1
ACQUISITION AGREEMENT AND PLAN OF MERGER
THIS ACQUISITION AGREEMENT AND PLAN OF MERGER (hereinafter referred to
as "Merger Agreement"), is entered into this 1st day of October, 1999, by and
among TEAM FINANCIAL, INC., a Kansas corporation (TFIN), TEAM FINANCIAL
ACQUISITION SUBSIDIARY, INC., a Kansas corporation (TAC), and COMBANKSHARES,
INC., a Kansas corporation, (CBI); and
RECITALS
WHEREAS, TFIN is a corporation duly organized and existing under the
laws of the State of Kansas; and
WHEREAS, TAC is a corporation duly organized and existing under the laws
of the State of Kansas; and
WHEREAS, CBI is a corporation duly organized and existing under the laws
of the State of Kansas,; and
WHEREAS, CBI is a bank holding company. Community Bank, Chapman, Kansas
(hereinafter referred to as "BANK") is a wholly-owned subsidiary of CBI; and
WHEREAS, TAC is a bank holding company which is wholly-owned by TFIN and
organized for business purposes including the facilitation of the acquisition of
CBI by TFIN through a merger of CBI into TAC; and
WHEREAS, it is the intention of the parties that the merger contemplated
by this agreement shall qualify as a tax free reorganization to the extent
authorized under the Internal Revenue Code of 1986, as amended, and the Rules
and Regulations promulgated thereunder, all as may be in effect at the time; and
WHEREAS, the Boards of Directors of TFIN, TAC and CBI have determined
that it is advisable for the general welfare and best interest of said
corporations and their respective stockholders that TAC and CBI merge as
provided for in this merger agreement and in accordance with the applicable
provisions of the laws of the State of Kansas; and
WHEREAS, The respective Boards of Directors of TAC and CBI have, by
resolutions, approved and authorized the execution and delivery of the Merger
Agreement on the terms and conditions set forth herein.
2
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein and subject to the satisfaction of the terms and conditions set forth
herein, and intending to be legally bound hereby; TFIN, TAC and CBI agree as
follows:
ARTICLE I
THE MERGER PLAN
SECTION 1.1 Plan of Merger. Subject to the terms and conditions of this
Merger Agreement, including the requisite governmental and stockholder
approvals; at the Effective Time, the acquisition of CBI by TAC will be carried
out in the following manner:
a. TAC and CBI will each cooperate in the preparation of such
applications, statements or materials as may be required to be furnished to the
stockholders of CBI or filed or submitted to appropriate governmental agencies
in connection with the merger and with the solicitation of the approval by the
stockholders of CBI in respect thereof and TFIN, the sole stockholder of TAC
agrees to vote all of its shares of capital stock of TAC in favor of the Merger
Agreement.
b. At the Effective Time as defined in Section 1.2, CBI shall merge
with and into TAC. As a result of the merger at the Effective Time, the
outstanding shares of the capital stock of CBI shall be surrendered and canceled
as provided herein and the separate existence of CBI shall cease. TAC shall
continue as the surviving corporation and shall continue to be governed by the
Laws of the State of Kansas and shall be properly authorized to do business in
the State of Kansas and comply with all applicable banking laws and regulations.
(TAC, in its capacity as the corporation surviving the merger, is sometimes
hereinafter referred to as the "Surviving Corporation") After the merger, TFIN
will continue to hold one-hundred percent (100%) of TAC capital stock and TAC
will own one-hundred percent (100%) of the assets of CBI, including one-hundred
percent (100%) of the outstanding capital stock of BANK. As a result of the
merger, stockholders of CBI shall be entitled to receive cash or TFIN Common
stock or a combination thereof as provided for herein.
SECTION 1.2 Effective Time. The consummation of the merger, the delivery
of the certificates and other documents called for by this Merger Agreement, and
the consummation of all other transactions contemplated by this Merger Agreement
shall take place at the offices of TFIN at 0 Xxxx Xxxxxx, Xxxxx, Xxxxxx, xx a
date that shall not be later than forty-five (45) days following the later of
the receipt of the final regulatory approval of the Board of Governors of the
Federal Reserve System and the State Banking Board of the State of Kansas, if
any shall be required, and the office of the Comptroller of the Currency, if any
shall be required, including the expiration of any applicable waiting period(s)
required to effect the merger. The Effective Time may be extended from time to
time by mutual written agreement of the parties. The parties agree that they
shall exert their reasonable best efforts to cause the Effective Time to be on
or before December 31, 1999.
SECTION 1.3 Surviving Corporation, Articles of Incorporation and Bylaws.
At the
2
3
Effective Time, CBI shall cease to exist and TAC will be the Surviving
Corporation. The Articles of Incorporation and Bylaws of TAC in effect
immediately prior to the Effective Date shall continue in full force and effect
until otherwise amended or repealed.
SECTION 1.4 Filing of Certificate of Merger. The merger shall be
documented by the filing of a Certificate of Merger at Xxx Xxxx Xxxxxx, Xxxxx,
Xxxxxx 00000 and by filing said Certificate with the Secretary of State of
Kansas pursuant to K.S.A. 17-6701(c).
SECTION 1.5 Officers and Directors. The directors and officers of TAC in
office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the directors and officers
of the Surviving Corporation from and after the Effective Time in accordance
with the Bylaws of the Surviving Corporation then existing or as amended and
restated as of the Effective Time and said directors and officers shall continue
to serve as the directors and officers of the Surviving Corporation until the
next annual meeting or until such time as their successors have been elected and
have qualified.
SECTION 1.6 Effect of Merger. At the Effective Time of the merger, the
Surviving Corporation shall succeed to, without other transfer, and shall
possess and enjoy, all the rights, privileges, immunities, powers and
franchises, both of a public and a private nature, and be subject to all the
restrictions, disabilities and duties of TAC and CBI. All property, real,
personal and mixed, and all debts due to either TAC or CBI on whatever account,
for stock as well as for all other things in action or belonging to TAC and CBI,
shall be vested in the Surviving Corporation, and all and every other interest
shall be thereafter as effectually the property of the Surviving Corporation, as
they were of TAC and CBI, and the title to any real estate vested by deed or
otherwise in either TAC or CBI shall not revert or be in any way impaired by
reason of the merger; provided, however, that all rights of creditors and all
liens upon any property of either TAC or CBI shall be preserved unimpaired,
limited in lien to the property affected by such liens at the Effective Time of
the merger, and all debts, liabilities and duties of said TAC and CBI,
respectively shall thenceforth attach to the Surviving Corporation and may be
enforced against it to the same extent as if said debts, liabilities and duties
has been incurred or contracted by the Surviving Corporation. Any existing
claim, action or proceeding, whether civil, criminal or administrative by or
against either TAC or CBI may be prosecuted to judgment or decree as if this
merger had not taken place, or TAC, as the Surviving Corporation, may be
substituted in such action or proceeding.
SECTION 1.7 Further Assurances. If at any time after the Effective Time,
TAC shall consider it advisable that any further conveyances, agreements,
documents, instruments or assurances of law or any other actions or things are
necessary or desirable to vest, perfect, confirm, or record in TAC the title to
any property or rights, privileges, powers, or franchises of CBI or BANK, the
former Board of Directors and officers of CBI, shall and will be authorized to,
execute and deliver in the name on behalf of CBI or otherwise, any and all
proper conveyances, agreements, documents, instruments, and assurances of law
and do all things necessary or proper to vest, perfect, or confirm title to
3
4
such property, rights, privileges, powers and franchises in TAC, and otherwise
to carry out the provisions of this Agreement.
SECTION 1.8 Governing Law. The laws which are to govern this Merger
Agreement and the Surviving Corporation are the laws of the State of Kansas.
ARTICLE II
STATUS AND CONVERSION OF SHARES
The mode of carrying into effect the merger provided in this Merger
Agreement, and the manner and basis of converting the shares of CBI stock to
shares of TFIN stock are as follows:
At the Effective Time by virtue of the merger and without any action on
the part of the holders thereof:
SECTION 2.1 TFIN's Common Stock. None of the shares of common stock, par
value .00 per share of TFIN, issued at the Effective Time of the merger,
hereinafter referred to as "TFIN Common Stock," shall be converted as a result
of the merger, but all of such shares shall remain issued shares of TFIN.
SECTION 2.2 CBI's Common Stock. TFIN shall appoint an Exchange Agent
("Exchange Agent") to accept surrender of the certificates representing shares
of CBI Common Stock and to deliver, in exchange for such surrendered
certificates, the consideration provided for herein in the form of the shares of
TFIN Common Stock or cash represented by such certificates.
a. At and after the Effective Time, each holder of a certificate or
certificates representing shares of CBI Common Stock, upon presentation and
surrender of such certificate or certificates to the Exchange Agent, shall be
entitled to receive the consideration provided for herein from the Exchange
Agent or TFIN, except that holders of those shares as to which dissenters'
rights shall have been asserted and perfected pursuant to Kansas Law shall not
receive the consideration provided for herein, but shall represent only such
dissenters' rights. Upon such presentation, surrender, and exchange, as provided
in this Section, certificates representing shares of CBI Common Stock previously
held shall be delivered to TFIN. Until so presented and surrendered, each
certificate or certificates which represented issued and outstanding shares of
CBI Common Stock at the Effective Time shall be deemed for all purposes to
evidence the right to receive the consideration as determined in accordance with
Section 2.3 of the Merger Agreement. If certificates representing shares of CBI
Common Stock have been lost, stolen, mutilated, or destroyed, the Exchange Agent
shall require the submission of a bond in lieu of such certificate. At the
Effective Time, the Stock Transfer Books of CBI shall be closed and no transfer
of CBI Common Stock shall thereafter be made, except to TFIN as provided for
herein.
