EXHIBIT 99.1
PURCHASE AND ASSUMPTION AGREEMENT
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by and between
FIRST BANKERS TRUST COMPANY, N.A.
Quincy, Illinois
and
UNIONBANK
Streator, Illinois
Dated as of May 21, 2004
TABLE OF CONTENTS
Page
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ARTICLE 1. SALE AND PURCHASE OF CERTAIN ASSETS AND ASSUMPTION AND
TRANSFER OF CERTAIN LIABILITIES..............................1
1.1 Sale of Assets...............................................1
1.2 Assets to be Retained by Seller..............................3
1.3 Assumption of Liabilities of Seller..........................3
1.4 Liabilities to be Retained by Seller.........................4
1.5 Purchase Price and Payment...................................5
1.6 The Closing, the Closing Date and the Effective Time.........5
1.7 Preliminary Balance Sheet and Final Balance Sheet............5
1.8 Adjustments..................................................6
1.9 Deliveries by Seller at the Closing..........................6
1.10 Deliveries by Buyer at the Closing...........................8
1.11 Closing Costs and Recording..................................9
1.12 Further Assurances...........................................9
ARTICLE 2. REAL ESTATE MATTERS...........................................9
2.1 Commitment for Title Insurance and Survey....................9
2.2 Objections and Remedies......................................9
2.3 Title Insurance Policy......................................10
2.4 Environmental Matters.......................................10
2.5 Destruction or Damage Prior to Closing......................11
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLER.....................11
3.1 Organization and Standing...................................11
3.2 Execution and Delivery......................................11
3.3 Compliance with Laws, Permits and Instruments...............12
3.4 Litigation..................................................12
3.5 Consents....................................................12
3.6 Title to and Condition of the Assets........................12
3.7 Financial Statements........................................13
3.8 Leases and Contracts........................................13
3.9 Absence of Certain Changes or Events........................13
3.10 No Adverse Change...........................................13
3.11 Evidences of Indebtedness...................................14
3.12 Books and Records...........................................14
3.13 Regulatory Compliance.......................................14
3.14 Brokerage Fees..............................................14
3.15 Employee Matters............................................14
3.16 Environmental Matters.......................................14
3.17 Representations Not Misleading..............................15
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER......................15
4.1 Organization and Standing...................................15
4.2 Execution and Delivery......................................16
4.3 Compliance with Laws, Permits and Instruments...............16
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4.4 Litigation..................................................16
4.5 Consents....................................................16
4.6 Brokerage Fees..............................................16
4.7 Disclosure..................................................17
4.8 Regulatory Conditions.......................................17
ARTICLE 5. COVENANTS OF SELLER..........................................17
5.1 Reasonable Efforts..........................................17
5.2 Information for Governmental Applications...................17
5.3 Required Acts of Seller.....................................17
5.4 Prohibited Acts of Seller...................................18
5.5 Access; Pre-Closing Investigation...........................19
5.6 Additional Financial Statements.............................19
5.7 Untrue Representations......................................20
5.8 Notice of Adverse Changes, Litigation and Claims............20
5.9 No Disclosure or Negotiation with Others....................20
5.10 Notices to Customers........................................20
ARTICLE 6. COVENANTS OF BUYER...........................................20
6.1 Reasonable Efforts..........................................20
6.2 Regulatory Approvals........................................20
6.3 Notice of Adverse Changes, Litigation and Claims............21
6.4 Change of Name, Notice to Customers.........................21
6.5 Use of Name.................................................21
6.6 Solicitation of Customers of the Branches...................21
6.7 Solicitation of Employees of the Branches...................22
ARTICLE 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER.............22
7.1 Compliance with Representations, Warranties and Agreements..22
7.2 Necessary Corporate Actions.................................22
7.3 Governmental Approvals......................................22
7.4 No Litigation...............................................22
7.5 No Material Adverse Change..................................23
7.6 Consents of Third Parties...................................23
7.7 Documentation...............................................23
ARTICLE 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER............23
8.1 Compliance with Representations, Warranties and Agreements..23
8.2 Necessary Corporate Actions.................................23
8.3 Governmental and Other Approvals............................23
8.4 No Litigation...............................................24
8.5 Documentation...............................................24
ARTICLE 9. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENT AND
OBLIGATIONS; INDEMNIFICATION................................24
9.1 Survival....................................................24
9.2 Indemnification by Seller...................................24
9.3 Indemnification by Buyer....................................25
9.4 Limit on Indemnities........................................26
ARTICLE 10. OPERATIONAL AGREEMENTS.......................................26
10.1 Replacement of Customer Check Stock and ATM Cards...........26
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10.2 Payment of Checks, Drafts, and Orders.......................26
10.3 Clearing Items..............................................26
10.4 Returned Items..............................................27
10.5 Data Processing and Utilities...............................27
10.6 Compliance with Garnishments and Similar Orders.............27
10.7 Direct Deposit Arrangements.................................27
10.8 Direct Debit Arrangements...................................28
10.9 XXX Deposits................................................28
10.10 Xxxxx Accounts..............................................28
10.11 Final Statements............................................28
10.12 XXX Deposits and Xxxxx Accounts.............................28
10.13 Interest Reporting and Withholding..........................29
10.14 Loans.......................................................29
10.15 Other Items.................................................29
10.16 Safe Deposit Box and Safekeeping Business...................30
10.17 Noncompetition Agreement....................................30
10.18 Books and Records...........................................31
10.19 Optical Disk Records........................................31
10.20 Taxes.......................................................31
ARTICLE 11. EMPLOYEE MATTERS.............................................31
11.1 Notice to Employees and Information.........................31
11.2 Offer of Employment.........................................32
11.3 Costs of Termination........................................32
11.4 Communications..............................................32
11.5 Seller's Retention of Liabilities...........................32
11.6 No Third Party Beneficiaries................................33
ARTICLE 12. TERMINATION AND ABANDONMENT..................................33
12.1 Right of Termination........................................33
12.2 Notice of Termination.......................................33
12.3 Effect of Termination.......................................33
ARTICLE 13. MISCELLANEOUS................................................34
13.1 Entire Agreement............................................34
13.2 Multiple Counterparts.......................................34
13.3 Amendment...................................................34
13.4 Notices.....................................................34
13.5 Binding Effect..............................................35
13.6 Governing Law...............................................35
13.7 Attorneys' Fees and Costs...................................35
13.8 Severability................................................35
13.9 Assignability...............................................36
13.10 Rules of Construction.......................................36
13.11 Expenses....................................................36
13.12 Waiver......................................................36
13.13 Specific Performance........................................36
13.14 Public Disclosure...........................................37
13.15 Confidential Information....................................37
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13.16 Arbitration.................................................37
13.17 Delivery of Exhibits........................................38
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PURCHASE AND ASSUMPTION AGREEMENT
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THIS PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") is made and
entered into as of the 21st day of May 2004 by and between First Bankers Trust
Company, N.A., a national banking association having its main office in Quincy,
Illinois ("Buyer"), and UnionBank an Illinois state banking association having
its principal office in Streator, Illinois ("Seller").
RECITALS:
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WHEREAS, Seller desires to sell and transfer to Buyer, and Buyer
desires to purchase certain assets from Seller associated with Seller's branches
at the following locations: (a) 0000 Xxxxxxxx Xx. Xxxxxx, Xxxxxxxx 00000; (b)
0000 Xxxxxxxx Xx., Xxxxxxxx, Xxxxxxxx 00000; (c) Xxxxxxx 00, Xxxxxx Xxxxxxxx
00000; (d) 000 Xxxxx Xxxxxxxxx Xx., Xxxxxx, Xxxxxxxx 00000; and (e) 000 X.
Xxxxxxxx Xx., Xxxxxxxxx, Xxxxxxxx 00000 (collectively, the "Branches") and to
assume certain liabilities of Seller associated with the Branches as hereinafter
described on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual representations, warranties, covenants and agreements contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and subject to the conditions herein set forth, the
parties hereto, intending to be legally bound hereby, do undertake, promise,
covenant and agree with each other as follows:
ARTICLE 1.
SALE AND PURCHASE OF CERTAIN ASSETS AND
ASSUMPTION AND TRANSFER OF CERTAIN LIABILITIES
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1.1 Sale of Assets. On the terms and subject to the conditions
contained in this Agreement, at the Closing (as defined in Section 1.6) Buyer
shall purchase from Seller and Seller shall sell, convey, assign, transfer and
deliver to Buyer all of the rights, title, and interests of Seller in and to the
following assets of the Branches as a going concern, free and clear of all
liens, security interests, pledges, encumbrances, adverse claims and demands of
every kind, character and description whatsoever (other than liens for taxes not
yet due, referred to herein as "Permitted Liens"), except as otherwise provided
in this Agreement (all of which are collectively referred to herein as the
"Assets"):
A. All cash on hand at the Branches as of the close of
business on the Closing Date including vault cash, automated teller
machine ("ATM") cash, xxxxx cash, tellers' cash and cash items in the
process of collection (the "Cash on Hand"). At the Closing, Seller
shall deliver to Buyer Schedule 1.1(a) ("Schedule of Cash") including
the amount and location of Seller's Cash on Hand as of the close of
business on the date preceding the Closing Date.
B. (i) All loans or extensions of credit listed on
Schedule 1.1(b); and (ii) all loans or extensions of credit made from
the date of Schedule 1.1(b) up to the Closing Date (the "Preclosing
Loans"), the Preclosing Loans together with all loans and extensions of
credit listed on Schedule 1.1(b), are collectively referred to herein
as the "Loans"), plus accrued but unpaid interest on such Loans through
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the Closing Date, and net of $441,000 (the "Reserve"), provided,
however, that the Loans shall not include any loans or extensions of
credit that, at the Closing Date, are (i) on nonaccrual status, (ii) 30
days or more past due, (iii) classified as "substandard," "doubtful" or
"loss" as of the date of the most recent examination of Seller or
placed on Seller's watch list as a result of the most recent internal
or external loan review of Seller performed prior to February 29, 2004,
(iv) upon which insurance has been force-placed, (v) in connection with
which the borrower has filed a petition for relief under the United
States Bankruptcy Code prior to the Closing Date or (vi) have specific
reserves as shown on Seller's books and records. Buyer shall have the
right to put and sell for the outstanding principal balance as of the
put date, plus accrued and unpaid interest, each and every Preclosing
Loan (except any Preclosing Loans with respect to which Buyer, without
the consent of Seller, has changed the terms or conditions or has
otherwise taken action which materially alters Seller's ability to
obtain repayment thereof) to the Seller for a period of sixty (60) days
following the Closing Date and Seller agrees to purchase such
Preclosing Loans as described herein within three (3) business days of
receipt of written notice of such put by Buyer (all such Preclosing
Loans are hereinafter referred to as "Putback Loans"). In the event
that the Loans, excluding Preclosing Loans, to be transferred to Buyer
have aggregate principal balance as of the Closing Date of less than
$40,000,000, Seller may terminate this Agreement unless Buyer agrees
not to put back to Seller a sufficient quantity of Preclosing Loans
such that the aggregate principal amount of Loans being acquired
hereunder will not be less than $40,000,000.
C. The real property on which the Branches are located
and all improvements to such property, purchased, installed or
constructed by or on behalf of Seller and used in connection with the
operation or maintenance of the Branches, without limitation,
buildings, structures, parking facilities and drive-in teller
facilities (the "Real Property").
D. All furniture, fixtures, equipment and other tangible
personal property, other than as set forth on Schedule 1.1(d), owned by
Seller and located at the Branches or affixed to the Real Property at
which the Branches are located, exclusive of (i) all signage and (ii)
the contents of safe deposit boxes (the "Personal Property");
E. All rights of Seller under safe deposit contracts and
leases for the safe deposit boxes located at the Branches as of the
Effective Time (the "Safe Deposit Contracts");
F. All rights of Seller under leases or subleases by
which Seller has rights to use the real property on which any Branch is
located (the "Leases");
G. All rights of Seller under express or implied
warranties given or made in connection with the Assets, if any;
H. All books, records (including computer records),
files and documentation relating to the Assets and the Liabilities (the
"Records"), including, but not limited to:
(i) Signature cards, orders and contracts
between Seller and its depositors, and records of similar
character;
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(ii) Loan and collateral records and credit
files; and
(iii) The Safe Deposit Contracts and the Leases.
It is understood that certain of Seller's records may be available only
in the form of photocopies, film copies or other non-original and non-paper
media. Further, it is understood that certain historical records are available
only on optical disk and are intermingled with other records of Seller (the
"Optical Disk Records"). The Optical Disk Records will remain in the possession
of Seller; after the Closing Date, Seller will provide printed copies of
information contained in the Optical Disk Records pursuant to Section 10.19 of
this Agreement.
Buyer shall succeed to all rights, title, benefits and interests in and
to the Assets as of the Effective Time, and shall be entitled to receive all
benefits therefrom as if Buyer had itself acquired such assets.
1.2 Assets to be Retained by Seller. Seller shall retain all
assets not expressly purchased by Buyer pursuant to Section 1.1, including, but
not limited to (i) all investment securities owned by Seller; (ii) all of the
Seller's investments in Seller's affiliates and subsidiaries; (iii) all other
real estate owned by Seller or carried as in substance foreclosures that are
associated with the Branches (if any); (iv) all repossessed personal property
owned by, or in the possession of, the Seller; (v) all of the Seller's life
insurance policies; (vi) all loans or participations in loans that are not
Loans; (vii) all assets and records associated with any investment, trust or
brokerage business of Seller or its affiliates, whether conducted at the
Branches or any other location of Seller; (viii) all deferred tax assets; (ix)
all intangible assets, including goodwill and mortgage servicing rights, of
Seller; (x) all rights to the name "UnionBank" and any of Seller's corporate
logos, trademarks, trade names, signs, paper stock, monetary instruments
(including, but not limited to, traveler's checks and cashier's checks), forms
and other supplies containing any such logos, trademarks or tradenames; (xi) all
customer and merchant credit card accounts; (xii) all trust assets and trust
accounts, and (xiii) any other assets listed on Schedule 1.2(a) (collectively,
the "Excluded Assets"). Seller shall coordinate with Buyer to remove the
Excluded Assets from the Branches prior to the Effective Time. Seller shall
remove the Excluded Assets at its own cost and will be responsible for making
any repairs necessitated by Seller's removal of the Excluded Assets.
