EXHIBIT 99.2
[EXECUTION COPY]
AGREEMENT AND PLAN OF MERGER
by and among
MAF BANCORP, INC.
a Delaware corporation,
CLASSIC ACQUISITION CORP.
a Delaware corporation,
and
CHESTERFIELD FINANCIAL CORP.,
a Delaware corporation
June 5, 2004
TABLE OF CONTENTS
PAGE
I. THE MERGER..............................................................................................1
1.1 Effects of the Merger..........................................................................1
1.2 Conversion of Shares upon the Merger...........................................................2
1.3 Stock Options..................................................................................4
1.4 Consummation of the Merger; Effective Time.....................................................4
1.5 Exchange of Company Common Stock...............................................................4
II. REPRESENTATIONS AND WARRANTIES OF PURCHASER.............................................................6
2.1 Organization...................................................................................7
2.2 Authorization..................................................................................8
2.3 Conflicts......................................................................................8
2.4 Capitalization.................................................................................9
2.5 Purchaser Financial Statements; Material Changes...............................................9
2.6 Purchaser Reports..............................................................................9
2.7 Compliance With Laws..........................................................................10
2.8 Litigation....................................................................................10
2.9 Defaults......................................................................................10
2.10 Absence of Certain Changes or Events..........................................................11
2.11 Undisclosed Liabilities.......................................................................11
2.12 Licenses......................................................................................11
2.13 Government Approvals..........................................................................11
2.14 Accuracy of All Representations...............................................................11
2.15 Fees..........................................................................................11
2.16 Fairness Opinion..............................................................................12
2.17 Disclosure....................................................................................12
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................................12
3.1 Organization..................................................................................12
3.2 Authorization.................................................................................13
3.3 Conflicts.....................................................................................14
3.4 Capitalization and Stockholders...............................................................14
3.5 Company Financial Statements; Material Changes................................................15
3.6 Company SEC Filings...........................................................................16
3.7 Company Reports...............................................................................16
3.8 Compliance With Laws..........................................................................16
3.9 Litigation....................................................................................17
3.10 Defaults......................................................................................17
3.11 Absence of Certain Change or Events...........................................................18
3.12 Undisclosed Liabilities.......................................................................18
3.13 Licenses......................................................................................18
3.14 Governmental and Stockholder Approvals........................................................18
3.15 Antitakeover Provisions Inapplicable..........................................................18
3.16 Disclosure....................................................................................18
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TABLE OF CONTENTS
(continued)
PAGE
3.17 Taxes.........................................................................................19
3.18 Insurance.....................................................................................20
3.19 Loans; Investments............................................................................20
3.20 Interest Rate Risk Management Arrangements....................................................21
3.21 Allowance for Loan Losses.....................................................................21
3.22 Insurance Subsidiary..........................................................................21
3.23 Company Benefit Plans.........................................................................22
3.24 Environmental Matters.........................................................................25
3.25 Material Contracts............................................................................27
3.26 Real Property.................................................................................27
3.27 Indemnification...............................................................................28
3.28 Insider Interests.............................................................................28
3.29 Accuracy of All Representations...............................................................28
3.30 Fairness Opinion..............................................................................28
3.31 Fees..........................................................................................28
IV. COVENANTS..............................................................................................29
4.1 Conduct of Business by the Company Until the Effective Time...................................29
4.2 Conduct of Business by Purchaser Until the Effective Time.....................................33
4.3 Certain Actions...............................................................................34
V. ADDITIONAL AGREEMENTS..................................................................................35
5.1 Inspection of Records; Confidentiality........................................................35
5.2 Meetings of the Company.......................................................................36
5.3 Bank Merger...................................................................................36
5.4 D&O Indemnification...........................................................................36
5.5 Affiliate Letters.............................................................................37
5.6 Regulatory Applications.......................................................................38
5.7 Financial Statements and Reports..............................................................38
5.8 Registration Statement; Stockholder Approval..................................................39
5.9 Notice........................................................................................39
5.10 Press Releases................................................................................40
5.11 Delivery of Supplements to Disclosure Schedules...............................................40
5.12 Tax Opinion...................................................................................40
5.13 Resolution of Company Benefit Plans...........................................................40
5.14 Environmental Investigation...................................................................42
5.15 Title to Real Estate..........................................................................43
5.16 Other Actions; Further Assurances; Form of Transaction........................................43
VI. CONDITIONS.............................................................................................44
6.1 Conditions to the Obligations of the Parties..................................................44
6.2 Conditions to the Obligations of Purchaser....................................................44
6.3 Conditions to the Obligations of the Company..................................................46
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TABLE OF CONTENTS
(continued)
PAGE
VII. TERMINATION; AMENDMENT; WAIVER.........................................................................47
7.1 Termination...................................................................................47
7.2 Termination Fee...............................................................................48
7.3 Expenses......................................................................................49
7.4 Survival of Agreements........................................................................49
7.5 Amendment.....................................................................................49
7.6 Waiver........................................................................................49
VIII. GENERAL PROVISIONS.....................................................................................50
8.1 Survival......................................................................................50
8.2 Notice........................................................................................50
8.3 Applicable Law................................................................................51
8.4 Headings, Etc.................................................................................51
8.5 Severability..................................................................................51
8.6 Entire Agreement; Binding Effect; Nonassignment; Counterparts.................................51
8.7 Certain Definitions...........................................................................51
8.8 Tax Treatment; Tax Structure..................................................................52
EXHIBITS
Exhibit A Form of Cancellation Agreement*
Exhibit B Form of Certificate of Merger*
Exhibit C Form of Bank Merger Agreement*
Exhibit D Form of Affiliate Letter*
Exhibit E Forms of Letter of Understanding*
Exhibit F Form of Benefits Letter*
Exhibit G Opinion of Luse, Gorman, Xxxxxxxx & Xxxxxx PC*
Exhibit H Opinion of the General Counsel of Purchaser*
_____________
*Intentionally omitted.
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger ("Agreement") is made and entered
into as of the 5th day of June, 2004, by and among MAF Bancorp, Inc., a Delaware
corporation ("Purchaser"), Classic Acquisition Corp., a Delaware corporation and
a wholly owned subsidiary of Purchaser ("Merger Sub"), and Chesterfield
Financial Corp., a Delaware corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, the parties desire that Merger Sub be merged with and into the
Company (the "Merger"), as a 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, the Board of Directors of the Company deems the Merger
advisable and in the best interests of the Company and its stockholders and has
adopted a resolution approving this Agreement and directing that this Agreement
be submitted for the consideration of the Company's stockholders.
WHEREAS, the respective Boards of Directors of Purchaser and Merger Sub
have adopted resolutions approving this Agreement, and Purchaser, as the sole
stockholder of Merger Sub, has approved and adopted this Agreement and the
transactions contemplated hereby.
WHEREAS, immediately following the Merger, Purchaser intends to cause
the Surviving Corporation (as defined herein) to be dissolved and liquidated
into Purchaser.
WHEREAS, in connection with the Merger, Purchaser and the Company
intend that Chesterfield Federal Savings and Loan Association of Chicago, a
wholly-owned subsidiary of the Company (the "Bank"), shall merge (the "Bank
Merger") with and into Mid America Bank, fsb, a wholly-owned subsidiary of
Purchaser ("Mid America") immediately following consummation of the merger.
WHEREAS, immediately following the Bank Merger, Purchaser intends to
cause Mid America to declare and pay a dividend to Purchaser in the amount up to
approximately $65 million to partially fund the cash portion of the Merger
Consideration.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties hereto agree as follows:
I.
THE MERGER
1.1 Effects of the Merger
(a) Surviving Corporation. Subject to the terms and conditions of this
Agreement, 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, and (iii) the Surviving Corporation shall be governed by the laws
of the State of Delaware. The Merger will have the effects set forth in the
Delaware General Corporation Laws ("DGCL") and as otherwise provided in this
Agreement and in accordance therewith. 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 either of the Company or Merger Sub, all of which shall vest
in the Surviving Corporation without further act or deed.
(b) Certificate of Incorporation. The Certificate of Incorporation of
the Company with such changes, if any, as may be provided for in the Certificate
of Merger (as defined herein) shall be the Certificate of Incorporation of the
Surviving Corporation until amended in accordance with the provisions thereof
and the DGCL.
(c) By-laws. The By-laws of Merger Sub in effect immediately prior to
the Effective Time shall be the By-laws of the Surviving Corporation until
altered, amended or repealed as provided therein, or in accordance with the
Certificate of Incorporation of the Surviving Corporation and the DGCL.
(d) Directors and Officers. The directors of the Surviving Corporation
shall be the persons who were directors of Merger Sub immediately prior to the
Effective Time and shall hold office until their respective successors are duly
elected or appointed and qualified.
1.2 Conversion of Shares upon the Merger. At the Effective Time (as
defined herein), by virtue of the Merger and without any action on the part of
Purchaser, Merger Sub, the Company or the holders of Purchaser Common Stock (as
defined below), Merger Sub Common Stock (as defined below) or Company Common
Stock (as defined below), the following shall occur:
(a) Merger Sub Common Stock. Each share of the common stock, par value
$0.01 per share, of Merger Sub ("Merger Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall be converted into one
share of the Common Stock of the Surviving Corporation and all such shares of
common stock of the Surviving Corporation shall be owned by Purchaser.
Outstanding certificates representing shares of common stock of Merger Sub
immediately prior to the Merger shall be deemed to represent an identical number
of shares of common stock of the Surviving Corporation upon consummation of the
Merger.
(b) Company Common Stock. Subject to Section 1.2(c), Section 1.2(d) and
Section 1.5(c), each share of the common stock, par value $0.01 per share, of
the Company ("Company Common Stock") issued and outstanding immediately prior to
the Effective Time shall be converted into the right to receive a combination of
cash and shares of common stock, par value $0.01 per share, of Purchaser
("Purchaser Common Stock") (collectively, the "Merger Consideration"), the
combined value of which shall equal $31.50 per share of Company Common Stock, to
be determined as follows:
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(i) an amount in cash (the "Per Share Cash Consideration")
equal to $20.48, or such greater portion of the Merger Consideration as
Purchaser may determine to pay in cash; provided, however, that in the
event Purchaser proposes to pay more than $20.48 of the Merger
Consideration in cash, Purchaser must first provide the Company notice
of the proposed cash amount no later than fifteen (15) business days
prior to the Closing Date and the Company shall have consented to such
greater amount, which consent shall not be unreasonably withheld;
provided, further, that if the Company does not object within three (3)
business days of receipt from Purchaser of any such notice, the Per
Share Cash Consideration shall be the greater amount proposed by
Purchaser; plus
(ii) a number of fully paid and nonassessable shares of the
common stock, par value $0.01 per share of Purchaser ("Purchaser Common
Stock"), determined by dividing (x) the amount obtained by subtracting
the Per Share Cash Consideration from $31.50, by (y) the Purchaser
Closing Price. For purposes hereof, the "Purchaser Closing Price" shall
mean the average of the last reported sales price on The Nasdaq
National Market ("Nasdaq") for Purchaser Common Stock as reported on
Nasdaq for the ten (10) trading days next preceding (the first of such
10 days herein referred to as, the "Pricing Commencement Date"), but
not including, the Closing Date. Purchaser shall not, within three (3)
days of the Pricing Commencement Date and through the Effective Time,
declare or establish a record date for a stock split, stock dividend,
recapitalization, reclassification, or similar transaction with respect
to the outstanding Purchaser Common Stock.
(c) Stock Held by the Company or Purchaser. All shares of Company
Common Stock (other than shares of Company Common Stock held directly or
indirectly in trust accounts, managed accounts and the like or otherwise held in
a fiduciary capacity that are beneficially owned by third parties) that are (i)
owned by the Company as treasury stock, (ii) owned directly or indirectly by the
Company or any of its wholly-owned subsidiaries or (iii) owned directly or
indirectly by Purchaser or any of its wholly-owned subsidiaries, shall be
cancelled and no shares of Purchaser Common Stock or other consideration shall
be delivered in exchange therefor.
(d) Dissenting Shares. Each outstanding share of Company Common Stock
the holder of which has perfected appraisal rights under Section 262 of the DGCL
and has not effectively withdrawn or lost such rights as of the Effective Time
(the "Dissenting Shares") shall not be converted into or represent a right to
receive the Merger Consideration hereunder, and the holder thereof shall be
entitled only to such rights as are granted by the DGCL. The Company shall give
Purchaser prompt notice upon receipt by Company of any such demands for payment
of the fair value of such shares of Company Common Stock and of withdrawals of
such notice and any other instruments provided pursuant to applicable law (any
stockholder duly making such demand being hereinafter called a "Dissenting
Stockholder"), and Purchaser shall have the right to participate in all
negotiations and proceedings with respect to any such demands. The Company shall
not, except with the prior written consent of Purchaser, voluntarily make any
payment with respect to, or settle or offer to settle, any such demand for
payment, or waive any failure to timely deliver a written demand for appraisal
or the taking of any other action by such Dissenting Stockholder as may be
necessary to perfect appraisal rights under the DGCL. Any payments made in
respect of Dissenting Shares shall be made by the Surviving Corporation.
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1.3 Stock Options. Immediately prior to the Effective Time, each option
granted by the Company to purchase shares of Company Common Stock (each an
"Option," and collectively, "Options"), which is outstanding and unexercised
immediately prior to the Effective Time, shall convert into the right to receive
cash to be paid in accordance with this Section 1.3. All Options converted to
cash pursuant to this Section 1.3 shall terminate effective immediately prior to
the Effective Time. Immediately prior to the Effective Time, the Company shall
make or shall cause to be made a cash payment to the holder of each Option in an
amount (less any applicable withholding taxes) equal to the number of shares of
Company Common Stock covered by such Option multiplied by the amount by which
$31.50 exceeds the exercise price per share of Company Common Stock under the
Option held by such holder. Prior to receipt of such payment, each holder of an
Option shall execute a cancellation agreement, substantially in the form of
Exhibit A hereto ("Cancellation Agreement"). In the event a holder of an Option
has not delivered an executed Cancellation Agreement prior to the Effective
Time, such holder shall be paid by Purchaser the amount to be paid pursuant to
this Section 1.3 within five (5) business days of Purchaser's receipt of such
Cancellation Agreement.
1.4 Consummation of the Merger; Effective Time. Subject to the terms
and conditions of this Agreement, the transactions contemplated by this
Agreement shall be consummated (the "Closing") at the offices of Vedder, Price,
Xxxxxxx & Kammholz, P.C., 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, on such
date and time as shall be fixed by mutual agreement of Purchaser and the Company
as promptly as practicable, but not later than five (5) business days (unless
otherwise agreed to by the parties or except as set forth below) after all of
the conditions set forth in Article VI (other than the receipt of closing
certificates and legal opinions) have first been fulfilled or waived, provided
such conditions shall continue, on such fifth business day, to be fulfilled or
waived, including the conditions which, by their terms, are to be satisfied on
the Closing Date and/or at the Effective Time; provided, further, that if the
Closing would otherwise occur pursuant to this Section 1.4 on a date during the
last month of a calendar quarter that is after the dividend payment date in that
quarter for the Company's regular quarterly dividend but before the dividend
record date in such month for Purchaser's regular quarterly dividend, Purchaser
shall have the right to delay the Closing to the next business day immediately
following Purchaser's dividend record date (the date of such closing being the
"Closing Date"). At the Closing, Purchaser and the Company shall cause the
Merger to become effective by causing a certificate of merger substantially in
the form set forth in Exhibit B (the "Certificate of Merger") to be executed in
accordance with the DGCL and to be filed with the Secretary of State of the
State of Delaware providing for the Merger to become effective at 12:01 a.m. on
the date immediately following the Closing Date, or at such other time as the
parties may mutually agree. The time at which the Merger becomes effective shall
be referred to as the "Effective Time."
1.5 Exchange of Company Common Stock.
(a) Surrender of Certificates. As soon as practicable after the
Effective Time but in no event later than three (3) business days following the
Effective Time, Computershare Investor Services LLP (the "Exchange Agent"),
pursuant to documentation reasonably acceptable to Purchaser and the Company
consistent with the terms hereof, shall mail to each holder of record of a
certificate or certificates which, as of the Effective Time, represented
outstanding shares of Company Common Stock (each, a "Certificate"): (i) a form
letter of
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transmittal which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates (or a lost certificate affidavit and bond in a form reasonably
acceptable to the Exchange Agent) to the Exchange Agent; and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for the
Merger Consideration. Upon surrender of a Certificate for cancellation to the
Exchange Agent (or a lost certificate affidavit and bond in a form reasonably
acceptable to the Exchange Agent), together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive, in
exchange therefor, (i) a certificate evidencing the whole number of shares of
Purchaser Common Stock into which the shares of Company Common Stock,
theretofore represented by the Certificate so surrendered, shall have been
converted pursuant to the provisions of Section 1.2, plus (ii) the aggregate
amount of Per Share Cash Consideration which such holder would be entitled to
receive pursuant to Section 1.2 plus, (iii) such additional cash amount, if any,
payable in lieu of fractional shares in accordance with Section 1.5(c), and the
Certificate so surrendered shall be cancelled. Purchaser shall direct the
Exchange Agent to make such deliveries within three (3) business days of the
receipt of all required documentation. If any Purchaser Common Stock to be
exchanged for shares of Company Common Stock is to be delivered in a name other
than that in which the Certificate surrendered for exchange is registered, it
shall be a condition to the exchange that the Certificate so surrendered shall
be properly endorsed or otherwise in proper form for transfer, that all
signatures shall be guaranteed by a member firm of any national securities
exchange in the United States or the National Association of Securities Dealers,
Inc., or by a commercial bank or trust company or other financial institution
acceptable to Purchaser having an office in the United States, and that the
person requesting the payment shall either (a) pay to the Exchange Agent any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of the Certificate surrendered, or (b) establish to the
satisfaction of the Exchange Agent that such taxes have been paid or are not
payable. From and after the Effective Time, there shall be no transfers on the
stock transfer books of the Company of any shares of Company Common Stock
outstanding immediately prior to the Effective Time and any such shares of
Company Common Stock presented to the Exchange Agent shall be cancelled in
exchange for the Merger Consideration payable with respect thereto as provided
in Section 1.2 above.