4
5
b. No dividends or other distributions that are declared after the
Effective Time with respect to TFIN Common Stock payable to the holders of
record thereof after the Effective Time shall be paid to CBI stockholders
entitled to receive certificates representing TFIN Common Stock until such
stockholders surrender to the Exchange Agent their certificates representing CBI
Common Stock. Upon such surrender, there shall be paid to the stockholder in
whose name the certificates representing such TFIN Common Stock shall be issued
any dividends which shall have become payable with respect to such TFIN Common
Stock between the date of the Effective Time and the time of such surrender,
without interest.
c. The Exchange Agent's authorization may be terminated by TFIN at
any time after six months following the Effective Time. Upon termination of such
authorization, any shares of TFIN Common Stock and funds held by the Exchange
Agent for payment to CBI stockholders pursuant to this Agreement shall be
transferred to TFIN or its designee which shall thereafter perform the
obligations of the Exchange Agent. If outstanding certificates for shares of CBI
Common Stock are not surrendered or the payment for them not claimed prior to
such date on which such payments would otherwise escheat to or become the
property of any governmental unit or agency, the unclaimed items shall, to the
extent permitted by abandoned property and any other applicable law, become the
property of TFIN (and to the extent not in its possession shall be paid over to
it), free and clear of all claims or interest of any person previously entitled
to such items. Notwithstanding the foregoing, neither the Exchange Agent nor any
party to this Merger Agreement shall be liable to any holder of CBI Common Stock
for any amount paid to any governmental unit or agency having jurisdiction of
such unclaimed items pursuant to the abandoned property or other applicable law
of such jurisdiction.
d. The certificates evidencing the TFIN shares will bear a legend
substantially as follows:
"The shares represented by this Certificate have not been registered
under the Securities Act of 1933 (the "Act") and are "restricted
securities" as that term is defined in Rule 144 under the Act. The
shares may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act or
pursuant to an exemption from registration under the Act, the
availability of which is to be established to the satisfaction of the
Company."
e. CBI understands that the offer and sale of the TFIN Common Stock
to be issued pursuant to the Merger has not been registered under the Securities
Act of 1933 or any state securities law and as a condition to the issuance of
shares of TFIN to each stockholder of CBI that receives shares of TFIN Common
Stock in the merger, that each such stockholder represents and warrants that he
or she is acquiring such securities for his or her own account for investment
and not with a view to the resale or other distribution thereof and acknowledges
that such securities may not be resold or transferred unless they
5
6
have been effectively registered under the Securities Act of 1933 and any
applicable state securities laws or TFIN has received an opinion of counsel
reasonably satisfactory to it to the effect that any such proposed resale or
transfer is exempt from the registration requirements of the Securities Act of
1933 and any applicable state securities laws. At the time of closing, each such
stockholder must also acknowledge that he or she is familiar with the provisions
applicable to the resale of "restricted securities" within the meaning and the
limitations of Rule 144 adopted by the Securities and Exchange Commission under
the Securities Act of 1933.
f. Incidental Registration. For a period of time within two (2)
years of the Effective Time, each time that TFIN shall determine by resolution
of the Board of Directors to proceed with the actual preparation and filing of a
registration statement under the Securities Act of 1933 (the "Securities Act")
in connection with the proposed offer and sale for cash of its Common Stock by
it (other than a registration statement on a form that does not permit the
inclusion of shares by its security holders), TFIN will deliver notice of its
determination to all holders of TFIN common stock issued in exchange for CBI
common stock (pursuant to the Merger Agreement not theretofore registered under
the Commission and sold no later than thirty (30) days prior to the filing of a
registration statement with the Commission (hereinafter "registrable
securities"). Upon the written request of a holder of any such registrable
securities delivered to TFIN within ten (10 )days after receipt of any such
notice, TFIN will, except as herein provided, cause all such shares of
registrable securities, the holders of which have so requested registration
thereof, to be included in such registration statement at no expense to the
holders of such shares of registrable securities, all to the extent requisite to
permit the sale or other disposition by the prospective seller or sellers of the
registrable securities to be so registered; provided, however, that nothing
herein shall prevent TFIN from, at any time, abandoning or delaying any
registration. If, in the good faith judgment of the managing underwriter of such
public offering, the inclusion of all of the registrable securities covered by a
request for registration would reduce the number of shares to be offered by TFIN
or interfere with the successful marketing of the shares of stock offered by
TFIN, the number of registrable securities otherwise to be included in the
underwritten public offering may be reduced in whole or in part pro rata (by
number of securities) among the holders thereof requesting such registration.
Holders requesting inclusion in the registration will also be subject to the
requirement that to the extent requested by the underwriters, such holders shall
enter into any "lock-up" provisions or other similar agreements relating to
limiting the sale of TFIN common stock with respect to any shares not being
registered; provided that such "lock-up" period does not exceed 180 days. With
respect to any registration hereunder, TFIN shall bear the customary and
ordinary expenses of registration. However, selling holders of registerable
securities shall bear on a pro-rata basis any underwriting discounts and
commissions, transfer taxes and professional fees for services to the selling
holders.
SECTION 2.3 Distribution to Stockholders.
Each CBI stockholder will be required to designate, at the time he or
she votes for or against the proposed merger, the number of shares of CBI Common
Stock to be
6
7
exchanged for cash and/or TFIN Common Stock. The purchase price shall be paid by
TFIN so that the aggregate purchase price paid for shares of CBI Common Stock
shall consist of 49% cash and 51% TFIN Common Stock. The Purchase Price and
method of payment to CBI stockholders will be determined as follows (An example
of the calculations and distribution to CBI stockholders is reflected in Exhibit
2.3A attached hereto.):
a. The total purchase price paid by TAC to the stockholders of CBI
for their shares ("Purchase Price") shall be the adjusted book value of CBI as
of the close of business two days before the Effective Time. Such adjusted book
value shall be determined in accordance with generally accepted accounting
principles consistently applied, except the stock investment in BANK which shall
be reflected as $7,200,000, excluding any unrealized gain or loss on securities,
plus BANK's 1999 net after tax income as of the close of business two days
before the Effective Time less all dividends paid by BANK to CBI from January 1,
1999 through the Effective Time.
b. The value of each share of CBI common stock shall be calculated
by dividing the Purchase Price by 16,953, which number is the number of issued
and outstanding shares of CBI ("Per Share Consideration").
c. TAC shall withhold $500,000 from the cash portion of the Purchase
Price and deposit said amount into an escrow account pursuant to Article III and
the Post Closing Escrow Agreement attached hereto as Exhibit 3.
d. The total TFIN share consideration will be determined by dividing
51% of the Purchase Price by $11.00 rounded to four decimal places.
The Board of Directors of CBI shall provide to TFIN and TAC a chart or
listing, marked Exhibit 2.3B, to be attached hereto, which will show for each
CBI stockholder, the number of shares of CBI Common Stock to be exchanged for
TFIN Common Stock and/or shares to be exchanged for cash. Exhibit 2.3B shall be
provided to TFIN and TAC prior to the Effective Time.
TFIN and TAC shall deliver cash and shares of TFIN Common Stock to the
Exchange Agent in accordance with Exhibit 2.3B at the Effective Time for the
payment of the Purchase Price to the stockholders of CBI.
Any issued share of CBI Common Stock held in its treasury at the
Effective Time shall be canceled.
SECTION 2.4 Fractional Shares. No fractional shares of the TFIN's Common
Stock will be issued in exchange for CBI Common Stock. Instead, each holder
thereof on the day next preceding the Effective Time shall be paid in cash the
value of the fractional share interest to which the holder thereof would
otherwise be entitled based upon the values established in Section 2.3.
7
8
SECTION 2.5 Authorized Shares. At the Effective Time, there shall have
been no change in the number of authorized shares of TFIN or of CBI.
SECTION 2.6 Stockholder Objections to Merger. All written objections to
the Merger shall be subject to and determined by the requirements of Kansas law.
TFIN, TAC and CBI agree that prior to the Effective Time neither corporation
will, without the express written consent of the other, voluntarily make any
payment with respect to, or settle or offer to settle any such objection. Any
stockholder of CBI who objects to the Merger and who becomes entitled to any
statutory right for payment for his/her shares of stock shall receive payment
from the Surviving Corporation (but only after the amount thereof shall have
been agreed upon or finally determined pursuant to said statute) and after
payment thereof, said shares shall be canceled.
