Exhibit 2.1
_________________________________________________________________
_________________________________________________________________
AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 27, 1999
BY AND AMONG
EXCHANGE NATIONAL BANCSHARES, INC.,
ENB HOLDINGS, INC.
AND
CNS BANCORP, INC.
_________________________________________________________________
_________________________________________________________________
TABLE OF CONTENTS
PAGE NO.
Introductory Statement . . . . . . . . . . . . . . . . . . . . .1
ARTICLE ITHE MERGER. . . . . . . . . . . . . . . . . . . . . . .1
Section 1.1. STRUCTURE OF THE MERGER. . . . . . . . . . .1
Section 1.2. EFFECT ON SHARES OF CNS COMMON STOCK . . . .2
Section 1.3. EXCHANGE PROCEDURES. . . . . . . . . . . . .3
Section 1.4. EFFECT ON SHARES OF ACQUISITION SUB
COMMON STOCK . . . . . . . . . . . . . . .5
Section 1.5. STOCK OPTIONS. . . . . . . . . . . . . . . .5
Section 1.6. BANK MERGER. . . . . . . . . . . . . . . . .5
Section 1.7. DIRECTORS AND OFFICERS OF CNS AT
EFFECTIVE TIME . . . . . . . . . . . . . .6
Section 1.8. ALTERNATIVE STRUCTURE. . . . . . . . . . . .6
Section 1.9. ARTICLES OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION.. . . . . . .6
Section 1.10. DISSENTERS' RIGHTS . . . . . . . . . . . . .6
ARTICLE IIREPRESENTATIONS AND WARRANTIES . . . . . . . . . . . .6
Section 2.1. DISCLOSURE LETTERS . . . . . . . . . . . . .6
Section 2.2. STANDARDS. . . . . . . . . . . . . . . . . .7
Section 2.3. REPRESENTATIONS AND WARRANTIES OF CNS. . . .7
Section 2.4. REPRESENTATIONS AND WARRANTIES OF ENB. . . 21
ARTICLE IIICONDUCT PENDING THE MERGER. . . . . . . . . . . . . 28
Section 3.1. CONDUCT OF CNS'S BUSINESS PRIOR TO
THE EFFECTIVE TIME . . . . . . . . . . . 28
Section 3.2. FORBEARANCE BY CNS . . . . . . . . . . . . 29
Section 3.3. CONDUCT OF ENB'S BUSINESS PRIOR TO
THE EFFECTIVE TIME . . . . . . . . . . . 32
ARTICLE IVCOVENANTS. . . . . . . . . . . . . . . . . . . . . . 32
Section 4.1. ACQUISITION PROPOSALS. . . . . . . . . . . 32
Section 4.2. CERTAIN POLICIES AND ACTIONS OF CNS. . . . 33
Section 4.3. ACCESS AND INFORMATION . . . . . . . . . . 34
Section 4.4. CERTAIN FILINGS, CONSENTS AND
ARRANGEMENTS . . . . . . . . . . . . . . 35
Section 4.5. ANTITAKEOVER PROVISIONS. . . . . . . . . . 35
Section 4.6. ADDITIONAL AGREEMENTS. . . . . . . . . . . 35
Section 4.7. PUBLICITY. . . . . . . . . . . . . . . . . 35
Section 4.8. STOCKHOLDERS MEETING . . . . . . . . . . . 35
Section 4.9. PROXY STATEMENT; PROSPECTUS. . . . . . . . 36
Section 4.10. NOTIFICATION OF CERTAIN MATTERS. . . . . . 36
Section 4.11. EMPLOYEES, DIRECTORS AND OFFICERS. . . . . 37
Section 4.12. INDEMNIFICATION. . . . . . . . . . . . . . 39
Section 4.13. YEAR 2000. . . . . . . . . . . . . . . . . 40
Section 4.14. Stock Listing . . . . . . . . . . . . . . 40
Section 4.15. AFFILIATE LETTERS. . . . . . . . . . . . . 40
Section 4.16. TAX-FREE REORGANIZATION TREATMENT. . . . . 41
Section 4.17 ACQUISITION SUB. . . . . . . . . . . . . . 41
ARTICLE VCONDITIONS TO CONSUMMATION. . . . . . . . . . . . . . 41
Section 5.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS . . 41
Section 5.2. CONDITIONS TO THE OBLIGATIONS OF ENB
AND ENB BANK . . . . . . . . . . . . . . 43
Section 5.3. CONDITIONS TO THE OBLIGATIONS OF CNS
AND CNS BANK . . . . . . . . . . . . . . 43
ARTICLE VI
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.1. TERMINATION. . . . . . . . . . . . . . . . 44
Section 6.2. TERMINATION FEE. . . . . . . . . . . . . . 45
Section 6.3. EFFECT OF TERMINATION. . . . . . . . . . . 45
ARTICLE VIICLOSING, EFFECTIVE DATE AND EFFECTIVE TIME. . . . . 46
Section 7.1. EFFECTIVE DATE AND EFFECTIVE TIME. . . . . 46
Section 7.2. DELIVERIES AT THE CLOSING. . . . . . . . . 46
ARTICLE VIIICERTAIN OTHER MATTERS. . . . . . . . . . . . . . . 46
Section 8.1. CERTAIN DEFINITIONS; INTERPRETATION. . . . 46
Section 8.2. SURVIVAL . . . . . . . . . . . . . . . . . 47
Section 8.3. WAIVER; AMENDMENT. . . . . . . . . . . . . 47
Section 8.4. COUNTERPARTS . . . . . . . . . . . . . . . 47
Section 8.5. GOVERNING LAW. . . . . . . . . . . . . . . 47
Section 8.6. EXPENSES . . . . . . . . . . . . . . . . . 47
Section 8.7. NOTICES. . . . . . . . . . . . . . . . . . 47
Section 8.8. ENTIRE AGREEMENT; ETC. . . . . . . . . . . 48
Section 8.9. SUCCESSORS AND ASSIGNS; ASSIGNMENT . . . . 48
AGREEMENT AND PLAN OF MERGER
This is an AGREEMENT AND PLAN OF MERGER, dated as of
the 27th day of October, 1999 ("Agreement"), by and among
Exchange National Bancshares, Inc., a Missouri corporation
("ENB"), ENB Holdings, Inc., a Missouri corporation ("Acquisition
Sub") and CNS Bancorp, Inc., a Delaware corporation ("CNS").
INTRODUCTORY STATEMENT
The Board of Directors of each of ENB and CNS (i) has
determined that this Agreement and the business combination and
related transactions contemplated hereby are in the best
interests of ENB and CNS, respectively, and in the best interests
of their respective stockholders and (ii) has approved, at
meetings of each of such Boards of Directors, this Agreement.
The parties hereto intend that the merger shall qualify
as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended ("IRC"), for federal
income tax purposes, and the merger shall be accounted for as a
purchase.
ENB and CNS desire to make certain representations,
warranties and agreements in connection with the business
combination and related transactions provided for herein and to
prescribe various conditions to such transactions.
Acquisition Sub has been organized as a wholly-owned
subsidiary of Exchange to facilitate the business combination
contemplated hereby.
In consideration of their mutual promises and
obligations hereunder, the parties hereto adopt and make this
Agreement and prescribe the terms and conditions hereof and the
manner and basis of carrying it into effect, which shall be as
follows:
ARTICLE I
THE MERGER
Section 1.1. STRUCTURE OF THE MERGER. On the
Effective Date, CNS will merge with and into Acquisition Sub
("Merger"), with Acquisition Sub being the surviving entity,
pursuant to the provisions of, and with the effect provided in,
the General and Business Corporation Law of Missouri ("MGBCL")
and the Delaware General Corporation Law ("DGCL"). Upon
consummation of the Merger, the separate corporate existence of
CNS shall cease. Acquisition Sub shall be the surviving
corporation in the Merger and shall continue to be governed by
the laws of the State of Missouri and its separate corporate
existence, with all of its rights, privileges, immunities, powers
and franchises, shall continue unaffected by the Merger. The
name of Acquisition Sub, as the surviving corporation in the
Merger, shall be ENB Holdings, Inc. From and after the Effective
Time, Acquisition Sub shall possess all of the properties and
rights and be subject to all of the liabilities and
obligations of CNS, all as more fully described in the MGBCL and
the DGCL.
Section 1.2. EFFECT ON SHARES OF CNS COMMON STOCK.
(a) By virtue of the Merger, automatically and without
any action on the part of the holder thereof, each share of
common stock, par value $.01 per share, of CNS ("CNS Common
Stock") that is issued and outstanding at the Effective Time,
other than Excluded Shares (as defined below), shall cease to be
outstanding and shall be converted into and become the right to
receive (subject to adjustment as described below) $8.80 in cash
(the "Cash Consideration") and 0.15 of a share (the "Stock
Consideration") of common stock, par value $1.00 per share, of
ENB ("ENB Common Stock"). The aggregate of the Cash
Consideration and Stock Consideration payable and/or issuable
pursuant to this Agreement at the Effective Time is sometimes
hereinafter collectively referred to as the "Merger
Consideration." If, between the date of this Agreement and the
Effective Time, the outstanding shares of ENB Common Stock shall
have been changed into a different number of outstanding shares
or into a different class by reason of any stock dividend,
subdivision, reclassification, recapitalization. split,
combination or exchange of shares, the Stock Consideration shall
be adjusted correspondingly to the extent appropriate to reflect
such change in the number of outstanding shares.
"Excluded Shares" shall consist of (i) shares of
CNS Common Stock as to which the respective holders thereof have
properly demanded appraisal rights and have not failed to
perfect, have not effectively withdrawn and have not lost their
rights to appraisal and payment pursuant to any applicable law
providing for dissenters' or appraisal rights (the "Dissenters'
Shares"), (ii) shares held directly or indirectly by ENB (other
than shares held in a fiduciary capacity or in satisfaction of a
debt previously contracted) and (iii) shares held by CNS as
treasury stock.
(b) The Cash Consideration to be payable pursuant to
Section 1.2(a) with respect to each share of CNS Common Stock
issued and outstanding at the Effective Time, shall be decreased
by the amount, if any, that the Adjusted Net Worth (as defined
below) of CNS as of the last day of the month prior to the month
in which the Effective Time shall occur ("Valuation Date") is
less than $20,950,000 divided by the number of shares of CNS
Common Stock issued and outstanding at the Effective Time. For
the purposes of the foregoing, "Adjusted Net Worth" shall mean
the consolidated stockholders' equity of CNS determined in
accordance with generally accepted accounting principles,
consistently applied ("GAAP"), but excluding the effect of (a)
any severance pay or employee benefit which would not have been
paid or accrued except for the Merger, (b) any income tax benefit
which may be recorded in respect of any realized or unrealized
loss on mutual fund shares held by CNS Bank on September 30,
1999, and (c) the proceeds of any stock options which may have
been exercised after the date hereof. Adjusted Net Worth shall
be further reduced by the amount by which CNS Bank's total
allowance for loan losses as of the Valuation Date is less than
$500,000.
(c) As of the Effective Time, each Excluded Share,
other than Dissenters' Shares, shall be canceled and retired and
shall cease to exist, and no exchange or payment shall be
made with respect thereto. In addition, no Dissenters'
Shares shall be converted into the Merger Consideration pursuant
to this Section 1.2 but instead shall be treated in accordance
with the procedures set forth in Section 1.10 of this Agreement.
(d) Notwithstanding any other provision hereof, no
fraction of a share of ENB Common Stock and no certificates or
scrip therefor will be issued in the Merger. Instead, ENB shall
pay to each holder of CNS Common Stock who would otherwise be
entitled to a fraction of a share of ENB Common Stock an amount
in cash, rounded to the nearest whole cent, determined by
multiplying such fraction by an amount equal to the then market
value of ENB stock based on the most recent transaction.
Section 1.3. EXCHANGE PROCEDURES.
(a) Appropriate transmittal materials ("Letter of
Transmittal") shall be mailed as soon as reasonably practicable
after the Effective Time, and in no event later than five
business days thereafter, to each holder of record of CNS Common
Stock as of the Effective Time. A Letter of Transmittal will be
deemed properly completed only if accompanied by certificates
representing all shares of CNS Common Stock to be converted
thereby.
(b) At and after the Effective Time, each certificate
("CNS Certificate") previously representing shares of CNS Common
Stock (except as specifically set forth in Section 1.2) shall
represent only the right to receive the Merger Consideration
multiplied by the number of shares of CNS Common Stock previously
represented by the CNS Certificate.
(c) Prior to the Effective Time, ENB shall deposit, or
shall cause to be deposited, in a segregated account with ENB
Bank (as defined in Section 1.6) or another bank or trust company
selected by ENB and reasonably acceptable to CNS, which shall act
as exchange agent ("Exchange Agent") for the benefit of the
holders of shares of CNS Common Stock, for exchange in accordance
with this Section 1.3, an amount of cash sufficient to pay the
aggregate amount of Cash Consideration to be paid pursuant to
Section 1.2 and the aggregate amount of cash to be paid in lieu
of fractional shares, and ENB shall reserve for issuance with the
Exchange Agent, its Transfer Agent and Registrar, a sufficient
number of shares of ENB Common Stock to provide for payment of
the Stock Consideration. At the Effective Time, ENB shall have
granted the Exchange Agent the requisite power and authority to
effect for and on behalf of ENB the issuance of the number of
shares of ENB Common Stock issuable in the share exchange.
(d) The Letter of Transmittal (which shall be subject
to the reasonable approval of CNS and ENB) shall (i) specify that
delivery shall be effected, and risk of loss and title to the CNS
Certificates shall pass, only upon delivery of the CNS
Certificates to the Exchange Agent, (ii) be in a form and contain
any other provisions as ENB may reasonably determine and (iii)
include instructions for use in effecting the surrender of the
CNS Certificates in exchange for the Merger Consideration. Upon
the proper surrender of the CNS Certificates to the Exchange
Agent, together with a properly completed and duly executed
Letter of Transmittal, the holder of such CNS Certificates shall
be entitled to receive in exchange therefor (a) a certificate
representing that number of whole shares of ENB Common Stock that
such holder has the right to receive pursuant to Section
1.2 and (b) a check in the amount equal to the cash that such
holder has the right to receive pursuant to Section 1.2
(including any cash in lieu of any fractional shares of ENB
Common Stock to which such holder is entitled and any dividends
or other distributions to which such holder is entitled pursuant
to this Section 1.3). CNS Certificates so surrendered shall
forthwith be canceled. As soon as practicable, but no later than
10 business days following receipt of the properly completed
Letter of Transmittal and any necessary accompanying
documentation, the Exchange Agent shall distribute ENB Common
Stock and cash as provided herein. The Exchange Agent shall not
be entitled to vote or exercise any rights of ownership with
respect to the shares of ENB Common Stock held by it from time to
time hereunder, except that it shall receive and hold all
dividends or other distributions paid or distributed with respect
to such shares for the account of the persons entitled thereto.
If there is a transfer of ownership of any shares of CNS Common
Stock not registered in the transfer records of CNS, the Merger
Consideration shall be issued to the transferee thereof if the
CNS Certificates representing such CNS Common Stock are presented
to the Exchange Agent, accompanied by all documents required, in
the reasonable judgment of ENB and the Exchange Agent, (x) to
evidence and effect such transfer and (y) to evidence that any
applicable stock transfer taxes have been paid.
(e) From and after the Effective Time there shall be
no transfers on the stock transfer records of CNS of any shares
of CNS Common Stock. If, after the Effective Time, CNS
Certificates are presented to ENB, they shall be canceled and
exchanged for the Merger Consideration deliverable in respect
thereof pursuant to this Agreement in accordance with the
procedures set forth in this Section 1.3. No dividends or other
distributions declared or made after the Effective Date with
respect to ENB Common Stock shall be remitted to any person
entitled to receive shares of ENB Common Stock hereunder until
such person surrenders his or her CNS Certificates in accordance
with this Section 1.3. Upon the surrender of such person's CNS
Certificates, such person shall be entitled to receive any
dividends or other distributions, without interest thereon, which
theretofore had become payable with respect to shares of ENB
Common Stock represented by such person's CNS Certificates.