1.3 Assumption of Liabilities of Seller. At the Closing, subject
to the conditions contained herein, Seller shall transfer and assign to Buyer,
and Buyer shall assume, pay for, perform and discharge from and after the
Effective Time, as and when due and payable, the following liabilities of Seller
attributable to the Branches and reflected on the books and records of Seller
(all of which are collectively referred to herein as the "Liabilities"):
A. All deposits associated with the Branches as of the
Effective Time (the "Deposits"), and accrued and unpaid interest on any
interest-bearing deposits through the Effective Time ("Accrued
Interest"), together with all duties and obligations of Seller
associated therewith, including, but not limited to, the agreements
with customers associated with such deposits (the "Deposit Agreements";
the holders of record of the Deposits are hereinafter referred to as
the "Depositors"); provided, however, that the Deposits shall not
include (i) any deposits associated with out-of-area relationships
which shall be maintained by the Seller and which are listed on
Schedule 1.3(a); (ii) any direct deposits of UnionBancorp, Inc. or any
of its affiliates or subsidiaries (other than officers of the
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Branches); (iii) any deposits of the officers or directors of
UnionBancorp, Inc., or the deposits of any of the officers and
directors of any of its affiliates and subsidiaries (other than
officers of the Branches); (iv) any brokered deposits which shall be
maintained by Seller and which are listed on Schedule 1.3(a) or (v)
deposits which are pledged to secure loans of Seller which are not
Loans and which are listed on Schedule 1.3(a).
B. All liabilities, duties and obligations of Seller
arising or to be performed after the Effective Time under the Safe
Deposit Contracts;
C. All liabilities, duties and obligations of Seller
under the Leases;
D. All other book liabilities of the Seller attributable
to the Branches, together with any accrued and unpaid interest on any
such liabilities through the Effective Time (the "Other Liabilities");
provided, however, that Other Liabilities shall not include any
obligations of the Seller for advances from the Federal Home Loan Bank
or any of the liabilities of the Seller listed on Schedule 1.3(b); and
E. All duties and obligations of Seller arising or to be
performed after the Effective Time under the loan documents related to
the Loans.
Buyer shall succeed to all obligations and liabilities of Seller to the
extent included in the Liabilities as of the Effective Time, and shall be liable
from then and thereafter to pay, discharge and perform all of the Liabilities as
if Buyer had itself incurred such obligations and liabilities, and Buyer shall
succeed to all rights, offsets and defenses of Seller in connection therewith.
For purposes of this Agreement, the term "deposit" shall include, but not be
limited to, all uncollected items included in the depositors' balances and
credited on the books of Seller, and shall have the meaning identical to that
defined in section 3(l) of the Federal Deposit Insurance Act, 12 U.S.C. ss.
1813(l).
1.4 Liabilities to be Retained by Seller. Seller shall retain all
liabilities or obligations not expressly assumed by Buyer pursuant to Section
1.3, including, but not limited to:
A. All real estate taxes on other real estate and
properties carried as in substance foreclosures of Seller, all sales
and use, social security and unemployment taxes withheld or collected
from employees or customers and all accounts payable and operating
expenses, whether or not accrued, for products or services incurred
prior to the Effective Time including, but not limited to, salaries,
attorneys' fees and telephone, utility, advertising and public
relations expenses, except that to the extent that an adjustment to the
purchase price hereunder is made in respect of any such liability or
obligation, Buyer shall assume all liability with respect thereto;
B. Liabilities or obligations with respect to any
litigation, suits, claims, demands or governmental proceedings asserted
by third parties against Seller and arising, commenced or resulting
from the operations of the Branches prior to the Effective Time; and
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C. Seller's cashier checks, letters of credit, money
orders, interest checks and expense checks issued prior to Closing,
consignments of U.S. Government "E" and "EE" bonds and any and all
traveler's checks.
1.5 Purchase Price and Payment. At the Closing, Seller shall
transfer to Buyer cash in the amount equal to the difference between (a) the
value of (i) the Deposits, plus (ii) Accrued Interest, plus (iii) Accrued
Expenses (as provided in Section 1.8) plus (iv) Other Liabilities minus (b) the
sum of (i) $2,762,086, less (A) the "Current Book Value" of the assets as set
forth on Schedule 1.1(d) and (B) any depreciation on the Assets realized by
Seller between February 24, 2004 and the Closing Date, as the aggregate value of
the Real Property and the Personal Property, plus (ii) an amount equal to the
principal balance plus accrued interest of the Loans as of the Closing Date,
less $441,000, which for the purposes hereof shall be deemed to be Seller's
allowance for loan losses allocable to the Loans (the "Reserve") plus (iii) an
amount equal to the Cash on Hand, plus (iv) the amount of Prepaid Expenses as
provided in Section 1.8. At the Closing, Buyer shall transfer to Seller cash in
the amount equal to 5.192% of the sum of the Deposits plus Accrued Interest (the
"Premium"); provided, however, in no event shall the Premium be less than
$4,892,000 unless the aggregate amount of the Deposits plus Accrued Interest as
of the Closing Date is less than $90,000,000, in which event the Premium will be
equal to the difference between (y) $4,892,000 and (z) the product of (i)
0.05192 times (ii) $90,000,000 less the actual amount of the Deposits and
Accrued Interest as of the Closing Date. Seller shall provide to Buyer within
three (3) business days prior to the Closing Date a preliminary schedule of
Closing settlement amounts substantially in the form attached hereto as Exhibit
"A" showing in reasonable detail the calculation of the payments to be made at
Closing, including any adjustments made in respect of the Preliminary Balance
Sheet described in Section 1.7 below.
1.6 The Closing, the Closing Date and the Effective Time. The sale
and purchase of the Assets and the assumption of the Liabilities pursuant to
this Agreement (the "Closing") shall occur on a date mutually acceptable to
Seller and Buyer as soon as practicable following the satisfaction or waiver of
all conditions precedent set forth in Articles 7 and 8. The Closing shall be
held at the offices of Xxxxxx & Xxxxxx Attorneys, P.C., 000 Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx, unless another place is mutually agreed upon by Buyer and
Seller. The date of the Closing is referred to herein as the "Closing Date." The
effective time (the "Effective Time") shall be 9:00 a.m., local time, on the
Closing Date or such other time as the Buyer and Seller shall mutually agree.
Buyer and Seller specifically agree that time is of the essence for all purposes
with respect to this Agreement and the transactions contemplated hereby.
1.7 Preliminary Balance Sheet and Final Balance Sheet. On the
Closing Date, Seller shall present Buyer with a list of the balances of the
Assets and the Liabilities as of a date three (3) business days prior to the
Closing Date, certified by the Chief Executive Officer or Chief Financial
Officer of Seller (acting in his or her official capacity, and not individually)
to be true and correct as of the date reflected thereon (the "Preliminary
Balance Sheet"), and the parties will calculate all amounts pursuant to Section
1.5 in accordance with the amounts reflected on the Preliminary Balance Sheet.
Within thirty (30) days following the Closing Date, Seller shall present Buyer
with a list of the balances of the Assets and the Liabilities as of the
Effective Time, certified by the Chief Executive Officer or Chief Financial
Officer of Seller (acting in his or her official capacity, and not individually)
to be true and correct as of the date reflected thereon (the "Final Balance
Sheet"). Additionally, Seller shall deliver to Buyer a list of Loans purchased,
individually identified by account number, which list shall be appended to the
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Xxxx of Sale, and a list of the Deposits assumed, which list shall be appended
to the Assignment and Assumption Agreement. Subject to rights of indemnification
pursuant to ARTICLE 9, the Final Balance Sheet shall become final and binding on
Buyer and Seller ten (10) business days after its delivery to Buyer, unless
Buyer gives written notice to Seller of its disagreement with respect to any
item included in such statement. Seller and Buyer shall use reasonable efforts
to resolve the disagreement during the ten (10) business day period following
receipt by Seller of the notice. If the disagreement is not resolved during such
ten (10) business day period, the parties agree to follow the procedures set
forth in Section 13.16 to resolve such dispute, and such Final Balance Sheet
shall be modified by any such resolution, whereupon the Final Balance Sheet
shall become final and binding. When the Final Balance Sheet becomes final and
binding, an appropriate adjusting settlement payment from Seller to Buyer or
from Buyer to Seller, as the case may be, will be made together with accrued
interest calculated at the federal funds rate in effect on the Closing Date for
the number of days elapsed between the Closing Date and the date of such
adjusting settlement payment.
1.8 Adjustments. All operating expenses and fees accrued or
prepaid on or prior to the Effective Time, including, without limitation, wages,
salaries, deposit insurance premiums, utility payments, telephone charges,
property taxes, other ordinary operating expenses of the Branches and other
expenses related to the Assets or Liabilities, shall be prorated between the
parties as of the Effective Time. All amounts prepaid relating to Safe Deposit
Contracts or agreements shall be prorated through the Effective Time, and all
deposits paid thereon, if any, shall be paid to Buyer. Notwithstanding Seller's
normal practices and procedures, to the extent that Seller has paid expenses
that are expenses allocable to Buyer pursuant to this Section, such expenses
shall appear as "Prepaid Expenses" on the Preliminary Balance Sheet, or, if not
allocable as of the date the Preliminary Balance Sheet is calculated (the
"Preliminary Balance Sheet Date"), on the Final Balance Sheet. Notwithstanding
Seller's normal practices and procedures, to the extent that expenses have been
incurred but not paid by Seller on or prior to the Effective Time, they shall
appear as an "Accrued Expense" on the Preliminary Balance Sheet or, if not
incurred by the Preliminary Balance Sheet Date, on the Final Balance Sheet.
1.9 Deliveries by Seller at the Closing. At the Closing, Seller
shall execute, acknowledge and deliver to Buyer in recordable form as
appropriate, and with third party consents and releases of liens and security
interests when required, certificates and other instruments of sale, conveyance,
transfer and assignment relating to all of the Assets, and containing warranties
consistent with the representations and warranties contained in this Agreement,
including, without limitation, the following (all of such actions constituting
conditions precedent to Buyer's obligations to close hereunder):
A. A general warranty deed covering the Real Property in
the form of Exhibit "B" hereto;
B. A general warranty xxxx of sale covering the Personal
Property in the form of Exhibit "C" hereto;
C. Documents properly endorsed for transfer reflecting
the assignment of all notes, guaranties, security agreements, financing
statements, and any other agreements and certificates of title to inure
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to the benefit of Buyer with respect to the Loans, and possession of
any instruments (duly endorsed as necessary) securing the Loans;
D. All collateral security of any nature whatsoever held
by Seller as collateral for any of the Assets;
E. Certificates and stock powers endorsed for transfer
reflecting the assignment of the Securities;
F. All of the Records (other than the Optical Disk
Records);
G. The Preliminary Balance Sheet;
H. The Cash on Hand and such of the other Assets that
are capable of physical delivery;
I. All Leases in force and effect as of the Closing and
recordable assignments and assumption agreements in form and substance
acceptable to Buyer that transfer, assign and convey to Buyer all of
the Seller's estates, rights, titles and interests in, to and under
each of the Leases, each evidencing the consent (if required) of the
lessors under such Leases, as may be required under the terms of such
Lease;
J. A certificate duly executed by an authorized officer
of Seller (acting in his or her official capacity, and not
individually), dated as of the Closing Date, pursuant to which such
officer shall certify that (a) the representations and warranties of
Seller as set forth in this Agreement are true and correct in all
material respects as of the Closing Date; (b) Seller has complied with
all covenants contained in Article 6 and its other agreements set forth
herein and (c) that since February 29, 2004, there has been no event,
condition or circumstance that has occurred or is reasonably likely to
occur that would (i) cause the total amount of the Deposits to be
assumed by Buyer pursuant to the terms of this Agreement to have an
aggregate balance of less than $80,000,000, (ii) cause the total amount
of Loans or extensions of credit to be purchased by Buyer pursuant to
the terms of this Agreement to have an aggregate balance of less than
$40,000,000, or (iii) prevent Seller from performing any of its
obligations under this Agreement or consummating the transactions
contemplated hereby (any of such events being referred to herein as a
"Material Adverse Change");
K. A certificate duly executed by the Cashier or
Secretary of Seller pursuant to which such officer shall certify (i)
the due adoption by the Board of Directors of Seller of corporate
resolutions attached to such certificate authorizing the transaction
and the execution and delivery of this Agreement and the other
agreements and documents contemplated hereby and the taking of all
actions contemplated hereby and thereby; and (ii) the incumbency and
true signatures of those officers of Seller duly authorized to act on
its behalf in connection with the transaction contemplated by this
Agreement and to execute and deliver this Agreement and other
agreements and documents contemplated hereby and the taking of all
actions contemplated hereby and thereby on behalf of Seller;
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L. All documents, contracts, certificates, instruments,
keys and records necessary or appropriate to transfer the safe deposit
and safekeeping businesses, if any, of the Branches to Buyer;
M. Possession of the Assets and access to and keys to
the Branches and all security devices located at the Branches, together
with security codes for access to the Branches and combinations to all
locking devices of Seller located at the Branches;
N. A list, certified by an authorized officer of Seller
(acting in his or her official capacity, and not individually), setting
forth all garnishments, similar court orders, tax liens and orders of
any governmental entity in effect with respect to the Deposits;
O. Payment to Buyer as is required pursuant to Section
1.5 in immediately available funds (such payment to be made at a time
no later than 12:00 p.m., Quincy, Illinois time, on the Closing Date);
P. A Power of Attorney in the form of Exhibit "D"
hereto; and
Q. An assignment and assumption agreement in the form of
Exhibit "E" hereto by which Seller assigns the Liabilities to Buyer.