SECTION 2.7 Accounting Matters. The assets of TAC and CBI as of the
Effective Time shall be taken up on the books of the Surviving Corporation in
the amounts at which they shall be carried at that time on the books of the
respective corporations. The amount of capital of the Surviving Corporation
after the merger shall be equal to the sum of the aggregate amount of the par
value of the TFIN Common Stock to be issued in the Merger and of the aggregate
par value of the TFIN Common Stock that will remain issued upon the Merger. The
surplus of the Surviving Corporation after the Merger, including any surplus
arising in the Merger, shall be available to be used for any legal purposes for
which a surplus may be used. Differences in the accounting procedures of either
TAC or CBI corporations shall be reconciled as determined by the Surviving
Corporation.
ARTICLE III
RESERVE FOR LEGAL EXPENSES AND CLAIMS
TFIN, TAC and CBI agree that the sum of Five Hundred Thousand Dollars of
the cash portion of the Purchase Price shall be placed in escrow pursuant to the
terms and provisions of the Post-Closing Escrow Agreement, a copy of which is
attached hereto as Exhibit 3. Any claim for reimbursement by TFIN and/or TAC
relating to legal expenses incurred in the continuing defense of the existing or
hereafter filed cases in the Federal District Court for the District of Kansas
or the District Court of Xxxxxxx County, Kansas generally referred to as the
"Parade of Toys" litigation and any expenses, settlement costs, claims or
judgments paid or resulting therefrom will be limited to the escrow amount and
shall be administered pursuant to the provisions of the Post-Closing Escrow
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
TFIN and TAC, jointly and severally, hereby represent and warrant to CBI
and the stockholders of CBI as follows:
SECTION 4.1 Organization and Authority. Each corporation is a
corporation duly
8
9
organized, validly existing and in good standing under the laws of the state of
Kansas. Each has corporate power to carry on its business as it is now being
conducted and is qualified to do business in every jurisdiction in which the
character and location of the assets owned by it or the nature of the business
transacted by it require qualification. TFIN is duly registered as a bank
holding company under the provisions of the Bank Holding Company Act of 1956, as
amended. TFIN has all requisite corporate power and authority to enter into this
Merger Agreement, and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Merger Agreement, and the
consummation of the transactions contemplated hereby, have been duly authorized
by all necessary corporate action on the part of TFIN. TAC has the power to
enter into and perform this Merger Agreement and the execution, delivery and
performance of this Merger Agreement by TAC and the consummation by TAC of the
transactions contemplated hereby have been duly authorized by its Board of
Directors and by TFIN as the sole stockholder of TAC. Assuming due execution and
delivery by CBI, this Merger Agreement constitutes a valid and binding
obligation of TFIN and TAC, enforceable in accordance with its terms, subject to
applicable conservatorship, receivership, bankruptcy, insolvency and similar
laws affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity (including without limitation
specific performance), whether applied in a court of law or a court of equity.
SECTION 4.2 No Violations. Subject to approval by the appropriate
regulatory agencies, the execution, delivery and performance of this Merger
Agreement by TFIN and TAC do not, and the consummation of the transactions
contemplated hereby will not, constitute (i) a breach or violation of, or a
default under, any law, rule or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture or instrument of TFIN
and TAC or any subsidiary of TFIN and TAC or to which TFIN and TAC or any
subsidiary (or any of their respective properties) is subject, (ii) a breach or
violation of, or a default under, the articles of incorporation, charter or
bylaws of TFIN and TAC or any subsidiary of TFIN and TAC or (iii) a breach or
violation of, or a default under (or an event which with due notice or lapse of
time or both would constitute a default under), or result in the termination of,
accelerate the performance required by, or result in the creation of any lien,
pledge, security interest, charge or other encumbrance upon any of the
properties or assets of TFIN and TAC or any subsidiary of TFIN and TAC under any
of the terms, conditions or provisions of any note, bond, indenture, deed of
trust, loan agreement or any other agreement, instrument or obligation to which
TFIN and TAC or any subsidiary of TFIN and TAC is a party, or to which any of
their respective properties or assets may be bound or affected.
SECTION 4.3 Capital Stock of TFIN. TFIN has total authorized capital
stock consisting of 60,000,000 shares of common stock, $0.00 par value, and
10,000 shares of preferred, $0.00 par value. All of the issued and outstanding
shares of TFIN common stock are fully paid and non-assessable, and there exist
no preemptive rights, options, obligations or rights of any character whereby
either corporation could be required to issue additional capital stock to any
person, except as specially disclosed.
SECTION 4.4 Financial Statements. The consolidated balance sheets of
TFIN as
9
10
of June 30, 1999 and all related notes to the foregoing, all of which have been
delivered to CBI and have been certified by KPMG LLP, independent certified
public accountants. All of the foregoing financial statements have been prepared
in accordance with generally accepted accounting principles and practices which
were applied on a consistent basis, and present fairly in all material respects
the financial position, results of operation and changes of financial position
of TFIN as of their respective dates and for the periods indicated. From the
date of the last such statement to the date hereof, there has been no material
adverse change in the financial condition, properties, assets, liabilities,
business or prospects of TFIN.
SECTION 4.5 Litigation and Proceedings. Except as disclosed on Exhibit
4.5 attached hereto, there is no suit, action or legal or administrative
proceeding pending, or to the knowledge of either TFIN or TAC, threatened,
against either of them, which, if adversely determined, might materially and
adversely affect the financial condition of the corporation or the conduct of
its businesses. Nor is there any decree, injunction or order of any court,
governmental department or agency outstanding against either corporation having
any such effect.
SECTION 4.6 Filing of Reports. Both TFIN and TAC have filed all
applicable reports, returns and filing information and data with state and
federal banking authorities and regulatory authorities as required by law or
regulation.
SECTION 4.7 Material Changes in Operations. Both TFIN and TAC have each
conducted their respective businesses, only in the ordinary and usual course of
business and neither corporation or their respective bank operations have
undergone or suffered any material change in financial condition, properties,
assets, liabilities, business, operations or prospects which in any individual
case or in aggregate materially adversely affects the corporation.
SECTION 4.8 No Conflict with Other Instruments. At the Effective Time,
the consummation of the transactions contemplated by this Merger Agreement will
not result in the breach of any term or provision of or constitute a default
under any indenture, mortgage, deed of trust or other material agreement or
instrument to which either TFIN or TAC is a party.
10
11
SECTION 4.9 Labor Relations; Employees; ERISA. Neither TFIN nor TAC is a
party to or affected by any collective bargaining agreement or employment
agreement, nor is either corporation a party to any pending or threatened labor
dispute, organizational efforts or labor negotiations. Both corporations have
complied with all applicable laws relating to the employment of labor, including
but not limited to, the provisions thereof relating to wages, hours, collective
bargaining, payment of social security taxes, and equal employment opportunity,
the violations of which would have a materially adverse impact on their
respective businesses. Neither corporation is liable for any arrears of wages or
any taxes or penalties for failure to comply with any of the foregoing. Except
for the Team Financial, Inc. Employees' Stock Ownership Plan; TFIN Employee
Stock Purchase Plan, and the TFIN Stock Incentive Plan; neither of the
corporations has any written or oral retirement, pension, profit sharing, stock
option, bonus or other employee benefit plan or practice other than group health
and accident insurance. Neither of the corporations has violated any of the
provisions of ERISA, and none of them has engaged in any "prohibited
transactions" as such term is defined in Section 406 of ERISA.
SECTION 4.10 Environmental Compliance. TFIN and TAC are in material
compliance with all relevant laws concerning conservation and protection of the
environment. No real property owned or leased by any of said corporations is
being used or has at any time in the past ever been used for the storage
(whether permanent or temporary), disposal, or handling of any hazardous
materials, hazardous waste, hazardous substance, contaminant or pollutant nor is
any such material, waste, substance, contaminant, or pollutant located in, on,
or under, or at the real or personal property owned, leased or used by any of
said corporation. No real or personal property of any corporation has ever been
used for the purpose of a dump site. Notwithstanding the foregoing, all
representations or warranties made under this Section 4.9 with respect to the
real and personal property owned by virtue of routine collection and/or
foreclosure activities undertaken by any subsidiary owned by TFIN or TAC to
enforce obligations of borrowers are made only to the best knowledge of the
corporations.
SECTION 4.11 Employment of Aliens. TFIN and TAC and their respective
subsidiaries are in material compliance with the Immigration and Control Act of
1986 and amendments thereof.
SECTION 4.12 Absence of Undisclosed Liabilities. Except as and to the
extent reflected or reserved against, TFIN and TAC or their wholly-owned
subsidiaries do not have any material liabilities or obligations whether
accrued, absolute, contingent or otherwise, including, governmental charges or
lawsuits, or any tax liabilities due or to become due.
SECTION 4.13 Tax Matters. TFIN and TAC have filed all federal, state,
municipal and local income, excise, property, special district, sales, transfer
and other tax returns and reports which are required to be filed up to and
including the Effective Time and have paid all taxes which have become due
pursuant to such returns or assessments which have
11
12
become payable. There are no examinations, reviews, audits or investigations of
any tax return or report which are presently pending or threatened.
