================================================================================
AGREEMENT AND PLAN OF MERGER
DATED AS OF THE 18th DAY OF SEPTEMBER, 1997
BY AND AMONG
NORTH CENTRAL BANCSHARES, INC.,
FIRST FEDERAL SAVINGS BANK OF FORT DODGE
AND
VALLEY FINANCIAL CORP.
================================================================================
TABLE OF CONTENTS
-----------------
PAGE
----
INTRODUCTORY STATEMENT.......................................................-1-
ARTICLE I: THE MERGER.......................................................-1-
Section 1.01 Structure of the Merger....................................-1-
Section 1.02 Bank Merger................................................-2-
Section 1.03 Effect on Outstanding Shares...............................-2-
Section 1.04 Exchange Procedures........................................-3-
Section 1.05 Dissenters' Rights.........................................-5-
ARTICLE II: REPRESENTATIONS AND WARRANTIES...................................-5-
Section 2.01 Disclosure Letter..........................................-5-
Section 2.02 Standards..................................................-5-
Section 2.03 Representations and Warranties of the Company..............-6-
Section 2.04 Representations and Warranties of the Purchaser...........-21-
ARTICLE III: CONDUCT PENDING THE MERGER....................................-23-
Section 3.01 Conduct of the Company's Business Prior to the
Effective Time..........................................-23-
Section 3.02 Conduct of the Purchaser's and the Purchaser Bank's
Business Prior to the Effective Time....................-27-
Section 3.03 Cooperation...............................................-27-
ARTICLE IV: COVENANTS......................................................-27-
Section 4.01 Acquisition Proposals.....................................-27-
Section 4.02 Certain Policies of the Company...........................-28-
Section 4.03 Employees and Directors...................................-29-
Section 4.04 Access and Information....................................-30-
Section 4.05 Certain Filings, Consents and Arrangements................-30-
Section 4.06 Antitakeover Provisions...................................-31-
Section 4.07 Additional Agreements.....................................-31-
Section 4.08 Publicity.................................................-31-
Section 4.09 Stockholders' Meeting/Action by Written Consent...........-31-
Section 4.10 Proxy/Information Statement...............................-31-
Section 4.11 Notification of Certain Matters...........................-32-
Section 4.12 Advisory Board............................................-32-
Section 4.13 Pledged Securities........................................-32-
-i-
ARTICLE V: CONDITION TO CONSUMMATION.......................................-33-
Section 5.01 Conditions to Each Party's Obligations....................-33-
Section 5.02 Conditions to the Obligations of the Purchaser Under
this Agreement..........................................-34-
Section 5.03 Conditions to the Obligations of the Company..............-35-
ARTICLE VI: TERMINATION....................................................-35-
Section 6.01 Termination...............................................-35-
Section 6.02 Effect of Termination.....................................-36-
ARTICLE VII: CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME....................-37-
Section 7.01 Effective Date and Effective Time.........................-37-
Section 7.02 Deliveries at the Closing.................................-37-
ARTICLE VIII: OTHER MATTERS................................................-37-
Section 8.01 Certain Definitions; Interpretation.......................-37-
Section 8.02 Non-Survival of Representations and Warranties............-38-
Section 8.03 Waiver; Amendment.........................................-38-
Section 8.04 Counterparts..............................................-38-
Section 8.05 Governing Law.............................................-38-
Section 8.06 Expenses..................................................-38-
Section 8.07 Notices...................................................-38-
Section 8.08 Entire Agreement; Etc.....................................-40-
Section 8.09 Assignment................................................-40-
-ii-
This is an AGREEMENT AND PLAN OF MERGER, dated as of the 18th day of
September, 1997 (this "Agreement"), by and among North Central Bancshares, Inc.,
an Iowa corporation (the "Purchaser"), First Federal Savings Bank of Fort Dodge,
a federally chartered savings bank and a wholly owned subsidiary of the
Purchaser (the "Purchaser Bank") and Valley Financial Corp., an Iowa corporation
(the "Company") and parent company of Valley Savings Bank, FSB, a federally
chartered stock savings bank (the "Company Bank").
INTRODUCTORY STATEMENT
The boards of directors of the Purchaser, Purchaser Bank and the
Company have approved, and deem it advisable and in the best interests of their
respective companies and their stockholders or members (as applicable) to
consummate, the business combination transaction provided for
herein.
The Purchaser and the Company desire to make certain representations,
warranties and agreements in connection with the business combination
transaction provided for herein and to prescribe various conditions to such
transaction.
In consideration of their mutual promises and obligations hereunder,
the parties hereto adopt and make this Agreement and prescribe the terms and
conditions hereof and the manner and basis of carrying it into effect, which
shall be as follows:
ARTICLE I
THE MERGER
SECTION 1.01 STRUCTURE OF THE MERGER. The Purchaser will cause an Iowa
corporation to be organized as a wholly owned special purpose subsidiary of the
Purchaser Bank ("Merger Sub"). On the Effective Date (as defined in Section
7.01), Merger Sub will merge (the "Merger") with and into the Company, with the
Company being the surviving entity (the "Surviving Corporation"), pursuant to
the provisions of, and with the effect provided in, the Iowa Business
Corporation Act ("IBCA") and pursuant to the terms and conditions of an
agreement and plan of merger to be entered into between Merger Sub and the
Company in the form attached hereto as Annex A. The separate corporate existence
of Merger Sub shall thereupon cease. The Surviving Corporation shall continue to
be governed by the laws of the State of Iowa and its separate corporate
existence with all of its rights, privileges, immunities, powers and franchises
shall continue unaffected by the Merger. At the Effective Time (as defined in
Section 7.01), the articles of incorporation and bylaws of the Company shall be
amended in their entirety to conform to the articles of incorporation and bylaws
of Merger Sub in effect immediately prior to the Effective Time and shall become
the articles of incorporation and bylaws of the Surviving Corporation. At the
Effective Time, the directors and officers of Merger Sub shall become the
directors and officers of the Surviving Corporation.
-2-
SECTION 1.02 BANK MERGER. Immediately after the Merger, the Board of
Directors of the Surviving Corporation shall adopt a plan of dissolution (which
shall be a plan of complete liquidation and dissolution of the Surviving
Corporation for purposes of Section 332(a) and 337(a) of the Internal Revenue
Code of 1986, as amended (the "Code")) and shall cause articles of dissolution
authorized in accordance with Section 490.1403 of the IBCA to be filed with the
Secretary of State of the State of Iowa. Upon the certificate of dissolution
becoming effective, the Purchaser Bank and the Company Bank shall enter into a
plan of merger in the form attached hereto as Annex B (which shall be a plan of
complete liquidation and dissolution of the Company for purposes of Sections
332(a) and 337(a) of the Code) pursuant to which the Company Bank will be merged
with and into the Purchaser Bank pursuant to and with the effect set forth in
the OTS Regulations (the "Bank Merger"). The documentation relating to the Bank
Merger shall provide that the directors of the Purchaser Bank as the surviving
entity of the Bank Merger shall be all of the respective directors of the
Purchaser Bank immediately prior to such merger.
SECTION 1.03 EFFECT ON OUTSTANDING SHARES. (a) By virtue of the Merger,
automatically and without any action on the part of the holder thereof, each
share of the common stock of the Company, par value $1.00 per share (the
"Company Common Stock"), issued and outstanding at the Effective Time (other
than (i) shares the holder of which (the "Dissenting Stockholder") pursuant to
any applicable law providing for dissenters' or appraisal rights is entitled to
receive payment in accordance with the provisions of any such law, such holder
to have only the rights provided in any such law (the "Dissenters' Shares"),
(ii) shares held directly or indirectly by the Purchaser (other than shares held
in a fiduciary capacity or in satisfaction of a debt previously contracted), and
(iii) shares held as treasury stock of the Company) shall become and be
converted into the right to receive an amount (the "Merger Consideration") equal
to the sum of (x) $525.00 in cash without interest (the "Base Amount") and (y)
in the event the Merger is not consummated on or before February 1, 1998, an
amount equal to the product of (I) the Base Amount, multiplied by (II) a
fraction, the numerator of which is (A) the number of days from but excluding
February 1, 1998 up to and including the Closing Date (as defined in Section
7.01) multiplied by .06, and the denominator of which is (B) 365. As of the
Effective Time, each share of Company Common Stock held directly or indirectly
by the Purchaser (other than shares held in a fiduciary capacity or in
satisfaction of a debt previously contracted) and shares held as treasury stock
of the Company shall be canceled and retired and cease to exist, and no exchange
or payment shall be made with respect thereto.
(b) The shares of common stock of Merger Sub issued and outstanding
immediately prior to the Effective Time shall become shares of the Surviving
Corporation after the Merger and shall thereafter constitute all of the issued
and outstanding shares of the capital stock of the
Surviving Corporation.
-3-
SECTION 1.04 EXCHANGE PROCEDURES. (a) At and after the Effective Time,
each certificate (each a "Certificate") previously representing shares of
Company Common Stock (except as specifically set forth in Section 1.03) shall
represent only the right to receive the Merger Consideration in cash without
interest.
(b) As of the Effective Time, the Purchaser shall deposit, or shall
cause to be deposited with a bank or trust company selected by the Purchaser to
act as exchange agent (the "Exchange Agent") pursuant to the terms of an
agreement (the "Exchange Agent Agreement") in form and substance mutually
satisfactory to the parties hereto, for the benefit of the holders of shares of
Company Common Stock, for exchange in accordance with this Section 1.04, an
amount of cash sufficient to pay the aggregate Merger Consideration to be paid
pursuant to Section 1.03.
(c) Within two (2) business days after the receipt of the approvals of
the regulatory or governmental authorities described in Section 5.02(b) hereof,
the Purchaser shall cause the Exchange Agent to forward by first class mail to
each holder of record as of the date that such approvals are received (the
"Record Date") of a Certificate or Certificates the following: (i) a letter of
transmittal specifying that delivery shall be effected, only upon delivery of
the Certificates to the Exchange Agent, which shall be in a form and contain any
other provisions as the Purchaser may reasonably determine; and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration. Risk of loss and title to the Certificates shall
pass at the Effective Time with respect to those Certificates properly delivered
to the Exchange Agent prior thereto and, with respect to those Certificates
properly delivered to the Exchange Agent after the Effective Time, risk of loss
and title shall pass only upon such delivery. Any Certificate or Certificates
surrendered pursuant to this provision shall be held by the Exchange Agent
pursuant to the Exchange Agent Agreement. Until the earlier of the Effective
Time or the termination of this Agreement in accordance with its terms, any
surrender of a Certificate or Certificates shall be irrevocable. On the
Effective Date, each shareholder of the Purchaser that has properly surrendered
a Certificate or Certificates to the Exchange Agent, together with a properly
completed and duly executed letter of transmittal, shall be entitled to receive
in exchange therefor a check drawn on a financial institution authorized to
conduct business in Iowa as a bank or savings association, payable in
immediately available U.S. funds in an amount equal to the product of the Merger
Consideration and the number of shares of Company Common Stock represented by
the Certificate or Certificates surrendered pursuant to the provisions hereof,
and the Certificate or Certificates so surrendered shall forthwith be canceled.
As to all other shareholders, if all required documentation is received by the
Exchange Agent within sixty (60) days after the Effective Time, the Purchaser
shall direct the Exchange Agent to make payment of the Merger Consideration with
respect to the Certificates so surrendered on the next business day after the
receipt of all required documentation. If all required documentation is received
by the Exchange Agent later than sixty (60) days after the Effective Time, the
Purchaser shall direct the Exchange Agent to make payment of the Merger
Consideration with respect to the Certificates so surrendered with reasonable
promptness after receipt of all required documentation. No interest
-4-
will be paid or accrued on the Merger Consideration after the Effective Time. In
the event of a transfer of ownership of any shares of Company Common Stock not
registered in the transfer records of the Company prior to the Effective Date, a
check for the Merger Consideration may be issued to the transferee if the
Certificate representing such Company Common Stock is presented to the Exchange
Agent, accompanied by documents sufficient, in the discretion of the Purchaser
and the Exchange Agent, (i) to evidence and effect such transfer and (ii) to
evidence that all applicable stock transfer taxes have been paid.