1.10 Deliveries by Buyer at the Closing. At the Closing, Buyer
shall execute, acknowledge and deliver to Seller, in recordable form as
appropriate, such documents and certificates necessary to carry out the terms
and provisions of this Agreement, including, without limitation, the following
(all of such actions constituting conditions precedent to Seller's obligations
to close hereunder):
A. An assignment and assumption agreement in the form of
Exhibit "E" hereto by which Buyer assumes the Liabilities;
B. A certificate duly executed by an authorized officer
of Buyer (acting in his or her official capacity, and not
individually), dated as of the Closing Date, pursuant to which such
officer shall certify that (a) the representations and warranties of
Buyer as set forth in this Agreement are true and correct in all
material respects as of the Closing Date and (b) Buyer has complied
with all covenants contained in Article 6 and its other agreements set
forth herein;
C. A certificate duly executed by the Cashier or
Assistant Cashier of Buyer pursuant to which such officer shall certify
(i) the due adoption by the Board of Directors of Buyer of corporate
resolutions attached to such certificate authorizing the execution and
delivery of this Agreement and the other agreements and documents
contemplated hereby and the taking of all actions contemplated hereby
and thereby on behalf of Buyer, and (ii) the incumbency and true
signatures of those officers of Buyer duly authorized to act on its
behalf, in connection with the transaction and this Agreement and to
execute and deliver the Agreement on behalf of Buyer; and
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D. Payment to Seller of the Premium in immediately
available funds (such payment to be made at a time no later than 12:00
p.m., Quincy, Illinois time, on the Closing Date).
1.11 Closing Costs and Recording. Except as otherwise specified in
this Agreement, Buyer shall be responsible for filing or recording any
instruments or documents evidencing, or otherwise notifying persons who are not
parties to this Agreement regarding, the consummation of the transactions
contemplated by this Agreement.
1.12 Further Assurances. From time to time following the Closing,
at the request of any party hereto and without further consideration, the other
party hereto shall, at the reasonable expense of the requesting party (to the
extent of any out of pocket costs incurred), execute and deliver to such
requesting party such instruments and documents and take such other action (but
without incurring any additional financial obligation) as such requesting party
may reasonably request in order to consummate more fully and effectively the
transactions contemplated hereby.
ARTICLE 2.
REAL ESTATE MATTERS
-------------------
2.1 Commitment for Title Insurance and Survey. Seller shall
deliver to Buyer and Buyer's counsel with respect to each parcel of Real
Property (a) within thirty (30) days from the date of this Agreement, title
commitments (including all documents, instruments or agreements evidencing or
creating the exceptions referenced in such commitment) (the "Commitments")
issued by a title company mutually agreeable to Buyer and Seller (the "Title
Company") and (b) within forty-five (45) days from the date of this Agreement,
land title surveys of the Real Property, prepared and certified as to all
matters shown thereon by a surveyor licensed by the State of Illinois (the
"Surveys"), which Surveys shall include a notation stating whether or not a
portion of such Real Property is located in a 100-year flood plain, flood-prone
area of special flood hazard and shall show the specific location of any
portions of such Real Property that may be located in any such flood areas. The
Commitments shall reflect that Buyer has good and indefeasible title to the Real
Property, subject only to (1) any shortages in area, (2) taxes for 2004 and
subsequent years and subsequent assessments for prior years due to a change in
land usage or ownership, (3) existing building and zoning ordinances, (4)
utility easements, and (5) objections accepted or deemed waived by Buyer
(collectively, the "Permitted Encumbrances"). The cost of the Commitments shall
be borne by Seller and the cost of the Surveys shall be shared equally between
the Buyer and Seller.
2.2 Objections and Remedies. If any Commitment contains any
exceptions other than the Permitted Encumbrances, Seller shall make a good faith
effort to cure such exception. Buyer may object to any remaining uncured
exceptions by providing written notice of such objection on or before the close
of business on the 10th business day after delivery of the last of Commitments
and the Surveys to Buyer. All objections raised by Buyer are referred to herein
as the "Objections." Within thirty (30) days after receipt of the Objections,
Seller shall either (i) remedy or remove all Objections, or (ii) notify Buyer
that Seller has elected not to remedy or remove some or all of the Objections.
In the event Seller gives the notice set forth in the preceding clause (ii) of
this Section 2.2, or in the event Seller fails to remedy or remove all
Objections within said 30-day period, Buyer may (as its sole remedy) on or
before close of business on the 5th business day after such 30-day period (or,
9
if applicable, on or before close of business on the 5th business day after
receipt of Seller's notice), terminate this Agreement in its entirety by giving
Seller written notice, whereon this Agreement shall terminate and have no
further force and effect except as set forth in Section 12.3 hereof. If Buyer
fails to terminate within such 5-business day period, Buyer shall be deemed to
have waived its Objections.
2.3 Title Insurance Policy. Seller shall cause the Title Company,
as soon as practicable after the Closing, to issue an Illinois Owner's Policy of
Title Insurance, to Buyer, at Seller's expense, covering the Real Property in
the amount equal to $1,692,460. Such policy shall guarantee Buyer's title to the
Real Property to be good and indefeasible subject only to the Permitted
Encumbrances.
2.4 Environmental Matters.
---------------------
A. Buyer shall be permitted to obtain Phase I
Environmental Assessments (including an asbestos survey) performed on
the Branches (the "Phase I Assessments"). Buyer acknowledges that Buyer
has the right and opportunity to conduct such additional inspections
and reviews of the Real Property and that Buyer is not purchasing the
Real Property in reliance upon any representations or warranties of any
kind whatsoever made by Seller (or any representatives, agents or
employees of Seller), except those made pursuant to this Agreement.
B. If Buyer elects to perform Phase I Assessments, Buyer
shall, on or before the 45th day after the date of this Agreement, (i)
complete all such environmental surveys of the Real Property that Buyer
wishes to conduct, (ii) furnish to Seller a copy of all reports
received by Buyer with respect to any environmental surveys of the Real
Property conducted by or on behalf of Buyer (the "Buyer's Assessment"),
(iii) make a determination (as shown by reliable estimates contained in
Buyer's Assessment or by competitive bid) of the costs to remediate any
Hazardous Materials (the "Estimated Costs"), and (iv) provide notice to
Seller of the Estimated Costs. The date by which all of the events in
the preceding sentence shall have occurred is hereinafter referred to
as the "Environmental Determination Date." All Phase I Assessments and
any additional assessments shall be conducted at Buyer's sole cost and
expense, and Seller shall cooperate in the performance of any such
assessments, provided that such assessments are (i) conducted at a
mutually agreeable date and time after at least one business days'
prior notice to Seller by Buyer, and (ii) accomplished in a manner
intended to minimize disruption to the operations of the Branches.
C. If Buyer's Phase I Assessments reflect the actual
presence of any Hazardous Material on, under or within the Real
Property that requires remediation under any Environmental Law ( as
defined in Section 3.16), and remediation is possible, then Seller
shall bear the costs actually incurred by Buyer within one year from
the Closing Date to remediate any additional Hazardous Materials (the
"Actual Costs"); provided, however, that the maximum amount of Actual
Costs payable by Seller hereunder shall not exceed $100,000, unless
Seller otherwise agrees in writing. Notwithstanding the foregoing, if
the Estimated Costs exceed $100,000, Buyer or Seller may terminate this
Agreement, by delivering written notice to the other party within five
(5) days after the Environmental Determination Date unless, within a
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period of five days after receipt of such written notice, such other
party agrees in writing to be responsible for the amount by which the
Estimated Costs exceed $100,000, in which instance Seller's and Buyer's
respective obligations to terminate this Agreement pursuant to this
Section shall not apply.
2.5 Destruction or Damage Prior to Closing. In the event of damage
to or destruction of all or any portion of the Real Property by fire or other
casualty prior to the Effective Time, Seller will promptly notify Buyer of the
nature and extent of such damage or destruction, the amount estimated to be
necessary to repair or restore the Real Property, the amount, if any, of
insurance proceeds that are available to make such repairs or restoration and
the estimated period of time it will take to make such repairs and restoration.
The rights and obligations of the parties by reason of such damage or
destruction shall be as follows:
A. If the estimated time for completion of the repairs
is three (3) months or less, then Buyer, at Buyer's option, may (i)
take title to the Real Property subject to such damage or destruction
with Seller assigning to Buyer all Seller's rights to proceeds of
insurance carried by Seller and payable as a result of such damage or
destruction, or (ii) request that Seller cause the repairs to be made,
in which case Seller shall cause the repairs to be made and the Closing
Date shall be extended until the repairs are completed.
B. If the estimated time for completion of the repairs
is more than three (3) months, then Buyer, at Buyer's option, may (i)
take title to the Real Property subject to such damage or destruction
with Seller assigning to Buyer all Seller's rights to proceeds of
insurance carried by Seller and payable as a result of such damage or
destruction, (ii) subject to (c) below, request in writing (the
"Buyer's Repair Request") that Seller cause the repairs to be made, in
which case Seller shall cause the repairs to be made and the Closing
Date shall be extended until the repairs are completed, or (iii)
terminate this Agreement by giving written notice to such effect to
Seller not later than ten (10) days after receipt of written notice
from Seller notifying Buyer of the estimated time needed for repair,
whereupon this Agreement shall terminate and have no further force or
effect except as set forth in Section 12.3.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller represents and warrants to Buyer as follows:
3.1 Organization and Standing. Seller is an Illinois state bank,
duly organized in good standing under the laws of the State of Illinois, and
Seller has full power and authority (including all licenses, franchises, permits
and other governmental authorizations as are legally required) to own, operate
and lease its properties and to carry on the business and activities now
conducted by it. Seller is an insured financial institution as defined in the
Federal Deposit Insurance Act, and all of the Deposits are insured by the Bank
Insurance Fund of the Federal Deposit Insurance Corporation ("FDIC") to the full
extent provided by law.
3.2 Execution and Delivery. Seller has all requisite corporate
power to enter into this Agreement with Buyer, to carry out its obligations
under this Agreement and to consummate the transactions contemplated hereby.
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Seller has taken all corporate and shareholder action, if any, necessary to
authorize the execution, delivery and (provided the required regulatory
approvals are obtained) performance of this Agreement and the other agreements
and documents contemplated hereby to which it is a party. This Agreement has
been, and the other agreements and documents contemplated hereby have been or at
Closing will be, duly executed by Seller constituting the valid and binding
obligation of Seller, enforceable in accordance with their respective terms and
conditions, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws and judicial decisions affecting the rights of
creditors generally and by general principles of equity (whether applied in a
proceeding at law or in equity).
3.3 Compliance with Laws, Permits and Instruments. The Branches
have been operated in all material respects in accordance with applicable laws,
rules and regulations. The execution, delivery and (provided the required
regulatory and shareholder approvals, if any, are obtained) performance of this
Agreement and the consummation of the transactions contemplated hereby will not
conflict with, or result, by itself or with the giving of notice or the passage
of time, in any violation of or default under, any provision of the Articles of
Association or Bylaws of Seller or any material mortgage, indenture, lease,
agreement or other instrument or any material permit, concession, grant,
franchise, license, contract, authorization, judgment, order, decree, writ,
injunction, statute, law, ordinance, rule or regulation applicable to Seller or
its properties.
3.4 Litigation. There are no actions, claims, suits,
investigations or proceedings pending or, to the knowledge of Seller, threatened
(or any basis therefor known by Seller) affecting the Assets or Liabilities at
law or in equity, or by or before any governmental department, commission,
board, bureau, agency or instrumentality, that involve any claim not fully
covered by insurance. No legal action, suit or proceeding or judicial,
administrative or governmental investigation is pending or, to the knowledge of
Seller, threatened against Seller that questions or might question the validity
of this Agreement or any actions taken or to be taken by Seller pursuant hereto
or seeks to enjoin or otherwise restrain the transactions contemplated hereby.
3.5 Consents. No approval, consent, authorization or action of, or
filing with, any governmental body is required on the part of Seller in
connection with (a) the execution, delivery or performance by Seller of this
Agreement and the other agreements and documents contemplated hereby or (b) the
consummation by Seller of the transactions contemplated hereby.
3.6 Title to and Condition of the Assets. Except with respect to
the Assets set forth on Schedule 3.6 that are subject to a pledge made to the
Federal Home Loan Bank of Chicago, which Assets shall be released from such
pledge prior to Closing, Seller has good and marketable title, free and clear of
all security interests, mortgages, encumbrances, pledges, trust agreements,
liens or other adverse claims to any of the Assets other than Permitted Liens.
No person or entity other than Seller has any right, title or interest in and to
any of the Assets other than any Permitted Lien. Upon payment by Buyer of the
amounts contemplated by this Agreement, Buyer will acquire good and indefeasible
title to the Assets, free and clear of any lien, charge, encumbrance, option or
adverse claim other than Permitted Liens. Except as expressly provided herein,
Seller makes no representations or warranties regarding the condition of the
Assets and Buyer takes the Assets "AS IS."
12
3.7 Financial Statements. The financial statements attached hereto
as Exhibit "F" are a true and complete presentation of the assets and the
liabilities of the Branches as of February 29, 2004 (the "Financial
Statements").
3.8 Leases and Contracts. Schedule 3.8 is a list identifying all
Leases. Seller and each other party thereto is in compliance under each Lease
and Seller has not received any notice of material default or any notice of
noncompliance, including, without limitation, noncompliance with any applicable
Federal, state or local obligation as a party to any Lease that it has not fully
performed, nor is Seller aware of any expenditure required under the provisions
of any such Lease for any purpose other than payment of rent. For each Lease,
Seller is the owner and holder of all the leasehold estates or other rights and
interest purported to be granted by such Lease, in each case free and clear of
any security interests, claims, liens (including tax liens), forfeitures,
mortgages, pledges, penalties, encumbrances, assignments or charges whatsoever.
Other than the Leases, there are no agreements, contracts or commitments
affecting the Assets to which Seller is a party and that require consent by any
other person or entity in connection with the consummation of the transactions
contemplated hereby either to prevent a breach or to continue the effectiveness
thereof.