SECTION 4.14 Information and Proxy Statement. The information relating
to TFIN and TAC including any information or proxy statement distributed
pursuant to this Merger will be accurate and complete in all material respects,
will not omit to state any material fact required to be stated therein or
necessary to prevent such information from being misleading, and will comply in
all material aspects with the requirements of federal and state law on the date
of first mailing of such information to the stockholders of CBI.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF CBI
CBI hereby represents and warrants to each of TFIN and TAC as follows:
SECTION 5.1. Organization and Good Standing.
a. CBI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Kansas with the corporate power and
authority to own its properties and conduct its business as it is now being
conducted and is duly registered as a bank holding under the Bank Holding Act of
1956, as amended. The conduct of CBI's business and the ownership of its
properties do not require CBI to qualify as a foreign corporation in any
jurisdiction, except where the failure to be so qualified individually or in the
aggregate would not materially and adversely affect the business, operations,
properties or financial condition of CBI and its subsidiary.
b. CBI has one wholly-owned subsidiary: Community Bank, Xxxxxxx,
Kansas ("BANK"), which is a Kansas banking corporation duly organized, validly
existing and in good standing under the laws of the State of Kansas, with the
corporate power and authority to carry on its business as it is now being
conducted. To the best of CBI's knowledge, BANK is duly qualified to do business
in each jurisdiction in which the conduct of its business requires such
qualification except where the failure to be so qualified individually or in the
aggregate would not materially and adversely affect the business, operations,
properties or financial condition of CBI and/or BANK.
SECTION 5.2 Authority. CBI has all requisite corporate power and
authority to enter into this Merger Agreement, and to consummate the
transactions contemplated hereby. The execution and delivery of this Merger
Agreement, and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of CBI. This
Merger Agreement has been duly executed and delivered by CBI, and assuming due
execution and delivery by TFIN, constitutes a valid and binding obligation of
CBI, enforceable in accordance with its terms subject to applicable
conservatorship, receivership, bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
general principles of equity (including without limitation specific
performance), whether applied in
12
13
a court of law or a court of equity. Attached hereto as Exhibits 5.2A and 5.2B,
respectively, are certified resolutions of the Board of Directors and the
stockholders of CBI.
SECTION 5.3 Stockholder Approval. The Board of Directors of CBI has
directed or will direct, that this Merger Agreement and the transactions
contemplated hereby be submitted to CBI's stockholders for approval at a meeting
of such stockholders and, except for adoption of this Merger Agreement by the
requisite vote of the CBI's stockholders, no other stockholder action is
necessary to approve this Merger Agreement and to consummate the transactions
contemplated hereby. The Board of Directors will recommend that the stockholders
approve the transactions contemplated hereby, subject to their fiduciary duties.
The approval of the holders of a majority of the outstanding shares of CBI
Common Stock entitled to vote with respect to such matter is required for
approval of this Merger Agreement and to consummate the transactions
contemplated hereby. No approval of a number of outstanding shares of CBI
greater than that required by the relevant statutory provisions is required for
approval of this Merger Agreement and the consummation of the transactions
contemplated hereby.
SECTION 5.4 No Violations. Except for the approvals of the appropriate
regulatory agencies and such filings and registrations as are required under
federal and state securities and Blue Sky laws, the execution, delivery and
performance of this Merger Agreement by CBI do not, and the consummation of the
transactions contemplated hereby will not, constitute (i) a breach or violation
of, or a default under any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or instrument of
CBI or to the best of CBI's knowledge of BANK or to which CBI or BANK (or any of
their respective properties) is subject, (ii) a breach or violation of, or a
default under, the articles of incorporation, charter or bylaws of CBI or BANK
or (iii) a breach or violation of, or a default under (or an event which with
due notice or lapse of time or both would constitute a default under), or result
in the termination of, accelerate the performance required by, or result in the
creation of any lien, pledge, security interest, charge or other encumbrance
upon any of the properties or assets of CBI or to the best of CBI's knowledge of
BANK under any of the terms, conditions or provisions of any note, bond,
indenture, deed of trust, loan agreement or other agreement, instrument or
obligation to which the CBI or BANK is a party, or to which any of their
respective properties or assets may be bound or affected. The parties
acknowledge that there is a Bank Stock Loan to CBI the principal of which shall
be paid by TFIN at closing. Upon such payment, TFIN shall use its best efforts
to ensure that any guaranty or other personal obligation of Xxxxx X. Xxxxxx in
regard to said loan will be terminated.
SECTION 5.5 Consents. Except for the approvals of the appropriate
regulatory agencies and such filings and registrations as are required under
federal and state securities and Blue Sky laws, no filing or registration with,
or authorization, consent or approval of, any public body or authority is
necessary for the consummation by CBI of the Merger or the other transactions
contemplated by this Merger Agreement.
13
14
SECTION 5.6 Capitalization. CBI has authorized capital stock consisting
of One Hundred Thousand (100,000) shares of common stock, par value Twenty Five
Dollars ($25.00) per share, of which Sixteen Thousand Nine Hundred Thirty Five
(16,935) shares are issued and outstanding with no shares held as treasury
stock. All of the issued and outstanding shares of CBI Common Stock are validly
issued, fully paid and non-assessable. There are no outstanding warrants,
options, subscriptions, contracts, rights or other agreements or commitments
obligating CBI to issue or sell any additional shares of CBI Common Stock nor
are there outstanding any securities, debts, obligations or rights which are
convertible into or exchangeable for shares of CBI Common Stock. The authorized
capital stock of BANK consists of Ten Thousand (10,000) shares of common stock,
One Hundred Dollars ($100.00) par value per share ("BANK Stock"), of which Five
Thousand (5,000) shares have been duly and validly issued, are fully paid, and,
are owned directly by CBI. Such shares are free and clear of all liens,
encumbrances, equities or claims save and except for a pledge of such shares to
secure the obligation of CBI to US Bank, the outstanding principal balance of
which is $1,150,000.00 as of the date hereof (the "BANK Stock Loan"). There are
no outstanding warrants, options, subscriptions, contracts, rights or other
arrangements or commitments obligating CBI or BANK to issue or sell any
additional shares of BANK's capital stock nor are there outstanding any
securities, debts, obligations or rights which are convertible into or
exchangeable for shares of capital stock or any other equity security of BANK.
SECTION 5.7 Government Regulation. CBI and to the best of CBI's
knowledge BANK holds all material licenses, certificates, permits, franchises
and rights from all appropriate federal, state or other public authorities
necessary for the lawful conduct of their respective businesses and ownership of
their respective properties. CBI and to the best of CBI's knowledge BANK have
substantially complied with all material federal, state and local statutes,
regulations, ordinances or rules applicable to the ownership of their respective
properties or the conduct of their respective businesses.
SECTION 5.8 Financial Statements. CBI has previously delivered to TFIN
and TAC balance sheets for the CBI as of December 31, 1998, December 31, 1997
and December 31, 1996, the statements of earnings for the period ended June 30,
1999 and for the years ended December 31, 1998, December 31, 1997, and December
31, 1996, and the call report of BANK dated September 30, 1999 (collectively the
"CBI Financial Statements"). Although such statements have not been certified as
of the date hereof by independent certified public accountants, the CBI
Financial Statements have been prepared (except for the absence of notes
thereto) in accordance with generally accepted accounting principles and
practices which were applied on a consistent basis, and present fairly in all
material respects the financial position, results of operation and changes of
financial position of CBI or the BANK, as applicable, as of their respective
dates and for the periods indicated. CBI has no material liabilities or
obligations of a type which would be included in a balance sheet prepared in
accordance with generally accepted accounting principles whether related to tax
or non-tax matters, accrued or contingent, due or not yet due, liquidated or
unliquidated, or otherwise, except as and to the extent disclosed or
14
15
reflected in the balance sheet of CBI as of June 30, 1999, or incurred since
June 30, 1999, in the ordinary course of business. From June 30, 1999 until the
date hereof, there has been no material adverse change in the financial
condition, properties, assets, liabilities, rights or business of CBI or BANK,
or in the relationship of CBI and BANK with respect to its employees, creditors,
suppliers, distributors, customers or others with whom it has business
relationships. Attached hereto as Exhibit 5.8B is the call report of the BANK
dated September 30, 1999.
SECTION 5.9 Legal Proceedings. Except as disclosed on Exhibit 5.9
attached hereto, there are as of the date hereof no actions, suits, claims,
demands or other proceedings or investigations, either judicial or
administrative, pending or, to the knowledge of CBI, threatened against or
affecting the properties, assets, rights or business of CBI or BANK or the right
to carry on or conduct their respective businesses, nor are there to the
knowledge of CBI any grounds therefor, which, if adversely determined, would in
the aggregate materially adversely affect the business, operations, properties
or financial condition of CBI or BANK, except as specifically disclosed and
escrowed for herein. Except as disclosed on Exhibit 5.9 attached hereto, there
are as of the date hereof no actions, suits, claims, demands or other
proceedings or investigations, either judicial or administrative, pending or, to
the knowledge of CBI, threatened which will or could prevent or interfere with
the consummation of the transactions contemplated by this Merger Agreement. CBI
agrees to advise TFIN and TAC if at any time between the date hereof and the
Effective Time, any legal proceeding as described in this paragraph is initiated
or, to the knowledge of CBI, threatened. The existing litigation known as
Community Bank vs. Sloan, Listrom, Xxxxxxxxxx, Xxxxx & Xxxxxxxx, LLC, et al.