(b) Failure to Exchange Company Common Stock. No dividends or other
distributions declared after the Effective Time with respect to Purchaser Common
Stock payable to the holders of record thereof after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect to Purchaser
Common Stock represented thereby nor will any payment of the Per Share
Consideration or cash in lieu of fractional shares be made to any holder until
the holder of record shall surrender such Certificate (or comply with the
provision with respect to lost Certificates above) and no interest will accrue
or become payable on any such amounts. Subject to the effect, if any, of
applicable law, after the subsequent surrender and exchange of a Certificate (or
comply with the provision with respect to lost Certificates above), the holder
thereof shall be entitled to receive any such dividends or distributions,
without interest thereon, which theretofore became payable with respect to the
Purchaser Common Stock represented by such Certificate. All dividends or other
distributions declared on or after the Effective Time with respect to the
Purchaser Common Stock and payable to the holders of record thereof on or after
the Effective Time which are payable to the holder of a Certificate not
theretofore surrendered and exchanged for Purchaser Common Stock pursuant to
this Section 1.5(b) shall be paid or delivered by Purchaser to the Exchange
Agent, in trust, for the
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benefit of such holders and paid (without interest) upon surrender for exchange
of the Certificate (or compliance with the provision with respect to lost
Certificates above). All such dividends and distributions held by the Exchange
Agent for payment or delivery to the holders of unsurrendered Certificates
unclaimed at the end of one (1) year from the Effective Time shall be repaid or
redelivered by the Exchange Agent to Purchaser after which time any holder of
Certificates who has not theretofore surrendered such Certificates to the
Exchange Agent, subject to applicable law, shall look only to Purchaser for
payment or delivery of such dividends or distributions, as the case may be. Any
shares of Purchaser Common Stock and any cash amounts or other consideration
delivered or made available to the Exchange Agent pursuant to this Section
1.5(b) and not exchanged for Certificates within one (1) year after the
Effective Time shall be returned by the Exchange Agent to Purchaser which shall
thereafter act as exchange agent subject to the rights of holders of
unsurrendered Certificates hereunder.
(c) Fractional Shares. No certificates or scrip representing fractional
shares of Purchaser Common Stock shall be issued upon the surrender for exchange
of Certificates, no dividend or distribution of Purchaser shall relate to any
fractional share, and such fractional share interests will not entitle the owner
thereof to vote or assert any rights of a stockholder of Purchaser. In lieu of
any fractional share of Purchaser Common Stock, Purchaser shall cause to be paid
to each holder of shares of Company Common Stock who otherwise would be entitled
to receive a fractional share of Purchaser Common Stock an amount of cash
(without interest) equal to the product of such fraction multiplied by the
Purchaser Closing Price.
(d) Exchange Fund. On the date the Effective Time occurs, Purchaser
shall deposit, or shall cause to be deposited, with the Exchange Agent for the
benefit of the holders of Company Common Stock, for exchange in accordance with
Section 1.5, an aggregate amount of cash, sufficient to pay the aggregate Per
Share Cash Consideration payable pursuant to Section 1.2(b) (plus an additional
amount of cash sufficient to cover amounts payable in lieu of any fractional
shares of Company Common Stock) (such cash, together with any dividends or
distributions with respect to shares of Purchaser Common Stock issuable as part
of the aggregate Merger Consideration, being hereinafter referred to as the
"Exchange Fund").
(e) Escheat. Notwithstanding anything 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 consideration delivered to a
public official pursuant to applicable escheat or abandoned property laws.
II.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to the Company that the
statements contained in this Article II are correct and complete as of the date
of this Agreement and will be correct and complete as of the Effective Time (as
though made then and as though the Effective Time were substituted for the date
of this Agreement throughout this Article II), except as to any representation
or warranty which specifically relates to an earlier date, which only need be so
correct as of such earlier date. The Purchaser has made a good faith effort to
ensure that the disclosure on each schedule of the Purchaser Disclosure Schedule
corresponds to the section
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referenced herein. However, for purposes of the Purchaser Disclosure Schedule,
any item disclosed on any schedule therein is deemed to be fully disclosed with
respect to all schedules under which such item may be relevant as and to the
extent that it is reasonably clear on the face of such schedule that such item
applies to such other schedule. The "Purchaser Disclosure Schedule" shall
consist of the agreements, lists, instruments and other documentation and
information described or referred to in this Agreement as being provided on a
specific schedule.
2.1 Organization.
(a) Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
power and authority, corporate and otherwise, to own, operate and lease its
assets, properties and businesses, and to carry on its business substantially as
it has been and is now being conducted. Purchaser is duly qualified to do
business and is in good standing in each jurisdiction where the character of the
properties owned or leased by it or the nature of the business transacted by it
requires that it be so qualified, except where the failure to so qualify would
not have a material adverse effect on the business of Purchaser and its
subsidiaries, taken as a whole, or its ability to consummate the transactions
contemplated herein. Purchaser has all requisite corporate power and authority
to enter into this Agreement, and, upon the approval of the Governmental
Authorities (as defined herein), to consummate the transactions contemplated
hereby. Purchaser is duly registered as a unitary savings and loan holding
company under the Home Owners' Loan Act, as amended ("HOLA").
(b) Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and wholly owned by
Purchaser. Merger Sub was formed for the purpose of engaging in the Merger and
has not engaged, and will not engage prior to the Merger, in any activities
other than those necessary to effectuate the terms of this Agreement. The
authorized capital stock of Merger Sub consists of 1,000 shares of common stock,
no par value per share, of which 100 shares are issued and outstanding.
(c) Mid America is a federally-chartered stock savings bank duly
organized and in existence under the laws of the United States. Mid America is
an "insured depository institution" as defined in the Federal Deposit Insurance
Act (the "FDI Act") and applicable regulations thereunder, the deposits of which
are insured by the Federal Deposit Insurance Corporation ("FDIC") through the
Savings Association Insurance Fund ("SAIF") to the full extent permitted under
applicable laws.
(d) Purchaser has no direct or indirect subsidiaries other than MAF
Developments, Inc., N.W. Financial Corporation, Mid America Investment Services,
Inc., Mid America Finance Corporation, Mid America Insurance Agency, Inc.,
Centre Point Title Services, Inc., MAF Realty Co., L.L.C.-III, MAF Realty Co.,
L.L.C.-IV, Mid America Mortgage Securities, Inc., Xxxxxxx Road Development
Corporation, Reigate Xxxxx Development Corporation, Mid America Re, Inc., Mid
Town Development Corporation, Equitable Finance Corporation, Fidelity
Corporation, Fidelity Loan Services, Inc., St. Xxxxxxx Investment Corporation,
St. Xxxxxxx Insurance Services Corporation and St. Xxxxxxx Equity Properties,
Inc. (the "Purchaser Corporate Subsidiaries") and Mid America (collectively, the
"Purchaser Subsidiaries"). Except as set forth on Schedule 2.1(d) to the
Purchaser Disclosure Schedule,
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each of the Purchaser Corporate Subsidiaries is either wholly-owned by Purchaser
or Mid America or by wholly-owned subsidiaries of Mid America, and is a duly
organized and validly existing corporation or limited liability company, as
applicable, in good standing under the laws of the State of Illinois, Delaware,
Vermont, Wisconsin or Nevada, as applicable, with entity power and authority to
own, operate and lease its assets and properties and carry on its business
substantially as it has been and is now being conducted. Each Purchaser
Subsidiary holds all licenses, certificates, permits, franchises and rights from
all appropriate federal, state or other public authorities necessary for the
conduct of its and their respective businesses, except where the failure to so
hold does not have a material adverse effect on the business of the Purchaser
and the Purchaser Subsidiaries, taken as a whole.
2.2 Authorization. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby have
been duly approved and authorized by each of Purchaser's and Merger Sub's Board
of Directors, and all necessary corporate action on the part of Purchaser and
Merger Sub has been taken. This Agreement has been duly executed and delivered
by Purchaser and Merger Sub and, subject to the approval of all Governmental
Authorities, will constitute the valid and binding obligations of Purchaser and
Merger Sub, except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles and doctrines. Neither the Certificate of Incorporation nor
the By-laws of the Purchaser will need to be amended to effectuate the
transactions contemplated by this Agreement.
2.3 Conflicts. The execution and delivery of this Agreement by
Purchaser and Merger Sub, and the Bank Merger Agreement by Mid America do not,
and the consummation of the transactions contemplated hereby and thereby will
not, conflict with or result in any violation of the Certificate of
Incorporation or By-laws of Purchaser or Merger Sub or organizational documents
of any Purchaser Subsidiary. The execution and delivery of this Agreement by
Purchaser and Merger Sub, and the Bank Merger Agreement by Mid America do not,
and the consummation of the transactions contemplated hereby and thereby will
not, conflict with or result in any violation, breach or termination of, or
default or loss of a material benefit under, or permit the acceleration of, any
obligation or result in the creation of any material lien, charge or encumbrance
on any of the property or assets under any provision of any mortgage, indenture,
lease, agreement or other instrument, permit, concession, grant, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Purchaser or Merger Sub or their respective properties, other than
any such conflicts, violations or defaults which (i) individually or in the
aggregate do not have a material adverse effect on Purchaser and the Purchaser
Subsidiaries, taken as a whole, or (ii) will be cured, by valid amendment or
otherwise, or waived prior to the Effective Time. No consent, approval, order or
authorization of, or registration, declaration or filing with, any federal or
state governmental authority is required by or with respect to Purchaser, Merger
Sub or Mid America in connection with the execution and delivery of this
Agreement or the Bank Merger Agreement, or the consummation by Purchaser, Merger
Sub or Mid America of the transactions contemplated hereby or thereby, the
absence of which would have a material adverse effect upon Purchaser, except for
those relating to: any application or notice with the Office of Thrift
Supervision ("OTS"), the FDIC, and any other federal or state regulatory
authorities having jurisdiction over the transactions contemplated hereby
(collectively, the "Governmental Authorities"); the Registration Statement to be
filed by Purchaser relating to the Purchaser Common Stock to be issued pursuant
to this Agreement (the
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"Registration Statement") with the Securities and Exchange Commission (the
"SEC"), which Registration Statement shall include the proxy statement for use
in connection with the meeting of the stockholders of the Company (the "Proxy
Statement") to be called pursuant to Section 5.8 hereof; the Certificate of
Merger to be filed with the Secretary of State of the State of Delaware; any
filings, approvals or no-action letters with or from state securities
authorities; and any antitrust filings, consents, waivers or approvals.
2.4 Capitalization. As of June 3, 2004, the capital stock of Purchaser
consists of the following:
CLASS OF STOCK PAR VALUE AUTHORIZED ISSUED OUTSTANDING TREASURY
-------------- --------- ---------- ------ ----------- --------
Common $ .01 80,000,000 33,121,465 32,663,985 457,480
Preferred $ .01 5,000,000 0 0 0
All of the issued and outstanding shares of Purchaser Common Stock have been,
and all of the shares of Purchaser Common Stock to be issued in the Merger will
be at the Effective Time, duly and validly authorized and issued, and are, or
upon issuance in the Merger will be, as the case may be, fully paid and
nonassessable. None of the outstanding shares of Purchaser Common Stock has been
issued in violation of any preemptive rights and none of the outstanding shares
of Purchaser Common Stock is or will be entitled to any preemptive rights in
respect of the Merger or any of the other transactions contemplated by this
Agreement. Purchaser has reserved, and will at the Effective Time have, a number
of authorized but unissued shares of Purchaser Common Stock or shares of
Purchaser Common Stock held in treasury sufficient to pay the stock portion of
the aggregate Merger Consideration in accordance with Section 1.2 hereof.
2.5 Purchaser Financial Statements; Material Changes. Purchaser has
previously delivered or made available to the Company its audited consolidated
financial statements for the years ended December 31, 2003, 2002 and 2001, and
the unaudited consolidated financial statements for the three months ended March
31, 2004 (collectively, the "Purchaser Financial Statements"). The Purchaser
Financial Statements (x) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis ("GAAP") during the
periods involved (except as may be indicated in the notes thereto and, in the
case of the unaudited consolidated financial statements, except for the absence
of footnotes and for normal and recurring year-end adjustments which are not
material); and (y) fairly present in all material respects the consolidated
statement of financial condition of Purchaser as of the dates thereof and the
related consolidated statement of operations, changes in stockholders' equity
and cash flows for the periods then ended. Except as otherwise disclosed in the
Purchaser Reports filed with the SEC on or prior to May 9, 2004, since December
31, 2003 to the date hereof, Purchaser and the Purchaser Subsidiaries, taken as
a whole, have not undergone or suffered any changes in their condition
(financial or otherwise), properties, assets, liabilities, business or
operations which have been, in any case or in the aggregate, materially adverse
to Purchaser on a consolidated basis.
2.6 Purchaser Reports. (a) Since January 1, 2003, each of Purchaser and
the Purchaser Subsidiaries has timely filed all reports, together with any
amendments required to be made with respect thereto, that were required to be
filed since such date with (a) the SEC, (b) the OTS, (c) the FDIC, (d) any
applicable state banking, insurance, securities, or other regulatory
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authorities (except filings which are not material), and (e) Nasdaq
(collectively, the "Purchaser Reports"). Purchaser has previously made available
to the Company true and complete copies of the Purchaser Reports requested by
the Company. As of their respective filing dates, each of the Purchaser Reports
(after giving effect to any amendments thereto), including the financial
statements, exhibits, and schedules thereto, complied in all material respects
with the applicable provisions of the statutes, rules, and regulations enforced
or promulgated by the authority with which they were filed. The Purchaser
Reports filed with the SEC did not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(b) Except as disclosed on Schedule 2.6(b) to the Purchaser Disclosure
Schedule and except for examinations or reviews conducted in the regular course
of the business of Purchaser or the Purchaser Subsidiaries by the SEC, Internal
Revenue Service, Department of Labor, state, and local taxing authorities, OTS
or the FDIC, no federal, state or local governmental agency, commission or other
entity has initiated any proceeding or, to the best knowledge of Purchaser,
investigation into the business or operations of Purchaser or the Purchaser
Subsidiaries within the past three (3) years nor, to the best of our knowledge,
has any such proceeding or investigation been threatened nor is currently
pending. None of Purchaser or any Purchaser Subsidiary is subject to a written
agreement (as such term is defined pursuant to 12 U.S.C. ss.1818) with the OTS
or the FDIC. There is no unresolved violation, criticism or exception noted by
the SEC, OTS or FDIC, or other agency, commission or entity with respect to any
Purchaser Report that has had or is expected to have a material adverse effect
on the business of Purchaser and the Purchaser Subsidiaries, taken as a whole.
2.7 Compliance With Laws. Purchaser and the Purchaser Subsidiaries are
each in compliance with all material federal and state laws and regulations that
regulate the business of a savings bank, including, without limitation, HOLA and
the FDI Act, and Purchaser and each of the Purchaser Subsidiaries are in
compliance with all other applicable laws and regulations, except in each case
where the failure to comply would not have a material adverse effect on the
business of Purchaser and the Purchaser Subsidiaries, taken as a whole.
2.8 Litigation. There is no suit, action, investigation or proceeding,
legal, quasi-judicial, administrative or otherwise, pending or, to the best
knowledge of Purchaser, threatened against or affecting Purchaser or any
Purchaser Subsidiary, or any of their respective officers, directors, employees
or agents, in their capacities as such, which, if adversely determined, would
have a material adverse effect on the business of Purchaser and the Purchaser
Subsidiaries, taken as a whole, or which would materially affect the ability of
Purchaser to consummate the transactions contemplated herein or which is seeking
to enjoin consummation of the transactions provided for herein or to obtain
other relief in connection with this Agreement or the transactions contemplated
hereby or thereby.
2.9 Defaults. There has not been any default, or the occurrence of an
event which with notice or lapse of time or both would constitute a default, in
any obligation to be performed by Purchaser or any Purchaser Subsidiary under
any contract, commitment, or other material obligation to which Purchaser, any
Purchaser Subsidiary or their respective properties is subject, and neither
Purchaser nor any Purchaser Subsidiary has waived any right under any contract
or
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commitment, except in each case where any such default or waiver, singly or in
the aggregate with any other such defaults or waivers, would not have a material
adverse effect on the business of Purchaser and the Purchaser Subsidiaries,
taken as a whole. To the best knowledge of Purchaser, no other party to any such
material contract or commitment is in default in any material obligation to be
performed by such party.
2.10 Absence of Certain Changes or Events. Except as disclosed in the
Purchaser Reports filed with the SEC on or prior to May 9, 2004, since December
31, 2003, there has not been, except for the transactions as contemplated herein
or matters related thereto, any event or condition of any character which has
had or would be reasonably expected to have a Material Adverse Effect on
Purchaser.
2.11 Undisclosed Liabilities. All of the obligations or liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise, whether due
or becoming due, and regardless of when asserted) arising out of transactions or
events heretofore entered into, or any action or inaction, including taxes with
respect to or based upon transactions or events heretofore occurring, that are
required to be reflected, disclosed or reserved against in the audited
consolidated financial statements in accordance with GAAP ("Liabilities") have,
in the case of Purchaser and the Purchaser Subsidiaries, been so reflected,
disclosed or reserved against in the audited consolidated financial statements
of Purchaser as of December 31, 2003 or in the notes thereto, and Purchaser and
the Purchaser Subsidiaries have no other Liabilities except Liabilities incurred
since December 31, 2003, in the ordinary course of business or in connection
with acquisitions consummated prior to December 31, 2003.