(d) From and after the Effective Time, there shall be no transfers on
the stock transfer records of the Company of any shares of Company Common Stock
that were outstanding immediately prior to the Effective Time. If after the
Effective Time Certificates are presented to the Purchaser or the Surviving
Corporation, they shall be canceled and exchanged for the Merger Consideration
deliverable in respect thereof pursuant to this Agreement in accordance with the
procedures set forth in this Section 1.04.
(e) Any portion of the aggregate Merger Consideration or the proceeds
of any investments thereof that remains unclaimed by the stockholders of the
Company for six (6) months after the Effective Time shall be repaid by the
Exchange Agent to the Purchaser. Any stockholders of the Company who have not
theretofore complied with this Section 1.04 shall thereafter look only to the
Purchaser for payment of their Merger Consideration deliverable in respect of
each share of Company Common Stock such stockholder holds as determined pursuant
to this Agreement without any interest thereon. If outstanding certificates for
shares of Company Common Stock are not surrendered or the payment for them is
not claimed prior to the date on which such payments would otherwise escheat to
or become the property of any governmental unit or agency, the unclaimed items
shall, to the extent permitted by abandoned property and any other applicable
law, become the property of the Purchaser (and to the extent not in its
possession shall be paid over to it), free and clear of all claims or interest
of any person previously entitled to such claims. Notwithstanding the foregoing,
none of the Purchaser, the Surviving Bank, the Exchange Agent or any other
person shall be liable to any former holder of Company Common Stock for any
amount delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
(f) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Exchange Agent, the posting by such person of a bond in such amount as the
Exchange Agent may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof pursuant to this Agreement.
-5-
SECTION 1.05 DISSENTERS' RIGHTS. Any Dissenting Stockholder who shall
be entitled to be paid the "fair value" of his or her Dissenters' Shares, as
provided in Section 490.1301 et. seq. of the IBCA, shall not be entitled to the
Merger Consideration, unless and until the holder thereof shall have failed to
perfect or shall have effectively withdrawn or lost such holder's right to
dissent from the Merger under Section 490.1301 et. seq. of the IBCA, and shall
be entitled to receive only the payment to the extent provided for by Section
490.1301 et. seq. of the IBCA with respect to such Dissenters' Shares. If any
Dissenting Stockholder shall fail to perfect or shall have effectively withdrawn
or lost the right to dissent, the Dissenters' Shares held by such Dissenting
Stockholder shall thereupon be treated as though such Dissenters' Shares had
been converted into the right to receive the Merger Consideration pursuant to
Section 1.03.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 DISCLOSURE LETTER. On or prior to the date hereof, the
Company has delivered to the Purchaser a letter (its "Disclosure Letter")
setting forth, among other things, facts, circumstances and events the
disclosure of which is required or appropriate in relation to any or all of its
covenants, representations and warranties (and making specific reference to the
Section of this Agreement to which they relate), other than Section 2.03(h);
PROVIDED, that (a) no such fact, circumstance or event is required to be set
forth in the Disclosure Letter as an exception to a covenant, representation or
warranty (it being understood that items to be set forth in response to Sections
2.03(n) (the first sentence only) and 2.03(s)(iii) and are intended as
informational disclosures and not to constitute exceptions to the applicable
representation or warranty) if its absence is not reasonably likely to result in
the related representation or warranty being deemed untrue or incorrect under
the standards established by Section 2.02, and (b) the mere inclusion of a fact,
circumstance or event in the Disclosure Letter shall not be deemed an admission
by a party that such item represents a material exception or that such item is
reasonably likely to result in a Material Adverse Effect (as defined in Section
2.02(b)).
SECTION 2.02 STANDARDS. (a) No representation or warranty of Company or
Purchaser contained in Section 2.03 or 2.04, respectively, shall be deemed
untrue or incorrect, and no party hereto shall be deemed to have breached a
representation or warranty, on account of the existence of any fact,
circumstance or event unless, as a direct or indirect consequence of such fact,
circumstance or event, individually or taken together with all other facts,
circumstances or events inconsistent with any paragraph of Section 2.03 or 2.04,
as applicable, there is reasonably likely to exist a Material Adverse Effect.
The Company's representations, warranties and covenants contained in this
Agreement shall not be deemed to be untrue or breached as a result of effects
arising solely from actions taken in compliance with a written request of the
Purchaser.
-6-
(b) As used in this Agreement, the term "Material Adverse
Effect" means either (i) an effect which (A) is material and adverse to the
business, financial condition, results of operations or prospects of the Company
or the Purchaser, as the context may dictate, and its subsidiaries taken as a
whole, or (B) adversely affects the ability of the Company or the Purchaser, as
the context may dictate, to perform its material obligations hereunder or (C)
materially and adversely affects the timely consummation of the transactions
contemplated hereby or (ii) the failure of a representation or warranty
contained in any of the following Sections to be true and correct: 2.03(a)(i)
and (ii), 2.03(b), 2.03(c), 2.03(d), the last sentence of 2.03(f), 2.03(g)(i),
2.03(h), 2.03(q), 2.03(v), 2.03(y), 2.04(a), 2.04(b), 2.04(g) and 2.04(h).
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Subject to
Sections 2.01 and 2.02, the Company represents and warrants to the Purchaser
that, except as specifically disclosed in the Disclosure Letter of the Company:
(a) ORGANIZATION. (i) The Company is a corporation duly organized and
validly existing under the laws of the State of Iowa, and is a savings and loan
holding company duly registered with the Office of Thrift Supervision ("OTS")
under the Home Owners' Loan Act of 1933, as amended ("HOLA"). The Company has
all requisite power and authority to own, lease and operate its properties and
to carry on its business as now being conducted. The Company owns beneficially
and of record all of the shares of capital stock of the Company Bank, except as
listed in the Disclosure Letter.
(ii) The Company Bank is a stock savings bank duly organized,
validly existing and in good standing under the laws of the United States of
America. Each Subsidiary (as defined below) of the Company (other than the
Company Bank) is a corporation, limited liability company or partnership duly
organized and validly existing under the laws of the State of Iowa. Each of the
Company Bank and its Subsidiaries has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. As used in this Agreement, unless the context requires otherwise, the
term "Subsidiary" when used with respect to any party means any corporation or
other organization, whether incorporated or unincorporated, which is
consolidated with such party for financial reporting purposes or which is
controlled, directly or indirectly, by such party, and with respect to the
Company includes only the Company Bank, Hearthstone Mortgage Company, Inc. and
Valley Services, Inc.
(iii) The Company and each Subsidiary of the Company is duly
qualified to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its
properties makes such qualification necessary.
(iv) Except for the Subsidiaries of the Company, there are no
entities (whether corporations, partnerships, or similar organizations) in which
the Company owns, directly or indirectly, 10% or more of the ownership interests
as of the date of this Agreement. All of the
-7-
Subsidiaries are in compliance with all applicable laws, rules and regulations
relating to direct investments in equity ownership interests. The Company owns,
either directly or indirectly, all of the outstanding capital stock of each of
its Subsidiaries. No Subsidiary of the Company (other than the Company Bank) is
an "insured depositary institution" as defined in the Federal Deposit Insurance
Act, as amended (the "FDIA"), and applicable regulations thereunder. All of the
shares of capital stock of each of the Subsidiaries (including the Company Bank)
held by the Company or by another Subsidiary of the Company are fully paid,
nonassessable and not subject to any preemptive rights and are owned by the
Company or a Subsidiary of the Company free and clear of any claims, liens,
encumbrances or restrictions (other than those imposed by applicable federal and
state securities laws) and there are no agreements or understandings with
respect to the voting or disposition of any such shares.
(b) CAPITAL STRUCTURE. (i) The authorized capital stock of the Company
consists of 100,000 shares of Company Common Stock. As of the date of this
Agreement: (A) 28,050 shares of Company Common Stock were issued and
outstanding, (B) no shares of Company Common Stock were reserved for issuance
and (C) 3,850 shares of Company Common Stock were held by the Company in its
treasury. All outstanding shares of Company Common Stock are validly issued,
fully paid and nonassessable and not subject to any preemptive rights and, with
respect to shares held by the Company in its treasury or by its Subsidiaries,
are free and clear of all liens, claims, encumbrances or restrictions (other
than those imposed by applicable federal and state securities laws) and there
are no agreements or understandings with respect to the voting or disposition of
any such shares.
The authorized capital stock of the Company Bank consists of 5,000,000
shares of common stock, par value $1.00 per share (the "Company Bank Common
Stock"), of which 1,500,000 shares are issued and outstanding, and none is held
in the Company Bank's treasury.
(ii) As of the date of this Agreement, except for this
Agreement, neither the Company nor any of its Subsidiaries has or is bound by
any outstanding options, warrants, calls, rights, convertible securities,
commitments or agreements of any character obligating the Company or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, any additional shares of capital stock of the Company or any of its
Subsidiaries or obligating the Company or any of its Subsidiaries to grant,
extend or enter into any such option, warrant, call, right, convertible
security, commitment or agreement. As of the date hereof, there are no
outstanding contractual obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its Subsidiaries.
(c) AUTHORITY. The Company has all requisite corporate power and
authority to enter into this Agreement and, subject to approval of this
Agreement by the requisite vote of the stockholders of the Company, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement, and, subject to the approval of this Agreement by the
stockholders
-8-
of the Company, the consummation of the transactions contemplated hereby, have
been duly authorized by all necessary corporate actions on the part of the
Company. This Agreement has been duly executed and delivered by the Company and
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity, whether applied in a court
of law or a court of equity.
(d) STOCKHOLDER APPROVALS. As to the Company and its Subsidiaries, the
affirmative vote of a majority of the outstanding shares of Company Common Stock
entitled to vote on this Agreement is the only stockholder vote required for
approval of this Agreement and consummation of the Merger and the other
transactions contemplated hereby.
(e) NO VIOLATIONS. Subject to approval of this Agreement by the
Company's stockholders, the execution, delivery and performance of this
Agreement by the Company do not, and the consummation of the transactions
contemplated hereby by the Company will not, constitute (i) a breach or
violation of, or a default under, any law, including any Environmental Law (as
defined in Section 2.03(r)), rule or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture or instrument of the
Company or any Subsidiary of the Company or to which the Company or any of its
Subsidiaries (or any of their respective properties) is subject, or enable any
person to enjoin the Merger or the other transactions contemplated hereby, (ii)
a breach or violation of, or a default under, the certificate or articles of
incorporation or bylaws of the Company or any Subsidiary of the Company or (iii)
a breach or violation of, or a default under (or an event which with due notice
or lapse of time or both would constitute a default under), or result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, pledge, security interest, charge or other encumbrance
upon any of the properties or assets of the Company or any Subsidiary of the
Company under, any of the terms, conditions or provisions of any note, bond,
indenture, deed of trust, loan agreement or other agreement, instrument or
obligation to which the Company or any Subsidiary of the Company is a party, or
to which any of their respective properties or assets may be bound or affected;
and the consummation of the transactions contemplated hereby will not require
any approval, consent or waiver under any such law, rule, regulation, judgment,
decree, order, governmental permit or license or the approval, consent or waiver
of any other party to any such agreement, indenture or instrument, other than
(i) the required approvals, consents and waivers referred to in Section 5.01(b)
and (ii) the approval of the stockholders of the Company referred to in Section
2.03(d).
(f) CONSENTS. Except as referred to herein or in connection, or in
compliance, with the provisions of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, the Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the HOLA, the
Bank Merger Act, as amended, the FDIA, the rules and
-9-
regulations of the OTS, and the environmental, corporation, securities or blue
sky laws or regulations of the various states, no filing or registration with,
or authorization, consent or approval of, any other party is necessary for the
consummation by the Company of the Merger or the Bank Merger or the other
transactions contemplated by this Merger Agreement. The Company knows of no
reason why the approvals, consents and waivers of governmental authorities
referred to in this Section 2.03(f) or in Section 4.13 should not be obtained
without the imposition of any material condition or restriction.