Case No. 97C3908 filed In the District Court of Xxxxxxx County, Kansas shall not
be transferred by merger hereunder. BANK is the plaintiff and CBI shall take all
necessary and appropriate action to cause BANK to assign all right title and
interest thereto, at or prior to closing, to the stockholders of CBI free and
clear of any claim of TFIN or TAC following the merger. CBI stockholders shall
hold BANK harmless from any continuing cost, expense and liability in regard to
such litigation following the assignment thereof.
SECTION 5.10 Title to Assets. Except as disclosed on Exhibit 5.10A and
except for securities pledged to secure public funds deposits or subject to
customer repurchase agreements entered into in the ordinary course of business,
and leased property discussed below; CBI and BANK have good and marketable title
to and possession of all of their respective real and personal properties and
assets, in each case free and clear of any liens, restrictions, encumbrances,
rights, title and interests of others, except for other real estate owned and
except as reflected on their respective financial statements and except for the
lien of current taxes, covenants and restrictions of record, and other minor
imperfections of title not affecting marketability, which liens, covenants,
restrictions and imperfections do not materially affect the value of such
property and do not interfere with the use made of such property by CBI and
BANK. The real and personal properties and assets held under lease by CBI and
BANK are held by them under valid, subsisting and enforceable leases with such
exceptions as do not interfere with the
15
16
use made of such properties and assets by CBI and BANK. No consent is necessary
under the terms of any such lease in connection with the consummation of the
transactions contemplated hereby. Attached hereto as Exhibit 5.10B is a list of
leases to which CBI or BANK is a party.
SECTION 5.11 Undisclosed Liabilities. As of the date hereof, neither
CBI nor BANK have any debt, liability or obligation (whether accrued,
contingent, absolute or otherwise) known to any of such corporations of the
nature which would customarily be included in a corporate balance sheet or the
notes thereto prepared in accordance with generally accepted accounting
principles that is not reflected or reserved against in the CBI Financial
Statements or was not incurred in the ordinary course of their business.
SECTION 5.12 Reserves: CBI specifically represents and warrants to TAC
that the reserve for possible loan and lease losses shown in the Consolidated
Financial Statements of CBI and its wholly-owned subsidiary, BANK, is adequate
in all material respects, under the requirements of generally accepted
accounting principles and regulatory requirements, to provide for possible
losses, net of recoveries relating to loans previously charged off, on loans
outstanding and as a percentage of loans no less than the percentage of reserve
to loans on June 30, 1999.
SECTION 5.13 Taxes. CBI and BANK have timely filed all tax returns
required to be filed by them, and the CBI and BANK have timely paid and
discharged all taxes due in connection with or with respect to the filing of
such tax returns and have timely paid all other taxes as are due, except such as
are being contested in good faith by appropriate proceedings and with respect to
which CBI is maintaining reserves adequate for their payment. To the best
knowledge of CBI, the liability for taxes set forth on each such tax return
adequately reflects the taxes required to be reflected on such tax return.
Neither the IRS nor any other governmental entity or taxing authority or agency
is now asserting, either through audits, administrative proceedings, court
proceedings or otherwise, or, to the best of CBI's knowledge, threatening to
assert against CBI or BANK any deficiency or claim for additional taxes. Neither
the CBI nor BANK has granted any waiver of any statute of limitations with
respect to, or any extension of a period for the assessment of, any tax. There
are no tax liens on any assets (excluding OREO properties) of CBI or BANK.
Neither CBI nor BANK has received a ruling or entered into an agreement with the
Internal Revenue Service or any other governmental entity or taxing authority or
agency that would have a Material Adverse Effect (as defined below) on CBI or
BANK, taken as a whole, after the Effective Time. For purposes of this
Agreement, "Material Adverse Effect" with respect to CBI or BANK means an effect
that: (1) is materially adverse to the business, financial condition, results
of operations or prospects of CBI or BANK taken as a whole; (2) significantly
and adversely affects the ability of the CBI or BANK to consummate the
transactions contemplated by this Agreement by the Closing Date or to perform
their material obligations under this Agreement; or (3) enables any persons to
prevent the consummation by the Closing Date of the transactions contemplated by
this Agreement. CBI agrees to provide assistance in the preparation of income
tax returns for CBI and BANK from the
16
17
commencement of the current fiscal year through the Effective Time with such
returns to be completed within ninety (90) days after the Effective Time.
SECTION 5.14 Contracts. Except as set forth on Exhibit 5.14 attached
hereto, neither CBI nor BANK is party to or bound by any:
a. Employment contract;
b. Bonus, deferred compensation, savings, profit sharing,
severance pay, pension or retirement plan or arrangement, except for the Plans
referenced in Section 5.17 hereof;
c. Material lease or license with respect to any property,
real or personal, whether CBI or BANK is landlord or tenant, licensor or
licensee, involving a liability or obligation of CBI or BANK as obligor in
excess of $5,000 on an annual basis;.
d. Agreement, contract or indenture relating to the borrowing
of money by CBI or any subsidiary, excluding deposit obligations, obligations
under certificates of deposit, letters of credit, items in the process of
collection, commitments to loan or discount, endorsements made for collection
and guarantees made in the ordinary course of business;
e. Agreement with any present or former officer, director or
stockholder of CBI or BANK; or
f. Other contract, agreement or other commitment which is
material to the business, operations, property, prospects or assets or to the
condition, financial or otherwise, of CBI or BANK or which involve a payment by
CBI or BANK of more than $5,000 on an annual basis.
SECTION 5.15 Regulatory Reports; Examinations. CBI and BANK have timely
filed all material reports, registrations and statements, together with any
amendments required to be made with respect thereto, with all governmental or
regulatory authorities, agencies, courts, commissions or other entity
("Governmental Entity") and have paid all fees and assessments due and payable
in connection therewith. Except for normal examinations conducted by a
Governmental Entity in the regular course of the business of CBI and BANK, no
Governmental Entity has initiated any proceeding or, to the best knowledge of
CBI, investigation into the business or operations of CBI or BANK. To the best
knowledge of CBI, there is no unresolved material violation, criticism, or
exception by any Governmental Entity with respect to any written report or
statement relating to any examinations of CBI or BANK.
SECTION 5.16 Conduct. From June 30, 1999 until the date hereof:
a. There has been no material adverse change in the financial
condition of,
17
18
or in the properties, assets, liabilities, rights or business, taken as a whole,
of CBI or BANK or, to the best of CBI's knowledge in the relationship of CBI or
BANK with respect to their employees, creditors, suppliers, distributors,
customers or others with whom they have business relationships.
b. The business affairs of CBI and BANK have been conducted
and carried on only in their ordinary and regular course of business, and CBI
and BANK have not incurred or become subject to any liabilities or obligations
other than those incurred in their ordinary course of business, those incurred
pursuant to existing contracts included on Exhibit 5.14, and those incurred
pursuant to commitments permitted hereby.
c. Neither CBI nor BANK have entered into any employment
contract with any director, officer or salaried employee, paid any or made any
accrual or arrangement for payment of bonuses or special compensation of any
kind or any severance or termination pay to any of their officers, employees or
directors, increased the rate of compensation, if any, or instituted or made any
material increase in any officer's, employee's or director's welfare, retirement
or similar plan or arrangement, other than merit increases made in accordance
with past practices and procedures.
SECTION 5.17 Compliance with ERISA. Neither CBI nor BANK has
established, maintained or contributed at any time during the five-year period
ending as of the Effective Time to any employee benefit plan (as defined in
Sections 3(3) or 3(37) of the Employment Retirement Income Security Act of 1974
("ERISA")) or any other plan with respect to which any governmental filings are
required, except for the Community Bank ESOP/401 (k) Plan (Plan). The Plan is
sponsored by BANK, not CBI. A true and accurate copy of the Plan, any related
trust agreements and each of the amendments thereto has been provided to TFIN
and TAC together with (i) all determination letters received in respect of any
qualified plans, and (ii) all required reports and supporting schedules filed
with any government agency in respect of the Plan for the three most recent
years ending on or before the date hereof. To CBI's knowledge, the Plan and each
fiduciary (as defined in Section 3(21) of ERISA) of the Plan are in compliance
in all material respects with all applicable requirements (including
nondiscrimination requirements in effect as of the date hereof) of the Internal
Revenue Code of 1986 ("Code"), including, but not limited to, Sections 79, 105,
106, 125, 401, 501, and 4975 of the Code. For purposes of this Section 4.16,
noncompliance with the Code or ERISA is material if such noncompliance could
have a Material Adverse Effect on the condition of the Plan or of CBI or BANK,
either as of the Effective Time or upon discovery of the noncompliance. To CBI's
knowledge, all required contributions to the Plan through the date hereof have
been made. To CBI's knowledge, CBI and BANK (each with respect to the Plan), as
well as the Plan, have no material current or threatened liability of any kind
to any person, including but not limited to any government agency, as of the
date hereof, other than for the payment of benefits in the ordinary course.
