EXHIBIT 2
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
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THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (the "Agreement"),
dated as of the 15th day of October, 1998, is made between AMERICAN SECURITY
BANCSHARES, INC., Ville Platte, Louisiana, a Louisiana corporation ("ASB"),
XXXXXXX HOLDING COMPANY, Gulfport, Mississippi, a Mississippi corporation
("HHC"), American Security Bank of Ville Platte, Ville Platte, Louisiana, a
Louisiana state bank ("Bank"), and Xxxxxxx Bank of Louisiana, Baton Rouge,
Louisiana, a Louisiana state bank ("Xxxxxxx Bank").
The Boards of Directors of ASB, HHC, Bank and Xxxxxxx Bank have duly
approved this Agreement and have authorized the execution hereof by their
respective Presidents. ASB and Bank have directed that this Agreement be
submitted to a vote of their shareholders, in accordance with Part XI of the
Louisiana Business Corporation Law ("LCL"), and Section 6:352 of the Louisiana
Banking Laws ("LBL"), respectively, and the terms of this Agreement.
In consideration of their mutual promises and obligations, the parties
hereto adopt and make this Agreement for the merger of ASB with and into HHC and
the merger of Bank with and into Xxxxxxx Bank and prescribe the terms and
conditions of such mergers and the mode of carrying them into effect, which
shall be as follows:
ARTICLE 1
DEFINITIONS
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Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meaning to be equally applicable to both
the singular and plural forms of the terms defined):
1.1 "Agreement" shall mean this Amended and Restated Agreement and Plan of
Merger by and between ASB, HHC, Bank, and Xxxxxxx Bank and any amendments
thereto. References to Articles, Sections, Schedules and the like refer to the
Articles, Sections, Schedules and the like of this Agreement unless otherwise
indicated.
1.2 "Bank" means American Security Bank of Ville Platte, a Louisiana
banking corporation duly chartered on January 9, 1956 organized and existing
under and pursuant to the laws of the State of Louisiana and maintaining its
principal place of business and registered address at 000 X. Xxxx Xxxxxx, in
Ville Platte, Xxxxxxxxxx Xxxxxx, Xxxxxxxxx 00000.
1.3 "Business Day" shall mean a day on which Xxxxxxx Bank is open for
business and which is not a Saturday, Sunday or legal bank holiday.
1.4 "ASB" means ASB, a corporation duly chartered on January 15, 1985,
organized, and existing under and pursuant to the laws of the State of
Louisiana; maintaining its principal place of business at 000 X. Xxxx Xxxxxx in
Ville Platte, Xxxxxxxxxx Xxxxxx, Louisiana; and is a bank holding company within
the meaning of the Bank Holding Company Act of 1956, as amended.
1.5 "Closing" The closing (the "Closing") of the transactions contemplated
herein will take place at a place and on a date that is mutually agreed to by
the parties ("Closing Date") that is within five (5) days following the later of
the date of receipt of all applicable regulatory approvals relating to the
transactions contemplated herein, the expiration of all applicable statutory and
regulatory waiting periods relative thereto, the date the Registration Statement
(the "Registration Statement") filed with the SEC is declared effective, the
date the ASB shareholders approve the Agreement, or such earlier or later date
as may be agreed to by the parties. At the Closing the parties shall each
deliver to the other such evidence of the satisfaction of the conditions to the
Mergers (as defined in Section 2.1 hereof) as may reasonably be required
(including material required to be delivered under this Agreement).
1.6 "Effective Date" Immediately upon consummation of the Closing, or on
such other later date as the parties hereto may agree, the Company Merger
Agreement (as defined in Section 2.1 hereof) shall be certified, executed,
acknowledged and delivered to the Secretary of State of the State of Louisiana
(the "Secretary") for filing pursuant to and in accordance with the provisions
of Section 12:112 of the LCL. The Company Merger shall become effective as of
the date and time of issuance by the Secretary of a Certificate of Merger
relating to the Company Merger.
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Immediately upon consummation of the Closing, or on such other later date
as the parties hereto may agree, the Bank Merger Agreement (as defined in
Section 2.1 hereof) shall be certified, executed, acknowledged and delivered to
the Louisiana Office of Financial Institutions (the "OFI") for filing pursuant
to and in accordance with the provisions of Section 6:352 of the LBL. The Bank
Merger shall become effective as of the date and time specified or permitted by
the OFI in a Certificate of Merger or other written record issued by the OFI.
1.7 "FDIC" means that agency of the United States of America known as the
Federal Deposit Insurance Corporation, or any successor United States
governmental agency which insures deposits of commercial banks.
1.8 "FRB" means that agency of the United States of America which acts in
the capacity of a governmental central bank known as the Federal Reserve System
represented by actions of its Board of Governors, having regulatory authority
over bank holding companies, or any successor United States governmental agency
performing the function of exercising such regulatory authority.
1.9 "HHC" means Xxxxxxx Holding Company, a corporation duly chartered,
organized and existing under and pursuant to the laws of the State of
Mississippi; maintaining its principal place of business at Xxx Xxxxxxx Xxxxx,
xx Xxxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxxxxxx; and is a bank holding company within
the meaning of the Bank Holding Company Act of 1956, as amended.
1.10 "Xxxxxxx Bank" means Xxxxxxx Bank of Louisiana, a Louisiana banking
corporation, duly chartered, organized and existing under and pursuant to the
laws of the State of Louisiana and maintaining its principal place of business
at One American Place in Baton Rouge, East Baton Rouge Parish, Louisiana.
1.11 "OFI" means the Office of Financial Institutions of the State of
Louisiana having regulatory authority over Xxxxxxx Bank and Bank or any
successor Louisiana governmental agency exercising such regulatory authority.
1.12 "Party" shall mean HHC, Xxxxxxx Bank, ASB, or Bank and "Parties"
shall mean HHC, Xxxxxxx Bank, ASB and Bank.
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1.13 "Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
1.14 "SEC" means that agency of the United States of America known as the
Securities and Exchange Commission.
ARTICLE 2
THE MERGERS AND RELATED MATTERS
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2.1 Mergers. On the Effective Date, ASB shall be merged with and into HHC
under the Articles of Incorporation of HHC, pursuant to the provisions of this
Agreement, the provisions of and with the effect provided in, Part XI of the LCL
(the "Company Merger") and the Company Merger Agreement in substantially the
form of Exhibit A hereto (the "Company Merger Agreement"). On a date following
the Effective Date of the Company Merger on a date determined by HHC, the Bank
shall be merged with and into Xxxxxxx Bank under the Articles of Incorporation
of Xxxxxxx Bank, pursuant to the provisions of this Agreement, the provisions of
and with the effect provided in Section 6:355 of the LBL (the "Bank Merger" and
together with the Company Merger, the "Mergers") and the Bank Merger Agreement
in substantially the form of Exhibit B hereto (the "Bank Merger Agreement" and,
together with the Company Merger Agreement, the "Merger Agreements"). The
Parties expect that the Mergers will further certain of their business
objectives, including, and without limitation, the expansion of operations as a
financial institution.
2.2 The Closing.
a. The closing of the Company Merger (the "Closing") will take place,
assuming satisfaction or waiver of each of the conditions set forth in
Article 8 hereof, on the date provided in Section 1.5.
b. At the Closing (i) ASB, Bank, HHC and Xxxxxxx Bank shall each
provide to the other such proof or other indication of satisfaction of the
conditions set forth in Article 8 as the party whose obligations are
conditioned upon such satisfaction may reasonably request, (ii) the
certificates, letters and opinions required by Article 8 shall be
delivered, (iii) the appropriate officers of the parties shall complete the
execution,
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acknowledgment and delivery of the Company Merger Agreement and (iv) the
parties shall take such further action as is required to consummate the
transactions contemplated by this Agreement and the Company Merger
Agreement.
2.3 Effect of Company Merger. Upon consummation of the Company Merger,
the separate corporate existence of ASB shall cease and HHC shall continue as
the surviving corporation. The name of HHC, as the surviving corporation, shall
by virtue of the Company Merger remain unchanged. On the Effective Date, as
hereinabove provided, all of the assets and property of every kind and
character, real, personal and mixed, tangible and intangible, choses in action,
rights, and credits then owned by ASB, or which would inure to it, shall
immediately by operation of law and without any conveyance or transfer or
without any further action or deed, be vested in and become the property of HHC,
which shall have, hold, and enjoy the same in its own right as fully and to the
same extent as the same were possessed, held, and enjoyed by ASB prior to such
merger, and HHC shall be deemed to be and shall be a continuation of the
original entities and all of the rights and obligations of ASB shall remain
unimpaired, and HHC, on the Effective Date of the Company Merger shall succeed
to all such rights, obligations, duties and liabilities connected therewith.
2.4 Effect of Bank Merger. Upon consummation of the Bank Merger, the
separate corporate existence of Bank shall cease and Xxxxxxx Bank shall continue
as the surviving corporation. The name of Xxxxxxx Bank, as the surviving
corporation, shall by virtue of the Bank Merger remain unchanged. On the
Effective Date, as hereinabove provided, all of the assets and property of every
kind and character, real, personal and mixed, tangible and intangible, choses in
action, rights, and credits then owned by Bank, or which would inure to it,
shall immediately by operation of law and without any conveyance or transfer or
without any further action or deed, be vested in and become the property of
Xxxxxxx Bank, which shall have, hold, and enjoy the same in its own right as
fully and to the same extent as the same were possessed, held, and enjoyed by
Bank prior to such merger; and Xxxxxxx Bank shall be deemed to be and shall be a
continuation of the original entities and all of the rights and obligations of
Bank shall remain unimpaired, and Xxxxxxx Bank, on the Effective Date of the
Bank Merger shall succeed to all such rights, obligations, duties and
liabilities connected therewith.
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ARTICLE 3
CONVERSION OF STOCK
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3.1 Conversion of ASB Stock and Bank Stock.
a. On the Effective Date of the Company Merger, each share of the
Common Stock, $3.33 par value, of HHC ("HHC Common Stock") issued and
outstanding immediately prior to the Effective Date shall remain
outstanding and shall represent one share of Common Stock, $3.33 par value,
of HHC.
b. Except for shares of ASB Common Stock as to which dissenter's
rights have been perfected and not withdrawn or otherwise forfeited under
Section 131 of the LBCL and subject to the provisions of Section 3.2d
relating to fractional shares on the Effective Date of the Company Merger,
each share of ASB Common Stock outstanding immediately following the
Company Merger shall be converted into (i) 13.8651 shares of HHC Common
Stock and (ii) the right to receive $285.22 in cash (the "Cash Payment");
provided, however, that any holder of 25 or fewer shares of ASB Common
Stock ("De Minimus Holdings") shall be entitled to receive a cash payment
of $950.75 per ASB share (the "De Minimus Holdings Cash Payment").
c. On the effective date of the Bank Merger, each share of Common
Stock, $10.00 par value, of Bank ("Bank Common Stock") issued and
outstanding immediately prior to the effective date, shall be canceled.
3.2 Exchange of Certificates Representing ASB Common Stock
and Bank Common Stock.
a. As of the Effective Date, HHC shall deposit, or shall cause to be
deposited, with Xxxxxxx Bank Trust Department, as exchange agent (the
"Exchange Agent"), for the benefit of the holders of shares of ASB Common
Stock, for exchange in accordance with this Article 3, certificates
representing the shares of HHC Common Stock and cash (such certificates for
shares of HHC Common Stock and cash being hereinafter referred to as the
"Exchange Fund") to be issued pursuant to Section 3.1 and paid pursuant to
this Section 3.2 in exchange for outstanding shares of ASB Common Stock.
