, as Purchaser may elect.
(c) The Substitute Option shall have the same terms and conditions as the
Option, provided, that if any term or condition of the Substitute Option cannot,
for legal reasons, be the same as the Option, such term or condition shall be as
similar as possible and in no event less advantageous to Purchaser. The issuer
of the Substitute Option shall also enter into an agreement with Purchaser in
substantially the same form as this Agreement, which shall be applicable to the
Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares
of Substitute Common Stock as is equal to (i) the product of (A) the Assigned
Value and (B) the number of shares of Common Stock for which the Option is then
exercisable, divided by (ii) the Average Price. The exercise price of the
Substitute Option per share of Substitute Common Stock shall then be equal to
the Option Price multiplied by a fraction, the numerator of which shall be the
number of shares of Common Stock for which the Option is then exercisable and
the denominator of which shall be the number of shares of Substitute Common
Stock for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the shares of Substitute
Common Stock outstanding prior to exercise of the Substitute Option.
9
(f) Company shall not enter into any transaction described in subsection
(a) of this Section 9 unless the Acquiring Corporation and any person that
controls the Acquiring Corporation assume in writing all the obligations of
Company hereunder.
10. Listing. If Company Common Stock to be acquired upon exercise of the
Option is then authorized for listing on the NASDAQ or on any other national
securities exchange or automated quotation system, Company will promptly file an
application to authorize for listing the shares of Company Common Stock to be
acquired upon exercise of the Option on the NASDAQ or such other securities
exchange or quotation system and will use its best efforts to obtain approval of
such listing as soon as practicable.
11. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 8, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment bankers,
accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits of such provision. This
Agreement may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability. This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof and is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or a federal or state regulatory agency to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court or
regulatory agency determines that the Option does not permit Purchaser to
acquire, or does not require Company to repurchase, the full number of shares of
Company Common Stock as provided in Sections 2 and 7, it is the express
intention of Company to allow Purchaser to acquire or to require Company to
repurchase such lesser number of shares as may be permissible without any
amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Indiana without regard to any
applicable conflicts of law rules.
(e) Descriptive Headings. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or
10
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):
If to Purchaser, addressed to:
Hasten Bancshares
0000 Xxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Chairman
Xxxx Xxxxxx, President
with a copy to:
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
If to Company, addressed to:
Xxxxxxxxxx Financial Group, Inc.
00000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx, President & Chief Executive Officer
with a copy to:
Xxxxxx, Xxxx & Xxxxxx LLP
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxx, Esq.
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
11
(g) Counterparts. This Agreement and any amendments hereto may be executed
in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.
(h) Assignment. TRANSFER OF THIS AGREEMENT IS SUBJECT TO CERTAIN
PROVISIONS CONTAINED HEREIN AND TO RESALE RESTRICTIONS UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Option may be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party, except that Purchaser may assign this Agreement to a
wholly owned subsidiary of Purchaser. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and permitted assigns.
(i) Further Assurances. In the event of any exercise of the Option by
Purchaser, Company and Purchaser shall execute and deliver all other documents
and instruments and take all other action that may be reasonably necessary in
order to consummate the transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that this Agreement may
be enforced by either party through specific performance, injunctive relief and
other equitable relief. Both parties further agree to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
12
IN WITNESS WHEREOF, Company and Purchaser have caused this Option
Agreement to be signed by their respective officers, all as of the day and year
first written above.
HASTEN BANCSHARES
-----------------------------------------------
By: Xxxx Xxxxxx
Its: President
XXXXXXXXXX FINANCIAL GROUP, INC.
-----------------------------------------------
By: Xxxxx X. Xxxxx
Its: President and Chief Executive Officer
13
Exhibit C
AGREEMENT OF MERGER
by and between
XXXXXXXXXX BANK, FSB
and
FIRST NATIONAL BANK AND TRUST
under the Articles of Association of
FIRST NATIONAL BANK AND TRUST
under the title of
FIRST NATIONAL BANK AND TRUST
THIS AGREEMENT OF MERGER ("Agreement") dated as of May 30, 2001 is by and
between FIRST NATIONAL BANK AND TRUST, a national banking association ("FIRST
NATIONAL"), and XXXXXXXXXX BANK, FSB, a federally chartered stock savings bank
("BANK"). FIRST NATIONAL and BANK are hereinafter collectively referred to as
the "Banks."
W I T N E S S E T H:
WHEREAS, FIRST NATIONAL is a national banking association having its main
banking premises located at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx, with
capital of $12,114,000 divided into 1,211,400 shares of common stock, $10.00 par
value per share; surplus of $40,233,853; and undivided profits, including
capital reserves, of $54,425,158, all as of March 31, 2001;
WHEREAS, BANK is a federally chartered stock savings bank having its main
banking premises located at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxx, with
capital of $486,293 divided into 486,293 shares of common stock, $1.00 par value
per share, surplus of $31,485,436 and undivided profits, including capital
reserves, of ($3,861,635) all as of March 31, 2001;
WHEREAS, FIRST NATIONAL is a direct, wholly-owned subsidiary of Hasten
Bancshares ("Purchaser"), an Indiana corporation registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended ("BHCA");
WHEREAS, BANK is a direct, wholly-owned subsidiary of Xxxxxxxxxx Financial
Group, Inc. ("Company"), an Indiana corporation registered with the Office of
Thrift Supervision as a savings and loan holding company under the Home Owners'
Loan Act, as amended ("HOLA");
WHEREAS, the Company, Purchaser, Al Acquisition Corp. and Xxxxxxx X.
Xxxxxxx have entered into an Agreement and Plan of Merger dated May 30, 2001,
pursuant to which Purchaser will acquire 100% of the issued and outstanding
shares of capital stock of the Company (the "Merger Agreement"). Purchaser
intends to dissolve the Company, thereby making BANK a direct subsidiary of
Purchaser, and to merge BANK with and into FIRST NATIONAL simultaneous with the
acquisition of the Company;
WHEREAS, each of the Banks, acting pursuant to resolutions of their
respective boards of directors duly adopted by the vote of a majority of their
respective directors, all pursuant to authority arising under and in accordance
with the provisions of the National Bank Act (12 U.S.C. ss.1 et seq.) (the
"Act") and HOLA, have authorized, approved and agreed upon this Agreement and
all of the transactions contemplated hereby in writing, including without
limitation the merger of BANK with and into FIRST NATIONAL (the "Bank Merger")
whereby FIRST NATIONAL shall be the receiving association (the "Receiving
Association") as defined in 12 U.S.C. 215b;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, and for the purpose of stating the terms and
conditions of the Bank Merger, the mode of effectuating the same, the manner of
converting or exchanging the shares of the Banks issued and outstanding
immediately prior to the consummation of the Bank Merger into shares of the
Receiving Association pursuant to this Agreement, and such other details and
provisions as are deemed desirable, the parties hereto hereby agree, subject to
the terms and conditions hereinafter set forth and in accordance with the
provisions of 12 U.S.C. 215c, as follows:
ARTICLE I
1.0 The Bank Merger. At the Effective Time (as hereinafter defined), the
Banks shall become a single national banking association by the merger of BANK
with and into FIRST NATIONAL. Upon the consummation of the Bank Merger, the
separate corporate existence of BANK shall cease as a consequence of being
merged into and continued in FIRST NATIONAL as the Receiving Association, which
shall be deemed to be the same business and corporate entity as the Banks. On
and after the Effective Time, the Receiving Association, operating under the
Articles of Association of FIRST NATIONAL, and the By-laws of FIRST NATIONAL,
shall have, without transfer, all the property (whether real, personal or
mixed), rights, powers and other assets (whether tangible or intangible) of the
Banks, and shall be subject to and liable for all debts, liabilities, duties and
other obligations of the Banks in the same manner as if the Receiving
Association had itself incurred them. All the rights, franchises and interests
of the Banks in and to every species of property (real, personal and mixed) and
choses in action thereunto belonging shall be deemed to be transferred to and
vested in the Receiving Association without any deed or other transfer, and the
Receiving Association, without any order or other action on the part of any
court or otherwise, shall hold and enjoy the same and all rights of property,
franchises and interests, including appointments, designations and nominations
and all other rights and interests as trustee, executor, administrator,
registrar or transfer agent of stock and bonds, guardian, conservator, assignee
and receiver and in every other fiduciary capacity, in the same manner and to
the same extent as were held and enjoyed by the Banks immediately prior to the
Bank Merger. Any reference to the Banks in any writing,
2
whether executed or taking effect before or after the Bank Merger, shall be
deemed a reference to the Receiving Association if not inconsistent with the
other provisions of such writing.