Prior to the Effective Time, CBI shall cause BANK to terminate the existing Plan
at the sole cost and expense of CBI and/or BANK unless, within fifteen (15) days
of the signing of this Merger Agreement, TFIN shall, in its sole discretion,
give notice to CBI of TFIN's intention to merge the ESOP Plan with TFIN's
18
19
existing ESOP. Any merger so requested by TFIN shall be at the sole cost and
expense of TFIN. It is understood that all actions required for complete
termination of the Plan may not be finalized prior to the Effective Time,
however, CBI shall take such action, or otherwise authorize such action as may
be necessary to finalize such termination following the Effective Time at the
sole cost of CBI.
SECTION 5.18 Defaults. Neither CBI nor BANK is in material breach or
material default known to CBI under any agreement or commitment to which CBI or
BANK is a party, or under any loan agreement, note, security agreement,
guarantee or other document pursuant to or in connection with CBI's or BANK's
extension of credit; and to CBI's knowledge, there has not occurred any event
which, after the giving of notice, the lapse time or otherwise, would constitute
any such default under, or result in any such breach of, any such agreement,
commitment or extension of credit.
SECTION 5.19 Insurance. Complete and correct copies of all material
policies of fire, product or other liability, workers' compensation and other
similar forms of insurance owned or held by CBI and BANK are attached hereto as
Exhibit 5.19. Subject to expirations and renewals of insurance policies in the
ordinary course of business, all such policies are in full force and effect; all
premiums with respect thereto covering all periods up to and including the date
as of which this representation is being made have been paid (other than
retrospective premiums which may be payable with respect to worker's
compensation insurance policies); and no notice of cancellation or termination
has been received with respect to any such policy. To the best of CBI's
knowledge, such policies are valid and enforceable policies. To the best
knowledge of CBI, the insurance policies to which CBI or BANK are parties are
sufficient for compliance with all material requirements of law and all material
agreements to which CBI or BANK are parties and will be maintained by CBI and
BANK until the Effective Time. Neither CBI nor BANK has been refused any
insurance with respect to any material assets or operations, nor has coverage
been limited in any respect material to their operations by any insurance
carrier to which they have applied for any such insurance or with which they
have carried insurance during the last five (5) years.
SECTION 5.20 Absence of Adverse Agreements. Neither CBI nor BANK is a
party to any agreement or instrument or any judgment, order or decree or any
rule or regulation of any court or other governmental agency or authority which
materially and adversely affects or is reasonably likely to result in a Material
Adverse Effect on the financial condition, results or operations, assets,
business or prospects of CBI or BANK, taken as a whole.
SECTION 5.21 Internal Controls and Records. CBI and to the best of
CBI's knowledge BANK maintain books of account which accurately and validly
reflect, in all material respects, all loans, mortgages, collateral and other
business transactions and maintain accounting controls sufficient to ensure that
all such transactions are (a) in all material respects, executed in accordance
with its management's general or specific authorization, and (b) recorded in
conformity with generally accepted accounting principles.
19
20
SECTION 5.22 Loans.
a. To the best of CBI's knowledge, BANK is not a party to any
written or oral loan agreement, note or borrowing arrangement which has been
classified as "substandard", "doubtful," "loss," "other loans especially
mentioned" or any comparable classifications by CBI or BANK or banking
regulators, except as reflected on a list attached hereto and marked Exhibit
5.22 A.
b. Neither CBI nor, to the best of CBI's knowledge, BANK is a
party to any written or oral loan agreement, note, or borrowing arrangement,
including any loan guaranty, with any director or executive officer of CBI or
BANK, or any person, corporation or enterprise controlling, controlled by or
under common control with any of the foregoing;
c. To the best knowledge of CBI neither CBI nor BANK is a
party to any written or oral loan agreement, note or borrowing arrangement in
violation of any law, regulation or rule of any governmental authority and which
violation is reasonably likely to result in a Material Adverse Effect on CBI or
the BANK.
SECTION 5.23 Environmental Laws. To the best knowledge of CBI:
a. The operations of CBI and BANK comply in all material
respects with all applicable past and present federal, state and local
environmental statutes and regulations and neither the condition of any property
owned by CBI or BANK nor the operation of the business of any of such entities
violates in all material respects any applicable federal, state or local
environmental statute or regulation.
b. None of the operations of CBI or BANK is subject to any
judicial or administrative proceeding alleging the violation of any federal,
state or local environmental health or safety statute or regulation nor is it
the subject of any claim alleging damages to health or property pursuant to
which CBI or BANK may be liable.
c. None of the operations of nor any of the properties owned
by CBI or BANK is the subject of any federal, state or local investigation in
evaluating whether any remedial action is needed to respond to a release or
threatened release of any hazardous waste or substance from whatever source.
d. No condition or event has occurred which, with notice or
the passage of time or both, would constitute a violation of any federal, state
or local environmental law and at no time has CBI or BANK stored or used any
pollutants, contaminants or hazardous or toxic waste, substances or materials on
or at any location owned by CBI or BANK.
20
21
e. There are no underground storage tanks now or heretofore
located on any real property owned by CBI or BANK.
f. Neither CBI nor BANK has ever been notified by either a
federal, state or local governmental authority, or any private party, that CBI
or BANK is a potentially responsible party for remedial costs spent addressing
the release, or threat of a release, of a hazardous substance and to the
environment pursuant to the Comprehensive Environmental Response, Compensation
or Liability Act, 42 U.S.C. 9601, et seq. or any corresponding state law. TFIN
or TAC may obtain at its option and expense on or prior to 120 days following
the date hereof an environmental audit of all properties and assets of CBI and
BANK whether directly owned or classified as other real estate owned. Such
environmental audit shall constitute a part of the due diligence process, should
TFIN or TAC choose to pursue it, and if TFIN or TAC determines in its sole
discretion that such environmental audit reflects the potential of a material
environmental problem with respect to any of the properties or assets of CBI or
BANK, then TFIN or TAC may deem the due diligence unsatisfactory and terminate
this Agreement under the terms of Section 6.1 hereinafter.
SECTION 5.24 Broker/Advisor's Fees. CBI has employed a broker advisor
in connection with the transactions contemplated by this Merger Agreement and
will be solely responsible for the payment of fees incurred thereby.
SECTION 5.25 Labor Matters
a. To the best knowledge of CBI, CBI and BANK are in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and are not
engaged in any unfair labor practice.
b. There is no unfair labor practice complaint against CBI or
BANK pending before the National Labor Relations Board.
c. There is no labor strike, dispute, slowdown, representation
campaign or work stoppage actually pending or to the best of CBI's knowledge,
threatened against or affecting CBI or BANK.
d. No grievance or arbitration proceeding arising out of or
under collective bargaining agreements is pending and no claim therefor has been
asserted against CBI or BANK.
e. Neither CBI nor BANK is experiencing any material work
stoppage.
SECTION 5.26. Information Supplied. None of the information supplied or
to be supplied by CBI for inclusion or incorporation by reference in the Proxy
Statement will,
21
22
at the date of mailing to stockholders and at the times of the meetings of
stockholders to be held in connection with the Merger, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, other than
information supplied by TFIN or TAC.
SECTION 5.27 Full Disclosure. No statement contained in any document,
certificate, or other writing furnished or to be furnished by or at the
direction of CBI to TFIN in, or pursuant to the provisions of, this Merger
Agreement contains or shall contain any untrue statement of a material fact or
omits or shall omit to state any material fact necessary, in light of the
circumstances under which it was made, in order to make the statements herein or
therein not misleading.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination. This Merger Agreement may be terminated and
the Merger may be abandoned at any time notwithstanding approval thereof by the
stockholders of CBI, but prior to the Effective Time:
a. By the written agreement jointly approved by both boards of
directors of CBI and TAC.
b. By the board of directors of either TAC or CBI if any court
of competent jurisdiction in the United States or other state or federal
regulatory or governmental body shall have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Merger Agreement and such order, decree,
ruling or other actions shall have become final and nonappealable.
c. By the board of directors of either TAC or CBI in the event
of a material breach or material misrepresentation by the other party giving
either TAC or CBI the right to terminate the Merger Agreement.
d. By the board of directors of either TAC or CBI, if within
180 days from the date hereof, (i) TAC, despite using its best efforts, has not
obtained all required regulatory approvals, notices of non-disapproval and
consents required to consummate this Merger Agreement, or (ii) there is any
remaining action or inaction by any regulatory body or agency, or any waiting
period remains, before the Merger can be lawfully concluded.
e. By the board of directors of TAC if a significant portion
of the assets of BANK are physically damaged, lost or destroyed prior to the
Effective Time.