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b. Within ten business days of the Effective Date, HHC shall cause
the Exchange Agent to mail to each holder of record of a Certificate or
Certificates (other than those representing Bank Common Stock held by ASB
or other than those representing shares with respect to which the holder
thereof has perfected appraisal rights under the LCL and has not
subsequently lost, withdrawn or forfeited such rights) (i) a letter of
transmittal which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as HHC may reasonably specify and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for
certificates representing shares of HHC Common Stock, and the Cash Payment,
and cash in lieu of fractional shares or the De Minimus Holdings Cash
Payment. Upon surrender of a Certificate for cancellation to the Exchange
Agent together with such letter of transmittal, duly executed and completed
in accordance with the instructions thereto, the holder of such Certificate
shall be entitled to receive in exchange therefor either (x) a check
representing the De Minimus Holdings Cash Payment or (y) a certificate
representing that number of whole shares of HHC Common Stock and a check
representing the amount of cash, including the Cash Payment and cash in
lieu of fractional shares, if any, which such holder has the right to
receive in respect of the Certificate surrendered pursuant to Section
3.1(b), after giving effect to any required withholding tax, and the
Certificate so surrendered shall forthwith be canceled. No interest will
be paid or accrued on the value of any HHC Common Stock or cash payable to
holders of Certificates. In the event of a transfer of ownership of ASB
Common Stock which is not registered in the transfer records of ASB, either
(x) a check representing the De Minimus Holdings Cash Payment or (y) a
certificate representing the proper number of shares of HHC Common Stock,
together with a check for the cash to be paid in lieu of fractional shares,
may be issued to such a transferee if the Certificate representing such ASB
Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and to evidence
that any applicable stock transfer taxes have been paid.
c. Notwithstanding any other provisions of this Agreement, no
dividends on HHC Common Stock shall be paid with respect to any shares of
ASB Common Stock represented by a Certificate until such Certificate is
surrendered for exchange as
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provided herein. Subject to the effect of applicable laws, following
surrender of any such Certificate except for holders of De Minimus Holdings
who shall be paid the De Miniumus Holdings Cash Payment, there shall be
paid to the holder of the certificates representing whole shares of HHC
Common Stock issued in exchange therefor, without interest, (i) at the time
of such surrender, the amount of dividends or other distributions with a
record date after the Effective Date theretofore payable with respect to
such whole shares of HHC Common Stock and not paid, less the amount of any
withholding taxes which may be required thereon, and (ii) at the
appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Date but prior to surrender and a
payment date subsequent to surrender payable with respect to such whole
shares of HHC Common Stock, less the amount of any withholding taxes which
may be required thereon.
d. On or after the Effective Date, there shall be no transfers on the
stock transfer books of ASB of the shares of ASB Common Stock which were
outstanding immediately prior to the Effective Date. If, after the
Effective Date, Certificates are presented to HHC, they shall be canceled
and exchanged for either (x) the De Minimus Holdings Cash Payment, or for
(y) certificates for shares of HHC Common Stock and cash, including Cash
Payments and cash in lieu of fractional shares, if any, deliverable in
respect thereof pursuant to this Agreement in accordance with the
procedures set forth in this Article 3. Certificates surrendered for
exchange by any person constituting an "affiliate" of ASB or Bank for
purposes of Rule 145(c) under the Securities Act of 1933 (the "Securities
Act") shall not be exchanged until HHC has received a written agreement
from such person as provided in Section 5.9.
e. No fractional shares of HHC Common Stock shall be issued pursuant
hereto. In lieu of the issuance of any fractional share of HHC Common
Stock pursuant to Section 3.1(b), cash adjustments will be paid to holders
in respect of any fractional share of HHC Common Stock that would otherwise
be issuable, and the amount of such cash adjustment shall be equal to such
fractional proportion of $48.00.
f. Any portion of the Exchange Fund (including the proceeds of any
investments thereof and any shares of HHC Common Stock) that remains
unclaimed by the former
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stockholders of ASB one year after the Effective Date shall be delivered to
HHC. Any former stockholders of ASB who have not theretofore complied with
this Article 3 shall thereafter look only to HHC for payment in respect of
their shares, in any event without any interest thereon.
g. None of HHC, ASB, Xxxxxxx Bank, Bank, the Exchange Agent or any
other person shall be liable to any former holder of shares of ASB Common
Stock for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
h. 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 HHC, the posting by such person of a bond in such reasonable amount as
HHC 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 either (x) the De Minimus
Holdings Cash Payment or (y) the shares of HHC Common Stock, Cash Payment
and cash in lieu of fractional shares, and unpaid dividends and
distributions on shares of HHC Common Stock as provided in Section 3.2(c),
deliverable in respect thereof pursuant to this Agreement.
3.3 Adjustment of Exchange Ratio. In the event that, subsequent to the
date of this Agreement but prior to the Effective Date, ASB, Bank, or HHC
changes the number of shares of ASB Common Stock, Bank Common Stock or HHC
Common Stock, respectively, issued and outstanding as a result of a stock split,
reverse stock split, stock dividend, recapitalization or other similar
transaction, the HHC Common Stock, Cash Payment and De Minimus Holdings Cash
Payment amounts set forth in Section 3.1b shall be appropriately adjusted.
ARTICLE 4
ACCOUNTING AND TAX MATTERS
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4.1 Accounting Treatment. It is intended by the Parties hereto, that the
Mergers will qualify for purchase accounting treatment under generally accepted
accounting principles.
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4.2 Tax Consequences. It is the intention of the Parties hereto, that the
Mergers shall constitute reorganizations within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), and that this
Agreement shall constitute a "plan of merger" for purposes of Section 368 of the
Code.
4.3 Accounting and Tax Representations. Each Party hereto represents and
warrants that the statements made with respect to it in the Statement of
Representations attached hereto on Schedule 4.3 and made a part hereof, are true
and correct as of the date hereof and will be true and correct on the Effective
Date.
ARTICLE 5
ASB'S COVENANTS AND AGREEMENTS
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5.1 Operation of Business. Between the date hereof and the Effective
Date, or until the termination of this Agreement, ASB covenants and agrees that
it will operate its business solely in the ordinary course consistent with
prudent business practices and in compliance with all applicable laws,
regulations and rules; and, ASB will cause the Bank to operate its business
solely in the ordinary course consistent with prudent business practices and in
compliance with all applicable laws, regulations and rules; and without prior
written consent of HHC, ASB will not, and ASB will cause Bank not to:
a. Amend or otherwise change its respective articles of incorporation
or bylaws (except to the extent required in order to effect the Mergers as
contemplated herein), as each such document is in effect on the date
hereof;
b. Issue or sell, or authorize for issuance or sale, the shares of
ASB or Bank or any additional shares of any class of capital stock of ASB
or Bank (except to the extent required to effect the Mergers as
contemplated herein);
c. Issue, grant, or enter into any subscription, option, warrant,
right, convertible security, or other agreement or commitment of any
character obligating ASB or Bank to issue securities;
d. Declare, set aside, make, or pay any dividend or other
distribution with respect to its capital stock except (i) dividends to ASB
shareholders in the aggregate amount per share of (A) $29.00 times a
fraction the denominator of which is 12 and the numerator of which is the
number of whole months between December 31, 1997, and the Effective Date of
the Company Merger minus the number of whole months in respect of which
dividends are paid pursuant to clause (B), plus (B), if the Effective Date
of the Company Merger occurs after the
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record date for the payment of dividends on the Common Stock of HHC
declared with respect to periods after December 31, 1998, an amount per
share equal to the amount per share that shareholders of ASB would have
received had they been shareholders of HHC on and after such record date,
and (ii) dividends from the Bank to ASB consistent with past practices and
to enable ASB to pay the shareholder dividends permitted hereby, to pay the
change of control amounts described herein, and to pay the expenses related
to the transactions contemplated hereby.
e. Redeem, purchase, or otherwise acquire, directly or indirectly,
any of its capital stock respectively;
f. Authorize any capital expenditure(s) which, individually or in the
aggregate, exceed $20,000 other than in connection with the branch
relocations described on Schedules 5.4(h) and 5.4(m);
g. Extend any new, or renew any existing, loan, credit, lease, or
other type of financing which individually exceeds $250,000 or renew any
such type of financing which individually exceeds $100,000 and does not
meet Bank's loan policy requirements except in connection with the workout
of loans;
h. Except in the ordinary course of business, sell, pledge, dispose
of, or encumber, or agree to sell, pledge, dispose of, or encumber, any
assets of ASB or Bank;
i. Excluding normal and customary banking transactions, incur any
indebtedness for borrowed money, issue any debt securities, or enter into
or modify any contract, agreement, commitment, or arrangement with respect
thereto;
j. Impose or suffer the imposition, on any share of stock held by ASB
in the Bank, of any material lien, charge, or encumbrance, or permit any
such lien to exist;
k. Establish or add any automated teller machines or branch or other
banking offices other than as set forth on any of the schedules to this
Agreement;
l. Acquire (by merger, consolidation, lease or other acquisition of
stock, ownership interests or assets) any corporation, partnership, or
other business organization or division thereof, or enter into any
contract, agreement, commitment, or arrangement with respect to any of the
foregoing, except to the extent required in order to effect the Mergers as
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contemplated herein and except in the ordinary course of business in
connection with foreclosures or similar actions;
m. Enter into, extend, or renew any lease for office or other space
other than as contemplated in the schedules to this Agreement;
n. Except as required by law, enter into, adopt or amend any bonus,
profit sharing, compensation, stock option, pension, retirement, deferred
compensation, employment, or other employee benefit plan, agreement, trust,
fund, or arrangement for the benefit or welfare of any officer, employee or
representative of ASB or Bank, other than as contemplated in the schedules
to this Agreement; provided, however, at Closing ASB and Bank shall make
the change in control payments in the total amount of $601,209.38 to the
persons and in the amounts listed on Schedule 5.1.n.;
x. Xxxxx any increase in compensation to any director, officer, or
employee or representative of ASB or Bank except in the ordinary course of
business consistent with past practice other than as contemplated in the
schedules to this Agreement; or
p. Enter into, amend, or terminate any employment agreement,
relationship or responsibilities with any director, officer, or key
employee or representative of ASB or Bank, or enter into, amend, or
terminate any employment agreement with any other person otherwise than in
the ordinary course of business, or take any action with respect to the
grant or payment of any severance or termination pay except as expressly
consented to in writing by HHC, provided, however, prior to the Effective
Date of the Company Merger, ASB and Bank shall terminate any and all
employment contracts with the persons listed on Schedule 5.1.p. with no
liability therefor on the part of ASB or Bank;
q. Take any action or omit to take any action which would cause any
of ASB's or Bank's representations or warranties to be untrue or misleading
in any material respect (within the meaning of the first paragraph of
Article 6) or any material covenant of ASB or Bank under this Agreement
incapable of being performed; or
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r. Take any action that would materially and adversely affect the
ability of any Party hereto to obtain the approvals necessary for
consummation of the transactions contemplated hereby or that would
materially and adversely affect ASB's ability to perform its material
covenants and agreements hereunder;
s. Agree in writing or otherwise to do any of the foregoing.
5.2 Preservation of Business. Between the date hereof and the Effective
Date, ASB will, and will cause Bank to, use its best efforts to preserve its
existing business and to keep its business organization intact, including its
present relationships with its employees and customers and others having
business relations with it, except that ASB and Bank need not attempt to
preserve its relationship with XXXX.
5.3 Insurance. Pending the Closing, ASB shall cause the real property
owned by ASB and Bank to be insured reasonably against all insurable risks under
policies with reasonable deductibles and in full compliance with any co-
insurance provision.