(f) Any portion of the aggregate amount of cash to be
paid pursuant to Section 1.2, any dividends or other
distributions to be paid pursuant to this Section 1.3 or any
proceeds from any investments thereof that remain unclaimed by
the stockholders of CNS for nine months after the Effective Time
shall be repaid by the Exchange Agent to ENB upon the written
request of ENB. After such request is made, any stockholders of
CNS who have not theretofore complied with this Section 1.3 shall
look only to ENB for the Merger Consideration deliverable in
respect of each share of CNS Common Stock such stockholder holds,
as determined pursuant to Section 1.2 of this Agreement, without
any interest thereon. If outstanding CNS Certificates are not
surrendered prior to the date on which such payments would
otherwise escheat to or become the property of any governmental
unit or agency, the unclaimed items shall, to the extent
permitted by any abandoned property, escheat or other applicable
laws, become the property of ENB (and, to the extent not in its
possession, shall be paid over to it), free and clear of all
claims or interest of any person previously entitled to such
claims. Notwithstanding the foregoing, neither the Exchange
Agent nor any party to this Agreement (or any affiliate thereof)
shall be liable to any former holder of CNS Common Stock
for any amount delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
(g) ENB and the Exchange Agent shall be entitled to
rely upon CNS's stock transfer books to establish the identity of
those persons entitled to receive the Merger Consideration, which
books shall be conclusive with respect thereto. In the event of
a dispute with respect to ownership of stock represented by any
CNS Certificate, ENB and the Exchange Agent shall be entitled to
deposit any Merger Consideration represented thereby in escrow
with an independent third party and thereafter be relieved with
respect to any claims thereto.
(h) If any CNS Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such CNS Certificate to be lost, stolen or
destroyed and, if required by the Exchange Agent, the posting by
such person of a bond in such amount as the Exchange Agent may
direct as indemnity against any claim that may be made against it
with respect to such CNS Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed CNS
Certificate the Merger Consideration deliverable in respect
thereof pursuant to Section 1.2.
Section 1.4. EFFECT ON SHARES OF ACQUISITION SUB
COMMON STOCK. Each share of common stock of Acquisition Sub that
is issued and outstanding at the Effective Time shall continue to
be an issued and outstanding share of Acquisition Sub common
stock from and after the Effective Time.
Section 1.5. STOCK OPTIONS. At the Effective Time,
each option to acquire shares of CNS Common Stock (a "CNS
Option") granted pursuant to the CNS Bancorp, Inc. 1997 Stock
Option Plan (the "CNS Option Plan") that is then outstanding and
unexercised shall be canceled, and in lieu thereof the holders of
such options shall be paid in cash an amount equal to the product
of (i) the number of shares of CNS Common Stock subject to such
option at the Effective Time and (ii) an amount by which $9.00
plus the Cash Consideration per share exceeds the exercise price
per share of such option, net of any cash which must be withheld
under federal and state income and employment tax requirements.
In the event that the exercise price of a CNS Option is greater
than the Merger Consideration, then at the Effective Time such
CNS Option shall be canceled without any payment made in exchange
therefor. At the Effective Time the CNS Option Plan shall be
deemed terminated.
Section 1.6. BANK MERGER. Concurrently with or as
soon as practicable after the execution and delivery of this
Agreement, The Exchange National Bank of Jefferson City ("ENB
Bank"), a wholly-owned subsidiary of ENB, and City National
Savings Bank, FSB ("CNS Bank"), a wholly-owned subsidiary of CNS,
shall enter into the Plan of Bank Merger, in the form attached
hereto as EXHIBIT A, pursuant to which the merger of CNS Bank
with and into ENB Bank ("Bank Merger") will be effected. The
parties hereto intend that the Bank Merger shall become effective
on the Effective Date and shall take all actions necessary or
appropriate to cause the Bank Merger to become effective
immediately following the Effective Time.
Section 1.7. DIRECTORS AND OFFICERS OF CNS AT
EFFECTIVE TIME. At the Effective Time, the directors and
officers of Acquisition Sub shall consist of the directors and
officers of Acquisition Sub serving immediately prior to the
Effective Time, each to hold office in accordance with the
Articles of Incorporation and Bylaws of the surviving corporation
until their respective successors are duly elected or appointed
and qualified.
Section 1.8. ALTERNATIVE STRUCTURE. Notwithstanding
anything to the contrary contained in this Agreement, prior to
the Effective Time, ENB may specify that the structure of the
transactions contemplated hereby be revised and the parties shall
enter into such alternative transactions as ENB may determine to
effect the purposes of this Agreement; provided, however, that
such revised structure shall not (i) adversely affect the tax
effects of the Merger to the holders of CNS Common Stock or alter
or change the amount or kind of the Merger Consideration or the
treatment of CNS Options or the economic benefits of the
transactions contemplated hereby to the holders of CNS Common
Stock, (ii) diminish the benefits to be received by the
directors, officers or employees of CNS or CNS Bank as set forth
in or as contemplated by this Agreement, or (iii) materially
impede or delay the receipt of any approval referred to in this
Agreement. This Agreement and any related documents shall be
appropriately amended in order to reflect any such revised
structure.
Section 1.9. ARTICLES OF INCORPORATION AND BYLAWS OF
THE SURVIVING CORPORATION. The Articles of Incorporation and
Bylaws of Acquisition Sub in effect immediately prior to the
Effective Time shall be the Articles of Incorporation and Bylaws
of the surviving corporation from and after the Effective Time
until amended as provided by law.
Section 1.10. DISSENTERS' RIGHTS.
(a) ENB shall pay for any Dissenters' Shares in
accordance with applicable law providing for dissenters' or
appraisal rights, and the holders thereof shall not be entitled
to receive any Merger Consideration; provided, that if appraisal
rights under applicable law with respect to any Dissenters'
Shares shall have been effectively withdrawn or lost, such shares
will thereupon cease to be treated as Dissenters' Shares and
shall be converted into the right to receive the Merger
Consideration pursuant to Section 1.2(b).
(b) CNS shall (i) give ENB prompt written notice of
the receipt of any notice from a stockholder purporting to
exercise any dissenters' rights, (ii) not settle nor offer to
settle any demand for payment without the prior written consent
of ENB and (iii) not waive any failure to comply strictly with
any procedural requirements of applicable corporate statutes.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. DISCLOSURE LETTERS. Prior to the
execution and delivery of this Agreement, CNS and ENB each shall
have delivered to the other a letter (each, its "Disclosure
Letter") setting forth, among other things, facts, circumstances
and events the disclosure of which is required or
appropriate in relation to any or all of their respective
representations and warranties (and making specific reference to
the Section of this Agreement to which they relate); provided,
that (a) no such fact, circumstance or event is required to be
set forth in the Disclosure Letter as an exception to a
representation or warranty if its absence is not reasonably
likely to result in the related representation or warranty being
deemed untrue or incorrect under the standards established by
Section 2.2 and (b) the mere inclusion of a fact, circumstance or
event in a Disclosure Letter shall not be deemed an admission by
a party that such item represents a material exception or that
such item is reasonably likely to result in a Material Adverse
Effect (as defined in Section 2.2(b)).
Section 2.2. STANDARDS.
(a) No representation or warranty of CNS or ENB
contained in Sections 2.3 or 2.4, respectively, shall be deemed
untrue or incorrect, and no party hereto shall be deemed to have
breached a representation or warranty, on account of the
existence of any fact, circumstance or event unless, as a direct
or indirect consequence of such fact, circumstance or event,
individually or taken together with all other facts,
circumstances or events inconsistent with any paragraph of
Sections 2.3 or 2.4, as applicable, there is reasonably likely to
exist a Material Adverse Effect. CNS's representations,
warranties and covenants contained in this Agreement shall not be
deemed to be untrue or breached as a result of effects arising
solely from actions taken pursuant to this Agreement or in
compliance with a written request of ENB.
(b) As used in this Agreement, the term "Material
Adverse Effect" means an effect which is material and adverse to
the business, financial condition or results of operations of CNS
or ENB, as the context may dictate, and its Subsidiaries (as
defined herein) taken as a whole; provided, however, that any
such effect resulting from any (i) changes in laws, rules or
regulations or GAAP or regulatory accounting requirements or
interpretations thereof that apply to both ENB and ENB Bank and
CNS and CNS Bank, as the case may be, or to similarly situated
financial and/or depository institutions or (ii) changes in
economic conditions affecting financial institutions generally,
including but not limited to, changes in the general level of
market interest rates shall not be considered in determining if a
Material Adverse Effect has occurred.
(c) For purposes of this Agreement, "knowledge" shall
mean, with respect to a party hereto, actual knowledge of any of
the members of the Board of Directors of that party or any
officer of that party with the title ranking not less than vice
president.
Section 2.3. REPRESENTATIONS AND WARRANTIES OF CNS.
Subject to Sections 2.1 and 2.2, CNS represents and warrants to
ENB that, except as disclosed in CNS's Disclosure Letter:
(a) ORGANIZATION.
(i) CNS is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and is registered as a savings and loan holding company
under the Home Owners' Loan Act, as amended ("HOLA"). CNS Bank
is a stock savings bank duly organized, validly existing
and in good standing under the laws of the United States of
America and is a wholly-owned Subsidiary (as defined below) of
CNS. Each Subsidiary of CNS other than CNS Bank is a
corporation, limited liability company or partnership duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization. Each of
CNS and its Subsidiaries has all requisite corporate power and
authority to own, lease and operate its properties and to carry
on its business as now being conducted. As used in this
Agreement, unless the context requires otherwise, the term
"Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or
unincorporated, which is consolidated with such party for
financial reporting purposes or which is controlled, directly or
indirectly, by such party.
(ii) CNS and each of its Subsidiaries has the
requisite corporate power and authority and is duly qualified to
do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its
properties makes such qualification necessary.
(iii) CNS's Disclosure Letter sets forth all
of CNS's Subsidiaries and all entities (whether corporations,
partnerships or similar organizations), including the
corresponding percentage ownership, in which CNS owns, directly
or indirectly, 5% or more of the ownership interests as of the
date of this Agreement and indicates for each of CNS's
Subsidiaries, as of such date, its jurisdiction of organization
and the jurisdiction(s) wherein it is qualified to do business.
All such Subsidiaries and ownership interests are in compliance
with all applicable laws, rules and regulations relating to
direct investments in equity ownership interests. CNS owns,
either directly or indirectly, all of the outstanding capital
stock of each of its Subsidiaries. No Subsidiary of CNS other
than CNS Bank is an "insured depository institution" as defined
in the Federal Deposit Insurance Act, as amended ("FDIA"), and
the applicable regulations thereunder. All of the shares of
capital stock of CNS's Subsidiaries are fully paid, nonassessable
and not subject to any preemptive rights and are owned by CNS or
a Subsidiary of CNS free and clear of any claims, liens,
encumbrances or restrictions (other than those imposed by
applicable federal and state securities laws), and there are no
agreements or understandings with respect to the voting or
disposition of any such shares.
(iv) The deposits of CNS Bank are insured by the
Savings Association Insurance Fund of the Federal Deposit
Insurance Corporation ("FDIC") to the extent provided in the
FDIA.
(b) CAPITAL STRUCTURE.
(i) The authorized capital stock of CNS consists
of 6,000,000 shares of CNS Common Stock and 1,000,000 shares of
preferred stock, par value $.01 per share. As of the date of
this Agreement (A) 1,418,286 shares of CNS Common Stock were
issued and outstanding, (B) no shares of CNS preferred stock were
issued and outstanding, (C) no shares of CNS Common Stock were
reserved for issuance, except that 165,313 shares of CNS Common
Stock were reserved for issuance pursuant to the CNS Option Plan,
(D) no shares of CNS preferred stock were reserved for issuance
and (E) 234,839 shares of CNS Common Stock were held by CNS
in its treasury or by its Subsidiaries. The authorized capital
stock of CNS Bank consists of 1,000 shares of common stock, par
value $1.00 per share, and 9,000 shares of preferred stock, par
value $1.00 per share. As of the date of this Agreement, 1,000
shares of such common stock were outstanding, no shares of such
preferred stock were outstanding and all outstanding shares of
such common stock were, and as of the Effective Time will be,
owned by CNS. All outstanding shares of capital stock of CNS and
CNS Bank are duly authorized and validly issued, fully paid and
nonassessable and not subject to any preemptive rights and, with
respect to shares of CNS held by CNS in its treasury or by its
Subsidiaries and shares of CNS Bank, are free and clear of all
liens, claims, encumbrances or restrictions (other than those
imposed by applicable federal and state securities laws) and
there are no agreements or understandings with respect to the
voting or disposition of any such shares. CNS's Disclosure
Letter sets forth a complete and accurate list of all outstanding
options to purchase CNS Common Stock that have been granted
pursuant to the CNS Option Plan, including the names of the
optionees, dates of grant, exercise prices, dates of vesting,
dates of termination and shares subject to each grant.
(ii) No bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which
stockholders may vote of CNS are issued or outstanding.
(iii) As of the date of this Agreement, except
for options granted pursuant to the CNS Option Plan, neither CNS
nor any of its Subsidiaries has or is bound by any outstanding
subscriptions, options, warrants, calls, rights, convertible
securities, commitments or agreements of any character obligating
CNS or any of its Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, any additional shares of
capital stock of CNS or any of its Subsidiaries or obligating CNS
or any of its Subsidiaries to grant, extend or enter into any
such option, warrant, call, right, convertible security,
commitment or agreement. As of the date hereof, there are no
outstanding contractual obligations of CNS or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock of CNS or any of its Subsidiaries.
(c) AUTHORITY.
(i) CNS has all requisite corporate power and
authority to enter into this Agreement, and, subject to approval
of this Agreement by the requisite vote of CNS's stockholders and
receipt of all required regulatory or governmental approvals, to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and, subject to the approval of
this Agreement by CNS's stockholders, the consummation of the
transactions contemplated hereby, have been duly authorized by
all necessary corporate actions on the part of CNS. This
Agreement has been duly and validly executed and delivered by CNS
and constitutes a valid and binding obligation of CNS,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability,
to general principles of equity, whether applied in a court of
law or a court of equity.
(ii) CNS Bank has all requisite corporate power
and authority to enter into the Plan of Bank Merger and, subject
to approval of the Plan of Bank Merger by CNS as the sole
stockholder of CNS Bank and the receipt of all required
regulatory or governmental approvals, to consummate the
transactions contemplated thereby. The execution and delivery of
the Plan of Bank Merger and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary
corporate actions on the part of CNS Bank. The Plan of Bank
Merger, upon execution and delivery by CNS Bank, will be duly and
validly executed and delivered by CNS Bank and will constitute a
valid and binding obligation of CNS Bank, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general
principles of equity, whether applied in a court of law or a
court of equity.
(d) STOCKHOLDER APPROVAL; FAIRNESS OPINION. The
affirmative vote of a majority of the outstanding shares of CNS
Common Stock entitled to vote on this Agreement is the only vote
of the stockholders of CNS required for approval of this
Agreement and the consummation of the Merger and the related
transactions contemplated hereby. CNS has received the written
opinion of RP Financial, LC. to the effect that, as of the date
hereof, the Merger Consideration to be received by CNS's
stockholders is fair, from a financial point of view, to such
stockholders.
(e) NO VIOLATIONS; CONSENTS. The execution, delivery
and performance of this Agreement by CNS do not, and the
consummation of the transactions contemplated hereby will not,
constitute (i) assuming receipt of all Requisite Regulatory
Approvals (as defined in Section 2.4(d)) and requisite
stockholder approvals, a breach or violation of, or a default
under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license to which CNS or any of its
Subsidiaries (or any of their respective properties) is subject,
(ii) a breach or violation of, or a default under, the
certificate of incorporation or bylaws of CNS or the similar
organizational documents of any of its Subsidiaries 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 CNS or any of its Subsidiaries
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 CNS or any of its
Subsidiaries is a party, or to which any of their respective
properties or assets may be subject. The consummation by CNS and
CNS Bank of the transactions (including the Bank Merger)
contemplated hereby (exclusive of the effect of any changes
effected pursuant to Section 1.7) will not require any approval,
consent or waiver under any such law, rule, regulation, judgment,
decree, order, governmental permit or license or the approval,
consent or waiver of any other party to any such agreement, or
instrument, other than (x) the approval of the holders of a
majority of the outstanding shares of CNS Common Stock entitled
to vote thereon, (y) the approval of CNS as the sole stockholder
of CNS Bank and (z) the consent of the Office of Thrift
Supervision ("OTS"). As of the date hereof, the executive
officers of CNS know of no reason pertaining to CNS why any of
the approvals referred to in this Section 2.3(e) should not be
obtained without the imposition of any material condition or
restriction described in the last sentence of Section 5.1(b).
(f) REPORTS AND FINANCIAL STATEMENTS.
(i) CNS and each of its Subsidiaries have each
timely filed all material reports, registrations and statements,
together with any amendments required to be made with respect
thereto, that they were required to file since December 31, 1997
with (a) the FDIC, (b) the OTS, (c) the National Association of
Securities Dealers, Inc. ("NASD") and (d) the Securities and
Exchange Commission ("SEC") (collectively, "CNS's Reports") and,
to CNS's knowledge, have paid all fees and assessments due and
payable in connection therewith. As of their respective dates,
none of CNS's Reports contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not
misleading. All of CNS's Reports filed with the SEC complied in
all material respects with the applicable requirements of the
Securities Exchange Act of 1934, as amended ("Exchange Act") and
the rules and regulations of the SEC promulgated thereunder.