2.12 Licenses. To Purchaser's best knowledge, Purchaser and each
Purchaser Subsidiary, respectively, hold all governmental registrations,
licenses, permits or franchises (each a "Purchaser Permit") required to be held
by it and which are material with respect to the operation of their respective
businesses, except for such Purchaser Permits which, the failure to hold, would
not have a material adverse effect on the business of Purchaser and the
Purchaser Subsidiaries, taken as a whole.
2.13 Government Approvals. To Purchaser's best knowledge, no fact or
condition exists with respect to Purchaser or any Purchaser Subsidiary which
Purchaser has reason to believe will prevent it from obtaining approval of the
Merger, the Bank Merger and other transactions contemplated by this Agreement by
any Governmental Authority.
2.14 Accuracy of All Representations. 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 necessary to make
the statements contained in such representations and warranties not misleading.
2.15 Fees. Other than the financial advisory services performed for
Purchaser by Xxxxxx, Xxxxxxxx & Company Incorporated, neither Purchaser nor any
of the Purchaser Subsidiaries, nor any of their respective officers, directors,
employees or agents, has employed a broker or finder or incurred any liability
for any financial advisory fees, brokerage fees, commissions, or finder's fees,
and no broker or finder has acted directly or indirectly for the
-11-
Purchaser or any Purchaser Subsidiary in connection with this Agreement or the
transactions contemplated hereby.
2.16 Fairness Opinion. Purchaser has received an opinion, dated the
date of this Agreement, from Xxxxxx, Xxxxxxxx & Company Incorporated, that,
subject to the terms, conditions and qualifications set forth therein, the
Merger Consideration is fair to Purchaser's stockholders from a financial point
of view.
2.17 Disclosure. None of the information to be supplied by the
Purchaser for inclusion or to be incorporated by reference in the Proxy
Statement or the information relating to the Purchaser and the Purchaser
Subsidiaries in the Registration Statement, will, in the case of the Proxy
Statement after giving effect to any amendments thereof or supplements thereto,
at the time of the meeting of the Company's stockholders to be held for purposes
of adopting the Agreement, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or, in the case of the Registration Statement, at the time it becomes
effective, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein not misleading.
The portions of the Registration Statement and Proxy Statement relating to the
Purchaser which are incorporated by reference to Forms 10-K, 10-Q and 8-K filed
by the Purchaser under the Securities Exchange Act comply and will comply as to
form in all material respects with the provisions of the Securities Exchange
Act.
III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser that the statements
contained in this Article III are correct and complete as of the date of this
Agreement and will be correct and complete as of the Effective Time (as though
made then and as though the Effective Time were substituted for the date of this
Agreement throughout this Article III), except as to any representation or
warranty which specifically relates to an earlier date, which only need be so
correct as of such earlier date. The Company has made a good faith effort to
ensure that the disclosure on each schedule of the Company Disclosure Schedule
corresponds to the section referenced herein. However, for purposes of the
Company Disclosure Schedule, any item disclosed on any schedule therein is
deemed to be fully disclosed with respect to all schedules under which such item
may be relevant as and to the extent that it is reasonably clear on the face of
such schedule that such item applies to such other schedule. The "Company
Disclosure Schedule" shall consist of all of the agreements, lists, instruments
and other documentation and information described or referred to in this
Agreement as being provided on a specified schedule.
3.1 Organization. (a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite power and authority, corporate and otherwise, to own,
operate and lease its assets, properties and businesses and to carry on its
businesses substantially as they have been and are now being conducted. The
Company is duly qualified to do business and is in good standing in each
jurisdiction where the character of the properties owned or leased by it or the
nature of the business transacted by it
-12-
requires that it be so qualified, except where the failure to be so qualified
does not have a material adverse effect on the Company and its subsidiaries,
taken as a whole, or its ability to consummate the transactions contemplated
herein. The Company has all requisite corporate power and authority to enter
into this Agreement, and, upon the approval of the Governmental Authorities and
the stockholders of the Company, to consummate the transactions contemplated
hereby. The Company is duly registered as a unitary savings and loan holding
company under HOLA.
(b) The Bank is a federally-chartered stock savings association duly
organized and in existence under the laws of the United States. The Bank is an
"insured depository institution" as defined in the FDI Act and applicable
regulations thereunder, the deposits of which are insured by FDIC through SAIF
to the full extent permitted under applicable laws. The Bank has all requisite
power and authority to enter into the Bank Merger Agreement and, upon the
approval of the Governmental Authorities and the sole stockholder of the Bank to
consummate the transactions contemplated thereby.
(c) The Company has no direct or indirect subsidiaries other than
Chesterfield Insurance Services, LLC (the "Company Insurance Subsidiary"),
Vincennes, L.L.C. (the "Company Indirect Subsidiary"), and the Bank
(collectively, the "Company Subsidiaries"). The Company Insurance Subsidiary is
wholly-owned by the Bank, the Company Insurance Subsidiary owns 65.93% of the
Company Indirect Subsidiary, and each is a duly organized and validly existing
limited liability company, in good standing under the laws of Illinois, with
corporate power and authority to own, operate and lease its assets and
properties and carry on its business substantially as it has been and is now
being conducted. Each Company Subsidiary is duly qualified to do business and is
in good standing in each jurisdiction where the character of the properties
owned or leased by it or the nature of the business transacted by it requires
that it be so qualified, except where the failure to be so qualified does not
have a material adverse effect on the Company and its subsidiaries, taken as a
whole, or the ability of the Company to consummate the transactions contemplated
herein. Each Company Subsidiary holds all licenses, certificates, permits,
franchises and rights from all appropriate federal, state or other public
authorities necessary for the conduct of its and their respective businesses,
except where the failure to so hold does not have a material adverse effect on
the business of the Company and the Company Subsidiaries, taken as a whole.
3.2 Authorization. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby have
been duly approved and authorized by the Company's Board of Directors, and all
necessary corporate action on the part of the Company (except for the requisite
stockholder approval) has been taken. This Agreement has been duly executed and
delivered by the Company and, subject to the approval of the stockholders of the
Company and the Governmental Authorities, will constitute the valid and binding
obligations of the Company, except to the extent that enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles and doctrines. Neither the Certificate of
Incorporation nor the By-laws of the Company will need to be amended to
effectuate the transactions contemplated by this Agreement.
-13-
3.3 Conflicts. The execution and delivery of this Agreement by the
Company, and of the Bank Merger Agreement by the Bank, do not, and the
consummation of the transactions contemplated hereby and thereby will not,
conflict with or result in any violation of the Certificates of Incorporation or
By-laws of the Company or organizational documents of any Company Subsidiary.
The execution and delivery of this Agreement, and of the Bank Merger Agreement
by the Bank, do not, and the consummation of the transactions contemplated
hereby and thereby will not, conflict with or result in any violation, breach or
termination of, or default or loss of a material benefit under, or permit the
acceleration of, any obligation or result in the creation of any material lien,
charge or encumbrance on any of the property or assets under any provision of
any mortgage, indenture, lease, agreement or other instrument, permit,
concession, grant, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any Company
Subsidiary or their respective properties, other than any such conflicts,
violations or defaults which (i) individually or in the aggregate do not have a
material adverse effect on the Company and the Company Subsidiaries, taken as a
whole, or (ii) will be cured, by valid amendment or otherwise, or waived prior
to the Effective Time. No consent, approval, order or authorization of, or
registration, declaration or filing with, any federal or state governmental
authority is required by or with respect to the Company or the Company
Subsidiaries in connection with the execution and delivery of this Agreement,
the Bank Merger Agreement or the consummation by the Company or the Bank of the
transactions contemplated hereby or thereby, the absence of which would have a
material adverse effect upon the Company, except for those relating to: any
application or notice with the Governmental Authorities; any application or
notice with the Illinois Department of Insurance (the "IDI") with respect to the
Company Insurance Company; the Purchaser's Registration Statement and the
Company's Proxy Statement to be filed with the SEC; the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware; and
any antitrust filings, consents, waivers or approvals.
3.4 Capitalization and Stockholders. (a) As of June 5, 2004, the
capital stock of the Company consists of the following:
CLASS OF STOCK PAR VALUE AUTHORIZED ISSUED OUTSTANDING TREASURY
-------------- --------- ---------- ------ ----------- --------
Common $0.01 7,000,000 4,304,738 3,875,521 429,217
Preferred $0.01 1,000,000 0 0 0
All of the issued and outstanding shares of Company Common Stock have been duly
and validly authorized and issued, and are fully paid and non-assessable. None
of the outstanding shares of Company Common Stock were issued in violation of
any preemptive rights of the current or past stockholders of the Company, and,
to the best knowledge of the Company, there exist no prior rights of any party
to acquire such shares. All of the issued and outstanding shares of Company
Common Stock as of the relevant record date will be entitled to vote to adopt
the Agreement.
(b) As of June 5, 2004, the Company has 430,473 shares of Company
Common Stock reserved for issuance under the stock option plans for the benefit
of employees and directors of the Company or the Company Subsidiaries ("Company
Stock Option Plans") pursuant to which options covering an aggregate of 418,254
shares of Company Common Stock are outstanding as of the date hereof. As of the
date hereof, all of the shares of Company
-14-
Common Stock authorized to be issued under the Company's 2001 Recognition and
Retention Plan ("RRP Plan") have been awarded, vested and distributed, except as
set forth on Schedule 3.4(b) to the Company Disclosure Schedule. Except as set
forth in this Section 3.4(b) and Schedule 3.4(b) to the Company Disclosure
Schedule, there are no shares of capital stock or other equity securities of the
Company outstanding and no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of the capital
stock of the Company, or contracts, commitments, understandings, or arrangements
by which the Company is or may be bound to issue additional shares of its
capital stock or options, warrants, or rights to purchase or acquire any
additional shares of its capital stock. Each option is exercisable or will be
exercisable as of the date set forth on Schedule 3.4(b) to the Company
Disclosure Schedule and has an exercise price in the amount set forth on
Schedule 3.4(b) to the Company Disclosure Schedule.
(c) Schedule 3.4(c) to the Company Disclosure Schedule accurately
identifies the names and addresses of all of the stockholders who, to the
Company's best knowledge, beneficially own more than 5% of the shares of Company
Common Stock and the number of shares of Company Common Stock held by each such
stockholder and by each director and senior officer of the Company. From the
date hereof until the Effective Time, the Company shall, upon request, provide
Purchaser with (i) a complete list of all of its stockholders of record and
non-objecting stockholders, including the names, addresses and number of shares
of Company Common Stock held by each stockholder, and (ii) any correspondence
between the Company and any stockholder of the Company.
(d) Except as set forth on Schedule 3.4(d) to the Company Disclosure
Schedule, no capital stock of any of the Company Subsidiaries is or may become
required to be issued (other than to the Company) by reason of any options,
warrants, scrip, rights to subscribe to, calls, or commitments of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of any Company Subsidiary. There are no
contracts, commitments, understandings or arrangements relating to the rights of
the Company to vote or to dispose of shares of the capital stock of any Company
Subsidiary. All of the shares of capital stock of each Company Subsidiary held
by the Company are fully paid and non-assessable and are owned by the Company
free and clear of any claim, lien or encumbrance.
3.5 Company Financial Statements; Material Changes. The Company has
previously delivered to Purchaser its audited consolidated financial statements
for the years ended June 30, 2003, 2002 and 2001, and the unaudited consolidated
financial statements for the nine (9) months ended March 31, 2004 (collectively,
the "Company Financial Statements"). The Company Financial Statements (x) have
been prepared in accordance with GAAP (except as may be indicated in the notes
thereto and, in the case of the unaudited consolidated financial statements,
except for the absence of footnotes and for normal and recurring year-end
adjustments which are not material); and (y) fairly present in all material
respects the consolidated statement of financial condition of the Company as of
the dates thereof and the related consolidated statement of operations, changes
in stockholders' equity and cash flows for the periods then ended. Since June
30, 2003 to the date hereof, the Company and the Company Subsidiaries, taken as
a whole, have not undergone or suffered any changes in their condition
-15-
(financial or otherwise), properties, assets, liabilities, business or
operations which have been, in any case or in the aggregate, materially adverse
to the Company on a consolidated basis.
3.6 Company SEC Filings. The Company has previously made available to
Purchaser true and complete copies of (a) its proxy statements on Schedule 14A
to the Securities Exchange Act relating to all meetings of stockholders (whether
special or annual) held during the calendar years 2001, 2002 and 2003, (b) all
other reports or filings, as amended, filed under the Securities and Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively,
the "Securities Exchange Act") by the Company with the SEC since July 1, 2002,
including, without limitation, reports on Forms 10-K, 10-Q and 8-K, and filings
with the SEC under the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, the "Securities Act"), and (c) beneficial
ownership reports or filings relating to Company Common Stock furnished to the
Company since July 1, 2002.
3.7 Company Reports. (a) Since July 1, 2002, each of the Company and
the Company Subsidiaries has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that were required
to be filed since such date with (a) the SEC, (b) the OTS, (c) the FDIC, (d) any
applicable state banking, insurance, securities, or other regulatory authorities
(except filings which are not material), and (e) Nasdaq (collectively, the
"Company Reports"). The Company has previously made available to Purchaser true
and complete copies of the Company Reports requested by Purchaser. As of their
respective filing dates, each of the Company Reports (after giving effect to any
amendments thereto), including the financial statements, exhibits, and schedules
thereto, complied in all material respects with the applicable provisions of the
statutes, rules, and regulations enforced or promulgated by the authority with
which they were filed. The Company Reports filed with the SEC did not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(b) Except for examinations or reviews conducted by the OTS or the FDIC
in the regular course of the business of the Company or the Company
Subsidiaries, no federal, state or local governmental agency, commission or
other entity has initiated any proceeding or, to the best knowledge of the
Company, investigation into the business or operations of the Company or the
Company Subsidiaries within the past three (3) years nor, to the best of our
knowledge, has any such proceeding or investigation been threatened nor is
currently pending. None of the Company or any Company Subsidiary is subject to a
written agreement (as such term is defined pursuant to 12 U.S.C. ss.1818) with
the OTS or the FDIC. Except as disclosed in Schedule 3.7(b) to the Company
Disclosure Schedule, there is no unresolved violation, criticism or exception
noted by the SEC, OTS or FDIC, or other agency, commission or entity with
respect to any Company Report other than those that have not had and are not
expected to have a material adverse effect on the business of the Company and
the Company Subsidiaries, taken as a whole.
3.8 Compliance With Laws. (a) The businesses of the Company and each
Company Subsidiary are not being conducted in violation of any applicable
federal and state laws, ordinances and regulations of any governmental entity,
including, without limitation, HOLA, the FDI Act, any laws affecting financial
institutions (including those pertaining to the Bank Secrecy Act, the USA
Patriot Act, the investment of funds, the lending of money, the collection of
-16-
interest and the extension of credit), federal and state securities laws, laws
and regulations relating to financial statements and reports, truth-in-lending,
truth-in-savings, fair debt collection practices, usury, fair credit reporting,
consumer protection, occupational safety, fair employment practices, fair labor
standards and laws and regulations relating to employee benefits, and any
statutes or ordinances relating to the properties occupied or used by the
Company or any Company Subsidiary, except for possible violations which either
singly or in the aggregate do not have a material adverse effect on the Company
or any Company Subsidiary, taken as a whole.
(b) The policies, programs and practices of the Company and each
Company Subsidiary relating to wages, hours of work, and other terms and
conditions of employment are in compliance in all material respects with
applicable laws, orders, regulations, public policies and ordinances governing
employment and terms and conditions of employment. There are no disputes,
claims, or charges, pending or, to the Company's best knowledge, threatened,
against the Company or any Company Subsidiary alleging breach of any express or
implied employment contract or commitment, or material breach of any applicable
law, order, regulation, public policy or ordinance relating to employment or
terms and conditions of employment, and, to the best knowledge of the Company,
there is no basis for any valid claim or charge with regard to such matters.
(c) No investigation or review by any governmental entity with respect
to the Company or any Company Subsidiary is pending or, to the best knowledge of
the Company, threatened, nor has any governmental entity indicated to the
Company an intention to conduct the same, other than normal bank regulatory
examinations.
3.9 Litigation. Except as identified on Schedule 3.9 to the Company
Disclosure Schedule, there is no suit, action, investigation or proceeding,
legal, quasi-judicial, administrative or otherwise, pending or, to the best
knowledge of the Company, threatened against or affecting the Company or any
Company Subsidiary, or any of their respective officers, directors, employees or
agents, in their capacities as such, which is seeking damages against the
Company, any Company Subsidiary, or any of their respective officers, directors,
employees or agents, in their capacities as such, in excess of $100,000, or
which would materially affect the ability of the Company to consummate the
transactions contemplated herein or which is seeking to enjoin consummation of
the transactions provided for herein or to obtain other relief in connection
with this Agreement or the transactions contemplated hereby, having, or which
could reasonably be foreseen to have in the future, any such effect.
3.10 Defaults. There has not been any default, or the occurrence of an
event which with notice or lapse of time or both would constitute a default, in
any obligation to be performed by the Company or any Company Subsidiary under
any contract, commitment, or other material obligation to which the Company, any
Company Subsidiary or their respective properties is subject, and neither the
Company nor any Company Subsidiary has waived any right under any contract or
commitment, except in each case where any such default or waiver, singly or in
the aggregate with any other such defaults or waivers, would not have a material
adverse effect on the business of the Company and the Company Subsidiaries taken
as a whole. To the best knowledge of the Company, no other party to any such
material contract or commitment is in default in any material obligation to be
performed by such party.
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3.11 Absence of Certain Change or Events. Except as disclosed in the
Company Reports filed with the SEC on or prior to May 9, 2004 or as set forth on
Schedule 3.11 to the Company Disclosure Schedule, since June 30, 2003, there has
not been, except for the transactions as contemplated herein or matters related
thereto, any event or condition of any character which has had or would be
reasonably expected to have a Material Adverse Effect on the Company.