5.4 Stockholders' Meeting. ASB will (i) take all steps necessary to call,
give notice of, convene and hold a special meeting of its shareholders as soon
as practicable for the purpose of approving this Agreement, the Merger
agreements and the transactions contemplated hereby and for such other purposes
as may be necessary or desirable, and (ii) cooperate and consult with HHC with
respect to each of the foregoing matters. Said notice shall include notice of
dissenter's rights, if any, and shall solicit stockholders' proxies in favor of
this Agreement, and all notices shall be given in accordance with all applicable
laws, regulations, and rules. Except as may be required by fiduciary
obligations, ASB and the directors of ASB and the Bank listed on Schedule 5.4
will support and vote in favor of a stockholder resolution approving this
Agreement.
5.5 Property Transfers. From time to time, as and when requested by HHC
and to the extent permitted by Louisiana law, the officers and directors of ASB
and Bank last in office shall be authorized to execute and deliver such deeds
and other instruments and shall take or cause to be taken such further or other
actions as shall be necessary in order to vest or perfect in or to confirm of
record or otherwise to HHC title to, and possession of, all the property,
interests, assets, rights, privileges, immunities, powers, franchises, and
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authorities of ASB and Bank, and otherwise to carry out the purposes of this
Agreement.
5.6 ASB and Bank Financial and Other Reports. ASB shall (and shall cause
Bank to) make available to HHC and Xxxxxxx Bank the following statements and
other reports and documents:
a. ASB's Consolidated Balance Sheets as of September 30, 1998 and
1997 (unaudited) and December 31, 1997, 1996 and 1995 (audited);
Consolidated Statements of Income and Changes in Stockholders' Equity and
Consolidated Statements of Cash Flows for the years ended December 31,
1997, 1996 and 1995 (audited) and Statements of Income for the nine-month
periods ended September 30, 1998 and 1997 (unaudited) ("ASB Financial
Statements");
b. All correspondence with the OFI, the FDIC, the FRB and the
Internal Revenue Service from January 1, 1997 through the date of Closing
except as may be restricted by legal limitations); and
c. Such additional financial or other information as may be required
for the regulatory applications and Registration Statement in connection
with the consummation of the Mergers (subject to any legal limitations).
5.7 Due Diligence. In order to afford HHC access to such information as
it may reasonably deem necessary to perform any due diligence review with
respect to the assets of ASB and Bank to be acquired as a result of the Mergers,
ASB shall (and shall cause the Bank to), upon reasonable notice, afford HHC and
its officers, employees, counsel, accountants, and other authorized
representatives access, during normal business hours throughout the period prior
to the Effective Date, to all of its and the Bank's properties; books,
contracts, commitments, loan files, litigation files and records (including, but
not limited to, the minutes of the Boards of Directors of ASB and the Bank and
all committees thereof), and it shall (and shall cause the Bank to), upon
reasonable notice and to the extent consistent with applicable law, furnish
promptly to HHC such information as HHC may reasonably request to perform such
review. All information obtained by HHC shall be subject to the Confidentiality
Agreement heretofore executed.
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5.8 No Solicitation. Prior to the Effective Date, neither ASB nor Bank
shall authorize or knowingly permit any of their officers, directors, employees,
representatives, agents or other persons controlled by ASB or Bank to directly
or indirectly, encourage or solicit or, hold any discussions or negotiations
with, or provide any information to, any persons, entity or group concerning any
merger, consolidation, sale of substantial assets, sale of shares of capital
stock or similar transactions involving, directly or indirectly, ASB or Bank
except as contemplated by this Agreement or as required by fiduciary
obligations. ASB and Bank shall promptly communicate to HHC the identity and
terms of any proposal which they may receive with respect to any such
transaction.
5.9 Affiliates. ASB, Bank and HHC shall cooperate and use their best
efforts to identify those persons who may be deemed to be "affiliates" of ASB or
Bank within the meaning of Rule 145(c) or Rule 144 (as applicable) under the
Securities Act. ASB and Bank shall use its best efforts to cause each person so
identified to deliver to HHC, not later than twenty (20) days after execution of
this Agreement, a written agreement in substantially the form set forth in
Exhibit C attached hereto. HHC shall be entitled to place appropriate legends
on the certificates evidencing shares of HHC Common Stock to be received
pursuant to this Agreement by such affiliates and to issue appropriate stop
transfer instructions to the transfer agent for HHC Common Stock.
ARTICLE 6
ASB'S REPRESENTATIONS AND WARRANTIES
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ASB represents and warrants to HHC and Xxxxxxx Bank as follows: for
purposes of this Agreement, except in Section 6.1 and where the context requires
otherwise, any reference to ASB in this Article 6 shall be deemed to include ASB
and Bank and any reference to "material," material adverse effect or a similar
standard shall refer to the financial condition, operations or other aspects of
ASB and Bank taken as a whole, except that no reduction of earnings for
stockholders' equity of ASB or Bank shall be considered material unless such
reduction is 10% or more of earnings for the comparable period after eliminating
any earnings as a consequence of XXXX, or 10% or more of stockholders' equity at
September 30, 1998.
6.1 Organization and Authority. Each of ASB and Bank is a corporation or
bank duly organized, validly existing and in good standing under the laws of the
State of Louisiana and each of ASB and
15
Bank has the corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as it is now being conducted.
6.2 Authorization. The execution, delivery and performance of this
Agreement by ASB and Bank and the consummation of the transactions contemplated
hereby have been duly authorized by the Boards of Directors of ASB and Bank,
subject to regulatory approval. No other corporate proceedings on the part of
ASB or Bank are necessary to authorize consummation of this Agreement, except
for the approval of the transaction by ASB's and Bank's stockholders, and the
performance by ASB and Bank of the terms hereof. This Agreement is a valid and
binding obligation of ASB and Bank enforceable against ASB and Bank in
accordance with its terms except as may be limited by applicable bankruptcy,
insolvency, reorganization or moratorium or other similar laws affecting
creditors' rights generally and except that the availability of equitable
remedies is within the discretion of the appropriate court and except that it is
subject to approval by its stockholders and applicable regulatory agencies.
Neither the execution, delivery or performance of this Agreement by ASB,
nor the consummation of the transactions contemplated hereby, nor compliance by
ASB with any of the provisions hereof, will (a) in any material respect violate,
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration, or
the creation of any lien, security interest, charge or encumbrance upon any of
the properties or assets of ASB or Bank under any terms, conditions or
provisions of (i) ASB's or Bank's Charter or Bylaws or other charter documents
of ASB or Bank or (ii) any material note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which ASB
or Bank is a party or by which ASB or Bank may be bound, or to which ASB or Bank
or the properties or assets of it may be subject, or (b) violate in any material
respect any judgment, ruling, order, writ, injunction, decree, statute, rule or
regulation applicable to ASB or Bank or any of its properties or assets.
6.3 Capital Structure of ASB. As of the date hereof, the authorized
capital of ASB consists solely of 90,000 shares of common stock of the par value
of $10.00 each and no preferred stock. As of the date hereof 48,467 shares of
such authorized common stock were issued and outstanding. The outstanding
shares of capital stock of
16
ASB are validly issued and outstanding, fully paid and nonassessable. There
are no outstanding options, conversion rights, warrants, calls, rights,
commitments or agreements to issue any form of stock or other security of ASB.
There are no outstanding obligations or commitments to purchase, redeem or
otherwise acquire any outstanding shares of common stock of ASB.
6.4 Ownership of Other Organizations. ASB does not own, directly or
indirectly, five percent (5%) or more of the outstanding capital stock or other
voting securities of any corporation, bank, or other organization except the
Bank. The presently authorized capital of the Bank consists solely of 90,000
shares of common stock of the par value of $10.00 each and no preferred stock.
As of the date hereof, 48,867 shares of common stock were issued and
outstanding. The outstanding shares of capital stock of the Bank are validly
issued and outstanding, fully paid and, nonassessable and, all of such shares
are owned by ASB, free and clear of all liens, claims and encumbrances (except
as provided in Section 262 of the LBL).
6.5 ASB Financial and Other Reports. ASB has made available to HHC true
and correct copies of (a) the consolidated balance sheets as of December 31,
1997, 1996 and 1995 of ASB and its consolidated subsidiaries and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for the respective years then ended, the related notes thereto, and the
report of its independent public accountants with respect thereto (the "ASB
Audited Financial Statements"), (b) the unaudited balance sheets as of September
30, 1998 and 1997 of ASB and its consolidated subsidiaries and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for the nine-month periods then ended and the related notes thereto (the
"ASB Unaudited Financial Statements"), and (c) all correspondence between ASB,
Bank including its electronic banking division (the "ASB Consolidated Group")
and the OFI, the FDIC, the FRB, the SEC and the Internal Revenue Service since
January 1, 1997, except as may be prohibited by law. ASB's Financial Statements
(i) have been prepared in accordance with generally accepted accounting
principles, consistently applied, and (ii) present fairly the consolidated
results of operations of the ASB Consolidated Group for the periods covered
thereby and the consolidated financial condition of the ASB Consolidated Group
as of the dates thereof. The latest balance sheet forming part of the ASB
Unaudited Financial Statements is referred to herein as the "ASB Latest Balance
Sheet."
17
6.6 No Material Adverse Change. Since the date of the ASB Latest Balance
Sheet, there has been no event or condition of any character (whether actual, or
to the knowledge of ASB or the Bank, threatened or contemplated) that has had or
can reasonably be anticipated to have, a material adverse effect on the
financial condition, results of operations, business or prospects of ASB and the
Bank, taken as a whole, excluding changes in laws or regulations that affect
banking institutions generally, and excluding the consequences of terminating
its XXXX relationship.
6.7 Tax Liability. The amounts set up as liabilities for taxes in the ASB
Financial Statements are sufficient for the payment of all respective taxes
which in its aggregate are material (including, without limitation, federal,
state, local, and foreign excise, franchise, property, payroll, income, capital
stock, and sales and use taxes) accrued in accordance with GAAP and unpaid at
the respective dates thereof.
6.8 Tax Returns: Payment of Taxes. All federal, state, local, and foreign
tax returns (including, without limitation, estimated tax returns, withholding
tax returns with respect to employees, and FICA and FUTA returns) required to be
filed by or on behalf of ASB or the Bank have been timely filed or requests for
extensions have been timely filed and granted and have not expired for periods
ending on or before the date of the ASB Latest Balance Sheet, and all returns
filed are complete and accurate to the best information and belief of their
respective managements and all taxes shown on filed returns have been paid other
than those returns or taxes that are not material. As of the date hereof, there
is no audit, examination, deficiency or refund litigation or matter in
controversy with respect to any taxes that might result in a determination
materially adverse to ASB or the Bank except as reserved against in the ASB
Audited or Unaudited Financial Statements. All taxes, interest, additions and
penalties due with respect to completed and settled examinations or concluded
litigation have been paid, and ASB's reserves for bad debts at December 31,
1996, as filed with the Internal Revenue Service were not greater than the
maximum amounts permitted under the provisions of Section 585 of the Code.
6.9 Litigation and Proceedings. Except as set forth on Schedule 6.9
hereto, no litigation, proceeding or controversy before any court or
governmental agency is pending against ASB that in the opinion of its management
is likely to have a material and adverse effect on the business, results of
operations or financial condition of ASB and the Bank taken as a whole, and, to
the best of its knowledge, no such
18
litigation, proceeding or controversy has been threatened or is contemplated.
6.10 Brokers' or Finders' Fees. Except for the engagement of Xxxxx, Xxxxx
Capital Partners, Inc. pursuant to the engagement letter dated as of November
25, 1997, as amended, a copy of which has been provided to HHC, no agent,
broker, investment banker, investment or financial advisor or other person
acting on behalf of ASB or the Bank or under their authority is entitled to any
commission, broker's or finder's fee from any of the Parties hereto in
connection with any of the transactions contemplated by this Agreement. The
aggregate amount of consideration to be paid Xxxxx, Xxxxx Capital Partners, Inc.
in connection with the transactions contemplated by this Agreement shall not
exceed the consideration provided in such engagement letter.