(ii) Each of the financial statements of CNS
included in CNS's Reports complied as to form, as of their
respective dates of filing with the SEC, in all material respects
with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto and have
been prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited financial
statements, as permitted by the SEC). Each of the consolidated
statements of condition contained or incorporated by reference in
CNS's Reports (including in each case any related notes and
schedules) and each of the consolidated statements of operations,
consolidated statements of cash flows and consolidated statements
of changes in stockholders' equity, contained or incorporated by
reference in CNS's Reports (including in each case any related
notes and schedules) fairly presented (a) the financial position
of the entity or entities to which it relates as of its date and
(b) the results of operations, stockholders' equity and cash
flows, as the case may be, of the entity or entities to which it
relates for the periods set forth therein (subject, in the case
of unaudited interim statements, to normal year-end adjustments
that are not material in amount or effect).
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
disclosed in CNS's Reports filed on or prior to the date of this
Agreement, since December 31, 1998, (i) CNS and its Subsidiaries
have not incurred any liability, except in the ordinary course of
their business consistent with past practice, (ii) CNS and its
Subsidiaries have conducted their respective businesses only in
the ordinary and usual course of such businesses consistent with
their past practices, (iii) there has not been any Material
Adverse Effect with respect to CNS and its Subsidiaries, taken as
a whole, (iv) there has been no increase in the salary,
compensation, pension or other benefits payable or to become
payable by CNS or any of its Subsidiaries to any of their
respective directors, officers or employees, other than in
conformity with the policies and practices of such entity in the
usual and ordinary course of its business, (v) neither CNS nor
any of its Subsidiaries has paid 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
directors, officers or employees, and (vi) there has been no
change in any accounting principles, practices or methods of CNS
or any of its Subsidiaries other than as required by GAAP.
(h) ABSENCE OF CLAIMS. No litigation, controversy,
claim, action, suit or other legal administrative or arbitration
proceeding before any court, governmental agency or arbitrator is
pending against CNS or any of its Subsidiaries and no such
litigation, controversy, claim, action, suit or proceeding has
been threatened. To the knowledge of CNS, there are no
investigations, reviews or inquiries by any court or governmental
agency pending or threatened against CNS or any of its
Subsidiaries.
(i) ABSENCE OF REGULATORY ACTIONS. Since December 31,
1996, neither CNS nor any of its Subsidiaries has been a party to
any cease and desist order, written agreement or memorandum of
understanding with, or any commitment letter or similar
undertaking to, or has been subject to any action, proceeding,
order or directive by, or has been a recipient of any
extraordinary supervisory letter from any federal or state
governmental authority charged with the supervision or regulation
of depository institutions or depository institution holding
companies or engaged in the insurance of bank and/or savings and
loan deposits ("Government Regulators"), or has adopted any board
resolutions at the request of any Government Regulator, or has
been advised by any Government Regulator that it is contemplating
issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such action, proceeding, order,
directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter, board
resolutions or similar undertaking. There is no unresolved
violation, criticism or exception by any Government Regulators
with respect to any report or statement relating to any
examinations of CNS or any of its Subsidiaries.
(j) TAXES. All federal, state, local and foreign tax
returns required to be filed by or on behalf of CNS or any of its
Subsidiaries have been timely filed or requests for extensions
have been timely filed and any such extension shall have been
granted and not have expired, and all such filed returns are
complete and accurate in all material respects. All taxes shown
on such returns, all taxes required to be shown on returns for
which extensions have been granted and all other taxes required
to be paid by CNS or any of its Subsidiaries have been paid in
full or adequate provision has been made for any such taxes on
CNS's balance sheet (in accordance with GAAP). For purposes of
this Section 2.3(j) and Section 2.4(i), the term "taxes" shall
include all income, franchise, gross receipts, real and personal
property, real property transfer and gains, wage and employment
taxes. As of the date of this Agreement, there is no audit
examination, deficiency assessment, tax investigation or refund
litigation with respect to any taxes of CNS or any of its
Subsidiaries, and no claim has been made by any authority in a
jurisdiction where CNS or any of its Subsidiaries do not file tax
returns that CNS or any such Subsidiary is subject to taxation in
that jurisdiction. All taxes, interest, additions and penalties
due with respect to completed and settled examinations or
concluded litigation relating to CNS or any of its Subsidiaries
have been paid in full or adequate provision has been made for
any such taxes on CNS's balance sheet (in accordance with GAAP).
CNS and its Subsidiaries have not executed an extension or waiver
of any statute of limitations on the assessment or collection of
any material tax due that is currently in effect. CNS and each
of its Subsidiaries has withheld and paid all taxes required to
have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor,
stockholder or other third party, and CNS and each of its
Subsidiaries has timely complied with all applicable information
reporting requirements under Part III, Subchapter A of Chapter 61
of the IRC and similar applicable state and local
information reporting requirements. Neither CNS nor any of
its Subsidiaries (i) has made an election under Section 341(f) of
the IRC, or (ii) has issued or assumed any obligation under
Section 279 of the IRC, any high yield discount obligation as
described in Section 163(i) of the IRC or any
registration-required obligation within the meaning of Section
163(f)(2) of the IRC that is not in registered form.
(k) AGREEMENTS.
(i) CNS and its Subsidiaries are not bound by
any material contract (as defined in Item 601(b)(10) of
Regulation S-B promulgated by the SEC), to be performed after the
date hereof that has not been filed with or incorporated by
reference in CNS's Reports. Neither CNS nor any of its
Subsidiaries is a party to an oral or written (A) consulting
agreement (including data processing and software programming
contracts) not terminable on 60 days' or less notice, (B)
agreement with any present or former director, officer or
employee of CNS or any of its Subsidiaries the benefits of which
are contingent, or the terms of which are materially altered,
upon the occurrence of a transaction involving CNS or any of its
Subsidiaries of the nature contemplated by this Agreement, (C)
agreement with respect to any employee or director of CNS or any
of its Subsidiaries providing any term of employment or
compensation guarantee extending for a period longer than 60
days, (D) agreement or plan, including any stock option plan,
phantom stock or stock appreciation rights plan, restricted stock
plan or stock purchase plan, any of the benefits of which will be
increased, or the vesting or payment of the benefits of which
will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement or (E) agreement
containing covenants that limit the ability of CNS or any of its
Subsidiaries to compete in any line of business or with any
person, or that involve any restriction on the geographic area in
which, or method by which, CNS (including any successor thereof)
or any of its Subsidiaries may carry on its business (other than
as may be required by law or any regulatory agency) or (F) any
lease or license with respect to any property, real or personal,
whether as landlord, tenant, licensor or licensee, involving a
liability or obligation as obligor in excess of $5,000 on an
annual basis. To the knowledge of CNS, each of the agreements
and other documents referenced in CNS's Disclosure Letter with
respect to this Section 2.3(k)(i) is a valid, binding and
enforceable obligation of the parties sought to be bound thereby,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally and subject,
as to enforceability to general principles of equity, whether
applied in a court of law or a court of equity. CNS has
previously delivered to ENB true and complete copies of each
agreement and other documents referenced in CNS's Disclosure
Letter with respect to this Section 2.3(k)(i).
(ii) Neither CNS nor any of its Subsidiaries is in
default under (and no event has occurred which, with due notice
or lapse of time or both, would constitute a default under) or is
in violation of any provision of any note, bond, indenture,
mortgage, deed of trust, loan agreement, lease or other agreement
to which it is a party or by which it is bound or to which any of
its respective properties or assets is subject and, to the
knowledge of CNS, no other party to any such agreement (excluding
any loan or extension of credit made by CNS or any of its
Subsidiaries) is in default in any respect thereunder.
(iii) CNS and each of its Subsidiaries owns or
possesses valid and binding licenses and other rights to use
without payment all patents, copyrights, trade secrets, trade
names, service marks and trademarks used in its businesses, and
neither CNS nor any of its Subsidiaries has received any notice
of conflict with respect thereto that asserts the right of
others. Each of CNS and its Subsidiaries has performed all the
obligations required to be performed by it and are not in default
under any contact, agreement, arrangement or commitment relating
to any of the foregoing.
(l) LABOR MATTERS. CNS and its Subsidiaries are in
material 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. Neither CNS nor any of its Subsidiaries is or
has ever been a party to, or is or has ever been bound by, any
collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization with
respect to its employees, nor is CNS or any of its Subsidiaries
the subject of any proceeding asserting that it has committed an
unfair labor practice or seeking to compel it or any such
Subsidiary to bargain with any labor organization as to wages and
conditions of employment nor has any such proceeding been
threatened, nor is there any strike, other labor dispute or
organizational effort involving CNS or any of its Subsidiaries
pending or threatened.
(m) EMPLOYEE BENEFIT PLANS. CNS's Disclosure Letter
contains a complete and accurate list of all written or oral
pension, retirement, stock option, stock purchase, stock
ownership, savings, stock appreciation right, profit sharing,
deferred compensation, consulting, bonus, group insurance,
severance and other benefit plans, funds, contracts, agreements
and arrangements, including, but not limited to, "employee
benefit plans," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
incentive and welfare policies, contracts, plans and arrangements
and all trust agreements related thereto with respect to any
present or former directors, officers or other employees of CNS
or any of its Subsidiaries (hereinafter collectively referred to
as the "CNS Employee Plans"). All of the CNS Employee Plans
comply in all material respects with all applicable requirements
of ERISA, the IRC and other applicable laws; with respect to the
CNS Employee Plans, no event has occurred that would subject CNS
or any of its Subsidiaries to a material liability under ERISA,
the IRC or any other applicable law; there has occurred no
"prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the IRC) which is likely to result in the
imposition of any penalties or taxes under Section 502(i) of
ERISA or Section 4975 of the IRC upon CNS or any of its
Subsidiaries; and all required contributions to the CNS Employee
Plans through the date hereof have been made. Neither CNS nor
any of its Subsidiaries has provided, or is required to provide,
security to any CNS pension plan or to any single-employer plan
of an ERISA Affiliate (as defined under Section 4001(b)(1) of
ERISA or Section 414 of the IRC) pursuant to Section 401(a)(29)
of the IRC. Neither CNS, its Subsidiaries, nor any ERISA
Affiliate has contributed to any "multiemployer plan," as defined
in Section 3(37) of ERISA, on or after September 26, 1980. Each
CNS Employee Plan that is an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA) and which is intended to be
qualified under Section 401(a) of the IRC (a "CNS Qualified
Plan") has received a favorable determination letter from the
Internal Revenue Service ("IRS"), and CNS and its Subsidiaries
are not aware of any circumstances likely to result in
revocation of any such favorable determination letter.
There is no pending or threatened litigation, administrative
action or proceeding relating to any CNS Employee Plan. There
has been no announcement or commitment by CNS or any of its
Subsidiaries to create an additional CNS Employee Plan, or to
amend any CNS Employee Plan, except for amendments required by
applicable law which do not materially increase the cost of such
CNS Employee Plan; and, except as specifically identified in
CNS's Disclosure Letter, CNS and its Subsidiaries do not have any
obligations for post-retirement or post-employment benefits under
any CNS Employee Plan that cannot be amended or terminated upon
60 days' notice or less without incurring any liability
thereunder, except for coverage required by Part 6 of Title I of
ERISA or Section 4980B of the IRC, or similar state laws, the
cost of which is borne by the insured individuals. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby will not result in any
payment or series of payments by CNS or any of its Subsidiaries
to any person which is an "excess parachute payment" (as defined
in Section 280G of the IRC), increase or secure (by way of a
trust or other vehicle) any benefits payable under any CNS
Employee Plan or accelerate the time of payment or vesting of any
such benefit. With respect to each CNS Employee Plan, CNS has
supplied to ENB a true and correct copy of (A) the annual report
on the applicable form of the Form 5500 series filed with the IRS
for the three most recent plan years, if required to be filed,
(B) such CNS Employee Plan, including amendments thereto, (C)
each trust agreement, insurance contract or other funding
arrangement relating to such CNS Employee Plan, including
amendments thereto, (D) the most recent summary plan description
and summary of material modifications thereto for such CNS
Employee Plan, if the CNS Employee Plan is subject to Title I of
ERISA, (E) the most recent actuarial report or valuation if such
CNS Employee Plan is a CNS pension plan and any subsequent
changes to the actuarial assumptions contained therein, and (F)
the most recent determination letter issued by the IRS if such
CNS Employee Plan is a CNS Qualified Plan.
(n) TITLE TO ASSETS. CNS's Disclosure Letter contains
a complete and accurate list of all real property owned or leased
by CNS or any of its Subsidiaries, including all properties of
CNS or any of its Subsidiaries classified as "Real Estate Owned"
or words of similar import (the "Real Property"). To the
knowledge of CNS, none of the buildings, structures or other
improvements located on the Real Property encroaches upon or over
any adjoining parcel or real estate or any easement or right-of-way.
CNS and each of its Subsidiaries have good and marketable
title to their respective properties and assets (including any
intellectual property asset such as any trademark, service xxxx,
trade name or copyright) and property acquired in a judicial
foreclosure proceeding or by way of a deed in lieu of foreclosure
or similar transfer whether real or personal, tangible or
intangible, reflected on the consolidated financial statements of
CNS as of December 31, 1998, or acquired after such date, other
than such items of personal property as have been disposed of in
the ordinary course of business since December 31, 1998, in each
case free and clear of any liens, security interests,
encumbrances, mortgages, pledges, restrictions, charges or rights
or interests of others, except pledges to secure deposits and
other liens incurred in the ordinary course of business. Each
lease pursuant to which CNS or any of its Subsidiaries is lessee
or lessor is valid and in full force and effect and neither CNS
nor any of its Subsidiaries, nor any other party to any such
lease is in default or in violation of any provisions of any such
lease. All material tangible properties of CNS and each of its
Subsidiaries are in a good state of maintenance and repair,
conform with all applicable ordinances, regulations and zoning
laws and are considered by CNS to be adequate for the current
business of CNS and its Subsidiaries.
(o) COMPLIANCE WITH LAWS. CNS and each of its
Subsidiaries has all permits, licenses, certificates of
authority, orders and approvals of, and has made all filings,
applications and registrations with, all federal, state, local
and foreign governmental or regulatory bodies (each, a
"Governmental Entity") that are required in order to permit it to
carry on its business as it is presently conducted; all such
permits, licenses, certificates of authority, orders and
approvals are in full force and effect, and, to the best
knowledge of CNS, no suspension or cancellation of any of them is
threatened. Since the date of its incorporation, the corporate
affairs of CNS have not been conducted in violation of any law,
ordinance, regulation, order, writ, rule, decree or approval of
any Governmental Entity. Neither CNS nor any of its Subsidiaries
are in material violation of, is, to the knowledge of CNS, under
investigation with respect to any material violation of, or has
been given notice or been charged with any material violation of,
any law, ordinance, regulation, order, writ, rule, decree or
condition to approval of any Governmental Entity.
(p) FEES. Other than financial advisory services
performed for CNS by R.P. Financial, LC., neither CNS nor any of
its Subsidiaries, nor any of their respective officers,
directors, employees or agents, has employed any broker or finder
or incurred any liability for any financial advisory fees,
brokerage fees, commissions or finder's fees, and no broker or
finder has acted directly or indirectly for CNS or any of its
Subsidiaries in connection with this Agreement or the
transactions contemplated hereby. CNS has provided ENB with a
true and correct copy of the contract between CNS and R.P.
Financial, LC.
(q) ENVIRONMENTAL MATTERS. There is no suit, claim,
action, demand, executive or administrative order, directive,
investigation or proceeding pending or, to the knowledge of CNS,
threatened before any court, governmental agency or board or
other forum against CNS or any of its Subsidiaries for alleged
noncompliance (including by any predecessor) with, or liability
under, any Environmental Law (as defined below) or relating to
the presence of or release into the environment of any Hazardous
Material (as defined below), whether or not occurring at or on a
site owned, leased or operated by it or any of its Subsidiaries.