1.1 Effective Time. The Bank Merger shall become effective immediately
following satisfaction of all requirements of law and other conditions specified
in this Agreement or on such other date and time as may be agreed upon by the
parties hereto and consented to by the Office of the Comptroller of the Currency
("OCC") (the "Effective Time"); provided, however, that the OCC shall have
approved the Bank Merger and the Agreement and shall have issued an approval
letter to the Receiving Association.
ARTICLE II
2.0 Form of Transactions. The parties hereto may, upon written agreement,
restructure the transactions described herein in any format sufficient to
achieve the needs of each party and its respective stockholders.
ARTICLE III
3.0 Articles of Association and By-laws. The Articles of Association of
FIRST NATIONAL, in effect immediately prior to the Effective Time, shall be the
Articles of Association of the Receiving Association, a copy of which Articles
of Association are attached hereto as Exhibit A. The By-laws of FIRST NATIONAL,
in effect immediately prior to the Effective Time, shall be the By-laws of the
Receiving Association, a copy of which By-laws is attached hereto as Exhibit B.
ARTICLE IV
4.0 Name and Place of Business. The business of the Receiving Association
shall be that of a national banking association. The Receiving Association shall
conduct this business under the name of "First National Bank and Trust" at its
main banking premises which shall be located at 000 Xxxxx Xxxx Xxxxxx, Xxxxxx,
Xxxxxxx and at its legally established branches.
ARTICLE V
5.0 Capital Structure. Upon completion of the Bank Merger, the Receiving
Association shall have 1,300,000 authorized shares of common stock. The amount
of capital stock of the Receiving Association shall be $12,114,000, divided into
1,211,400 shares of outstanding common stock, $10.00 par value per share. Upon
completion of the Bank Merger, the Receiving Association shall have a surplus of
$72,205,582 and $50,563,523 of undivided profits, including capital reserves,
which when combined with the capital and surplus will be equal to the combined
capital structures of the Banks as stated in the preamble of this Agreement, as
adjusted for normal earnings and expenses between March 31, 2001 and the
Effective Time and such other accounting adjustments as may be recommended by
the accountants of the Banks and Hasten.
3
ARTICLE VI
6.0 Capital Stock and Stockholders.
6.1 Conversion of Stock of the Banks.
(a) On and as of the Effective Time, each issued and outstanding
share of common stock of the BANK, $1.00 par value per share, outstanding
immediately prior to the Effective Time shall, by virtue of the Bank Merger, be
canceled and no consideration shall be paid.
(b) On and as of the Effective Time, each issued and outstanding
share of common stock of FIRST NATIONAL, $10.00 par value per share, outstanding
immediately prior to the Effective Time shall be converted into a right to
receive one share of the common stock, $10.00 par value per share, of the
Receiving Association solely by virtue of the Bank Merger.
6.2 Exchange of the Banks' Certificates. Outstanding certificates
representing shares of common stock of FIRST NATIONAL shall be deemed to
represent an identical number of shares of common stock of the Receiving
Association, without any action on the part of the shareholders of FIRST
NATIONAL.
ARTICLE VII
7.0 Stockholder Approval. This Merger Agreement has been submitted to the
stockholders of each of FIRST NATIONAL and BANK for approval in the manner
provided by the applicable provisions of the Act and the HOLA.
ARTICLE VIII
8.0 Officers and Directors.
8.1 Board of Directors. As of the Effective Time, the Board of
Directors of FIRST NATIONAL shall constitute the Board of Directors of the
Receiving Association.
8.2 Officers. As of the Effective Time, the officers of FIRST
NATIONAL shall constitute the officers of the Receiving Association.
4
ARTICLE IX
9.0 Conditions to Consummation.
9.1 Consummation. Consummation of the Bank Merger is subject to the
satisfaction of the following conditions:
(a) The consummation of the acquisition of 100% of the
issued and outstanding shares of the Company by
Purchaser in accordance with the terms and conditions of
the Merger Agreement;
(b) The approval of the Bank Merger and this Agreement, by
the OCC as provided in the Act; and
(c) The receipt of all other necessary corporate and
regulatory approvals.
ARTICLE X
10.0 Termination. This Agreement may be terminated (i) in the event the
Merger Agreement is terminated, or (ii) by written agreement of the parties.
ARTICLE XI
11.0 Miscellaneous.
11.1 Expenses. Whether the Bank Merger is approved or disapproved by
the OCC, FIRST NATIONAL shall pay any examination fees and filing fees of the
OCC incurred in connection with the Bank Merger.
11.2 Counterparts and Captions. This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed an
original but which together shall constitute one and the same instrument. The
captions of the Sections hereof are for descriptive purposes only, and they are
not intended to limit or otherwise affect the content nor are they a part of
this Agreement.
11.3 Law Governing. This Agreement will be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Indiana, without giving effect to the conflict of laws provision thereof, and
the laws of the United States of America.
11.4 Amendment and Waiver. Any of the terms or conditions of this
Agreement may be waived, amended or modified in whole or in part at any time
before or after the approval of this Agreement by the stockholders of each of
the parties hereto, to the extent authorized by applicable law, by a writing
signed by all of the parties hereto.
5
11.5 Notices. Any notice or communication required or permitted
hereunder shall be sufficiently given if in writing and (a) when delivered, if
delivered in person or by facsimile transmission, or (b) on the following
business day, if sent by overnight courier, as follows (or to such other
addresses as shall be specified by like notice):
If to BANK, addressed to:
Xxxxxxxxxx Financial Group, Inc.
00000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Telecopier: (000) 000-0000
Attn: Xxxxx X. Xxxxx, President and Chief Executive Officer
with a copy to:
Xxxxxx, Xxxx & Xxxxxx LLP
0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxx, Esq.
If to FIRST NATIONAL, addressed to:
Hasten Bancshares
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx
Telecopier: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Chairman
Xxxx Xxxxxx, President
with a copy to:
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
11.6 Remedies. Subject to the terms hereof, in the event of any
breach of this Agreement in any material respect by any of the parties hereto,
any other party hereto damaged shall have all the rights, remedies and causes of
action available at law or in equity, including, but not limited to, attorneys'
fees and the right to specific performance.
6
IN WITNESS WHEREOF, the parties hereto, pursuant to resolutions duly
adopted by their respective Boards of Directors, have caused this Agreement to
be executed by their respective duly authorized officers as of the date first
above written.
FIRST NATIONAL BANK AND TRUST
-----------------------------------------------
By: Xxxxxxx Xxxxxx
Its: Chief Executive Officer
XXXXXXXXXX BANK, FSB
-----------------------------------------------
By: Xxxxx X. Cemy
Its: President and Chief Executive Officer
-----------------------------------------------
By: Xxxx Xxxxxxx
Its: Chief Financial Officer
7
LIST OF EXHIBITS
EXHIBIT A Articles of Association of the Receiving Association
EXHIBIT B By-laws of the Receiving Association
EXHIBIT A
ARTICLES OF ASSOCIATION OF THE RECEIVING ASSOCIATION
EXHIBIT B
BY-LAWS OF THE RECEIVING ASSOCIATION
Exhibit D
LICENSE AND CONCURRENT USE AGREEMENT
This License and Concurrent Use Agreement ("Agreement") is entered into as
of the _____ day of ___________, 2001, by and between Los Padres Bank, FSB,
having a principal place of business of 610 Alamo Pintado, Solvang, California
("Los Padres"), Xxxxxxxxxx West Financial Group, Inc., having a principal place
of business of 610 Alamo Pintado, Solvang, California ("Xxxxxxxxxx West" and,
together with Los Padres, the "Los Padres Parties"); Xxxxxxxxxx Wealth
Management Company, having a principal place of business of ___________________
___________________________ ("Xxxxxxxxxx Wealth"); and Xxxxxxxxxx Bank, FSB,
having a principal place of business at 00000 Xxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxx Xxxx, Xxxxxx 00000 ("Xxxxxxxxxx Bank"), and Xxxxxxxxxx Financial Group,
Inc., having a principal place of business at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxx 00000 ("HFG" and, together with Xxxxxxxxxx Bank, the "Xxxxxxxxxx Bank
Parties"), with reference to the following facts. From time to time in this
Agreement, the Xxxxxxxxxx Bank parties are referred to herein collectively as
"Licensor" and Los Padres is referred to herein as "Licensee".