6.11 Contingent Liabilities. Except as disclosed on Schedule 6.11 hereto
or as reflected in the ASB Audited or Unaudited Financial Statements and except
in the case of the Bank for unfunded loan commitments made in the ordinary
course of business consistent with past practices, since the date of the ASB
Latest Balance Sheet neither ASB nor the Bank has any obligation or liability
(contingent or otherwise) that was material, or that when combined with all
similar obligations or liabilities would have been material, to ASB and the Bank
taken as a whole and there does not exist a set of circumstances resulting from
transactions effected or events occurring prior to, on, or after the date of the
ASB Latest Balance Sheet or from any action omitted to be taken during such
period that, to the knowledge of ASB, could reasonably be expected to result in
any such material obligation or liability.
6.12 Title to Assets; Adequate Insurance Coverage.
Except as described on Schedule 6.12:
a. As of the date of the ASB Latest Balance Sheet, ASB and the Bank
had, and except with respect to assets disposed of for adequate
consideration in the ordinary course of business since such date, now have,
good and merchantable title to all real property and good and merchantable
title to all other material properties and assets reflected in the ASB
Latest Balance Sheet, free and clear of all mortgages, liens, pledges,
restrictions, security interests, charges and encumbrances of any nature
except for (i) mortgages and encumbrances which secure indebtedness which
is properly reflected in the ASB Audited or Unaudited
19
Financial Statements or which secure deposits of public funds as required
by law; (ii) liens for taxes accrued by not yet payable; (iii) liens
arising as a matter of law in the ordinary course of business with respect
to obligations incurred after the date of the ASB Latest Balance Sheet,
provided that the obligations secured by such liens are not delinquent or
are being contested in good faith; (iv) such imperfections of title and
encumbrances, if any, as do not materially detract from the value or
materially interfere with the present use of any of such properties or
assets or the potential sale of any such owned properties or assets; and
(v) capital leases and leases, if any, to third parties for fair and
adequate consideration. ASB and the Bank own, or have valid leasehold
interests in, all material properties and assets, tangible or intangible,
used in the conduct of its business. Any real property and other material
assets held under lease by ASB or the Bank are held under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere with the use made or proposed to be made by HHC in such lease of
such property.
b. Except as disclosed on Schedule 6.12 with respect to each lease of
any real property or a material amount of personal property to which ASB or
the Bank is a party, except for financing leases in which ASB or the Bank
is lessor, (i) such lease is in full force and effect in accordance with
its terms; (ii) all rents and other monetary amounts that have been due and
payable thereunder have been paid; (iii) there exists no default or event,
occurrence, condition or act which with the giving of notice, the lapse of
time or the happening of any further event, occurrence, condition or act
would become a default under such lease; and (iv) the Company Merger will
not constitute a default or a cause for termination or modification of such
lease.
c. Neither ASB nor the Bank has any legal obligation, absolute or
contingent, to any other person to sell or otherwise dispose of any
substantial part of its assets or to sell or dispose of any of its assets
except in the ordinary course of business consistent with past practices.
d. To the knowledge and belief of its management, the policies of
fire, theft, liability and other insurance maintained with respect to the
assets or businesses of ASB and the Bank provide adequate coverage against
loss and the fidelity bonds in
20
effect as to which ASB or the Bank is named insured meet the applicable
standards of the American Bankers Association.
6.13 Liabilities. To the best knowledge and belief of its management, all
liabilities of ASB and Bank were, and will be created, for good, valuable and
adequate consideration in accordance with prudent business standards and in
substantial compliance with all laws, regulations and rules and the accounts or
evidence of ownership of accounts are and will be genuine, true, valid and
enforceable in accordance with their written terms. Neither ASB nor Bank has
agreed to any modification or extension of accounts or account terms or
otherwise made any agreements regarding such accounts except as disclosed in
writing on the books and records of ASB or Bank or which are not material; and
ASB and Bank have no knowledge of any claim of ownership to any account other
than as shown on the written ownership records of ASB and Bank for each account,
and ASB and Bank have no knowledge of any alleged improper or wrongful
withdrawal or payment of any such account.
6.14 Loans. To the best knowledge and belief of its management, each loan
reflected as an asset of ASB in the ASB Latest Balance Sheet, or acquired since
that date, is the legal, valid, and binding obligation of the obligor named
therein, enforceable in accordance with its terms, and no loan is subject to any
asserted defense, offset or counterclaim known to ASB, except as disclosed in
writing to HHC on or prior to the date hereof.
6.15 Allowance for Loan Losses. The allowances for possible loan losses
shown on the ASB Latest Balance Sheet are adequate in all material respects
under the requirements of GAAP to provide for possible losses, net of
recoveries, relating to loans previously charged off, on loans outstanding
(including accrued interest receivable) as of the date of the ASB Latest Balance
Sheet and each such allowance has been established in accordance with GAAP.
6.16 Investments. Except for investments classified as held-to-maturity as
prescribed under the Financial Accounting Standards Board Statement Number 115,
and pledges to secure public or trust deposits, none of the investments
reflected in the ASB Financial Statements under the heading "Investment
Securities," and none of the investments made by ASB or the Bank since the date
of the ASB Latest Balance Sheet, and none of the assets reflected in the ASB
Financial Statements under the heading "Cash and Due From Banks," is subject to
any restriction, whether contractual or statutory, that
21
materially impairs the ability of ASB or the Bank freely to dispose of such
investment at any time except as disclosed in Schedule 6.16. With respect to all
repurchase agreements to which ASB or the Bank is a party, ASB or the Bank, as
the case may be, has a valid, perfected first lien or security interest in the
government securities or other collateral securing each such repurchase
agreement which equals or exceeds the amount of debt secured by such collateral
under such agreement.
6.17 Information for Registration and Proxy Statements. None of the
information supplied or to be supplied by ASB for inclusion in (a) the
Registration Statement to be filed by HHC with the SEC (b) the Notice of Meeting
and Proxy Statement to be mailed by ASB to its stockholders in connection with
the meeting referred to in Section 5.4 hereof (the "Proxy Statement"), and (c)
any other documents to be filed with the SEC or any regulatory agency in
connection with the transactions contemplated hereby will, as amended or
supplemented at the time the Registration Statement is filed with the SEC or at
the time it becomes effective, at the time the Proxy Statement is mailed to
holders of ASB's stock, as may be amended at the time of ASB Stockholders'
Meeting, and at the time of filing of such other documents, respectively,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. All documents,
financial statements, or other information or materials which ASB and Bank shall
provide for filing with the SEC and any regulatory agency in connection with the
Mergers will comply with generally accepted accounting principles.
6.18 Commitments and Contracts. Neither ASB nor Bank is a party or subject
to any of the following (whether written or oral, express or implied):
a. Except as listed on Schedule 5.1.p. attached hereto and with a
complete copy provided to HHC, any employment contract (including any
obligations with respect to severance or termination pay liabilities or
fringe benefits) with any present or former officer, director, employee or
consultant (other than those which are terminable at will by ASB or Bank);
b. Except as listed on Schedule 5.1.n. attached hereto and with a
complete copy provided to HHC, any plan or contract providing for any
bonus, pension, option, deferred compensation, retirement payment, profit
sharing or similar arrangement with
22
respect to any present or former officer, director, employee or consultant;
or
c. Any contract not made in the ordinary course of business
containing covenants which limit the ability of ASB or Bank to compete in
any line of business or with any person or which involves any restriction
of the geographical area in which, or method by which, ASB or Bank may
carry on its respective business (other than as may be required by law or
applicable regulatory authorities).
6.19 Employee Plans. To the best of ASB's knowledge and belief, it, the
Bank, and all "employee benefit plans," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that
cover one or more employees employed by ASB or the Bank:
i. is in compliance with all laws, regulations, reporting and
licensing requirements and orders applicable to its business or to
such plan or any of its employees (because of such employee's
activities on behalf of it), the breach or violation of which could
have a material and adverse effect on such business; and
ii. has received no notification from any agency or department
of federal, state or local government or the staff thereof asserting
that any such entity is not in compliance with any of the statutes,
regulations or ordinances that such governmental authority enforces,
or threatening to revoke any license, franchise, permit or
governmental authorization, and is subject to no agreement with any
such governmental authority with respect to its assets or business.
6.20 Plan Liability. Except for liabilities to the Pension Benefit
Guaranty Corporation pursuant to Section 4007 of ERISA, all of which have been
fully paid in all material respects, and except for liabilities to the Internal
Revenue Service under Section 4971 of the Code, all of which have been fully
paid in all material respects, neither ASB nor the Bank has any liability to the
Pension Benefit Guaranty Corporation or to the Internal Revenue Service with
respect to any pension plan qualified under Section 401 of the Code.
6.21 Vote Required. The affirmative vote of the holders of at least two-
thirds of the voting power of ASB present, is the only vote
23
of the stockholders of ASB necessary to approve the Company Merger and related
transactions contemplated hereby. The affirmative vote of the holders of at
least two-thirds of the voting power present is the only vote of the
stockholders of Bank necessary to approve the Bank Merger and related
transactions contemplated hereby.
6.22 Continuity of Interest. To the best knowledge of ASB and Bank, there
is no plan or intention by the ASB or Bank shareholders who own 1% or more of
the ASB Common Stock or Bank Common Stock, and to the best of the knowledge of
management of ASB and Bank, there is no plan or intention on the part of the
remaining ASB or Bank shareholders to sell, exchange or otherwise dispose of a
number of shares of HHC Common Stock, to be received in the Mergers that would
reduce ASB or Bank stockholders' ownership of the HHC Common Stock to a number
of shares having a value, as of the date of the Mergers, of less than 50% of the
value of all of the formerly outstanding ASB or Bank Common Stock as of the same
date. For purposes of this representation, shares of ASB or Bank Common Stock
surrendered by dissenters or exchanged for cash in lieu of fractional shares of
ASB or Bank Common Stock will be treated as outstanding ASB or Bank Common Stock
on the date of the Mergers. Furthermore, shares of ASB or Bank Common Stock and
shares of HHC Common Stock held by ASB or Bank stockholders and otherwise sold,
redeemed, or disposed of prior to or subsequent to the Mergers are considered in
this assumption. See Schedule 4.4 for additional representations regarding
continuity of shareholder interest under Section 368(a)(1)(A) and Section
368(a)(2)(D) of the Code of 1986, as amended.
6.23 Continuity of Business Enterprise. ASB operates at least one
significant historic business line, namely, financial services, and owns at
least a significant portion of its historic business assets within the meaning
of Treasury Regulation Section 1.368-1(d).
6.24 Environmental Matters. Except as set forth on Schedule 6.24; neither
ASB nor the Bank nor, to the best knowledge of its management, any previous
owner or operator of any properties at any time owned (including any properties
owned or subsequently resold) leased, or occupied by ASB or the Bank or used by
ASB or the Bank in their respective business ("ASB Properties") used, generated,
treated, stored, or disposed of any hazardous waste, toxic substance, or similar
materials on, under, or about ASB Properties except in compliance with all
applicable federal, state, and local laws, rules and regulations pertaining to
air and water quality, hazardous waste, waste
24
disposal, air omissions, and other environmental matters ("Environmental Laws").
Neither ASB nor the Bank has received any notice of noncompliance with
Environmental Laws, applicable laws, orders, or regulations of any governmental
authorities relating to waste generated by any such party or otherwise or notice
that any such party is liable or responsible for the remediation, removal, or
clean-up of any site relating to ASB Properties.
6.25 Accuracy of Information. To the best of ASB's and its officers' and
directors' knowledge, all information furnished by ASB or Bank to HHC and
Xxxxxxx Bank relating to the assets, liabilities, and this Agreement is
accurate, and ASB has not omitted to disclose any information which is or would
be material to this Agreement.