To CNS's knowledge, the properties currently owned or operated by
CNS or any of its Subsidiaries (including, without limitation,
soil, groundwater or surface water on, under or adjacent to the
properties, and buildings thereon) are not contaminated with and
do not otherwise contain any Hazardous Material other than as
permitted under applicable Environmental Law. Neither CNS nor
any of its Subsidiaries has received any notice, demand letter,
executive or administrative order, directive, request or other
communication (written or oral) for information from any federal,
state, local or foreign governmental entity or any third party
indicating that it may be in violation of, or liable under, any
Environmental Law. To CNS's knowledge, there are no underground
storage tanks on, in or under any properties owned or operated by
CNS or any of its Subsidiaries and no underground storage tanks
have been closed or removed from any properties owned or operated
by CNS or any of its Subsidiaries. To CNS's knowledge, during
the period of CNS's or any of its Subsidiaries' ownership or
operation of any of their respective current properties, there
has been no contamination by or release of Hazardous Materials
in, on, under or affecting such properties. To CNS's
knowledge, prior to the period of CNS's or any of its
Subsidiaries' ownership or operation of any of their respective
current properties, there was no contamination by or release of
Hazardous Material in, on, under or affecting such properties.
"Environmental Law" means (i) any federal, state or
local law, statute, ordinance, rule, regulation, code, license,
permit, authorization, approval, consent, legal doctrine, order,
directive, executive or administrative order, judgment, decree,
injunction, legal requirement or agreement with any governmental
entity relating to (A) the protection, preservation or
restoration of the environment (which includes, without
limitation, air, water vapor, surface water, groundwater,
drinking water supply, structures, soil, surface land, subsurface
land, plant and animal life or any other natural resource), or to
human health or safety as it relates to Hazardous Materials, or
(B) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling,
production, release or disposal of, Hazardous Materials, in each
case as amended and as now in effect. The term Environmental Law
includes all federal, state and local laws, rules, regulations or
requirements relating to the protection of the environment or
health and safety, including, without limitation, (i) the Federal
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act of
1986, the Federal Water Pollution Control Act of 1972, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal
Resource Conservation and Recovery Act of 1976 (including, but
not limited to, the Hazardous and Solid Waste Amendments thereto
and Subtitle I relating to underground storage tanks), the
Federal Solid Waste Disposal and the Federal Toxic Substances
Control Act, the Federal Insecticide, Fungicide and Rodenticide
Act, the Federal Occupational Safety and Health Act of 1970 as it
relates to Hazardous Materials, the Federal Hazardous Substances
Transportation Act, the Emergency Planning and Community
Right-To-Know Act, the Safe Drinking Water Act, the Endangered
Species Act, the National Environmental Policy Act, the Rivers
and Harbors Appropriation Act or any so-called "Superfund" or
"Superlien" law, each as amended and as now or hereafter in
effect, and (ii) any common law or equitable doctrine (including,
without limitation, injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to,
or threatened as a result of, the presence of or exposure to any
Hazardous Material.
"Hazardous Material" means any substance (whether
solid, liquid or gas) which is or could be detrimental to human
health or safety or to the environment, currently or hereafter
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any
Environmental Law, whether by type or by quantity, including any
substance containing any such substance as a component. Hazardous
Material includes, without limitation, any toxic waste,
pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste, industrial substance, oil or
petroleum, or any derivative or by-product thereof, radon,
radioactive material, asbestos, asbestos-containing material,
urea formaldehyde foam insulation, lead and polychlorinated
biphenyl.
(r) LOAN PORTFOLIO; ALLOWANCE; ASSET QUALITY.
(i) With respect to each loan owned by CNS or its
Subsidiaries in whole or in part, to CNS's knowledge (A) the note
and the related security documents are each legal, valid and
binding obligations of the maker or obligor thereof, enforceable
against such maker or obligor in accordance with their terms, (B)
the note and the related security documents, copies of which are
included in the loan files, are true and correct copies of the
documents they purport to be and have not been suspended,
amended, modified, canceled or otherwise changed except as
otherwise disclosed by documents in the applicable loan file and
(C) CNS or one of its Subsidiaries is the sole holder of legal
and beneficial title to each loan reflected in the consolidated
financial statements of CNS except as otherwise disclosed in the
applicable loan file or on the books and records of CNS and its
Subsidiaries.
(ii) The allowance for loan losses reflected in
CNS's statement of financial condition at December 31, 1998 was,
and the allowance for loan losses shown on the balance sheets in
CNS's Reports for periods ending after December 31, 1998 will be,
in the opinion of management, adequate to provide for losses
inherent in CNS's loan portfolio.
(iii) CNS's Disclosure Letter sets forth a
true and complete listing, as of September 30, 1999, of (A) all
loans, leases, advances, credit enhancements, guarantees, other
extensions of credit, commitments and interest-bearing assets of
CNS and its Subsidiaries (collectively, "Loans") that have been
classified (whether regulatory or internal) as "Special Mention,"
"Substandard," "Doubtful," "Loss" or words of similar import
listed by category, including the amounts thereof; (B) Loans (1)
that are contractually past due 90 days or more in the payment of
principal and/or interest, (2) that are on a non-accrual status,
(3) where the interest rate terms have been reduced and/or the
maturity dates have been extended subsequent to the agreement
under which the Loan was originally created due to concerns
regarding the borrower's ability to pay in accordance with such
initial terms, or (4) where a specific reserve allocation exists
in connection therewith, listed by category, including the
amounts thereof; and (C) Loans with any director, executive
officer or five percent or greater stockholder of CNS or any of
its Subsidiaries or any person, corporation or enterprise
controlling, controlled by or under common control with any of
the foregoing, including the amounts thereof. To the knowledge
of CNS, neither CNS nor any of its Subsidiaries is a party to any
Loan that is in violation of any law, regulation or rule of any
Governmental entity. Any asset of CNS or any of its Subsidiaries
that is classified as "Real Estate Owned" or words of similar
import that is included in any non-performing assets of CNS or
any of its Subsidiaries is listed in CNS's Disclosure Letter and
is carried net of reserves at the lower of cost or fair value,
less estimated selling costs, based on current independent
appraisals or evaluations or current management appraisals or
evaluations; provided, however, that "current" shall mean within
the past 12 months.
(s) DEPOSITS. None of the deposits of CNS or any of
its Subsidiaries is a "brokered" deposit.
(t) ANTI-TAKEOVER PROVISIONS INAPPLICABLE. CNS and
its Subsidiaries have taken all actions required to exempt CNS,
ENB, Acquisition Sub, ENB Bank, the Agreement, the Plan of Bank
Merger, the Merger and the Bank Merger from any provisions of an
antitakeover nature contained in their organizational documents,
and the provisions of any federal or state "anti-takeover,"
"fair price," "moratorium," "control share acquisition" or
similar laws or regulations.
(u) MATERIAL INTERESTS OF CERTAIN PERSONS. No
officer or director of CNS, or any "associate" (as such term is
defined in Rule 12b-2 under the Exchange Act of any such officer
or director, has any material interest in any material contract
or property (real or personal), tangible or intangible, used in
or pertaining to the business of CNS or any of its Subsidiaries.
(v) INSURANCE. In the opinion of management, CNS and
its Subsidiaries are presently insured, and since December 31,
1998 have been insured, for amounts deemed reasonable by
management against such risks as companies engaged in a similar
business would, in accordance with good business practice,
customarily be insured. All of the insurance policies and bonds
maintained by CNS and its Subsidiaries are in full force and
effect, CNS and its Subsidiaries are not in default thereunder
and all material claims thereunder have been filed in due and
timely fashion.
(w) INVESTMENT SECURITIES; DERIVATIVES.
(i) Except for investments in Federal Home Loan
Bank ("FHLB") Stock, pledges to secure FHLB borrowings, and
reverse repurchase agreements entered into in arms-length
transactions pursuant to normal commercial terms and conditions
and entered into in the ordinary course of business and
restrictions that exist for securities to be classified as "held
to maturity," none of the investments reflected in the
consolidated balance sheet of CNS at December 31, 1998, and none
of the investment securities held by it or any of its
Subsidiaries since December 31, 1998, is subject to any
restriction (contractual or statutory) that would materially
impair the ability of the entity holding such investment freely
to dispose of such investment at any time.
(ii) Except for adjustable-rate mortgage loans and
adjustable-rate advances, neither CNS nor any of its Subsidiaries
is a party to or has agreed to enter into an exchange-traded or
over-the-counter equity, interest rate, foreign exchange or other
swap, forward, future, option, cap, floor or collar or any other
contract that is a derivative contract (including various
combinations thereof) or owns securities that (a) are referred to
generically as "structured notes," "high risk mortgage
derivatives," "capped floating rate notes" or "capped floating
rate mortgage derivatives" or (b) are likely to have changes in
value as a result of interest or exchange rate changes that
significantly exceed normal changes in value attributable to
interest or exchange rate changes.
(x) INDEMNIFICATION. Except as provided in the
certificate of incorporation or bylaws of CNS and the similar
governing documents of its Subsidiaries, neither CNS nor any
Subsidiary is a party to any indemnification agreement with any
of its present or former directors, officers, employees, agents
or other persons who serve or served in any other capacity with
any other enterprise at the request of CNS and, to the best
knowledge of CNS, there are no claims for which any such person
would be entitled to indemnification under the organization
certificate of incorporation or bylaws of CNS or the
similar governing documents of any of its Subsidiaries, under any
applicable law or regulation or under any indemnification
agreement.
(y) BOOKS AND RECORDS. The books and records of CNS
and its Subsidiaries on a consolidated basis have been, and are
being, maintained in accordance with applicable legal and
accounting requirements and reflect in all material respects the
substance of events and transactions that should be included
therein.
(z) CORPORATE DOCUMENTS. Complete and correct copies
of the certificate of incorporation, bylaws and similar governing
documents of CNS and each of CNS's Subsidiaries, as in effect as
of the date of this Agreement, have previously been delivered to
ENB. The minute books of CNS and CNS Bank constitute a complete
and correct record of all actions taken by their respective
boards of directors (and each committee thereof) and their
stockholders. The minute books of each of CNS's other
Subsidiaries constitutes a complete and correct record of all
actions taken by their respective boards of directors (and each
committee thereof) and the stockholders of each such Subsidiary.
(aa) YEAR 2000 MATTERS. CNS and its Subsidiaries have
completed a review of their computer systems to identify systems
that could be affected by the "Year 2000" issue and reasonably
believe they have identified all such Year 2000 problems. CNS's
management has developed and commenced implementation of a plan
which is designed to complete any required initial changes to the
computer systems of CNS and its Subsidiaries and to complete
testing of those changes by December 31, 1999 (the "Year 2000
Plan"), a true and complete copy of which has been provided to
ENB. Between the date of this Agreement and the Effective Time,
CNS shall use commercially practicable efforts to implement
and/or continue to undertake its Year 2000 Plan. Year 2000
issues have not had, and are not reasonably expected to have, a
Material Adverse Effect on CNS and its Subsidiaries, taken as a
whole.
(bb) REGISTRATION STATEMENT. The information regarding
CNS and its Subsidiaries to be supplied by CNS for inclusion in
the Registration Statement on Form S-4 to be filed by ENB with
the SEC under the Securities Act of 1933, as amended ("Securities
Act") for the purpose of registering the shares of ENB Common
Stock to be issued to CNS's shareholders in the Merger (including
the proxy statement and prospectus constituting a part thereof)
(as amended or supplemented from time to time, the "Registration
Statement"), will not, at the time the Registration Statement
becomes effective, 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 are made, not
misleading.
(cc) COMMUNITY REINVESTMENT ACT COMPLIANCE. CNS Bank
is in material compliance with the applicable provisions of the
Community Reinvestment Act ("CRA") and the regulations
promulgated thereunder, and CNS Bank currently has a CRA rating
of satisfactory or better. To CNS's knowledge, there is no fact
or circumstance or set of facts or circumstances that would cause
CNS Bank to fail to comply with such provisions or cause the CRA
rating of CNS Bank to fall below satisfactory.
(dd) UNDISCLOSED LIABILITIES. As of the date hereof,
CNS and its Subsidiaries have not incurred any debt, liability or
obligation of any nature whatsoever (whether accrued, contingent,
absolute or otherwise and whether due or to become due) except
for (i) liabilities reflected on or reserved against in the
consolidated financial statements of CNS as of June 30, 1999,
(ii) liabilities incurred since June 30, 1999 in the ordinary
course of business consistent with past practice that, either
alone or when combined with all similar liabilities, have not
had, and would not reasonably be expected to have, a Material
Adverse Effect on CNS and its Subsidiaries, taken as a whole, and
(iii) liabilities incurred for legal, accounting, financial
advising fees and out-of-pocket expenses in connection with a
proposed sale or merger of CNS.
Section 2.4. REPRESENTATIONS AND WARRANTIES OF ENB.
Subject to Sections 2.1 and 2.2, ENB represents and warrants to
CNS that:
(a) ORGANIZATION.
(i) ENB is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Missouri and is registered as a bank holding company under the
Bank Holding Company Act, as amended ("BCHA"). ENB Bank is a
bank duly organized, validly existing and in good standing under
the laws of the United States of America and is a Subsidiary of
ENB. Each Subsidiary of ENB other than ENB Bank is a
corporation, limited liability company or partnership duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization. Each of
ENB and its Subsidiaries has all requisite corporate power and
authority to own, lease and operate its properties and to carry
on its business as now being conducted.
(ii) Acquisition Sub is a corporation, duly
organized, validly existing and in good standing under the laws
of Missouri, all of the outstanding capital stock of which is, or
will be prior to the Effective Time, owned directly or indirectly
by ENB free and clear of any lien, charge or other encumbrance.
From and after its incorporation, Acquisition Sub has not and
will not engage in any activities other than in connection with
or as contemplated by this Agreement. Acquisition Sub has, or
will have prior to the Effective Time, all corporate power and
authority to consummate the transactions contemplated hereunder
and carry out all of its obligations with respect to such
transactions. The consummation of the transactions contemplated
hereby has been, or will have been prior to the Closing, duly and
validly authorized by all necessary corporate action in respect
thereof on the part of Acquisition Sub.
(iii) ENB and each of its Subsidiaries has the
requisite corporate power and authority and is duly qualified to
do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its
properties makes such qualification necessary.
(iv) All of the shares of capital stock of ENB
Bank and Union State Bank and Trust of Clinton are fully paid,
nonassessable and not subject to any preemptive rights and
(except for directors' qualifying shares) are owned, directly or
indirectly, by ENB free and clear of any claims, liens,
encumbrances or restrictions (other than those imposed by
applicable federal and state securities laws) and there are
no agreements or understandings with respect to the voting or
disposition of any such shares.
(v) The deposits of ENB Bank and Union State Bank
and Trust of Clinton are insured by the Bank Insurance Fund of
the FDIC to the extent provided in the FDIA.
(b) CAPITAL STRUCTURE.
(i) The authorized capital stock of ENB consists
of 1,500,000 shares of ENB Common Stock. As of the date of this
Agreement (A) 1,077,723 shares of ENB Common Stock were issued
and outstanding, (B) no shares of ENB Common Stock were reserved
for issuance, and (C) no shares of ENB Common Stock were held by
ENB in its treasury or by its Subsidiaries. All outstanding
shares of ENB Common Stock are duly authorized and validly
issued, fully paid and nonassessable and not subject to any
preemptive rights.
(ii) No bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which
stockholders may vote of ENB are issued or outstanding.
(iii) As of the date of this Agreement,
neither ENB nor any of its Subsidiaries has or is bound by any
outstanding subscriptions, options, warrants, calls, rights,
convertible securities, commitments or agreements of any
character obligating ENB or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, any
additional shares of capital stock of ENB or of any of its
Subsidiaries (other than subscriptions to purchase ENB stock for
$60 per share) or obligating ENB or any of its Subsidiaries to
grant, extend or enter into any such option, warrant, call,
right, convertible security, commitment or agreement. As of the
date hereof, there are no outstanding contractual obligations of
ENB or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of ENB or any of its
Subsidiaries.
(c) AUTHORITY.
(i) ENB has all requisite corporate power and
authority to enter into this Agreement and, subject to receipt of
all required regulatory or governmental approvals, to consummate
the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of
Directors of ENB. This Agreement has been duly and validly
executed and delivered by ENB and constitutes a valid and binding
obligation of ENB, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally and subject,
as to enforceability, to general principles of equity, whether
applied in a court of law or a court of equity.
(ii) ENB Bank has all requisite corporate power
and authority to enter into the Plan of Bank Merger and, subject
to approval of the Plan of Bank Merger by the stockholders of ENB
Bank and the receipt of all required regulatory or governmental
approvals, to consummate the transactions contemplated thereby.
The execution and delivery of the Plan of Bank Merger and,
subject to the approval of the stockholders of ENB Bank, the
consummation of the transactions contemplated thereby, have been
duly authorized by the Board of Directors of ENB Bank. The Plan
of Bank Merger, upon execution and delivery by ENB Bank, will be
duly and validly executed and delivered by ENB Bank and will
constitute a valid and binding obligation of ENB Bank,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability,
to general principles of equity, whether applied in a court of
law or a court of equity.
