EXHIBIT 99.2
AGREEMENT AND PLAN OF MERGER
by and among
MAF BANCORP, INC.,
a Delaware corporation,
LINCOLN ACQUISITION CORP.,
an Illinois corporation,
and
MID TOWN BANCORP, INC.,
an Illinois corporation,
July 2, 2001
TABLE OF CONTENTS
PAGE NO.
ARTICLE I MERGER; CLOSING; EFFECTIVE TIME.................................1
1.1 The Merger..........................................................1
1.2 Closing and Effective Time..........................................2
1.3 Articles of Incorporation of Surviving Corporation..................3
1.4 By-Laws of Surviving Corporation....................................3
1.5 Directors and Officers of Surviving Corporation.....................3
ARTICLE II CONVERSION OF SHARES IN THE MERGER..............................3
2.1 Conversion of Shares upon the Merger................................3
2.2 Surrender of Certificates and Payment of Merger Consideration.......5
2.3 Fractional Shares...................................................6
2.4 List of Company Shareholders........................................7
2.5 Dissenting Shares...................................................7
2.6 Share Issuance......................................................7
2.7 Escheat.............................................................7
2.8 Special Procedures..................................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB......8
3.1 Organization........................................................8
3.2 Requisite Authority.................................................9
3.3 Conflicts...........................................................9
3.4 Capitalization.....................................................10
3.5 Purchaser Financial Statements; Material Changes...................11
3.6 Purchaser Subsidiaries.............................................11
3.7 Purchaser SEC Filings..............................................11
3.8 Purchaser Reports..................................................11
3.9 Compliance With Laws...............................................12
3.10 Litigation.........................................................12
3.11 Defaults...........................................................12
3.12 Absence of Material Adverse Change.................................13
3.13 Undisclosed Liabilities............................................13
3.14 Licenses...........................................................13
3.15 Government Approvals...............................................13
3.16 Accuracy of All Representations....................................13
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMPANY......................13
4.1 Organization.......................................................14
4.2 Proper Authorization...............................................14
4.3 Capital Stock......................................................15
4.4 Subsidiaries.......................................................15
4.5 Financial Statements...............................................16
4.6 Taxes..............................................................16
4.7 Material Contracts.................................................17
4.8 Real and Personal Property.........................................18
4.9 Material Adverse Change............................................19
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4.10 Investigations and Litigation......................................19
4.11 Accuracy of Minute Books...........................................20
4.12 [INTENTIONALLY LEFT BLANK].........................................20
4.13 Insurance..........................................................20
4.14 Licenses...........................................................20
4.15 Compliance with Law................................................20
4.16 Accuracy of Shareholder Communications.............................21
4.17 Investment Banker/Finder Fee.......................................21
4.18 Dividends..........................................................21
4.19 Employee Benefits..................................................21
4.20 Employees..........................................................23
4.21 Environmental Matters..............................................24
4.22 Company Facilities.................................................25
4.23 Loans..............................................................25
4.24 Investment Securities..............................................26
4.25 Intellectual Properties............................................26
4.26 Governmental Reports...............................................27
4.27 Reserve for Possible Loan and Lease Losses.........................27
4.28 Affiliate Transactions.............................................27
4.29 Government Approvals...............................................28
4.30 Fairness Opinion...................................................28
4.31 Affiliate Letters..................................................28
4.32 Accuracy of Representations........................................28
ARTICLE V ADDITIONAL COVENANTS AND AGREEMENTS............................28
5.1 Conduct of Business by the Company.................................28
5.2 Filings, Approvals and Other Actions...............................32
5.3 Acquisition Transactions...........................................32
5.4 Notification of Certain Matters....................................34
5.5 Purchaser Access to Information; Confidentiality...................35
