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EXHIBIT 2.3
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (Agreement) is made and entered into this 4th
day of May, 1998, by and between CIB BANK (CIB), an Illinois chartered
commercial bank, and ARGO FEDERAL SAVINGS BANK, FSB (ARGO), a federally
chartered savings bank.
WHEREAS, ARGO shall transfer to CIB, subject to the terms and
conditions of this Agreement certain deposit accounts, including demand deposit
accounts, passbook savings, money market accounts, certificates of deposit and
negotiable order of withdrawal accounts attributable to its Gurnee, Illinois
branch office (the "Branch Office") as more fully described herein;
WHEREAS, CIB shall acquire from ARGO, subject to the terms and
conditions of this Agreement, certain deposit accounts, including demand deposit
accounts, passbook savings, money market accounts, certificates of deposit and
negotiable order of withdrawal accounts attributable to the Branch Office, as
more fully described herein;
WHEREAS, CIB has agreed to acquire and ARGO has agreed to sell certain
of the furniture, fixtures and equipment at the Branch Office, as more fully
described herein;
WHEREAS, CIB has agreed to assume the liabilities of ARGO with respect
to the lease pertaining to the Branch Office premises, as more fully described
herein;
WHEREAS, CIB and ARGO have determined that the transactions
contemplated by this Agreement are in the best interests of their respective
shareholders; and
WHEREAS, the transactions contemplated by this Agreement have been
approved by at least a two-thirds vote of the respective entire Boards of
Directors of CIB and ARGO and each has authorized their appropriate officers to
execute and attest to this Agreement and to make application for and to receive
the necessary supervisory approvals of the subject transactions from the Federal
Deposit Insurance Corporation (the "FDIC"), the Office of Banks and Real Estate
of the State of Illinois (the "OBRE"), the Federal Reserve Bank of Chicago (the
"FRB") and the Office of Thrift Supervision (the "OTS"), to the extent
necessary.
NOW THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, covenants,
terms and conditions set forth herein, CIB and ARGO hereby covenant and agree as
follows:
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PURCHASE AGREEMENT Page 2
1. IDENTIFICATION OF ACQUISITION BY OFFICE LOCATION. ARGO shall
transfer to CIB all of its FDIC insured deposit accounts, including demand
deposit accounts, passbook savings, money market accounts, certificates of
deposit and negotiable order of withdrawal accounts, as more fully set forth and
described in Paragraph 2 hereof (hereinafter sometimes for convenience
collectively referred to as the "Accounts" or the "Transferred Accounts"); with
the said Accounts generally originating at and attributable to the branch office
of ARGO located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, except that
ARGO shall not transfer to and CIB shall not assume liability for any public
funds, brokered deposits, collateralized deposits (except as provided in
Paragraph 3 hereof) or Accounts owned by affiliates, directors, officers and/or
employees of ARGO who do not work at the Branch Office or any insiders or
shareholders of ARGO, or any correspondents to any interest-bearing Accounts.
2. IDENTIFICATION OF ACCOUNTS BY EXHIBIT. Marked Exhibit "A",
attached hereto and specifically incorporated herein by this reference, is a
verified statement prepared and submitted by ARGO setting forth the identity of
holder, the type of account, ownership type, account opening date, account
maturity date, history of each such account for the previous twenty four (24)
months, principal balance (including accrued and credited interest of such
account), terms of each such account and interest rate payable on each of the
Accounts as of February 28, 1998. After the close of business on the day
preceding the Closing Date (as defined in Paragraph 13 hereof), ARGO hereby
agrees to deliver to CIB a supplemental statement verifying the information set
forth in the preceding sentence together with such information with respect to
any new or additional accounts opened after February 28, 1998 on each of the
Accounts to be transferred to CIB as of the date of Closing (as defined in
Paragraph 13 hereof). The form and substance of the statements referenced in
this paragraph shall be to the satisfaction of CIB and shall include such
information as necessary to identify the ownership and total liability of such
Accounts. For the purposes of this Agreement any interest accrued on the
Accounts by ARGO, but not due for payment as of the date of Closing shall be
transferred to CIB in current funds pursuant to Paragraph 5 hereof, and CIB
shall thereupon assume the liability therefore.
3. SPECIAL PROVISION WITH RESPECT TO PLEDGED ACCOUNTS. Except as
provided in Exhibit "B" hereto, no Accounts pledged for collateral purposes or
Accounts which are otherwise pledged, encumbered or attached shall be deemed to
be subject to the terms of this Agreement, the same being specifically excluded
herefrom.
4. TRANSFER. CIB shall assume the liability for such Transferred
Accounts to it as of the date of Closing subject to the terms and conditions of
this Agreement. CIB and ARGO hereby agree that performance of this Agreement
shall be subject to receipt of all necessary regulatory approvals as set forth
in this Agreement.