RECITALS
A. The Xxxxxxxxxx Bank Parties have used the names XXXXXXXXXX BANK and
XXXXXXXXXX FINANCIAL GROUP in the United States since 19__ for use with banking
services in the States of Indiana, Kansas and North Carolina.
B. The Los Padres Parties have used the name XXXXXXXXXX WEST FINANCIAL
GROUP in the United States since 1994 for use with banking services in the State
of California.
X. Xxxxxxxxxx Bank and Los Padres jointly own a subsidiary, Xxxxxxxxxx
Wealth, which has used such name to conduct a wealth management business in the
states of Indiana, Kansas, California and North Carolina.
D. Los Padres and the Xxxxxxxxxx Bank Parties have entered into a Purchase
and Assumption Agreement and certain other documentation (collectively, the
"Kansas Transaction Documents") contemplating the sale by the Xxxxxxxxxx Bank
Parties and the purchase by Los Padres of the Kansas operations of Xxxxxxxxxx
Bank. The Kansas Transaction Documents provide that, at the closing of the
transactions contemplated thereunder, the Xxxxxxxxxx Bank Parties will assign
(i) all right, title and interest in and to the domain names
"xxxxxxxxxx-xx.xxx", "xxxxxxxxxx.xxx", and "xxxxxxxxxxxxxx.xxx" (the "Domain
Names") to Los Padres and (ii) effective December 31, 2006, all right, title and
interest in and to the names and trademarks "Xxxxxxxxxx", "Xxxxxxxxxx Bank" and
"Xxxxxxxxxx Financial Group" (collectively, the "Marks") to Los Padres;
provided, however, that prior to December 31, 2006, the use of the Marks will be
licensed to Los Padres in accordance with the terms of this Agreement. The
Kansas Transaction Documents further provide that Los Padres will enter into a
royalty-free, perpetual sub-license agreement with Community First Financial
Group, Inc., relating to the use of the foregoing Marks in North Carolina and
certain other territories, excluding the states of Kansas and Indiana, as
further provided therein, a copy of which sub-license agreement is attached
hereto as Exhibit A (the "Sub-License").
E. Los Padres and the Xxxxxxxxxx Bank Parties have entered into a Stock
Purchase Agreement contemplating the sale by Xxxxxxxxxx Bank to Los Padres of
all shares of capital stock of Xxxxxxxxxx Wealth owned by Xxxxxxxxxx Bank.
F. Community First Financial Group, Inc. ("Community First") and the
Xxxxxxxxxx Bank Parties have entered into a Purchase and Assumption Agreement
and certain other documentation contemplating the sale by the Xxxxxxxxxx Bank
Parties and purchase by Community First of the North Carolina operations of
Xxxxxxxxxx Bank (the "North Carolina Transaction").
G. The parties desire to specify the rights of the various parties in
connection with the Domain Names and the Marks.
AGREEMENT
NOW, THEREFORE, in consideration of the promises, mutual covenants, mutual
understandings, obligations and agreements herein contained, the parties hereto
agree as follows:
1. Grant of License. Subject to and in accordance with all the terms and
conditions of this Agreement, Licensor hereby grants to Licensee a royalty-free,
exclusive, nontransferable license (except for the Sub-License) to use the Marks
for banking and financial services to customers residing in or in connection
with the Licensee's places of business in (i) the State of Kansas and (ii) all
states other than the State of Indiana. All rights not granted herein shall
remain with Licensor. Licensor further grants to Xxxxxxxxxx Wealth a
royalty-free, exclusive, nontransferable license to use the name "Xxxxxxxxxx
Wealth Management" in its asset management business, but not for the business of
banking including, but not limited to, taking deposits or making loans.
2. Term of License. Except in the event of a breach by Licensee that has
not been cured after at least thirty (30) days prior written notice to Licensee
by Licensor, the term of this Agreement shall be for the term commencing upon
the closing date of the transactions contemplated under the Kansas Transaction
Documents (the "Kansas Closing") until the earlier of December 31, 2006 or five
(5) years after the Kansas Closing. All notices of default issued or sent by
Licensor to Licensee shall set forth any alleged default(s) with reasonable
particularity such that Licensee can understand the basis for the alleged
default(s) and can cure the alleged default(s), if possible. If this Agreement
is terminated prior to the earlier of December 31, 2006 or five (5) years after
the Kansas Closing, Licensee shall immediately cease all use of the Marks
licensed hereunder, and all rights granted hereunder to Licensee shall
immediately and automatically revert to Licensor. After termination, Licensee
shall not use the Marks or any name, xxxx, logo, domain name, vanity telephone
number, or any other indicia that is confusingly similar to the Marks for any
banking or financial services. Effective on the earlier of December 31, 2006 or
five (5) years after the Kansas Closing, Licensor shall assign the Marks to
Licensee pursuant to the Assignment of Marks and Domain Names attached hereto as
Exhibit B, and incorporated herein by reference.
3. Rights to Licensed Marks/Policing. During the term of this License,
Licensee has no rights of any kind whatsoever with respect to the Marks, except
to the extent of the license hereby granted. Notwithstanding this Agreement,
Licensee shall maintain all right, title and interest in and to the name and
xxxx XXXXXXXXXX WEST FINANCIAL GROUP and this Agreement shall not
2
be construed to affect any rights to, or ownership in, such name and xxxx by
Licensee. Licensor shall have the sole right and discretion to police the Marks
including, but not limited to, XXXXXXXXXX, XXXXXXXXXX BANK and XXXXXXXXXX
FINANCIAL GROUP, including but not limited to, bringing any infringement or
unfair competition actions. Notwithstanding this provision, Licensor shall
consult with Licensee with respect to any third party that Licensor intends to
police or file suit against, who uses the allegedly infringing xxxx outside of
the State of Indiana in addition to using the xxxx within the State of Indiana.
Such consultation shall include, but shall not be limited to, contacting
Licensee prior to sending a demand letter to such an infringer and prior to
filing suit against such an infringer and permitting Licensee to join as a party
in such action; provided, however, if Licensee so elects to join as a party, it
shall pay one-half of all costs and expenses of such action including, but not
limited to, attorneys fees and costs. For any infringer who solely uses the
accused xxxx in the State of Indiana, any recovery obtained from such infringer
shall be the exclusive property of Licensor. For any infringer who uses the
accused xxxx outside of the State of Indiana in addition to using it within the
State of Indiana, any recovery obtained from such infringer shall be divided or
shared between Licensor and Licensee on a pro-rata basis if, and only if,
Licensee makes the election described above and pays its share of the costs and
expenses of such action.
4. The Xxxxxxxxxx Bank Parties' Prohibition of Use Outside the State of
Indiana. The Xxxxxxxxxx Parties shall not offer, sell, distribute, promote,
advertise, publicize, produce, or sponsor banking services or products or any
other goods or services under the names or marks XXXXXXXXXX, XXXXXXXXXX BANK, or
XXXXXXXXXX FINANCIAL GROUP, or any other xxxx, name, symbol, logo, Internet
domain name, or vanity telephone number, that incorporates, or is confusingly
similar thereto, anywhere outside the State of Indiana at any time following
execution of this Agreement.