5.6 Company Access to Information......................................36
5.7 Registration Statements; Shareholder Approval; and Related Matters.37
5.8 Employee Benefits..................................................38
5.9 D&O Indemnification................................................39
5.10 Further Assurances; Form of Transaction............................41
5.11 Environmental Matters..............................................41
ARTICLE VI CONDITIONS.....................................................43
6.1 Conditions to Obligations of Each Party............................43
6.2 Additional Conditions to Obligations of Purchaser and Merger Sub...44
6.3 Additional Conditions to Obligations of Company....................46
ARTICLE VII TERMINATION OF AGREEMENT.......................................47
7.1 Termination........................................................47
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7.2 Effect of Termination..............................................49
ARTICLE VIII GENERAL PROVISIONS............................................50
8.1 Expenses...........................................................50
8.2 Publicity..........................................................50
8.3 Assignment.........................................................50
8.4 Governing Law......................................................50
8.5 Counterparts.......................................................51
8.6 Amendment..........................................................51
8.7 Non-Survival.......................................................51
8.8 Notice.............................................................51
8.9 Performance........................................................52
8.10 Entire Agreement; Construction.....................................52
EXHIBITS
Exhibit A Form of Shareholder Voting Agreement
Exhibit B Form of Non-Competition Agreement*
Exhibit C Form of Bank Merger Agreement*
Exhibit D Form of Articles of Merger*
Exhibit E Form of Altheimer & Xxxx Legal Opinion*
Exhibit F Form of Vedder, Price, Xxxxxxx & Kammholz Legal Opinion*
Exhibit G Form of Affiliate Letter*
Exhibit H Form of Press Release*
Exhibit I Form of Access Agreement*
* intentionally omitted
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as of
the 2nd day of July, 2001, by and among MAF Bancorp, Inc., a Delaware
corporation ("Purchaser"), Lincoln Acquisition Corp., an Illinois corporation
and a wholly owned subsidiary of Purchaser ("Merger Sub"), and Mid Town Bancorp,
Inc., an Illinois corporation ("Company"). Company together with Merger Sub are
sometimes referred to as the "Constituent Corporations."
W I T N E S S E T H:
WHEREAS, the parties desire that Merger Sub be merged with and into Company
(the "Merger"), as a result of which the Company will be the surviving corporate
entity, with the Merger to be upon the terms and subject to the conditions set
forth herein.
WHEREAS, the Board of Directors of Company deems the Merger advisable and
in the best interests of Company and its shareholders and has adopted a
resolution approving this Agreement and directing that this Agreement be
submitted for the consideration of Company's shareholders.
WHEREAS, immediately following the Merger, Purchaser intends to cause the
Surviving Corporation (as defined herein) to be dissolved and liquidated into
Purchaser.
WHEREAS, the respective Boards of Directors of Purchaser and Merger Sub
have adopted resolutions approving this Agreement, and Purchaser, as the sole
shareholder of Merger Sub, has approved and adopted this Agreement and the
transactions contemplated hereby.
WHEREAS, as an inducement for Purchaser to enter into this Agreement,
certain shareholders of Company identified on Schedule A hereto have agreed to
enter into the Shareholder Voting Agreement and Non-Competition Agreements in
the forms of Exhibit A and B, respectively.
NOW, THEREFORE, in consideration of the premises and the agreements,
representations, warranties and covenants herein contained, the parties,
intending to be bound, hereby agree as follows:
ARTICLE I
MERGER; CLOSING; EFFECTIVE TIME
1.1 The Merger.
(a) Subject to the terms and conditions of this Agreement,
including the receipt of all regulatory and shareholder approvals which are
conditions to the consummation of the Merger as set forth in Article VI hereof,
the Company and Merger Sub shall consummate the Merger, pursuant to which (i)
Merger Sub shall be merged with and into the Company and the separate corporate
existence of Merger Sub shall thereupon cease, (ii) the Company shall be the
surviving corporation in the Merger (the "Surviving Corporation") and shall
become a wholly-
owned subsidiary of Purchaser, and (iii) the Surviving Corporation shall be
governed by the laws of the State of Illinois with all its rights, privileges,
powers and franchises unaffected by the Merger. The Merger will have the effects
set forth in the Illinois Business Corporation Act (the "IBCA") and as otherwise
provided in this Agreement and in accordance therewith. The Surviving
Corporation shall possess all assets and property of every description, and
every interest in the assets and property, contingent or otherwise, wherever
located, and the rights, privileges, immunities, powers, franchises and
authority, of a public as well as a private nature, of each of the Company and
Merger Sub, and all obligations belonging or due to either of the Company or
Merger Sub, all of which shall vest in the Surviving Corporation without further
act or deed.