3.12 Undisclosed Liabilities. All of the Liabilities have, in the case
of the Company and the Company Subsidiaries, been so reflected, disclosed or
reserved against in the audited consolidated financial statements of the Company
as of June 30, 2003 or in the notes thereto, and the Company and the Company
Subsidiaries have no other Liabilities except Liabilities incurred since June
30, 2003, in the ordinary course of business.
3.13 Licenses. The Company and each Company Subsidiary, respectively,
hold all governmental registrations, licenses, permits or franchises (each a
"Company Permit") required to be held by it and which are material with respect
to the operation of their respective businesses.
3.14 Governmental and Stockholder Approvals. To the Company's best
knowledge, no fact or condition exists which the Company has reason to believe
will prevent the parties from obtaining approval of the Merger, the Bank Merger
and other transactions contemplated by this Agreement by any Governmental
Authority, the IDI or the stockholders of the Company.
3.15 Antitakeover Provisions Inapplicable. Other than Section 203 of
the DGCL, no "business combination," "moratorium," "control share" or other
state antitakeover statute or regulation, nor any provision in the Company's
Certificate of Incorporation or By-laws, (i) prohibits or restricts the
Company's ability to perform its obligations under this Agreement, or its
ability to consummate the transactions contemplated hereby and thereby, (ii)
would have the effect of invalidating or voiding this Agreement, or any
provision hereof or thereof, or (iii) would subject Purchaser to any impediment
or condition in connection with the exercise of any of its rights under this
Agreement. The Company has taken all steps necessary to cause the restrictions
on "business combinations" (as defined in Section 203 of the DGCL) set forth in
Section 203 of the DGCL to be inapplicable to this Agreement and the
transactions contemplated hereby
3.16 Disclosure. None of the information to be supplied by the Company
for inclusion or to be incorporated by reference in the Proxy Statement or the
information relating to the Company and the Company Subsidiaries in the
Registration Statement, will, in the case of the Proxy Statement after giving
effect to any amendments thereof or supplements thereto, at the time of the
meeting of the Company's stockholders to be held for purposes of adopting the
Agreement, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or, in the case of the
Registration Statement, at the time it becomes effective and at the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein not misleading.
The portions of the Proxy Statement relating to the Company which are
incorporated by reference to Forms 10-K, 10-Q and 8-K filed by the Company under
the Securities Exchange Act comply and
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will comply as to form in all material respects with the provisions of the
Securities Exchange Act.
3.17 Taxes. (a) The Company, each Company Subsidiary and each other
company (including any limited liability company) or joint venture where the
Company or a Company Subsidiary owns more than 50% of the equity interest of
such entity measured by both vote and value (a "Tax Subsidiary") have each
timely filed all tax and information returns, including but not limited to all
required Forms 1099, 1098 and 5498, required to be filed (all such returns being
correct and complete in all material respects) and have paid (or the Company has
paid on behalf of each Company Subsidiary and Tax Subsidiary), or have accrued
on their respective books and set up an adequate reserve for the payment of, all
taxes, interest and penalties required to be paid in respect of the periods
covered by such returns and have accrued on their respective books and set up an
adequate reserve for the payment of all income and other taxes anticipated to be
payable in respect of periods through the end of the calendar month next
preceding the date hereof. Neither the Company nor any Company Subsidiary or Tax
Subsidiary is delinquent in the payment of any tax, assessment or governmental
charge. No deficiencies for any taxes have been proposed, asserted or assessed
against the Company, any Company Subsidiary or Tax Subsidiary that have not been
resolved or settled and no requests for waivers of the time to assess any such
tax are pending or have been agreed to. The income tax returns of the Company
and each Company Subsidiary and Tax Subsidiary have not been audited by either
the Internal Revenue Service, or any state or local taxing authorities, for any
of the last ten years. Neither the Company nor any Company Subsidiary or Tax
Subsidiary is a party to any action or proceeding by any governmental authority
for the assessment or the collection of taxes. Deferred taxes of the Company and
each Company Subsidiary have been accounted for in accordance with GAAP. The
Company and each Company Subsidiary have delivered to Purchaser correct and
complete copies of all federal and state income tax returns and supporting
schedules for all tax years since December 31, 2001.
(b) The Company has not filed any consolidated federal income tax
return with an "affiliated group" (within the meaning of Section 1504 of the
Code) where the Company was not the common parent of the group. Neither the
Company nor any Company Subsidiary or Tax Subsidiary is, or has been, a party to
any tax allocation agreement or arrangement pursuant to which it has any
contingent or outstanding liability to anyone other than the Company, any
Company Subsidiary or Tax Subsidiary.
(c) The Company, each Company Subsidiary and each Tax Subsidiary have
each withheld amounts from its employees, stockholders or holders of deposit
accounts in material compliance with the tax withholding provisions of
applicable federal, state and local laws, has filed all federal, state and local
returns and reports for all years for which any such return or report would be
due with respect to employee income tax withholding, social security,
unemployment taxes, income and other taxes and all payments or deposits with
respect to such taxes have been timely made and has notified all employees,
stockholders and holders of public deposit accounts of their obligations to file
all forms, statements or reports with it in accordance with applicable federal,
state and local tax laws and has taken reasonable steps to insure that such
employees, stockholders and holders of public deposit accounts have filed all
such forms, statements and reports with it.
-19-
3.18 Insurance. The Company and each Company Subsidiary maintain
insurance with an insurer which in the best judgment of management of the
Company is sound and reputable, on their respective assets, and upon their
respective businesses and operations, against loss or damage, risks, hazards and
liabilities of the kinds customarily insured against by prudent corporations
engaged in the same or similar businesses. The Company and each Company
Subsidiary maintain in effect all insurance required to be carried by law or by
any agreement by which they are bound. All material claims under all policies of
insurance maintained by the Company and each Company Subsidiary have been filed
in due and timely fashion. Neither the Company nor any Company Subsidiary has
had an insurance policy cancelled by the issuer of the policy within the past
five (5) years.
3.19 Loans; Investments. (a) Except as otherwise disclosed on Schedule
3.19(a) to the Company Disclosure Schedule, each loan reflected as an asset on
the Company Financial Statements is evidenced by appropriate and sufficient
documentation in all material respects and constitutes, the legal, valid and
binding obligation of the obligor named therein, enforceable in accordance with
its terms except to the extent that the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting the enforcement of creditors rights generally or equitable
principles or doctrines; no obligor named under any such loan is seeking to
avoid the enforceability of the terms of any loan under any such laws or
equitable principles or doctrines and no loan is subject to any defense, offset
or counterclaim. All such loans originated by the Company or any Company
Subsidiary and all such loans purchased by the Company or any Company
Subsidiary, were made or purchased in accordance with customary lending
standards of the Company and any Company Subsidiary and in the ordinary course
of business of the Company and each Company Subsidiary. Set forth on Schedule
3.19(a) to the Company Disclosure Schedule is a complete list of the Company REO
(as defined herein) as of March 31, 2004.
(b) Except as otherwise disclosed on Schedule 3.19(b) to the Company
Disclosure Schedule, all guarantees of indebtedness owed to the Company or any
Company Subsidiary, including but not limited to those of the Federal Housing
Administration, the Small Business Administration, and other state and federal
agencies, are valid and enforceable, except to the extent enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting the enforcement of creditors rights
generally or equitable principles or doctrines.
(c) Except as otherwise disclosed on Schedule 3.19(c) to the Company
Disclosure Schedule, in originating, purchasing, underwriting, servicing, and
discharging loans, mortgages, land contracts, and contractual obligations
relating thereto, either for their own account or for the account of others, the
Company and each Company Subsidiary have complied in all material respects with
all applicable terms and conditions of such obligations and with all applicable
laws, regulations, rules, contractual requirements, and procedures with respect
to such activities.
(d) Except as otherwise disclosed on Schedule 3.19(d) to the Company
Disclosure Schedule, none of the investments reflected in the Company Financial
Statements and none of the investments made by the Company since June 30, 2003,
is subject to any restriction, whether contractual or statutory, which
materially impairs the ability of the Company freely to
-20-
dispose of such investment at any time. With respect to all material repurchase
agreements to which the Company or any Company Subsidiary is a party, the
Company or such Company Subsidiary has a valid, perfected first lien or security
interest in the government securities or other collateral securing each such
repurchase agreement, and the value of the collateral securing each such
repurchase agreement equals or exceeds the amount of the debt secured by such
collateral under such agreement. Except as set forth on Schedule 3.19(d) to the
Company Disclosure Schedule, neither the Company nor any Company Subsidiary has
sold or otherwise disposed of any assets in a transaction in which the acquiror
of such assets or other person has the right, either conditionally or
absolutely, to require the Company or any Company Subsidiary to repurchase or
otherwise reacquire any such assets. Set forth on Schedule 3.19(d) to the
Company Disclosure Schedule is a complete and accurate list as of April 30,
2004, of each investment and debt security, mortgage-backed and related
securities, marketable equity securities and securities purchased under
agreements to resell owned by the Company or any Company Subsidiary, showing the
carrying values and estimated fair values of investment and debt securities, the
gross carrying value and estimated fair value of the mortgage-backed and related
securities and the cost and estimated fair value of the marketable equity
securities.
(e) All United States Treasury securities, obligations of other United
States Government agencies and corporations, obligations of States of the United
States and their political subdivisions, and other investment securities
classified as "held to maturity," "available for sale" and "trading" held by the
Company or any Company Subsidiary, as reflected in the Company Financial
Statements were classified and accounted for in accordance with F.A.S.B. 115 and
the intentions of management.
3.20 Interest Rate Risk Management Arrangements. Except as set forth on
Schedule 3.20 to the Company Disclosure Schedule, neither the Company nor any
Company Subsidiary is a party to any, nor is any property bound by, any interest
rate swaps, caps, floors and option agreements or other interest rate risk
management arrangements.
3.21 Allowance for Loan Losses. The Company's allowance for loan and
lease losses shown on the Company Financial Statements, as of such date was (and
will be as of such subsequent financial statement dates) in the reasonable
judgment of the Company, adequate in all respects to provide for possible or
specific losses, net of recoveries relating to loans previously charged off, on
loans outstanding, and based upon GAAP.
3.22 Insurance Subsidiary.
(a) The Company Insurance Subsidiary is duly licensed as an insurance
agent with the Illinois Department of Insurance and, except as disclosed on
Schedule 3.22(a), to the best knowledge of the Company, is not required to be
licensed in any other state to conduct its business as now being conducted.
Schedule 3.22(a) to the Company Disclosure Schedule contains a list and true and
correct copies of all agency contracts and sales agreements between the Company
Insurance Subsidiary and any insurance companies, and all such agreements are in
full force and effect and, except as set forth on Schedule 3.22(a) to the
Company Disclosure Schedule, the consummation of the Merger and the Bank Merger
will not conflict with or result in any violation, breach or termination of any
such agreements. Except as disclosed on Schedule 3.22(a), all of the Company
Insurance Subsidiary's business, contracts and
-21-
relationships with insured customers is owned by the Company Insurance
Subsidiary and not by any of its employees or agents.
(b) The Company Insurance Subsidiary does not engage in premium
financing. To the best knowledge of the Company, any premium trust accounts of
the Company Insurance Subsidiary have been administered in accordance with
applicable laws and regulations in all material respects.
(c) Except as disclosed on Schedule 3.22(c) to the Company Disclosure
Schedule, the Company Insurance Subsidiary maintains E&O insurance coverage in
amounts sufficient to satisfy the requirements, if any, under its agreements
with insurance companies. In the reasonable opinion of the Company, such
insurance coverages are adequate for the business of the Company Insurance
Subsidiary, and neither the Company nor the Company Insurance Subsidiary has
received notice of any cancellation or nonrenewal of the applicable insurance
policies. Except as described on Schedule 3.22(c) to the Company Disclosure
Schedule, there are no material claims pending or threatened against the Company
Insurance Subsidiary for any act, error or omission in services rendered by any
agent or employee of the Company Insurance Subsidiary or that should have been
rendered by any such agent or employee arising out of the business of the
Company Insurance Subsidiary, and the Company has no reason to believe any agent
or employee of the Company Insurance Subsidiary has breached any professional
duty or obligation in any material respect.
(d) Except as disclosed on Schedule 3.22(d) of the Company's Disclosure
Schedules, there are no continuing rights or unperformed obligations of the
Company Insurance Subsidiary with respect to prior acquisitions of any business
or substantially all of the properties, assets or securities of any business.
Schedule 3.22(d) contains true and correct copies of such continuing agreements,
including any employment, non-competition or indemnification agreements, and a
schedule of purchase price amounts, contingent or otherwise, if any, remaining
to be paid in connection with such acquisitions.
3.23 Company Benefit Plans. (a) Schedule 3.23(a)(i) to the Company
Disclosure Schedule contains a list and a true and correct copy (or, a
description with respect to any oral employee benefit plan, practice, policy or
arrangement), including all amendments thereto, 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 agreement or any agreement
providing any payment or benefit resulting from a change in control, profit
sharing, retirement, 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 each 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"), and current summary plan descriptions, trust agreements, and insurance
contracts and Internal Revenue Service Form 5500
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or 5500-C/R (for the three most recently completed plan years) with respect
thereto, and the loan agreement and related documents, including any amendments
thereto, evidencing the ESOP Loan (as described in Section 3.23(h)(iv) below).
Except as set forth on Schedule 3.23(a)(ii) of the Company Disclosure Schedule,
the Company neither maintains nor has entered into any Company Benefit Plan or
other document, plan or agreement which contains any change in 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 of the Company or any Company Subsidiary or
to Purchaser as a result of the transactions contemplated by this Agreement or
any related action thereafter (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 3.23, 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. No Company Benefit Plan is a
multiemployer plan within the meaning of Section 3(37) of ERISA. Neither the
Company nor any Company Subsidiary has been notified by any Governmental
Authority to modify or limit 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
Company or any Company Subsidiary and to the best knowledge of the Company, all
such payments are in compliance with all applicable rules, regulations and
bulletins promulgated by the Governmental Authorities.
(b) 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 ("Company Qualified Plans")
has been determined by the Internal Revenue Service to qualify under Section
401(a) of the Code and an application for determination of such qualification
has been timely made to the Internal Revenue Service prior to the end of the
applicable remedial amendment period under Section 401(b) of the Code (a copy of
each such determination letter and each pending application is included on
Schedule 3.23(b) of the Company Disclosure Schedule), and, to the best knowledge
of the Company, there exist no circumstances likely to materially adversely
affect the qualified status of any such Company Qualified Plan. All such Company
Qualified Plans established or maintained by the Company or each Company
Subsidiary or to which the Company or any Company Subsidiary 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 non-discrimination 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. Except as set forth on
Schedule 3.23(b), no Company Qualified Plan is a defined benefit pension plan
which is subject to Title IV of ERISA. All accrued contributions and other
payments required to be made by the Company or each Company Subsidiary to any
Company Benefit Plan through the date hereof, have been made or reserves
adequate for such purposes as of the date hereof, have been set aside therefor
and reflected in the Company Financial Statements. Neither the Company nor any
Company Subsidiary has accumulated any funding deficiency under Section 412 of
the Code. For each Company Qualified Plan that is a defined benefit pension
plan, the net fair market value of assets under the Plan exceeds the actuarial
present value of the accumulated Plan benefits, both vested and non-vested, as
determined on the basis of the actuarial methods and assumptions used for
-23-
purposes of the most recent actuarial report for the Plan filed with the
Internal Revenue Service. 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 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 best knowledge of the Company,
threatened litigation or pending claim (other than individual 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 the Company or any Company Subsidiary which allege
violations of applicable state or federal law or the terms of the Plan which are
reasonably likely to result in a liability on the part of the Company or any
Company Subsidiary or any such Plan.
(d) The Company and each Company Subsidiary 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 Department of
Labor, the Pension Benefit Guaranty Corporation (the "PBGC") and the Internal
Revenue Service under ERISA, the Code or any other applicable law. No
"reportable event" (as defined in Section 4043(c) of ERISA) has occurred with
respect to any Company Benefit Plan. Except as set forth on Schedule 3.23(d) of
the Company Disclosure Schedule, 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 Section 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 Sections 601-609 of
ERISA and with the certification of prior coverage and other requirements of
Sections 701-702 and 711-713 of ERISA.
(e) Neither the Company nor any Company Subsidiary has incurred, nor to
the best knowledge of the Company or such Company Subsidiary is reasonably
likely to incur, any liability under Title IV of ERISA in connection with any
Plan subject to the provisions of Title IV of ERISA now or heretofore maintained
or contributed to by it or by the Company or any Company Subsidiary.
(f) Except as set forth on Schedule 3.23(f) to the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary has made any payments,
or is or has been a party to any agreement or any Company Benefit Plan, that
under any circumstances could obligate it, or any Company Subsidiary, or any
successor of any of them, to make any payment that is not or will not be
deductible in full because of Section 162(m) or 280G of the Code.
(g) Schedule 3.23(g) to the Company Disclosure Schedule describes any
obligation that the Company or any Company Subsidiary has to provide health or
welfare
-24-
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.