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5. COMPENSATION ON TRANSFERRED ACCOUNTS. CIB will receive, as
consideration for the assumption of liability on the Transferred Accounts
(including interest previously credited in accordance with the terms of the
account), a cash payment at Closing equal to ninety four percent (94%) of the
aggregate account balances of the Transferred Accounts which have not matured on
or prior to Closing pursuant to the terms of the account and one hundred percent
(100%) of all interest accrued on the Transferred Accounts but not due for
payment or credited to the account as of the date of Closing. Notwithstanding
anything to the contrary contained in this Paragraph, in the event that the
aggregate amount of the Transferred Accounts as of the date of Closing exceed
Thirteen Million, Eight Hundred and Sixty Four Thousand Two Hundred and Sixty
Seven Dollars ($13,864,267), CIB shall receive one hundred percent (100%) of the
aggregate account balances, interest accrued and/or credited but not due for
payment as of the date of Closing on such excess amount; provided that such
excess amount is related to deposits acquired, accepted or renewed after
November 30, 1997 at a Premium Interest Rate. For purposes of this Agreement,
Premium Interest Rate shall mean an interest rate equal to or greater than one
hundred and four percent (104%) of the average rates paid by the banking offices
of Bank of Northern Illinois, N.A., The First National Bank of Chicago, First of
America Bank - Illinois, N.A., ▇▇▇▇▇▇ Bank - Libertyville and Northside
Community Bank in Gurnee, Illinois on accounts of same or similar terms. For
example, if the average interest rate is five and one-half percent (5.5%) for a
one year certificate of deposit, any one year certificate of deposit with an
interest rate equal to or in excess of five and seventy-two hundredths percent
(5.72%) would be considered at a Premium Interest Rate.
6. ACCOUNTHOLDERS. Each holder of a Transferred Account of ARGO
shall, after the close of business on the Closing Date, automatically become a
holder of an Account in CIB, in a dollar amount equal to the withdrawable value
of the Account; CIB having assumed the liability for the Accounts subject to the
indemnification provisions contained herein and the existing rights,
delegations, assignments, appointments, powers of appointment and privileges of
the accounthoIders. Thereafter, each such accountholder shall be entitled to all
of the rights and privileges of an accountholder of CIB, as prescribed by its
Articles of Incorporation, ByLaws and account rules and, when appropriate, be
issued proper account documentation evidencing such account in CIB. CIB shall
continue to recognize the terms and maturities of all passbooks and certificates
of deposit issued by ARGO and outstanding on the effective date of this
Agreement or as of the Closing Date, as the case may be, until the originally
stated maturity date. Thereafter, such accounts shall be renewed upon the terms
of CIB for similar accounts.
7. ACQUISITION OF FURNITURE, FIXTURES AND EQUIPMENT. Marked Exhibit
"C", attached hereto and specifically incorporated herein by this reference is a
schedule of furniture, fixtures and equipment (the "Assets") presently located
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at the Branch Office, which CIB agrees to purchase from ARGO at Closing for a
price of Three Hundred and Fifty Thousand Dollars ($350,000.00.) ARGO shall
transfer its ownership of such Assets to CIB by a duly-authorized ▇▇▇▇ of Sale.
Such sale shall be "as is", and ARGO makes no warranties whatsoever except those
set forth herein at Paragraph 12.
8. ASSIGNMENT OF LEASE. ARGO agrees to assign to CIB, and CIB agrees
to assume, all of ARGO's rights and obligations under that certain Lease
Agreement dated September 22, 1995 by and between DANVID CORPORATION ("DANVID")
as Lessor and ARGO as Lessee (the "Lease"), a copy of which Lease is attached
hereto as Exhibit "D". The parties understand that such assignment is subject to
the consent of DANVID, and the parties agree to fully cooperate with each other
and with DANVID in order to obtain such consent. CIB agrees to indemnify and
hold ARGO harmless from any obligations or liabilities arising out of the Lease
or the Leased Premises which accrued after the Closing. ARGO shall pay all Lease
obligations to the date of Closing, and shall be entitled to a credit at Closing
for prepaid rent and for its security deposit.
9. CONDITIONS PRECEDENT TO CIB'S OBLIGATION. Unless the conditions
are waived by CIB, all obligations of CIB under this Agreement are subject to
the fulfillment, prior to or at the Closing, of each of the following
conditions:
(a) OPINION OF COUNSEL TO ARGO. ARGO shall have delivered to CIB
an opinion, dated as of the Closing, of ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Ltd. counsel for
ARGO, as to the validity of the transaction, and such other matters as CIB may
reasonably request. Such opinion shall be in form and substance satisfactory to
CIB and its counsel.
(b) TAX AND ACCOUNTING OPINIONS. CIB shall have ordered and
received an opinion from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company, L.L.C., independent
certified public accountants, to the effect that (i) the transaction shall be
accounted for under the purchase method of accounting and not as a pooling; and
(ii) the transaction shall constitute a tax-free transaction for CIB for both
Federal and State tax purposes.