6.26 Compliance with Laws and Contracts. To the best of ASB's and its
officers' and directors' knowledge, neither ASB nor the Bank is in violation of
any laws, regulations, or agreements to which it is a party and have failed to
file any material reports required by any governmental or other regulatory body,
in which violations or failure to file would have a material adverse effect on
ASB and Bank as a whole.
ARTICLE 7
HHC'S REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
-----------------------------------------------------------
HHC represents and warrants to ASB as follows: for purposes of this
Agreement, except in Section 7.1 and where the context requires otherwise, any
reference to HHC in this Article 7 shall be deemed to include HHC and Xxxxxxx
Bank and any reference to "material," material adverse effect or a similar
standard shall refer to the financial condition, operations or other aspects of
HHC and its subsidiaries including Xxxxxxx Bank taken as a whole.
7.1 Organization and Authority. Each of HHC and Xxxxxxx Bank is a
corporation or bank duly incorporated, validly existing and in good standing
under the laws of the State of Mississippi and Louisiana, respectively, and has
the corporate power and authority to own its properties and assets and to carry
on its business as it is now being conducted.
7.2 Shares Fully Paid and Non Assessable. The outstanding shares of
capital stock of HHC are validly issued and outstanding, fully paid and
nonassessable and all of such shares of Xxxxxxx Bank are
25
owned directly or indirectly by HHC free and clear of all liens, claims, and
encumbrances. The shares of HHC common stock to be issued in connection with the
Mergers pursuant to this Agreement have been duly authorized and, when issued in
accordance with the terms of this Agreement, will be validly issued, fully paid,
and nonassessable.
7.3 Authorization. The execution, delivery and performance of this
Agreement by HHC and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors of HHC and Xxxxxxx Bank,
subject to regulatory approval. No other corporate proceedings on the part of
HHC are necessary to authorize the execution and delivery of this Agreement and
the performance by HHC of the terms hereof. This Agreement is a valid and
binding obligation of HHC enforceable against HHC in accordance with its terms
except as may be limited by applicable bankruptcy, insolvency, reorganization or
moratorium or other similar laws affecting creditors' rights generally and
except that the availability of equitable remedies is within the discretion of
the appropriate court and except that it is subject to approval of applicable
regulatory agencies.
7.4 No Material Adverse Change. Since the date of the ASB Latest Balance
Sheet, there has been no event or condition of any character (whether actual, or
to the knowledge of HHC or Xxxxxxx Bank, threatened or contemplated) that has
had or can reasonably be anticipated to have, or that, if concluded or sustained
adversely to HHC would reasonably be anticipated to have, a material adverse
effect on the financial condition, results of operations, business or prospects
of HHC or Xxxxxxx Bank excluding changes in laws or regulations that affect
banking institutions generally.
7.5 Loans. To the best knowledge and belief of its management, and
management of Xxxxxxx Bank, each loan reflected as an asset of HHC in the
unaudited consolidated balance sheet contained in HHC's quarterly report to
shareholders for the period ended September 30, 1998, or acquired since that
date, is the legal, valid and binding obligation of the obligor named therein,
enforceable in accordance with its terms, and no loan is subject to any asserted
defense, offset, or counterclaim known to HHC, except as disclosed on Schedule
7.5 hereto.
7.6 Litigation. Except as disclosed on Schedule 7.6 hereto, no
litigation, proceeding or controversy before any court or governmental agency is
pending that in the opinion of its management is likely to have a material and
adverse effect on the business, results of operations
26
or financial condition of HHC and its subsidiaries taken as a whole, and, to the
best of its knowledge, no such litigation, proceeding or controversy has been
threatened or is contemplated.
7.7 Contingent Liabilities. Except as disclosed on Schedule 7.7 hereto or
reflected in the HHC reports filed with the SEC and except in the case of HHC's
subsidiaries for unfunded loan commitments made in the ordinary course of
business consistent with past practices, as of the date of the ASB Latest
Balance Sheet, neither HHC nor any of its subsidiaries had any obligation or
liability (contingent or otherwise) that was material, or that when combined
with all similar obligations or liabilities would have been material, to HHC and
its subsidiaries taken as a whole.
7.8 Allowances for Possible Loan Losses. The allowances for possible loan
losses shown on the balance sheet of HHC contained in the HHC reports filed with
the SEC as of the date of the ASB Latest Balance Sheet, were or will be, as the
case may be, adequate in all material respects under the requirements of GAAP to
provide for possible loan losses, net of recoveries relating to loans previously
charged off, on loans outstanding (including accrued interest receivable) as of
the respective date of such balance sheet and such allowance has been or will
have been established in accordance with GAAP. To the knowledge of HHC's and
Xxxxxxx Bank's management, HHC is not likely to be required to materially
increase the provision for loan losses between the date hereof and the Effective
Date.
7.9 Benefit Plans. To the knowledge and belief of HHC's senior
management, HHC, each of its subsidiaries and all "employee benefit plans," as
defined in Section 3(3) of ERISA, that cover one or more employees employed by
HHC or any of its subsidiaries:
i. is in compliance with all laws, regulations, reporting and
licensing requirements and orders applicable to its business or to
such plan or any of its employees (because such employee's activities
on behalf of it), the breach or violation of which could have a
material and adverse effect on such business; and
ii. has received no notification from any agency or department
of federal, state or local government or the staff thereof asserting
that any such entity is not in compliance with any of the statutes;
regulations or ordinances that such
27
governmental authority enforces, or threatening to revoke any license,
franchise or permit or governmental authorization, and is subject to
no agreement or written understanding with any such governmental
authorities with respect to its assets or business.
7.10 RESERVED
7.11 Year 2000 Compliance. HHC and Xxxxxxx Bank are Year 2000 compliant.
HHC covenants and agrees as follows:
7.12 Conduct of Business. HHC agrees to operate its business solely in the
ordinary course consistent with prudent business practices and in compliance
with all applicable laws, regulations, and rules; but nothing herein shall be
construed as limiting or restricting HHC in its assets, liability, or capital
structure or limiting any action of HHC or its affiliates, nor shall anything in
this Agreement be construed as limiting the future number and amount of
outstanding shares of HHC stock pending consummation of the transactions
contemplated hereby; provided however, that HHC and Xxxxxxx Bank shall not, and
shall instruct their executive officers, directors, and control persons and any
affiliates of any of the foregoing not to, effect any transactions in HHC Common
Stock in violation of Regulation M of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or otherwise for the purpose, or with the effect,
of manipulating the trading price of HHC Common Stock.
7.13 Due Diligence. In order to afford ASB access to such information as
it may reasonably deem necessary to perform its due diligence review with
respect to HHC and its assets in connection with the Mergers, HHC shall (and
shall cause Xxxxxxx Bank to), (a) upon reasonable notice, afford ASB and its
officers, employees, counsel, accountants and other authorized representatives,
during normal business hours throughout the period prior to the Effective Date
and to the extent consistent with applicable law, access to its premises,
properties, books and records, and to furnish ASB and such representatives with
such financial and operating data and other information of any kind respecting
its business and properties as ASB shall from time to time reasonably request to
perform such review, (b) furnish ASB with copies of all reports filed by HHC
with the Securities and Exchange Commission ("SEC") throughout the period after
the date hereof prior to the Effective Date promptly after such reports are
28
so filed, and (c) promptly advise ASB of the occurrence before the Effective
Date of any event or condition of any character (whether actual or to the
knowledge of HHC, threatened or contemplated) that has had or can reasonably be
anticipated to have, or that, if concluded or sustained adversely to HHC, would
reasonable be anticipated to have, a material adverse effect on the financial
condition, results of operations, business or prospects of its consolidated
group as a whole.
7.14 Registration Statement.
a. HHC will prepare and file on Form S-4 a registration statement
under the Securities Act (which will include the Proxy Statement) complying
with all the requirements of the Securities Act applicable thereto, for the
purpose, among other things, of registering the HHC Common Stock which will
be issued to the holders of ASB Common Stock pursuant to the Mergers. HHC
shall use its best efforts to cause the Registration Statement to become
effective as soon as practicable, to qualify the HHC Common Stock under the
securities or blue sky laws of such jurisdictions as may be required and to
keep the Registration Statement and such qualifications current and in
effect for so long as is necessary to consummate the transactions
contemplated hereby.
b. ASB's Consolidated Group shall cooperate in preparing the
Registration Statement and the Proxy Statement, and will promptly furnish
all such data and information relating to it as HHC may reasonably request
for the purpose of including such data and information in the Registration
Statement.
c. HHC will indemnify and hold harmless each member of ASB's
consolidated group and each of their respective directors, officers, agents
and other persons, if any, who control ASB within the meaning of the
Securities Act from and against any losses, claims, damages, liabilities or
judgments, joint or several, to which they or any of them may become
subject under the Securities Act or any state securities or blue sky laws
or otherwise, insofar as such losses, claims, damages, liabilities, or
judgements (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or in any amendment or supplement
thereto, or in any state application for qualification, permit, exemption
or registration as a broker/dealer, or in any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse each such
person for any legal or other expenses reasonably incurred by such person
in connection with investigating or defending any such action or claim;
provided, however, that HHC shall not be liable, in any such case, to the
extent that any such loss, claim, damage, liability, or judgment (or action
in respect thereof) arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, or any such amendment or supplement thereto, or in
any such state application, or in any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to
HHC by ASB.
7.15 Application to Regulatory Authorities. HHC shall prepare, as promptly
as practicable, all regulatory applications and filings which
29
are required to be made with respect to the Mergers and provide copies
thereof to ASB and its counsel.
7.16 Indemnification of Directors and Officers of ASB and Bank.
a. From and after the Effective Date of the Company Merger, HHC
agrees to indemnify and hold harmless each person who is an officer or
director of ASB or Bank on the day of this agreement or hereafter from and
against all losses, claims, damages, liabilities and judgments (and related
expenses including, but not limited to, attorney's fees and amounts paid in
investigating or defending any action in respect thereof or in settlement
of any such action) based upon or arising from his capacity as an officer
or director of ASB or Bank, as the case may be, to the same extent he would
have been indemnified under the Articles of Incorporation and Bylaws of HHC
as such documents were in effect on the date of this Agreement as if he
were an officer or director of HHC at all relevant times. Any
indemnification to which subparagraph (c) of Section 7.14 applies shall be
paid pursuant thereto and shall not be payable under this Section 7.16.
The persons entitled to indemnification hereunder and their respective
heirs, executors, estates and assigns are hereinafter referred to as
"Indemnified Persons."
b. The rights granted to the Indemnified Persons hereby shall be
contractual rights inuring to the benefit of all Indemnified Persons and
shall survive the Mergers, and any merger, consolidation or reorganization
of HHC.
c. An Indemnified Person shall give HHC prompt notice of any matter
as to which indemnification is provided, shall employ counsel that is
reasonably acceptable to HHC (and no more than one counsel for all
Indemnified Persons shall be employed in any one matter or series of
related matters except to the extent that actual conflicts of interest
require otherwise) and shall not settle any such matter unless HHC shall
first consent thereto.
d. The total aggregate indemnification to be provided by HHC
pursuant to Section 7.16 hereof will not exceed, as to all of the
Indemnified Persons described herein as a group, the sum of Seven Million
Five Hundred Thousand Dollars ($7,500,000).
e. ASB shall pay the insurance premium required for an extension of
the existing directors and officer's liability insurance
30
policy of ASB and Bank, respectively, covering persons who are currently
covered by such insurance for a "discovery" period of three (3) years after
the Effective Date on terms generally no less favorable than those in
effect on the date of this Agreement, provided the total of such premium
shall not exceed $18,000.