(g) REPORTS. (i) As of their respective dates, neither the Company's
Audited Financial Report for the fiscal year ended December 31, 1996, nor any
other financial report provided to the stockholders or board of directors of the
Company subsequent to December 31, 1996 each in the form (including exhibits and
any documents specifically incorporated by reference therein) filed with the
corporate records of the Company (collectively, the "Reports"), contained or
will contain any untrue statement of a material fact or omitted or will omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. Each of the balance sheets contained or incorporated by
reference in the Company's Reports (including in each case any related notes and
schedules) fairly presented the financial position of the entity or entities to
which it relates as of its date and each of the statements of income and of
changes in stockholders' equity and of cash flows, contained or incorporated by
reference in its Reports (including in each case any related notes and
schedules), fairly presented the results of operations, stockholders' equity and
cash flows, as the case may be, of the entity or entities to which it relates
for the periods set forth therein (subject, in the case of unaudited interim
statements, to normal year-end audit adjustments that are not material in amount
or effect), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein.
(ii) The Company and each of its Subsidiaries have each timely
filed all material reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were required to
file since December 31, 1994 with (A) the OTS, (B) the Federal Deposit Insurance
Corporation (the "FDIC"), (C) any state banking commission or other regulatory
authority ("State Regulator") (collectively, the "Regulatory Agencies"), (D) the
SEC, and (E) the National Association of Securities Dealers, Inc., and (F) any
other self-regulatory organization, and have paid all fees and assessments due
and payable in connection therewith.
(h) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Company's Reports filed since December 31, 1996 and prior to the date of this
Agreement, true and complete copies of which have been provided by the Company
to the Purchaser, (i) the Company and its Subsidiaries have not incurred any
liability, except in the ordinary course of their business consistent with past
practice, (ii) the Company and its Subsidiaries have conducted their respective
-10-
businesses only in the ordinary and usual course of such businesses and (iii)
there has not been any condition, event, change or occurrence that, individually
or in the aggregate, has had, or is reasonably likely to have, a Material
Adverse Effect on the Company.
(i) TAXES. All federal, state, local and foreign tax returns required
to be filed by or on behalf of the Company or any of its Subsidiaries have been
timely filed or requests for extensions have been timely filed and any such
extension shall have been granted and not have expired, and all such filed
returns are complete and accurate in all material respects. All taxes shown on
such returns, all taxes required to be shown on returns for which extensions
have been granted, and all other taxes required to be paid by Company or any of
its Subsidiaries, have been paid in full or adequate provision has been made for
any such taxes on the Company's balance sheet (in accordance with generally
accepted accounting principles). For purposes of this Section 2.03(i), the term
"taxes" shall include all income, franchise, gross receipts, real and personal
property, real property transfer and gains, wage and employment taxes. As of the
date of this Agreement, there is no audit examination, deficiency, or refund
litigation with respect to any taxes of the Company or any of its Subsidiaries,
and no claim has been made by any authority in a jurisdiction where the Company
or any of its Subsidiaries do not file tax returns that the Company or any such
Subsidiary is subject to taxation in that jurisdiction. All taxes, interest,
additions, and penalties due with respect to completed and settled examinations
or concluded litigation relating to the Company or any of its Subsidiaries have
been paid in full or adequate provision has been made for any such taxes on the
Company's balance sheet (in accordance with generally accepted accounting
principles). The Company and its Subsidiaries have not executed an extension or
waiver of any statute of limitations on the assessment or collection of any
material tax due that is currently in effect. The Company and each of its
Subsidiaries has withheld and paid all taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party, and the Company and each
of its Subsidiaries has timely complied with all applicable information
reporting requirements under Part III, Subchapter A of Chapter 61 of the Code
and similar applicable state and local information reporting requirements.
(j) ABSENCE OF CLAIMS. No litigation, proceeding or controversy before
any court or governmental agency is pending, and there is no pending claim,
action or proceeding against the Company or any of its Subsidiaries and, to the
best of the Company's knowledge, no such litigation, proceeding, controversy,
claim or action has been threatened.
(k) ABSENCE OF REGULATORY ACTIONS. Neither the Company nor any of its
Subsidiaries is a party to any cease and desist order, written agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, federal or state governmental
authorities charged with the supervision or regulation of depository
institutions or depository institution holding companies or engaged in the
insurance of bank and/or savings and
-11-
loan deposits ("Government Regulators") nor has it been advised by any
Government Regulator that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
directive, written agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar undertaking.
(l) AGREEMENTS. (i) Except for arrangements made in the ordinary course
of business, the Company and its Subsidiaries are not bound by any material
contract (as defined in Item 601(b)(10) of Regulation S-K of the Securities Act)
to be performed after the date hereof. Except as disclosed in the Company's
Reports filed prior to the date of this Agreement, neither the Company nor any
of its Subsidiaries is a party to an oral or written (A) consulting agreement
(other than data processing, software programming and licensing contracts
entered into in the ordinary course of business) not terminable on thirty (30)
days' or less notice, (B) agreement with any executive officer or other key
employee of the Company or any of its Subsidiaries the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence of
a transaction involving the Company or any of its Subsidiaries of the nature
contemplated by this Agreement, (C) agreement with respect to any employee or
director of the Company or any of its Subsidiaries providing any term of
employment or compensation guarantee extending for a period longer than sixty
(60) days or for the payment of in excess of $10,000 per annum, (D) agreement or
plan, including any stock option plan, stock appreciation rights plan,
restricted stock plan or stock purchase plan, any of the benefits of which will
be increased, or the vesting of the benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement or (E) agreement containing
covenants that limit the ability of the Company or any of its Subsidiaries to
compete in any line of business or with any person, or that involve any
restriction on the geographic area in which, or method by which, the Company
(including any successor thereof) or any of its Subsidiaries may carry on its
business (other than as may be required bylaw or any regulatory agency).
(ii) Neither the Company nor any of its Subsidiaries is in
default under or in violation of any provision, and is not aware of any fact or
circumstance that has been or could be alleged to constitute a default or
violation, of any note, bond, indenture, mortgage, deed of trust, loan agreement
or other agreement to which it is a party or by which it is bound or to which
any of its respective properties or assets is subject.
(iii) To the best knowledge of the Company, the Company and
each of its Subsidiaries owns or possesses valid and binding license and other
rights to use without payment all patents, copyrights, trade secrets, trade
names, servicemarks and trademarks used in its businesses and neither the
Company nor any of its Subsidiaries has received any notice of conflict with
respect thereto that asserts the right of others. Each of the Company and its
Subsidiaries has performed all the obligations required to be performed by it
and are not in default under any contract, agreement, arrangement or commitment
relating to any of the foregoing.
-12-
(m) LABOR MATTERS. Neither the Company nor any of its Subsidiaries is
or has ever been a party to, or is or has ever been bound by, any collective
bargaining agreement, contract, or other agreement or understanding with a labor
union or labor organization with respect to its employees, nor is the Company or
any of its Subsidiaries the subject of any proceeding asserting that it has
committed an unfair labor practice or seeking to compel it or any such
Subsidiary to bargain with any labor organization as to wages and conditions of
employment, nor is the management of the Company aware of any strike, other
labor dispute or organizational effort involving the Company or any of its
Subsidiaries pending or threatened. The Company and its Subsidiaries are in
compliance with applicable laws regarding employment of employees and retention
of independent contractors, and are in compliance with applicable employment tax
laws.
(n) EMPLOYEE BENEFIT PLANS. The Disclosure Letter contains a complete
and accurate list of all pension, retirement, stock option, stock purchase,
stock ownership, savings, stock appreciation right, profit sharing, deferred
compensation, consulting, bonus, group insurance, severance and other benefit
plans, contracts, agreements, arrangements, including, but not limited to,
"employee benefit plans" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), incentive and welfare
policies, contracts, plans and arrangements and all trust agreements related
thereto with respect to any current or former directors, officers, or other
employees of the Company or any of its Subsidiaries (hereinafter referred to
collectively as the "Employee Plans"). All of the Employee Plans comply in all
material respects with all applicable requirements of ERISA, the Code and other
applicable laws; neither the Company nor any of its Subsidiaries has engaged in
a "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975
of the Code) which is likely to result in any penalties or taxes under Section
502(i) of ERISA or Section 4975 of the Code.) No liability, to the Pension
Benefit Guaranty Corporation or otherwise, has been or is expected by the
Company or any of its Subsidiaries to be incurred with respect to any Employee
Plan which is subject to Title IV of ERISA ("Pension Plan"), or with respect to
any "single-employer plan" (as defined in Section 4001(a)(15) of ERISA)
currently or formerly maintained by the Company or any entity which is
considered one employer with the Company under Section 4001 of ERISA or Section
414 of the Code (an "ERISA Affiliate"). No Pension Plan had an "accumulated
funding deficiency" (as defined in Section 302 of ERISA (whether or not waived))
as of the last day of the end of the most recent plan year ending prior to the
date hereof; the fair market value of the assets of each Pension Plan exceeds
the present value of the "benefit liabilities" (as defined in Section
4001(a)(16) of ERISA) under such Pension Plan as of the end of the most recent
plan year with respect to the respective Pension Plan ending prior to the date
hereof, calculated on the basis of the actuarial assumptions used in the most
recent actuarial valuation for such Pension Plan as of the date hereof; and no
notice of a "reportable event" (as defined in Section 4043 of ERISA) for which
the 30-day reporting requirement has not been waived has been required to be
filed for any Pension Plan within the 12-month period ending on the date hereof.
Neither the Company nor any Subsidiary of the Company has provided, or is
required to provide, security to any Pension Plan or to any single-employer plan
of an ERISA Affiliate pursuant to Section 401(a)(29) of the Code. Neither
-13-
the Company, its Subsidiaries, nor any ERISA Affiliate has contributed to any
"multiemployer plan", as defined in Section 3(37) of ERISA, on or after
September 26, 1980. Each Employee Plan of the Company or of any of its
Subsidiaries which is an "employee pension benefit plan" (as defined in Section
3(2) of ERISA) and which is intended to be qualified under Section 401(a) of the
Code (a "Qualified Plan") has received a favorable determination letter from the
Internal Revenue Service (the "IRS") and the Company and its Subsidiaries are
not aware of any circumstances likely to result in revocation of any such
favorable determination letter. Each Qualified Plan which is an "employee stock
ownership plan" (as defined in Section 4975(e)(7) of the Code) has satisfied all
of the applicable requirements of Sections 409 and 4975(e)(7) of the Code and
the regulations thereunder in all material respects and any assets of any such
Qualified Plan that are not allocated to participants' individual accounts are
pledged as security for, and may be applied to satisfy, any securities
acquisition indebtedness. There is no pending or threatened litigation,
administrative action or proceeding relating to any Employee Plan. There has
been no announcement or commitment by the Company or any Subsidiary of the
Company to create an additional Employee Plan, or to amend an Employee Plan
except for amendments required by applicable law which do not materially
increase the cost of such Employee Plan; and the Company and its Subsidiaries do
not have any obligations for post-retirement or post-employment benefits under
any Employee Plan that cannot be amended or terminated upon no more than sixty
(60) days' notice without incurring any liability thereunder. With respect to
the Company or any of its Subsidiaries, except as specifically identified in the
Disclosure Letter, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in any
payment or series of payments by the Company or any Subsidiary of the Company to
any person which is an "excess parachute payment" (as defined in Section 280G of
the Code), increase or secure (by way of a trust or other vehicle) any benefits
payable under any Employee Plan other than a Pension Plan, or accelerate the
time of payment or vesting of any such benefit. With respect to each Employee
Plan, the Company has supplied to the Purchaser a true and correct copy of (A)
the annual report on the applicable form of the Form 5500 series filed with the
IRS for the most recent plan years, (B) such Employee Plan, including amendments
thereto, (C) each trust agreement, insurance contract or other funding
arrangement relating to such Employee Plan, including amendments thereto, (D)
the most recent summary plan description and material employee communication for
such Employee Plan, including amendments thereto, if the Employee Plan is
subject to Title I of ERISA, (E) the most recent actuarial report or valuation
if such Employee Plan is a Pension Plan and (F) the most recent determination
letter issued by the IRS if such Employee Plan is a Qualified Plan.