3.9 Absence of Certain Changes or Events. Since the date of the
Financial Statements, Seller has conducted its business at the Branches only in
the ordinary course and has not, other than in the ordinary course of business
and consistent with past practices and safe and sound banking practices:
A. Incurred any obligation or liability, absolute,
accrued, contingent or otherwise, whether due or to become due;
B. Mortgaged, pledged or subjected to lien, charge,
security interest or any other encumbrance or restriction any of the
Assets;
C. Sold, transferred, leased to others or otherwise
disposed of any of the Assets;
D. Terminated, canceled or surrendered, or received any
notice of or threat of termination or cancellation of any contract,
lease or other agreement or suffered any damage, destruction or loss
(whether or not covered by insurance) which, in any case or in the
aggregate, would result in a Material Adverse Change;
E. Suffered any change, event or condition that, in any
case or in the aggregate, has had or may result in a Material Adverse
Change; or
F. Entered into any agreement or made any commitment to
take any of the types of action described in subsections A through E
above.
3.10 No Adverse Change. Except as disclosed in the representations
and warranties made hereunder, since February 29, 2004, there has been no
Material Adverse Change nor any event or condition that has had, nor has a
reasonable possibility of having in the future, a Material Adverse Change, since
the date of the Financial Statements. No material liabilities affecting the
Branches have been incurred since the date of the Financial Statements other
than those arising from normal transactions in the ordinary course of business
that have been or will be disclosed to Buyer in writing prior to the Closing
Date.
13
3.11 Evidences of Indebtedness. All evidences of indebtedness
reflected as Assets of Seller associated with the Branches are legal, valid and
binding obligations of the respective obligors thereof enforceable in accordance
with their respective terms except as limited by applicable bankruptcy,
insolvency, reorganization and similar laws affecting creditors generally and
the availability of injunctive relief, specific performance, and other equitable
remedies) and are not subject to any defenses, offsets or counterclaims that may
be asserted against Seller or the present holder thereof. The borrower's
obligations with respect to each Loan are secured by a validly perfected
security interest in the collateral specified in the Loan documents in favor of
Seller as secured party, having the priority as described in the Loan documents.
Seller has been charging interest and other amounts due under the Loan documents
in accordance with the terms of such documents.
3.12 Books and Records. The books and records of the Branches have
been kept accurately in the ordinary course of business, the transactions
entered therein represent bona fide transactions and the revenues, expenses,
assets and liabilities of Seller have been properly recorded in such books and
records.
3.13 Regulatory Compliance. Seller is an "eligible depository
institution," as defined in 12 C.F.R. ss. 303.2(r). Except as disclosed in
writing to Buyer, all reports, records and other documents or information
involving any of the Assets or the Liabilities or the operation of the Branches
that are required to be filed by Seller with any regulatory authority including,
without limitation, the Federal Deposit Insurance Corporation and the Internal
Revenue Service have been duly and timely filed and all information and data
contained in such reports, records or other documents is true, accurate and
correct.
3.14 Brokerage Fees. Seller has not paid or agreed to pay any fee
or commission to any agent, broker, finder or other person for or as a result of
services rendered as a broker or finder in connection with this Agreement or the
transactions covered and contemplated hereby. All negotiations relating to this
Agreement have been conducted by Seller directly and without the intervention of
any person in such manner as to give rise to any valid claim against Seller for
any brokerage commission or like payment.
3.15 Employee Matters. Schedule 3.15 lists the names of all
Transferred Employees (as defined in Section 11.1) as of the date specified
thereon and states for each such individual his or her position, dates of
employment with Seller, years of service and present compensation. All
Transferred Employees have been, or will have been prior to any such Transferred
Employee's enrollment in Buyer's employee welfare benefit plan (as that term is
defined in section 3(1) of the Employee Retirement Income Security Act of 1974
("ERISA")) pursuant to Section 11.2, covered by an employee welfare benefit plan
for a period of not less than twelve consecutive months without a 63-day break
in coverage.
3.16 Environmental Matters. With respect to the Branches and the
Real Property on which the Branches are located, except as specifically
described in Seller's Assessment: (i) to the best of Seller's knowledge, the
Branches and the Real Property and their operations are in material compliance
with all Environmental Laws, (ii) Seller is not aware of or has received notice
of, any past, present, or future conditions, events, activities, practices or
14
incidents that may interfere with or prevent the compliance of the Branches or
the Real Property with all Environmental Laws, (iii) to the best of Seller's
knowledge, no Hazardous Materials exist on, about or within the Branches or the
Real Property, nor have any Hazardous Materials previously existed on, about or
within or been used, generated, stored, transported, disposed of, on or released
from the Real Property, and (iv) Seller has not previously received any report
reflecting the results of any environmental assessment or survey (including an
asbestos survey) performed on the Branches or the Real Property. For purposes of
this Agreement, "Environmental Laws" mean all federal, state and local laws,
regulations, statutes, ordinances, codes, rules, decisions, orders or decrees
relating or pertaining to the public health and safety or the environment, or
otherwise governing the generation, use, handling, collection, treatment,
storage, transportation, recovery, recycling, removal, discharge or disposal of
Hazardous Materials, including, without limitation, (i) the Solid Waste Disposal
Act, 42 U.S.C. 6901 et seq., as amended ("SWDA," also known as "RCRA" for a
subsequent amending act), (ii) the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss.9601 et seq., as amended
("CERCLA"), (iii) the Clean Water Act, 33 U.S.C. ss. 251 et seq., as amended
("CWA"), (iv) the Clean Air Act, 42 U.S.C. ss. 7401 et seq., as amended ("CAA"),
(v) the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq., as amended
("TSCA"), (vi) the Emergency Planning and Community Right to Know Act, 15 U.S.C.
ss. 2601 et seq., as amended ("EPCRKA"), and (vii) the Occupational Safety and
Health Act, 29 U.S.C. ss. 651 et seq., as amended. For purposes of this
Agreement, "Hazardous Material" means, without limitation, (i) any "hazardous
wastes" as defined under RCRA, (ii) any "hazardous substances" as defined under
CERCLA, (iii) any toxic pollutants as defined under CWA, (iv) any hazardous air
pollutants as defined under CAA, (v) any hazardous chemicals as defined under
TSCA, (vi) any hazardous substances or extremely hazardous substances as defined
under EPCRKA, (vii) asbestos, (viii) polychlorinated biphenyls, (ix) underground
storage tanks, whether empty, filled or partially filled with any substance, (x)
any substance the presence of which on the property in question is prohibited
under any Environmental Law, and (xi) any other substance which under any
Environmental Law requires special handling or notification of or reporting to
any federal, state or local governmental entity in its generation, use,
handling, collection, treatment, storage, re-cycling, treatment, transportation,
recovery, removal, discharge or disposal.
3.17 Representations Not Misleading. No representation or warranty
by Seller contained in this Agreement, and no statement made by Seller contained
in any other agreement or document contemplated hereby, contains or will contain
any untrue statement of material fact or omits or will omit to state any
material fact necessary to make the statements herein or therein, in light of
the circumstances under which it was or will be made, not misleading. To the
knowledge of Seller, except as disclosed herein, there is no matter that
materially adversely affects or will in the future materially adversely affect
the Assets or Liabilities other than general economic conditions.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer represents and warrants to Seller as follows:
4.1 Organization and Standing. Buyer is a national banking
association duly organized and validly existing under the laws of the United
States and in good standing under the laws of the State of Illinois, and Buyer
has full power and authority (including all licenses, franchises, permits and
15
other governmental authorizations that are legally required) to own, operate and
lease its properties and to carry on the business and activities now conducted
by it. Buyer has all requisite corporate power to enter into this Agreement and
carry out its obligations under this Agreement and to consummate the
transactions contemplated hereby.
4.2 Execution and Delivery. Buyer has taken all corporate action
necessary to authorize the execution, delivery and (provided the required
regulatory approvals are obtained) performance of this Agreement and the other
agreements and documents contemplated hereby to which it is a party. This
Agreement has been, and the other agreements and documents contemplated hereby
have been or at Closing will be, duly executed by Buyer, and each constitutes
the legal, valid and binding obligation of Buyer, enforceable in accordance with
their respective terms and conditions, except as enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws and judicial decisions
affecting the rights of creditors generally and by general principles of equity
(whether applied in a proceeding at law or in equity).
4.3 Compliance with Laws, Permits and Instruments. The execution,
delivery and (provided the required regulatory approvals are obtained)
performance of this Agreement and the consummation of the transactions
contemplated hereby will not conflict with, or result, by itself or with the
giving of notice or the passage of time, in any violation of or default under,
any provision of the Articles of Association or Bylaws of Buyer or any material
mortgage, indenture, lease, agreement or other instrument or any permit,
concession, grant, franchise, license, contract, authorization, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Buyer or its
properties. No consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority or other third party is
required in connection with the execution and delivery of this Agreement by
Buyer or the consummation by Buyer of the transactions contemplated hereby,
except for filings required in order to obtain the required regulatory
approvals, as described in Section 7.3.
4.4 Litigation. No legal action, suit or proceeding or judicial,
administrative or governmental investigation is pending or, to the knowledge of
Buyer, threatened against Buyer that questions or might question the validity of
this Agreement or any actions taken or to be taken by Buyer pursuant hereto or
seeks to enjoin or otherwise restrain the transactions contemplated hereby.
4.5 Consents. Other than the approvals described in Section 7.3,
no approval, consent, authorization or action of, filing with, any governmental
body or other third party is required on the part of Buyer in connection with
(a) the execution, delivery or performance by Buyer of this Agreement and the
other agreements and documents contemplated hereby or (b) the consummation by
Buyer of the transactions contemplated hereby.
4.6 Brokerage Fees. Buyer has not paid or agreed to pay any fee or
commission to any agent, broker, finder or other person for or as a result of
services rendered as a broker or finder in connection with this Agreement or the
transactions covered and contemplated hereby. All negotiations relating to this
Agreement have been conducted by Buyer directly and without the intervention of
any person in such manner as to give rise to any valid claim against Buyer for
any other brokerage commission or like payment.
16
4.7 Disclosure. No representation or warranty by Buyer contained
in this Agreement, and no statement made by Buyer contained in any other
agreement or document contemplated hereby, contains or will contain any untrue
statement of material fact or omits or will omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which it was or will be made, not misleading.
4.8 Regulatory Conditions. The only regulatory application that
Buyer is required to file and have approved to permit it to consummate the
transactions contemplated hereby is the approval of the Office of the
Comptroller of the Currency ("OCC"). In addition, Buyer must also satisfy the
Federal Reserve Bank of St. Louis with respect to its capital ratios on a pro
forma basis of the giving effect the consignment of the transaction contemplated
in this Agreement. Subject to its raising sufficient capital as described
herein, Buyer knows of no reason why such approval cannot be obtained. Buyer has
a CRA rating of satisfactory or better. Buyer is an "eligible depository
institution," as defined in 12 C.F.R. ss. 303.2(r). Buyer satisfies each and all
of the standards and requirements lawfully within the control of Buyer of which
it is aware (and, as of the Closing Date, will satisfy each and all of the
standards and requirements lawfully within the control of Buyer) imposed as a
condition to obtaining or necessary to comply with and in order to obtain any of
the governmental or regulatory approvals referred to in Section 7.3 of this
Agreement; provided, however, nothing contained herein shall be deemed to
require Buyer to dispose of any substantial portion of its assets or to
undertake any other action that is not otherwise contemplated by this Agreement
that would result in a material adverse change in Buyer's business or the
conduct of Buyer's business. Buyer agrees to use its commercially reasonable
efforts to raise the capital necessary to obtain regulatory approvals and to
consummate the transactions contemplated hereby in accordance with the terms
hereof.
ARTICLE 5.
COVENANTS OF SELLER
-------------------
5.1 Reasonable Efforts. Seller agrees to use commercially
reasonable efforts to cause the consummation of the transactions contemplated
hereby in accordance with the terms and conditions of this Agreement.
5.2 Information for Governmental Applications. Seller shall
promptly, but in no event later than 10 days after receipt of a request by
Buyer, furnish Buyer with all information concerning Seller required for
inclusion in any application or statement required by law to be made by Buyer to
or filed by Buyer with any governmental body in connection with the transactions
contemplated by this Agreement, and Seller represents and warrants that all
information so furnished for such statements and applications shall be true and
correct in all material respects and shall not omit any material fact required
to be stated therein or necessary to make the statements made, in light of the
circumstances under which they were made, not misleading. Seller shall otherwise
cooperate with Buyer in obtaining all governmental and regulatory consents,
approvals, licenses, waivers and the like required to be fulfilled or obtained
for the completion of the transactions contemplated by this Agreement.
5.3 Required Acts of Seller. Prior to the Closing, Seller shall,
with respect to the Branches, unless otherwise permitted in writing by Buyer:
17
A. Operate the Branches in the ordinary course of
business;
B. Use all reasonable efforts to preserve its business
organization intact and to retain its present customers, depositors,
suppliers, officers and employees;
C. Act in a manner that will preserve or attempt to
preserve its goodwill;
D. Perform all of its obligations under contracts,
leases and documents relating to or affecting its assets, properties
and business associated with the Branches, except such obligations as
Seller may in good faith reasonably dispute;
E. Maintain all Personal Property in its current
operating condition and repair, ordinary wear and tear excepted;
F. Maintain in full force and effect all insurance
policies now in effect or renewals thereof and give all notices and
present all claims under all insurance policies in due and timely
fashion;
G. Timely file all reports required to be filed with
governmental authorities and observe and conform to all applicable
laws, rules, regulations, ordinances, codes, orders, licenses and
permits;
H. Timely file all tax returns required to be filed by
it and promptly pay all taxes, assessments, governmental charges,
duties, penalties, interest and fines that become due and payable;
I. Withhold from each payment made to each of its
employees the amount of all taxes (including, but not limited to,
Federal income taxes, FICA taxes and state and local income and wage
taxes) required to be withheld therefrom and pay the same to the proper
tax receiving officers;
J. Continue to follow and implement policies, procedures
and practices regarding the identification, monitoring, classification
and treatment of all assets in substantially the same manner as it has
in the past;
K. Cooperate with and assist Buyer in assuring the
orderly transition of the business of the Branches to Buyer from
Seller; and
L. Remove all signage from the Branches at the expense
of Seller on or before the Closing Date, it being understood that Buyer
shall be responsible for installation of its signage at its expense on
or after the Closing Date.