(c) REGULATORY APPROVALS. CIB and ARGO shall have obtained and
received all necessary consents and approvals of all regulatory agencies and
other authorities having jurisdiction over this transaction necessary to
complete the transactions contemplated by this Agreement upon such terms and
conditions, if any, as are satisfactory to CIB in its reasonable judgment, all
waiting periods shall have expired, and there shall have been no motion for
rehearing or appeal from such approval or commencement of any suit or action by
any governmental authority seeking to enjoin the transaction provided herein or
to obtain other relief with respect thereto.
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PURCHASE AGREEMENT Page 5
(d) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein and in the exhibits hereto delivered by ARGO or on
its behalf to CIB pursuant to this Agreement shall have been true and correct as
of the date of this Agreement and shall be true and correct as of the Closing as
though made on the Closing Date and shall survive the Closing as defined at
Paragraph 16 hereof.
(e) PERFORMANCE OF AGREEMENTS. ARGO shall have in all material
respects performed all obligations and agreements and complied with all
covenants and conditions contained in this Agreement to be performed and
complied with by it on or prior to the Closing.
(f) CORPORATE APPROVALS. All necessary corporate action on the
part of the directors of ARGO adopting and approving this Agreement and
approving the transactions contemplated hereby shall have been taken.
(g) CONSENT OF OTHER PERSONS.
(i) CIB and ARGO shall have received the consent of DANVID to
the assignment of the Lease upon such terms as are acceptable to CIB.
(ii) CIB and ARGO shall have received the consent of On-Line
Financial Services, Inc. ("OLFSI"), ARGO's data processor, to the conversion by
CIB of the Transferred Accounts and Assets to CIB Data Processing Services, Inc.
("CIB DP"). The data processing conversion shall be completed within one hundred
and twenty (120) days after the Closing Date. OLFSI shall covenant and consent
to provide CIB and/or CIB DP all system documentation, file layouts and files on
tape in a form acceptable to CIB DP and provide any and all additional
information and assistance deemed necessary by CIB and/or CIB DP to complete the
conversion. All costs and fees assessed by OLFSI for the conversion shall be
paid by ARGO. CIB shall pay all costs and fees assessed by CIB DP for the
conversions.
(iii) To the extent that any other material lease, contract
or Agreement to which ARGO is a party and which is related to the terms of this
Agreement shall require the consent of any other person to the transactions
contemplated herein, such consent shall have been obtained by the effective
date; provided, however, that ARGO shall not make as a condition for the
obtaining of any such consent, any agreements or undertakings not approved by
CIB.
(h) LITIGATION. No suit, action or proceeding by any governmental
agency shall have been instituted or threatened seeking to (i) enjoin, restrain
or prohibit the consummation of the transactions contemplated by
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this Agreement which would in the reasonable judgment of CIB make it inadvisable
to consummate such transactions, or to (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or (iii)
that would affect adversely the right of CIB to own the Assets or to operate the
Branch Office as a Branch Office of CIB; and no court order shall have been
entered in any action or proceeding instituted by any other person which
enjoins, restrains or prohibits this Agreement or consummation of the
transactions contemplated by this Agreement. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered, promulgated or
enforced by an governmental entity which prohibits, restricts or makes illegal
consummation of the transactions contemplated hereby.
(i) PROCEEDINGS SATISFACTORY TO COUNSEL. All proceedings taken by
ARGO and all instruments executed and delivered by ARGO on or prior to the close
of business on the Closing Date, in connection with the transactions herein
contemplated shall be reasonably satisfactory in form and substance to CIB and
its counsel.
(j) NO ADVERSE CHANGES. Between the date of this Agreement and
the Closing Date, the business of the Branch Office shall be conducted in the
ordinary course, consistent in all material respects with prudent banking
practices; there shall not have occurred any material adverse change or any
condition, event, circumstance, fact or occurrence that may be expected to
result in a material adverse change in the business of the Branch Office; and
the business and properties of the Branch Office shall be kept substantially
intact, including its present operations, physical facilities, working
conditions, and relationships with lessors, customers and employees.
(k) REQUIRED FILINGS. ARGO shall have made all filings with the
Securities Exchange Commission and the regulatory agencies required or
necessitated by the consummation of the transactions contemplated by this
Agreement.
(l) DUE DILIGENCE. Commencing within thirty (30) business days
after the date of this Agreement, CIB shall commence a not greater than seven
(7) business day due diligence examination of Branch office, including the
Assets, Accounts, and all other contracts, agreements and/or documents related
to the transactions contemplated by this Agreement (Initial Investigation). ARGO
shall provide CIB full cooperation, disclosure and complete access to all
aspects of the Branch Office, including, but not limited to all books, records,
contracts, commitments, correspondence, accounts, reports, properties, assets
and employees of the Branch Office and with the full and complete cooperation of
ARGO, their officers, directors, agents and representatives at the Branch
Office. Commencing five (5) business days prior to Closing, CIB shall commence a
three (3) business day due diligence examination consistent with the Initial
Investigation. The due diligence examinations contemplated hereby shall be
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conducted at the sole discretion of CIB and the results of such investigations
shall be acceptable to CIB; provided, however that the right of CIB to terminate
this Agreement as a result of either such examinations shall be based upon its
review of the financial and account information provided, the operating
condition of the Assets and any other liabilities to be assumed. No
investigation by CIB shall affect the representations and warranties of ARGO set
forth herein.