(o) TITLE TO ASSETS. The Company and each of its Subsidiaries has good
and marketable title to its properties and assets other than property as to
which it is lessee, in which case the related lease is valid and in full force
and effect. Each lease pursuant to which the Company or any of its Subsidiaries
is lessor is valid and in full force and effect and no lessee under any such
lease is in default or in violation of any provisions of any such lease. All
material tangible properties of the Company and each of its Subsidiaries are in
a good state of maintenance and
-14-
repair, conform with all applicable ordinances, regulations and zoning laws and
are considered by the Company to be adequate for the current business of the
Company and its Subsidiaries.
(p) COMPLIANCE WITH LAWS. The Company and each of its Subsidiaries has
all permits, licenses, certificates of authority, orders and approvals of, and
has made all filings, applications and registrations with, federal, state, local
and foreign governmental or regulatory bodies that are required in order to
permit it to carry on its business as it is presently conducted; all such
permits, licenses, certificates of authority, orders and approvals are in full
force and effect, and, to the best knowledge of the Company, no suspension or
cancellation of any of them is threatened. Since the date of its incorporation,
the corporate affairs of the Company have not been conducted in violation of any
law, ordinance, regulation, order, writ, rule, decree or approval of any
Governmental Entity. The business of the Company and its Subsidiaries are not
being conducted in violation of any law, ordinance, regulation, order, writ,
rule or decree approval of any Governmental Entity.
(q) FEES. Other than financial advisory services performed for the
Company by Holder and Associates, pursuant to an agreement, true and complete
copies of which have been previously delivered to the Purchaser, neither the
Company nor any of its Subsidiaries, nor any of their respective officers,
directors, employees or agents, has employed any broker or finder or incurred
any liability for any financial advisory fees, brokerage fees, commissions, or
finder's fees, and no broker or finder has acted directly or indirectly for the
Company or any Subsidiary of the Company, in connection with the Agreement or
the transactions contemplated hereby. The Company shall not be liable for any
financial services advisory fees incurred by the Purchaser.
(r) ENVIRONMENTAL MATTERS. (i) With respect to the Company and each of
its Subsidiaries:
(A) Each of the Company and its Subsidiaries, the
Participation Facilities, and the Loan Properties (each as defined
below) are, and have been, in substantial compliance with all
Environmental Laws (as defined below);
(B) There is no suit, claim, action, demand,
executive or administrative order, directive, investigation or
proceeding pending or threatened, before any court, governmental agency
or board or other forum against it or any of its Subsidiaries or any
current or former Participation Facility (as defined in Section
2.03(r)(ii)) (x) for alleged noncompliance (including by any
predecessor) with, or liability under, any Environmental Law or (y)
relating to the Release (defined below) into the environment of any
Hazardous Material (as defined below), whether or not occurring at or
on a site owned, leased or operated by it or any of its Subsidiaries or
any Participation Facility;
-15-
(C) To the Company's knowledge, there is no suit,
claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending or threatened, before any court,
governmental agency or board or other forum relating to or against any
Loan Property (as defined in Section 2.03(r)(ii)) (or the Company or
any of its Subsidiaries in respect of such Loan Property) (x) relating
to alleged noncompliance (including by any predecessor) with, or
liability under, any Environmental Law or (y) relating to the Release
into the environment of any Hazardous Material whether or not occurring
at or on a site owned, leased or operated by a Loan Property;
(D) To the Company's knowledge, there is no
reasonable basis for any suit, claim, action, demand, executive or
administrative order, directive or proceeding of
a type described in Section 2.03(r)(i)(B) or (C);
(E) To the Company's knowledge, the properties
currently or formerly owned or operated by the Company or any of its
Subsidiaries (including, without limitation, soil, groundwater or
surface water on, under or adjacent to the properties, and buildings
thereon) do not contain any Hazardous Material other than in compliance
with applicable Environmental Law; PROVIDED, HOWEVER, that with respect
to properties formerly owned or operated by the Company or any of its
Subsidiaries, such representation is limited to the period the Company
or any such Subsidiary owned or operated such properties;
(F) None of the Company or any of its Subsidiaries
has received any notice, demand letter, executive or administrative
order, directive or request for information from any federal, state,
local or foreign governmental entity or any third party relating to
Hazardous Materials or Remediation (defined below) thereof or
indicating that it may be in violation of, or liable under, any
Environmental Law, other environmental conditions in connection with
the Loan Properties, or any actual or potential administrative or
judicial proceedings in connection with any of the foregoing;
(G) To the Company's knowledge, there are no
underground storage tanks on, in or under any properties currently or
formerly owned or operated by the Company or any of its Subsidiaries,
any Participation Facility or any Loan Property and no underground
storage tanks have been closed or removed from any properties currently
or formerly owned or operated by the Company or any of its
Subsidiaries, any Participation Facility or any Loan Property which are
or have been in the ownership of the Company or any of its
Subsidiaries; PROVIDED, HOWEVER, that with respect to properties
formerly owned or operated by the Company or any of its Subsidiaries,
such representation is limited to the period the Company or any such
Subsidiary owned or operated such properties;
-16-
(H) To the Company's knowledge, during the period of
(l) the Company or any of its Subsidiaries' ownership or operation of
any of their respective current or formerly owned properties, (m) the
Company's or any of its Subsidiaries' participation in the management
of any Participation Facility, or (n) its or any of its Subsidiaries'
holding of a security interest in a Loan Property, there has been no
Release and there is currently no threatened Release of Hazardous
Material in, on, under, affecting or migrating to such properties;
PROVIDED, HOWEVER, that with respect to properties formerly owned or
operated by the Company or any of its Subsidiaries, such representation
is limited to the period the Company or any such Subsidiary owned or
operated such properties. To the Company's knowledge, prior to the
period of (x) the Company's or any of its Subsidiaries' ownership or
operation of any of their respective current properties, (y) the
Company's or any of its Subsidiaries' participation in the management
of any Participation Facility, or (z) the Company's or any of its
Subsidiaries' holding of a security interest in a Loan Property, there
was no Release of Hazardous Material in, on, under, affecting or
migrating to any such property, Participation Facility or Loan
Property.
(ii) The following definitions apply for purposes of this
Section 2.03(r): (u) "Loan Property" means any property in which the applicable
party (or a Subsidiary of it) holds a security interest, and, where required by
the context, includes the owner or operator of such property, but only with
respect to such property and is limited to those properties securing loans
identified in the Disclosure Letter as "foreclosed loans," "impaired loans" or
"non-performing loans", (v) "Participation Facility" means any facility in which
the applicable party (or a Subsidiary of it) participates in the management
(including all property held as trustee or in any other fiduciary capacity) and,
where required by the context, includes the owner or operator of such property,
but only with respect to such property; (w) "Environmental Law" means (i) any
federal, state or local law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, legal doctrine, order,
directive, executive or administrative order, judgment, decree, injunction,
requirement or agreement with any governmental entity, (A) relating to the
protection, preservation or restoration of the environment (which includes,
without limitation, air, water vapor, surface water, groundwater, drinking water
supply, structures, soil, surface land, subsurface land, plant and animal life
or any other natural resource), or to human health or safety, or (B) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of, Hazardous Materials, in each case as amended and as now in effect, including
all current Environmental Laws, regulations and the like addressing similar
issues. The term Environmental Law includes, without limitation, the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act, the Federal Water Pollution
Control Act of 1972, the Federal Clean Air Act, the Federal Clean Water Act, the
Federal Resource Conservation and Recovery Act of 1976 (including, but not
limited to, the Hazardous and Solid Waste Amendments thereto and Subtitle I
relating to underground storage tanks), the Federal Solid Waste Disposal and the
Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and
-17-
Rodenticide Act, the Federal Occupational Safety and Health Act of 1970, the
Federal Hazardous Substances Transportation Act, the Emergency Planning and
Community Right-To-Know Act, the Safe Drinking Water Act, the Endangered Species
Act, the National Environmental Policy Act, the Rivers and Harbors Appropriation
Act or any so-called "Superfund" or "Superlien" law, each as amended and as now
in effect, (ii) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence, nuisance,
trespass and strict liability) that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Material and (iii) any present federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law: conditioning transfer of property upon a negative declaration or
other approval of a governmental authority of the environmental condition of the
property; requiring notification or disclosure of Releases of Hazardous
Substances or other environmental condition of the Loan Property to any
governmental authority or other person or entity, whether or not in connection
with transfer of title to or interest in property; imposing conditions or
requirements in connection with permits or other authorization for lawful
activity; relating to nuisance, trespass or other causes of action related to
the Loan Property; and relating to wrongful death, personal injury, or property
or other damage in connection with any physical condition or use of the Loan
Property; (x) "Hazardous Material" means any substance (whether solid, liquid or
gas) which is or could be detrimental to human health or safety or to the
environment, currently or hereafter listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any
Environmental Law, whether by type or by quantity, including any substance
containing any such substance as a component. Hazardous Material includes,
without limitation, any toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste, industrial
substance, extremely hazardous wastes, or words of similar meanings or
regulatory effect under any present Environmental Laws, including, but not
limited to, oil or petroleum or any derivative or by-product thereof, radon,
radioactive material, asbestos, asbestos-containing material, urea formaldehyde
foam insulation, lead and polychlorinated biphenyl, flammables and explosives;
(y) "Release" of any Hazardous Material includes, but is not limited to, any
release, deposit, discharge, emission, leaking, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or other
movement of Hazardous Materials; and (z) "Remediation" includes, but is not
limited to, any response, remedial, removal, or corrective action, any activity
to cleanup, detoxify, decontaminate, contain or otherwise remediate any
Hazardous Material, any actions to prevent, cure or mitigate any Release of
Hazardous Materials, any action to comply with any Environmental Laws or with
any permits issued pursuant thereto, any inspection, investigation, study,
monitoring, assessment, audit, sampling and testing, laboratory or other
analysis, or evaluation relating to any Hazardous Materials.
(s) LOAN PORTFOLIO; ALLOWANCE; ASSET QUALITY. (i) With respect to each
loan owned by the Company or its Subsidiaries in whole or in part (each, a
"Loan"), to the best knowledge of the Company:
-18-
(A) the note and the related security documents are each
legal, valid and binding obligations of the maker or obligor thereof,
enforceable against such maker or obligor in accordance with their
terms;
(B) neither the Company nor any of its Subsidiaries nor any
prior holder of a Loan has modified the note or any of the related
security documents in any material respect or satisfied, canceled or
subordinated the note or any of the related security documents except
as otherwise disclosed by documents in the applicable Loan file;
(C) the Company or a Subsidiary is the sole holder of legal
and beneficial title to each Loan (or the Company or its Subsidiary's
applicable participation interest, as applicable);
(D) the note and the related security documents, copies of
which are included in the Loan files, are true and correct copies of
the documents they purport to be and have not been suspended, amended,
modified, canceled or otherwise changed except as otherwise disclosed
by documents in the applicable Loan file;
(E) there is no pending or threatened condemnation proceeding
or similar proceeding affecting the property which serves as security
for a Loan;
(F) there is no litigation or proceeding pending or
threatened, relating to the property which serves as security for a
Loan that would have a material adverse effect upon the related Loan;
(G) with respect to a Loan held in the form of a
participation, the participation documentation is legal, valid, binding
and enforceable and the interest in such Loan of the Company or its
Subsidiaries created by such participation would not be a part of the
insolvency estate of the Loan originator or other third party upon the
insolvency thereof; and
(H) each Loan secured by a mortgage on residential property
(except for construction loans) was originated by a bank, thrift, other
HUD-approved lender, licensed mortgage broker or insurance company.
(ii) The allowance for possible losses reflected in the
Company's audited statement of condition at December 31, 1996 was, and the
allowance for possible losses shown on the balance sheets in its Reports for
periods ending after December 31, 1996 have been and will be, adequate, as of
the dates thereof, under generally accepted accounting principles applicable to
federal savings banks and federal savings and loan holding companies
consistently applied.