SECTION 6.2 Survival. All obligations set forth in Section 9.4 shall
survive any termination of this Merger Agreement. All representations and
warranties contained herein shall survive the Effective Time for a period of two
(2) years following the Effective Time. Waiver of any liability for a breach of
this provision must be in writing signed by the parties in order to be
effective.
22
23
ARTICLE VII
CLOSING PREPARATIONS
PROXY STATEMENT
SECTION 7.1 TFIN shall, as promptly as practicable after the date of
this Merger Agreement and the furnishing by CBI of all information regarding
TFIN required or desired by CBI to be reflected therein, prepare an Offering
Circular relating to shares of TFIN Common Stock to be issued at the Effective
Time and containing a Proxy Statement ("Proxy Statement") for use at the CBI
Stockholders' Meeting referred to in Section 8.1. TFIN shall use its best
efforts to enable the proxy material to be mailed to stockholders as promptly as
practicable. CBI will furnish to TFIN the information relating to CBI required
by TFIN to be included in the Offering Circular.
SECTION 7.2 Whether or not the transactions contemplated by this Merger
Agreement are consummated, the expenses of the Offering Circular and of
preparing and distributing the Proxy Statement shall be borne as follows:
a. CBI shall bear all fees and expenses of its auditors and
attorneys and its own costs of preparing the information on CBI required for the
Proxy/Offering Circular Statement.
b. TFIN shall bear all fees and expenses of drafting and
completing the Proxy/Offering Circular, but not limited to all Proxy/Offering
Circular filing fees and all fees and expenses of its auditors and attorneys in
preparation of the Proxy/Offering Circular; and
c. TFIN shall bear all printing and mailing costs of the
Proxy/Offering Circular, except that such costs shall be borne by CBI if this
Merger Agreement is terminated by TFIN because of a material breach of this
Merger Agreement by CBI or is not approved by the requisite vote of stockholders
of CBI. Provided, however, any amount paid hereunder by CBI shall be limited to
the actual out of pocket costs incurred by TFIN, not to exceed One Thousand
Dollars ( $1,000).
ARTICLE VIII
CLOSING CONDITIONS
STOCKHOLDERS' MEETING
SECTION 8.1 CBI shall call a Stockholders' Meeting to consider the
approval of this Merger Agreement and to authorize the transactions contemplated
by this Merger Agreement on a date selected by CBI , such date to be the
earliest practicable date after the date the Proxy Statement may first be sent
to CBI stockholders. Subject to its fiduciary
23
24
obligations to CBI stockholders, the Board of Directors of CBI will recommend to
CBI stockholders in the Proxy Statement that, at such Stockholders Meeting, they
approve this Merger Agreement and authorize the transactions contemplated by it.
SECTION 8.2 Prior to the Closing, TFIN and TAC shall take all action
necessary to cause its Board of Directors to authorize the Merger and to take
any other corporate action necessary on their part to complete the Merger and
perform the transactions contemplated thereby.
SECTION 8.3 CBI and TFIN shall promptly provide each other information
as to any significant developments in the performance of this Merger Agreement
and shall promptly notify the other if it discovers that any of its
representations and warranties contained in this Merger Agreement or in any
document delivered in connection with this Merger Agreement was not true and
correct in all material respects or became untrue or incorrect in any material
respect.
The obligation of the parties to effect the Merger contemplated herein
shall be subject following conditions which may, to the extent permitted by law,
be waived by the parties at their respective option:
SECTION 8.4 Employment Contract. The closing of this Merger Agreement
is conditioned upon the approval and execution of an employment agreement
between TFIN and Xxxxx X. Xxxxxx prior to the Effective Time. Such agreement
shall be provided by TFIN to CBI on a confidential basis with the terms thereof
not to be revealed to anyone other than the senior officers of CBI and the
stockholders of CBI. A waiver of the provisions of this section may be made by
either CBI or Xxxxx X. Xxxxxx.
SECTION 8.5 Regulatory Approvals. All required notices, approvals,
failures to disapprove, notices of non-disapproval and consents regarding the
proposed purchase and sale transaction have been obtained from the Federal
Reserve Bank of Kansas City and all other applicable state or federal regulatory
bodies and agencies, and all required waiting periods shall have expired.
SECTION 8.6 Representation and Warranties. All representations and
warranties of the parties set forth in this Merger Agreement shall be true in
all material respects as of the Effective Time.
SECTION 8.7 Performance of Obligations. The parties shall have
performed and complied with all obligations which are to be performed or
complied with by them under this Merger Agreement prior to or on the date of the
Effective Time.
SECTION 8.8 Phantom Stock Plan. The Phantom Stock Plan shall be
terminated prior to the Effective Time by CBI unless TAC, CBI, Xxxxxxx X. Xxxxx
and Xxxxx X. Xxxxxx agree otherwise.
24
25
SECTION 8.9 Life Insurance. Prior to the Effective Time, CBI shall
cause BANK to release the assignment of the Reverse Split-Dollar life insurance
policy on the life of Xxxxx X. Xxxxxx issued by The Security Mutual Life
Insurance Company of Lincoln, Nebraska held by BANK pursuant to that assignment
agreement between Xxxxx X. Xxxxxx and BANK dated August 12, 1993, unless TAC,
CBI and Xxxxx X. Xxxxxx agree otherwise.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Covenants. CBI shall not, without the express written
consent of TAC, permit BANK to:
a. Incur any indebtedness for borrowed money (except for
federal funds, repurchase agreements entered into in the ordinary and usual
course of business, deposits received by the BANK and endorsement, for
collection or deposit, of negotiable instruments received in the ordinary and
usual course of business, and issuance of letters of credit by the BANK in the
ordinary course of business), assume, guarantee, endorse or otherwise as an
accommodation become liable or responsible for obligations of any other
individual, firm or corporation in excess of zero dollars ($0.00).
b. Make, grant or incur any obligation or liability to make or
grant a loan to any person or entity in excess of Fifty Thousand Dollars
($50,000) with the exception that loans for 1 to 4 family dwellings meeting the
underwriting standards of FHLMC or FNMA may be made in amounts not to exceed One
Hundred Thousand Dollars ($100,000). In the event that CBI or BANK should
request the issuance of a loan in excess of the stated amounts, CBI or BANK
shall provide Xxxxxx X. Xxxxxxxxxx or his designee the information it would
customarily prepare for determination of whether a loan should be approved and
Xxxxxx X. Xxxxxxxxxx or his designee shall provide a written response either
approving or rejecting the issuance of such loan within five (5) business days
of receipt of such request.
c. Except for transactions in the ordinary and usual course of
business, sell or transfer any of its properties or assets or cancel, release or
assign any indebtedness owed to it or any claims held by it.
d. Make any purchase or commitment/obligation to purchase any
fixed asset in excess of One Thousand Dollars ($1,000.00).
e. Materially alter or change the customary terms and
conditions upon which it conducts business.
f. Materially alter or change the business or business
organization.
g. Declare or pay any dividend.
25
26
h. Issue any new shares of stock.
i. Purchase or acquire any additional brokered deposits or
borrowed funds following the execution of the Agreement.
SECTION 9.2 Cash Payment by TAC: At the time of signing this Merger
Agreement, TAC shall pay the sum of Five Thousand Dollars ($5,000) to CBI in
immediately available funds as and for a down payment, to be held in a
non-interest bearing escrow by BANK until the closing/Effective Time when said
sum shall be applied to the distribution to stockholders provided by this Merger
Agreement. In the event of termination by mutual agreement or for any cause
attributable to the actions of CBI or BANK said sum shall be returned to TFIN.
In the event of termination for any other cause, said sum shall be retained by
CBI.
SECTION 9.3 Inspection and Due Diligence. Between the date hereof and
the Effective Time and upon reasonable notice, TFIN and its authorized
representatives shall be permitted full access during regular business hours to
all properties, books, records, contracts and documents of CBI and BANK. CBI
shall furnish to TFIN and its authorized representatives all information with
respect to the affairs of CBI and BANK as may be reasonably requested. CBI shall
provide such information and answer such inquiries as TFIN may reasonably
request or make concerning the subject matter of the representations and
warranties of CBI made herein. Immediately prior to the Effective Time TFIN may,
at its sole cost and expense conduct a second due diligence examination of the
assets of CBI and BANK for the period from September 1, 1999 forward.
SECTION 9.4 Regulatory Approval. By October 30, 1999, TAC shall, at its
expense, file an appropriate application with all applicable state and federal
regulatory agencies and bodies to obtain applications and notices necessary to
obtain all required approvals or consents to consummate the transactions
contemplated herein. TAC shall use its best efforts to obtain all required
approvals, consents and failures to disapprove as promptly thereafter as
possible, and shall keep CBI fully apprised as to the progress of such efforts
and provide CBI copies of all filings, applications and notices, together with
all other significant documents and correspondence exchanged between TAC (or its
accountants or other representatives) and any such agencies and bodies with
respect thereto. Copies of all such materials prepared and filed with any
regulatory agency and bodies by or for TAC shall be furnished to Xxx Xxxxx,
Xxxxxxxxx Xxxxxxxx, LLP, attorneys for CBI. In the event additional information
or documentation is requested by any regulatory agency or body, TAC shall comply
with such request as promptly as possible; in the event any such information or
documentation is in the possession or knowledge of CBI or BANK, TAC shall
immediately inform CBI, and CBI shall use its best efforts to make such
documentation or information promptly available to TAC or TAC's designated
representative.