(m) CLOSING CERTIFICATE. CIB shall have received a certificate
signed by the President and another duly authorized officer of ARGO and dated as
of the Closing Date, certifying in such detail as CIB may reasonably request as
to the fulfillment of the conditions to the obligations of ARGO as set forth in
this Agreement.
(n) RELEASE OF ESCROW. The funds placed in escrow pursuant to
Paragraph 14 of this Agreement shall have been released to CIB, together with
all accrued interest thereon.
(o) BULLS MONEY CARD. ARGO shall terminate and cause the
discontinuance of any Branch Office account holders' use of the "Bulls" money
card and pay any amounts relating thereto to account holders and shall not offer
at the Branch Office any other "Bulls" money cards.
(p) OLFSI AGREEMENT. OLFSI and CIB shall have agreed to the fees
and expenses to be charged by OLFSI to CIB for data processing services to be
provided by OLFSI to CIB (other than conversion fees) following the Closing and
until completion of the conversion set forth in Paragraph 9(g)(ii). OLFSI shall
agree to provide CIB and CIB DP separate financial information and data relative
to the Branch office, including but not limited to, separate general ledger and
trial balance reports together with all other daily reporting to the Branch
Office as reasonably requested by CIB and/or CIB DP until the completion of the
conversion as more fully described in Paragraph 9(g)(ii). ARGO and OLFSI shall
covenant to cooperate with CIB and CIB DP in all matters during the account
transition period and the conversion process.
10. CONDITIONS PRECEDENT TO ARGO'S OBLIGATIONS. Unless the conditions
are waived by ARGO, all obligations of ARGO under this Agreement are subject to
the fulfillment, prior to or at the Closing, of each of the following
conditions:
(a) OPINION OF COUNSEL TO CIB. CIB shall have delivered to ARGO
an opinion, dated as of the Closing, of counsel for CIB, as to the validity of
the transaction, and such other matters as ARGO may reasonably request. Such
opinion shall be in form and substance satisfactory to ARGO and its counsel,
▇▇▇▇ & Grzelakowki, Ltd.
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(b) REGULATORY APPROVALS. CIB and ARGO shall have obtained and
received all necessary consents and approvals of all regulatory agencies and
other authorities having jurisdiction over this transaction necessary to
complete the transactions contemplated by this Agreement.
(c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein by CIB pursuant to this Agreement shall have been
true and correct as of the date of this Agreement and shall be true and correct
at the Closing as though made on the Closing Date and shall survive the Closing
as defined at Paragraph 12 of this Agreement.
(d) PERFORMANCE OF AGREEMENTS. CIB shall have in all material
respects performed all obligations and agreements and complied with all
covenants and conditions contained in this Agreement to be performed and
complied with by it on or prior to the Closing.
(e) CORPORATE APPROVALS. All other corporate action on the part
of the directors of CIB adopting and approving this Agreement and approving the
transactions contemplated hereby shall have been taken.
(f) CONSENT OF OTHERS. CIB and ARGO shall have received the
consent of DANVID to the assignment or the Lease.
(g) LITIGATION. No action or proceeding by any governmental
agency shall have been instituted or threatened which would enjoin, restrain or
prohibit the consummation of the transaction contemplated by this Agreement
which would in the reasonable judgment of ARGO make it inadvisable to consummate
such transactions, and no court order shall have been entered in any action or
proceeding instituted by any other person which enjoins or prohibits this
Agreement or consummation of the transactions contemplated by this Agreement.
(h) PROCEEDINGS SATISFACTORY TO COUNSEL. All proceedings taken by
CIB and all instruments executed and delivered by CIB on or prior to the close
of business on the Closing Date, in connection with the transactions herein
contemplated, shall be reasonably satisfactory in form and substance to ARGO and
its counsel.
(i) CLOSING CERTIFICATE. ARGO shall have received a certificate
signed by the President and another duly authorized officer of CIB and dated as
of the Closing Date, certifying in such detail as ARGO may reasonably request as
to the fulfillment of the conditions to the obligations of CIB as set forth in
this Agreement.
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11. REPRESENTATIONS AND WARRANTIES OF ARGO. ARGO represents and
warrants to CIB the following statements of Essential Facts, which are true and
correct on the date of this Agreement and which shall be true and correct on the
date of Closing, and of each of which shall constitute a condition precedent to
CIB's obligations hereunder:
(a) ORGANIZATION AND STANDING. ARGO is a capital stock savings
bank duly organized and validly existing and in good standing under the laws of
the United States of America, and it has all corporate powers and certificates
of authority, licenses, permits and other documentation to own its property and
to carry on its business as it is now being conducted. The deposit accounts of
ARGO, to the extent insurable, are insured by the FDIC Savings Association
Insurance Fund ("SAIF").