5. Prohibition of Use By the Los Padres Parties and Xxxxxxxxxx Wealth
Within the State of Indiana. The Los Padres Parties and Xxxxxxxxxx Wealth shall
not, and the Los Padres Parties shall cause Community First to not, use the
names or marks XXXXXXXXXX, XXXXXXXXXX BANK, XXXXXXXXXX FINANCIAL GROUP or any
xxxx, name, symbol, logo, Internet domain name, or vanity telephone number, that
incorporates, or is confusingly similar thereto for banking products and
services or for any goods or services related thereto with any customers
residing in the State of Indiana, from the date of execution of this Agreement
until December 31, 2006. After December 31, 2006, the Los Padres Parties may use
the marks XXXXXXXXXX, XXXXXXXXXX BANK, XXXXXXXXXX FINANCIAL GROUP or any other
xxxx, name, symbol, logo, internet domain name, or vanity telephone number for
any goods or services in the State of Indiana. The foregoing will not restrict
(i) Xxxxxxxxxx Wealth or the Los Padres Parties from using the name and xxxx
XXXXXXXXXX WEALTH MANAGEMENT or XXXXXXXXXX WEALTH MANAGEMENT COMPANY in
connection with or to refer to the wealth management business of Xxxxxxxxxx
Wealth or (ii) the Los Padres Parties from using the name and xxxx XXXXXXXXXX
WEST FINANCIAL GROUP solely to refer to the corporation of that name for
informational purposes only, and not in connection with the banking business of
Los Padres; provided, however, that the Los Padres Parties and Xxxxxxxxxx Wealth
hereby acknowledge and agree (a) that neither the Las Padres Parties nor
Xxxxxxxxxx Wealth have possession, retained a copy of (in any written,
electronic or other format) or have any knowledge of the contents of the
customer list or similar information belonging to Xxxxxxxxxx Bank for customers
in the State of Indiana (other than customers that were joint customers of
Xxxxxxxxxx Bank and Xxxxxxxxxx Wealth as of the date of this Agreement, which
3
customers are specified on Exhibit C attached hereto and made a part hereof),
and (b) that, for a period of five (5) years after the Kansas Closing, neither
shall, and Los Padres shall require Community First not to, pursuant to the
Sub-License, knowingly solicit or conduct any banking business (including, but
not limited to, taking deposits and making loans) with any person or entity that
was a customer of Xxxxxxxxxx Bank in the State of Indiana at the date of the
Kansas Closing.
6. The Los Padres Parties' Rights Within the State of Indiana. The Los
Padres Parties may offer, sell, distribute, promote, advertise, publicize,
produce, or sponsor any goods or services, including banking products or
services, within the State of Indiana, provided they do not use the trademarks
XXXXXXXXXX, XXXXXXXXXX BANK, XXXXXXXXXX FINANCIAL GROUP or XXXXXXXXXX WEST
FINANCIAL GROUP or xxxx, name, symbol, logo, Internet domain name, or vanity
that incorporates, or is confusingly similar to, the foregoing, subject to
Section 5 above.
7. Costs and Fees. Each party to this Agreement shall bear its own costs
and expenses and neither shall assert any claim in law or equity against the
other on account of the controversy settled by this Agreement. In the event any
proceeding is commenced by any party to this Agreement to enforce or construe
any provision hereof, the prevailing party shall be entitled to all of its
reasonable costs, expenses, and attorneys' fees incurred in such proceeding.
8. Extraterritorial Enforcement of Agreement. This Agreement shall be
effective as between and among the parties hereto with respect to the trademark
rights covered herein throughout the world, but shall be enforceable only in the
limits of general jurisdiction in the United States of America.
9. Quality of Use of Marks and Products and Services. Licensee agrees that
its use of the Marks during the term of the license granted herein shall be in
reasonably the same manner as Licensee currently uses its other existing names
and marks and that the quality of the goods and services offered under the
licensed Marks shall be of reasonably the same quality as the products and
services currently offered by Licensee under Licensee's other names and marks.
Licensor agrees that such quality of use and of products and services currently
offered by Licensee are acceptable to maintain the quality control requirements
for the licensed Marks.
10. Integration and Waiver. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof;
and all prior agreements, contracts, negotiations, representations and
discussions, if any, pertaining to this matter, and the parties hereto are
hereby merged into this Agreement, other than the Sub-License (Exhibit A) and
that certain Assignment of Marks and Domain Names (Exhibit B) of even date
herewith among Licensor and Licensee. No provision of this Agreement may be
waived unless such waiver is in writing, signed by the parties. Waiver of anyone
provision herein shall not be deemed a waiver of any other provision herein.
This Agreement may be modified or amended only by a written agreement executed
by all of the parties.
11. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but which together shall be deemed to
constitute a single document.
4
12. Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be given by first class mail, postage
prepaid, to the applicable party or parties at the address set forth above or at
such other address given by written notice in accordance herewith.
13. Agreement Binding on Successors in Interest. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and all successors
and assigns, parent companies, general partners, officers, directors, agents,
and affiliates.
14. No Agency. Nothing in this Agreement shall be construed to make any
party the agent, representative or partner of or a joint venturer with the other
party and neither shall so hold itself out, nor shall either party be liable or
bound by any act or omission of the other party.
15. Assignability. This Agreement shall bind and inure to the benefit of
Licensor, its successors and assigns. Licensee shall not sublicense,
subcontract, sell, assign or otherwise dispose of any or all of its rights
and/or obligations under this Agreement without prior written consent of
Licensor, which consent may be withheld in its sole discretion; provided, that
this provision shall not prohibit or require the Licensor's consent for an
assignment as a result of a merger of the Licensee with another federally
insured depositary institution or in connection with the sale of all or
substantially all of the assets and liabilities of the Licensee to a federally
insured depositary institution or in connection with the Sub-License.
16. Governing Law and Jurisdiction. The construction and meaning of the
terms and provisions of this Agreement shall be interpreted in accordance with
the laws of the State of Indiana. Each of the parties hereto agree that any
suit, action or proceeding instituted by such party under or in connection with
this Agreement shall be brought in the United States District Court for the
Southern District of the State of Indiana located in Xxxxxx County, Indiana. By
its execution hereof, each party hereto irrevocably waives any objection to, and
any right of immunity on the grounds of, improper venue, the convenience of the
forum, the personal jurisdiction of such court or the execution of judgments
resulting therefrom. Each party hereto irrevocably accepts and submits to the
exclusive jurisdiction of such court in any such action, suit or proceeding.
17. Non-solicitation. Licensor hereby agrees on behalf of itself and its
successors in interest that: (i) for a period of five (5) years after the
Closing of the Kansas Purchase Agreement, it shall not knowingly use any
customer list, customer files, or proprietary information regarding Kansas
customers of Xxxxxxxxxx Bank to solicit or conduct any banking business
(including, but not limited to, taking deposits and making loans) with any
person or entity that was a customer of Xxxxxxxxxx Bank in the state of Kansas
as of the date of such Closing and (ii) for a period of five (5) years after the
Closing of the North Carolina Purchase Agreement, it shall not knowingly use any
customer list, customer files, or proprietary information regarding North
Carolina customers of Xxxxxxxxxx Bank to solicit or conduct any banking business
(including, but not limited to, taking deposits and making loans) with any
person or entity that was a customer of Xxxxxxxxxx Bank in the state of North
Carolina as of the date of such Closing. Licensor acknowledges and agrees that
Community First Financial Group, Inc., and its successors in interest are
intended beneficiaries of clause (ii) of the preceding sentence.
5
This License and Concurrent Use Agreement has been executed by persons
authorized to bind each party and signatory to this Agreement.
AGREED TO AND ACCEPTED:
LOS PADRES BANK, FSB
By:______________________________________
Its:_____________________________________
XXXXXXXXXX BANK, FSB
By:______________________________________
Its:_____________________________________
XXXXXXXXXX FINANCIAL GROUP, INC.
By:______________________________________
Its:_____________________________________
XXXXXXXXXX WEST FINANCIAL GROUP, INC.
By:______________________________________
Its:_____________________________________
XXXXXXXXXX WEALTH MANAGEMENT COMPANY
By:______________________________________
Its:_____________________________________
6
Exhibit A
Community First License Agreement
7
Exhibit B
Assignment of Marks and Domain Names
8
ASSIGNMENT OF MARKS AND DOMAIN NAMES
This Assignment is made by and between XXXXXXXXXX FINANCIAL GROUP, INC, an
Indiana corporation, having a principal place of business at 00000 Xxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxx 00000, and XXXXXXXXXX BANK, FSB, a
federally chartered savings association having a principal place of business at
000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxx 00000 (collectively the "Xxxxxxxxxx
Parties"), and LOS PADRES BANK, FSB, a federally chartered savings association,
having its principal place of business at 000 Xxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxx
00000 ("Los Padres").