(b) Following the consummation of the Merger, Purchaser shall
cause Mid Town Bank & Trust Company of Chicago, an Illinois chartered bank and a
wholly owned subsidiary of the Company (the "Bank") to be merged with and into
Mid America Bank, fsb, a federally-chartered savings bank and a wholly-owned
subsidiary of the Purchaser ("Mid America"), pursuant to the terms of the
Agreement of Merger (the "Bank Merger"), the form of which is attached hereto as
Exhibit C (the "Bank Merger Agreement"). In connection with the Bank Merger,
Purchaser shall appoint Xxxx X. Xxxxxx to the Board of Directors of Mid America
until the next annual meeting of the stockholders of Mid America, and at such
annual meeting of stockholders, shall appoint Xx. Xxxxxx to the Board of
Directors of Mid America for a three (3) year term. Purchaser and the Company
shall use their respective reasonable best efforts to take all necessary actions
to permit the Bank Merger to occur immediately following the consummation of the
Merger.
(c) The Company and the Bank will cooperate in the preparation
by Purchaser, Merger Sub and Mid America of such applications to the appropriate
federal or state governmental authorities having jurisdiction over the Merger,
the Bank Merger and/or the transactions contemplated herein and any other
regulatory authorities as may be necessary in connection with all governmental
approvals requisite to the consummation of the transactions contemplated hereby
(the "Governmental Authorities"). Purchaser and the Company will each cooperate
in the preparation of such applications, statements or materials as may be
required to be furnished to the shareholders of the Company or filed or
submitted to Governmental Authorities in connection with the Merger, the Bank
Merger and with solicitation of the approval by shareholders of the Company in
respect thereof.
1.2 Closing and Effective Time. Subject to the terms and conditions of
this Agreement, the transactions contemplated by this Agreement shall be
consummated (the "Closing") at (a) 10:00 a.m., at the offices of Vedder, Price,
Xxxxxxx & Kammholz, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, ten (10)
business days after all of the conditions set forth in Article VI (other than
the receipt of closing certificates, legal opinions and the resignations of the
directors of the Company and the Company Subsidiaries to be delivered at
Closing) have first been fulfilled or waived (provided such conditions shall
continue, on such tenth business day, to be fulfilled or waived) (including the
conditions which, by their terms, are to be satisfied on the Closing Date and/or
at the Effective Time), or (b) if the parties so agree, at such other time
and/or place as is mutually agreed upon by the parties (the date of such closing
being, the "Closing Date"). At the Closing, in order to effectuate the Merger,
Purchaser and the Constituent Corporations shall cause the Merger to become
effective by causing articles of
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merger (the "Articles of Merger") substantially in the form set forth in Exhibit
D to be executed in accordance with the IBCA and to be filed with the Secretary
of State of the State of Illinois. The time at which the Merger becomes
effective shall be referred to as the "Effective Time."
1.3 Articles of Incorporation of Surviving Corporation. The Articles of
Incorporation of the Company with such changes, if any, as may be provided for
in the Articles of Merger shall, as of the Effective Time and by virtue of the
Merger, continue in full force and effect from and after the Effective Time as
the Articles of Incorporation of the Surviving Corporation, until otherwise
amended as provided by law or by such Articles of Incorporation.
1.4 By-Laws of Surviving Corporation. The By-Laws of Merger Sub, as in
effect at the Effective Time, shall, by virtue of the Merger, constitute the
By-Laws of the Surviving Corporation from and after the Effective Time until
otherwise amended as provided by law or by such By-Laws.
1.5 Directors and Officers of Surviving Corporation. The directors and
officers of Merger Sub at the Effective Time shall, as of the Effective Time and
by virtue of the Merger, become the directors and officers of the Surviving
Corporation and shall hold office from and after the Effective Time until their
respective successors are duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SHARES IN THE MERGER