(b) AUTHORITY. ARGO has the full corporate power and authority to
enter into this Agreement and to carry out the transactions contemplated to be
carried out by it. This Agreement has been duly executed and delivered by ARGO
and constitutes the legal, valid and binding obligation of ARGO enforceable in
accordance with its terms.
(c) NO MATERIAL CHANGE AFTER AGREEMENT. Until the transaction is
effective, ARGO will conduct its operations related to the Transferred Accounts
hereunder in accordance with all applicable laws, regulations, orders of
regulatory authorities and in accordance with sound business and past practices.
Furthermore, between the date hereof and the Closing provided for herein, unless
otherwise agreed in writing, ARGO shall use its best efforts to maintain and
preserve its business organization intact, and to maintain its relationships and
good will with the accountholders, employees and others having business
relationships related to the deposit Accounts and the Assets which are the
subject of this Agreement. ARGO will neither enter into nor materially amend any
agreements related to the operation of the Branch Office and will not offer a
premium rate of interest to attract or maintain deposits without the prior
written consent of CIB, which consent may be withheld by CIB in its sole
discretion, nor artificially inflate the aggregate account balances of the
Transferred Accounts prior to Closing.
(d) STANDSTILL. ARGO will not, directly or indirectly, make,
encourage, facilitate, solicit, assist or initiate any inquiry, proposal or
offer to or by, or provide any information to or participate in any negotiations
with any other party related to a liquidation, consolidation, sale, purchase or
assumption related to the Assets or the Transferred Accounts, participate in any
discussions or negotiations regarding the same, furnish any information with
respect to the same, assist or participate in, or facilitate in any other manner
any effort or attempt by any person to do or seek any of the foregoing, or make
any agreement with respect to or engage in any of the foregoing anytime prior to
July 1, 1998, unless this Agreement is terminated prior to July
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1, 1998. ARGO shall immediately inform CIB in writing of any inquiry, proposal
or request for information (including the terms thereof and the person making
such inquiry) which ARGO may receive with respect to same and ARGO shall provide
CIB with a copy of any such written inquiries, proposals and offers.
(e) LITIGATION. There are no claims, demands, orders, actions,
suits, proceedings or other litigation (nor does ARGO know of any investigation
preliminary thereto) of any nature pending or to the knowledge of ARGO
threatened against ARGO, related to its deposit accounts at law or in equity, or
affecting any of its properties before or by any Federal, State, municipal or
other court, governmental department, commission, board, bureau, agency or
instrumentality; there is no default existing or penalty incurred under any
agreement or obligation of or binding upon ARGO nor is ARGO aware of any facts
that could reasonably afford a basis for a cause of action against ARGO.
(f) BROKERS. Neither ARGO nor any of its respective officers or
directors has retained or otherwise engaged or employed any broker, finder, or
any other such person or paid or agreed to pay any fee or commission to any
agent, broker, finder or other such person for or on account of this Agreement
or the transaction contemplated hereby.
(g) ACCURACY OF STATEMENTS. Neither this Agreement nor any
Exhibit hereto, statement, list, certificate or other information furnished or
to be furnished in writing by ARGO to CIB in connection with this Agreement or
any of the transactions contemplated hereby contains or will contain an untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein taken as a whole
with all other such statements, lists, certificates or other information
furnished above in light of the circumstances in which they are made, not
misleading.
(h) NO VIOLATION. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will not violate or
result in a breach by ARGO of, or constitute a default under, or conflict with,
or cause any acceleration of any obligation with respect to: any provision or
restriction of any charter, bylaw, loan or indenture of ARGO or any provision or
restriction of any lien, lease agreement, contract, instrument, order judgment,
award, decree, ordinance or regulation or any other restriction of any kind or
character to which any assets or properties of ARGO are subject or by which ARGO
is bound.
(i) DISASTER PROVISION. The business and properties of the Branch
Office shall not have been adversely affected in any material way as a result of
any act of God, fire, flood, disturbance, or similar calamity.
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(j) MATERIAL CONTRACTS. Set forth in Exhibit "E", attached hereto
and specifically incorporated herein by this reference, is a listing and
description of all contracts, commitments or arrangements (whether written or
oral) under which ARGO is obligated that relate to the Branch facility, and
copies of such contracts, commitments, or arrangements are attached thereto.
(k) NO DEFAULTS. All contracts, commitments or arrangements of
ARGO set forth in Exhibits "B" and "E" (collectively the "Contracts") are valid
and in full force and effect. ARGO has fulfilled and taken all action reasonably
necessary to enable it to fulfill when due all material obligations under the
Contracts; and there are no material defaults and no events have occurred that,
with the lapse of time or election of any other party, will become material
defaults by it under any of the Contracts.
(l) ENVIRONMENTAL. The Branch Office is not contaminated with any
wastes or Hazardous Substances. "Hazardous Substances" means any substance
presently 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 such substance as a component.
"Hazardous Substances" include without limitation petroleum or any derivative or
byproduct thereof, asbestos radioactive material and polychlorinated biphenyls.