WHEREAS, the Xxxxxxxxxx Parties adopted and use, and thereby own in the
United States, right, title and interest in and to (i) the marks and names
"Xxxxxxxxxx", "Xxxxxxxxxx Financial Group, Inc." and "Xxxxxxxxxx Bank" and all
other names, trademarks, service marks, characters, designs, logos, or the like,
if any, used in association therewith (collectively the "Marks"), and (ii) the
URLs "xxxxxxxxxx.xxx", "xxxxxxxxxxxxxx.xxx", and "xxxxxxxxxx-xx.xxx",
(collectively, the "Domain Names") along with the goodwill of the business
appurtenant thereto.
WHEREAS, Xxxxxxxxxx Bank, FSB has entered into a Purchase and Assumption
Agreement with Los Padres dated May 30, 2001 (the "Purchase Agreement").
WHEREAS, the Xxxxxxxxxx Parties have agreed as follows: (i) as of the
closing of the Purchase Agreement, to assign all of their right, title, and
interest in the Domain Names and any and all then existing pending or future
claims, demands and causes of action for infringement, unfair competition and
dilution of the Domain Names and all of the proceeds from the foregoing to Los
Padres; and (ii) effective as of the earlier of December 31, 2006 or five (5)
years from the closing of the Purchase Agreement, to assign all of their right,
title and interest in the Marks, to Los Padres, including any and all then
existing, pending or future claims, demands, and causes of action for
infringement, unfair competition or dilution of the Marks (except for claims,
demands and causes of action asserted or to be asserted by all or any of the
Xxxxxxxxxx Parties against Los Padres) and all of the proceeds from the
foregoing.
WHEREAS, effective as of the earlier of December 31, 2006 or five (5)
years from the closing of the Purchase Agreement, the Xxxxxxxxxx Parties agree
that they will not use, or seek registration of, any domain names, trademarks,
service marks, fictitious business names, vanity telephone numbers, or other
names containing the Marks, any phonetic equivalent thereof, or any name, logo,
domain name, or xxxx confusingly similar thereto for any goods or services;
provided, however, that effective as of the closing of the Purchase Agreement
and the execution hereof, the Xxxxxxxxxx Parties agree that they will not seek
registration of the Domain Names.
WHEREAS, effective as of the earlier of December 31, 2006 or five (5)
years from the closing of the Purchase Agreement, the Xxxxxxxxxx Parties agree
not to (a) oppose any trademark application(s) to register the Marks, the
phonetic equivalent thereof or misspellings, or any name, logo, domain name, or
xxxx confusingly similar thereto in any form filed by Los Padres, (b) petition
to cancel any registration(s) of the Marks, the phonetic equivalent thereof or
misspellings, or any name, logo, domain name, or xxxx confusingly similar
thereto in any form owned by Los Padres, (c) challenge the registration of any
internet domain names containing the Marks, the phonetic
equivalent or misspellings thereof, (d) file any claims or proceeding against
Los Padres relating in any manner to the Marks, the phonetic equivalent thereof,
misspellings thereof, or any name or xxxx confusingly similar thereto, or (e)
assist or encourage any other person, business, company, corporation,
partnership, or any other business form from taking any of these enumerated
steps or in using the Marks, the phonetic equivalent thereof or misspellings, or
any name, logo, domain name, or xxxx confusingly similar thereto.
NOW, THEREFORE, in consideration of good and valuable consideration, the
receipt of which is hereby acknowledged, (i) effective as of the closing of the
Purchase Agreement and the execution of this Assignment, the Xxxxxxxxxx Parties
hereby assign to Los Padres all of their right, title and interest to the Domain
Names and any and all then existing pending or future claims, demands and causes
of action for infringement, unfair competition and dilution of the Domain Names
and all of the proceeds from the foregoing and (ii) effective as of the earlier
of December 31, 2006 or five (5) years from the closing of the Purchase
Agreement, the Xxxxxxxxxx Parties hereby assign to Los Padres all of their
right, title and interest in and to the Marks, and any and all then existing,
pending or future claims, demands, and causes of action for infringement, unfair
competition or dilution of the Marks (except for claims, demands and causes of
action asserted or to be asserted by all or any of the Xxxxxxxxxx Parties
against Los Padres), and all of the proceeds from the foregoing. Los Padres may
not, without the consent of the Xxxxxxxxxx Parties, assign its rights under this
Assignment except as a result of a merger of Los Padres with another federally
insured depository institution or in connection with the sale of all or
substantially all of the assets and liabilities of Los Padres to a federally
insured depository institution. The Xxxxxxxxxx Parties agree to sign any
additional documents reasonably required to effect the transfer of Marks and
URLs contemplated by this Assignment within ten (10) business days of receipt of
such documents from Los Padres.
Signed at ____________, this ______ day of 2001
XXXXXXXXXX FINANCIAL GROUP, INC.
By:____________________________________________
XXXXXXXXXX BANK, FSB
By:____________________________________________
LOS PADRES BANK, FSB
By:____________________________________________
2
State of )
) ss:
County of )
On this _____ day of ___________, 2001, before me personally appeared,
known to me, who duly acknowledged that he/she is the of Xxxxxxxxxx Financial
Group, Inc., an Indiana corporation, and that the foregoing instrument was
signed on behalf of said corporation by an officer authorized to sign such
instrument.
________________________________
Notary Public
State of )
) ss:
County of )
On this _____ day of _______________, 2001, before me personally appeared
____________________, known to me, who duly acknowledged that he/she is the of
Xxxxxxxxxx Bank, FSB, a federally chartered savings association, and that the
foregoing instrument was signed on behalf of said corporation by an officer
authorized to sign such instrument.
________________________________
Notary Public
Exhibit C
Certain Customers
Exhibit E
ASSIGNMENT OF MARKS AND DOMAIN NAMES
This Assignment is made by and between XXXXXXXXXX FINANCIAL GROUP, INC, an
Indiana corporation, having a principal place of business at 00000 Xxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxx 00000, and XXXXXXXXXX BANK, FSB, a
federally chartered savings association having a principal place of business at
000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxx 00000 (collectively the "Xxxxxxxxxx
Parties"), and LOS PADRES BANK, FSB, a federally chartered savings association,
having its principal place of business at 000 Xxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxx
00000 ("Los Padres").
WHEREAS, the Xxxxxxxxxx Parties adopted and use, and thereby own in the
United States, right, title and interest in and to (i) the marks and names
"Xxxxxxxxxx", "Xxxxxxxxxx Financial Group, Inc." and "Xxxxxxxxxx Bank" and all
other names, trademarks, service marks, characters, designs, logos, or the like,
if any, used in association therewith (collectively the "Marks"), and (ii) the
URLs "xxxxxxxxxx.xxx", "xxxxxxxxxxxxxx.xxx", and "xxxxxxxxxx-xx.xxx",
(collectively, the "Domain Names") along with the goodwill of the business
appurtenant thereto.
WHEREAS, Xxxxxxxxxx Bank, FSB has entered into a Purchase and Assumption
Agreement with Los Padres dated May 30, 2001 (the "Purchase Agreement").
WHEREAS, the Xxxxxxxxxx Parties have agreed as follows: (i) as of the
closing of the Purchase Agreement, to assign all of their right, title, and
interest in the Domain Names and any and all then existing pending or future
claims, demands and causes of action for infringement, unfair competition and
dilution of the Domain Names and all of the proceeds from the foregoing to Los
Padres; and (ii) effective as of the earlier of December 31, 2006 or five (5)
years from the closing of the Purchase Agreement, to assign all of their right,
title and interest in the Marks, to Los Padres, including any and all then
existing, pending or future claims, demands, and causes of action for
infringement, unfair competition or dilution of the Marks (except for claims,
demands and causes of action asserted or to be asserted by all or any of the
Xxxxxxxxxx Parties against Los Padres) and all of the proceeds from the
foregoing.
WHEREAS, effective as of the earlier of December 31, 2006 or five (5)
years from the closing of the Purchase Agreement, the Xxxxxxxxxx Parties agree
that they will not use, or seek registration of, any domain names, trademarks,
service marks, fictitious business names, vanity telephone numbers, or other
names containing the Marks, any phonetic equivalent thereof, or any name, logo,
domain name, or xxxx confusingly similar thereto for any goods or services;
provided, however, that effective as of the closing of the Purchase Agreement
and the execution hereof, the Xxxxxxxxxx Parties agree that they will not seek
registration of the Domain Names.