(d) STOCKHOLDER APPROVAL. No approval of this
Agreement by the stockholders of ENB is required for the
consummation of the Merger and the related transactions
contemplated hereby.
(e) NO VIOLATIONS; CONSENTS. The execution, delivery
and performance of this Agreement by ENB do not, and the
consummation of the transactions contemplated hereby will not,
constitute (i) assuming receipt of all Requisite Regulatory
Approvals, a breach or violation of, or a default under, any law,
rule or regulation or any judgment, decree, order, governmental
permit or license to which ENB or any of its Subsidiaries (or any
of their respective properties) is subject, (ii) a breach or
violation of, or a default under, the articles of incorporation
or bylaws of ENB or the similar organizational documents of any
of its Subsidiaries 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 ENB or
any of its Subsidiaries 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
ENB or any of its Subsidiaries is a party, or to which any of
their respective properties or assets may be subject. The
consummation by ENB and ENB Bank of the transactions (including
the Bank Merger) contemplated hereby (exclusive of the effect of
any changes effected pursuant to Section 1.7) will not require
any approval, consent or waiver under any such law, rule,
regulation, judgment, decree, order, governmental permit or
license or the approval, consent or waiver of any other party to
any such agreement, or instrument, other than (w) the approval
of ENB as the sole shareholder of Acquisition Sub, (x) the
approval of the shareholders of ENB Bank, (y) the approval of
the Board of Governors of the Federal Reserve System ("FRB")
under the BHCA, the approval of the Comptroller of the Currency
of the Bank Merger and of the payment by ENB Bank of a dividend
sufficient to fund the payment of the Cash Consideration
(collectively, the "Requisite Regulatory Approvals"), and
(z) such approvals, consents or waivers as are required under the
federal and state securities or "blue sky" laws in connection
with the transactions contemplated by this Agreement. As of the
date hereof, the executive officers of ENB know of no reason
pertaining to ENB why any of the approvals referred to in this
Section 2.4(d) should not be obtained without the imposition of
any material condition or restriction described in the last
sentence of Section 5.1(b).
(f) REPORTS AND FINANCIAL STATEMENTS.
(i) ENB and each of its Subsidiaries have each
timely filed all material reports, registrations and statements,
together with any amendments required to be made with respect
thereto, that they were required to file since December 31, 1996
with (a) the FDIC, (b) the FRB, (c) the Missouri Division of
Finance, (d) the Comptroller of the Currency, (e) the NASD, and
(f) the SEC (collectively, "ENB's Reports") and, to ENB's
knowledge, have paid all fees and assessments due and payable in
connection therewith. As of their respective dates, none of ENB's
Reports contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. All of
ENB's Reports filed with the SEC complied in all material
respects with the applicable requirements of the Exchange Act and
the rules and regulations of the SEC promulgated thereunder.
(ii) Each of the financial statements of ENB
included in ENB's Reports complied as to form, as of their
respective dates of filing with the SEC, in all material respects
with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto and have
been prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited financial
statements, as permitted by the SEC). Each of the consolidated
statements of condition contained or incorporated by reference in
ENB's Reports (including in each case any related notes and
schedules) and each of the consolidated statements of operations,
consolidated statements of cash flows and consolidated statements
of changes in stockholders' equity, contained or incorporated by
reference in ENB's Reports (including in each case any related
notes and schedules) fairly presented (a) the financial position
of the entity or entities to which it relates as of its date and
(b) the results of operations, stockholders' equity and cash
flows, as the case may be, of the entity or entities to which it
relates for the periods set forth therein (subject, in the case
of unaudited interim statements, to normal year-end adjustments
that are not material in amount or effect), in each case in
accordance with GAAP, except as may be noted therein.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
disclosed in ENB's Reports filed on or prior to the date of this
Agreement, since December 31, 1998, no event has occurred or
circumstances arisen which has had or might reasonably be
expected to have a Material Adverse Effect with respect to ENB
and its Subsidiaries, taken as a whole.
(h) ABSENCE OF CLAIMS. No litigation, proceeding,
controversy, claim, action or suit or other legal, administrative
or arbitration proceeding before any court, governmental agency
or arbitrator is pending or has been threatened against ENB or
any of its Subsidiaries that would reasonably be expected to
prevent or adversely affect or which seeks to prohibit the
consummation of the transactions contemplated by this Agreement
or which would have a Material Adverse Effect with respect to ENB
and its Subsidiaries taken as a whole.
(i) ABSENCE OF REGULATORY ACTIONS. Neither ENB nor
any of its Subsidiaries is a party to any cease and desist order,
written agreement or memorandum of understanding with, or any
commitment letter or similar written undertaking to, or is
subject to any action, proceeding, order or directive by, or is a
recipient of any extraordinary supervisory letter from any
Government Regulator, or has adopted any board resolutions
at the request of any Government Regulator, nor has it been
advised by any Governmental Regulator that it is contemplating
issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such action, proceeding, order,
directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter, board
resolutions or similar written undertaking.
(j) TAXES. All federal, state, local and foreign tax
returns required to be filed by or on behalf of ENB or any of its
Subsidiaries have been timely filed or requests for extensions
have been timely filed and any such extension shall have been
granted and not have expired, and all such filed returns are
complete and accurate in all material respects. All taxes shown
on such returns, all taxes required to be shown on returns for
which extensions have been granted and all other taxes required
to be paid by ENB or any of its Subsidiaries have been paid in
full or adequate provision has been made for any such taxes on
ENB's balance sheet (in accordance with GAAP). As of the date of
this Agreement, there is no audit examination, deficiency
assessment, tax investigation or refund litigation with respect
to any taxes of ENB or any of its Subsidiaries, and no claim has
been made by any authority in a jurisdiction where ENB or any of
its Subsidiaries do not file tax returns that ENB or any such
Subsidiary is subject to taxation in that jurisdiction. All
taxes, interest, additions and penalties due with respect to
completed and settled examinations or concluded litigation
relating to ENB or any of its Subsidiaries have been paid in full
or adequate provision has been made for any such taxes on ENB's
balance sheet (in accordance with GAAP). ENB and its
Subsidiaries have not executed an extension or waiver of any
statute of limitations on the assessment or collection of any
material tax due that is currently in effect. ENB and each of
its Subsidiaries has withheld and paid all taxes required to have
been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder or
other third party, and ENB and each of its Subsidiaries has
timely complied with all applicable information reporting
requirements under Part III, Subchapter A of Chapter 61 of the
IRC and similar applicable state and local information reporting
requirements. Neither ENB nor any of its Subsidiaries (i) has
made an election under Section 341(f) of the IRC, or (ii) has
issued or assumed any obligation under Section 279 of the IRC,
any high yield discount obligation as described in Section 163(i)
of the IRC or any registration-required obligation within the
meaning of Section 163(f)(2) of the IRC that is not in registered
form.
(k) AGREEMENTS. (i) Except for arrangements made
in the ordinary course of business, ENB and its Subsidiaries are
not bound by any material contract (as defined in Item 601(b)(10)
of Regulation S-B) to be performed after the date hereof that has
not been filed with or incorporated by reference in ENB's
Reports.
(ii) Neither ENB nor any of its Subsidiaries is in
default under (and no event has occurred which, with due notice
or lapse of time or both, would constitute a default under) or is
in violation of any provision of any note, bond, indenture,
mortgage, deed of trust, loan agreement, lease or other agreement
to which it is a party or by which it is bound or to which any of
its respective properties or assets is subject and, to the
knowledge of ENB, no other party to any such agreement (excluding
any loan or extension of credit made by ENB or any of its
Subsidiaries) is in default in any respect thereunder.
(iii) ENB and each of its Subsidiaries owns or
possesses valid and binding licenses and other rights to use
without payment all patents, copyrights, trade secrets, trade
names, service marks and trademarks used in its businesses, and
neither ENB nor any of its Subsidiaries has received any notice
of conflict with respect thereto that asserts the right of
others. Each of ENB and its Subsidiaries has performed all the
obligations required to be performed by it and are not in default
under any contact, agreement, arrangement or commitment relating
to any of the foregoing.
(l) ENB COMMON STOCK. The shares of ENB Common Stock
to be issued pursuant to this Agreement, when issued in
accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid and non-assessable and
subject to no preemptive rights.
(m) LABOR MATTERS. ENB and its Subsidiaries are in
material 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. Neither ENB nor any of its Subsidiaries is or
has ever been a party to, or is or has ever been bound by, any
collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization with
respect to its employees, nor is ENB or any of its Subsidiaries
the subject of any proceeding asserting that it has committed an
unfair labor practice or seeking to compel it or any such
Subsidiary to bargain with any labor organization as to wages and
conditions of employment nor has any such proceeding been
threatened, nor is there any strike, other labor dispute or
organizational effort involving ENB or any of its Subsidiaries
pending or threatened.
(n) COMPLIANCE WITH LAWS. ENB and each of its
Subsidiaries has all permits, licenses, certificates of
authority, orders and approvals of, and has made all filings,
applications and registrations with, all Governmental Entities
that are required in order to permit it to carry on its business
as it is presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force
and effect, and, to the best knowledge of ENB, no suspension or
cancellation of any of them is threatened. Since the date of its
incorporation, the corporate affairs of ENB have not been
conducted in violation of any law, ordinance, regulation, order,
writ, rule, decree or approval of any Governmental Entity.
Neither ENB nor any of its Subsidiaries are in material violation
of, is, to the knowledge of ENB, under investigation with respect
to any material violation of, or has been given notice or been
charged with any material violation of, any law, ordinance,
regulation, order, writ, rule, decree or condition to approval of
any Governmental Entity.
(o) ENVIRONMENTAL MATTERS. There is no suit, claim,
action, demand, executive or administrative order, directive,
investigation or proceeding pending or, to the knowledge of ENB,
threatened before any court, governmental agency or board or
other forum against ENB or any of its Subsidiaries for alleged
noncompliance (including by any predecessor) with, or liability
under, any Environmental Law or relating to the presence of or
release into the environment of any Hazardous Material, whether
or not occurring at or on a site owned, leased or operated by it
or any of its Subsidiaries. To ENB's knowledge, the properties
currently owned or operated by ENB or any of its Subsidiaries
(including, without limitation, soil, groundwater or surface
water on, under or adjacent to the properties, and
buildings thereon) are not contaminated with and do not otherwise
contain any Hazardous Material other than as permitted under
applicable Environmental Law. Neither ENB nor any of its
Subsidiaries has received any notice, demand letter, executive or
administrative order, directive, request or other communication
(written or oral) for information from any federal, state, local
or foreign governmental entity or any third party indicating that
it may be in violation of, or liable under, any Environmental
Law. To ENB's knowledge, there are no underground storage tanks
on, in or under any properties owned or operated by ENB or any of
its Subsidiaries and no underground storage tanks have been
closed or removed from any properties owned or operated by ENB or
any of its Subsidiaries. To ENB's knowledge, during the period of
ENB's or any of its Subsidiaries ownership or operation of any
of their respective current properties, there has been no
contamination by or release of Hazardous Materials in, on, under
or affecting such properties. To ENB's knowledge, prior to the
period of ENB's or any of its Subsidiaries ownership or
operation of any of their respective current properties, there
was no contamination by or release of Hazardous Material in, on,
under or affecting such properties.
(p) YEAR 2000 MATTERS. ENB has completed a review of
its computer systems to identify systems that could be affected
by the "Year 2000" issue and reasonably believes it has
identified all Year 2000 problems. ENB's management has
developed and commenced implementation of a plan which is
designed to complete any required initial changes to its computer
systems and to complete testing of those changes by December 31,
1999. Between the date of this Agreement and the Effective Time,
ENB shall use commercially practicable efforts to implement
and/or continue to undertake such plan. Year 2000 issues have
not had and are not reasonably expected to have a Material
Adverse Effect on ENB and its subsidiaries, taken as a whole, and
are not reasonably expected to prevent or adversely affect the
ability of ENB to obtain the Requisite Regulatory Approvals.
(q) REGISTRATION STATEMENT. The information regarding
ENB and its Subsidiaries to be supplied by ENB for inclusion in
the Registration Statement will not, at the time the Registration
Statement becomes effective, 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 are made,
not misleading.
(r) COMMUNITY REINVESTMENT ACT COMPLIANCE. ENB's
depository institution Subsidiaries are each in material
compliance with the applicable provisions of the CRA and the
regulations promulgated thereunder, and each currently has a CRA
rating of satisfactory or better. To ENB's knowledge, there is
no fact or circumstance or set of facts or circumstances that
would cause any of its depository institution Subsidiaries to
fail to comply with such provisions or cause the CRA rating of
any such institution to fall below satisfactory.
(s) AVAILABILITY OF FUNDS. Upon payment of a dividend
or dividends prior to the Effective Time from one or more
Subsidiaries of ENB aggregating an amount equal to the Cash
Consideration, ENB will have sufficient funds available to carry
out its obligations under this Agreement. Such Subsidiaries have
capital and access to funds sufficient to pay such dividends.
(t) UNDISCLOSED LIABILITIES. As of the date hereof,
ENB and its Subsidiaries have not incurred any debt, liability or
obligation of any nature whatsoever (whether accrued, contingent,
absolute or otherwise and whether due or to become due) except
for (i) liabilities reflected on or reserved against in the
consolidated financial statements of ENB as of June 30, 1999,
(ii) liabilities incurred since June 30, 1999 in the ordinary
course of business consistent with past practice that, either
alone or when combined with all similar liabilities, have not
had. and would not reasonably be expected to have, a Material
Adverse Effect on ENB and its Subsidiaries, taken as a whole.
(u) PENDING SUBSCRIPTION OFFERING. ENB will conduct
its proposed subscription offering in compliance with all
applicable federal and state securities laws, including all
registration or qualification requirements under such laws, and
the offering documents used in connection with the proposed
subscription offering will not 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.
ARTICLE III
CONDUCT PENDING THE MERGER
Section 3.1. CONDUCT OF CNS'S BUSINESS PRIOR TO THE
EFFECTIVE TIME. Except as expressly provided in this Agreement,
during the period from the date of this Agreement to the
Effective Time, CNS shall, and shall cause its Subsidiaries to,
use its best efforts to (i) conduct its business in the regular,
ordinary and usual course consistent with past practice, (ii)
maintain and preserve intact its business organization,
properties, leases, employees and advantageous business
relationships and retain the services of its officers and key
employees, (iii) take no action which would adversely affect or
delay the ability of CNS or ENB to perform their respective
covenants and agreements on a timely basis under this Agreement,
(iv) take no action which would adversely affect or delay the
ability of CNS, CNS Bank, ENB or ENB Bank to obtain any necessary
approvals, consents or waivers of any governmental authority
required for the transactions contemplated hereby or which would
reasonably be expected to result in any such approvals, consents
or waivers containing any material condition or restriction, (v)
take no action that results in or is reasonably likely to have a
Material Adverse Effect on CNS or CNS Bank, (vi) continue to
implement its Year 2000 Plan in accordance with its terms, (vii)
maintain insurance in such amounts and against such risks and
losses as are customary for companies engaged in a similar
business, (viii) confer on a regular and frequent basis with one
or more representatives of ENB to discuss, subject to applicable
law, material operational matters and the general status of the
ongoing operations of CNS and its Subsidiaries, (ix) promptly
notify ENB of any material change in its business, properties,
assets, condition (financial or otherwise) or results of
operations, and (x) promptly provide ENB with copies of all
filings made by CNS or any of its Subsidiaries with any state or
federal court, administrative agency, commission or other
Governmental Entity in connection with this Agreement and the
transactions contemplated hereby.