-19-
(iii) The Disclosure Letter sets forth, as of the date of this
Agreement, by category the amounts of all loans, leases, advances, credit
enhancements, other extensions of credit, commitments and interest-bearing
assets of the Company and its Subsidiaries that have been classified by any
officer of the Company Bank responsible for loan review or by any bank examiner
as "Other Loans Specially Mentioned," "Special Mention," "Substandard,"
"Doubtful," "Loss," "Classified," "Criticized," "Credit Risk Assets," "Concerned
Loans" (in the latter two cases, to the extent available) or words of similar
import, and the Company and its Subsidiaries shall promptly after the end of any
month inform the Purchaser of any such classification arrived at any time after
the date hereof. The Other Real Estate Owned ("OREO") included in any
non-performing assets of the Company or any of its Subsidiaries is carried net
of reserves at the lower of cost or fair value based on current independent
appraisals or current management appraisals; PROVIDED, HOWEVER, that "current"
shall mean within the past 12 months.
(t) DEPOSITS. None of the deposits of the Company or any of its
Subsidiaries is a "brokered" deposit or subject to any encumbrance, legal
restraint or other legal process except to the extent any such deposits serve as
collateral for any Loan.
(u) ANTITAKEOVER PROVISIONS INAPPLICABLE. The Company and its
Subsidiaries have taken all actions required to exempt the Company, the Company
Bank, the Agreement and the Merger from any provisions of an antitakeover nature
in their charters and bylaws and the provisions of any federal or state
"antitakeover," "fair price," "moratorium," "control share acquisition" or
similar laws or regulations.
(v) MATERIAL INTERESTS OF CERTAIN PERSONS. No officer or director of
the Company, or any "associate" (as such term is defined in Rule 12b-2 under the
Exchange Act) of any such officer or director, has any material interest in any
material contract or property (real or personal), tangible or intangible, used
in or pertaining to the business of the Company or any of its Subsidiaries. No
such interest has been created or modified since the date of the last regulatory
examination of the Company Bank.
(w) INSURANCE. The Company and its Subsidiaries are presently insured,
and since December 31, 1993, have been insured, for reasonable amounts with
financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by the Company and its Subsidiaries are in full force and effect, the
Company and its Subsidiaries are not in default thereunder and all material
claims thereunder have been filed in due and timely fashion. In the best
judgment of the Company's management, such insurance coverage is adequate.
(x) INVESTMENT SECURITIES. (i) Except for investments in Federal Home
Loan Bank Stock and pledges to secure Federal Home Loan Bank borrowings and
reverse repurchase agreements
-20-
entered into in arms-length transactions pursuant to normal commercial terms and
conditions and entered into in the ordinary course or business, none of the
investments reflected in the investment report as of June 30, 1997 to the
Company's or the Company Bank's Board of Directors, a copy of which is attached
to the Disclosure Letter, and none of the investments made by it or any of its
Subsidiaries since June 30, 1997, is subject to any restriction (contractual,
statutory or otherwise) that would materially impair the ability of the entity
holding such investment freely to dispose of such investment at any time.
(ii) Except as set forth in the Disclosure Letter, neither the
Company nor any Subsidiary is a party to or has agreed to enter into an
exchange-traded or over-the-counter equity, interest rate, foreign exchange or
other swap, forward, future, option, cap, floor or collar or any other contract
that is not included on the consolidated statements of condition and is a
derivative contract (including various combinations thereof) (each, a
"Derivatives Contract") or owns securities that (A) are referred to generically
as "structured notes," "high risk mortgage derivatives," "capped floating rate
notes" or "capped floating rate mortgage derivatives" or (B) are likely to have
changes in value as a result of interest or exchange rate changes that
significantly exceed normal changes in value attributable to interest or
exchange rate changes, except for those Derivatives Contracts and other
instruments legally purchased or entered into in the ordinary course of
business, consistent with safe and sound banking practices and regulatory
guidance, and listed (as of the date hereof) in the Disclosure Letter or
disclosed in its Reports filed on or prior to the date hereof.
(y) REGISTRATION OBLIGATIONS. Neither the Company nor any of its
Subsidiaries is under any obligation, contingent or otherwise, to register any
of its securities under the Securities Act or the OTS Regulations.
(z) INDEMNIFICATION. Except as provided in the Company's Employment
Agreements or the articles of incorporation or charter, as applicable, or bylaws
of the Company or any Subsidiary, neither the Company nor any Subsidiary is a
party to any indemnification agreement with any of its present or future
directors, officers, employees, agents or other persons who serve or served in
any other capacity with any other enterprise at the request of the Company (a
"Covered Person"), and, except as set forth in the Disclosure Letter, to the
best knowledge of the Company, there are no claims for which any Covered Person
would be entitled to indemnification under the charter or bylaws of the Company
or any Subsidiary of the Company, applicable law regulation or any
indemnification agreement.
(aa) BOOKS AND RECORDS. The books and records of the Company and its
Subsidiaries have been, and are being, maintained in accordance with applicable
legal and accounting requirements and reflect in all material respects the
substance of events and transactions that should be included therein.
-21-
(bb) CORPORATE DOCUMENTS. The Company has delivered to the Purchaser
true and complete copies of its articles of incorporation and bylaws and the
federal stock charter and bylaws of the Company Bank. The minute books of the
Company and of each of its Subsidiaries constitute a complete and correct record
of all actions taken by the respective boards of directors (and each committee
thereof) and the stockholders of the Company and each of its Subsidiaries.
(cc) LIQUIDATION ACCOUNT. Neither the Merger nor the Bank Merger will
result in any payment or distribution payable out of the Liquidation Account of
the Company Bank.
(dd) DISCLOSURE. To the knowledge of the Company, all material facts
relating to the business, results of operations, financial condition,
properties, assets, liabilities (contingent or otherwise) and prospects of the
Company have been disclosed to the Purchaser in, or in connection with, this
Agreement. No representation or warranty contained in this Agreement, and no
statement contained in any certificate, annex, list, letter or other writing
furnished to the Purchaser pursuant to the provisions hereof, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements herein or therein not misleading. No information
material to the Merger and which is necessary to make the representations and
warranties herein contained not misleading, has been withheld from, or has not
been made available to, the Purchaser.
SECTION 2.04 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. Subject
to Sections 2.01 and 2.02 the Purchaser represents and warrants to the Company
that:
(a) CORPORATE ORGANIZATION AND QUALIFICATION. (i) The Purchaser is a
corporation duly incorporated and validly existing under the laws of the State
of Iowa. The Purchaser Bank is a savings bank duly incorporated, validly
existing and in good standing under the laws of the United States of America.
Each of the Purchaser and the Purchaser Bank is in good standing as a foreign
corporation in each jurisdiction where the properties owned, leased or operated,
or the business conducted, by it requires such qualification. The Purchaser and
the Purchaser Bank each has the requisite corporate and other power and
authority (including all federal, state, local and foreign government
authorizations) to carry on its respective businesses as they are now being
conducted and to own their respective properties and assets. The Purchaser owns
all of the shares of capital stock of the Purchaser Bank.
(ii) MERGER SUB. Merger Sub will, at the Effective Time, be a
corporation duly incorporated and validly existing under the laws of the State
of Iowa. At the Effective Time, the Purchaser will have received all requisite
approvals of government authorities to own, and the Purchaser will own, all of
the outstanding capital stock of Merger Sub.
(b) AUTHORITY. Each of the Purchaser and the Purchaser Bank has the
requisite corporate power and authority and has taken all corporate action
necessary in order to execute and
-22-
deliver this Agreement and to consummate the transactions contemplated hereby.
This Agreement is a valid and binding agreement of the Purchaser and the
Purchaser Bank enforceable against the Purchaser and the Purchaser Bank in
accordance with its terms.
(c) NO VIOLATIONS. The execution, delivery and performance of this
Agreement by the Purchaser or the Purchaser Bank do not, and the consummation of
the transactions contemplated hereby will not, constitute (i) a breach or
violation of, or a default under, any law, rule or regulation or any judgment,
decree, order, governmental permit or license, or agreement, indenture or
instrument of the Purchaser or the Purchaser Bank or to which the Purchaser or
the Purchaser Bank (or any of their respective properties) is subject, or enable
any person to enjoin the Merger or the other transactions contemplated hereby,
(ii) a breach or violation of, or a default under, the articles of incorporation
or bylaws of the Purchaser or the charter or bylaws of the Purchaser Bank or
(iii) a breach or violation of, or a default under (or an event which with due
notice or lapse of time or both would constitute a default under), or result in
the termination of, accelerate the performance required by, or result in the
creation of any lien, pledge, security interest, charge or other encumbrance
upon any of the properties or assets of the Purchaser or the Purchaser Bank
under, any of the terms, conditions or provisions of any note, bond, indenture,
deed of trust, loan agreement or other agreement, instrument or obligation to
which the Purchaser or the Purchaser Bank is a party, or to which any of their
respective properties or assets may be bound or affected; and the consummation
of the transactions contemplated hereby will not require any approval, consent
or waiver under any such law, rule, regulation, judgment, decree, order,
governmental permit or license or the approval, consent or waiver of any other
party to any such agreement, indenture or instrument, other than (i) the
required approvals, consents and waivers of governmental authorities referred to
in Section 5.01(b). The Purchaser knows of no reason why the approvals, consents
and waivers of governmental authorities referred to in Section 5.01(b) should
not be obtained without the imposition of any material conditions or
restrictions.
(d) CONSENTS. Except as referred to herein or in connection, or in
compliance, with the provisions of the HSR Act, the Securities Act, the Exchange
Act, the HOLA, the Bank Merger Act, as amended, the FDIA, the rules and
regulations of the OTS, and the environmental, corporation, securities or blue
sky laws or regulations of the various states, no filing or registration with,
or authorization, consent or approval of, any other party is necessary for the
consummation by the Purchaser of the Merger or the Bank Merger or the other
transactions contemplated by this Merger Agreement. The Purchaser knows of no
reason why the approvals, consents and waivers of governmental authorities
referred to in this Section 2.04(d) should not be obtained without the
imposition of any material condition or restriction.
(e) ABSENCE OF CLAIMS. No litigation, proceeding or controversy before
any court or governmental agency is pending, and there is no pending claim,
action or proceeding against the Purchaser or any of its Subsidiaries, which is
reasonably likely, individually or in the aggregate, to materially hinder or
delay consummation of the transactions contemplated hereby, and, to the
-23-
best of the Purchaser's knowledge, no such litigation, proceeding, controversy,
claim or action has been threatened.
(f) ABSENCE OF REGULATORY ACTIONS. Excluding reports of examination by
Regulatory Agencies, neither the Purchaser nor any of its Subsidiaries is a
party to any cease and desist order, written agreement or memorandum of
understanding with, or a party to any commitment letter or similar written
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from any Government Regulator, nor has it
been advised by any Governmental Regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such order, directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter or similar written
undertaking.
(g) ACCESS TO FUNDS. The Purchaser and the Purchaser Bank have, or on
the Closing Date will have, access to all funds necessary to consummate the
Merger and pay the aggregate Merger Consideration.
(h) FEES. Other than the financial advisory services performed for the
Purchaser by Xxxxxxx Xxxx & Company, neither the Purchaser nor any of its
Subsidiaries, nor any of their respective officers, directors, employees or
agents, has employed any broker or finder or incurred any liability for any
financial advisory fees, brokage fees, commissions, or finder's fee, and no
broker or finder has acted directly or indirectly for the purchase of any
Subsidiary of the Purchaser, in connection with the Agreement or the
transactions contemplated hereby. The Purchaser shall not be liable for any
financial services advisory fees incurred by the Company.
ARTICLE III
CONDUCT PENDING THE MERGER
SECTION 3.01 CONDUCT OF THE COMPANY'S BUSINESS PRIOR TO THE EFFECTIVE
TIME.