WHEREAS, effective as of the earlier of December 31, 2006 or five (5)
years from the closing of the Purchase Agreement, the Xxxxxxxxxx Parties agree
not to (a) oppose any trademark application(s) to register the Marks, the
phonetic equivalent thereof or misspellings, or any name, logo, domain name, or
xxxx confusingly similar thereto in any form filed by Los Padres, (b) petition
to cancel any registration(s) of the Marks, the phonetic equivalent thereof or
misspellings, or any name, logo, domain name, or xxxx confusingly similar
thereto in any form owned by Los Padres, (c) challenge the registration of any
internet domain names containing the Marks, the phonetic
equivalent or misspellings thereof, (d) file any claims or proceeding against
Los Padres relating in any manner to the Marks, the phonetic equivalent thereof,
misspellings thereof, or any name or xxxx confusingly similar thereto, or (e)
assist or encourage any other person, business, company, corporation,
partnership, or any other business form from taking any of these enumerated
steps or in using the Marks, the phonetic equivalent thereof or misspellings, or
any name, logo, domain name, or xxxx confusingly similar thereto.
NOW, THEREFORE, in consideration of good and valuable consideration, the
receipt of which is hereby acknowledged, (i) effective as of the closing of the
Purchase Agreement and the execution of this Assignment, the Xxxxxxxxxx Parties
hereby assign to Los Padres all of their right, title and interest to the Domain
Names and any and all then existing pending or future claims, demands and causes
of action for infringement, unfair competition and dilution of the Domain Names
and all of the proceeds from the foregoing and (ii) effective as of the earlier
of December 31, 2006 or five (5) years from the closing of the Purchase
Agreement, the Xxxxxxxxxx Parties hereby assign to Los Padres all of their
right, title and interest in and to the Marks, and any and all then existing,
pending or future claims, demands, and causes of action for infringement, unfair
competition or dilution of the Marks (except for claims, demands and causes of
action asserted or to be asserted by all or any of the Xxxxxxxxxx Parties
against Los Padres), and all of the proceeds from the foregoing. Los Padres may
not, without the consent of the Xxxxxxxxxx Parties, assign its rights under this
Assignment except as a result of a merger of Los Padres with another federally
insured depository institution or in connection with the sale of all or
substantially all of the assets and liabilities of Los Padres to a federally
insured depository institution. The Xxxxxxxxxx Parties agree to sign any
additional documents reasonably required to effect the transfer of Marks and
URLs contemplated by this Assignment within ten (10) business days of receipt of
such documents from Los Padres.
Signed at ____________, this ______ day of 2001
XXXXXXXXXX FINANCIAL GROUP, INC.
By:____________________________________________
XXXXXXXXXX BANK, FSB
By:____________________________________________
LOS PADRES BANK, FSB
By:____________________________________________
2
State of )
) ss:
County of )
On this _____ day of _____________, 2001, before me personally appeared,
known to me, who duly acknowledged that he/she is the of Xxxxxxxxxx Financial
Group, Inc., an Indiana corporation, and that the foregoing instrument was
signed on behalf of said corporation by an officer authorized to sign such
instrument.
________________________________
Notary Public
State of )
) ss:
County of )
On this _____ day of ________________, 2001, before me personally appeared
_____________________, known to me, who duly acknowledged that he/she is the of
Xxxxxxxxxx Bank, FSB, a federally chartered savings association, and that the
foregoing instrument was signed on behalf of said corporation by an officer
authorized to sign such instrument.
________________________________
Notary Public
Exhibit F
TENANT ESTOPPEL LETTER
__________, 2001
Hasten Bancshares
0000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Re: ______________________, as amended ____________________ ("Lease") by
and between Xxxxxxxxxx Bank, FSB ("Landlord") and
___________________ ("Tenant") for the premises commonly known as
__________________________ ("Premises")
Dear ____________:
In connection with the acquisition of Xxxxxxxxxx Financial Group, Inc. by
Hasten Bancshares ("Assignee"), and the corresponding assignment of the above
referenced Lease, the undersigned Tenant hereby certifies to Assignee that the
following statements are true, correct and complete as of the date hereof:
1. Tenant is the tenant under the Lease for the Premises. The term of the
Lease commenced on _____________, and will expire on _____________. There have
been no amendments, modifications or revisions to the Lease, and there are no
agreements of any kind between Landlord and Tenant regarding the Premises,
except as provided in the attached Lease.
2. Attached hereto as Exhibit A is a true, correct and complete copy of
the Lease which has been duly authorized and executed by Tenant and which is in
full force and effect.
3. Tenant has accepted and is in sole possession of the Premises and is
presently occupying the Premises. The Lease has not been assigned, by operation
of law or otherwise, by Tenant, and no sublease, concession agreement or
license, covering the Premises, or any portion of the Premises, has been entered
into by Tenant. If the landlord named in the Lease is other than Landlord,
Tenant has received notice of the assignment to Landlord of the landlord's
interest in the Lease and Tenant recognizes Landlord as the landlord under the
Lease.
4. Tenant began paying rent on ___________. Tenant is obligated to pay
rent under the Lease in the total amount of________________________________
Dollars ($_________), payable in ______ installments
of____________________________ Dollars ($_________). No rent under the Lease has
been paid more than one (1) month in advance, and no other sums or security
deposits have been deposited with Landlord, except in the amount of $_______.
(If none, state "NONE"). Tenant is not entitled to rent concessions or free
rent.
5. All conditions and obligations of Landlord relating to completion of
tenant improvements and making the Premises ready for occupancy by Tenant have
been satisfied or
performed and all other conditions and obligations under the Lease to be
satisfied or performed by Landlord as of the date hereof have been fully
satisfied or performed.
6. There exists no defense to, or right of offset against, enforcement of
the Lease by Landlord. Neither Landlord nor Tenant is in default under the Lease
and no event has occurred which, with the giving of notice or passage of time,
or both, could result in such a default.
7. Tenant has not received any notice of any present violation of any
federal, state, county or municipal laws, regulations, ordinances, orders or
directives relating to the use or condition of the Premises.
8. Except as specifically stated herein, Tenant has not been granted (a)
any option to extend the term of the Lease; (b) any option to expand the
Premises or to lease additional space with in the Premises; (c) any right to
terminate the Lease prior to its stated expiration; or (d) any option or right
of first refusal to purchase the Premises or any part thereof.
9. Tenant acknowledges having been notified that Landlord's interest in
and to the Lease has been, or will be, assigned to Assignee. Until further
notice from Landlord, however, Tenant will continue to make all payments under
the Lease to Landlord and otherwise look solely to Landlord for the performance
of the Landlord's obligations under the Lease.
The agreements and certifications set forth herein are made with the
knowledge and intent that Assignee will rely on them in purchasing the Premises,
and Assignee's successors and assigns may rely upon them for that purpose.
Very truly yours,
[TENANT]
________________________________
By: ____________________________
Name:_______________________
Title:______________________
2
EXHIBIT A
LEASE
Exhibit G
LANDLORD ESTOPPEL LETTER
__________, 2001
Hasten Bancshares
0000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Re: _____________________, as amended ___________________ ("Lease") by
and between ______________ ("Landlord") and Xxxxxxxxxx Bank, FSB
("Tenant") for the premises commonly known as
_________________________ ("Premises")
Dear ____________:
In connection with the acquisition of Xxxxxxxxxx Financial Group, Inc. by
Hasten Bancshares ("Assignee"), and the corresponding assignment of the above
referenced Lease, the undersigned Landlord hereby certifies to Assignee that the
following statements are true, correct and complete as of the date hereof:
1. Tenant is the tenant under the Lease for the Premises. The term of the
Lease commenced on _____________, and will expire on _____________. There have
been no amendments, modifications or revisions to the Lease, and there are no
agreements of any kind between Landlord and Tenant regarding the Premises,
except as provided in the attached Lease.
2. Attached hereto as Exhibit A is a true, correct and complete copy of
the Lease which has been duly authorized and executed by Landlord and which is
in full force and effect.
3. Tenant has accepted and is in sole possession of the Premises and is
presently occupying the Premises. To the Landlord's knowledge, the Lease has not
been assigned, by operation of law or otherwise, by Tenant, and no sublease,
concession agreement or license, covering the Premises, or any portion of the
Premises, has been entered into by Tenant.