Section 3.2. FORBEARANCE BY CNS. Without limiting
the covenants set forth in Section 3.1 hereof, except as
otherwise provided in this Agreement and except to the extent
required by law or regulation or any Governmental Entity, during
the period from the date of this Agreement to the Effective Time,
CNS shall not, and shall not permit any of its Subsidiaries to,
without the prior consent of ENB:
(a) unless required by applicable law or regulation or
regulatory directive, change any provisions of the certificate of
incorporation or bylaws of CNS or the similar governing documents
of its Subsidiaries;
(b) issue, deliver or sell any shares of its capital
stock or any securities or obligations convertible or exercisable
for any shares of its capital stock or change the terms of any of
its outstanding stock options or warrants or issue, grant or sell
any option, warrant, call, commitment, stock appreciation right,
right to purchase or agreement of any character relating to the
authorized or issued capital stock of CNS except pursuant to the
exercise of stock options or warrants outstanding as of the date
of this Agreement, or split, combine, reclassify or adjust any
shares of its capital stock or otherwise change its
capitalization;
(c) make, declare or pay any cash or stock dividend or
make any other distribution on, or directly or indirectly redeem,
purchase or otherwise acquire, any shares of its capital stock or
any securities or obligations convertible into or exchangeable
for any shares of its capital stock, provided, however, that CNS
may pay normal quarterly cash dividends of not more than $0.09
per share of CNS Common Stock (except that CNS shall not declare
or pay any cash dividend with respect to any quarter in which the
Effective Time is anticipated to occur if the record date for
ENB's normal cash dividend for such quarter is scheduled to occur
after the Effective Time). Subject to applicable regulatory
restrictions, if any, CNS Bank may pay a cash dividend that is,
in the aggregate, sufficient to fund any dividend by CNS
permitted hereunder;
(d) other than in the ordinary course of business
consistent with past practice, (i) sell, transfer, assign,
mortgage, encumber or otherwise dispose of any of its material
properties, leases, assets or other rights or agreements to any
individual, corporation or other entity other than a direct or
indirect wholly owned Subsidiary of CNS or (ii) cancel, release
or assign any indebtedness of any such individual, corporation or
other entity;
(e) except to the extent required by law or as
specifically provided for elsewhere herein, increase in any
manner the compensation or fringe benefits of any of its
employees or directors, other than general increases in
compensation for non-executive officer employees in the ordinary
course of business consistent with past practice; pay any pension
or retirement allowance not required by any existing plan or
agreement to any employees or directors, or become a party to,
amend or commit itself to fund or otherwise establish any trust
or account related to any CNS Employee Plan (as defined in
Section 2.3(m)) with or for the benefit of any employee or
director; voluntarily accelerate the vesting of any stock options
or other compensation or benefit; grant or award any stock
options; make any discretionary contribution to any CNS Employee
Plan; hire any employee with an annual total compensation payment
in excess of $30,000; or enter into any employment contract
or other agreement or arrangement with any director, officer or
other employee;
(f) except as contemplated by Section 4.2, change its
method of accounting as in effect at September 30, 1999, except
as required by changes in GAAP as concurred in by CNS's
independent auditors;
(g) settle any claim, action or proceeding involving
any liability of CNS or any of its Subsidiaries for money damages
in excess of $25,000 or impose material restrictions upon the
operations of CNS or any of its Subsidiaries;
(h) acquire or agree to acquire, by merging or
consolidating with, or by purchasing a substantial equity
interest in or a substantial portion of the assets of, or by any
other manner, any business or any corporation, partnership,
association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets, in each case
which are material, individually or in the aggregate, to CNS,
except in satisfaction of debts previously contracted;
(i) except pursuant to commitments existing at the
date hereof which have previously been disclosed to ENB, other
than in the ordinary course consistent with past practice, make
any real estate loans secured by undeveloped land or real estate
located outside the State of Missouri (other than real estate
secured by one-to-four family homes) or make any construction
loans (other than construction loans secured by one-to-four
family homes) outside the State of Missouri;
(j) establish or commit to the establishment of any
new branch or other office facilities or file any application to
relocate or terminate the operation of any banking office;
(k) other than in the ordinary course of business
consistent with past practice in individual amounts not to exceed
$25,000 and other than investments for CNS's portfolio made in
accordance with Section 3.2(l), make any investment either by
purchase of stock or securities, contributions to capital,
property transfers, or purchase of any property or assets of any
other individual, corporation or other entity;
(l) make any investment in any debt security,
including mortgage-backed and mortgage-related securities (other
than U.S. government and U.S. government agency securities with
final maturities not greater than five years, mortgage-backed or
mortgage related securities which would not be considered "high
risk" securities pursuant to Thrift Bulletin Number 52 issued by
the OTS or securities of the FHLB, in each case that are
purchased in the ordinary course of business consistent with past
practice), or materially restructure or change its investment
securities portfolio, through purchases, sales or otherwise;
(m) enter into, renew, amend or terminate any contract
or agreement, or make any change in any of its leases or
contracts, other than with respect to those involving aggregate
payments of less than, or the provision of goods or
services with a market value of less than, $20,000 per annum and
other than contracts or agreements covered by Section 3.2(n);
(n) make, renegotiate, renew, increase, extend, modify
or purchase any loan, lease (credit equivalent), advance, credit
enhancement or other extension of credit, or make any commitment
in respect of any of the foregoing, except (A) in conformity with
existing lending practices in amounts not to exceed an aggregate
of $300,000 with respect to any individual borrower or (B) loans
or advances as to which CNS has a binding obligation to make such
loan or advances as of the date hereof;
(o) incur any additional borrowings other than
short-term (six months or less) FHLB borrowings and reverse repurchase
agreements consistent with past practice, or pledge any of its
assets to secure any borrowings other than as required pursuant
to the terms of borrowings of CNS or any Subsidiary in effect at
the date hereof or in connection with borrowings or reverse
repurchase agreements permitted hereunder;
(p) make any capital expenditures in excess of $15,000
per expenditure other than pursuant to binding commitments
existing on the date hereof disclosed in the CNS Disclosure
Schedule and other than expenditures necessary to maintain
existing assets in good repair or to make payment of necessary
taxes;
(q) organize, capitalize, lend to or otherwise invest
in any Subsidiary;
(r) elect to any senior executive office any person
who is not a member of the senior executive officer team of CNS
as of the date of this Agreement or elect to the Board of
Directors of CNS any person who is not a member of the Board of
Directors of CNS as of the date of this Agreement;
(s) engage in any transaction that is not in the usual
and ordinary course of business and consistent with past
practices;
(t) enter into any new line of business;
(u) take or omit to take any action that is intended
or may reasonably be expected to result in any of CNS's
representations and warranties set forth in this Agreement being
or becoming untrue in any material respect, or which would make
any of such representations and warranties untrue or incorrect in
any material respect if made anew after taking such action;
(v) make any equity investment or commitment to make
such an investment in real estate or in any real estate
development project, other than in connection with foreclosures,
settlements in lieu of foreclosure or troubled loan or debt
restructuring in the ordinary course of business consistent with
prudent banking practices;
(w) except for loans or extensions of credit made on
terms generally available to the public, make or increase any
loan or other extension of credit, or commit to make or increase
any such loan or extension of credit, to any director or officer
of CNS or any of its Subsidiaries, or any entity controlled,
directly or indirectly, by any of the foregoing, other than
renewals of existing loans or commitments to loan; or
(x) agree or make any commitment to take any action
that is prohibited by this Section 3.2.
In the event that ENB does not respond in writing to
CNS within five business days of receipt by ENB of a written
request for CNS to engage in any of the actions for which ENB's
prior written consent is required pursuant to this Section 3.2,
ENB shall be deemed to have consented to such action. Any
request by CNS or response thereto by ENB shall be made in
accordance with the notice provisions of Section 8.7, shall note
that it is a request pursuant to this Section 3.2 and shall state
that a failure to respond within five business days shall
constitute consent.
Section 3.3. CONDUCT OF ENB'S BUSINESS PRIOR TO THE
EFFECTIVE TIME. Except as expressly provided in this Agreement,
during the period from the date of this Agreement to the
Effective Time, ENB shall, and shall cause its Subsidiaries to,
use its best efforts to (i) conduct its business in the regular,
ordinary and usual course consistent with past practice; (ii)
maintain and preserve intact its business organization,
properties. leases, employees and advantageous business
relationships; (iii) take no action which would materially
adversely affect or delay the ability of CNS or ENB to perform
their respective covenants and agreements on a timely basis under
this Agreement and (iv) take no action which would adversely
affect or delay the ability of CNS, ENB, CNS Bank or ENB Bank to
obtain any necessary approvals, consents or waivers of any
governmental authority required for the transactions contemplated
hereby or which would reasonably be expected to result in any
such approvals, consents or waivers containing any material
condition or restriction.
ARTICLE IV
COVENANTS
Section 4.1. ACQUISITION PROPOSALS. From and after
the date hereof until the termination of this Agreement, neither
CNS or CNS Bank, nor any of their respective officers, directors,
employees, representatives, agents or affiliates (including,
without limitation, any investment banker, attorney or accountant
retained by CNS or any of its Subsidiaries), will, directly or
indirectly, initiate, solicit or knowingly encourage (including
by way of furnishing non-public information or assistance), or
facilitate knowingly, any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal (as defined below), or enter into or
maintain or continue discussions or negotiate with any person or
entity in furtherance of such inquiries or to obtain an
Acquisition Proposal or agree to or endorse any Acquisition
Proposal, or authorize or permit any of its officers, directors
or employees or any of its subsidiaries or any investment banker,
financial advisor, attorney, accountant or other
representative retained by any of its Subsidiaries to take
any such action; provided, however, that nothing contained in
this Section 4.1 shall prohibit the Board of Directors of CNS
from (i) furnishing information to, or entering into discussions
or negotiations with any, person or entity that makes an
unsolicited written, bona fide proposal to acquire CNS pursuant
to a merger, consolidation, share exchange, business combination,
tender or exchange offer or other similar transaction, if, and
only to the extent that, (A) the Board of Directors of CNS
receives a written opinion from its independent financial advisor
that such proposal may be superior to the Merger from a financial
point-of-view to CNS's stockholders, (B) the Board of Directors
of CNS, after consultation with and based upon the advice of
independent legal counsel, determines in good faith that such
action is necessary for the Board of Directors of CNS to comply
with its fiduciary duties to stockholders under applicable law
(such proposal that satisfies (A) and (B) being referred to
herein as a "Superior Proposal") and (C) prior to furnishing such
information to, or entering into discussions or negotiations
with, such person or entity, CNS (x) provides reasonable notice
to ENB to the effect that it is furnishing information to, or
entering into discussions or negotiations with, such person or
entity and (y) receives from such person or entity an executed
confidentiality agreement in reasonably customary form;
(ii) complying with Rule 14e-2 promulgated under the Exchange Act
with regard to a tender or exchange offer; or (iii) failing to
make or withdrawing or modifying its recommendation and entering
into a Superior Proposal if there exists a Superior Proposal and
the Board of Directors of CNS, after consultation with
independent legal counsel, determines in good faith that such
action is necessary for the Board of Directors of CNS to comply
with its fiduciary duties to stockholders under applicable law.
CNS shall notify ENB orally and in writing of any Acquisition
Proposal (including, without limitation, the terms and conditions
of any such Acquisition Proposal and the identity of the person
making such Acquisition Proposal) as promptly as practicable
(but, in any event, no later than 24 hours) after the receipt
thereof and shall keep ENB informed of the status and details of
any such Acquisition Proposal. For purposes of this Agreement,
"Acquisition Proposal" shall mean any of the following (other
than the transactions contemplated hereunder) involving CNS or
any of its Subsidiaries: (i) any merger, consolidation, share
exchange, business combination, or other similar transaction;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of 25% or more of the assets of CNS or CNS
Bank, taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange offer for 25% or
more of the outstanding shares of capital stock of CNS or the
filing of a registration statement under the Securities Act
of 1933 in connection therewith; or (iv) any public announcement
of a proposal, plan or intention to do any of the foregoing or
any agreement to engage in any of the foregoing.
Section 4.2. CERTAIN POLICIES AND ACTIONS OF CNS.
(a) CNS shall cause CNS Bank to sell all mutual fund
shares which it owns as soon as practicable after the date of
this Agreement.
(b) At the request of ENB, CNS shall cause CNS Bank to
modify and change its loan, litigation and real estate valuation
policies and practices (including loan classifications and levels
of reserves) and investment and asset/liability management
policies and practices after the date on which all Requisite
Regulatory Approvals and stockholder approvals are received, and
after receipt of written confirmation from ENB that it is not
aware of any fact or circumstance that would prevent
completion of the Merger, and prior to the Effective Time so as
to be consistent on a mutually satisfactory basis with those of
ENB Bank; provided, however, that CNS shall not be required to
take such action more than 30 days prior to the Effective Date;
and provided, further, that such policies and procedures are not
prohibited by GAAP or any applicable laws and regulations.
Notwithstanding the foregoing except to the extent provided in
Section 1.2(b), CNS Bank shall not be required to increase its
levels of reserves pursuant to this Section 4.2(b) until after
the Merger Consideration has been calculated in accordance with
Section 1.2.
(c) CNS's representations, warranties and covenants
contained in this Agreement shall not be deemed to be untrue or
breached in any respect for any purpose as a consequence of any
modifications or changes undertaken solely on account of Section
4.2(b). ENB agrees to hold harmless, indemnify and defend CNS
and its Subsidiaries, and their respective directors, officers
and employees, for any loss, claim, liability or other damage
caused by or resulting from compliance with Section 4.2(b).
Section 4.3. ACCESS AND INFORMATION. Upon
reasonable notice, CNS shall (and shall cause its Subsidiaries
to) afford ENB and its representatives (including, without
limitation, directors, officers and employees of ENB and its
affiliates and counsel, accountants and other professionals
retained by ENB) such reasonable access during normal business
hours throughout the period prior to the Effective Time to the
books, records (including, without limitation, tax returns and
work papers of independent auditors), contracts, properties,
personnel and to such other information relating to CNS and its
Subsidiaries as ENB may reasonably request; provided, however,
that no investigation pursuant to this Section 4.3 shall affect
or be deemed to modify any representation or warranty made
herein. CNS shall provide ENB with true and complete copies of
all financial and other information relating to the business or
operations of CNS and its Subsidiaries that is provided to
directors of CNS and CNS Bank in connection with meetings of
their Board of Directors of committees thereof. In furtherance,
and not in limitation of the foregoing, CNS shall make available
to ENB all information necessary or appropriate for the
preparation and filing of all real property and real estate
transfer tax returns and reports required by reason of the Merger
or the Bank Merger. ENB will not, and will cause its
representatives not to, use any information obtained pursuant to
this Section 4.3 for any purpose unrelated to the consummation of
the transactions contemplated by this Agreement. Subject to the
requirements of applicable law, ENB will keep confidential, and
will cause its representatives to keep confidential, all
information and documents obtained pursuant to this Section 4.3
unless such information (i) was already known to ENB or an
affiliate of ENB, other than pursuant to a confidentiality
agreement or other confidential relationship, (ii) becomes
available to ENB or an affiliate of ENB from other sources not
known by such party to be bound by a confidentiality agreement or
other obligation of secrecy, (iii) is disclosed with the prior
written approval of CNS or (iv) is or becomes readily
ascertainable from published information or trade sources. In
the event that this Agreement is terminated or the transactions
contemplated by this Agreement shall otherwise fail to be
consummated, each party shall promptly cause all copies of
documents or extracts thereof containing information and data as
to another party hereto (or an affiliate of any party hereto) to
be returned to the party that furnished the same.
Section 4.4. CERTAIN FILINGS, CONSENTS AND
ARRANGEMENTS. ENB shall as soon as practicable and in
cooperation with CNS (and in any event within 45 days after the
date hereof) make, or cause to be made, any filings and
applications and provide any notices required to be filed or
provided in order to obtain all approvals, consents and waivers
of Governmental Entities and third parties necessary or
appropriate for the consummation of the transactions contemplated
hereby, including approvals needed for the payment of any special
dividends required to fund the Cash Consideration. ENB and CNS
each shall provide the other and its counsel with an opportunity
to review all filings, applications and notices prior to their
being submitted to any governmental authority and shall provide
the other with copies of all filings, applications and notices
submitted to any governmental authority.
Section 4.5. ANTITAKEOVER PROVISIONS. CNS and its
Subsidiaries shall take all steps required by any relevant
federal or state law or regulation or under any relevant
agreement or other document to exempt or continue to exempt ENB,
Acquisition Sub, ENB Bank, the Agreement, the Plan of Bank
Merger, the Merger and the Bank Merger from any provisions of an
antitakeover nature contained in CNS's or its Subsidiaries'
organization certificates and bylaws and the provisions of any
federal or state antitakeover laws.
Section 4.6. ADDITIONAL AGREEMENTS. Subject to the
terms and conditions herein provided, each of the parties hereto
agrees to use all reasonable efforts to take promptly, or cause
to be taken promptly, all actions and to do promptly, or cause to
be done promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including the
Merger and the Bank Merger, as expeditiously as possible,
including using efforts to obtain all necessary actions or
non-actions, extensions, waivers, consents and approvals from all
applicable Governmental Entities, effecting all necessary
registrations, applications and filings (including, without
limitation, filings under any applicable state securities laws)
and obtaining any required contractual consents and regulatory
approvals.