(a) GENERAL. Except as expressly provided in this Agreement, during the
period from the date of this Agreement to the Effective Time, the Company shall,
and shall cause its Subsidiaries to, (i) conduct its business in the usual,
regular and ordinary course consistent with prudent banking practice; (ii)
maintain and preserve intact its business organization, properties, leases,
employees and advantageous business relationships and retain the services of its
officers and key employees, (iii) take no action which would adversely affect or
delay the ability of the Company, the Company Bank, the Purchaser or the
Purchaser Bank to perform their covenants and agreements on a timely basis under
this Agreement, (iv) take no action which would adversely affect or delay the
ability of the Company, the Company Bank, the Purchaser or the Purchaser Bank to
obtain any necessary approvals, consents or waivers of any governmental
authority
-24-
required for the transactions contemplated hereby or which would reasonably be
expected to result in any such approvals, consents or waivers containing any
material condition or restriction, and (v) take no action that results in or is
reasonably likely to have a Material Adverse Effect on the Company, except that
any actions taken by the Company or the Company Bank pursuant to the written
request of the Purchaser shall not be deemed to have a Material Adverse Effect
on the Company.
(b) FORBEARANCE BY THE COMPANY. Without limiting the covenants set
forth in Section 3.01(a) hereof, during the period from the date of this
Agreement to the Effective Time the Company shall not, and shall not permit any
of its Subsidiaries, without the prior written consent
of the Purchaser, to:
(i) change any provisions of the articles of incorporation or
bylaws of the Company, the federal stock charter or bylaws of the Company Bank
or any similar governing documents of the Subsidiaries;
(ii) issue any shares of capital stock; issue, grant or sell
any option warrant, call, commitment, stock appreciation right, right to
purchase or agreement of any character relating to the authorized or issued
capital stock of the Company or any Subsidiary of the Company; adjust, split,
combine or reclassify any capital stock; make, declare or pay any dividend or
make any other distribution on, or directly or indirectly redeem, purchase or
otherwise acquire, any shares of the Company's capital stock or any securities
or obligations convertible into or exchangeable for any shares of the Company's
capital stock; PROVIDED, HOWEVER, that this Section 3.01(b)(ii) shall not
prohibit any capital distribution in the form of a cash dividend paid by the
Company Bank to the Company in accordance with all applicable law and
regulation, including without limitation any such distribution made pursuant to
Section 4.13 hereof;
(iii) other than in the ordinary course of business consistent
with past practice and pursuant to policies currently in effect, sell, transfer,
mortgage, encumber or otherwise dispose of any of its properties, leases or
assets having a book value in excess of $20,000 to any individual, corporation
or other entity other than a direct or indirect wholly owned Subsidiary of the
Company, or cancel, release or assign any indebtedness of any such person,
except (A) pursuant to contracts or agreements in force at the date of this
Agreement and which have been described to Purchaser; or (B) with respect to the
sale of OREO, the limitations in this Section 3.01(b)(iii) shall apply to
properties having a book value in excess of $100,000;
(iv) except to the extent required by law or specifically
provided for elsewhere herein, increase in any manner the compensation or fringe
benefits of any of its employees or directors, except for general salary
increases in the ordinary course of business consistent with past practice
(other than employees who have employment agreements or change in control or
retention agreements with the Company or the Company Bank) not to exceed 3.5% in
the
-25-
aggregate, or pay any pension or retirement allowance not required by any
existing plan or agreement to any such employees or directors, or become a party
to, amend or commit itself to or fund or otherwise establish any trust or
account related to any Employee Plan (as defined in Section 2.03(n) with or for
the benefit of any employee or director; voluntarily accelerate the vesting of
any compensation or benefit; terminate or increase the costs to the Company or
any Subsidiary of any Employee Plan; hire any employee with an annual
compensation in excess of $20,000 or enter into any employment contract;
increase the compensation of any employee or director or make any discretionary
contributions to any Employee Plan.
(v) except as contemplated by Section 4.02, change its method
of accounting as in effect at December 31, 1996, except as required by changes
in generally accepted accounting principles as concurred in writing by the
Company's independent auditors;
(vi) other than U.S. government and U.S. government agency
securities with final maturities not greater than three years purchased in the
ordinary course of business consistent with past practice in individual amounts
not to exceed $500,000, make any investment either by purchase of stock or
securities, contributions to capital, property transfers, or purchase of any
property or assets of any other individual, corporation or other entity;
(vii) enter into or terminate any contract or agreement, or
make any change in any of its leases or contracts, other than with respect to
those involving aggregate payments of less than, or the provision of goods or
services with a market value of less than, $10,000 per annum;
(viii) settle any claim, action or proceeding involving any
liability of the Company or any of its Subsidiaries for money damages in excess
of $10,000 or material restrictions upon the operations of the Company or any of
its Subsidiaries;
(ix) except in the ordinary course of business and in amounts
less than $10,000, waive or release any material right or collateral or cancel
or compromise any extension of credit or other debt or claim;
(x) make, renegotiate, renew, increase, extend or purchase any
loan, lease (credit equivalent), advance, credit enhancement or other extension
of credit, or make any commitment in respect of any of the foregoing, except (A)
loans, advances or commitments made in accordance with underwriting guidelines
and not in excess of loan limitations established by either the Federal National
Mortgage Association or the Federal Home Loan Mortgage Corporation made in the
ordinary course of business consistent with past practice and made in conformity
with all applicable policies and procedures or (B) loans or advances as to which
the Company has a legally binding obligation to make such loan or advances as of
the date hereof and a description of which has been provided by the Company in
writing to the Purchaser prior to the execution of this Agreement or (C)
agricultural, commercial real estate or commercial business
-26-
loans made in the ordinary course of business consistent with past practice and
pursuant to the Company Bank's underwriting guidelines in existence as of the
date hereof and, with respect to renegotiations, renewals, increases or
extensions, in amounts not to exceed $100,000 or, with respect to new
originations or purchases, in amounts not to exceed $250,000; PROVIDED, HOWEVER,
that the Company may not make, renegotiate, renew, increase, extend or purchase
any loan that is underwritten based on either no or limited verification of
income or otherwise without full documentation customary for such a loan;
(xi) acquire or agree to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets, in each case which are
material, individually or in the aggregate, to the Company;
(xii) incur any additional borrowings beyond those reflected
in the financial statements included in the Company's or the Company Bank's
Report for the quarter ended June 30, 1997, other than short-term Federal Home
Loan Bank and Nationsbank, NA, Des Moines, Iowa borrowings consistent with past
practice, or pledge any of its assets to secure any borrowings other than as
required pursuant to the terms of borrowings of Company or any Subsidiary in
effect at the date hereof. Deposits shall not be deemed to be borrowings within
the meaning of this paragraph;
(xiii) make any capital expenditures in excess of $10,000 in
the aggregate from the date of this Agreement until the Effective Date other
than pursuant to binding commitments existing on the date hereof and other than
expenditures necessary to maintain existing assets in good repair;
(xiv) fail to maintain all its properties in repair, order and
condition no worse than on the date of this Agreement or fail to maintain
insurance until the Effective Date upon all its properties and with respect to
the conduct of its business in amount and kind as now in existence and, if not
available at rates presently paid by it, in such amount and kind as would be
appropriate in the exercise of good business judgment;
(xv) make any investment or commitment to invest in real
estate or in any real estate development project, other than real estate
acquired in satisfaction of defaulted mortgage loans and investments or
commitments approved by the Board of Directors of the Company prior to the date
of this Agreement and disclosed in writing to the Purchaser;
(xvi) except pursuant to commitments existing at the date
hereof which have previously been disclosed in writing to the Purchaser, make
any real estate loans secured by undeveloped land or real estate located outside
the State of Iowa and the State of Illinois.
-27-
(xvii) establish or make any commitment relating to the
establishment of any new branch or other office facilities;
(xviii) organize, capitalize, lend to or otherwise invest in
any Subsidiary, or invest in or acquire a 10% or greater equity or voting
interest in any firm, corporation or business enterprise; or
(xix) elect to the Board of Directors of Company any person
who is not a member of the Board of Directors of Company as of the date of this
Agreement.
The Company's representations, warranties and covenants contained in
this Agreement shall not be deemed to be untrue or breached in any respect for
any purpose as a consequence of the Company's compliance with this Section 3.01.
SECTION 3.02 CONDUCT OF THE PURCHASER'S AND THE PURCHASER BANK'S
BUSINESS PRIOR TO THE EFFECTIVE TIME. Except as expressly provided in this
Agreement, during the period from the date of this Agreement to the Effective
Time, the Purchaser shall not, and shall cause the Purchaser Bank and its other
Subsidiaries not to, (i) take any action that would cause the representation in
Section 2.04(g) to fail to be true and accurate or that would materially affect
the ability of the Purchaser and the Purchaser Bank to perform their covenants
and agreements under this Agreement or to consummate the transactions
contemplated hereby or (ii) knowingly take any action, other than action
consistent with acting in the ordinary course of business consistent with
prudent banking practice, which would materially adversely affect or delay the
ability of the Company, the Purchaser or the or the Purchaser Bank to obtain any
necessary approvals, consents or waivers of any governmental authority required
for the transactions contemplated hereby. Except as expressly provided in this
Agreement, Merger Sub shall not conduct any business prior to the Effective
Time.
SECTION 3.03 COOPERATION. The Company shall cooperate with Purchaser,
Purchaser Bank and Merger Sub in completing the transactions contemplated hereby
and shall not take, cause to be taken or agree or make any commitment to take
any action: (i) that is reasonably likely to cause any of the representations or
warranties of it that are set forth in Article II hereof not to be true and
correct, or (ii) that is inconsistent with or prohibited by Section 3.01 or
Section 3.02.
ARTICLE IV
COVENANTS
SECTION 4.01 ACQUISITION PROPOSALS. The Company agrees that neither it
nor any of its Subsidiaries nor any of the respective officers and directors of
the Company or its Subsidiaries shall, and the Company shall direct and use its
best efforts to cause its employees, agents and
-28-
representatives (including, without limitation, any investment banker, attorney
or accountant retained by it or any of its Subsidiaries) not to, (a) initiate,
solicit or encourage, directly or indirectly, any inquiries or the making of any
proposal or offer (including, without limitation, any proposal or offer to
stockholders of the Company) with respect to a merger, consolidation or similar
transaction involving, or any purchase of all or any significant portion of the
assets or any equity securities of, the Company or any of its Subsidiaries (any
such proposal or offer being hereinafter referred to as an "Acquisition
Proposal") or, (b) engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person
relating to an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal. The Company will notify
the Purchaser immediately if any such inquiries, proposals or offers are
received by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with the Company after the
date hereof. The Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. The Company will take the
necessary steps to inform the appropriate individuals or entities referred to in
the first sentence hereof, with whom the Company or its Subsidiaries, employees,
agent or representatives have had any contact with respect to the activities
described in clause (a) of such sentence within the preceding six months, of the
obligations undertaken in this Section 4.01. The Company will promptly request
each such person (other than the Purchaser) that has previously executed a
confidentiality agreement in connection with its consideration of a business
combination with the Company or any Subsidiary of the Company to return or
destroy all confidential information previously furnished to such person by or
on behalf of the Company or any of its Subsidiaries.
SECTION 4.02 CERTAIN POLICIES OF THE COMPANY. (a) At the written
request of the Purchaser, the Company shall, and shall cause the Company Bank
to, modify and change its loan, litigation, real estate valuation policies and
practices (including loan classifications and levels of reserves) and investment
and asset/liability management policies and practices after the date on which
all required federal depository institution regulatory approvals are received
and prior to the Effective Time so as to be consistent on a mutually
satisfactory basis with those of the Purchaser; PROVIDED, that such policies and
procedures are consistent with generally accepted accounting principles and all
applicable laws and regulations.
(b) The Company's representations, warranties and covenants contained
in this Agreement shall not be deemed to be untrue or breached in any respect
for any purpose as a consequence of any modifications or changes undertaken
solely on account of this Section 4.02. The Purchaser hereby agrees to hold
harmless, indemnify and defend the Company, its Subsidiaries and their
respective directors, officers and employees for any loss, claim, liability or
other damage caused by or resulting from compliance with this Section 4.02.
-29-
SECTION 4.03 EMPLOYEES AND DIRECTORS. (a) All persons who are employees
of the Company Bank or Subsidiaries, immediately prior to the Effective Time
(the "Company's Employees") shall, at the Effective Time, become employees of
the Purchaser Bank; PROVIDED, HOWEVER, that in no event shall any of the
Company's Employees be officers of the Purchaser Bank, or have or exercise any
power or duty conferred upon such an officer, unless and until duly elected or
appointed to such position in accordance with the bylaws of the Purchaser Bank.