4. Tenant began paying rent on __________. Tenant is obligated to pay rent
under the Lease in the total amount of________________________________ Dollars
($_______), payable in _____ installments of__________________________ Dollars
($_________). No rent under the Lease has been paid to Landlord more than one
(1) month in advance, and no other sums or security deposits have been deposited
with Landlord, except in the amount of $________. (If none, state "NONE").
Tenant is not entitled to rent concessions or free rent.
5. All conditions and obligations of Landlord relating to completion of
tenant improvements and making the Premises ready for occupancy by Tenant have
been satisfied or performed and all other conditions and obligations under the
Lease to be satisfied or performed by Landlord and Tenant as of the date hereof
have been fully satisfied or performed.
6. There exists no defense to, or right of offset against, enforcement of
the Lease by Tenant. Neither Landlord nor Tenant is in default under the Lease
and no event has occurred which, with the giving of notice or passage of time,
or both, could result in such a default.
7. Landlord has not received any notice of any present violation of any
federal, state, county or municipal laws, regulations, ordinances, orders or
directives relating to the use or condition of the Premises.
8. Except as specifically stated herein, Tenant has not been granted (a)
any option to extend the term of the Lease, except as follows: ________________
(if none, state "NONE"); (b) any option to expand the Premises or to lease
additional space with in the Premises, except as follows: ________________ (if
none, state "NONE"); (c) any right to terminate the Lease prior to its stated
expiration, except as follows:________________ (if none, state "NONE"); or (d)
any option or right of first refusal to purchase the Premises or any part
thereof, except as follows: __________________ (if none, state "NONE").
The agreements and certifications set forth herein are made with the
knowledge and intent that Assignee will rely on them in purchasing the Premises,
and Assignee's successors and assigns may rely upon them for that purpose.
Very truly yours,
[LANDLORD]
________________________________
By: ____________________________
Name:___________________________
Title:__________________________
2
EXHIBIT A
LEASE
Exhibit H
_______, 2001
Board of Directors
Xxxxxxxxxx Financial Group, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx
Ladies and Gentlemen:
We have acted as special counsel to Hasten Bancshares, an Indiana
corporation ("Purchaser"), AL Acquisition Corp., an Indiana corporation ("Merger
Sub"), and First National Bank and Trust, a national banking association ("First
National"), in connection with that certain Agreement and Plan of Merger dated
as of May 30, 2001 (the "Merger Agreement") and the related Agreement of Merger,
Option Agreement and Shareholder Voting Agreement, each dated as of May 30, 2001
(together with the Merger Agreement, the "Transaction Documents") by and among
Purchaser, Merger Sub, Xxxxxxxxxx Financial Group, Inc., an Indiana corporation
(the "Company"), and Xxxxxxx X. Xxxxxxx, which sets forth, among other things,
the terms upon which Merger Sub, a wholly-owned subsidiary of Purchaser, shall
merge with and into the Company (the "Merger"). Pursuant to the Merger
Agreement, Xxxxxxxxxx Bank, FSB, a wholly-owned subsidiary of the Company (the
"Bank"), and First National, a wholly-owned subsidiary of Purchaser, entered
into an agreement pursuant to which the Bank shall merge with and into First
National (collectively, with the Merger, the "Transactions"). This Opinion
Letter is furnished to you at the request of Purchaser pursuant to Section
6.2(d) of the Merger Agreement.
This Opinion Letter is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, including but not limited to, the
assumptions contained in ss.4 of the Accord and the General Qualifications (as
defined in the Accord), and this Opinion Letter should be read in conjunction
therewith. The law covered by the opinions expressed herein is limited to the
Federal Law of the United States and the Law of the State of Illinois and, for
purposes of this opinion, we have assumed that the laws of the State of Indiana,
if applicable, are identical in all relevant respects to the laws of the State
of Illinois, as to which assumption we express no opinion. Except as otherwise
indicated in this Opinion Letter, capitalized terms used in this Opinion Letter
are defined as set forth in the Accord or the Merger Agreement.
In preparing this Opinion Letter, we have, among other things, examined
(i) an executed copy of the Merger Agreement and Bank Merger Agreement, (ii) the
Constituent Documents of Purchaser, Merger Sub and First National, (iii)
certificates of good standing issued by the Secretary of State of Indiana with
respect to each of Purchaser and Merger Sub, and by the Office of the
Comptroller of the
XXXXXX PRICE
Xxxxxxxxxx Financial Group, Inc.
_________, 2001
Page 2
Currency with respect to First National; and (iv) the records of proceedings and
actions of the Boards of Directors of Purchaser, Merger Sub and First National,
relevant to the matters on which we have opined.
Based on the foregoing, and subject to the qualifications, assumptions,
limitations and exceptions set forth herein and in the Accord, we are of the
opinion that:
1. Purchaser and Merger Sub are corporations validly existing and in
good standing under the laws of the State of Indiana. First National is a
national banking association validly existing and in good standing under the
laws of the United States.
2. Purchaser, Merger Sub and First National have adequate corporate
power and authority to execute, deliver and perform their respective obligations
under the Transaction Documents.
3. The execution and delivery by Purchaser, Merger Sub and First
National, as applicable, of the Transaction Documents and the performance by
Purchaser, Merger Sub and First National of their respective agreements under
such documents have been duly authorized by all requisite corporate action on
the part of Purchaser, Merger Sub and First National. Purchaser, Merger Sub and
First National, as applicable, have duly executed and delivered the Transaction
Documents.
4. The Transaction Documents constitute the legal, valid and binding
obligations of each of Purchaser, Merger Sub and First National, as applicable,
and are enforceable against them in accordance with their respective terms.
5. The execution and delivery by each of Purchaser, Merger Sub and
First National, as applicable, of the Transaction Documents and the performance
by Purchaser, Merger Sub and First National of their respective agreements
thereunder will not (a) violate the Constituent Documents of Purchaser, Merger
Sub or First National, (b) constitute a breach of or result in a default under
any of the terms, conditions or provisions of any material agreement or
instrument Actually Known to us to which Purchaser, Merger Sub or First National
is a party or by which any of their properties are bound, (c) breach any
existing obligation of Purchaser, Merger Sub or First National under any
material decree or order of the United States of America Actually Known to us to
which Purchaser, Merger Sub or First National is a party or in which it is
named, or (d) violate applicable provisions of statutory law or regulation.
6. No approval, consent or authorization of, or filing with, any
governmental agency or authority of the United States of America is required on
the part of Purchaser, Merger Sub or First National to make valid and legally
binding the execution, delivery and performance by Purchaser, Merger Sub and
First National of the Transaction Documents, except for approvals,
XXXXXX PRICE
Xxxxxxxxxx Financial Group, Inc.
_________, 2001
Page 3
consents, authorizations and filings (a) specified in the Transaction Documents
or (b) already obtained or made.
This Opinion Letter may be relied upon by you only in connection with the
Transaction and may not be used or relied upon by you or any other person for
any purpose whatsoever, except to the extent authorized in the Accord, without
in each instance our prior written consent.
Very truly yours,
VEDDER, PRICE, XXXXXXX & KAMMHOLZ
MAN/DMH/NDK/tgw
Exhibit I
_________, 2001
Board of Directors
Hasten Bancshares
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx
Ladies and Gentlemen:
We have acted as special counsel to Xxxxxxxxxx Financial Group, Inc., an
Indiana corporation (the "Company"), and Xxxxxxxxxx Bank, FSB, a
federally-chartered stock savings bank (the "Bank"), in connection with that
certain Agreement and Plan of Merger dated as of May 30, 2001 (the "Merger
Agreement") by and among the Company, Hasten Bancshares, an Indiana corporation
(the "Purchaser"), AL Acquisition Corp., an Indiana corporation ("Merger Sub"),
and Xxxxxxx X. Xxxxxxx (the "Majority Shareholder"), which sets forth, among
other things, the terms upon which Merger Sub, a wholly-owned subsidiary of
Purchaser, shall merge with and into the Company (the "Merger"). Pursuant to the
Merger Agreement, the Bank and First National Bank and Trust, a wholly-owned
subsidiary of Purchaser ("First National"), entered into an agreement pursuant
to which the Bank shall merge with and into First National (collectively, with
the Merger, the "Transactions"). This opinion is furnished to you at the request
of the Company pursuant to Section 6.3(d) of the Merger Agreement. Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
assigned to them in the Merger Agreement.