(h) Schedule 3.23(h) to the Company Disclosure Schedule lists: (i) each
employee, officer and director of the Company and each Company Subsidiary who is
eligible to receive a Change in Control Benefit, showing the amount of each such
Change in Control Benefit and the basis of the calculation thereof, estimated
compensation for 2004 based upon compensation received to the date of this
Agreement, and the individual's rate of salary in effect on the date of this
Agreement, the individual's participation in any bonus or other employee benefit
plan, and with respect to each such individual who is a party to a Letter of
Understanding (as described in Section 5.13 below) such individual's
compensation from the Company or any Company Subsidiary for each of the calendar
years 1999 through 2003 as reported by the Company or each Company Subsidiary on
Form W-2 or Form 1099; (ii) each other employee of the Company or any Company
Subsidiary who may be eligible for a Change in Control Benefit, showing the
number of years of service of each such employee, whether such employee has been
designated as an officer under the terms of the Company's severance plan and his
or her estimated salary for 2004 and bonus amount for 2003; (iii) a listing of
each Option, showing the holder thereof, the number of shares, the type of
option (incentive or non-statutory), the exercise price per share and a copy of
the option agreements relating thereto; (iv) a listing of the participants in
the Employee Stock Ownership Plan ("ESOP"), showing the number of outstanding
shares of Company Common Stock credited to each participant as of the most
recent valuation date, and the unpaid balance of any loans owing by the ESOP to
the Company or any party as of the date hereof (the "ESOP Loan"), the number of
unallocated shares of Company Common Stock held by such trusts; and (v) each
employee, officer or director for whom a supplemental executive retirement,
salary continuation or deferred compensation plan or agreement is maintained,
showing the amounts due under each such plan or agreement and the payment
schedule thereof, and the amounts accrued in the Company Financial Statements
with respect thereto.
(i) The Company and each Company Subsidiary 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 Internal Revenue
Service, the PBGC, and the Department of Labor, as prescribed by the Code or
ERISA, or regulations issued thereunder. All such filings, as amended, were
complete and accurate in all material respects as of the dates of such filings,
and there were no misstatements or omissions in any such filing which would be
material to the financial condition of the Company on a consolidated basis.
(j) Neither the Company nor any Company Subsidiary is a party to or
bound by any collective bargaining agreement and, to the best of the Company's
knowledge, no labor union claims to or is seeking to represent any employees of
the Company or any Company Subsidiary.
3.24 Environmental Matters. (a) For purposes of this Section 3.24,
"Company Properties" means (i) the real estate owned or leased by the Company or
any Company Subsidiary and used as a banking or insurance related facility; (ii)
other real estate owned, if any
-25-
("Company REO"), by the Company or any Company Subsidiary as defined by any
other federal or state financial institution regulatory agency with regulatory
authority for the Company or any Company Subsidiary; (iii) real estate that is
in the process of pending foreclosure or forfeiture proceedings conducted by the
Company or any Company Subsidiary; (iv) real estate that is held in trust for
others by the Bank; and (v) real estate owned or leased by a partnership, joint
venture or limited liability company in which the Company or a Company
Subsidiary has an ownership interest.
(b) Except as set forth on Schedule 3.24(b) to the Company Disclosure
Schedule, to the best knowledge of the Company, there are no present or past
conditions on the Company Properties, involving or resulting from a past or
present storage, spill, discharge, leak, emission, injection, escape, dumping or
release of any kind whatsoever of any material or substance: (i) 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; (ii) containing gasoline, oil, diesel fuel
or other petroleum products, or fractions thereof; (iii) which is or becomes
defined as a "hazardous waste" pursuant to RCRA and amendments thereto and
regulations promulgated thereunder; (iv) which contains polychlorinated
biphenyls; (v) which contains asbestos; (vi) which is radioactive; (vii) which
is biologically hazardous; (viii) the presence of which requires investigation
or remediation under any federal, state or local statute, regulation, ordinance,
policy or other Environmental Laws; (ix) which is defined as a "hazardous
waste", "hazardous substance", "pollutant" or "contaminant" or other such term
used to define a substance having an adverse effect on the environment under
Environmental Laws; or (x) which is toxic, explosive, dangerous corrosive or
otherwise hazardous substance, material or waste, which is regulated by any
federal, state or local governmental authority (collectively, "Hazardous
Materials") or from any generation, transportation, treatment, storage,
disposal, use or handling of any Hazardous Materials.
(c) The Company and each Company Subsidiary are in compliance in all
material respects with all federal, state and local laws relating to pollution
or protection of the environment such as laws relating to emissions, discharges,
releases or threatened releases of Hazardous Materials or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (together with all regulations and
rules adopted thereunder). Neither the Company nor any Company Subsidiary have
received notice of, nor to the best knowledge of the Company are there
outstanding or pending, any public or private claims, lawsuits, citations,
penalties, unsatisfied abatement obligations or notices or orders of
non-compliance relating to the environmental condition of the Company
Properties.
(d) To the best knowledge of the Company, no Company Properties are
currently undergoing remediation or cleanup of Hazardous Materials or other
environmental conditions.
(e) To the best knowledge of the Company after such inquiry and
investigation as the Company deems appropriate, the Company and each Company
Subsidiary have all governmental permits, licenses, certificates of inspection
and other authorizations governing or protecting the environment necessary to
conduct its present business. Further, the
-26-
Company warrants and represents that these permits, licenses, certificates of
inspection and other authorizations are fully transferable, to the extent
permitted by law, to Purchaser.
3.25 Material Contracts. Schedule 3.25 to the Company Disclosure
Schedule sets forth each contract, indenture, and other binding commitment and
agreement (including any wholesale broker or loan purchase agreement, but not
including documents evidencing, governing or related to loans or credits by the
Company or any Company Subsidiary or deposits or investments held by the Bank)
that provides for the receipt or expenditure of in excess of $50,000 over the
course of any twelve-month period, or which cannot be terminated without penalty
in excess of $25,000 to which the Company and/or any Company Subsidiary is a
party or to which the Company and/or any Company Subsidiary or any of their
properties are subject (collectively, the "Material Contracts" and each a
"Material Contract"). True copies of each Material Contract are set forth on
Schedule 3.25 to the Company Disclosure Schedule, including all material
amendments and supplements thereto. Except as disclosed on Schedule 3.25 to the
Company Disclosure Schedule, all of the Material Contracts are binding upon the
Company and/or Company Subsidiaries (as applicable) and, to the Company's best
knowledge, the other parties thereto. The Company and the Company Subsidiaries
have each duly performed in all material respects all of its obligations under
each Material Contract to which they are a party to the extent that such
obligations to perform have accrued. No breach or default under any Material
Contract by the Company or any of the Company Subsidiaries or, to the Company's
knowledge, any other party thereto, has occurred which has had or which would be
reasonably likely to have a material adverse effect on the business of the
Company and the Company Subsidiaries taken as a whole. Except as disclosed on
Schedule 3.25, none of the Material Contracts contains an express prohibition
against assignment by operation of law or a change of control of the Company or
a Company Subsidiary (or require written consent or notice to the other party),
or contains any other provision which would preclude Purchaser from exercising
and enjoying all of the rights, remedies and obligations of the Company or a
Company Subsidiary, as the case may be, under such Material Contracts.
3.26 Real Property. (a) Except as set forth on Schedule 3.26(a) to the
Company Disclosure Schedule, the Company and each Company Subsidiary have good,
sufficient and marketable title to their real properties, including any
leaseholds and ground leases, and their other assets and properties, all as
reflected as owned by the Company or any Company Subsidiary in the Company
Financial Statements dated as of March 31, 2004 except for (i) assets and
properties disposed of since such date in the ordinary course of business and
(ii) such liens as set forth on Schedule 3.26(a) to the Company Disclosure
Schedule. All buildings, structures, fixtures and appurtenances comprising part
of the real properties of the Company or any Company Subsidiary (whether owned
or leased by the Company or any Company Subsidiary) are in good operating
condition and have been well maintained, reasonable wear and tear excepted.
Title to all real property listed as being owned by the Company or any Company
Subsidiary on the Company Disclosure Schedule is held in fee simple. The Company
and each Company Subsidiary have title or other rights to its assets sufficient
in all material respects for the conduct of their respective businesses as
presently conducted, and such assets are free, clear and discharged of, and from
any and all liens, charges, encumbrances, security interests and/or equities.
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(b) All leases pursuant to which the Company or any Company Subsidiary,
as lessee, leases real or personal property are, to the best knowledge of the
Company, valid, effective, and enforceable against the lessor in accordance with
their respective terms. There is not under any of such leases any existing
default, or any event which with notice or lapse of time or both would
constitute a default, with respect to either the Company or any Company
Subsidiary, or to the best knowledge of the Company, the other party. Except as
set forth on Schedule 3.26(b) to the Company Disclosure Schedule, none of such
leases contains a prohibition against assignment by the Company or any Company
Subsidiary, by operation of law or otherwise, or any other provision which would
preclude the Purchaser or any Purchaser Subsidiary from possessing and using the
leased premises for the same purposes and upon the same rental and other terms
upon the consummation of the Merger as are applicable to the possession and use
by the Company or any Company Subsidiary as of the date of this Agreement.
Neither the Company nor any Company Subsidiary has made a prior assignment for
collateral purposes of any such lease.
3.27 Indemnification. To the best knowledge of the Company, no action
or failure to take action by any director, officer, employee or agent of the
Company or each Company Subsidiary has occurred which would give rise to a claim
or a potential claim by any such person for indemnification from the Company or
any Company Subsidiary under the corporate indemnification provisions of the
Company or any Company Subsidiary in effect on the date of this Agreement.
3.28 Insider Interests. All outstanding loans and other contractual
arrangements (including deposit relationships) between the Company or any
Company Subsidiary and any officer, director or employee of the Company or any
Company Subsidiary conform to the applicable rules and regulations and
requirements of all applicable regulatory agencies which were in effect when
such loans and other contractual arrangements were entered into. Except as set
forth on Schedule 3.28 to the Company Disclosure Schedule, no officer, director
or employee of the Company or any 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.
3.29 Accuracy of All Representations. The representations and
warranties made by the Company in this Agreement do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained in such representations and warranties not misleading.
3.30 Fairness Opinion. The Board of Directors of the Company has
received an opinion, dated the date of this Agreement, from Xxxxx, Xxxxxxxx &
Xxxxx, Inc., that, subject to the terms, conditions and qualifications set forth
therein, the Merger Consideration is fair to the Company's stockholders from a
financial point of view.
3.31 Fees. Other than the financial advisory services performed for the
Company by Xxxxx, Xxxxxxxx & Xxxxx, Inc., neither the Company, nor any of the
Company Subsidiaries, nor any of their respective officers, directors, employees
or agents, has employed a broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions, or finder's
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fees, and no broker or finder has acted directly or indirectly for the Company
or any Company Subsidiary in connection with this Agreement or the transactions
contemplated hereby.
IV.
COVENANTS
4.1 Conduct of Business by the Company Until the Effective Time. During
the period commencing on the date hereof and continuing until the Effective
Time, the Company agrees (except as expressly contemplated by this Agreement or
to the extent that Purchaser shall otherwise consent in writing, which consent
shall not be unreasonably withheld or delayed) that:
(a) Except as contemplated by this Agreement, the Company and each
Company Subsidiary will carry on their respective businesses in, the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted, maintain their respective books in accordance with GAAP, conduct
their respective businesses and operations only in accordance with safe and
sound banking and business practices and will use best efforts to comply in all
material respects with all applicable federal and state laws, and use all
reasonable efforts to preserve intact their present business organizations, to
generally keep available the services of their present officers and employees
and to preserve their relationships with customers, suppliers and others having
business dealings with them to the end that their respective goodwill and going
businesses shall be unimpaired at the Effective Time.
(b) The Company will, and will cause each Company Subsidiary to, use
their best efforts to obtain (and to cooperate with Purchaser in obtaining) any
consent, authorization or approval of, or any exemption by, any governmental
authority or agency, or other third party, required to be obtained or made by
any of them in connection with the Merger or the taking of any action
contemplated hereby. The Company will not, nor will it permit any of the Company
Subsidiaries to, knowingly or willfully take any action that would adversely
affect the ability of such party to perform its obligations under this
Agreement.
(c) The Company will not declare or pay any cash dividends on or make
other distributions with respect to capital stock, except that the Company will
be permitted to declare and pay a regular quarterly cash dividend per share not
exceeding $.08. The Company shall not make any changes in its normal practice of
establishing dividend record or dividend payment dates.
(d) The Company will not, and will not permit any Company Subsidiary
to, sell, lease or otherwise dispose of any assets, except in the ordinary
course of business, which are material, individually or in the aggregate, to the
business or financial condition of the Company on a consolidated basis, except
that the Bank may dispose of shares of stock in the Federal Home Loan Bank of
Chicago.
(e) The Company will not, and will not permit any Company Subsidiary
to, acquire by merging or consolidating with, purchasing substantially all of
the assets of or otherwise, any business or any corporation, partnership,
association or other business organization or division thereof.
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(f) Except as otherwise contemplated by this Agreement, or pursuant to
the exercise of outstanding options, the Company will not, and will not permit
any Company Subsidiary to, or enter into any agreement to, issue, sell, grant,
authorize or propose the issuance or sale of, or purchase or propose the
purchase of, permit the conversion of or otherwise acquire or transfer for any
consideration any shares of their respective capital stocks of any class or
securities convertible into, or rights, warrants or options to acquire, any such
shares or other convertible securities, or to increase or decrease the number of
shares of capital stock by split-up, reclassification, reverse split, stock
dividend, stock split or change in par or stated value. No additional shares of
Company Common Stock shall become subject to new grants of employee stock
options, stock appreciation rights, limited rights or similar stock-based
employee compensation rights, including, but not limited to, grants under any
stock option plan or agreement or the RRP Plan.
(g) The Company will not, and will not permit any Company Subsidiary
to, create or incur any liabilities, in a single transaction or a series of
related transactions, in excess of $50,000 other than the taking of deposits and
other liabilities incurred in the ordinary course of business or consistent with
past practices, or permit or suffer the imposition on any shares of stock held
by it or by any Company Subsidiary of any material lien, charge or encumbrance.
(h) Except as set forth on Schedule 4.1(h) to the Company Disclosure
Schedule or as otherwise contemplated in this Agreement, the Company will not,
and will not permit any Company Subsidiary to, grant to any director, officer or
employee any increase in compensation (except in accordance with past practices
for those employees who are not executive or senior management), designate any
additional employees as officers under the Company's severance plan, make
contributions to any Company Benefit Plan (except in accordance with past
practices or the terms of such plans or agreements as currently in effect as of
the date of this Agreement provided that no contributions shall be made to any
Company Qualified Plan that is a defined benefit plan) or pay any bonus (except
in accordance with past practices or plans or agreements with respect to
employees other than executive or senior management) or increase in any
severance or termination pay, or enter into or amend any employment, special
termination, retention, covenant not to compete or severance agreement with any
such person except as set forth on Schedule 4.1(h) to the Company Disclosure
Schedule or otherwise contemplated in this Agreement.
(i) Except as set forth on Schedule 4.1(i) to the Company Disclosure
Schedule, neither the Company, nor any Company Subsidiary, will enter into,
renew, extend, amend or modify any material lease or license with respect to any
property, whether real or personal.
(j) Neither the Company, nor any Company Subsidiary, will enter into or
amend any continuing contract or series of related contracts involving in excess
of $50,000 for the purchase of materials, supplies, equipment or services which
cannot be terminated without cause with less than ninety (90) 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.
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(k) The Company will not, and will not permit any Company Subsidiary
to, adopt or, except as required by law, amend in any material respect any
collective bargaining, employee pension, profit-sharing, retirement, employee
stock ownership, insurance, incentive compensation, severance, vacation, stock
option, or other plan, agreement, trust, fund or arrangement for the benefit of
employees, except as contemplated in this Agreement.
(l) The Company will, and will cause each Company Subsidiary to, use
their best efforts to maintain their respective properties and assets in their
present states of repair, order and condition, reasonable wear and tear
excepted, and to maintain and keep in full force and effect all policies of
insurance presently in effect, including the insurance of accounts with the
FDIC. The Company will, and will cause each Company Subsidiary to, take all
requisite action (including without limitation the making of claims and the
giving of notices) pursuant to their directors' and officers' liability
insurance policies in order to preserve all rights thereunder with respect to
all matters known by the Company which could reasonably give rise to a claim
prior to the Effective Time.
(m) The Company will not, and will not permit any Company Subsidiary
to, amend their respective Certificate of Incorporation, Charters, or by-laws,
except as contemplated by this Agreement.
(n) The Company will not, and will not permit any Company Subsidiary
to, enter into, renew, modify or increase any (i) loans secured by lease
receivables, (ii) loans secured by commercial real estate, (iii) business loans,
(iv) loans or credit commitments (including letters of credit) which are secured
by property located outside of the six-county Chicago MSA, and (v) loans or
credit commitments (including letters of credit) to, or invest or agree to
invest in, any person or entity or modify any of the material provisions or
renew or otherwise extend the maturity date of any existing loan or credit
commitment: (A) to any person or entity in an amount in excess of $400,000 or in
any amount which, when aggregated with any and all loans or credit commitments
of the Company and Bank to such person or entity, would be in excess of
$600,000; (B) to any person other than in accordance with its lending policies
as in effect on the date hereof; or (C) to any person or entity any of the loans
or other extensions of credit to which, or investments in which, are delinquent,
non-performing or on a "watch list" or similar internal report of the Company or
the Bank; provided, however, that nothing in this subsection shall prohibit the
Company or the Bank from honoring any contractual obligation in existence on the
date of this Agreement.
(o) make any fixed rate loan, loan commitment or renewal or extension
with a term longer than ten (10) years, except on such terms and in such amounts
as are consistent with past practice and in any event no more than $2 million in
aggregate principal amount on average in any month of fixed rate loans with
terms 30 years or longer unless such loans conform to the FNMA/FHLMC standards,
or purchase any loans except the Bank may purchase up to $5 million per month of
adjustable rate mortgages with initial fixed rate periods of three (3) years or
less.
(p) The Company will not, and will not permit any Company Subsidiary
to, materially restructure or change its investment securities portfolio,
through purchases, sales or otherwise, or change the manner in which the
portfolio is classified or reported (in accordance with FAS 115 or otherwise),
or execute individual investment transactions in excess of $50,000,
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except that the Company may purchase up to $5 million per month of readily
marketable United States Treasury bills or governmental agency securities with a
maturity of three (3) years or less, provided, however, that the Bank may
dispose of shares of stock of the Federal Home Loan Bank of Chicago.