The Purchaser Bank shall not have any duty or obligation to continue to employ
any of Company's Employees beyond the Effective Time; PROVIDED, HOWEVER, that
the Purchaser Bank will use reasonable efforts under the circumstances to place
or retain such persons after the Effective Time in positions for which they are
qualified.
(b) If it is not practical to enroll the Company's Employees as of the
Effective Time in a particular employee benefit plan or program maintained by
the Purchaser or the Purchaser Bank for the benefit of their employees (the
"Purchaser Plans"), the Purchaser or the Purchaser Bank shall continue any
comparable plan or program of the Company in effect immediately prior to the
Effective Time (the "Company Plans") for a transition period. During the
transition period, the Company's Employees shall participate in the Company
Plans which are continued, and other employees of the Purchaser and the
Purchaser Bank will participate only in the Purchaser Plans. At the end of the
transition period, the Company's Employees will be eligible to participate in a
uniform program of employee benefits applicable to all eligible employees of the
Purchaser and the Purchaser Bank.
(c) If the Company's Employees become eligible to participate in a
life, health or medical, long-term disability or other insurance plan of the
Purchaser or the Purchaser Bank, the Purchaser shall cause such plan to (A)
waive any waiting periods, proof of insurability, pre-existing condition
limitations for conditions covered under the applicable health or medical plan
of the Company and to the extent of the coverage provided by the Company
immediately prior to the Effective Time, and (B) honor any deductible,
co-insurance and out-of-pocket expenses incurred by the Company's Employees and
their beneficiaries under such plan for the portion of the calendar year
preceding participation.
(d) At the Effective Time, the Purchaser shall become the plan sponsor
of each and every employee benefit plan, deferred compensation arrangement,
stock option, bonus or incentive plan and other compensation and benefit plan
maintained by the Company immediately prior to such time. The Company agrees to
take or cause to be taken such actions as the Company or the Purchaser or the
Purchaser Bank may reasonably request to give effect to such assumption.
(e) The Purchaser and the Purchaser Bank shall assume the obligations
of the Company and Company Bank, respectively, with respect to the employment
agreement by and between the Company, the Company Bank and Xxxxx X. Xxxxx,
effective as of September [ ] , 1997, and the
-30-
consulting agreement by and between the Company, the Company Bank and Xxxxx X.
Xxxxx, effective as of September [ ], 1997.
SECTION 4.04 ACCESS AND INFORMATION. Upon reasonable notice, the
Company shall (and shall cause its Subsidiaries to) afford to the Purchaser and
its representatives (including, without limitation, directors, officers and
employees of the Purchaser and its affiliates, and counsel, accountants and
other professionals retained) such access during normal business hours
throughout the period prior to the Effective Time to the books, records
(including, without limitation, tax returns and work papers of independent
auditors), properties, personnel and to such other information as the Purchaser
may reasonably request; PROVIDED, HOWEVER, that no investigation pursuant to
this Section 4.04 shall affect or be deemed to modify any representation or
warranty made herein. The Purchaser will not, and will cause its representatives
not to, use any information obtained pursuant to this Section 4.04 for any
purpose unrelated to the consummation of the transactions contemplated by this
Agreement. Subject to the requirements of law, the Purchaser will keep
confidential, and will cause its representatives to keep confidential, all
information and documents obtained pursuant to this Section 4.04 unless such
information (i) was already known to the Purchaser or an affiliate of the
Purchaser, other than pursuant to a confidentiality agreement or other
confidential relationship, (ii) becomes available to the Purchaser or an
affiliate of the Purchaser from other sources not known by such party to be
bound by a confidentiality obligation or agreement, (iii) is disclosed with the
prior written approval of the Company or (iv) is or becomes readily
ascertainable from published information or trade sources. In the event that
this Agreement is terminated or the transactions contemplated by this Agreement
shall otherwise fail to be consummated, each party shall promptly cause all
copies of documents or extracts thereof containing information and data as to
another party hereto (or an affiliate of any party hereto) to be returned to the
party which furnished the same.
SECTION 4.05 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. The Purchaser,
the Purchaser Bank and the Company shall, and the Purchaser Bank shall cause
Merger Sub and the Company shall cause Company Bank to, (a) within forty-five
(45) days after the date hereof make (or cause to be made) any filings and
applications and provide any notices, required to be filed or provided in order
to obtain all approvals, consents and waivers of governmental authorities and
third parties necessary or appropriate for the consummation of the transactions
contemplated hereby (including the Bank Merger), (b) cooperate with one another
(i) in promptly determining what filings and notices are required to be made or
approvals, consents or waivers are required to be obtained under any relevant
federal, state or foreign law or regulation or under any relevant agreement or
other document and (ii) in promptly making any such filings and notices,
furnishing information required in connection therewith and seeking timely to
obtain any such approvals, consents or waivers and (c) deliver to the other
copies of the publicly available portions of all such filings, notices and
applications promptly after they are filed.
-31-
SECTION 4.06 ANTITAKEOVER PROVISIONS. The Company and its Subsidiaries
shall take all steps (i) to exempt or continue to exempt the Company, the
Agreement and the Merger from any provisions of an antitakeover nature in the
Company's or its Subsidiaries' charters and bylaws and the provisions of any
federal or state antitakeover laws, and (ii) upon the request of the Purchaser,
to assist in any challenge by the Purchaser to the applicability to the
Agreement or the Merger of any state antitakeover law.
SECTION 4.07 ADDITIONAL AGREEMENTS. (a) Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take promptly, or cause to be taken promptly, all actions
and to do promptly, or cause to be done promptly, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement as promptly as
practicable, including using efforts to obtain all necessary actions or
non-actions, extensions, waivers, consents and approvals from all applicable
governmental entities, effecting all necessary registrations, applications and
filings (including, without limitation, filings under any applicable state
securities laws) and obtaining any required contractual consents and regulatory
approvals.
SECTION 4.08 PUBLICITY. The initial press release announcing this
Agreement shall be a joint press release and thereafter the Company and the
Purchaser shall consult with each other in issuing any press releases or
otherwise making public statements with respect to the acquisition contemplated
hereby and in making any filings with any governmental entity or with any
national securities exchange with respect thereto.
SECTION 4.09 STOCKHOLDERS' MEETING/ACTION BY WRITTEN CONSENT. The
Company shall take all action necessary, in accordance with applicable law and
its articles of incorporation and bylaws, to convene a meeting of the holders of
Company Common Stock (the "Stockholder Meeting") as promptly as practicable for
the purpose of considering and voting on approval and adoption of this
Agreement, no later than December 31, 1997. In lieu of the Stockholder Meeting,
the Company may, consistent with Iowa law and its articles of incorporation and
bylaws, cause to be executed by the requisite number of the Company's
stockholders a written consent for the purpose of approving and adopting this
Agreement. The board of directors of the Company shall (a) recommend that the
holders of the Company Common Stock vote in favor of and approve the Merger and
adopt this Agreement, and (b) use its best efforts to solicit such approvals.
SECTION 4.10 PROXY/INFORMATION STATEMENT. As soon as practicable after
the date hereof, the Company shall prepare a proxy or information statement,
which shall be acceptable to counsel to the Purchaser, to take stockholder
action on the Merger and this Agreement (the "Proxy/Information Statement"), and
promptly mail the Proxy/Information Statement to all holders of record (as of
the applicable record date) of shares of Company Common Stock. The Company
represents and covenants that the Proxy/Information Statement and any amendment
or supplement thereto, at the date of mailing to stockholders of the Company and
the date of the Stockholder
-32-
Meeting or execution of a written consent, will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Purchaser and the Company shall
cooperate with each other in the preparation of the Proxy/Information Statement.
SECTION 4.11 NOTIFICATION OF CERTAIN MATTERS. Each party shall give
prompt notice to the others of: (a) any event or notice of, or other
communication relating to, a default or event that, with notice or lapse of time
or both, would become a default, received by it or any of its Subsidiaries
subsequent to the date of this Agreement and prior to the Effective Time, under
any contract material to the financial condition, properties, businesses or
results of operations of the Company and its Subsidiaries taken as a whole to
which the Company or any Subsidiary is a party or is subject; and (b) any event,
condition, change or occurrence which individually or in the aggregate has, or
which, so far as reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a Material Adverse Event. Each of the Company,
the Purchaser and the Purchaser Bank shall give prompt notice to the other party
of any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement.
SECTION 4.12 ADVISORY BOARD. The Purchaser agrees, promptly following
the Effective Time, to cause Xx. Xxxxxx X. Xxxxx and Xx. Xxxxxx X. Xxxxxx III,
if they are willing to serve, to be elected or appointed as members of a newly
formed advisory board, the function of which shall be to advise the Purchaser
and its Subsidiaries on deposit and lending activities in the Company's former
market area and to maintain and develop customer relationships and to otherwise
preserve and enhance the Company's franchise; PROVIDED, HOWEVER, that the
Purchaser may request the resignation of any member of the advisory board, and
such member promptly shall so resign, if the Purchaser reasonably determines
that such member has a conflict of interest that compromises such member's
ability to effectively serve as a member of the advisory board or for any other
reason that otherwise would allow for renewal of such person as a director of
the Purchaser if such person was a member of the Purchaser's board of directors.
The advisory board shall meet once every calendar quarter and terminate on the
first anniversary of the Effective Date unless re-appointed by the Purchaser's
board of directors. The members of the advisory board shall receive an initial
retainer fee of $2,000 payable at the first quarterly meeting of the advisory
board and a meeting fee of $450 per meeting attended payable at such meeting.
SECTION 4.13 PLEDGED SECURITIES. Not later than sixty (60) days from
the date hereof, the Company shall secure the release of any pledges, liens,
claims, encumbrances or restrictions existing on the capital stock of the
Company, including the return of any certificates representing any capital stock
so encumbered, the Company Bank or any of the Company's Subsidiaries, including
without limitation, the Company's pledge of the common stock of the Company Bank
to LaSalle National Bank. In order to secure the release of any such pledges,
and only for such
-33-
purpose, the Company Bank may make a capital distribution in the form of a cash
dividend to the Company in an amount up to $525,000.00, which the Company shall
then pay to LaSalle National Bank, and, in so doing, the Company Bank shall
first obtain all requisite approvals, consents and waivers from, and file all
requisite notices with, all applicable governmental authorities.
ARTICLE V
CONDITION TO CONSUMMATION
SECTION 5.01 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each party to effect the Merger shall be subject to the
fulfillment of the following conditions, none of which may be waived:
(a) this Agreement and the transactions contemplated hereby shall have
been approved by the requisite vote of the Company's stockholders in accordance
with applicable law;
(b) all necessary regulatory or governmental approvals, consents or
waivers required to consummate the transactions contemplated hereby shall have
been obtained and shall remain in full force and effect and all statutory
waiting periods in respect thereof shall have expired; and all other permits,
consents, waivers, clearances, approvals, authorizations of and filings with
regulatory or governmental bodies and any third parties which are necessary to
permit the consummation of the Merger and the other transactions contemplated
hereby shall have been obtained or made. None of the approvals or waivers
referred to herein shall contain any term or condition which (i) is unduly
burdensome to the Purchaser, (ii) materially reduces or impairs the value of the
Company and its Subsidiaries, taken as a whole, to the Purchaser or (iii) would
have a Material Adverse Effect on (x) the Company and its Subsidiaries taken as
a whole or (y) the Purchaser and its Subsidiaries taken as a whole;
(c) no party hereto shall be subject to any order, decree or injunction
of a court or agency of competent jurisdiction which enjoins or prohibits the
consummation of the Merger, the Bank Merger or any other transaction
contemplated by this Agreement, and no litigation or proceeding shall have been
instituted after the date of this Agreement relating to the transactions
contemplated by this Agreement, and no judgment, order or decree of any court
shall be in effect, and no statute or rule, and no applicable order or
regulation of any governmental agency shall be in effect that, in the reasonable
opinion of Purchaser, materially reduces or impairs the value of the Company and
its Subsidiaries to the Purchaser or its stockholders; and
(d) no statute, rule, regulation, order injunction or decree shall have
been enacted, entered, promulgated, interpreted, applied or enforced by any
governmental authority which
-34-
prohibits, restricts or makes illegal consummation of the Merger, the Bank
Merger or any other transaction contemplated by this Agreement.