2.1 Conversion of Shares upon the Merger.
(a) Each share of the common stock, par value $2.50 per share,
of Company ("Company Common Stock") issued and outstanding immediately prior to
the Effective Time, provided, however, that such number of issued and
outstanding shares shall not exceed 320,528 without the prior written consent of
Purchaser, shall be converted (other than (i) any shares of Company Common Stock
held by Company or any of its wholly owned subsidiaries (except for shares, if
any, so held in a fiduciary capacity), all of which shares shall be cancelled,
and (ii) shares held by shareholders exercising appraisal rights pursuant to
Article 11 of the IBCA and as set forth in Section 2.5 hereof) into the right to
receive a combination of cash and shares of common stock, par value $0.01 per
share, of Purchaser ("Purchaser Common Stock") (collectively, the "Merger
Consideration") as follows:
(i) an amount in cash (the "Per Share Cash
Consideration") equal to $172.22, plus
(ii) subject to the provisions of Section 2.1(b), a
number of fully paid and nonassessable shares of Purchaser Common Stock
(the "Exchange Ratio") equal to $43.05 divided by the average (i.e.,
the arithmetic mean) per share closing price on The Nasdaq Stock Market
("Nasdaq") for the twenty (20) consecutive trading days ending five
trading days preceding but not including the Closing Date (the
"Purchaser Reference Stock Price") as reported in The Wall Street
Journal, Midwest Edition (the "Reference Period").
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(b) Notwithstanding anything provided herein, for purposes of
calculating the Exchange Ratio, except as provided below, if the Purchaser
Reference Stock Price is less than $25.00 it shall be deemed to be $25.00 and if
the Purchaser Reference Stock Price is greater than $31.00 it shall be deemed to
be $31.00; provided, however, that if the actual Purchaser Reference Stock Price
as calculated pursuant to Section 2.1(a) above and without giving effect to
deemed limits thereon contemplated by this Section 2.1(b) is less than $21.00,
then at any time prior to the close of business on the second business day after
establishment of the Purchaser Reference Stock Price, the Company shall have the
option of terminating this Agreement pursuant to Section 7.1(g); provided,
further, any such termination pursuant to Section 7.1(g) shall not be given
effect if within two (2) business days after receipt of such notice Purchaser
has agreed either (i) to modify the Exchange Ratio to equal $36.16 divided by
the actual Purchaser Reference Stock Price as calculated pursuant to Section
2.1(a) above and without giving effect to deemed limits thereon contemplated by
this Section 2.1(b) or (ii) to utilize an Exchange Ratio of 1.722 and provide an
additional amount of cash which, when added to the dollar value of 1.722 shares
of Purchaser Common Stock based on the actual Purchaser Reference Stock Price as
calculated pursuant to Section 2.1(a) above and without giving effect to deemed
limits thereon contemplated by this Section 2.1(b) will equal $36.16. Nothing
provided in this Section 2.1(b) shall affect the applicability of the Company's
closing conditions set forth in Section 6.3(a), (b) or (c) or termination rights
in Section 7.1(b), (d) or (h) or the determination or interpretation of whether
or not any such event referred to therein has occurred.
(c) If subsequent to the date of this Agreement but prior to
the Effective Time, Purchaser should split or combine shares of the Purchaser
Common Stock, or pay a stock dividend or other distribution in Purchaser Common
Stock, then the Exchange Ratio shall be appropriately adjusted to reflect such
split, combination, stock dividend or distribution. If subsequent to the date of
this Agreement, but prior to the Effective Time, Company should split or combine
shares of Company Common Stock, or pay a stock dividend or other distribution in
Company Common Stock, then the Per Share Cash Consideration and the Exchange
Ratio shall be appropriately adjusted to reflect such split, combination, stock
dividend or distribution.
(d) Except as provided in Section 2.5, at the Effective Time,
each share of Company Common Stock issued and outstanding immediately prior to
the Effective Time of the Merger, shall, ipso facto and without any action on
the part of the holder thereof, the Company, Purchaser or Merger Sub, become and
be converted into the right to receive the Merger Consideration. The
certificates representing outstanding shares of Company Common Stock immediately
prior to the Effective Time ("Company Certificates") shall, after the Effective
Time of the Merger, represent only the right to receive the Merger Consideration
from Purchaser. Until so presented and surrendered in exchange for the Merger
Consideration, each Company Certificate shall be deemed for all purposes to
evidence ownership of the Merger Consideration. After the Effective Time, there
shall be no transfer on the stock transfer books of the Company of Company
Common Stock. No interest shall accrue or be payable with respect to the Merger
Consideration.
(e) Each share of common stock of Merger Sub issued and
outstanding at the Effective Time of the Merger shall, ipso facto and without
any action on the part of the holder thereof, be converted into one share of the
common stock of the Surviving Corporation and all such shares of common stock of
the Surviving Corporation shall be owned by Purchaser.
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Outstanding certificates representing shares of common stock of Merger Sub
immediately prior to the Merger shall be deemed to represent an identical number
of shares of common stock of the Surviving Corporation upon consummation of the
Merger.