5.4 Prohibited Acts of Seller. Prior to the Closing, Seller shall
not, without the prior written consent of Buyer:
A. Introduce any new material method of management or
operation of the Branches;
B. Take any action that may result in a Material Adverse
Change;
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C. Default with respect to any provision of any
insurance policy now or hereafter in effect relating to the Branches;
D. Enter into any transaction affecting any Asset or
Liability other than in the ordinary course of business;
E. Make, or incur any obligation to make, any capital
expenditures or enter into any contracts to make such expenditures with
respect to the Branches, in either case in an aggregate amount not to
exceed $10,000, provided that Seller can make any emergency repairs
required to restore the Branches to a safe operating condition;
F. Make any material modifications, including, but not
limited to, any changes in collateral, repayment terms or (except upon
renewals in accordance with the terms of any such Asset or Liability to
reflect changes in market rates) interest rates, to any of the Assets
or Liabilities;
G. Sell, transfer, mortgage, encumber or otherwise
dispose of any of the Assets except for the disposition of Assets in
the ordinary course of business;
H. Cause the transfer from the Branches to Seller's
other operations of any deposits of the type included in the
Liabilities, provided, however, that Seller may transfer deposits to
Seller's other branch or offices upon the unsolicited request of the
depositors;
I. Pay a rate higher on deposits at the Branches than
the comparable rate then being paid by Buyer for such deposits in
Quincy, Illinois; or
J. Cause the Branches to generate any deposits
associated with out-of-area relationships or brokered deposits.
5.5 Access; Pre-Closing Investigation. Seller shall afford the
officers and authorized representatives of Buyer full access to the properties,
books and records of Seller pertaining to the Assets and Liabilities and
employees of the Branches in order that Buyer may have full opportunity to make
such reasonable investigation as it shall desire to make of the Assets and
Liabilities, including, without limitation, access sufficient to verify the
value of the Assets and the Liabilities and the satisfaction of the conditions
precedent to Buyer's obligations described in Section 6. Seller agrees at any
time, and from time to time, to furnish to Buyer as soon as practicable, any
additional information pertaining to the Assets and Liabilities that Buyer
Purchaser may reasonably request. In addition, Seller shall provide Buyer
reasonable access to the Branches for a mutually agreeable period of time
preceding the Closing Date for the purpose of installing equipment. Buyer agrees
to conduct its investigations hereunder during normal business hours of the
Branches and in a manner which does not unreasonably interfere with the normal
operations of the Branches and Buyer further agrees to cause the installation of
such equipment to be effected in a manner intended to minimize disruption to the
operation of the Branches.
5.6 Additional Financial Statements. Within five (5) days of the
date thereof, Seller shall furnish Buyer with financial statements as of each
month end substantially in the format of Exhibit "F" from the date hereof until
the Closing Date with respect to the Branches.
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5.7 Untrue Representations. Seller shall promptly notify Buyer in
writing if Seller becomes aware of any fact or condition that makes untrue, or
shows to have been untrue, in any material respect, any schedule or any other
information furnished to Buyer or any representation or warranty made in or
pursuant to this Agreement or that results in Seller's failure to comply with
any covenant, condition or agreement contained in this Agreement.
5.8 Notice of Adverse Changes, Litigation and Claims. Seller shall
promptly notify Buyer in writing if Seller becomes aware of (i) any litigation,
or any claim, controversy or contingent liability that might become the subject
of litigation, against Seller or affecting the Branches, if such litigation or
potential litigation might, in the event of an unfavorable outcome, result in a
Material Adverse Change, or (ii) any change that has occurred or has been
threatened (or any development has occurred or been threatened involving a
prospective change) in the business, financial condition, operations or
prospects of Seller that is or may reasonably be expected to result in a
Material Adverse Change.
5.9 No Disclosure or Negotiation with Others. Seller shall prevent
the disclosure of any of the terms or conditions hereof to any other person
except for disclosure required by appropriate regulatory authorities, and as
long as this Agreement shall remain effective, Seller shall not, directly or
indirectly, nor shall it permit any of its officers, directors, employees,
representatives or agents to, directly or indirectly, encourage, solicit or
initiate discussions or negotiations with, or discuss or negotiate with, or
provide any information to, any corporation, partnership, person or other entity
or group (other than Buyer or an affiliate or an associate of Buyer or an
officer, partner, employee or other authorized representative of Buyer or such
affiliate or associate) concerning any sale of or similar transaction involving
the Assets or the Liabilities
5.10 Notices to Customers. Prior to the Closing Date, Seller agrees
to mail or cause to be mailed, to each of the Depositors, each holder of a safe
deposit box domiciled at the Branches and to such other customers as may be
required by applicable law, such notice of contemplated transfer of the Assets,
the Liabilities or the operations of the Branches as may be required of Seller
as a condition of approval by any regulatory authority, or as otherwise may be
required by applicable law. Each such notice shall be in a form acceptable to
each party hereto, such approval not to be unreasonably withheld.
ARTICLE 6.
COVENANTS OF BUYER
------------------
6.1 Reasonable Efforts. Buyer agrees to use commercially
reasonable efforts to cause the consummation of the transactions contemplated
hereby in accordance with the terms and conditions of this Agreement.
6.2 Regulatory Approvals. Buyer shall promptly, but in no event
later than thirty (30) days after the date of this Agreement, subject to the
prior receipt of all information from Seller necessary to be included as part of
such applications, file or cause to be filed applications for all regulatory
approvals required to be obtained by Buyer in connection with the transactions
contemplated hereby. Buyer shall use its commercially reasonable efforts to
obtain such regulatory approvals at the earliest practicable time. Buyer will
provide Seller with copies of all non-confidential portions of any application,
statements or correspondence submitted to or received from any regulatory
authorities in connection with the transactions contemplated by this Agreement.
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6.3 Notice of Adverse Changes, Litigation and Claims. Buyer shall
promptly notify Seller in writing if Buyer becomes aware of (i) any fact or
condition that makes untrue, or shows to have been untrue, in any material
respect, any schedule or any other information furnished to Buyer or any
representation or warranty made in or pursuant to this Agreement or that results
in Buyer's failure to comply with any covenant, condition or agreement contained
in this Agreement, or (ii) any litigation against Buyer if such litigation might
prevent consummation of the transactions contemplated by this Agreement.
6.4 Change of Name, Notice to Customers.
-----------------------------------
A. Prior to the Closing Date, Buyer agrees to mail or
cause to be mailed, to each of the Depositors, each holder of a safe
deposit box domiciled at the Branches and to such other customers as
may be required by applicable law, such notice of contemplated transfer
of the Assets, the Liabilities or the operations of the Branches as may
be required as a condition of approval by any regulatory authority, or
as otherwise may be required by applicable law. Each such notice shall
be in a form acceptable to each party hereto, such approval not to be
unreasonably withheld.
B. After the Closing Date, Buyer shall, (i) as soon as
practicable change the name on all documents and facilities relating to
the Branches from Seller's name to Buyer's name; and (ii) starting
promptly after the Closing Date, mail written notice by first class
mail to all customers of the Branches as of the Closing Date, all
Depositors and all borrowers with respect to the Loans, of the
consummation of the transactions contemplated by this Agreement, the
form and substance of such notice being mutually satisfactory to Buyer
and Seller.
6.5 Use of Name. It is understood that Seller is not transferring
to Buyer any right, title or interest in or to, or any right of license to use,
Seller's name in connection with the Branches or otherwise. Accordingly, Buyer
shall not use, keep or claim any registered or unregistered trademark, service
xxxx or other identification commonly associated with Seller, or any sign,
display or similar material of Seller or any banking or other forms, stationery,
passbooks, checks, traveler's checks, cashier's checks, manager's checks or
similar banking material of Seller or bearing Seller's name or other similar
marks or identification (except to the extent necessary to conduct business
operations and with Seller's prior consent following Closing, and then only if
Seller's name, marks or identification are obliterated from such material, and
such material is clearly identified as that of Buyer), or any proprietary
material of Seller including, without limitation, operating manuals, training
manuals and public relations, explanatory or advertising materials. No agency
relationship exists between the parties hereto. At no time, whether before or
after Closing Date, shall Buyer transact any business in the name of Seller or
in any way hold itself out as the actual or apparent agent of Seller.
6.6 Solicitation of Customers of the Branches. From and after the
execution and delivery of this Agreement and until the Closing Date, Buyer shall
not offer to pay or accept and pay on any deposit account at any of Buyer's
locations within the market of the Branches, or advertise in the market of the
21
Branches the payment of, any rate or term that is higher or better than that
generally offered by Buyer on similar deposit products at other offices of
Buyer.
6.7 Solicitation of Employees of the Branches. Except as
contemplated by Article 11, from and after the execution and delivery of this
Agreement and until the Closing Date, Buyer will not solicit or initiate
communications with any Employees (as that term is hereinafter defined) for the
purpose of inducing such person to become an employee of Buyer.
ARTICLE 7.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
------------------------------------------------
All obligations of Buyer under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions,
any or all of which may be waived in whole or in part in writing by Buyer:
7.1 Compliance with Representations, Warranties and Agreements.
The representations and warranties made by Seller in this Agreement or in any
schedule delivered to Buyer pursuant hereto shall have been true and correct in
all material respects when made and shall be true and correct in all material
respects as of the Effective Time with the same force and effect as if such
representations and warranties were made at and as of the Effective Time, except
with respect to those representations and warranties specifically made as of an
earlier date (in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date). Seller shall have
performed or complied in all material respects with all material agreements,
terms, covenants and conditions required by this Agreement to be performed or
complied with by Seller prior to or at the Closing except as specifically
provided to the contrary in this Agreement.
7.2 Necessary Corporate Actions. Seller shall have taken any and
all requisite corporate actions and other steps and secured any other corporate
approvals, including any requisite shareholder's approval, necessary to
authorize and consummate this Agreement and the transactions contemplated
hereby.
7.3 Governmental Approvals. Buyer shall have received approvals,
acquiescences or consents, all on terms and conditions acceptable to Buyer, from
all necessary governmental agencies and authorities to the transactions
contemplated by this Agreement, including, but not limited to, the approval of
the OCC for Buyer to acquire the Assets and assume the Liabilities and to
establish a branch of Buyer at each of the locations of the Branches; provided,
however, that no governmental or regulatory consent, approval or authorization
shall have imposed any condition or requirement that would result in a Material
Adverse Change, or a material adverse effect on the consummation of the
transactions contemplated hereby. Such approvals and the transactions
contemplated hereby shall not have been contested or threatened to be contested
by any federal or state governmental authority or by any other third party by
formal proceedings.
7.4 No Litigation. No action shall have been taken, and no
statute, rule, regulation or order shall have been promulgated, enacted,
entered, enforced or deemed applicable to the acquisition by any federal, state
or foreign government or governmental authority or by any court, domestic or
foreign, including the entry of a preliminary or permanent injunction, that
would (a) make this Agreement or the transactions contemplated hereby illegal,
22
invalid or unenforceable (b) require the divestiture of a material portion of
the Assets or the Liabilities once acquired by Buyer, (c) impose material limits
in the ability of Buyer to consummate the Agreement or the transactions
contemplated hereby, or (d) if the Agreement or the transactions contemplated
hereby are consummated, subject Buyer or any officer, director or employee of
Buyer to criminal penalties or to civil liabilities. No action or proceeding
before any court or governmental authority, domestic or foreign, by any
government or governmental authority or by any other person, domestic or
foreign, shall be threatened, instituted or pending that would reasonably be
expected to result in any of the consequences referred to in clauses (a) through
(d) above.
7.5 No Material Adverse Change. There shall have been no Material
Adverse Change since February 29, 2004.
7.6 Consents of Third Parties. Seller shall have obtained all
consents of third parties in form and substance reasonably satisfactory to the
Buyer, necessary to consummate the transactions contemplated by this Agreement.
7.7 Documentation. The form and substance of all instruments of
assumption and other documents delivered pursuant to this Agreement by Seller
shall be reasonably satisfactory in all respects to Buyer.
ARTICLE 8.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
-------------------------------------------------
All obligations of Seller under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions,
any or all of which may be waived in whole or in part by Seller.
8.1 Compliance with Representations, Warranties and Agreements.
The representations and warranties made by Buyer in this Agreement shall have
been true and correct in all material respects when made and shall be true and
correct in all material respects as of the Effective Time with the same force
and effect as if such representations and warranties were made at and as of the
Effective Time, except with respect to those representations and warranties
specifically made as of an earlier date (in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date). Buyer shall have performed or complied in all material respects with all
material agreements, terms, covenants and conditions required by this Agreement
to be performed or complied with by Buyer prior to or at the Effective Time.
8.2 Necessary Corporate Actions. Buyer shall have taken any and
all requisite corporate actions and other steps and secured any other corporate
approvals, necessary to authorize and consummate this Agreement and the
transactions contemplated hereby.
8.3 Governmental and Other Approvals. Buyer shall have received
approvals, acquiescences or consents to the transactions contemplated by this
Agreement from all necessary governmental agencies and authorities for the
transactions contemplated hereby, and Seller and Buyer shall have received
satisfactory evidence that such approvals have been obtained and that any
23
necessary waiting periods have passed. In addition, neither Buyer nor its parent
holding company shall have received any objection to the transactions
contemplated by this Agreement from any governmental agency or authority,
including, without limitation, the Federal Reserve Bank of St. Louis.
8.4 No Litigation. No action shall have been taken, and no
statute, rule, regulation or order shall have been promulgated, enacted,
entered, enforced or deemed applicable to the acquisition by any Federal, state
or foreign government or governmental authority or by any court, domestic or
foreign, including the entry of a preliminary or permanent injunction, that
would (a) make the Agreement or the transactions contemplated hereby illegal,
invalid or unenforceable or (b) if the Agreement or the transactions
contemplated hereby is consummated, subject any officer, director or employee of
Seller to criminal or civil liability. No action or proceeding before any court
or governmental authority, domestic or foreign, by any government or
governmental authority or by any other person, domestic or foreign, shall be
threatened, instituted or pending that would reasonably be expected to result in
any of the consequences referred to in clauses (a) or (b) above.