(q) Except as required by applicable law or regulation, the Company (i)
will not, and will not permit any Company Subsidiary to, implement or adopt any
material change in its interest rate and other risk management policies,
procedures or practices, and (ii) will, and will cause each Company Subsidiary
to, follow its existing policies and practices with respect to managing its
exposure to interest rate and other risk and to use commercially reasonable
means to avoid any material increase in its aggregate exposure to interest risk.
(r) The Company will not, and will not permit any Company Subsidiary
to, enter into any new, or modify, amend or extend the terms of any existing,
contracts relating to the purchase or sale of financial or other futures,
derivative or synthetic mortgage product or any put or call option relating to
cash, securities or commodities or any interest rate swap agreements or other
agreements relating to the hedging of interest rate risks.
(s) The Company will not, and will not permit any Company Subsidiary
to, enter into, increase or renew any loan or credit commitment (including
letters of credit) to any executive officer or director of the Company or any
Company Subsidiary, any five percent stockholder of the Company, or any entity
controlled, directly or indirectly, by any of the foregoing or engage in any
transaction with any of the foregoing which is of the type or nature sought to
be regulated in 12 U.S.C. 371c and 12 U.S.C. 371c-1. For purposes of this
Subsection, "control" shall have the meaning associated with that term under 12
U.S.C. 371c.
(t) The Company will promptly advise Purchaser orally and in writing of
any event or series of events which has resulted in a material adverse effect or
which may have a material adverse effect on the Company or any Company
Subsidiary or which may adversely affect the satisfaction of any condition to
the consummation of the Merger or the ability of the Company to perform its
obligations under this Agreement.
(u) Notwithstanding any of the foregoing, at or immediately prior to
the Effective Time, if and as so requested by Purchaser, the Company and each
Company Subsidiary shall cause dividends to be paid to the Company in such
amounts as specified by Purchaser, subject to any regulatory notice or approval
requirement.
(v) Neither the Company, nor any Company Subsidiary, will enter into
any contract or agreement to buy, sell, exchange or otherwise deal in any
tangible assets in a single transaction or a series of related transactions in
excess of $50,000 in aggregate value.
(w) Neither the Company, nor any Company Subsidiary, will 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 $50,000; provided, further, any computer or
network equipment acquired by the Company or the Bank shall satisfy certain
standards and specifications acceptable to Purchaser.
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(x) Neither the Company, nor any Company Subsidiary, will file any
application to relocate operations from existing locations.
(y) Neither the Company, nor any Company Subsidiary, will create or
incur or suffer to exist any mortgage, lien, pledge, or security interest,
against or in respect of any property or right of the Company or any Company
Subsidiary securing any obligation in excess of $50,000.
(z) Neither the Company, nor any Company Subsidiary, will 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, unless the expense realized by the Company or any
Company Subsidiary to discharge or satisfy any such mortgage, lien, charge or
encumbrance is less than of $50,000, unless such discharge or satisfaction is
covered by general or specific reserves.
(aa) Neither the Company, nor any Company Subsidiary, will 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 $50,000 by the Company or
any Company Subsidiary.
(bb) Neither the Company, nor any Company Subsidiary, will offer
internet banking services, debit cards (other than ATM cards) or credit cards to
its customers, or enter into any contract or procure any services or assets in
order to offer internet banking services, debit cards or credit cards to its
customers.
(cc) Neither the Company, nor any Company Subsidiary, will change in
any material respect 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
appropriate in the opinion of the Chief Executive Officer of the Company or Bank
or other appropriate senior management of the Company or the Bank, as the case
may be, in each case to respond to then current business, market or economic
conditions or as may be required by the rules of the AICPA or the FASB or by
Governmental Authorities or by law.
(dd) Neither the Company, nor any Company Subsidiary, will knowingly or
intentionally default under the terms of any agreement to which the Company or
any Company Subsidiary is party.
4.2 Conduct of Business by Purchaser Until the Effective Time. During
the period commencing on the date hereof and continuing until the Effective
Time, Purchaser agrees (except as expressly contemplated by this Agreement or to
the extent that the Company shall otherwise consent in writing, which consent
shall not be unreasonably withheld or delayed) that:
(a) Except as contemplated by this Agreement, Purchaser and the
Purchaser Subsidiaries will maintain their respective books in accordance with
GAAP, conduct their respective businesses and operations only in accordance with
safe and sound banking and business practices and will use best efforts to
comply in all material respects with all applicable federal and state laws, and,
to the extent consistent with such businesses, use all reasonable
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efforts to preserve intact their present business organizations, to generally
keep available the services of their present officers and employees and to
preserve their relationships with customers, suppliers and others having
business dealings with them to the end that their respective goodwill and going
businesses shall be unimpaired at the Effective Time.
(b) Purchaser will, and will cause the Purchaser Subsidiaries to, use
their best efforts to obtain (and to cooperate with the Company in obtaining)
any consent, authorization or approval of, or any exemption by, any governmental
authority or agency, or other third party, required to be obtained or made by
any of them in connection with the Merger or the taking of any action
contemplated hereby; provided, however, that if Purchaser shall reasonably
determine that acceptance of nonstandard conditions or restrictions would have a
materially adverse effect on Purchaser, Purchaser shall have no further
obligations under this Section 4.2(b). Purchaser will not, nor will it permit
any of the Purchaser Subsidiaries to, knowingly or willfully take any action
that would adversely affect their ability to perform their obligations under
this Agreement.
(c) The Purchaser agrees to list on the Nasdaq (or such other national
securities exchange on which the shares of Purchaser Common Stock shall be
listed as of the date of consummation of the Merger), subject to official notice
of issuance, the shares of the Purchaser Common Stock to be issued in the
Merger.
4.3 Certain Actions. (a) None of the Company or any Company Subsidiary
or their directors, officers or employees (i) shall solicit, initiate,
participate in discussions of, or encourage or take any other action to
facilitate (including by way of the disclosing or furnishing of any information
that it is not legally obligated to disclose or furnish) any inquiry or the
making of any proposal relating to an Acquisition Transaction (as defined below)
or a potential Acquisition Transaction with respect to the Company or, except at
the request of Purchaser, any Company Subsidiary, or (ii) shall enter into any
agreement, arrangement, or understanding (whether written or oral), regarding
any proposal or transaction providing for or requiring it to abandon, terminate
or fail to consummate this Agreement, or compensating it or any Company
Subsidiary under any of the instances described in this clause, provided,
however, that nothing contained in this Section 4.3 shall prohibit the Board of
Directors of the Company from furnishing information to, or entering into
discussions or negotiations or an agreement with any person or entity that makes
an unsolicited written proposal after the date hereof to acquire the Company
pursuant to an Acquisition Transaction (an "Acquisition Proposal"), if, and only
to the extent that, (A) the Board of Directors of the Company has consulted with
its independent financial advisor as to whether such Acquisition Proposal may be
or could be superior to the Merger from a financial point-of-view to the
Company's shareholders, (B) the Board of Directors of the Company, after
consultation with and after considering the advice of independent legal counsel,
determines in good faith that the failure to furnish information to or enter
into discussions with such person may cause the Board of Directors of the
Company to breach its fiduciary duties to shareholders under applicable law; (C)
such Acquisition Proposal was not solicited by the Company after the date hereof
and did not otherwise result from a breach of this Section 4.3 by the Company
(such proposal that satisfies (A), (B) and (C) being referred to herein as a
"Superior Proposal"); (D) the Company promptly notifies Purchaser of such
inquiries, proposals or offers received by, any such information requested from,
or any such discussions or negotiations sought to be initiated or continued with
the Company or any of its representatives indicating, in connection with such
notice, the name of such person and the
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material terms and conditions of any inquiries, Acquisition Proposals or offers,
and receives from such person or entity an executed confidentiality agreement in
form and substance identical in all material respects to the confidentiality
agreement that the Company and Purchaser entered into; and (E) the Stockholders'
Meeting has not occurred. The Company shall immediately instruct and otherwise
use its best efforts to cause its agents, advisors (including, without
limitation, any investment banker, attorney or accountant retained by the
Company or any Company Subsidiary), consultants and other representatives to
comply with such prohibitions. The Company shall immediately cease and cause to
be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to such activities.
(b) "Acquisition Transaction" shall, with respect to the Company, mean
any of the following if initiated by a party not affiliated with Purchaser: (i)
a merger or consolidation, or any similar transaction (other than the Merger) of
any company with either the Company or any Company Subsidiary; (ii) a purchase,
lease or other acquisition of all or substantially all the assets of either the
Company or any Company Subsidiary; (iii) a purchase or other acquisition of
"beneficial ownership" by any "person" or "group" (as such terms are defined in
Section 13(d)(3) of the Securities Exchange Act) (including by way of merger,
consolidation, share exchange or otherwise) which would cause such person or
group to become the beneficial owner of securities representing 10% or more of
the voting power of either the Company or any Company Subsidiary; (iv) a tender
or exchange offer to acquire securities representing 10% or more of the voting
power of the Company; (v) a public proxy or consent solicitation made to
stockholders of the Company seeking proxies 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; (vi) the filing of an
application or notice with the OTS or any other federal or state regulatory
authority seeking approval to engage in one or more of the transactions
referenced in clauses (i) through (iv) above; or (vii) the making of a bona fide
proposal to the Company or its stockholders, by public announcement or written
communication, that is or becomes the subject of public disclosure, to engage in
one or more of the transactions referenced in clauses (i) through (v) above.
V.
ADDITIONAL AGREEMENTS
5.1 Inspection of Records; Confidentiality. (a) The Company shall
afford to Purchaser and Purchaser's accountants, counsel and other
representatives, upon reasonable notice, full access, during normal business
hours during the period prior to the Effective Time, to all of its properties,
books, contracts, commitments and records, including all attorneys' responses to
auditors' requests for information and accountants' work papers, developed by
the Company or any Company Subsidiary or their accountants or attorneys, and
will permit the Company's representatives to discuss such information directly
with Purchaser's officers, directors, employees, attorneys and accountants. From
the date hereof until the Effective Time, the Company shall, upon reasonable
request, provide Purchaser with (i) a complete list of all of its stockholders
of record and non-objecting stockholders as of the record date fixed for a
meeting of any stockholders of the Company, including the names, addresses and
number of shares of Company Common Stock held by each stockholder, and (ii) any
correspondence between the Company and any stockholder of the Company.
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(b) In the event that this Agreement is terminated, each party shall
upon request of the other party return all nonpublic documents furnished to it
hereunder or destroy all documents or portions thereof that contain nonpublic
information furnished by the other party pursuant hereto and, in any event,
shall hold all nonpublic information received pursuant hereto in the same degree
of confidence with which it maintains its own like information unless or until
such information is or becomes a matter of public knowledge or is or becomes
known to the party receiving the information through persons other than the
party providing such information.
5.2 Meetings of the Company. The Company shall provide to Purchaser the
agenda for or a summary of the business proposed to be discussed at: (i) all
meetings of the Boards of Directors of the Company and each Company Subsidiary,
and (ii) all meetings of the committees of each such Board of Directors,
including without limitation the audit and executive committees thereof. The
Company shall give reasonable notice to Purchaser of any such meeting. The
Company shall provide to Purchaser all information provided to the directors on
all such Boards of Directors and committees in connection with all such meetings
of directors, when the same are provided to such directors, including minutes of
prior meetings, financial reports and any other analyses prepared by senior
management of the Company. All such information provided to Purchaser shall be
treated in confidence as provided in Section 5.1(b) hereof. Notwithstanding the
foregoing, the Company shall not be required to permit Purchaser (or its
representatives) to review material containing any confidential discussion of
this Agreement and the transactions contemplated hereby or any other matter
where the Company's Board of Directors has reasonably determined such review
would result in a violation of applicable Delaware law.
5.3 Bank Merger. The Company and Purchaser intend to take all action
necessary and appropriate to cause to be entered into the Bank Merger Agreement,
substantially on the terms and in the form attached hereto as Exhibit C pursuant
to which Mid America and the Bank shall merge immediately after the consummation
of the Merger.
5.4 D&O Indemnification.
(a) For a period of six (6) years after the Effective Time, Purchaser
agrees to use its reasonable best efforts to maintain in effect insurance
coverage comparable to the Company's and the Company Subsidiary's current policy
of officers' and directors' liability insurance with respect to actions and
omissions covered thereunder and occurring on or prior to the Effective Date;
provided, however, that Purchaser shall not be required to pay a premium amount
in excess of the maximum amount disclosed on Schedule 5.4 to the Purchaser
Disclosure Schedule and if Purchaser is unable to obtain the insurance required
by this Section 5.4, Purchaser shall obtain as much comparable insurance as
possible for a premium equal to such maximum amount. Schedule 5.4 to the Company
Disclosure Schedule sets forth a copy of the Company's current D&O Insurance
Policy and the current premium amount paid by the Company to obtain such
insurance.
(b) From and after the Effective Time through the sixth anniversary of
the Effective Time, Purchaser and Mid America (each an "Indemnifying Party" and
together, the "Indemnifying Parties") jointly and severally agree to indemnify
and hold harmless each person who is now or has been at any time prior to the
date hereof or who becomes prior to the Effective Time, a director, officer,
employee or agent of the Company or a Company Subsidiary, or trustee
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of any benefit plan of the Company or any Company Subsidiary, except for
unaffiliated corporate trustees (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, arising out of matters involving the Company, and/or any Company
Subsidiary existing or occurring at or prior to the Effective Time, including in
connection with the transaction contemplated by this Agreement, whether asserted
or claimed prior to, at or through the sixth anniversary of the Effective Time,
to the fullest extent to which the Company or the applicable Company Subsidiary
is permitted or required by law or their respective Certificate of Incorporation
(or other chartering document) and Bylaws to indemnify such Indemnified Parties
and in the manner to which it could indemnify such parties under the Certificate
of Incorporation (or other chartering document) and Bylaws of such entity, in
each case as in effect on the date hereof, or under applicable law.
(c) Any Indemnified Party wishing to claim indemnification under
Section 5.4(b), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the appropriate Indemnifying Party thereof.
Notwithstanding the provisions of Section 5.4(b), in the event of any such
claim, action, suit, proceeding or investigation, (i) the Indemnifying Party
shall have the right to promptly and timely assume the defense thereof with
counsel reasonably acceptable to such Indemnified Party 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
Parties in connection with the defense thereof, except that if the Indemnifying
Party elects not to, or fails to promptly and timely assume such defense, or to
appropriately defend such claim once assumed (except with respect to any
settlement contemplated below), the Indemnified Parties may retain counsel which
is reasonably satisfactory to Purchaser to handle such defense and the
Indemnifying Party shall pay the reasonable fees and expenses to all such
counsel for an Indemnified Party (which may not exceed one firm in any
jurisdiction for an Indemnified Party), and notwithstanding any assumption of
such defense by the Indemnifying Party, an Indemnified Party may retain counsel
of its own choosing to monitor such defense (with the Indemnified Party assuming
any and all expenses as a result of hiring such counsel); (ii) the Indemnified
Parties will cooperate in the defense of any such matter; (iii) the Indemnifying
Party shall not be liable for any settlement effected without its prior written
consent and (iv) the Indemnifying Party shall not make any settlement of any
such claim without prior written consent of an Indemnified Party.
5.5 Affiliate Letters. The Company shall obtain and deliver to
Purchaser on the date hereof a signed representation letter as to certain
restrictions on resale substantially in the form of Exhibit D hereto from each
executive officer and director of the Company and each stockholder of the
Company who may reasonably be deemed an "affiliate" of the Company within the
meaning of such term as used in Rule 145 under the Securities Act, and shall
obtain and deliver to Purchaser a signed representation letter substantially in
the form of Exhibit D from any person who becomes an executive officer or
director of the Company or any stockholder who becomes such an "affiliate" after
the date hereof as promptly as practicable after (and shall use its reasonable
best efforts to obtain and deliver within five (5) business days after) such
person achieves such status. The letter described in this Section 5.5 shall
include certain provisions pursuant to which such individuals will agree to vote
in favor of the Merger.
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5.6 Regulatory Applications. (a) Purchaser shall, as soon as
practicable, file applications or notices with the applicable Governmental
Authorities seeking requisite approval of the transactions contemplated in this
Agreement, and shall use its commercially reasonable efforts to respond as
promptly as practicable to all inquiries received concerning said applications;
provided, however, that Purchaser shall have no obligation to accept nonstandard
conditions or restrictions with respect to the aforesaid approvals of
Governmental Authorities if it shall reasonably determine that such conditions
or restrictions would have a material adverse effect on Purchaser and its
subsidiaries taken as a whole or would be materially burdensome to Purchaser and
its subsidiaries taken as a whole. In the event of an adverse or unfavorable
determination by any Governmental Authority with respect to the requisite
approvals of the transactions contemplated in this Agreement, or in the event
such Governmental Authority's approval of the transactions contemplated in this
Agreement is subject to nonstandard conditions or restrictions, or in the event
the transactions contemplated in this Agreement are challenged or opposed by any
administrative or legal proceeding, whether by the United States Department of
Justice or otherwise, the determination of whether and to what extent to seek
appeal or review, administrative or otherwise, or other appropriate remedies
shall be made by Purchaser after consultation with the Company. Except for
confidential portions reflecting pro forma financial information prepared by
Purchaser, Purchaser shall deliver a draft of all regulatory applications to the
Company prior to filing them and copies of all responses from or written
communications from regulatory authorities relating to the Merger or this
Agreement, and Purchaser shall deliver a final copy of all regulatory
applications to the Company promptly after they are filed with the appropriate
regulatory authority.
(b) The Company shall, as soon as practicable, file an application or
notice with the IDI to obtain requisite approval of the change in ownership of
the Company Insurance Subsidiary resulting from the Bank Merger to properly
maintain the IDI license held by the Company Insurance Subsidiary, and shall use
its commercially reasonable efforts to respond as promptly as practicable to all
inquiries received concerning said application or notice. The Company shall
deliver a draft of such application or notice to Purchaser prior to filing and
copies of all responses from or written communications from the IDI relating
thereto, and the Company shall deliver a final copy of such application or
notice to Purchaser promptly after it is filed with the IDI.