SECTION 5.02 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER UNDER THIS
AGREEMENT. The obligations of the Purchaser to effect the Merger shall be
further subject to the satisfaction of the following conditions, any one or more
of which may be waived by the Purchaser:
(a) each of the obligations of the Company required to be performed by
it at or prior to the Closing pursuant to the terms of this Agreement shall have
been duly performed and complied with in all material respects and the
representations and warranties of the Company contained in this Agreement shall
be true and correct as of the date of this Agreement and as of the Effective
Time as though made at and as of the Effective Time (except as to any
representation or warranty which specifically relates to an earlier date). The
Purchaser shall have received a certificate to the foregoing effect signed by
the president and the chief financial officer of the Company;
(b) the Purchaser shall have received certificates (such certificates
to be dated as of a day as close as practicable to the date of the Closing) from
appropriate authorities as to the corporate existence of the Company and the
Company Bank;
(c) the Purchaser shall have received an opinion of Xxxxxxx Xxxxxxxx &
Wood, counsel to the Purchaser, in form and substance reasonably satisfactory to
the Purchaser substantially to the effect that:
(i) For Federal income tax purposes, the Merger will be
treated as a purchase by the Purchaser of all the outstanding shares of Company
Common Stock held by stockholders of the Company (except Dissenters' shares);
the purchase of shares of Company Common Stock by the Purchaser will be treated
as a "qualified stock purchase" within the meaning of Section 338(d) (3) of the
Code;
(ii) none of the Purchaser, Merger Sub, Company or the Company
Bank will recognize gain or loss as a result of the Purchaser's purchase of
shares of Company Common Stock from the stockholders of the Company;
(iii) Neither the Company Bank nor the Company will recognize
gain or loss as a result of the Bank Merger; and
(iv) Neither the Merger nor the Bank Merger shall cause the
Company Bank to restore to gross income any of its bad debt reserves previously
deducted pursuant to Section 593 of the Code;
-35-
(d) the Company shall have caused to be delivered to the Purchaser an
opinion, dated the date of the Closing, from the law firm of Nyemaster, Goode,
Voights, West, Xxxxxxx & X'Xxxxx, P.C. counsel to the Company, concerning such
matters as are customarily covered in transactions of the type contemplated
hereby; and
(e) the Company shall have furnished the Purchaser with such
certificates of its officers or others and such other documents to evidence
fulfillment of the conditions set forth in this Section 5.02 as the Purchaser
may reasonably request.
SECTION 5.03 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company to effect the Merger shall be further subject to the
satisfaction of the following conditions, any one or more of which may be waived
by the Company:
(a) the obligations of each of the Purchaser and the Purchaser Bank,
required to be performed by it at or prior to the Closing pursuant to the terms
of this Agreement shall have been duly performed and complied with in all
material respects and the representations and warranties of the Purchaser and
the Purchaser Bank, contained in this Agreement shall be true and correct as of
the date of this Agreement and as of the Effective Time as though made at and as
of the Effective Time (except as to any representation or warranty which
specifically relates to an earlier date). The Company shall have received a
certificate to the foregoing effect signed by the president and the chief
financial officer of the Purchaser; and
(b) the Purchaser and the Purchaser Bank shall have furnished the
Company with such certificates of its officers or others and such other
documents to evidence fulfillment of the conditions set forth in this Section
5.03 as the Company may reasonably request.
ARTICLE VI
TERMINATION
SECTION 6.01 TERMINATION. This Agreement may be terminated, and the
Merger abandoned, prior to the Effective Date, either before or after its
approval by the stockholders of the Company and the Purchaser:
(a) by the mutual consent of the Purchaser and the Company, if the
board of directors of each so determines by vote of a majority of the members of
its entire board;
(b) by the Purchaser or the Company, if its board of directors so
determines by vote of a majority of the members of its entire board, in the
event of (i) the failure of the stockholders of the Company to approve the
Agreement either at its meeting called to consider such approval or by written
consent; PROVIDED, HOWEVER, that the Company shall only be entitled to terminate
the
-36-
Agreement pursuant to this clause (i) if it has complied with its obligations
under Sections 4.09 and 4.10, or (ii) a material breach by the other party
hereto of any representation, warranty, covenant or agreement contained herein
or occurrence of any event which causes a representation or warranty to become
untrue which is not cured or not curable within 10 business days after written
notice of such breach is given to the party committing such breach by the other
party.
(c) by the Purchaser or the Company by written notice to the other
party if either (i) any approval, consent or waiver of a governmental authority
required to permit consummation of the transactions contemplated hereby shall
have been denied or (ii) any governmental authority of competent jurisdiction
shall have issued a final, unappealable order enjoining or otherwise prohibiting
consummation of the transactions contemplated by this Agreement.
(d) by the Purchaser or the Company, if its board of directors so
determines by vote of a majority of the members of its entire board, in the
event that the Merger is not consummated by April 1, 1998, unless the failure to
so consummate by such time is due to the breach of any representation, warranty
or covenant contained in this Agreement by the party seeking to terminate; or
(e) by the Purchaser by written notice to the Company in the event that
the Purchaser reasonably determines that there has occurred an event, condition,
change or occurrence which, individually or in the aggregate, has had or might
reasonably be expected to result in a Material Adverse Effect on the Company.
SECTION 6.02 EFFECT OF TERMINATION. In the event of the termination of
this Agreement by either the Purchaser or the Company, as provided above, this
Agreement shall thereafter become void and, subject to the provisions of Section
8.02, there shall be no liability on the part of any party hereto or their
respective officers or directors, except that any such termination shall be
without prejudice to the rights of any party hereto arising out of the willful
breach by any other party of any covenant or willful misrepresentation contained
in this Agreement; PROVIDED, HOWEVER, that:
(a) in recognition of the efforts, expenses and other opportunities
foregone by the Purchaser while structuring the Merger, the parties agree that
the Company shall pay to the Purchaser the termination fee of Two Hundred
Thousand and 00/100 Dollars ($200,000.00) in cash on demand after termination of
this Agreement in accordance with Section 6.01 if the holders of shares of
Company Common Stock shall not have approved the Agreement at the meeting of
such stockholders held for the purpose of voting on the Agreement, such meeting
shall not have been held or shall have been canceled prior to termination of the
Agreement or the Company's Board of Directors shall have withdrawn or modified
in a manner adverse to the Purchaser the recommendation of the Company's Board
of Directors with respect to the Agreement and the
-37-
holders of shares of Company Common Stock otherwise shall not have approved the
Agreement by written consent in accordance with Iowa law; and
(b) in recognition of the efforts, expenses and other opportunities
foregone by the Company while structuring the Merger, the parties agree that the
Purchaser shall pay to the Company the termination fee of One Hundred Thousand
and 00/100 Dollars ($100,000.00) in cash on demand after termination of this
Agreement in accordance with Section 6.01 due to the affirmative denial of the
applicable bank regulatory agencies to approve the Merger for reasons related to
the Purchaser or the Purchaser Bank.
ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME
SECTION 7.01 EFFECTIVE DATE AND EFFECTIVE TIME. Subject to the
provisions of Article V and VI, the closing of the transactions contemplated
hereby shall take place at the offices of the Purchaser located in 000 Xxxxxxx
Xxxxxx, Xxxx Xxxxx, Xxxx, xx such date (the "Closing
Date")
and such time as the Purchaser reasonably selects no later than 10 business days
after the expiration of all applicable waiting periods in connection with
approvals of governmental authorities and all conditions to the consummation of
this Agreement are satisfied or waived, or on such earlier or later date as may
be agreed by the parties, and in any event upon five business days prior written
notice to the Company. On the Closing Date, the Purchaser and the Company shall
execute articles of merger in accordance with all appropriate legal requirements
and shall immediately thereafter be filed as required by the IBCA, and the
Merger provided for herein shall become effective upon such filing or on such
date as may be specified in such certificate of merger which date is mutually
satisfactory to the Company and the Purchaser. The date of such filing or such
later effective date is herein called the "Effective Date." The "Effective Time"
of the Merger shall be as set forth in such certificate of merger.
SECTION 7.02 DELIVERIES AT THE CLOSING. Subject to the provisions of
Articles V and VI, on the Closing Date there shall be delivered to the Purchaser
and the Company the documents and instruments required to be delivered under
Article V.
ARTICLE VIII
OTHER MATTERS
SECTION 8.01 CERTAIN DEFINITIONS; INTERPRETATION. As used in this
Agreement, the following terms shall have the meanings indicated:
-38-
"material" means material to the Purchaser or the Company (as the case
may be) and its respective subsidiaries, taken as a whole.
"person" includes an individual, corporation, limited liability
company, partnership, association, trust or unincorporated organization.
When a reference is made in this Agreement to Sections, Annexes,
Exhibits or Schedules, such reference shall be to a Section of, or Annex,
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for ease of reference only
and shall not affect the meaning or interpretation of this Agreement. Whenever
the words "include", "includes", or "including" are used in this Agreement, they
shall be deemed followed by the words "without limitation." Any singular term in
this Agreement shall be deemed to include the plural, and any plural term the
singular. Any reference to gender in this Agreement shall be deemed to any other
gender.
SECTION 8.02 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties, agreements and covenants shall be deemed to be
conditions of the Agreement and shall not survive the Effective Time. If the
Agreement shall be terminated, the agreements of the parties in the last three
sentences of Section 4.04 and Section 8.06 shall survive such termination.
SECTION 8.03 WAIVER; AMENDMENT. Prior to the Effective Time, any
provision of this Agreement may be: (i) waived in writing by the party
benefitted by the provision; or (ii) amended or modified at any time (including
the structure of the transaction) by an agreement in writing between the parties
hereto approved by their respective boards of directors, except that, after the
vote by the stockholders of the Company, no amendment may be made that would
contravene any provision of the IBCA or the rules and regulations of the OTS.
SECTION 8.04 COUNTERPARTS. This Agreement may be executed in
counterparts each of which shall be deemed to constitute an original, but all of
which together shall constitute one and the same instrument.
SECTION 8.05 GOVERNING LAW. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Iowa, without regard to
conflicts of laws principles.
SECTION 8.06 EXPENSES. Each party hereto will bear all expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby.
SECTION 8.07 NOTICES. All notices, requests, acknowledgments and other
communications hereunder to a party shall be in writing and shall be deemed to
have been duly given when delivered by hand, overnight courier or facsimile
transmission (confirmed in writing) to such party
-39-
at its address or facsimile number set forth below or such other address or
facsimile transmission as such party may specify by notice to the other party
hereto.
If to the Company, to:
Xxxxxx X. Xxxxxx
Holder & Associates
0000 Xxxx Xxxxxxx Xxx
Xxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Xxx Xxxxxxxx, Esq.
Nyemaster, Goode, Voigts,
West, Xxxxxxx & X'Xxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Purchaser, Purchaser Bank or Merger Sub, to:
Xxxxx X. Xxxxxxx
North Central Bancshares, Inc.
000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxx Xxxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxxxx & Wood
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-40-
SECTION 8.08 ENTIRE AGREEMENT; ETC. This Agreement, together with the
Disclosure Letter and the Plan of Merger, represents the entire understanding of
the parties hereto with reference to the transactions contemplated hereby and
supersedes any and all other oral or written agreements heretofore made. All
terms and provisions of the Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.
Nothing in this Agreement is intended to confer upon any other person any rights
or remedies of any nature whatsoever under or by reason of this Agreement.
SECTION 8.09 ASSIGNMENT. This Agreement may not be assigned by any
party hereto without the written consent of the other parties.
-41-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
NORTH CENTRAL BANCSHARES, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Chairman, President & CEO
FIRST FEDERAL SAVINGS BANK OF FORT DODGE
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Chairman, President & CEO
VALLEY FINANCIAL CORP.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Chairman