8.5 Documentation. The form and substance of all instruments of
assumption and other documents delivered pursuant to this Agreement by Buyer
shall be reasonably satisfactory in all respects to Seller.
ARTICLE 9.
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
AGREEMENT AND OBLIGATIONS; INDEMNIFICATION.
------------------------------------------
9.1 Survival. The representations and warranties of Seller and
Buyer contained in this Agreement shall survive the Effective Time and shall
continue thereafter for a period of two (2) years after the Closing Date. Such
representations and warranties shall not be affected by, and shall remain in
full force and effect notwithstanding, any investigation at any time made by or
on behalf of any party hereto or any information any party may have with respect
thereto.
9.2 Indemnification by Seller. Seller agrees, effective as of the
Closing, to pay, and to indemnify, save, defend and hold harmless Buyer and each
of its officers, directors, shareholders and representatives (collectively,
"Insiders"), from and against, and shall reimburse Buyer and its Insiders with
respect to, any and all damages, liabilities, losses, obligations, actions,
suits, disbursements, claims, deficiencies, penalties, interest, expenses,
fines, assessments, charges and costs (including, without limitation, reasonable
attorneys' and expert witness' fees, costs of investigation and court costs) of
every kind (collectively, "Losses"), imposed on, incurred by or asserted against
Buyer or its Insiders (or any of them) in any way relating to or arising from or
out of:
A. A breach, deficiency, inaccuracy or inadequacy of or
in any statement, representation or warranty of Seller contained in
this Agreement, or any schedule, certificate or other document
delivered pursuant hereto or as part of the transactions contemplated
hereby;
24
B. Ownership or operation of the Branches or their
business and properties prior to the Effective Time;
C. Liabilities of Seller that are not expressly assumed
by Buyer; and
D. A breach of any covenant of Seller or the failure of
Seller to perform any agreement, covenant or obligation of Seller
contained in this Agreement or in any other agreement or document
executed pursuant to this Agreement.
E. Any taxes, including interest and penalties, required
to be paid by Seller or its successor, which relate to Seller's
business or assets at or prior to the Effective Time;
F. The termination of employment by Seller prior to the
Effective Time of any individual who is an officer or employee of
Seller; and
G. All refunds or repayments made by Seller following
the Effective Time of credit life or single interest insurance premiums
on policies that were issued in connection with loans made by Seller
prior to the Effective Time and purchased by Buyer.
Any claim for indemnification shall be applicable to each
representation independently, irrespective of whether such claim is consistent
with any other representation contained in this Agreement.
9.3 Indemnification by Buyer. Buyer hereby agrees, effective as of
the Closing, to pay, and to indemnify, save and hold harmless Seller and each of
its Insiders from and against, and shall reimburse Seller and its Insiders with
respect to, any and all Losses imposed on, incurred by or asserted against
Seller or its Insiders (or any of them) in any way relating to or arising from
or out of:
A. A breach, deficiency, inaccuracy or inadequacy of or
in any statement, representation or warranty of Buyer contained in this
Agreement, or any schedule, certificate or other document delivered
pursuant hereto or as part of the transactions contemplated hereby;
B. Ownership or operation of the Branches or their
business and properties after the Effective Time;
C. Liabilities of Seller that are expressly assumed by
Buyer; and
D. A breach of any covenant of Buyer or the failure of
Buyer to perform any agreement, covenant or obligation of Buyer
contained in this Agreement or in any other agreement or document
executed pursuant to this Agreement,
Any claim for indemnification shall be applicable to each
representation independently, irrespective of whether such claim is consistent
with any other representation contained in this Agreement.
25
9.4 Limit on Indemnities. Notwithstanding any other provision
hereof, the rights of any party to be indemnified shall be subject to the
following limitations:
A. The indemnifying party shall pay claims hereunder
when a claim against the indemnified party has been established by a
final judgment in litigation or by settlement consented to in writing
by Seller and Buyer; and
B. The indemnifying party shall not be liable for any
claim covered by the indemnities under Sections 9.2(A) or 9.3(A) unless
the indemnifying party has been notified of such claim prior to the
second anniversary of the Closing Date.
ARTICLE 10.
OPERATIONAL AGREEMENTS
----------------------
10.1 Replacement of Customer Check Stock and ATM Cards. As soon as
practicable, but in no event later than ten (10) business days after the Closing
Date, Buyer shall mail to each Depositor whose account may be accessed by checks
a letter approved by Seller requesting that such Depositor promptly cease
writing checks on Seller's check stock against such account. At such time as
Buyer mails each such notice to each Depositor, Buyer shall also forward to each
Depositor new checks on Buyer's check stock, which checks the Depositor may draw
upon Buyer for the purpose of effecting transactions with respect to such
Deposits. The parties will use reasonable efforts to develop procedures (i) that
will cause checks drawn on Seller's form of check stock against Deposits that
are received after the Effective Time to be cleared through Buyer's then current
clearing procedures and (ii) to provide for the delivery of new ATM cards by
Buyer and the orderly processing of ATM transactions.
10.2 Payment of Checks, Drafts, and Orders. After the Effective
Time, Buyer agrees (i) to pay in accordance with applicable law, the Deposit
Agreements and customary banking practice all checks, drafts and withdrawal
orders properly drawn by Depositors and properly presented to Buyer, whether
drawn on the checks, withdrawal or draft forms provided by Seller or by Buyer,
to the extent that the Deposit balances to the credit of the respective makers
or drawers assumed by the Buyer under this Agreement are sufficient to permit
the payment thereof (after taking into account any overdraft protection rights
of the Depositors), and (ii) in all other respects to discharge, in accordance
with applicable law, the Depository Agreements and customary banking practice in
the usual course of its banking business, all duties and obligations of Seller
with respect to the balances due and owing to the Depositors. If any of the
Depositors shall demand payment from Seller for all or any part of any Deposit,
Seller shall not be liable or responsible for making such payment. As of the
Closing Date, Buyer shall become the "holder," as that term is defined in the
Uniform Disposition of Unclaimed Property Act (765 Illinois Compiled Statutes
1025/1), of all the Deposits and safe deposit boxes that Buyer assumes under
this Agreement. Buyer will be responsible for the escheat of any property for
which it becomes the holder and that becomes abandoned during the calendar year
in which the Closing occurs.
10.3 Clearing Items. During the 120-day period following the
Closing Date, if it is not possible to clear checks and other items drawn on a
Deposit account through Buyer's then current clearing procedures, Seller will
make provisional settlement to the presenting institution and will forward such
checks and other items on such Deposit to Buyer, no later than the next business
day after receipt thereof, and Buyer will reimburse Seller for such provisional
26
settlement. Upon the expiration of such 120-day period, Seller shall cease
forwarding checks and other debits against the Deposit accounts and return them
to the originators marked "Account Closed." Upon timely presentation to Buyer,
Buyer will assume all responsibility for such items (except for such items that
have not been handled by Seller in accordance with applicable law or regulation,
or with ordinary care), including but not limited to determining whether to
honor or dishonor such items and giving any required notification for the return
of items.
10.4 Returned Items. Buyer agrees, no later than the start of the
second business day after demand by Seller, to pay to Seller an amount
equivalent to the amount of any uncollected item included in a Depositor's
balance on the Closing Date that is returned within 60 days after Closing as not
collected. Buyer shall be required to make such payment for an item only up to
the balance of any funds on deposit with Buyer and any balance available to the
customer under any overdraft plan the Depositor has with Buyer at the xxxx
Xxxxxx makes the demand as aforesaid; provided, however, if prior to the Closing
Seller had placed a "hold" or other similar protective measure on the
Depositor's account with respect to such item and subsequent to Closing Buyer
removes such hold or protective measure other than as required under applicable
law or regulation, then Buyer will be obligated to pay to Seller in full on
account of such uncollected item. So long as any hold or other protective
measure placed on the depositor's account with respect to such item complies
with applicable law, the placing of any such hold or other protective measure
shall not be deemed a breach of this Agreement.
10.5 Data Processing and Utilities. Following the receipt of all
required regulatory approvals, Seller shall (i) provide reasonable cooperation
to Buyer in converting the current data processing activities of the Branches to
Buyer's data processing system, and (ii) assist Buyer in the transfer of all
utilities relating to the Branches, including the existing phone numbers for the
Branches, into the name of Buyer. As soon as practicable at the request of Buyer
after receipt of all required regulatory approvals, Seller shall deliver to
Buyer a list of the Deposits (customer names, addresses and tax identification
numbers, balances at Closing and maturities of all certificates of deposits),
grouped by deposit type, and original or duplicate copies (including electronic
copy, magnetic tape, disc storage, card forms and printed copy) of all customer
information files and customer records, ACH items, application files, machine
operating and application software, full documentation of all application and
processing routines, and any other documentation in the possession of Seller and
necessary to the orderly operation and conversion to Buyer's system of the
Branches' data processing operations.
10.6 Compliance with Garnishments and Similar Orders. After the
Effective Time, Buyer will comply in all material respects with any and all
garnishments, similar court orders, tax liens and order of any governmental
entity in effect with respect to the Deposits, and Buyer will not pay any
Deposits in violation of such garnishments, orders or tax liens or otherwise
take any actions not permitted pursuant thereto or pursuant to applicable law.
10.7 Direct Deposit Arrangements. Seller will use reasonable
efforts to transfer to Buyer on the Closing Date all of those automated clearing
house and Fed wire direct deposit arrangements that are tied by agreement or
other standing arrangement to the Deposits. For a period of 120 days, (the
"Direct Deposit Cut-off Date"), Seller will, no later than the next business day
following the date of receipt thereof, remit and transfer by electronic
transmission to Buyer all direct deposits intended for the Deposits. After the
27
Direct Deposit Cut-off Date, Seller may discontinue accepting and forwarding
automated-clearing-house and Fed-wire entries and funds and return such direct
deposits to the originators marked "Account Closed."
10.8 Direct Debit Arrangements. With respect to all Deposits that
have arrangements providing for direct debit of such accounts by third parties
("Direct Debit Accounts"), for a period of 120 days after the Closing Date,
Seller will forward to Buyer all direct debits on Direct Debit Accounts on the
business day following the date of receipt thereof, and will give Buyer a daily
accounting of such debits to Buyer's clearing account. Thereafter, Seller may
discontinue forwarding such entries and return them to the originators marked
"Account Closed."
10.9 XXX Deposits. With respect to Deposits that are individual
retirement accounts created by a trust for the exclusive benefit of an
individual or his or her beneficiaries in accordance with the provisions of
section 408, section 530 and section 408A of the Code ("XXX Deposits"), Seller
will appoint Buyer as successor custodian of all such XXX Deposits, including,
but not limited to, sending to the Depositors thereof appropriate notices, and
filing any appropriate applications with applicable regulatory authorities. At
the Effective Time, Buyer will accept appointment as custodian with respect to
such XXX Deposits and will perform all of the duties so transferred and comply
with the terms of Seller's agreement with the Depositor of the XXX Deposits
affected thereby.
10.10 Xxxxx Accounts. With respect to Deposits that are Xxxxx
Accounts created by a trust for the benefit of employees and that comply with
the provisions of section 401 of the Code ("Xxxxx Accounts"), Seller will use
reasonable efforts and cooperate with Buyer to invite depositors thereof to
direct a transfer of each such depositor's Xxxxx Account and the related Deposit
to Buyer, as custodian thereof, and to adopt Buyer's form of Xxxxx master plan
as a successor to Seller's Xxxxx master plan. Buyer will assume no Deposits that
are Xxxxx Accounts unless Buyer has received the documents necessary for such
assumption or transfer at or before the Closing. With respect to any Depositors
who do not transfer such Xxxxx Accounts to Buyer's form of Xxxxx master plan,
Seller will use reasonable efforts in order to enable Buyer to retain such Xxxxx
Accounts at the Branches.
10.11 Final Statements. Seller will render a final statement to each
Depositor of an account assumed under this Agreement as to transactions
occurring through the Effective Time and will comply with all laws, rules and
regulations regarding tax reporting of transactions of such accounts through the
Effective Time; provided, however, that Seller shall not be obligated to render
a final statement on any account not ordinarily receiving periodic statements in
the ordinary course of Seller's business. Seller will be entitled to impose
normal fees and service charges on a per-item basis, but Seller will not impose
periodic fees or blanket charges in connection with such final statements unless
such final statement is made as of a date that would ordinarily carry such
periodic fees or blanket charges.
10.12 XXX Deposits and Xxxxx Accounts. Seller will deliver to Buyer
on the Closing Date all of the documents in Seller's possession governing each
XXX Deposit and Xxxxx Account that is included in the Deposits. Seller will
prepare and file all reports to government authorities required to be filed for
the period ending on the Closing Date and all prior periods. Buyer will be
responsible for all such reporting for periods commencing on the day after the
Closing.
28
10.13 Interest Reporting and Withholding. All tax information
reporting and filing requirements and all tax withholding requirements with
respect to the Assets and the Liabilities are the responsibility of Seller up to
and through the Closing Date and the responsibility of Buyer thereafter.
10.14 Loans. In connection with the transfer of the Loans, Seller
and Buyer agree as follows:
A. The parties will cooperate and use commercially
reasonable efforts to cause Buyer to become the beneficiary of credit
life, accident and health, vendor's single interest premium or similar
insurance purchased by or on behalf of such customer on the Loans. For
the duration of such insurance, Seller and Buyer agree to cooperate in
good faith to develop a mutually satisfactory method by which the
issuer of such insurance will make rebate payments to and satisfy
claims of the holders of such certificates of insurance after the
Effective Time.
B. Each of Buyer and Seller will use commercially
reasonable efforts to comply with all notice and reporting requirements
of the loan documents or of any law or regulation with respect to the
transfer of such loans.
C. Within thirty (30) days after the Closing Date, Buyer
will, at its expense, issue new coupon books or similar payment notices
for payment of the Loans with instructions to use Buyer's coupons or
statements and to destroy unused coupons furnished by Seller.