(c) Each party will use all reasonable efforts and will cooperate in
all reasonable respects with the other party in taking all reasonable actions
necessary to obtain all of the foregoing regulatory approvals and consents at
the earliest practicable time, including participating in any required hearings
or proceedings.
5.7 Financial Statements and Reports. From the date of this Agreement
and prior to the Effective Time: (a) each party will deliver to the other, not
later than ninety days after the end of any fiscal year (or such extended date
as the other party may agree), its Annual Report on Form 10-K (and all schedules
and exhibits thereto) for the fiscal period then ended as filed with the SEC,
which shall be prepared in conformity with GAAP and the rules and regulations of
the SEC; (b) the Company will deliver to Purchaser not later than thirty (30)
days after the end of any fiscal quarter, the quarterly reports filed with the
OTS by the Company or the Bank which shall be prepared in accordance with the
rules and regulations of the OTS; (c) each party will deliver to the other not
later than forty (40) days after the end of each of its first three (3) fiscal
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quarters, its report on Form 10-Q for such quarter as filed with the SEC which
shall be prepared in conformity with GAAP and the rules and regulations of the
SEC; (d) the Company will deliver to Purchaser any and all other material
reports filed with the SEC, the FDIC, the OTS or any other regulatory agency
within five (5) business days of the filing of any such report; and (e) the
Company will deliver to Purchaser monthly financial statements along with a
summary of the securities acquired in the ordinary course of business.
5.8 Registration Statement; Stockholder Approval. As soon as reasonably
practicable after the date hereof, Purchaser shall prepare and file with the SEC
a Registration Statement on Form S-4 covering the Purchaser Common Stock to be
issued to holders of Company Common Stock in the Merger, which Registration
Statement shall include the Proxy Statement for use in soliciting proxies for
the special meeting of stockholders (the "Stockholders' Meeting") to be held by
the Company for purposes of considering the Merger, and Purchaser and the
Company shall use their reasonable best efforts to cause the Registration
Statement to become effective under the Securities Act. The Company shall
furnish all information concerning the Company and the holders of its capital
stock as Purchaser may reasonably request in connection with the preparation and
filing of the Registration Statement and Proxy Statement and related actions.
The Company shall call the Stockholders' Meeting to be held as soon as
reasonably practicable, and in no event later than forty-five (45) days, after
the effective date of the Registration Statement for the purpose of voting upon
this Agreement and the Merger. In connection with the Stockholders' Meeting, (a)
Purchaser and the Company shall jointly prepare the Proxy Statement as part of
the Registration Statement, and the Company shall mail the Proxy Statement to
its stockholders, on a date mutually acceptable to the parties hereto (the
"Mailing Date"); (b) the Board of Directors of the Company shall, subject to the
exercise of its fiduciary duties, unanimously recommend to its stockholders the
approval of this Agreement and the Merger, and (c) the Board of Directors of the
Company shall otherwise use its best efforts to the extent consistent with its
fiduciary duty to obtain such stockholder approval.
5.9 Notice. At all times prior to the Effective Time, each party shall
give prompt notice to the other of the occurrence or its knowledge of any event
or condition that would cause any of its representations or warranties set forth
in this Agreement not to be true and correct in all material respects as of the
date of this Agreement or as of the Effective Time, or any of its obligations
set forth in this Agreement required to be performed at or prior to the
Effective Time not to be performed in all material respects at or prior to the
Effective Time, including without limitation, any event, condition, change or
occurrence which individually, or in the aggregate with any other events,
conditions or changes that have occurred after the date hereof, has resulted or
which, so far as reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a material adverse effect on it. After receipt of
any such notice disclosing a material breach, the nondisclosing party may,
within five business days thereof, notify the disclosing party of its intent to
terminate this Agreement pursuant to Section 7.1(d); provided, however, that the
disclosing party shall have the right to cure such breach within thirty (30)
days thereof but no later than the Effective Time. In the event the
nondisclosing party fails to notify the disclosing party of its intent to
terminate within five (5) business days after receipt of any notice hereunder,
the nondisclosing party shall be deemed to have waived its right of termination
as to any such breach arising out of or with respect to the events, conditions,
change or occurrence described in such notice; provided, however, that any
particular breach that is deemed to have been waived by the nondisclosing party
may thereafter be considered by the nondisclosing party in determining
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the aggregate contribution of all events, conditions, changes and occurrences
described by the disclosing party pursuant to this Section 5.9 toward the
occurrence of a material breach by the disclosing party.
5.10 Press Releases. Purchaser and the Company shall coordinate all
publicity relating to the transactions contemplated by this Agreement and,
except as otherwise required by law, or with respect to employee meetings,
neither party shall issue any press release, publicity statement or other public
notice relating to this Agreement or any of the transactions contemplated hereby
without obtaining the prior consent of the other, which consent shall not be
unreasonably withheld. The Company shall obtain the prior consent of Purchaser
to the content of any communication to its stockholders, which consent shall not
be unreasonably withheld or delayed.
5.11 Delivery of Supplements to Disclosure Schedules. Five (5) business
days prior to the Effective Time, the Company and Purchaser will supplement or
amend their respective Disclosure Schedules with respect to any matter hereafter
arising which, if existing or occurring at or prior to the date of this
Agreement, would have been required to be set forth or described in such
Disclosure Schedule or which is necessary to correct any information in the
Disclosure Schedule or in any representation and warranty made by the Company
which has been rendered inaccurate thereby. For purposes of determining the
accuracy of the representations and warranties of Purchaser continued in Article
II hereof, or of the Company contained in Article III hereof and in order to
determine the fulfillment of the conditions set forth in Article VI hereof as of
the Effective Time, the Company or Purchaser Disclosure Schedule shall be deemed
to include only the information contained therein on the date hereof and any
information previously disclosed pursuant to Section 5.9 as to which a party is
deemed to have waived its right of termination; provided, however, that delivery
of such supplements containing information which causes any representation or
warranty of either the Company or Purchaser to be false or materially misleading
will not cure any breach hereunder of such representations or warranties.
5.12 Tax Opinion. Purchaser shall obtain a written opinion ("Tax
Opinion") of Vedder, Price, Xxxxxxx & Kammholz, P.C. addressed to Purchaser,
dated the Closing Date, subject to customary representations and assumptions
referred to therein, and substantially to the effect that (a) the exchange in
the Merger of Purchaser Common Stock for Company Common Stock will not give rise
to the recognition of any income, gain or loss to Purchaser or the Company; (b)
the adjusted tax basis of the assets of the Company in the hands of Purchaser
will be the same as the adjusted tax basis of such assets in the hands of the
Company immediately prior to the exchange; and (c) the holding period of the
assets of the Company transferred to Purchaser will include the period during
which such assets were held by the Company prior to the exchange.
5.13 Resolution of Company Benefit Plans. 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 a Purchaser Subsidiary) shall
be substituted for the Company or the Bank as the sponsoring employer under
those Company Benefit Plans with respect to which the Company or the Bank is a
sponsoring employer
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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
the Company or the Bank with respect to each such plan. Except as otherwise
provided herein, each such plan and any Company Benefit Plan sponsored by the
Company or the Bank shall be continued in effect by Purchaser or any applicable
Purchaser Subsidiary after 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 Purchaser Subsidiary under each such plan to
subsequently amend or terminate the plan, which amendments or terminations shall
comply with applicable law. The Company, the Bank and Purchaser will use all
reasonable efforts (i) to effect said substitutions and assumptions, and take
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) Except as contemplated in the Letter of Understanding or Benefits
Letter discussed below, at or as promptly as practicable after the Effective
Time, as Purchaser shall reasonably determine, Purchaser shall provide, or cause
any Purchaser Subsidiary to provide, to each employee of the Company and the
Bank as of the Effective Time ("Company Employees") the opportunity to
participate in each employee benefit plan and program maintained by Purchaser or
the Purchaser Subsidiaries for similarly situated employees (the "Purchaser
Benefit Plans"); provided, however, that with respect to such Purchaser Benefit
Plans, Company Employees shall be given credit for service with the Company or
the Bank in determining eligibility for and vesting in benefits thereunder, but
not for purposes of benefit accrual except that such prior service shall be
recognized for benefit accrual purposes under any vacation pay plan or program
and under any severance compensation plan or program; provided, further, that
Company Employees shall not be subject to any waiting periods or pre-existing
condition exclusions under the Purchaser Benefit Plans if they have satisfied
such waiting periods or pre-existing condition exclusions under the Company
Benefit Plan even if such periods are longer or restrictions impose a greater
limitation than the periods or limitations imposed under the Company Benefit
Plans; provided, further, that to the extent that the initial period of coverage
for Company Employees under any Purchaser Benefit Plan that is an "employee
welfare benefit plan" as defined in Section 3(1) of ERISA is not a full 12-month
period of coverage, Company Employees shall be given credit under the applicable
Purchaser Benefit Plans for any deductibles and co-insurance payments made by
such Company Employees under the Company Benefit Plans during the balance of
such 12-month period of coverage. Nothing in the preceding sentence shall
obligate Purchaser to provide or cause to be provided any benefits duplicative
of those provided under any Company Benefit Plan continued pursuant to
subparagraph (a) above, including, but not limited to, extending participation
in any Purchaser Benefit Plan which is an "employee pension benefit plan" under
ERISA with respect to any year during which allocations are made to Company
Employees under the Company ESOP or profit sharing plan. Except as otherwise
provided in this Agreement, the power of Purchaser or any Purchaser Subsidiary
to amend or terminate any benefit plan or program, including any Company Benefit
Plan, shall not be altered or affected. Moreover, neither this Agreement nor the
Letter of Understanding discussed below shall confer upon any Company Employee
any rights or remedies hereunder and shall not constitute a contract of
employment or create the rights, to be retained or otherwise, in employment with
Purchaser or any Purchaser Subsidiary.
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(c) Concurrently with or immediately after the execution of this
Agreement, the Company shall use its best efforts to obtain from the President
of the Company who is a party to an employment agreement with the Bank a Letter
of Understanding with Purchaser substantially in the form of Exhibit E attached
hereto (the "Letter of Understanding"), addressing certain matters pertaining to
such executive's employment agreement and benefits payable thereunder, and
participation in other Company Benefit Plans.
(d) Notwithstanding anything in this Agreement to the contrary, all
retention, severance, covenant not to compete, termination payments,
acceleration of benefit vesting, and other compensation paid by the Company or
the Bank, or as provided for in this Agreement, the Letter of Understanding,
Exhibit F, any Company Benefit Plan or otherwise, including, but not limited to,
any Change in Control Benefit, shall not violate any prohibitions which are
imposed by any Governmental Authorities, or which any Governmental Authorities
otherwise deem to constitute unsafe and unsound banking practices or
unreasonable compensation giving effect to any obligations of Purchaser or the
Purchaser Subsidiary as provided herein or in the Letter of Understanding.
(e) Purchaser and the Company agree to take certain actions to
effectuate the foregoing and other actions with respect to the Company Benefit
Plans as set forth in the letter agreement of even date herewith between
Purchaser and the Company in the form of Exhibit F attached hereto (the
"Benefits Letter").
5.14 Environmental Investigation.
(a) Purchaser shall engage an environmental consultant to conduct a
preliminary ("Phase I") environmental assessment of each of the parcels of owned
real estate used in the operation of the businesses of the Company and the
Company Subsidiaries and any other real estate owned by the Company or any
Company Subsidiary or any Tax Subsidiary. The fees and expenses of the
consultant with respect to the Phase I assessments shall be paid by Purchaser.
The Company shall fully cooperate with Purchaser to provide the consultant
reasonable access to the premises under assessment. The consultant shall
complete and deliver the Phase I assessments not later than sixty (60) days
after the date of this Agreement. If any environmental conditions are found or
suspected or would tend to be indicated by the report of the consultant which
may be contrary to the representations and warranties of the Company set forth
herein without regard to any exceptions that may be contained in the Company
Disclosure Schedule, Purchaser shall cause copies of the consultant reports to
be furnished to the Company, and the parties shall then obtain from one or more
mutually acceptable consultants or contractors, as appropriate, an estimate of
the cost of any further environmental investigation, sampling, analysis,
remediation, or other follow-up work that may be necessary to address those
conditions in accordance with applicable laws and regulations.
(b) Upon receipt of the estimate of the costs of all follow-up work to
the Phase I assessments or any subsequent investigation phases that may be
conducted, the parties shall attempt to agree upon a course of action for
further investigation and remediation of any environmental condition suspected,
found to exist, or that would tend to be indicated by the report of the
consultant. All post-Phase I investigations or assessments (the cost of which
shall be paid by Purchaser), all work plans for any post-Phase I assessments or
remediation and any
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removal or remediation actions that may be performed shall be mutually
satisfactory to Purchaser and the Company. If the work plans or removal or
remediation actions are estimated to cost more than $100,000 (individually or in
the aggregate) to complete, Purchaser and the Company shall discuss a mutually
acceptable modification of this Agreement. Purchaser and the Company shall
cooperate in the review, approval and implementation of all work plans.
(c) If the parties are unable to agree upon a course of action for
further investigation and remediation of an environmental condition or issue
raised by an environmental assessment and/or a mutually acceptable modification
to this Agreement, and the condition or issue is not one for which it can be
determined to a reasonable degree of certainty that the risk and expense to
which the Surviving Corporation, Purchaser, Mid America or any affiliate would
be subject as owner of the property involved can be quantified, in good faith,
and limited to an amount less than $500,000 then Purchaser may abandon this
Agreement as soon as possible but in no event more than 120 days after the
receipt of the Phase I assessments.
5.15 Title to Real Estate. As soon as practical after the date hereof,
but in any event no later than thirty (30) days after the date hereof, the
Company, at its own expense, shall obtain and deliver to Purchaser, with respect
to all real estate owned or held pursuant to a ground lease by the Company, or
any Company Subsidiary or Tax Subsidiary, either (i) an owner's preliminary
report of title covering a date subsequent to the date hereof, issued by Chicago
Title Insurance Company or such other title insurance company accepted by
Purchaser (such acceptance not to be unreasonably withheld), showing fee simple
title in the Company or such Company Subsidiary or Tax Subsidiary, in such real
estate or the appropriate leasehold interest of the Company or such Company
Subsidiary or Tax Subsidiary, subject only to (A) the standard exceptions to
title customarily contained in a policy on ALTA 1970 Owner's Form B; (B) liens
of current state and local property taxes which are not delinquent or subject to
penalty; and (C) liens and encumbrances as disclosed on Schedule 3.26(a) to the
Company Disclosure Schedule, and restrictions and conditions of record that do
not materially adversely affect the value or use of such real estate, or (ii) a
commitment by the title insurance company currently insuring Company or Company
Subsidiary's or Tax Subsidiary's title to the real estate owned or held pursuant
to a ground lease to provide an endorsement to the current title policies
changing the name of the insured to Purchaser at Closing; provided, however, (a)
such commitments and title policies are subject only to the matters set forth in
this Section 5.15; and (b) the effective date of such endorsement shall be
subsequent to or contemporaneous with the Effective Time.
5.16 Other Actions; Further Assurances; Form of Transaction.
(a) At Purchaser's request, the parties will use all reasonable efforts
and cooperate in all reasonable respects with each other to obtain any consents
or waivers from third parties 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 as a result of the consummation of the Merger or
the Bank Merger.
(b) In case at any time after the Effective Time any further action is
necessary or desirable to carry out the contemplated purposes and intent of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary action.
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(c) If necessary to expedite the Closing of the Merger, the Bank Merger
or 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
stockholders of the Company, and will not jeopardize the receipt of approvals
required from Governmental Authorities or other consents and approvals relating
to the consummation of the Merger and the Bank Merger or otherwise cause any
condition to Closing set forth in Article VI not to be capable of being
fulfilled.
VI.
CONDITIONS
6.1 Conditions to the Obligations of the Parties. Notwithstanding any
other provision of this Agreement, the obligations of Purchaser on the one hand,
and the Company on the other hand, to consummate the Merger are subject to the
following conditions precedent:
(a) No preliminary or permanent injunction or other order by any
federal or state court which prevents the consummation of the Merger or the Bank
Merger shall have been issued and shall remain in effect.
(b) This Agreement shall have been duly adopted by the requisite vote
of the stockholders of the Company at a duly called meeting.
(c) Purchaser shall have received approvals of the Governmental
Authorities to acquire the Company and to consummate the transactions
contemplated hereby and all required waiting periods relating thereto shall have
expired.
(d) The Registration Statement shall have been declared effective under
the Securities Act and no stop orders shall be in effect and no proceedings for
such purpose shall be pending or threatened by the SEC.
(e) The shares of Purchaser Common Stock which shall be issued to the
stockholders of the Company upon consummation of the Merger shall have been
authorized for listing on Nasdaq, subject to official notice of issuance.
6.2 Conditions to the Obligations of Purchaser. Notwithstanding any
other provision of this Agreement, the obligations of Purchaser to consummate
the Merger are subject to the following conditions precedent:
(a) All of the representations and warranties made by the Company in
this Agreement and in any documents or certificates provided by the Company (i)
shall have been true and correct in all material respects as of the date of this
Agreement and (ii) shall have been true and correct as of the Effective Time as
though made at and as of the Effective Time, provided, however, that if any
representation or warranty (other than the representations contained in Sections
3.1, 3.2, 3.3, 3.4(a), 3.4(b) and 3.4(d) is not true or correct as of the
Effective Time, the condition in this clause (ii) shall nonetheless be deemed
satisfied unless the
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facts or circumstances causing any representation or warranty not to be true or
correct, either individually or in the aggregate, and without giving effect to
any materiality qualifier set forth in any such representation or warranty, have
a Material Adverse Effect on the Company.
(b) The Company shall have performed in all material respects all
obligations and shall have complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied with by it
prior to or at the Effective Time.