(m) ARGO'S BOARD OF DIRECTORS APPROVAL. Marked Exhibit "F",
attached hereto and specifically incorporated herein by this reference is a
certified copy of its Board of Directors' Resolution approving this transaction.
(n) TITLE TO ASSETS. ARGO has good and marketable title to the
Assets set forth on Exhibit "C", free and clear of all liens, Security
Interests, encumbrances or restrictions on transfer.
(o) DAMAGE TO ASSETS OR BRANCH OFFICE. There has been no damage,
destruction or loss (whether or not covered by insurance) to any of the Assets
set forth on Exhibit "C" or the Branch Office.
(p) CONDEMNATION. There are no pending or threatened condemnation
proceedings, suits or administrative actions relating to the Branch Office or
other matters materially and adversely affecting the current use, occupancy or
value thereof.
(q) EMPLOYMENT. There are no employment agreements or collective
bargaining agreements that are binding upon CIB, nor any benefit packages or
benefits under which CIB will be obligated to any of the employees of the Branch
Office whether or not CIB hires any such employees or officers of the Branch
Office.
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(r) TAXES. All taxes owed by ARGO relating to the Branch Office,
the Accounts set forth on Exhibit "A" and the Assets set forth on Exhibit "C"
have been paid.
(s) LEASE. The Lease is legal, valid, binding, enforceable, and
in full force and effect and will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby. No party to the Lease is
in breach or default, and no event has occurred which, with notice or lapse of
time, would constitute a breach or default or permit termination, modification
or acceleration thereunder. There are no disputes, oral agreements or
forbearance programs in effect as to the Lease. ARGO has not assigned,
transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in
the Leasehold. There are no subleases, licenses, concessions, or other
agreements, written or oral, granting to any party or parties the right of use
or occupancy of any portion of the Branch Office.
12. REPRESENTATIONS AND WARRANTIES OF CIB. CIB represents and
warrants to ARGO the following statements of Essential Facts, which are true and
correct on the date of this Agreement and which shall be true and correct on the
date of Closing, and of each of which shall constitute a condition precedent to
ARGO's obligations hereunder:
(a) ORGANIZATION AND STANDING. CIB is a capital stock commercial
bank duly organized, validly existing and in good standing under the laws of the
State or Illinois, and it has all corporate powers and certificates of
authority, licenses, permits and other documentation to own its property and to
carry on its business as it is now being conducted. The deposit Accounts of CIB,
to the extent insurable, are insured by the FDIC Bank Insurance Fund (BIF).
(b) AUTHORITY. CIB has the full corporate power and authority to
enter into this Agreement and to carry out the transactions contemplated to be
carried out by it. This Agreement has been duly executed and delivered by CIB
and constitutes the legal, valid and binding obligation or CIB, enforceable in
accordance with its terms.
(c) COMMUNITY REINVESTMENT ACT RATING. CIB received a rating of
satisfactory or outstanding pursuant to its most recent Community Reinvestment
Act (CRA) examination conducted by the FDIC as of August 25, 1997, and CIB has
received no notice of the downgrading of such CRA rating, nor any reason to
suspect that regulatory approval may not be obtained because or CIB's CRA
performance.
(d) CIB'S BOARD OF DIRECTORS APPROVAL. Marked Exhibit "G",
attached hereto and specifically incorporated herein by this reference is a
certified copy of its Board of Directors" Resolution approving this transaction.
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PURCHASE AGREEMENT Page 13
13. THE CLOSING AND EFFECTIVE DATE.
(a) CLOSING. The Closing of this transaction shall be after the
close of business on June 30, 1998. Either CIB or ARGO shall be entitled to
extend the date of Closing for up to thirty (30) days if the requesting party
notifies the other party in writing on or before June 15, 1998. Further, in the
event that all the necessary regulatory approvals have not been received thirty
(30) days prior to Closing, Closing will take place as soon as practical but not
later than thirty (30) days after receipt of regulatory approval and the
expiration of all notice periods. Whenever the term "Closing of" or "Closing
Date" or similar term is used in this Agreement, it shall be deemed to be a
reference thereto. CIB shall advise ARGO of the exact time and location of the
Closing in accordance with the foregoing.
(b) EFFECTIVE DATE. The transactions contemplated by this
Agreement shall become effective on such date as (i) all applicable legal
requirements or this Agreement (including occurrence of the Closing as described
in Paragraph 13(a) of this Agreement) and all other requirements of relevant law
have been fulfilled; (ii) all conditions precedent shall have been satisfied or
affirmatively waived; and (iii) the transaction shall be deemed effective under
all relevant rules and regulations duly promulgated by the FDIC, FRB, OBRE and
the OTS.
(c) TRANSFER DATE. The Transfer Date shall be the first business
day following the Closing Date. At 10 a.m. or earlier on the Transfer Date, ARGO
shall pay to CIB, by wire transfer or by transfer of immediately available
funds, the amount calculated pursuant to Paragraph 5 hereof, as of ARGO's close
of business on the Closing Date.