D. For a period of 120 days after the Closing Date,
within three (3) business days after receipt by Seller of any check or
money order made payable to Seller representing payment on a Loan,
Seller shall issue and forward a cashier's check made payable to Buyer
or wire transfer to the benefit of Buyer in the amount of such item,
and forward the item for collection. If the item is returned unpaid,
however, Seller shall promptly notify Buyer of such item's return and
shall forward the original of such item to Buyer. Within three (3)
business days after receipt of such returned item, Buyer shall issue
and forward a cashier's check or wire transfer to Seller in the amount
of such item, and Buyer shall be responsible for any further efforts to
collect such item.
E. If the balance due on any Loan has been reduced by
Seller as a result of a payment by check received prior to the Closing
Date, which item is returned after the Closing Date, the asset value
representing the Loan transferred shall be correspondingly increased
and an amount in cash equal to such increase shall be paid by Buyer to
Seller promptly upon demand.
10.15 Other Items. Following the Effective Time, Seller agrees to
deliver immediately, but in no event later than two (2) business days after
receipt by Seller, to Buyer (i) any collected funds accepted by Seller for
credit to any account included in the Deposits, (ii) any refunds or
reimbursements of prepaid expenses included in the acquired Assets for which an
adjustment to the purchase price was made pursuant to Section 1.8 and which are
accepted by Seller, and (iii) any written notices or correspondence received by
Seller relating to the Deposits or the Loans. Buyer shall pay to Seller
immediately, but in no event later than two (2) business days after receipt by
29
Buyer, any refunds or reimbursements of accrued expenses for which an adjustment
to the purchase price was made pursuant to Section 1.8 and which are accepted by
Buyer. Notwithstanding the foregoing provisions of this Article 10, each of
Seller and Buyer shall as soon as practicable following the Closing establish
demand deposit accounts in favor of the other, and shall credit such accounts
with any amounts payable to the other pursuant to this Article 10. The party in
whose favor such account is established shall be entitled to draw upon such
account by wire transfer at any time. All amounts shall be credited on or before
the time that such amounts would otherwise be payable pursuant to the applicable
section of this Article 10. Each of Buyer and Seller shall maintain the accounts
so established for a period of 120 days after the Closing Date.
10.16 Safe Deposit Box and Safekeeping Business. From and after the
Effective Time, Buyer agrees to assume and discharge, in the usual course of
banking business, the duties and obligations of Seller with respect to all safe
deposit boxes located in the Branches, and to maintain all necessary facilities
for the use of such boxes by the renters thereof during the period for which
such persons have paid rent therefor in advance to Seller, subject to the
provisions of the rental agreements between Seller and the respective renters of
such boxes. From and after the Closing, Buyer shall assume, honor, and discharge
the duties and obligations of Seller with respect to all safekeeping items
obtained from Seller and shall be entitled to any right or benefit thereafter.
At the Closing, Seller shall provide Buyer with a true and correct list of all
Safe Deposit Contracts with respect to the Branches in effect as of the Closing
Date, together with the rentals or other amounts paid on such Safe Deposit
Contracts and the expiration dates of such Safe Deposit Contracts.
10.17 Noncompetition Agreement. For and in consideration of the
purchase by Buyer of the Assets and the assumption of the Liabilities, the
payment of the Premium and the other agreements and covenants contained in this
Agreement, from the date hereof and for a period of two years following the
Closing Date, none of Seller or any of its affiliates, including, without
limitation, its directors, will (i) establish, own or operate a branch or other
office within a 75-mile radius of any of the following cities of Quincy,
Carthage, Paloma, Macomb and Rushville, Illinois (each a "Noncompete Area" and
collectively the "Noncompete Areas"), or (ii) solicit the banking business of
any current customers of the Branches whose banking business or any part thereof
is transferred to Buyer pursuant to the terms of this Agreement. Notwithstanding
the foregoing sentence, Seller shall not be deemed to be in violation of this
Section 10.17 by virtue of (i) Seller's acceptance after the Closing Date of
deposits received by Seller at any of its offices from persons or firms
providing an address within any Noncompete Area, (ii) Seller's continued banking
dealings, including marketing, with current customers of the Branches who also
maintain accounts with Seller at other banking offices of Seller, who are
identified in Schedule 10.17, or (iii) Seller's advertising in publications that
are normally distributed in geographic areas that include both the Noncompete
Area and geographic markets served by Seller's branches other than the Branches.
In the event the Seller or UnionBancorp, Inc. engages in a merger or similar
transaction to which it is not the successor, the agreements and covenants
contained in this Section 10.17 shall not apply to the operations of such
successor in any Noncompete Area in which such successor has had a continuing
presence for at least 12 months prior to consummation of such successor's
acquisition of Seller or Union Bancorp, Inc., as applicable (a "Preexisting
Presence"). Nothing in the preceding sentence will release such a successor from
the agreements and covenants contained in this Section 10.17 in any Noncompete
Area in which such successor did not have a Preexisting Presence. In the event,
30
such successor subsequently acquires a bank or bank holding company that has a
Preexisting Presence in a Noncompete Area, such successor may continue the
operations of such bank or bank holding company in any Noncompete Area in which
a Preexisting Presence exists without regard to the noncompete provisions of
this Section 10.17. If any court of competent jurisdiction should determine that
any term or terms of this covenant are too broad in terms of time, geographic
area, lines of commerce or otherwise, such court shall modify and revise any
such term or terms so that they comply with applicable law. Seller hereby
acknowledges and agrees that Buyer will be irreparably damaged if the provisions
of this Section 10.17 are not specifically enforced. Accordingly, Buyer shall be
entitled to an injunction restraining any violation of this Section 10.17 by
Seller (without any bond or other security being required), or any other
appropriate decree of specific performance. Such remedies shall not be exclusive
and shall be in addition to any other remedy that Buyer may have at law or in
equity.
10.18 Books and Records. Buyer shall allow Seller and its authorized
agents and representatives to inspect any of the Records for any proper purpose
during regular business hours after the Closing Date upon reasonable notice to
Buyer (which notice shall specify the purpose of such inspection), and Seller
may, at its own expense, make such copies of and excerpts from such books and
records as it may deem desirable; provided, however, that all information,
including copies of books and records, obtained by Seller from Buyer pursuant to
this Section shall be and remain confidential information known to Seller or
otherwise contained in Seller's books and records. Buyer shall maintain all
material books and records relating to the Assets, the Liabilities and the
business of the Branches for a period that is not less than the greater of (i)
the period required by applicable law, rule or regulation or (ii) three (3)
years from the Closing Date.
10.19 Optical Disk Records. After the Closing Date, Seller shall
provide research assistance, on a case-by-case basis, with respect to the Assets
and Liabilities, to the extent the Records are only available as Optical Disk
Records. Seller will use commercially reasonable efforts to comply with each
research request made by Buyer on a timely basis, and Seller agrees to provide
such research at no cost to Buyer until the second anniversary of the Closing
Date; thereafter, Buyer will reimburse Seller for reasonable search costs
incurred.
10.20 Taxes. Buyer shall be responsible for the payment of all taxes
(including transfer taxes), recording fees, Uniform Commercial Code filing fees
and the like arising as a result of the purchase of the Assets; except that
Buyer shall not be responsible for, or have any liability with respect to, taxes
on any income to Seller arising out of this transaction. Seller shall cooperate
with Buyer in Buyer's efforts to minimize all taxes and fees payable by Buyer,
if any, as a result of the transactions contemplated by this Agreement, provided
that Seller can do so without incurring any out-of-pocket costs or expenses.
ARTICLE 11.
EMPLOYEE MATTERS
----------------
The parties shall follow the following procedure in dealing with
employees of the Branches regarding employment after the Closing:
11.1 Notice to Employees and Information. With respect to all
employees (other than those employees identified on Schedule 11.1 who shall
continue to be employed by Seller) of Seller affiliated with the Branches
31
("Employees"), as soon as reasonably practicable, but no later than ten (10)
days after the date hereof, Seller shall notify each Employee that Seller and
Buyer have entered into an agreement with respect to the Buyer's acquisition of
the Branches. Seller shall also furnish to Buyer within such time period a
schedule containing the name of each Employee, such Employee's salary and
benefits, and a synopsis of each Employee's tenure with Seller and any other
information reasonably requested by Buyer with respect to such Employee.
11.2 Offer of Employment. No later than fifteen (15) days prior to
the Closing Date, Buyer will offer employment to each of the Employees at their
salaries as of the date of this Agreement. To the extent permitted by applicable
law, the period of service with Seller of each Employee who accepts employment
with Buyer (each a "Transferred Employee") shall be recognized only for vesting
and eligibility purposes under Buyer's benefit plans. Buyer shall permit each of
the Transferred Employees to participate in the same health, vacation and other
benefits as Buyer provides to its other employees, provided that Buyer shall not
be obligated to make any contribution to any plan or program on behalf of any of
such employees, or to otherwise provide any compensation or benefits to any of
such employees, with respect to any period prior to the Closing. Pre-existing
condition restrictions of the Buyer's health plan shall be waived with regard to
the Transferred Employees; provided, however, that to the extent a pre-existing
condition exclusion applied to such Transferred Employee under Seller's health
plan, such pre-existing condition exclusion shall continue to apply under the
Buyer's health plan. All sick leave and disability leave accrued and not used by
a Transferred Employee prior to the Closing Date shall be maintained by Buyer
after the Closing Date. For purposes of determining each Transferred Employee's
vacation benefit with the Buyer for the year in which the Effective Time occurs
under Buyer's vacation program, any vacation taken by a Transferred Employee
while employed with Seller preceding the Closing Date for the year in which the
Effective Time occurs will be deducted from the total Buyer vacation benefit for
which such Transferred Employee is eligible for such year under the Buyer's
vacation program. After the Closing Date, Transferred Employees will be employed
on an at-will basis by the Buyer provided, however, Buyer agrees not to
terminate from employment any Transferred Employee except for cause for a period
of six (6) months following the Closing Date. It is further provided that in no
way shall Buyer be liable for any claims of that any Employee may have against
Seller and Buyer may request a release from each Employee with respect thereto.
11.3 Costs of Termination. Seller shall pay any and all costs
(including, without limitation, severance pay and accrued vacation pay)
associated with termination of any Employee other than the Transferred
Employees.
11.4 Communications. Buyer and Seller shall coordinate all
communications to Employees, provided, however, this paragraph shall not be
construed to require Buyer and Seller to act jointly at any time.
11.5 Seller's Retention of Liabilities. Seller shall retain all
liabilities and obligations (including, without limitation, the liability and
obligation for all wages, salary, vacation pay and unemployment, medical,
dental, vision, health, disability and retirement benefits), for any claims
incurred by any employee of the Branches prior to the Effective Time. Buyer
shall not at any time assume any liability for the benefits of any employee of
the Branches under any of Seller's benefit plans. Seller shall be responsible
for providing any employee of the Branches whose "qualifying event," within the
32
meaning of section 4980B(f)(3) of the Internal Revenue Code of 1986, as amended
(the "Code"), occurs on or prior to the Effective Time (and such Employee's
"qualified beneficiaries" within the meaning of section 4980B(g)(1) of the Code)
with the continuation of group health coverage required by section 4980B(f) of
the Code under the terms of the health plan maintained by Seller.
11.6 No Third Party Beneficiaries. Nothing in this Article is
intended, nor shall it be construed, to confer any rights or benefits upon any
person other than Buyer and Seller.
ARTICLE 12.
TERMINATION AND ABANDONMENT
---------------------------
12.1 Right of Termination. This Agreement and the transactions
contemplated hereby may be terminated and abandoned at any time prior to or at
the Closing as follows, and in no other manner:
A. By the mutual consent of Seller and Buyer;
B. By either Buyer or Seller, if the Closing has not
occurred by September 30, 2004, or such other date as Seller and Buyer
shall agree in writing, unless the failure to so consummate by such
time is due to a breach of this Agreement by the party seeking to
terminate;
C. By Buyer if there shall be any actual or threatened
litigation to restrain or invalidate the sale of the Assets to, or the
assumption of the Liabilities by, Buyer that, in the good faith
judgment of Buyer, after consultation with counsel and Seller, makes it
inadvisable to proceed with such transaction;
D. By Seller if there shall be any actual or threatened
litigation to restrain or invalidate the sale of the Assets to, or the
assumption of the Liabilities by, Buyer that, in the good faith
judgment of Seller, after consultation with counsel and Buyer, makes it
inadvisable to proceed with such transaction;
E. By Buyer if there shall have been any Material
Adverse Change since February 29, 2004; or
F. By either Buyer of Seller in the event of a material
breach by the other of any representation, warranty or agreement
contained herein that is not cured or cannot be cured within thirty
(30) days after written notice of such termination has been delivered
to the breaching party; provided, however, that termination pursuant to
this provision shall not relieve the breaching party of liability for
such breach.
12.2 Notice of Termination. The power of termination provided for
by Section 12.1 may be exercised only by a notice given in writing, as provided
in Section 13.4.
12.3 Effect of Termination. Without limiting any other relief to
which either party hereto may be entitled, in the event of the termination and
abandonment of this Agreement pursuant to the provisions of Section 12.1, no
party to this Agreement shall have any further liability or obligation in
33
respect of this Agreement, except for (a) liability of a party for expenses
pursuant to Section 13.11, and (b) the provisions of Section 13.15 shall remain
applicable.
ARTICLE 13.
MISCELLANEOUS
-------------
13.1 Entire Agreement. This Agreement and the other agreements,
documents and instruments executed and delivered by the parties to each other at
the Closing constitute the full understanding of the parties, a complete
allocation of risks between them and a complete and exclusive statement of the
terms and conditions of their agreement relating to the subject matter hereof
and supersede any and all prior agreements, whether written or oral, that may
exist between the parties with respect thereto, including, without limitation,
that certain letter of intent dated April 1, 2004, (as amended) between the
parties hereto.
13.2 Multiple Counterparts. For the convenience of the parties
hereto, this Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, and all counterparts hereof so executed by the
parties hereto, whether or not such counterpart shall bear the execution of each
of the parties hereto, shall be deemed to be, and shall be construed as, one and
the same Agreement. A telecopy or facsimile transmission of a signed counterpart
of this Agreement shall be sufficient to bind the party or parties whose
signature(s) appear thereon.