(c) Except as specifically contemplated herein, there shall not have
been any action taken, or any statute, rule, regulation or order enacted,
promulgated or issued or deemed applicable to the Merger by any federal or state
government or governmental agency or instrumentality or court, which would
prohibit Purchaser's ownership or operation of all or a material portion of the
Company's business or assets, whether immediately at the Effective Time or as of
some future date, whether specified or to be specified, or would compel
Purchaser to dispose of or hold separate all or a material portion of the
Company's business or assets, whether immediately at the Effective Time or as of
some future date, whether specified or to be specified as a result of this
Agreement, or which would render Purchaser or the Company unable to consummate
the transactions contemplated by this Agreement.
(d) To the extent any material lease, license, loan or financing
agreement or other contract or agreement to which the Company or any Company
Subsidiary, as the case may be, is a party requires the consent of, waiver from,
or notice to, the other party thereto as a result of the transactions
contemplated by this Agreement, such consent, waiver or notice shall have been
obtained or given.
(e) Purchaser shall have received a certificate signed by the President
and Chief Executive Officer of the Company, in his capacity as such, dated as of
the Effective Time, certifying that based upon his knowledge, the conditions set
forth in Sections 6.2(a) and (b) have been satisfied.
(f) Neither the Company nor any Company Subsidiary shall be made a
party to, or to the knowledge of the Company, threatened by, any actions, suits,
proceedings, litigation or legal proceedings which, if adversely determined,
would, in the reasonable opinion of Purchaser, have a Material Adverse Effect on
the Company. No action, suit, proceeding or claim shall have been instituted,
made or threatened by any person relating to the Merger or the validity or
propriety of the transactions contemplated by this Agreement or the Bank Merger
Agreement which would make consummation of the Merger inadvisable in the
reasonable opinion of Purchaser.
(g) The Bank Merger Agreement shall have been duly authorized and
approved by the Company and the Bank and the other terms and conditions of the
Bank Merger Agreement shall have been satisfied so as to permit the Bank Merger
to be consummated as contemplated thereby.
(h) If requested by Purchaser, the Company shall have caused to be
delivered to Purchaser letters from the Company's independent public
accountants, Xxxxx, Xxxxxx and Company LLP, dated the date on which the
Registration Statement shall become effective, and
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dated the Effective Time, and addressed to Purchaser and the Company, with
respect to the Company's consolidated financial position and results of
operations, and which describes procedures which shall be consistent with
applicable professional standards for "comfort" letters delivered by independent
accountants in connection with comparable transactions.
(i) All action required to be taken by or on the part of the Company to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken by the Board of Directors and the stockholders of the Company, and
Purchaser shall have received certified copies of the resolutions evidencing
such authorization.
(j) If requested by Purchaser, the Company shall have procured and
delivered to Purchaser the resignations of each of the directors and executive
officers of the Company and the Company Subsidiaries in form and substance
reasonably acceptable to Purchaser (none of which resignations shall prejudice
or limit any rights such persons would otherwise have).
(k) Purchaser shall have received an opinion of Luse, Gorman, Xxxxxxxx
& Xxxxxx PC, counsel for the Company, substantially in the form of Exhibit G
hereto.
(l) The Purchaser shall have received the Tax Opinion (as contemplated
in Section 5.12 above).
6.3 Conditions to the Obligations of the Company. Notwithstanding any
other provision of this Agreement, the obligations of Company to consummate the
Merger are subject to the following conditions precedent:
(a) All of the representations and warranties made by the Purchaser in
this Agreement and in any documents or certificates provided by the Purchaser
(i) shall have been true and correct in all material respects as of the date of
this Agreement and (ii) shall have been true and correct as of the Effective
Time as though made at and as of the Effective Time, provided, however, that if
any representation or warranty (other than the representations contained in
Sections 2.1(a), 2.1(b), 2.1(c), 2.2 and 2.3) is not true or correct as of the
Effective Time, the condition in this clause (ii) shall nonetheless be deemed
satisfied unless the facts or circumstances causing any representation or
warranty not to be true or correct, either individually or in the aggregate, and
without giving effect to any materiality qualifier set forth in any such
representation or warranty, have a Material Adverse Effect on the Purchaser.
(b) Purchaser shall have performed in all material respects all
obligations and shall have complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied with by it
prior to or at the Effective Time.
(c) The Company shall have received a certificate signed by the
Chairman and Chief Executive Officer of Purchaser, in his capacity as such,
dated as of the Effective Time, that based upon such Chief Executive Officer's
knowledge, the conditions set forth in Sections 6.3(a) and (b) have been
satisfied.
(d) All action required to be taken by or on the part of Purchaser to
authorize the execution, delivery and performance of this Agreement and the
consummation of the
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transactions contemplated hereby shall have been duly and validly taken by the
Board of Directors of Purchaser, and the Company shall have received certified
copies of the resolutions evidencing such authorization.
(e) The Company shall have received an opinion of the General Counsel
of Purchaser, substantially in the form of Exhibit H hereto.
VII.
TERMINATION; AMENDMENT; WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time:
(a) By mutual written consent of the Board of Directors of Purchaser
and the Board of Directors of the Company;
(b) At any time prior to the Effective Time, by Purchaser or the
Company if there shall have been a final judicial or regulatory determination
(as to which all periods for appeal shall have expired and no appeal shall be
pending) that any material provision of this Agreement is illegal, invalid or
unenforceable (unless the enforcement thereof is waived by the affected party)
or denying any regulatory approval of the transactions contemplated by this
Agreement, the approval of which is a condition precedent to either party's
obligations hereunder;
(c) By either party at any time after the stockholders of the Company
fail to approve this Agreement and the Merger in a vote taken at a meeting duly
convened for that purpose; provided, however, the Company shall have no right to
terminate pursuant to this Section 7.1(c) if the Company has taken any action,
or failed to take any action, as applicable, described in Section 7.1(g).
(d) By Purchaser or the Company in the event of the material breach by
the other party of any representation, warranty, covenant or agreement contained
herein or in any schedule or document delivered pursuant hereto, which breach
would result in the failure to satisfy the closing conditions set forth in
Section 6.2 hereof, in the case of Purchaser, or Section 6.3 hereof, in the case
of the Company, except in each case, for any such breach which has been
disclosed pursuant to Section 5.9 and waived by the non-disclosing party
pursuant to Section 5.9 or cured by the disclosing party prior to the Effective
Time and within the time period specified in Section 5.9;
(e) By either party on or after March 31, 2005, in the event the Merger
has not been consummated by such date (provided that the terminating party is
not then in material breach of any representation, warranty, covenant or other
agreement contained herein);
(f) By Purchaser pursuant to the provision of Section 5.14 hereof
relating to certain environmental matters;
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(g) By the Board of Directors of Purchaser if the Company has received
a Superior Proposal, and the Board of Directors of the Company has entered into
an acquisition agreement with respect to the Superior Proposal, terminated this
Agreement, or withdraws, modifies or amends in any respect adverse to Purchaser
its approval of this Agreement or the transactions contemplated hereby, or
withdraws or fails to make a unanimous recommendation that stockholders of the
Company vote in favor of the Merger, or modifies or qualifies such
recommendation in a manner adverse to Purchaser, or the Board of Directors of
the Company has resolved to do any of the foregoing; or
(h) By the Board of Directors of the Company if the Company has
received a Superior Proposal, and in accordance with Section 4.3 of this
Agreement, the Board of Directors of the Company has made a determination to
accept such Superior Proposal; provided that the Company shall not terminate
this Agreement pursuant to this Section 7.1(h) and enter in a definitive
agreement with respect to the Superior Proposal until the expiration of five (5)
business days following Purchaser's receipt of written notice advising Purchaser
that the Company has received a Superior Proposal, specifying the material terms
and conditions of such Superior Proposal (and including a copy thereof with all
accompanying documentation, if in writing) identifying the person making the
Superior Proposal and stating whether the Company intends to enter into a
definitive agreement with respect to the Superior Proposal. After providing such
notice, the Company shall provide a reasonable opportunity to Purchaser during
the five-day period to make such adjustments in the terms and conditions of this
Agreement as would enable the Company to proceed with the Merger on such
adjusted terms.
7.2 Termination Fee. (a) In consideration of the expenses and forgone
opportunities of Purchaser, as a condition and inducement to Purchaser's
willingness to enter into and perform this Agreement, provided that the Company
has not validly terminated this Agreement pursuant to Section 7.1(d), the
Company shall pay to Purchaser immediately upon demand a fee of $6,250,000 (the
"Termination Fee") upon the earliest to occur of the following:
(i) Purchaser terminates this Agreement pursuant to Section
7.1(g), or the Company terminates this Agreement pursuant to Section
7.1(h); or
(ii) The entering into a definitive agreement by the Company
relating to an Acquisition Transaction, or the consummation or
occurrence of an Acquisition Transaction involving the Company within
eighteen (18) months after the occurrence of any of the following: (i)
the valid termination of the Agreement by the Purchaser pursuant to
Section 7.1(d) because of a willful breach by the Company; or (ii) the
failure of the stockholders of the Company to approve this Agreement
after the occurrence of an Acquisition Proposal.
(b) If demand for payment of the Termination Fee is made pursuant to
Section 7.2 and payment is timely made, then Purchaser will not have any other
rights or claims against the Company, the Company Subsidiaries, and their
respective officers and directors, with respect to this Agreement, it being
agreed that the acceptance of the Termination Fee under Section 7.2 will
constitute the sole and exclusive remedy of Purchaser against the Company, the
Company Subsidiaries and their respective officers and directors, other than any
claims by Purchaser for damages arising from any willful breach of this
Agreement by the Company.
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7.3 Expenses. Except as provided elsewhere herein, Purchaser and the
Company shall each 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 or other consultants, investment bankers,
accountants and counsel. In the event one of the parties hereto files suit to
enforce this Section 7.3 or a suit seeking to recover costs and expenses or
damages for a willful breach of this Agreement, the costs, fees, charges and
expenses (including attorneys' fees and expenses) of the prevailing party in
such litigation (and any related litigation) shall be borne by the losing party.
7.4 Survival of Agreements. In the event of termination of this
Agreement by either Purchaser or the Company as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect except that (i) the
agreements contained in Sections 5.1(b), 5.10, 7.2 and 7.3 hereof shall survive
the termination hereof; and (ii) a termination pursuant to Section 7.1(d) hereof
shall not relieve a breaching party from any liability for any breach giving
rise to such termination.
7.5 Amendment. This Agreement may be amended by the parties hereto by
action taken by their respective Boards of Directors at any time before or after
approval hereof by the stockholders of the Company but, after such approval, no
amendment shall be made which changes the form of consideration or adversely
affects or decreases the value of the consideration to be received by the
stockholders of the Company without the further approval of such stockholders or
which in any other way adversely affects the rights of the stockholders of the
Company without the further required approval of the stockholders so affected.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto. Purchaser and the Company may, without
approval of their respective Boards of Directors, make such technical changes to
this Agreement, not inconsistent with the purposes hereof and thereof, as may be
required to effect or facilitate any governmental approval or acceptance of the
Merger or of this Agreement or to effect or facilitate any filing or recording
required for the consummation of any of the transactions contemplated hereby.
7.6 Waiver. Any term, provision or condition of this Agreement (other
than requirements for stockholder approval and required approvals of the
Governmental Authorities) may be waived in writing at any time by the party
which is entitled to the benefits hereof. Each and every right granted to any
party hereunder, or under any other document delivered in connection herewith or
therewith, and each and every right allowed it by law or equity, shall be
cumulative and may be exercised from time to time. The failure of either party
at any time or times to require performance of any provision hereof shall in no
manner affect such party's right at a later time to enforce the same except as
provided in Section 5.9. No waiver by any party of a condition or of the breach
of any term, covenant, representation or warranty contained in this Agreement,
whether by conduct or otherwise, in any one or more instances shall be deemed to
be or construed as a further or continuing waiver of any such condition or
breach or a waiver of any other condition or of the breach of any other term,
covenant, representation or warranty of this Agreement. No investigation, review
or audit by Purchaser of the Company or the Company of Purchaser prior to or
after the date hereof shall estop or prevent either party from exercising any
right hereunder or be deemed to be a waiver of any such right.
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VIII.
GENERAL PROVISIONS
8.1 Survival. All representations, warranties, covenants and agreements
of the parties in this Agreement or in any instrument delivered by the parties
pursuant to this Agreement (other than the agreements, covenants and obligations
set forth herein which are contemplated to be performed after the Effective
Time, which include, without limitation, Section 5.4) shall not survive the
Effective Time except as provided for in Section 7.4.
8.2 Notice. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, by facsimile
transmission or by registered or certified mail to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice) and shall be deemed to be delivered on the date so delivered:
(a) if to Purchaser or MAF Bancorp, Inc.
Merger Sub: 00xx & Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Chairman and Chief
Executive Officer
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
copy to: Vedder, Price, Xxxxxxx & Kammholz, P.C.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
(b) if to the Company: Chesterfield Financial Corp.
00000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxx
Chairman and Chief
Executive Officer
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
copy to: Luse, Gorman, Xxxxxxxx & Xxxxxx PC
0000 Xxxxxxxxx Xxxxxx XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
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8.3 Applicable Law. This Agreement shall be construed and interpreted
in all respects, including validity, interpretation and effect, by the laws of
the State of Delaware with respect to matters of corporate laws and, with
respect to all other matters, by the laws of the State of Illinois, except to
the extent that the federal laws of the United States apply.
8.4 Headings, Etc. The article headings and section headings contained
in this Agreement are inserted for convenience only and shall not affect in any
way the meaning or interpretation of this Agreement.
8.5 Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a final and unappealable order of a court
of competent jurisdiction to be invalid, void, or unenforceable, then the
remainder of the terms, provisions, covenants and restrictions contained in this
Agreement shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated unless the effect would be to cause this
Agreement to not achieve its essential purposes.
8.6 Entire Agreement; Binding Effect; Nonassignment; Counterparts.
Except as otherwise expressly provided herein, this Agreement (including the
documents and instruments referred to herein) (a) constitutes the entire
agreement between the parties hereto and supersedes all other prior agreements
and undertakings, both written and oral, between the parties, with respect to
the subject matter hereof; and (b) is not intended to confer upon any other
person any rights or remedies hereunder except as specifically provided herein
(including without limitation Section 5.4). This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either party hereto without the prior
written consent of the other party hereto. This Agreement may be executed in two
or more counterparts which together shall constitute a single agreement.
8.7 Certain Definitions. (a) Solely for purposes of Sections 2.10,
3.11, 6.2(a), 6.2(f) and 6.3(a) of this Agreement, the term "Material Adverse
Effect" means, with respect to Purchaser or the Company, as the case may be, any
effect that (a) is material and adverse to the business, assets, liabilities,
results of operations or financial condition of the Purchaser and the Purchaser
Subsidiaries taken as a whole, or the Company and the Company Subsidiaries taken
as a whole, respectively, or (b) materially impairs the ability of Purchaser or
the Company to consummate the transactions contemplated hereby; provided,
however, that Material Adverse Effect shall not be deemed to include the impact
of (i) actions contemplated by this Agreement, including, with respect to the
Company, the payment of or provision for benefits contemplated to be paid to any
directors, officers or employees of the Company and its Subsidiaries in
accordance with the terms of this Agreement, (ii) changes in laws and
regulations or interpretations thereof that are generally applicable to banks,
savings institutions or their holding companies, (iii) changes in GAAP that are
generally applicable to banks, savings institutions or their holding companies,
(iv) expenses reasonably incurred in connection with the transactions
contemplated hereby, and (v) changes attributable to or resulting from changes
in general economic conditions affecting similarly situated banks, savings
institutions or their holding companies generally, including changes in the
prevailing level of interest rates.
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(b) The term "knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) means those facts
that are known or should have been known by any of the executive officers or
directors of such Person (including with respect to the Company, Xxxx X.
Xxxxxxxxx), and includes any facts, matters or circumstances set forth in any
written notice from any governmental entity or any other material written notice
received by that Person.
(c) The term "business day" means any day that the New York Stock
Exchange or Nasdaq are open for trading.
(d) The term "Person" means any individual, financial institution,
corporation, partnership, association, limited liability company, business
trust, unincorporated organization or similar organization, whether domestic or
foreign, together with its direct or indirect parents, subsidiaries and
affiliates (as such term is used in Rule 145 of the Securities Act).
8.8 Tax Treatment; Tax Structure. Notwithstanding anything to the
contrary contained herein, the parties acknowledge and agree that any party (and
each employee, representative, or other agent of the party) may disclose to any
and all persons the tax treatment and tax structure (as such terms are defined
in Treasury Regulations ss. 1.6011-4(c)) of the Transaction and any and all
materials of any kind (including opinions or other tax analyses) relating to
such tax treatment or tax structure; provided however that such disclosure may
not be made until the earlier of (i) the date of the public announcement of
discussions relating to the Transaction; (ii) the date of the public
announcement of the Transaction; and (iii) the date of the execution of the
agreement (with or without conditions) to enter into the Transaction. The
preceding sentence is intended to cause the Transaction to be treated as not
having been offered under conditions of confidentiality for purposes of Section
1.6011-4(b)(3) of the Treasury Regulations promulgated under Section 6011 of the
Internal Revenue Code of 1986, as amended, and should be construed in a manner
consistent with such purpose.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
MAF BANCORP, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------------------
By: Xxxxx X. Xxxxxxx
Its: Chairman and Chief Executive Officer
CLASSIC ACQUISITION CORP.
/s/ Xxxxx X. Xxxxxxx
------------------------------------------
By: Xxxxx X. Xxxxxxx
Its: Chairman and Chief Executive Officer
CHESTERFIELD FINANCIAL CORP.
/s/ Xxxxxxx X. XxXxxx
------------------------------------------
By: Xxxxxxx X. XxXxxx
Its: Chairman and Chief Executive Officer
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