7.17 Continuity of Business Enterprise. It is the present intention of HHC
to continue at least one significant historic business line of ASB, namely,
financial services, and to use at least a significant portion of ASB's historic
business assets in a business within the meaning of Treasury Regulation Section
1.368-1(d).
7.18 Payment of Bonuses. HHC agrees to pay up to a total of $305,604.69
bonuses to the persons and in the amounts listed on Schedule 7.18 that are
employed by HHC or Xxxxxxx Bank on the six-month anniversary date of the
Effective Date of the Company Merger or whose employment is terminated either by
the employer without "cause" or by the employee voluntarily after an "effective
termination," as defined in Schedule 7.18, provided that as a condition to
payment of the Bonus, such employee shall agree to a reasonable non-compete
agreement to be executed at the closing of the Company Merger which would
prohibit such employee from competing against HHC within the Louisiana Parishes
of Xxxxxxxxxx, St. Xxxxxx, Rapids, Avoyelles and Xxxxx, for a six-month period
beginning upon the date of such employee's voluntary resignation.
ARTICLE 8
CONDITIONS TO CLOSING
---------------------
The obligations of ASB, Bank, HHC and Xxxxxxx Bank under this Agreement,
except as otherwise provided herein, shall be subject to the satisfaction or
waiver of the following conditions on or prior to the Closing of the Company
Merger:
8.1 Conditions to Each Party's Obligations to Effect the Company Merger.
The respective obligation of each party to effect the Company Merger shall be
subject to the following conditions:
a. Stockholder Approval. The Company Merger shall have been approved
by the requisite vote of the holders of the outstanding shares of ASB
Common Stock at ASB's Stockholders' Meeting.
31
b. Regulatory Approvals. The transactions contemplated by this
Agreement, with respect to the Company Merger, shall have been approved by
all governing regulatory authorities, without any condition or requirement
that either HHC or ASB deem burdensome, or which otherwise would have a
material adverse effect on the business, operations, properties, assets or
financial condition of HHC, Xxxxxxx Bank, ASB or Bank after the Effective
Date, all conditions required to be satisfied shall have been satisfied,
and all waiting periods relating to such approvals shall have expired.
c. Registration Statement. The Registration Statement shall have
been declared effective and shall not be subject to a stop order or any
threatened stop order, and all state securities and blue sky permits or
approvals required to consummate the transactions contemplated by this
Agreement shall have been received.
d. No Restraining Action. No action or proceeding shall have been
threatened or instituted before a court or other governmental body to
restrain or prohibit the transactions contemplated by the Merger Agreements
or this Agreement or to obtain damages or other relief in connection with
the execution of such agreements or the consummation of the transactions
contemplated hereby or thereby other than as described on the schedules
hereto; and no governmental agency shall have given notice to any party
hereto to the effect that consummation of the transactions contemplated by
the Merger Agreements or this Agreement would constitute a violation of any
law or that it intends to commence proceedings to restrain consummation of
the Mergers.
8.2 Conditions to Obligations of ASB to Effect the Company Merger. The
obligations of ASB to effect the Company Merger shall be subject to the
following additional conditions:
a. Representations and Warranties. The representations and
warranties of HHC set forth in this Agreement shall be true and correct in
all material respects (except to the extent such representation or warranty
is qualified by materiality in which case such representation or warranty
shall be true and correct) as of the date of this Agreement and as of the
Closing as though made at and as of the Closing, except as otherwise
contemplated by this Agreement or consented to in writing by ASB.
b. Performance of Obligations. HHC and Xxxxxxx Bank shall have
performed in all material respects all obligations and complied with all
covenants required by it under this Agreement prior to the Closing and HHC
shall deliver at Closing appropriate certificates setting forth such.
32
c. No Material Adverse Change. There shall not have occurred any
material adverse change from the date of this Agreement to the Closing Date
in the financial condition, results of operations or business of HHC and
its subsidiaries taken as a whole.
d. Legal Opinion. An opinion of Xxxxxxx Xxxxxx Winter & Stennis,
P.A., special counsel to HHC, shall be delivered to ASB dated the Closing
Date and in form and substance reasonably satisfactory to ASB and its
counsel to the effect that:
i. HHC is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Mississippi, and has
corporate authority to own and operate its businesses and properties
and to carry on its business as presently conducted by it;
ii. Xxxxxxx Bank is a Louisiana banking corporation, duly
organized and validly existing and in good standing under the laws of
the State of Louisiana, and has corporate authority to own and operate
its businesses and properties and to carry on its business as
presently conducted by it;
iii HHC had and has corporate authority to make, execute and
deliver this Agreement, it has been duly authorized and approved by
all necessary corporate action of HHC and has been duly executed and
delivered and is as of the Closing Date its valid and binding
obligation subject, however, to bankruptcy, insolvency and similar
laws affecting the enforcement of creditors' rights generally and to
the availability of equitable remedies in general;
iv. All required regulatory approvals have been obtained with
respect to the Company Merger;
v. To such counsel's knowledge after inquiry, there is no
litigation or proceeding pending or threatened against HHC relating to
the participation in or consummation of this Agreement by HHC and
consummation will not violate any other contract, agreement, charter
or bylaw of HHC; and
vi. All shares of HHC Common Stock to be issued pursuant to the
Mergers have been duly authorized and, when issued pursuant to the
Merger Agreements, will be
33
validly and legally issued, fully paid and non-assessable and will be,
at the time of their delivery, free and clear of all liens, charges,
security interests, mortgages, pledges and other encumbrances and any
preemptive or similar rights.
e. Tax Opinion. ASB shall have received from Xxxxxxx Xxxxxx Winter &
Stennis, P.A. an opinion of counsel, dated the Closing Date, as to certain
federal income tax aspects of the Company Merger, including an opinion that
such merger will constitute a tax free reorganization and shareholders of
American who receive Xxxxxxx Common Stock and cash in the merger will not
recognize gain with respect to the Xxxxxxx Common Stock.
f. Fairness Opinion. ASB and Bank shall have received a letter from
Xxxxx, Xxxxx Capital Partners, Inc., or another financial advisor selected
by ASB, dated within five (5) business days of the date of the mailing of
the Proxy Statement to its shareholders to the effect that the terms of the
Mergers are fair to its shareholders from a financial point of view.
g. Transaction Value. The total value of the HHC Common Stock to be
issued pursuant to the Company Merger shall be not less than 51% of the
total value of all consideration issued or deliverable by HHC pursuant to
this Agreement, all as determined under applicable provisions of the
Internal Revenue Code and regulations.
8.3 Conditions to Obligations of HHC to Effect the Company Merger. The
obligations of HHC to effect the Company Merger shall be subject to the
following additional conditions:
a. Representations and Warranties. The representations and
warranties of ASB and Bank set forth in this Agreement shall be true and
correct in all material respects (except to the extent such representation
or warranty is qualified by materiality in which case such representation
or warranty shall be true and correct) as of the date of this Agreement and
as of the Closing as though made at and as of the Closing, except as
otherwise contemplated by this Agreement or consented to in writing by HHC,
and except that no inaccuracy shall give rise to a termination right unless
it and all the other inaccuracies together result in a material and adverse
change in ASB.
34
b. Performance of Obligations. ASB and Bank shall have performed in
all material respects all obligations and complied with all covenants
required by it under this Agreement prior to the Closing and ASB shall
deliver at Closing appropriate certificates setting forth such.
c. No Material Adverse Change. There shall not have occurred any
material adverse change from the date of this Agreement to the Closing Date
in the financial condition, results of operations or business of ASB and
its subsidiaries taken as a whole, excluding the consequences of
terminations of the XXXX relationship and other items as contemplated by
this Agreement and its Schedules hereto.
d. Termination of Employment Contract. Immediately prior to the
Effective Date of the Company Merger, ASB and Bank shall have terminated
any and all employment contracts listed at Schedule 5.1.p. with no further
obligation whatsoever owed by any of the Parties hereto.
e. Affiliate Agreement. An Affiliate Agreement substantially in the
form specified on Exhibit C hereto (as contemplated by Section 5.9 hereof)
shall have been executed by each person who serves as an executive officer
or director of ASB or Bank or who beneficially owns 10% or more of the ASB
Common Stock outstanding; and HHC shall have received from each such person
a written confirmation dated not earlier than five business days prior to
the Closing Date to the effect that each representation made in such
person's Affiliate Agreement is true and correct as of the date of such
confirmation and that such person has complied with all of his or her
covenants therein through the date of such confirmation.
f. Legal Opinion. An Opinion of Xxxxxx Xxxxxx, counsel to ASB, shall
be delivered to HHC dated the Closing Date, and in form and substance
reasonably satisfactory to HHC to the effect that:
i. ASB is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Louisiana, and has
corporate authority to own and operate its businesses and properties
and to carry on its business as presently conducted by it;
ii. Bank is a Louisiana banking corporation, duly organized and
validly existing and in good standing under
35
the laws of the State of Louisiana, and has corporate authority to own
and operate its businesses and properties and to carry on its business
as presently conducted by it;
iii. ASB and Bank had and have corporate authority to make,
execute and deliver this Agreement, it has been duly authorized and
approved by all necessary corporate action of ASB and Bank and has
been duly executed and delivered and is as of the Closing Date its
valid and binding obligation subject, however, to bankruptcy,
insolvency and similar laws affecting the enforcement of creditors'
rights generally and to the availability of equitable remedies in
general;
iv. To such counsel's knowledge after inquiry, there is no
litigation or proceeding pending or threatened against ASB or Bank
relating to the participation in or consummation of this Agreement by
ASB or Bank other than as may be disclosed in a schedule to this
Agreement and consummation will not violate any other contract,
agreement, charter or bylaw of ASB or Bank; and
v. ASB and Bank have complied with all laws and regulations
relating to dissenters' rights and all stock in ASB and Bank will be
acquired by HHC pursuant to the terms of this Agreement and that the
title and/or ownership interest in the shares of ASB and Bank stock
are as represented in ASB's and Bank's certificate at Closing and that
no known dispute exists as to the title and/or ownership of any such
shares.
ARTICLE 9
CLOSING
-------
9.1 Closing. The Closing shall be held at the offices of Xxxxxxx Bank or
such other place as HHC and ASB shall mutually designate.
9.2 Deliveries at Closing. At the Closing, all documents and instruments
shall be duly and validly executed and delivered by all the Parties hereto, and
possession of all liabilities and assets shall be transferred and delivered
accordingly.
9.3 Documents. The Parties shall execute any and all documents reasonably
requested by them or their legal counsel for the purpose of effecting the
transaction contemplated, including but not limited to the following:
36
a. endorsement, negotiation, and/or assignment of all original notes
and Security Agreements relating to all loans;
b. warranty deeds for the real property;
c. commitments for owners title insurance for the real property;
d. such other endorsements, assignments or other conveyances as may
be appropriate or necessary to effect the transfer to HHC of the assets,
duties, responsibilities and obligations as referred to herein; and
e. listing of dissenting stockholders, if any, including name,
address, and number of shares owned.
ARTICLE 10
EMPLOYMENT MATTERS
------------------
10.1 Employees. Neither HHC nor Xxxxxxx Bank shall be obligated to retain
in any capacity any of ASB's or Bank's officers, directors, or employees or to
pay any stipulated compensation to any employees, other than as contemplated by
Section 7.18. HHC will make reasonable efforts to maintain compensation levels
for any retained personnel commensurate with the employees' experience and
qualifications, and in accordance with HHC and Xxxxxxx Bank's salary
administration program. With regard to any retained employee, HHC and Xxxxxxx
Bank shall be free of any obligation to honor any past agreement of ASB or Bank
to such person.