13.3 Amendment. This Agreement may be amended, modified or
supplemented only by a written instrument signed by each party hereto.
13.4 Notices. Any and all notices and other communications required
or permitted to be given under this Agreement by any party hereto to the other
party may be delivered personally or by overnight courier service or sent by
mail, telex or facsimile transmission, at the respective addresses or
transmission numbers set forth below and shall be effective upon the earlier of
actual receipt or (a) in the case of mail, upon the earlier of actual receipt or
3 business days after deposit in the United States Postal Service, first class
certified or registered mail, postage prepaid, return receipt requested; and (b)
in the case of overnight courier service, one business day after delivery to
such courier service with instructions to deliver the next business day. The
parties may change their respective addresses and transmission numbers by
written notice to all other parties, sent as provided in this Section. All
communications must be in writing and addressed as follows:
If to Seller: UnionBank
000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Chairman/CEO
Telecopy: (000) 000-0000
34
With a Copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxx Attorneys, P.C.
Comerica Building
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
If to Buyer: First Bankers Trust Company, N.A.
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Chairman of the Board
Telecopy: (000) 000-0000
With a Copy to: Xxxxxxx X. Xxxxx, Esq.
Jenkens & Xxxxxxxxx,
a Professional Corporation
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
13.5 Binding Effect. All of the terms, covenants, representations,
warranties and conditions of this Agreement shall be binding upon, and inure to
the benefit of and be enforceable by, the parties hereto and their respective
successors, representatives and permitted assigns. Nothing expressed or referred
to herein is intended or shall be construed to give any person other than the
parties hereto any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provision herein contained, it being the intention of
the parties hereto that this Agreement, the assumption of obligations and
statements of responsibilities hereunder, and all other conditions and
provisions hereof are for the sole benefit of the parties to this Agreement and
for the benefit of no other person. Nothing in this Agreement shall act to
relieve or discharge the obligation or liability of any third party to any party
to this Agreement, nor shall any provision give any third party any right of
subrogation or action over or against any party to this Agreement.
13.6 Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Illinois.
13.7 Attorneys' Fees and Costs. In the event attorneys' fees or
other costs are incurred to secure performance of any of the obligations herein
provided for, or to establish damages for the breach thereof, or to obtain any
other appropriate relief, whether by way of prosecution or defense, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred therein.
13.8 Severability. In the event that any provision of this
Agreement is held to be illegal, invalid or unenforceable under present or
future laws, then (a) such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision were not a part hereof; (b) the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by such illegal,
invalid or unenforceable provision or by its severance from this Agreement; and
(c) there shall be added automatically as a part of this Agreement a provision
35
as similar in terms to such illegal, invalid or unenforceable provision as may
be possible and still be legal, valid and enforceable.
13.9 Assignability. No party to this Agreement shall assign this
Agreement, by operation of law or otherwise, in whole or in part, without the
prior written consent of the other parties. Any assignment made or attempted in
violation of this Section shall be void and of no effect.
13.10 Rules of Construction. All sections referred to herein are
sections of this Agreement and all exhibits and schedules referred to herein are
exhibits and schedules, respectively, attached to this Agreement. Descriptive
headings as to the contents of particular sections are for convenience only and
shall not control or affect the meaning, construction or interpretation of any
provision of this Agreement. The exhibits and schedules to this Agreement (and
any appendices thereto) referred to in this Agreement and attached hereto are
and shall be incorporated herein and made a part hereof for all purposes as
though set forth herein verbatim. Each use herein of the masculine, neuter or
feminine gender shall be deemed to include the other genders. Each use herein of
the plural shall include the singular and vice versa, in each case as the
context requires or as it is otherwise appropriate. The word "or" is used in the
inclusive sense.
13.11 Expenses. Seller shall pay all of its expenses and costs
(including, without limitation, all attorneys' fees and expenses and application
fees), and Buyer shall pay all of its expenses and costs (including, without
limitation, all attorneys' fees and expenses and application fees), in
connection with this Agreement and the consummation of the transactions
contemplated hereby.
13.12 Waiver. Any of the terms or conditions of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof. Such
action shall be evidenced by a signed written notice given in the manner
provided in Section 13.4. No party to this Agreement shall by any act (except by
a written instrument given pursuant to Section 13.4) be deemed to have waived
any right or remedy hereunder or to have acquiesced in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in exercising
any right, power or privilege hereunder by any party hereto shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver of any party of any right or
remedy on any one occasion shall not be construed as a bar to any right or
remedy that such party would otherwise have on any future occasion or to any
right or remedy that any other party may have hereunder.
13.13 Specific Performance. Each of the parties hereto acknowledges
that the other parties would be irreparably damaged and would not have an
adequate remedy at law for money damages in the event that any of the covenants
contained in this Agreement were not performed in accordance with its terms or
otherwise were materially breached. Each of the parties hereto therefore agrees
that, without the necessity of proving actual damages or posting bond or other
security, the other party shall be entitled to temporary and/or permanent
injunction or injunctions to prevent breaches of such performance and to
specific enforcement of such covenants in addition to any other remedy to which
they may be entitled, at law or in equity.
36
13.14 Public Disclosure. Seller and Buyer will consult with each
other regarding the content of any press release or other public disclosure
concerning this transaction and obtain the prior written approval of the other
party hereto; provided, however, that notwithstanding anything else contained in
this Section, Seller and Buyer shall be permitted to make any public disclosure
or governmental filings as its counsel may deem necessary to maintain compliance
with or to prevent violations of applicable Federal or state laws or
regulations.
13.15 Confidential Information. Except as may be required by
applicable securities laws or as may be necessary to obtain the regulatory
approvals as described in Section 7.3, Seller and Buyer will treat as
confidential any information related to the transactions described herein
obtained from any other party. Seller and Buyer will use such information, and
not disclose it to others, except their employees, advisors, directors and
agents, expressly for the purposes of evaluating the potential of consummating
the transactions proposed herein. The term "information" does not include any
information that (a) at the time of disclosure or thereafter is generally
available to and known by the public, (b) was available on a nonconfidential
basis from a source other than Seller or Buyer or (c) was independently acquired
or developed without violating any laws or obligations under this Agreement.
13.16 Arbitration.
-----------
A. Any controversy or claim between Buyer and Seller
arising out of or relating to this Agreement or any agreements or
instruments relating hereto or delivered in connection herewith,
including, but not limited to, a claim based on or arising from an
alleged tort, will, at the request of any party, be determined by
arbitration in accordance with the United States Arbitration Act (Title
9, U.S. Code), notwithstanding any choice of law provision in this
Agreement, and under the Commercial Rules of the American Arbitration
Association ("AAA"). The AAA will be instructed by either or both
parties to --- prepare a list of proposed arbitrators. Within ten (10)
days of receipt of the list, each party may strike one name from the
list. The AAA will then appoint one arbitrator from the name(s)
remaining on the list. The arbitration will be conducted in [Quincy,
Illinois]. The arbitrator shall give effect to statutes of limitation
in determining any claim. Any controversy concerning whether an issue
is arbitrable shall be determined by the arbitrator. The award rendered
by the arbitrator shall set forth findings of the facts and conclusions
of law and shall be final, and the judgment may be entered in any court
having jurisdiction thereof. A failure by the arbitrator to make
findings of fact and conclusions of law shall be grounds for
overturning the award. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall
not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any
other party contests such action for judicial relief.
B. In any arbitration proceeding, the arbitrator is
authorized to apportion costs and expenses, including investigation,
legal and other expense, which will include, if applicable, a
reasonable estimate of allocated costs and expenses of in-house legal
counsel and legal staff. Such costs and expenses are to be awarded only
after the conclusion of the arbitration and will not be advanced during
the course of such arbitration.
37
13.17 Delivery of Exhibits. In order to provide for the prompt
execution of this Agreement, the parties hereto agree that with respect to the
schedules to this Agreement:
A. Full and complete schedules to this Agreement shall
be delivered by Seller to Buyer pursuant to Section 13.17, by 5:00
p.m., Quincy, Illinois time, on Wednesday, May 26, 2004.
B. Buyer will have until 5:00 p.m., Quincy, Illinois
time, on Friday, May 28, 2004 to review such schedules and to determine
whether they are in form and substance satisfactory to Buyer in its
sole discretion. If they are satisfactory to Buyer, then this Agreement
shall remain in full force and effect and the parties hereto will
proceed in accordance with their respective rights and obligations
hereunder. If the schedules are not satisfactory to Buyer, in its sole
discretion, Buyer shall have the unconditional right to terminate this
Agreement and all of its obligations hereunder by providing Seller
written notice of such termination no later than 5:00 p.m., Quincy,
Illinois time, on Friday, May 28, 2004.
[Signature Page Follows]
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be
hereunto affixed as of the date first above written.
Buyer:
FIRST BANKERS TRUST COMPANY, N.A.
By: /s/ XXXXXX X. XXXXX
--------------------------------------
Xxxxxx X. Xxxxx, Chairman of the Board
Seller:
UNIONBANK
By: /s/ XXXXX X. XXXXXX
--------------------------------------
Xxxxx X. Xxxxxx, Chairman/CEO
39
FIRST AMENDMENT TO PURCHASE AND ASSUMPTION AGREEMENT
----------------------------------------------------
This FIRST AMENDMENT TO PURCHASE AND ASSUMPTION AGREEMENT (this
"Amendment") is made and entered into as of the 16th day of June 2004, by and
between FIRST BANKERS TRUST COMPANY, N.A., a national banking association having
its main office in Quincy, Illinois ("Buyer"), and UNIONBANK, an Illinois state
banking association having its principal office in Streator, Illinois
("Seller").
WITNESSETH:
-----------
WHEREAS, Buyer and Seller have previously entered into that certain
Purchase and Assumption Agreement, dated as of May 21, 2004 (the "Agreement");
and
WHEREAS, it is the desire of the parties to amend the Agreement:
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual representations, warranties, covenants and agreements contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be bound hereby, the parties hereby
agree as follows:
1. Section 11.2. Section 11.2 of the Agreement is hereby amended to read
in its entirety as follows:
"11.2 Offer of Employment. No later than fifteen (15) days prior to the
Closing Date, Buyer will offer employment to each of the Employees at
their salaries as of the date of this Agreement. To the extent
permitted by applicable law, the period of service with Seller of each
Employee who accepts employment with Buyer (each a "Transferred
Employee") shall be recognized only for vesting and eligibility
purposes under Buyer's benefit plans. Buyer and Seller agree that
effective immediately before the Effective Time, all of the Transferred
Employees shall be terminated by Seller and hired immediately
thereafter by Buyer. All benefits accrued, earned or otherwise offered
by Seller to Transferred Employees that upon termination of employment
with Seller are forfeited (including without limitation, payment for
earned but unused sick and disability leave) shall cease without
compensation or payment of any kind pursuant to the policy or agreement
underlying such benefit and Buyer shall have no liability therefor. All
benefits accrued, earned or otherwise offered by Seller to Transferred
Employees that upon termination of employment with Seller require
compensation to be paid by Seller to the Transferred Employee shall be
paid by Seller to the Transferred Employee pursuant to the policy or
agreement underlying such benefit and Buyer shall have no liability
therefor. Buyer shall permit each of the Transferred Employees to
participate in the same health, vacation and other benefits as Buyer
provides to its other employees, provided that Buyer shall not be
obligated to make any contribution to any plan or program on behalf of
any of such employees, or to otherwise provide any compensation or
benefits to any of such employees, with respect to any period prior to
the Effective Time. Pre-existing condition restrictions of the Buyer's
health plan shall be waived with regard to the Transferred Employees;
40
provided, however, that to the extent a pre-existing condition
exclusion applied to such Transferred Employee under Seller's health
plan, such pre-existing condition exclusion shall continue to apply
under the Buyer's health plan. For purposes of determining each
Transferred Employee's vacation benefit with the Buyer, each
Transferred Employee is eligible for the number of vacation days under
the Buyer's vacation program that such Transferred Employee would have
received had such Transferred Employee been employed by Buyer on
January 1, 2004 ("Eligible Vacation Days"); provided that Buyer shall
deduct from the number of Eligible Vacation Days the pro rata portion
to reflect the percentage of the year elapsed from January 1, 2004
until the Effective Time. For example, if a Transferred Employee would
have 10 Eligible Vacation Days and the Effective Time is August 31,
2004, such Transferred Employee will have one-third of ten, or 3.5,
vacation days left for calendar year 2004 (fractions shall be rounded
to the nearest half of one vacation day). After the Closing Date,
Transferred Employees will be employed on an at-will basis by the Buyer
provided, however, Buyer agrees not to terminate from employment any
Transferred Employee except for cause for a period of six (6) months
following the Closing Date. It is further provided that in no way shall
Buyer be liable for any claims of that any Employee may have against
Seller and Buyer may request a release from each Employee with respect
thereto.
2. All Other Terms in Force. Except as expressly amended hereby, all
terms, provisions, conditions, covenants, representations and
warranties contained in the Agreement are not modified by this
Amendment and continue in full force and effect as originally written.
As hereby modified and amended, all of the terms and provisions of the
Agreement are ratified and confirmed.
3. Multiple Counterparts. For the convenience of the parties hereto, this
Amendment may be executed in multiple counterparts, each of which shall
be deemed an original, and all counterparts hereof so executed by the
parties hereto, whether or not such counterpart shall bear the
execution of each of the parties hereto, shall be deemed to be, and
shall be construed as, one and the same Amendment. A telecopy or
facsimile transmission of a signed counterpart of this Amendment shall
be sufficient to bind the party or parties whose signature(s) appear
thereon.
[Signature Page Follows]
41
[Signature Page to First Amendment to Purchase and Assumption Agreement]
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Amendment to be executed by their duly authorized officers as of the date first
above written.
FIRST BANKERS TRUST COMPANY, N.A.
By: /s/ XXXXXX X. XXXXX
--------------------------------------
Xxxxxx X. Xxxxx, Chairman of the Board
UNIONBANK
By: /s/ XXXXX X. XXXXXX
--------------------------------------
Xxxxx X. Xxxxxx, Chairman/CEO
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