Section 4.7. PUBLICITY. CNS and ENB shall consult
with each other in issuing any press releases or otherwise making
public statements with respect to the Merger and any other
transaction contemplated hereby and in making any filings with
any governmental entity or with any national securities exchange
with respect thereto.
Section 4.8. STOCKHOLDERS MEETING. CNS shall take
all action necessary, in accordance with applicable law and its
Certificate of Incorporation and Bylaws, to convene a meeting of
its stockholders ("Stockholder Meeting") as promptly as
practicable for the purpose of considering and voting on approval
and adoption of this Agreement, the Merger and the other
transactions provided for in this Agreement. Except to the
extent legally required for the discharge by the Board of
Directors of its fiduciary duties as advised by such Board's
counsel, the Board of Directors of CNS shall (a) recommend at its
Stockholder Meeting that the stockholders vote in favor of and
approve the transactions provided for in this Agreement and (b)
use its best reasonable efforts to solicit such approvals. CNS
may employ professional proxy solicitors to assist in contacting
stockholders in connection with soliciting favorable votes on the
Merger.
Section 4.9. PROXY STATEMENT; PROSPECTUS.
(a) For the purposes (i) of registering the shares of
ENB Common Stock to be offered to holders of CNS Common Stock in
connection with the Merger with the SEC under the Securities Act
and applicable state securities laws and (ii) of holding the CNS
Stockholders Meeting, ENB and CNS shall jointly prepare a
combined proxy statement and prospectus satisfying all applicable
requirements of the Securities Act and the Exchange Act, and the
rules and regulations thereunder (such proxy statement/prospectus
in the form mailed by CNS to the CNS stockholders, together with
any and all amendments or supplements thereto, being herein
referred to as the "Proxy Statement-Prospectus"). ENB shall
prepare and file the Registration Statement, in which the Proxy
Statement-Prospectus will be included, with the SEC. Each of ENB
and CNS shall use their best efforts to have the Registration
Statement declared effective under the Securities Act as promptly
as practicable after such filing, and CNS shall thereafter
promptly mail the Proxy Statement-Prospectus to its stockholders.
ENB shall also use its best efforts to obtain all necessary state
securities law or "Blue Sky" permits and approvals required to
carry out the transactions contemplated by this Agreement, and
CNS shall furnish all information concerning CNS and the holders
of CNS Common Stock as may be reasonably requested in connection
with any such action.
(b) ENB shall notify CNS promptly of the receipt of
any comments of the SEC with respect to the Proxy
Statement-Prospectus and of any requests by the SEC for any
amendment or supplement thereto or for additional information and
shall provide to CNS promptly copies of all correspondence
between ENB or any representative of ENB and the SEC. ENB shall
give CNS and its counsel the opportunity to review and comment on
all amendments and supplements to the Proxy Statement-Prospectus
and all responses to requests for additional information and
replies to comments prior to their being filed with, or sent to,
the SEC. Each of ENB and CNS agrees to use all reasonable
efforts, after consultation with the other party hereto, to
respond promptly to all such comments of and requests by the SEC
and to cause the Proxy Statement-Prospectus and all required
amendments and supplements thereto to be mailed to the holders of
CNS Common Stock entitled to vote at the CNS Stockholders Meeting
referred to in Section 4.8 hereof at the earliest practicable
time.
(c) CNS and ENB shall promptly notify the other party
if at any time it becomes aware that the Proxy
Statement-Prospectus or the Registration Statement contains any
untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under
which they were made, not misleading. In such event, CNS shall
cooperate with ENB in the preparation of a supplement or
amendment to such Proxy Statement-Prospectus which corrects such
misstatement or omission, and ENB shall file an amended
Registration Statement with the SEC, and CNS shall mail an
amended Proxy Statement-Prospectus to CNS's stockholders.
Section 4.10. NOTIFICATION OF CERTAIN MATTERS. Each
party shall give prompt notice to the other of: (a) any event or
notice of, or other communication relating to, a default or event
that, with notice or lapse of time or both, would become a
default, received by it or any of its Subsidiaries subsequent to
the date of this Agreement and prior to the Effective Time, under
any contract material to the financial condition,
properties, businesses or results of operations of each party and
its Subsidiaries taken as a whole to which each party or any
Subsidiary is a party or is subject; and (b) any event,
condition, change or occurrence which individually or in the
aggregate has, or which, so far as reasonably can be foreseen at
the time of its occurrence, is reasonably likely to result in a
Material Adverse Effect with respect to such party and its
Subsidiaries taken as a whole. Each of CNS and ENB shall give
prompt notice to the other party of any (i) notice or other
communication from any third party alleging that the consent of
such third party is or may be required in connection with any of
the transactions contemplated by this Agreement and (ii) the
occurrence or non-occurrence of any fact or event which would be
reasonably likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any
respect at any time from the date hereof to the Effective Time or
to cause any covenant, condition or agreement under this
Agreement not to be complied with or satisfied in all material
respects.
Section 4.11. EMPLOYEES, DIRECTORS AND OFFICERS.
(a) All persons who are employees of CNS Bank
immediately prior to the Effective Time and whose employment is
not specifically terminated at or prior to the Effective Time (a
"Continuing Employee") shall, at the Effective Time, become
employees of ENB Bank; provided, however, that in no event shall
any of CNS's employees be officers of ENB Bank, or have or
exercise any power or duty conferred upon such an officer, unless
and until duly elected or appointed to such position in
accordance with the bylaws of ENB Bank. All of the Continuing
Employees shall be employed at the will of ENB Bank and no
contractual right to employment shall inure to such employees
because of this Agreement. ENB will use its best efforts to
retain all of the employees of CNS Bank, subject to the
qualifications of such employees and the needs of ENB Bank.
(b) Except as otherwise provided in paragraph (d) of
this Section 4.11, appropriate steps shall be taken to terminate
all CNS Employee Plans as of the Effective Time or as promptly as
practical thereafter. Immediately following the Effective Time,
each Continuing Employee shall be eligible to participate in
ENB's benefit plans on the same basis as a new employee of ENB or
ENB Bank (it being understood that inclusion of Continuing
Employees in ENB's benefit plans may occur at different times
with respect to different plans). Service with CNS or CNS Bank
shall be treated as service with ENB Bank for purposes of
satisfying any waiting periods, evidence of insurability
requirements, or the application of any preexisting condition
limitation with respect to any ENB or ENB Bank "welfare benefit
plan", as defined in Section 3(1) of ERISA, but not with respect
to any pension, profit sharing or any other employee benefit plan
unless the Continuing Employee remains in the service of ENB for
at least one year immediately following the Effective Time. Each
Continuing Employee shall receive credit for service with CNS or
CNS Bank for purposes of computing vacation pay benefits.
(c) ENB agrees to honor the existing employment
agreement with CNS's chief executive officer, including the
change in control provisions of such agreement, CNS's Executive
Deferred Compensation Plan, and CNS's Management Recognition and
Development Plan. Payments under such agreement and plans may
be made by CNS immediately prior to the Effective Time if
so agreed to by ENB, or on such other schedule as may be mutually
agreed upon by the individual employee and ENB. ENB also agrees
to honor the deferred fee arrangement with Director Xxxxxxx X.
Xxxxxxxxx.
(d) At or immediately prior to the Effective Time, the
CNS Employee Stock Ownership Plan ("ESOP") shall be terminated on
such terms and conditions as CNS shall determine. As soon as
administratively practicable after the Effective Time, any loan
between CNS and the ESOP shall be repaid in full from the Cash
Consideration received for unallocated shares of CNS Common Stock
held by the ESOP (or, if such amount is insufficient to repay the
loan, through the sale of a sufficient number of shares of ENB
Common Stock) upon the conversion pursuant to the Merger of such
shares of CNS Common Stock held by the ESOP. Any remaining Cash
Consideration or ENB Common Stock received for such unallocated
shares after such repayment shall be allocated as investment
earnings of the ESOP to the ESOP accounts of those CNS or CNS
Bank employees who are ESOP participants and beneficiaries (the
"ESOP Participants") in accordance with the terms of the ESOP as
amended with respect to such termination and as in effect on the
Effective Time. All ESOP Participants shall fully vest and have
a nonforfeitable interest in their accounts under the ESOP
determined as of the Effective Time. As soon as practicable
after the receipt of a favorable determination letter from the
IRS as to the tax qualified status of the ESOP upon its
termination under Section 401(a) and 4975(e) of the IRC,
distributions of the benefits under the ESOP shall be made to the
ESOP Participants in accordance with the provisions of the ESOP.
To the extent that ENB Common Stock is not "readily tradeable on
an established securities market" within the meaning of Section
409(h) of the IRC, ENB shall honor the provisions of the ESOP
relating to the put option provided by Section 409(h) and will
comply with the independent appraisal requirements of
Section 401(a)(28)(C) of the IRC.
(e) CNS shall use its best efforts to obtain from each
holder of an CNS Option and to deliver to ENB at or before the
Closing (as defined in Section 7.1) an agreement to the
cancellation of such holder's CNS Options in exchange for a cash
payment as described in Section 1.5.
(f) Any employee of CNS or any CNS Subsidiary (i)
whose employment with ENB or any ENB Subsidiary is terminated by
ENB or (ii) who voluntarily terminates employment in
circumstances where, without the employee's consent, there has
occurred (x) a material reduction in the employee's level of
compensation and benefits as in effect immediately prior to the
Effective Time, (y) a material change in the employee's
functions, duties or responsibilities which would cause the
employee's position to be one of lesser responsibility,
importance or scope than immediately prior to the Effective Time
or (z) a change in location of the location of the employee's job
or office immediately prior to the Effective Time by more than 25
miles, at the Effective Time and for a one (1) year period
thereafter and shall be entitled to receive (a) a lump-sum
severance benefit in an amount equal to one weeks' pay for each
year of employment with CNS or any CNS Subsidiary, (with partial
years of service included in the calculation on a pro-rated
basis), up to a maximum of eight weeks' pay, and (b) continuation
of health benefits, on the same terms and conditions applicable
to ENB's active employees, for the same number of weeks factored
into the calculation of severance payments, up to a maximum of
eight weeks, and thereafter COBRA benefits for an
additional period of time determined as though the employee
terminated employment upon expiration of the period covered by
said continued health benefits.
Section 4.12. INDEMNIFICATION.
(a) From and after the Effective Time through the
sixth anniversary of the Effective Date, ENB (and any successor)
agrees to indemnify and hold harmless each present and former
director and officer of CNS and its Subsidiaries and each officer
or employee of CNS and its Subsidiaries that is serving or has
served as a director or trustee of another entity expressly at
CNS's request or direction (each, an "Indemnified Party"),
against any costs or expenses (including reasonable attorneys'
fees), judgments, fines, amounts paid in settlement, losses,
claims, damages or liabilities (collectively, "Costs") incurred
in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or
investigative, arising out of matters existing or occurring at or
prior to the Effective Time (including the transactions
contemplated by this Agreement), whether asserted or claimed
prior to, at or after the Effective Time, and to advance any such
Costs to each Indemnified Party as they are from time to time
incurred, in each case to the fullest extent such Indemnified
Party would have been permitted to be indemnified as a director,
officer or employee of CNS and its Subsidiaries and under the
DGCL (as in effect on the Effective Date).
(b) Any Indemnified Party wishing to claim
indemnification under Section 4.12(a), upon learning of any such
claim, action, suit, proceeding or investigation, shall promptly
notify ENB thereof, but the failure to so notify shall not
relieve ENB of any liability it may have hereunder to such
Indemnified Party if such failure does not materially and
substantially prejudice ENB. In the event of any such claim,
action, suit, proceeding or investigation: (i) ENB shall have the
right to assume the defense thereof with counsel reasonably
acceptable to the Indemnified Party and ENB shall not be liable
to such Indemnified Party for any legal expenses of other counsel
subsequently incurred by such Indemnified Party in connection
with the defense thereof, except that if ENB does not elect to
assume such defense within a reasonable time or counsel for the
Indemnified Party at any time advises that there are issues which
raise conflicts of interest between ENB and the Indemnified Party
(and counsel for ENB does not disagree), the Indemnified Party
may retain counsel satisfactory to such Indemnified Party, and
ENB shall remain responsible for the reasonable fees and expenses
of such counsel as set forth above, to be paid promptly as
statements therefor are received; provided, however, that ENB
shall be obligated pursuant to this paragraph (b) to pay for only
one firm of counsel for all Indemnified Parties in any one
jurisdiction with respect to any given claim, action, suit,
proceeding or investigation unless the use of one counsel for
such Indemnified Parties would present such counsel with a
conflict of interest; (ii) the Indemnified Party will reasonably
cooperate in the defense of any such matter; and (iii) ENB shall
not be liable for any settlement effected by an Indemnified Party
without its prior written consent, which consent may not be
withheld unless such settlement is unreasonable in light of such
claims, actions, suits, proceedings or investigations against, or
defenses available to, such Indemnified Party.
(c) ENB shall pay all reasonable Costs, including
attorneys' fees, that may be incurred by any Indemnified Party in
successfully enforcing the indemnity and other obligations
provided for in this Section 4.12 to the fullest extent
permitted by law. The rights of each Indemnified Party hereunder
shall be in addition to any other rights such Indemnified Party
may have under applicable law.
(d) ENB shall maintain CNS's existing directors and
officers' insurance policy (or provide a policy providing
comparable coverage and amounts on terms no less favorable to the
persons currently covered by CNS's existing policy, including
ENB's existing policy if its meets the foregoing standard)
covering persons who are currently covered by such insurance for
a period of three years after the Effective Date.
(e) In the event ENB or any of its successors or
assigns (i) consolidates with or merges into any other person or
entity and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) transfers or
conveys all or substantially all of its properties and assets to
any person or entity, then, and in each such case, to the extent
necessary, proper provision shall be made so that the successors
and assigns of ENB assume the obligations set forth in this
Section 4.12.
(f) The provisions of this Section 4.12 are intended
to be for the benefit of, and shall be enforceable by, each
Indemnified Party and his or her representatives.
Section 4.13. YEAR 2000. From the date hereof until
the Effective Time, with respect to all computer systems of CNS
and its Subsidiaries, CNS hereby covenants and agrees (a) to use
its best efforts to comply with all Federal Financial Institution
Examination Council Year 2000 regulations and guidelines and (b)
that CNS and CNS Bank will each take all actions necessary to
receive a rating of "Satisfactory" or better on any Year 2000
compliance examination conducted by their respective examining
agencies.
Section 4.14 STOCK LISTING. ENB shall file an
application for listing the ENB Common Stock on the Nasdaq Stock
Market and shall use its best efforts to cause the ENB Common
Stock to be listed on the Nasdaq Stock Market as of the Effective
Time of the Merger, provided, that if such listing would require
action to be taken at a shareholders meeting of ENB, ENB shall
use its best efforts to cause the ENB Common Stock to be listed
on the Nasdaq Stock Market within 20 days after ENB's 2000 annual
meeting of shareholders, which will be held not later than May
15, 2000.
Section 4.15. AFFILIATE LETTERS. CNS has delivered
to ENB a letter identifying all persons who, to the knowledge of
CNS, may be deemed to be "affiliates" of CNS under Rule 145 of
the Securities Act of 1933, including, without limitation, all
directors and executive officers of CNS. Prior to or
concurrently herewith, CNS has delivered executed letter
agreements, each substantially in the form attached hereto as
EXHIBIT B, executed by each director of CNS agreeing (a) to
comply with Rule 145 and, in the case of persons who are
directors of CNS, (b) to be present in person or by proxy and
vote in favor of the Merger at any meeting of CNS's stockholders
called for the purpose of considering and approving the Merger
and this Agreement, to the extent that such person is entitled to
vote thereat. CNS agrees to obtain letter agreements to
the same effect from all other persons identified as affiliates
of CNS within three weeks after the date hereof.
Section 4.16. TAX-FREE REORGANIZATION TREATMENT.
Prior to the Effective Time, neither ENB nor CNS shall
intentionally take, fail to take, or cause to be taken or not
taken, or cause or permit any of their respective Subsidiaries to
take, fail to take, or cause to be taken or not taken, any action
within its control that would disqualify the Merger as a
reorganization within the meaning of Section 368(a) of the IRC.
Subsequent to the Effective Time, ENB shall not take any action
within its control that would disqualify the Merger as a
reorganization under the IRC.
Section 4.17 ACQUISITION SUB. Prior to the Effective
Time, ENB will take any and all necessary action to cause (i)
Acquisition Sub to become a direct wholly-owned subsidiary of ENB
and (ii) the directors and stockholder or stockholders of
Acquisition Sub to approve the transactions contemplated by this
Agreement.