ASB's and Bank's group health and life benefit plan as it relates to
employees, HHC shall have the option of either: (1) continuing such plan on and
after the Effective Date of the Mergers; or (2) discontinuing such plan upon the
Effective Date and thereafter, all retained employees will be eligible to
participate in Xxxxxxx Bank's group health and life benefit plan based on the
provisions in the plan. The ninety (90) day employment period will be waived
for eligible retained employees in accordance with Xxxxxxx Bank's plan. Xxxxxxx
Bank will waive pre-existing medical conditions for health insurance purposes as
to all retained personnel.
10.2 Retirement Plan. ASB and Bank currently maintain the American
Security Bank of Ville Platte Employee Stock Ownership Plan (the "ESOP") and
401(k) Plan which will remain operative and in effect through the Effective Date
of the Company Merger (the
37
"Plans"). The Plans will be terminated as of the Effective Date of the Company
Merger and distributed to vested employees of ASB and Bank in accordance with
the terms of the Plans after the normal and customary contributions have been
made consistent with past practices. The trustees for the Plans will be
responsible for the termination, allocation and distribution of plan assets and
related notices and other reporting responsibilities to the IRS, Department of
Labor and other government agencies. All such termination costs will be paid
from the Plans' assets, if permitted by law. For purposes of Section 3.2b of
this Agreement, the trustee of the ESOP is the shareholder of record of the ASB
Common Stock held by the ESOP.
Upon the Effective Date of the Company Merger, all retained employees will
be eligible to enter the Xxxxxxx Bank Profit Sharing Plan, Xxxxxxx Bank 401-K
Plan, and Xxxxxxx Bank Pension Plan based on the provisions set forth in the
respective plans. All retained employees will be granted full credit for all
prior service for vesting, eligibility and benefit purposes for the Xxxxxxx Bank
Profit Sharing Plan, for eligibility purposes for the Xxxxxxx Bank 401-K Plan,
and for vesting and eligibility purposes for the Xxxxxxx Bank Pension Plan.
10.3 Other Benefit Plans. Other ASB and Bank benefit plans will continue
through the Effective Date of the Company Merger. Thereafter, all retained
employees will be eligible to participate in all Xxxxxxx Bank employment benefit
plans not set forth in Sections 10.1 and 10.2 hereof, based on the provisions
set forth in the plans with full credit for all prior service.
10.4 Notices. ASB shall be (and shall cause Bank to be) responsible for
notifying its employees of the terms of this Agreement as it affects and/or
relates to them and for complying with any applicable laws regarding such
notices.
ARTICLE 11
REMEDIES
--------
For purposes of this Agreement, any reference to HHC in this Article 11
shall be deemed to include HHC and Xxxxxxx Bank and any reference to ASB in this
Article 11 shall be deemed to include ASB and Bank.
11.1 Parties' Joint Remedies. In the event regulatory authorities impose
requirements which do not materially alter this Agreement and which are not
otherwise burdensome or objectionable to the Parties, then the Parties agree to
amend this Agreement to conform to such regulatory requirements, and specific
performance shall be available as a remedy for this purpose.
38
11.2 ASB's Remedies. In the event HHC breaches this Agreement, then ASB
shall give HHC notice of the breach, and HHC shall have a reasonable amount of
time to cure the breach, and HHC shall be liable for such economic damages that
are the direct result of any uncured breach, but HHC shall not be liable for
consequential or punitive damages. If HHC breaches a warranty, representation,
covenant or agreement that does not materially affect the entire transaction,
then the amount of the damages shall be mutually agreed upon by the Parties, and
if they cannot agree as to the damage, then by an arbitrator mutually agreeable
to them, and the damage determined shall be conclusively binding on both Parties
and shall be treated as an adjustment to the Conversion Amount.
11.3 HHC's Remedies. In the event ASB breaches this Agreement, then HHC
shall give ASB notice of the breach, and ASB shall have a reasonable amount of
time to cure the breach, and ASB shall be liable for such economic damages that
are the direct result of any uncured breach, but ASB shall not be liable for
consequential or punitive damages. If ASB breaches a warranty, representation,
covenant or agreement that does not materially affect the entire transaction,
then the amount of the damages shall be mutually agreed upon by the Parties, and
if they cannot agree as to the damage, then by an arbitrator mutually agreeable
to them, and the damage determined shall be conclusively binding on both Parties
and shall be treated as an adjustment to the ASB Exchange Ratio.
11.4 Attorney Fees. Each Party shall bear its own attorney fees except
attorney fees may be awarded by the presiding judge if the trier of fact finds
that the other Party has committed fraud against the other Party.
ARTICLE 12
TERMINATION
-----------
12.1 Termination. This Agreement may be terminated, either before or after
approval by the stockholders of ASB and Bank as follows:
a. Mutual Consent. At any time on or prior to the Effective Date of
the Company Merger, by the mutual consent in writing of a majority of the
members of each of the Board of Directors of the Parties hereto;
b. Expiration of Time. By the Board of Directors of HHC in writing
or by the Board of Directors of ASB in writing, if the Company Merger shall
have not become effective on or
39
before March 31, 1999, unless the absence of such occurrence shall be due
to the failure of the Party seeking to terminate this Agreement to perform
each of its obligations under this Agreement required to be performed by it
on or prior to the Effective Date of the Company Merger;
c. Breach of Representation, Warranty or Covenant. By either Party
hereto, in the event of a breach by the other Party (a) of any covenant or
agreement contained herein or (b) of any representation or warranty herein,
if the facts constituting such breach of a covenant, agreement,
representation or warranty reflect a material and adverse change in the
financial condition, results of operations, business, or prospects taken as
a whole, of the breaching Party, which in either case cannot be or is not
cured within 60 days after written notice of such breach is given to the
Party committing such breach, or results in an increase in the cost of the
non-breaching Party's performance of this Agreement in excess of $200,000.
d. Regulatory Approval. By either Party hereto, at any time after
the FRB, FDIC, or OFI has denied any application for any approval or
clearance required to be obtained as a condition to the consummation of the
Mergers and the time-period for all appeals or requests for reconsideration
thereof has run.
e. Shareholder Approval. By either Party hereto, if the Company
Merger is not approved by the required vote of shareholders of ASB.
ARTICLE 13
APPRAISAL RIGHTS
----------------
13.1 Appraisal Rights of ASB. Notwithstanding any other provision of this
Agreement to the contrary, dissenting stockholders of ASB who comply with the
procedural requirements of the LCL Section 12:131 will be entitled to receive
payment of the fair cash value of their shares if the Company Merger is effected
upon approval by less than eighty percent of ASB's total voting power.
40
ARTICLE 14
MISCELLANEOUS
-------------
14.1 Entire Agreement. This Agreement embodies the entire understanding of
the Parties in relation to the subject matter herein and supersede all prior
understandings or agreements, oral or written, between the Parties hereto other
than the Confidentiality Agreement heretofore executed by the Parties.
14.2 Effect of Termination or Consummation; Survival.
a. Upon termination of this Agreement pursuant to Article 12, the
Merger Agreements shall also terminate, and this Agreement and the Merger
Agreements shall be void and of no effect, and there shall be no liability
by reason of this Agreement or the Merger Agreements, or the termination
thereof, on the part of any party or their respective directors, officers,
employees, agents or shareholders except for any liability of a party
hereto arising out of (i) an intentional breach of any representation,
warranty or covenant in this Agreement prior to the date of termination,
except if such breach was required by law or by any bank or bank holding
company regulatory authority or (ii) a breach of the covenant in Section
7.14(c).
b. None of the representations and warranties in this Agreement or
in any instrument delivered pursuant hereto shall survive the Effective
Time. Each party hereby agrees that its sole right and remedy with respect
to any breach of a representation or warranty or covenant by the other
party prior to the Closing Date shall be not to close the transactions
described herein if such breach results in the nonsatisfaction of a
condition set forth in Article 8 hereof; provided, however, that the
foregoing shall not be deemed to be a waiver of any claim for an
intentional breach of a representation, warranty or covenant or for fraud
except if such breach is required by law or by any bank or bank holding
company regulatory authority. Each covenant of the Parties to be performed
after the Effective Time shall survive the Effective Time and may be
enforced by the person or persons in whose favor it runs.
14.3 Headings. The headings and subheadings in this Agreement, except the
terms identified for definition in Article 1 and elsewhere in this Agreement,
are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provision hereof.
41
14.4 Duplicate Originals. This Agreement may be executed in any number of
duplicate originals, any one of which when fully executed by all Parties shall
be deemed to be an original without having to account for the other originals.
14.5 Governing Law. This Agreement and the rights and obligations
hereunder shall be governed and construed by the laws of the State of Louisiana.
14.6 Successors: No Third Party Beneficiaries. All terms and conditions of
this Agreement shall be binding on the successors and assigns of ASB and HHC.
Except as otherwise specifically provided in this Agreement, including Section
14.2 nothing expressed or referred to in this Agreement is intended or shall be
construed to give any person other than ASB and HHC any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provisions
contained herein, it being the intention of the Parties hereto that this
Agreement, the obligations and statements of responsibilities hereunder, and all
other conditions and provisions hereof are for the sole and exclusive benefit of
ASB and HHC and for the benefit of no other person.
14.7 Modification; Assignment. No amendment or other modification of any
part of this Agreement shall be effective except pursuant to a written agreement
subscribed by the duly authorized representatives of all of the Parties hereto.
This Agreement may not be assigned without the express written consent of both
Parties.
14.8 Notice. Any notice, request, demand, consent, approval or other
communication to any Party hereof shall be effective when received and shall be
given in writing, and delivered in person against receipt thereof, or sent by
certified mail, postage prepaid or courier service at its address set forth
below or at such other address as it shall hereafter furnish in writing to the
others. All such notices and other communications shall be deemed given on the
date received by the addressee or its agent.
ASB
---
ASB
000 X. Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxxx, CEO
Fax Number: 000-000-0000
Copy to: Xxxxxxx X. Xxxxxxx, III, Esq.
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxx Xxxxx
Walmsley & Casteix
000 Xx. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000-0000
Fax Number: 000-000-0000
42
HHC
---
Xxxxxxx Holding Company
Xxxx Xxxxxx Xxx 0000
Xxxxxxxx, XX 00000
Attn: Xx. Xxxx X. Xxxxxx, Chief Financial Officer
Copy to: Xxxxxxx Xxxxxx Winter & Stennis, P.A.
P. O. Xxx 000
Xxxxxxx, XX 00000-0000
or
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Fax Number: (000) 000-0000
14.9 Waiver. ASB and HHC may waive their respective rights, powers or
privileges under this Agreement; provided that such waiver shall be in writing;
and further provided that no failure or delay on the part of ASB or HHC to
exercise any right, power or privilege under this Agreement will operate as a
waiver thereof, nor will any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege by ASB or HHC under the
terms of this Agreement, nor will any such waiver operate or be construed as a
future waiver of such right, power or privilege under this Agreement.
14.10 Costs, Fees and Expenses. Each Party hereto agrees to pay all costs,
fees and expenses which it has incurred in connection with or incidental to the
matters contained in this Agreement, including without limitation any fees and
disbursements to its accountants, financial advisors and counsel. HHC will be
responsible for preparing the applications, regulatory filings and registration
statement necessary to obtain approval of the Mergers and the issuance of the
HHC common stock. ASB will be responsible for the cost of its (and Bank's)
accountants and legal counsel and will bear all costs related to conducting its
stockholders' meetings and obtaining stockholders' approval of the Mergers.
14.11 Press Releases. ASB and HHC shall consult with each other as to the
form and substance of any press release related to this Agreement or the
transactions contemplated hereby, and shall consult each other as to the form
and substance of other public disclosures related thereto, provided, however,
that nothing contained herein shall prohibit HHC, following notification to ASB,
from making any disclosures which its counsel deems necessary to conform with
43
requirements of law or the rules of the National Association of Securities
Dealers Automated Quotation System.