14. ESCROW DEPOSIT. Within seven (7) business days of the date of
this Agreement, CIB shall deposit into an interest bearing Escrow Account with
▇▇▇▇▇▇ Bank- Chicago (HBC) an amount of Two Hundred Eighty Eight Thousand
Dollars ($288,000). The Escrow Agreement shall be in form and substance
acceptable to CIB in its sole discretion, and shall provide inter alia, that
such Escrow funds together with all accrued interest may be withdrawn by CIB
upon the earlier of the termination of this Agreement or the closing of this
Agreement. ARGO and CIB shall be jointly and equally responsible for, and pay
any charges, costs, fees or expenses in connection with the Escrow Account or
administration thereof; provided that CIB's portion of the same shall not exceed
Two Hundred Dollars ($200) in the aggregate.
15. BRANCH OFFICE EMPLOYEES. CIB shall have the right, but not the
obligation, to interview and employ the existing personnel of the Branch Office.
CIB shall notify ARGO prior to the Closing of which employees CIB will offer
employment. CIB may offer employment to such employees upon terms and conditions
determined by CIB in its sole discretion.
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PURCHASE AGREEMENT Page 14
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties set forth in Paragraph 11 hereof shall be true as of and survive
the Closing and shall continue to be in force and effect thereafter. Without
limiting the effect of the foregoing, CIB's right and remedy for any breach of
warranty or misrepresentation shall be solely at CIB's election, and shall
include but not be limited to the termination of this Agreement. In addition to
CIB's right to terminate this Agreement for any breach of warranty or
misrepresentation by ARGO, ARGO shall indemnify and reimburse CIB for breaches
of representations, warranties, covenants and obligations of ARGO hereunder, and
all losses arising out of or relating to any of the Transferred Accounts and for
any liabilities of ARGO in connection with the Branch Office, except those
liabilities (other than deposit liabilities) expressly disclosed to and assumed
by CIB. This indemnification shall include reimbursement for all costs,
reasonable attorney's fees, and expenses and a return of the premium, if any,
relating to such Transferred Accounts. This indemnification shall survive the
Closing.
17. MISCELLANEOUS.
(a) NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and may be delivered via facsimile
transmittal, overnight carrier or registered or certified mail postage prepaid.
When notice is given via facsimile transmittal, it shall be conclusively deemed
to have been received on the date of transmittal provided the sender receives
confirmation of transmittal to the number set forth below. Notice given by
overnight carrier shall be conclusively deemed received on the date following
the date sent. Notice sent registered or certified mail, postage prepaid, shall
be conclusively deemed to have been received three (3) business days after its
deposit in the United States mail when sent to the other party at the received
address set forth below. Either party may change the address or facsimile number
to which notice shall be sent by giving written notice to the other party.
To ARGO: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman of the Board and President
ARGO FEDERAL SAVINGS BANK,FSB
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
To CIB: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Chairman of the Board
CIB BANK
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
15
PURCHASE AGREEMENT Page 15
(b) SUCCESSORS AND ASSIGNS. All terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective transferees, successors and assigns, but the Agreement may
not be assigned by either party without the written consent of the other.
(c) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one action and the
same instrument.
(d) GOVERNING LAW. This Agreement is being delivered and is
intended to be performed in the State of Illinois and shall be construed and
enforced in accordance with the laws of the State of Illinois of the United
States of America, as applicable.
(e) REMEDIES NOT EXCLUSIVE. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by
either of the parties shall not constitute a waiver of the right to pursue other
available remedies.
(f) ASSIGNMENT. This Agreement shall not be assignable by either
party without the written consent of the other. Nothing in this Agreement,
expressed or implied, is intended to confer upon any person other than the
parties hereto and their successors and permitted assigns any right or remedy
under or by reason of this Agreement.
(g) COSTS. All of the costs and expenses, including legal and
accounting fees attendant to this transaction, incurred by either party in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring the same.
(h) MODIFICATION. This Agreement may be amended or modified in
whole or in part at any time by an agreement in writing executed on behalf of
CIB and ARGO.
(i) ABANDONMENT. The transactions contemplated by this Agreement
may be abandoned on or before the effective date notwithstanding adoption or
this Agreement or the approval of any transaction contemplated by this Agreement
by the Boards or Directors of CIB and ARGO or any governmental agency by (i) the
mutual agreement of the Boards of Directors of CIB and ARGO; or (ii) by the
Board or Directors of CIB if any of the conditions provided in Paragraph 9
herein shall not have satisfied, complied with or performed in any material
respect, and CIB shall not have waived such failure of
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PURCHASE AGREEMENT Page 16
satisfaction, noncompliance or non-performance; or (iii) by the Board of
Directors of ARGO if any of the conditions provided in Paragraph 10 shall not
have been satisfied, complied with or performed in any material respect, and
ARGO shall not have waived such failure of satisfaction, noncompliance or
non-performance.
In the event of any termination, written notice setting forth the
reason thereof shall forthwith be given by CIB, if it is the terminating party,
to ARGO, or by ARGO, if ARGO is the terminating party, to CIB.