In rendering this opinion, we have examined:
a. the Merger Agreement;
b. the Bank Merger Agreement;
c. the Option Agreement;
d. the Articles of Incorporation and Charter of the Company and the
Bank, respectively;
e. the By-laws of the Company and the Bank, respectively;
f. a Certificate of Good Standing as of a recent date from the
Secretary of State of Indiana with respect to the Company, and from
the Office of Thrift Supervision with respect to the Bank;
g. resolutions of the Boards of Directors of the Company and the Bank
approving the Merger Agreement, the Bank Merger Agreement and the
transactions contemplated thereby;
h. the Purchase and Assumption Agreement dated as of May 30, 2001 by
and between Los Padres Bank, FSB ("Los Padres") and the Bank, the
Purchase and Assumption Agreement dated as of May 30, 2001 by and
between Community First Financial Group, Inc. and the Bank, and the
Stock Purchase Agreement dated as of May 30,
Hasten Bancshares
__________, 2001
Page 2
2001 by and between the Bank and Los Padres (collectively, the
"Branch Agreements"); and
i. such other documents as we, in our professional judgment, have
deemed necessary or appropriate as a basis for the opinions set
forth below (items a-c above are referred to herein collectively as
the "Transaction Documents").
In examining the documents referred to above, we have assumed, without
independent verification, the genuineness of all signatures (other than those on
behalf of the Company, the Bank and the Majority Shareholder), the legal
capacity of all natural persons, the authenticity of documents purporting to be
originals and the conformity to originals of all documents submitted to us as
copies. As to questions of fact material to our opinion, we have relied (without
investigation or independent confirmation) upon the representations contained in
the Transaction Documents and on certificates and other communications from
public officials, officers and transfer agents of the Company and the Bank. We
have also assumed, without independent verification, that each of the
Transaction Documents has been duly authorized, executed and delivered by, and
constitutes the legal and valid obligation of each party thereto (other than the
Company and the Bank), and is enforceable there against in accordance with its
terms. With respect to matters stated to be based on our knowledge, such
language indicates that (i) the relevant knowledge is limited to the actual
knowledge of the lawyers in the firm who have participated from time to time in
the representation of the Company and the Bank; (ii) we have not undertaken any
independent investigation with respect to such matter except as to the
investigations referred to herein and as to the review of documents and
certificates referred to herein as we have deemed appropriate for purposes of
rendering the opinions herein; and (iii) no inference that we have actual
knowledge concerning such matter should be drawn from the fact of our
representation of the Company and Bank as special counsel or our expression of
such opinion. For purposes of our opinion, no proceedings shall be deemed to be
pending or threatened and no action shall be deemed to be instituted unless, in
each case, a director or executive officer of the Company or the Bank shall have
received a copy of such proceedings or action or have knowledge of the threat of
such proceedings or action and has so indicated in a certificate delivered to
us.
Except as described herein, this opinion is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the "Accord") of the
ABA Section of Business Law (1991). As a consequence, it is subject to a number
of qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, including but not
limited to, the assumptions contained in ss.4 of the Accord and the General
Qualifications (as defined in the Accord), and this Opinion Letter should be
read in conjunction therewith.
Hasten Bancshares
__________, 2001
Page 3
We express no opinion as to the laws of any jurisdiction other than the
Federal Laws of the United States of America and the Laws of the State of
Indiana. For purposes of this opinion, we have relied upon the opinion of
_____________ with respect to the laws of the State of Indiana ( a copy of which
is attached hereto).
Based on the foregoing, and subject to the qualifications, assumptions and
limitations set forth herein, we are of the opinion that:
1. The Company is a corporation validly existing and in good standing
under the laws of the State of Indiana and is registered with the OTS as a
savings and loan holding company. The Company is duly qualified to do business
and in good standing as a foreign corporation in the State of Kansas. The Bank
is a federally-chartered stock savings bank validly existing and in good
standing under the laws of the United States of America. The Company and the
Bank have adequate corporate power and authority to conduct their respective
businesses as they are now being conducted.
2. The Company and the Bank have adequate corporate power and authority to
execute, deliver and perform their obligations under the Transaction Documents.
3. The execution and delivery by the Company and the Bank of the
Transaction Documents and the performance by the Company and the Bank, as
applicable, of their agreements under such documents have been duly authorized
by all requisite corporate action on the part of the Company and the Bank. The
Company and the Bank, as applicable, have duly executed and delivered the
Transaction Documents.
4. The Transaction Documents constitute the legal, valid and binding
obligations of the Company and the Bank, as applicable, and are enforceable
against them in accordance with their respective terms.
5. The execution and delivery by the Company and the Bank, as applicable,
of the Transaction Documents, and the performance by the Company and the Bank of
their agreements under such documents, do not (a) violate the Company's Articles
of Incorporation or By-laws, or the Bank's Charter or By-laws, (b) result in a
breach of, constitute a default under, or result in the creation of any lien,
security interest or other encumbrance upon any of the Company's or the Bank's
properties under, any agreement or instrument which is filed as an exhibit to
the Company's Annual Report on Form 10-K for the year ended June 30, 2000 or (c)
violate any applicable statutory law or regulation of the United States of
America or any decree or order of the United States of America to which the
Company or the Bank is a party and which is known to us.
Hasten Bancshares
_________, 2001
Page 4
6. To our knowledge and except as set forth in Schedule 3.10 to the
Company Disclosure Schedule, there is no Action, pending or overtly threatened
in writing, against the Company or the Bank.
7. No approval, consent or authorization of, or filing with, any
governmental agency or authority of the United States of America, is required on
the part of the Company or the Bank to make valid and legally binding the
execution, delivery and performance by the Company and the Bank of the
Transaction Documents, except for approvals, consents, authorizations and
filings (a) specified in the Transaction Documents or (b) already obtained or
made.
8. The Company's capital stock consists solely of (i) 10,000,000 shares of
Company Common Stock, of which 3,129,670 shares have been validly issued and are
outstanding, fully paid and nonassessable as of the date hereof, and (ii)
5,000,000 shares of preferred stock, $1.00 par value per share, none of which
are outstanding. To our knowledge, except for the option granted to Purchaser
pursuant to the Option Agreement and except for stock options granted pursuant
to the Company Incentive Plan, there is no existing subscription, option,
warrant, right, agreement or commitment of any kind relating to the unissued
shares of Company Common Stock and no outstanding security convertible into or
exchangeable for shares of the Company Common Stock.
9. The Company Sales have been consummated in accordance with the terms of
the Branch Agreements.
The foregoing opinions are subject to the following qualifications:
(a) With respect to our opinions in paragraph 1 above regarding the
good standing of the Company and the Bank, the Company's due qualification
to do business as a foreign corporation, and the Company's registration
with the OTS as a savings and loan holding company, we have relied solely
on Certificates of Good Standing issued by the Secretaries of State of the
States of Indiana and Kansas, and the Office of Thrift Supervision.
(b) With respect to our opinions in paragraph 8 above regarding the
amount of issued and outstanding shares of Company Common Stock and the
fully paid nature of such Company Common Stock, we have relied solely on
our review of the Company's stock ledger and an officer's certificate from
the Company.
(c) The enforceability of any obligation of the Company or the Bank
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, rehabilitation,
Hasten Bancshares
__________, 2001
Page 5
moratorium, marshaling or other laws affecting the enforcement generally
of creditors' rights and remedies.
(d) The enforceability of any obligation of the Company or the Bank
is subject to principles of equity (regardless of whether considered and
applied in a proceeding in equity or at law), public policy, applicable
law relating to fiduciary duties, and judicial imposition of an implied
covenant of good faith and fair dealing.
(e) No opinion is given herein as to the availability of specific
performance or equitable relief of any kind.
(f) The opinions expressed herein relate only to laws which are
specifically referred to in this opinion and which laws, in our
experience, are normally directly applicable to transactions of the type
provided for in the Transaction Documents.
This opinion is solely for the information of the addressee hereof and is
not to be quoted in whole or in part or otherwise referred to, nor is it to be
filed with any government agency or any other person, without our prior written
consent, and no one other than the addressee hereof is entitled to rely on this
opinion. This opinion is given to you as of the date hereof and we assume no
obligation to advise you of any change which may hereafter be brought to our
attention.
Very truly yours,
XXXXXX XXXX & XXXXXX LLP