14.12 Severability. If any provision of this Agreement is invalid or
unenforceable then, to the extent possible, all of the remaining provisions of
this Agreement shall remain in full force and effect and shall be binding upon
the Parties hereto.
14.13 Mutual Covenant of Best Efforts and Good Faith. The Parties mutually
covenant and agree with each other that they will use their best efforts to
consummate the transactions herein contemplated and that they will act and deal
with each other in good faith as to this Agreement and all matters arising from
or related to it.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
[Signatures omitted]
44
EXHIBIT A
COMPANY MERGER AGREEMENT
------------------------
This Company Merger Agreement is made and entered into as of the 15th day
of October, 1998, between Xxxxxxx Holding Company, Gulfport, Mississippi, a
Mississippi corporation ("HHC") and American Security Bancshares, Inc., Ville
Platte, a Louisiana corporation ("ASB") (the "Company Merger Agreement").
W I T N E S S E T H:
WHEREAS, HHC and ASB (collectively, the "Constituent Corporations") and
their respective Boards of Directors deem it advisable that ASB be merged into
HHC (the "Company Merger") pursuant to the provisions of the Louisiana Business
Corporation Law and upon the terms and conditions hereinafter set forth and in
the Plan (as hereinafter defined); and
WHEREAS, the Constituent Corporations have entered into an Agreement and
Plan of Merger dated as of the date hereof (the "Plan") (the defined terms in
which are used herein as defined therein) setting forth certain representations,
warranties, covenants and conditions relating to the Company Merger;
NOW THEREFORE, the Constituent Corporations hereby make, adopt and approve
this Company Merger Agreement and prescribe the terms and conditions of the
Company Merger and the mode of carrying the Company Merger into effect as
follows:
ARTICLE ONE
The Company Merger
------------------
Upon the terms and subject to the conditions hereinafter set forth, on the
Effective Date (as defined in Article Two hereof) ASB shall be merged into HHC
and the separate existence of ASB shall cease.
ARTICLE TWO
Effective Date and Time
-----------------------
The Company Merger shall be effective as of the date and time when this
Company Merger Agreement, having been certified, signed and acknowledged in the
manner required by law, is filed in the office of the Secretary of State of
Louisiana (such time and date being herein referred to as the "Effective Time"
and the "Effective Date," respectively).
45
ARTICLE THREE
Conversion and Cancellation of Shares
-------------------------------------
a. On the Effective Date of the Company Merger, each share of the
Common Stock, $3.33 par value, of HHC ("HHC Common Stock") issued and
outstanding immediately prior to the Effective Date shall remain
outstanding and shall represent one share of Common Stock, $3.33 par value,
of HHC.
b. Except for shares of ASB Common Stock as to which dissenter's
rights have been perfected and not withdrawn or otherwise forfeited under
Section 131 of the LBCL and subject to the provisions of Section 3.2d
relating to fractional shares on the Effective Date of the Company Merger,
each share of ASB Common Stock outstanding immediately following the
Company Merger shall be converted into (i) 13.8651 shares of HHC Common
Stock and (ii) the right to receive $285.22 in cash (the "Cash Payment");
provided, however, that any holder of 25 or fewer shares of ASB Common
Stock ("De Minimus Holdings") shall be entitled to receive a cash payment
of $950.75 per ASB share (the "De Minimus Holdings Cash Payment").
ARTICLE FOUR
Effects of Company Merger
-------------------------
The Company Merger shall have the effects set forth in Section 12:115 of
the Louisiana Business Corporation Law.
ARTICLE FIVE
Filing of Company Merger Agreement
----------------------------------
If this Company Merger Agreement is approved by the shareholders of ASB,
then the fact of such approval shall be certified hereon by the Secretary or
Assistant Secretary of ASB, and this Company Merger Agreement, as approved and
certified, shall be signed and acknowledged by the President or Vice President
of each of the Constituent Corporations. Thereafter, a multiple original of this
Company Merger Agreement, so certified, signed and acknowledged, shall be
delivered to the Secretary of State of Louisiana for filing and recordation in
the manner required by law; and thereafter, as soon as practicable (but not
later than the time required by law), a copy of the Certificate of Merger issued
by the Secretary of State of Louisiana
46
shall be filed for record in the office of the recorder of mortgages for the
parishes of Xxxxxxxxxx and East Baton Rouge and shall also be recorded in the
conveyance records for the parishes of Xxxxxxxxxx and East Baton Rouge and any
other parish in which any of the Constituent Corporations owns real property on
the Effective Date of the Company Merger.
ARTICLE SIX
Miscellaneous
The obligations of the Constituent Corporations to effect the Company
Merger shall be subject to all of the terms and conditions of the Plan. At any
time prior to the Effective Date, this Company Merger Agreement may be
terminated (a) by the mutual agreement of the Boards of Directors of the
Constituent Corporations or (b) pursuant to the terms and provisions of the
Plan.
IN WITNESS WHEREOF, this Company Merger Agreement is signed by a majority
of the Directors of each of the Constituent Corporations as of the day first
above written.
[Signatures omitted]
47
EXHIBIT B
BANK MERGER AGREEMENT
---------------------
This Bank Merger Agreement is made and entered into as of the 15th day of
October, 1998, between Xxxxxxx Bank of Louisiana, Baton Rouge, Louisiana, a
Louisiana banking corporation ("Xxxxxxx Bank") and American Security Bank, Ville
Platte, Louisiana, a Louisiana banking corporation ("Bank") (the "Bank Merger
Agreement").
WITNESSETH:
WHEREAS, Xxxxxxx Bank and Bank (collectively, the "Constituent Banks") and
their respective Boards of Directors deem it advisable that Bank be merged into
Xxxxxxx Bank (the "Bank Merger") pursuant to the provisions of the Louisiana
Banking Laws and upon the terms and conditions hereinafter set forth and in the
Plan (as hereinafter defined); and;
WHEREAS, the Constituent Corporations have entered into an Agreement and
Plan of Reorganization dated as of the date hereof (the "Plan") (the defined
terms in which are used herein as defined therein) setting forth certain
representations, warranties, covenants and conditions relating to the Bank
Merger;
NOW THEREFORE, the Constituent Banks hereby make, adopt and approve this
Merger Agreement and prescribe the terms and conditions of the Bank Merger and
the mode of carrying the Bank Merger into effect as follows:
ARTICLE ONE
The Bank Merger
---------------
Upon the terms and subject to the conditions hereinafter set forth, on the
Effective Date (as defined in Article Two hereof) Bank shall be merged into
Xxxxxxx Bank and the separate existence of Bank shall cease.
ARTICLE TWO
Effective Date and Time
-----------------------
48
The Bank Merger shall be effective no earlier than the latter of: (a) the
date and time specified or permitted by the Louisiana Office of Financial
Institutions ("OFI") in a Certificate of Merger or other written record issued
by the OFI; or (b) fifteen (15) days after the time specified in the certificate
to be issued by the Federal Deposit Insurance Corporation under its seal
approving the Bank Merger, such date to be determined by resolution of the Board
of Directors of Xxxxxxx Bank (such time and date being herein referred to as the
"Effective Time" and the "Effective Date," respectively).
ARTICLE THREE
Conversion and Cancellation of Shares
-------------------------------------
Except for shares as to which dissenters' rights have been perfected and
not withdrawn or otherwise forfeited under Section 6:376 of the Louisiana
Banking Laws, on the Effective Date each issued and outstanding share of Bank
Common Stock, par value $10.00, shall be canceled.
ARTICLE FOUR
Effects of Bank Merger
----------------------
The Bank Merger shall have the effects set forth in Section 6:355 of the
Louisiana Banking Laws. Upon the Effective Date, each branch office maintained
by Bank as a branch office immediately before the Bank Merger becomes effective,
shall become a branch office of Xxxxxxx Bank.
ARTICLE FIVE
Filing of Merger Agreement
--------------------------
If this Merger Agreement is approved by the shareholders of Bank and
Xxxxxxx Bank, then the fact of such approval shall be certified hereon by the
Secretary or Assistant Secretary of the Constituent Banks, and this Merger
Agreement, as approved and certified, shall be signed and acknowledged by the
President or Vice President of each of the Constituent Banks. Thereafter, a
multiple original of this Merger Agreement, so certified, signed and
acknowledged, shall be delivered to the OFI for filing and recordation in the
manner required by law; and thereafter, as soon as practicable (but not later
than the time required by law), a copy of the Certificate
49
of Merger issued by the OFI shall be filed for record in the office of the
recorder of mortgages for the parishes of Xxxxxxxxxx and East Baton Rouge and
shall also be recorded in the conveyance records for the parishes of Xxxxxxxxxx
and East Baton Rouge and any other parish in which any of the Constituent Banks
owns real property on the Effective Date of the Bank Merger.
ARTICLE SIX
Miscellaneous
-------------
The obligations of the Constituent Banks to effect the Bank Merger shall be
subject to all of the terms and conditions of the Plan. At any time prior to the
Effective Date, this Bank Merger Agreement may be terminated (a) by the mutual
agreement of the Boards of Directors of the Constituent Banks or (b) pursuant to
the terms and provisions of the Plan.
IN WITNESS WHEREOF, this Bank Merger Agreement is signed by a majority of
the Directors of each of the Constituent Banks as of the day first above
written.
(Signatures omitted]
50
EXHIBIT C
FORM OF AFFILIATE AGREEMENT
Xxxxxxx Holding Company
Xxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Gentlemen:
I, the undersigned director, executive officer or significant stockholder
of American Security Bancshares, Inc. ("ASB") Ville Platte, Louisiana,
acknowledge and understand that, as an affiliate of ASB, Rule 145 promulgated
under the Securities Act of 1933, as amended (the "Act"), restricts my ability
to sell, pledge, transfer or otherwise dispose of the shares of Xxxxxxx Holding
Company ("HHC") common stock to be issued to me in the Agreement and Plan of
Merger ("Merger") between HHC and ASB, unless the requirements of Rule 145(d)
are satisfied or the sale, transfer or disposition is otherwise in compliance
with the Act.
On the basis of the foregoing, and in consideration of the delivery to me
of the HHC Common Stock into which my ASB common stock will be converted, I
agree that:
1. I will not sell, transfer, pledge, alienate, encumber or otherwise
dispose of said securities in violation of the Act or rules of
regulations promulgated thereunder.
2. I have no plan or intention to sell, transfer or otherwise dispose of
a number of said securities to be received in the Merger that would
reduce ASB stockholders' ownership of the HHC common stock to a number
of shares having a value, as of the date of the Merger, of less than
50% of the value of all of the formerly outstanding ASB common stock
as of the same date.
3. I expressly agree to the placement of a restrictive legend on any and
all certificates for shares of HHC Common Stock received pursuant to
the Merger will bear a restrictive legend, to the effect that the
shares were received in a transaction to which Rule 145 applies, as
follows:
"The shares represented by this certificate have been issued or
transferred to the registered holder as a result of a transaction
to which Rule 145 under the Securities Act of 1933, as amended (the
"Act"), applies. The shares represented by this certificate may not
be sold, transferred, pledged or assigned, and the issuer shall not
be required to give effect to any attempted sale, transfer or
assignment, except in accordance with the requirements of the Act
and the other conditions specified in that certain Affiliates
Agreement dated as of _________________________, 1998 between the
issuer and the shareholder, a copy of which Agreement will be
furnished, without charge, by Xxxxxxx Holding Company to the holder
of this certificate upon written request therefor."
4. I agree to be bound by the terms of this letter until the expiration
of the time period set forth in Rule 145(d)(2) or (3), whichever may
apply.
Sincerely,
_____________________________________
Title: ______________________________
Accepted and agreed to:
XXXXXXX HOLDING COMPANY Date: _____________________
By: ______________________________
Title: ___________________________ Number of ASB Shares owned: _____________
51