If the transaction is abandoned as defined in this Agreement, then (i)
this Agreement shall forthwith come wholly void and of no effect and without
liability to any party to this Agreement: and (ii) each party hereto shall pay
all of its costs incurred by it in the negotiation, preparation and execution of
this Agreement and the obtaining of the necessary approvals thereof, including
fees and expenses of legal counsel, accountants, and other experts, except that
ARGO shall pay costs and expenses of CIB in the event of ARGO's breach of
representations, warranties, covenants and obligations as more fully described
in Paragraph 11 (g) hereof.
(j) PARAGRAPH HEADINGS. The paragraph headings in this Agreement
are for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(k) GENDER, ETC. Words herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural and any other gender, masculine, feminine or neuter,
as the context requires.
(l) CONFIDENTIALITY. CIB and ARGO each agree to keep confidential
all information, documents, books, records and any other material no matter how
obtained from the other party hereto unless and until the transaction
contemplated herein is consummated, and if such transaction is not consummated,
each party hereto will return or cause to be returned to the applicable party
all such documents, material and information then in its possession, or the
possession of a representative of either, and neither party hereto will divulge
or use such information until it becomes known generally to the public.
18. COOPERATION. CIB and ARGO further covenant and agree that each
shall cooperate in expeditiously obtaining all necessary or appropriate
governmental approvals, consents or permits and in preparing any and all
applications contemplated by this Agreement, and will furnish such supporting
information or exhibits as may be required, and will not do, sanction or
knowingly permit any person under the control of each to do anything which might
in any way hinder, delay or prevent the expeditious approval of the transactions
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PURCHASE AGREEMENT Page 17
contemplated by this Agreement or commit any act or omission which might be
reasonably expected to have such an effect.
19. NOTICE TO ACCOUNT HOLDERS. CIB and ARGO further covenant and
agree that each shall cooperate in preparing a mailing notifying all
accountholders affected by this Agreement of the transactions contemplated
hereby. The language of the said letter shall be mutually agreeable to CIB and
ARGO. ARGO shall provide necessary mailing labels for transmittal of the same.
The said letter shall not be mailed until CIB and ARGO have received all
necessary regulatory approvals contemplated under the terms of this Agreement.
The cost of preparation of the aforescribed mailing labels and the costs of
mailing of the letter shall be a joint obligation of ARGO and CIB, in equal
amounts.
20. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between CIB and ARGO. There are no written or oral agreements between
CIB and ARGO in connection with this Agreement that are not set forth herein or
in the exhibits attached hereto. This Agreement supersedes and replaces any and
all prior agreements between CIB and ARGO whether written or oral.
21. TERMINATION; AMENDMENT. This Agreement may be amended in writing
at any time with the mutual consent of the Board of Directors of CIB and ARGO.
CIB and ARGO hereby covenant that neither shall unreasonably take any action or
refuse to take any action, whether or not specifically or generally contemplated
as a part of this Agreement, wherein such action or non-action would interfere
with the accomplishment of the transaction contemplated by this Agreement. This
Agreement and the obligations created hereby shall terminate in the event that
any one or the following events occur: (i) the necessary regulatory approvals
have not been obtained prior to the Closing Date, or (ii) the mutual agreement
of the parties. Any material condition contained in the approval of the
transactions contemplated by this Agreement by the FDIC, FRB, OBRE or the OTS
will be subject to the consent of the Boards of Directors of both CIB and ARGO,
as limited under the terms of this Agreement.
22. SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction; provided, however, that in the event the
invalid provision shall result in a material change in the terms or conditions
of this Agreement, the party against whom the provision affects may terminate
this Agreement; provided that such invalid or unenforceable provision(s) cannot
be replaced with a new provision which has the most nearly similar permittable
economic effect and which is acceptable to CIB and ARGO.
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PURCHASE AGREEMENT Page 18
23. RULE OF CONSTRUCTION. The language and all parts of this
Agreement shall in all cases be construed as a whole according to its fair
meaning, strictly neither for nor against any party hereto, and without
implication or presumption that the terms hereof shall be more strictly
construed against any party by reason of the rule of construction that a
document is to be construed more strictly against the person who prepared this
Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
ARGO FEDERAL SAVINGS BANK, FSB
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman of the Board and President
ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Secretary
CIB BANK
BY: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Chairman of the Board
ATTEST:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Secretary
19
PURCHASE AGREEMENT EXHIBIT LIST
EXHIBIT A Deposit Account Trial Balances
EXHIBIT B Pledged, Encumbered, and Attached Deposit Accounts
EXHIBIT C Furniture, Fixtures and Equipment Listing
EXHIBIT D Lease Agreement for the Gurnee Branch Facility
EXHIBIT E Material Contracts Relating to the Gurnee Branch Facility
EXHIBIT F Certified Copy of Board Resolution Approving the Transaction -
ARGO
EXHIBIT G Certified Copy of Board Resolution Approving the Transaction -
Central Illinois Bank