SECTION 9.5 Confidential Information. All information disclosed to,
obtained by or otherwise coming into the possession of the parties hereto shall
be maintained in strict
26
27
confidence in accordance with the terms of that certain Confidentiality
Agreement executed by the agents of the parties dated, October 1, 1998. The
terms of the Confidentiality Agreement previously executed by the agents of TFIN
and CBI are specifically ratified by TFIN and CBI and incorporated into this
Merger Agreement as if fully set forth at length herein, and attached as Exhibit
9.5.
SECTION 9.6 Headings. Headings contained in this Merger Agreement are
inserted for convenience only and do not constitute a part of the Agreement.
SECTION 9.7 Governing Law. This Merger Agreement embodies the entire
agreement between the parties. There have been no agreements, representations or
warranties between the parties hereto other than those set forth and provided
herein. This transaction and the Agreement shall be construed, interpreted and
enforce according to the laws of the State of Kansas.
ARTICLE X
AMENDMENTS AND WAIVER
SECTION 10.1 Amendment. This Merger Agreement may be amended by
agreement of TFIN, TAC and CBI, by action taken by their respective boards of
directors or their respective officers at any time prior to the Effective Time
and either before or after the approval of this Merger Agreement by the
stockholders of CBI or TAC, except that no amendment shall be made, SUBSEQUENT
to the adoption of this Merger Agreement by the stockholders of the
corporations, that:
27
28
a. Alters or changes the method of calculation of cash or
stock which is to be transferred or paid to CBI stockholders hereunder;
b. Alters or changes any term of the articles of incorporation
of CBI;
c. Alters or changes any of the terms and conditions of this
Merger Agreement if such alteration or change would adversely affect the holders
of any class of stock or series thereof of either corporation.
This Merger Agreement may only be amended by a written instrument signed by an
authorized person on behalf of each of the corporations which are party to this
Merger Agreement.
SECTION 10.2 Waivers and Extensions. Any extensions or waiver of
compliance with any provisions of this Merger Agreement on the part of either
corporation party hereto shall be valid only if set forth in a written
instrument signed by an authorized person on behalf of each of the corporations.
SECTION 10.3 Notices. All notices and other communications hereunder
shall be deemed to have been given when delivered by hand of when deposited in
the mail, by certified or registered mail, postage prepaid or delivered by
recognized overnight courier, as follows:
TO: TEAM FINANCIAL, INC.
and
TEAM FINANCIAL ACQUISITION SUBSIDIARY INC.
0 Xxxx Xxxxxx
X.X. Xxx 000
Xxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxx,
Chairman and CEO
With a copy to:
Xxxx X. Xxxxxxx, Esq.
P. O. Xxx 000
Xxxxx, XX 00000-0000
28
29
TO: COMBANKSHARES, INC.
Xxxxx X. Xxxxxx, President
0000 Xxxx 00xx Xx.
Xxxxxxx Xxxxxxx, XX 00000-0000
With a copy to:
Xxx Xxxxx, Esq.
Xxxxxxxxx X. Xxxxxx, Esq.
0000 Xxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
SECTION 10.4 Counterparts. This Merger Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and all of
which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, this Merger Agreement has been signed by the
directors of TFIN, TAC and CBI pursuant to actions taken by their Boards of
Directors at meetings and the corporate seals have been affixed hereto.
TEAM FINANCIAL, INC. COMBANKSHARES, INC.
/s/ Xxxxxx X. Xxxxxxxxxx /s/ Xxxxx X. Xxxxxx
---------------------------- -------------------------
Xxxxxx X. Xxxxxxxxxx Xxxxx X. Xxxxxx
Chairman and CEO President
TEAM FINANCIAL ACQUISITION
SUBSIDIARY, INC.
/s/ Xxxxxx X. Xxxxxxxxxx
----------------------------
Xxxxxx X. Xxxxxxxxxx
Chairman and CEO
29
30
CERTIFICATION OF CHAIRMEN AND SECRETARIES
This Merger Agreement, adopted by the directors of the respective TFIN,
TAC and CBI subject to approval by a vote of CBI and TAC Stockholders is hereby
adopted and made effective as of October 1, 1999, pursuant to the actions taken
by the respective corporations, and in witness whereof, this Merger Agreement is
signed by the Chairman/President and Secretary of each of the corporations, and
the respective corporate seals have been affixed thereto.
TEAM FINANCIAL, INC. COMBANKSHARES, INC.
/s/ Xxxxxx X. Xxxxxxxxxx /s/ Xxxxx X. Xxxxxx
--------------------------- --------------------
Xxxxxx X. Xxxxxxxxxx Xxxxx X. Xxxxxx
Chairman and CEO President
BY: /s/ Xxxx Xxxxxx BY: /s/ Xxxxxxx X. Xxxxx
------------------------ ---------------------
Xxxx Xxxxxx Xxxxxxx X. Xxxxx
Secretary Secretary
TEAM FINANCIAL ACQUISITION
SUBSIDIARY, INC.
/s/ Xxxxxx X. Xxxxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxxxx
Chairman and CEO
BY: /s/ Xxxx Xxxxxx
------------------------
Xxxx Xxxxxx
Secretary
30
31
STATE OF KANSAS, COUNTY OF MIAMI, SS:
Personally appeared before me, a Notary Public in and for the County
and State aforesaid, Xxxxxx X. Xxxxxxxxxx, Chairman and CEO, and Xxxx Xxxxxx,
Secretary, of Team Financial, Inc. who are personally known to me to be the same
persons who executed the foregoing instrument of writing, and they duly
acknowledged the execution of the same, and declare that they executed the
Merger Agreement on behalf of the corporation pursuant to the authority granted
them by their Board of Directors.
IN TESTIMONY WHEREOF, I hereunto subscribe my name and affix my
official seal this 1st day of October, 1999.
/s/ Xxxxxx X. Xxxxxxxx
------------------------
Notary Public
My appointment expires: 0-00-00
XXXXX XX XXXXXX, XXXXXX XX XXXXX, SS:
Personally appeared before me, a Notary Public in and for the County
and State aforesaid, Xxxxxx X. Xxxxxxxxxx, Chairman and CEO, and Xxxx Xxxxxx,
Secretary, of Team Financial Acquisition Subsidiary, Inc. who are personally
known to me to be the same persons who executed the foregoing instrument of
writing, and they duly acknowledged the execution of the same, and declare that
they executed the Merger Agreement on behalf of the corporation pursuant to the
authority granted them by their Board of Directors.
IN TESTIMONY WHEREOF, I hereunto SUBSCRIBE my name and affix my
official seal this 1st day of October, 1999.
/s/ Xxxxxx X. Xxxxxxxx
------------------------
Notary Public
My appointment expires: 9-15-03
31
32
STATE OF KANSAS, COUNTY OF XXXXXXX, XX:
Personally appeared before me, a Notary Public in and for the County
and State aforesaid, Xxxxx X. Xxxxxx, President, and Xxxxxxx X. Xxxxx,
Secretary, of ComBankshares, Inc., who are personally known to me to be the same
persons who executed the foregoing instrument of writing, and they duly
acknowledged the execution of the same, and declare that they executed the
Agreement on behalf of the corporation pursuant to the authority granted them by
their Board of Directors.
IN TESTIMONY WHEREOF, I hereunto SUBSCRIBE my name and affix my
official seal this 4th day of October, 1999.
/s/ Xxxx X. Xxxxxxx
------------------------
Notary Public
My appointment expires: 12-22-2000
32
33
EXHIBIT 2.3A
COMBANKSHARES, INC. (CBI)
11/30/1999
CBI ASSETS a CASH 2,808.15
e INC TAX REC. 0.00
a PREPAID DUES 947.32
e INTEREST ON DEBT (0.00)
e ACR EXPENSES (0.00)
e INC TAX PAYABLE 0.00 3,755.47
DEBT PAYMENT a (1,150,000.00)
PHANTOM STOCK c PH STK LIAB (369,576.75)
c DEF TAX LIAB 125,656.10
c MEDICARE TAX DUE (2,813.76)
c MEDICARE TAX SVGS 956.68 (245,777.74)
1999 BANK EARNINGS a 413,524.04
1999 BANK DIVIDENDS a (220,000.00) 193,524.04
BANK VALUE a 7,200,000.00
PURCHASE PRICE 0.00
PER SHARE CONSIDERATION c SHARES 16,935.00 0.0000
$ AMOUNT OF STOCK TO STOCKHOLDERS 51.00% 0.00
CASH PROCEEDS ERR 0.00
CASH ESCROWED (500,000.00)
CASH TO SHAREHOLDERS AT CLOSING (500,000.00)
TFIN STOCK PRICE 11.000
STOCK TO SHAREHOLDERS e 278,251.4460 3,060,765.91
a ACTUAL
c CALCULATED
e ESTIMATED