Section 4.18 SUBSCRIPTION OFFERING. CNS shall
cooperate with ENB in providing information and public documents
respecting CNS reasonably requested by ENB for inclusion in ENB's
offering circular in connection with its subscription offering,
which information and documents shall not 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.
ARTICLE V
CONDITIONS TO CONSUMMATION
Section 5.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS.
The respective obligations of each party to effect the Merger,
the Bank Merger and any other transactions contemplated by this
Agreement shall be subject to the satisfaction of the following
conditions:
(a) This Agreement shall have been approved by the
requisite vote of CNS's stockholders in accordance with
applicable laws and regulations.
(b) The Requisite Regulatory Approvals, the consent of
the OTS and any other required waivers with respect to this
Agreement and the transactions contemplated hereby shall have
been obtained and shall remain in full force and effect, and all
statutory waiting periods shall have expired; and all other
consents, waivers and approvals of any third parties which are
necessary to permit the consummation of the Merger and the other
transactions contemplated hereby shall have been obtained or made
except for those the failure to obtain would not have a Material
Adverse Effect (i) on CNS and its Subsidiaries taken as a whole
or (ii) on ENB and its Subsidiaries taken as a whole. No such
approval or consent shall have imposed any condition or
requirement that would so materially and adversely impact the
economic or business benefits to ENB or CNS of the transactions
contemplated hereby that, had such condition or requirement been
known, such party would not, in its reasonable judgment, have
entered into this Agreement.
(c) No party hereto shall be subject to any order,
decree, ruling or injunction of a court or agency of competent
jurisdiction which enjoins or prohibits the consummation of the
Merger, the Bank Merger or any other transactions contemplated by
this Agreement and no Governmental Entity shall have instituted
any proceeding for the purpose of enjoining or prohibiting the
consummation of the Merger, the Bank Merger or any transactions
contemplated by this Agreement.
(d) No statute, rule or regulation shall have been
enacted, entered, promulgated, interpreted, applied or enforced
by any governmental authority which prohibits, restricts or makes
illegal consummation of the Merger, the Bank Merger or any other
transactions contemplated by this Agreement.
(e) The Registration Statement shall have been
declared effective by the SEC and no proceedings shall be pending
or threatened by the SEC to suspend the effectiveness of the
Registration Statement; all required approvals by state
securities or "blue sky" authorities with respect to the
transactions contemplated by this Agreement shall have been
obtained.
(f) ENB shall have received the letter agreement
referred to in Section 4.15 from each affiliate of CNS.
(g) No litigation, claim, action, suit or other legal
administrative proceeding challenging the Merger or the Bank
Merger shall be pending against any party hereto or any of its
Subsidiaries, directors or officers, which in the opinion of
counsel for ENB is likely to result in the incurring of damages
and defense costs not covered by insurance by ENB or any of its
Subsidiaries or by any person or persons whom ENB would be
required to indemnify in an aggregate amount exceeding $350,000.
(h) ENB and CNS each shall have received an opinion of
Xxxxxxx, Mag & Fizzell, P.C., counsel to ENB, dated as of the
Effective Date, in form and substance customary in transactions
of the type contemplated hereby, and reasonably satisfactory to
ENB and CNS, respectively, substantially to the effect that on
the basis of the facts, representations and assumptions set forth
in such opinion which are consistent with the state of facts
existing at the Effective Time, the Merger will be treated for
federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code and that accordingly:
(i) No gain or loss will be recognized by ENB,
ENB Bank, CNS or CNS Bank as a result of the Merger;
(ii) Except to the extent of any Cash
Consideration, no gain or loss will be recognized by the
stockholders of CNS who exchange their CNS Common Stock for ENB
Common Stock pursuant to the Merger;
(iii) The tax basis of ENB Common Stock
received by stockholders who exchange their CNS Common Stock for
ENB Common Stock in the Merger will be the same as the tax basis
of CNS Common Stock surrendered pursuant to the Merger reduced by
the Cash Consideration and any amount allocable to a
fractional share interest for which cash is received and
increased by any gain recognized on the exchange; and
(iv) The holding period of ENB Common Stock
received by each stockholder in the Merger will include the
holding period of CNS Common Stock exchanged therefor, provided
that such stockholder held such CNS Common Stock as a capital
asset on the Effective Date.
Such opinion may be based on, in addition to the review
of such matters of fact and law as Xxxxxxx, Mag & Fizzell, P.C.
considers appropriate, (x) representations made at the request of
Xxxxxxx, Mag & Fizzell, P.C. by ENB, ENB Bank, CNS, CNS Bank, or
any combination of such persons and (y) certificates provided at
the request of Xxxxxxx, Mag & Fizzell, P.C. by officers of ENB,
ENB Bank, CNS, CNS Bank and other appropriate persons.
Section 5.2. CONDITIONS TO THE OBLIGATIONS OF ENB AND
ENB BANK. The obligations of ENB and ENB Bank to effect the
Merger, the Bank Merger and any other transactions contemplated
by this Agreement shall be further subject to the satisfaction of
the following additional conditions:
(a) Each of the obligations of CNS and CNS Bank,
respectively, required to be performed by it at or prior to the
Closing pursuant to the terms of this Agreement shall have been
duly performed and complied with in all material respects and the
representations and warranties of CNS and CNS Bank contained in
this Agreement shall be true and correct, subject to Sections 2.1
and 2.2, as of the date of this Agreement and as of the Effective
Time as though made at and as of the Effective Time (except as to
any representation or warranty which specifically relates to an
earlier date), and ENB shall have received a certificate to the
foregoing effect signed by the chief executive officer and the
chief financial or principal accounting officer of CNS.
(b) On the Closing Date, Dissenters' Shares shall not
constitute more than 10% of the outstanding shares of CNS Common
Stock.
(c) ENB shall have received the opinion of counsel to
CNS and CNS Bank with respect to those matters set forth on
Exhibit C hereto in form and substance reasonably satisfactory to
ENB.
Section 5.3. CONDITIONS TO THE OBLIGATIONS OF CNS AND
CNS BANK. The obligations of CNS and CNS Bank to effect the
Merger, the Bank Merger and any other transactions contemplated
by this Agreement shall be further subject to the satisfaction of
the following additional conditions:
(a) Each of the obligations of ENB and ENB Bank,
respectively, required to be performed by it at or prior to the
Closing pursuant to the terms of this Agreement shall have been
duly performed and complied with in all material respects and the
representations and warranties of ENB and ENB Bank contained in
this Agreement shall be true and correct, subject to Sections 2.1
and 2.2, as of the date of this Agreement and as of the Effective
Time as though made at and as of the Effective Time (except
as to any representation or warranty which specifically relates
to an earlier date), and CNS shall have received a certificate to
the foregoing effect signed by the chief executive officer and
the chief financial or principal accounting officer of ENB.
(b) ENB shall have provided to the Exchange Agent
sufficient cash and shares of ENB Common Stock to issue and pay
the aggregate Merger Consideration and CNS shall have received a
certificate from the Exchange Agent to such effect.
(c) CNS shall have received the opinion of counsel to
ENB and ENB Bank with respect to those matters set forth on
Exhibit D hereto in form and substance reasonably satisfactory to
CNS.
ARTICLE VI
TERMINATION
Section 6.1. TERMINATION. This Agreement may be
terminated, and the Merger abandoned, at or prior to the
Effective Date, either before or after any requisite stockholder
approval:
(a) by the mutual consent of ENB and CNS in a written
instrument, if the Board of Directors of each so determines by
vote of a majority of the members of its entire Board; or
(b) by ENB or CNS, if its Board of Directors so
determines by vote of a majority of the members of its entire
Board, in the event of the failure of the stockholders of CNS to
approve the Agreement at the Stockholder Meeting; provided,
however, that CNS shall only be entitled to terminate the
Agreement pursuant to this clause if it has complied in all
material respects with its obligations under Section 4.8; or
(c) by ENB or CNS, by written notice to the other
party, if either (i) any approval, consent or waiver of a
governmental agency required to permit consummation of the
transactions contemplated hereby shall have been denied or (ii)
any governmental authority of competent jurisdiction shall have
issued a final, unappealable order enjoining or otherwise
prohibiting consummation of the transactions contemplated by this
Agreement; or
(d) by ENB or CNS, if its Board of Directors so
determines by vote of a majority of the members of its entire
Board, in the event that the Merger is not consummated by August
31, 2000, unless the failure to so consummate by such time is due
to the breach of any representation, warranty or covenant
contained in this Agreement by the party seeking to terminate; or
(e) by ENB or CNS (provided that the party seeking
termination is not then in material breach of any representation,
warranty, covenant or other agreement contained herein), in
the event of (i) a failure to perform or comply by the other
party with any covenant or agreement of such other party
contained in this Agreement, which failure or non-compliance is
material in the context of the transactions contemplated by this
Agreement, or (ii) subject to Section 2.2(a), any inaccuracies,
omissions or breach in the representations, warranties, covenants
or agreements of the other party contained in this Agreement the
circumstances as to which either individually or in the aggregate
have, or reasonably could be expected to have, a Material Adverse
Effect on such other party; in either case which has not been or
cannot be cured within 30 calendar days after written notice
thereof is given by the party seeking to terminate to such other
party; or
(f) by CNS, if the Board of Directors of CNS
reasonably determines by vote of a majority of the members of its
entire Board that a proposal made by a third party to acquire,
directly or indirectly, including pursuant to a tender offer,
exchange offer, merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar
transaction, for consideration consisting of cash and/or
securities, more than 50% of the combined voting power of the
shares of CNS Common Stock then outstanding or all or
substantially all of the assets of CNS constitutes a Superior
Proposal and that such proposal must be accepted in order to
comply with the Board of Directors' fiduciary duties to
stockholders under applicable law; provided, however, that prior
to any such termination, CNS shall use its reasonable efforts to
negotiate in good faith with ENB to make such adjustments in the
terms and conditions of this Agreement a would enable CNS to
proceed with the transactions contemplated herein.
Section 6.2. TERMINATION FEE.
(a) In the event that (a) CNS terminates this
Agreement pursuant to Section 6.1(f) or (b) ENB or CNS terminates
this Agreement pursuant to Section 6.1(b) after it has been
publicly announced prior to the Stockholders Meeting that a
person (other than ENB) has made or disclosed an intention to
make a proposal to engage in a merger, consolidation, share
exchange or other similar transaction with CNS or CNS Bank and
within 12 months after the termination of this Agreement CNS or
CNS Bank enters into an agreement with any person to effect a
merger, consolidation, share exchange or other similar
transaction, then CNS shall, within 10 business days following
written demand by ENB, pay to ENB an amount equal to $1,000,000.
(b) In the event that the Merger is not consummated as
a result of the failure of ENB to satisfy the conditions set
forth in Section 5.1(b) due to concerns expressed by governmental
authorities with respect to ENB's financial condition,
management, compliance with applicable law and regulations or
pending acquisition transactions with parties other than CNS and
its Subsidiaries (and this Agreement is not otherwise terminable
by ENB or CNS upon grounds not directly related to such failure),
or the failure by any ENB subsidiary to obtain approval for the
payment of any dividend required to fund the Cash Consideration,
then ENB shall, within 10 business days following written demand
by CNS pay to CNS an amount equal to $250,000.
Section 6.3. EFFECT OF TERMINATION. In the event of
termination of this Agreement by either ENB or CNS prior to the
consummation of the Merger as provided in Section 6.1, this
Agreement shall forthwith become void and have no effect except
(i) the obligations of the parties under Sections 4.3 (with
respect to confidentiality and the return of information), 6.2
and 8.6 shall survive any termination of this Agreement and (ii)
that notwithstanding anything to the contrary contained in this
Agreement, no party shall be relieved or released from any
liabilities or damages arising out of its willful breach of any
provision of this Agreement.
ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME
Section 7.1. EFFECTIVE DATE AND EFFECTIVE TIME. The
closing of the transactions contemplated hereby ("Closing") shall
take place at the offices of Xxxxxxx, Mag & Fizzell, P.C., 0000
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxxxxxxx, unless another
place is agreed to by ENB and CNS, on a date designated by ENB
("Closing Date") that is no later than 14 days following the date
on which the expiration of the last applicable waiting period in
connection with notices to and approvals of governmental
authorities shall occur and all conditions to the consummation of
this Agreement are satisfied or waived, or on such other date as
may be agreed to by the parties. Prior to the Closing Date,
Acquisition Sub and CNS shall execute a Certificate of Merger in
accordance with all appropriate legal requirements, which shall
be filed as required by law on the Closing Date, and the Merger
provided for therein shall become effective upon such filing or
on such date as may be specified in such Certificate of Merger.
The date of such filing or such later effective date as specified
in the Certificate of Merger is herein referred to as the
"Effective Date." The "Effective Time" of the Merger shall be as
set forth in the Certificate of Merger.
Section 7.2. DELIVERIES AT THE CLOSING. Subject to
the provisions of Articles V and VI, on the Closing Date there
shall be delivered to ENB and CNS the documents and instruments
required to be delivered under Article V.
ARTICLE VIII
CERTAIN OTHER MATTERS
Section 8.1. CERTAIN DEFINITIONS; INTERPRETATION.
As used in this Agreement, the following terms shall have the
meanings indicated:
"material" means material to ENB or CNS (as the case
may be) and its respective Subsidiaries, taken as a whole.
"person" includes an individual, corporation, limited
liability company, partnership, association, trust or
unincorporated organization.
When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of,
Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this
Agreement are for ease of reference only and shall not affect the
meaning or interpretation of this Agreement. Whenever the
words "include," "includes" or "including" are used in this
Agreement, they shall be deemed followed by the words "without
limitation." Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the singular. Any
reference to gender in this Agreement shall be deemed to include
any other gender.
Section 8.2. SURVIVAL. Only those agreements and
covenants of the parties that are by their terms applicable in
whole or in part after the Effective Time, including Sections
4.3, 4.11 and 4.12 of this Agreement, shall survive the Effective
Time. All other representations, warranties, agreements and
covenants shall be deemed to be conditions of the Agreement and
shall not survive the Effective Time.
Section 8.3. WAIVER; AMENDMENT. Prior to the
Effective Time, any provision of this Agreement may be (i) waived
in writing by the party benefitted by the provision or (ii)
amended or modified at any time (including the structure of the
transaction) by an agreement in writing between the parties
hereto except that, after the vote by the stockholders of CNS, no
amendment or modification may be made that would reduce the
amount or alter or change the kind of consideration to be
received by holders of CNS Common Stock or contravene any
provision of the DGCL, the MGBCL or the federal banking laws,
rules and regulations.
Section 8.4. COUNTERPARTS. This Agreement may be
executed in counterparts each of which shall be deemed to
constitute an original, but all of which together shall
constitute one and the same instrument.
Section 8.5. GOVERNING LAW. This Agreement shall be
governed by, and interpreted in accordance with, the laws of the
State of Missouri, without regard to conflicts of laws
principles.
Section 8.6. EXPENSES. Each party hereto will bear
all expenses incurred by it in connection with this Agreement and
the transactions contemplated hereby, it being understood that
the cost of printing the Proxy Statement-Prospectus included in
ENB's registration statement shall be solely that of ENB.
Section 8.7. NOTICES. All notices, requests,
acknowledgments and other communications hereunder to a party
shall be in writing and shall be deemed to have been duly given
when delivered by hand, overnight courier or facsimile
transmission (confirmed in writing) to such party at its address
or facsimile number set forth below or such other address or
facsimile transmission as such party may specify by notice (in
accordance with this provision) to the other party hereto.
If to CNS, to:
CNS Bancorp, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
President and Chief Executive Officer
With copies to:
Xxxx X. Xxxxxxx, Esq.
Xxxxxxx, Xxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
If to ENB, to:
Exchange National Bancshares, Inc.
000 Xxxx Xxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Chairman
With copies to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxx, Mag & Fizzell, P.C.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Section 8.8. ENTIRE AGREEMENT; ETC. This
Agreement, together with the Plan of Bank Merger and the
Disclosure Letters, represents the entire understanding of the
parties hereto with reference to the transactions contemplated
hereby and supersedes any and all other oral or written
agreements heretofore made. All terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
Except for Sections 4.11 and 4.12, which confer rights on the
parties described therein, nothing in this Agreement is intended
to confer upon any other person any rights or remedies of any
nature whatsoever under or by reason of this Agreement.
Section 8.9. SUCCESSORS AND ASSIGNS; ASSIGNMENT.
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and
assigns; provided, however, that this Agreement may not be
assigned by either party hereto without the written consent of
the other party.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized officers
as of the date first above written.
EXCHANGE NATIONAL BANCSHARES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Chairman of the Board
CNS BANCORP, INC.
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
President and
Chief Executive Officer
ENB HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
President