2.2 Surrender of Certificates and Payment of Merger Consideration.
(a) Prior to the Closing, Purchaser shall engage Computershare
Investor Services LLP to act as exchange agent (the "Exchange Agent") in
connection with the Merger pursuant to documentation reasonably acceptable to
Purchaser and the Company.
(b) Immediately prior to the Effective Time, Purchaser shall
deposit, or cause to be deposited, with the Exchange Agent for the benefit of
the holders of Company Certificates immediately available funds in an amount
sufficient to pay the cash portion of the Merger Consideration in respect of all
shares of Company Common Stock which may be converted pursuant to Section 2.1
and shall authorize the Exchange Agent to cause to be issued in its capacity as
transfer agent for Purchaser Common Stock such numbers of shares of Purchaser
Common Stock as will be sufficient to pay the stock portion of the Merger
Consideration all in accordance with the terms hereof.
(c) As soon as practicable after the Effective Time, but in no
event more than three (3) business days after the Effective Time, the Exchange
Agent shall cause to be delivered to each holder of record of a Company
Certificate then outstanding (unless any such holder has previously surrendered
such Company Certificate pursuant to Section 2.8): (i) a form letter of
transmittal in customary form which shall specify that delivery shall be
effected, and risk of loss and title to the Company Certificates shall pass,
only upon delivery of the Company Certificates (or a lost certificate affidavit
and bond in a form reasonably acceptable to the Exchange Agent) to the Exchange
Agent; and (ii) instructions for use in effecting the surrender of the Company
Certificates in exchange for the Merger Consideration. Upon surrender of a
Company Certificate for cancellation to the Exchange Agent (or a lost
certificate affidavit and bond in a form reasonably acceptable to the Exchange
Agent), together with such letter of transmittal, duly executed, the holder of
such Company Certificate shall be entitled to receive, in exchange therefor,
Purchaser Common Stock (without any restrictive legends, other than restrictions
relating to Rule 145 under the Securities Act) representing the whole number of
shares of Purchaser Common Stock into which the shares of Company Common Stock,
theretofore represented by the Company Certificate so surrendered, shall have
been converted pursuant to the provisions of Section 2.1 hereof (taking into
account all shares of Company Common Stock surrendered by such holder), plus the
amount of the aggregate Per Share Cash Consideration which such holder would be
entitled to receive pursuant to Section 2.1 hereof plus such additional cash
amount, if any, payable in lieu of fractional shares in accordance with Section
2.3 hereof, and the Company Certificate so surrendered shall be cancelled. If
any payment for shares of Company Common Stock is to be made in a name other
than that in which the Company Certificate surrendered for exchange is
registered, it shall be a condition to payment of the Merger Consideration that
the Company Certificate so surrendered shall be properly endorsed or otherwise
in proper form for transfer, that all signatures shall be guaranteed by a member
firm of any national securities exchange in the United States or the National
Association of Securities Dealers, Inc., or by a bank or trust company having an
office in the United States, and that the person requesting the payment shall
either (a) pay to the Exchange Agent any
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transfer or other taxes required by reason of the payment of the aggregate
Merger Consideration to a person other than the registered holder of the Company
Certificate surrendered, or (b) establish to the satisfaction of the Exchange
Agent that such taxes have been paid or are not payable.
(d) No dividends or other distributions with respect to
Purchaser Common Stock payable to the holders of record thereof after the
Effective Time shall be paid to the holder of any Company Certificate with
respect to Purchaser Common Stock represented thereby, and no cash payment in
lieu of fractional shares shall be paid to any such holder, until the holder of
record shall surrender such Company Certificate (or comply with the provision
with respect to lost certificates above). Notwithstanding anything herein to the
contrary, after the surrender and exchange of a Company Certificate or
compliance with provisions with respect to lost certificates above, the holder
thereof shall be entitled to receive any such dividends or distributions,
without interest thereon, which theretofore became payable with respect to the
Purchaser Common Stock represented by such Company Certificate. All dividends or
other distributions with respect to the Purchaser Common Stock and payable to
the holders of record thereof on or after the Effective Time which are payable
to the holder of a Company Certificate not theretofore surrendered and exchanged
for Purchaser Common Stock pursuant to this Section 2.2(d) shall be paid or
delivered by Purchaser to the Exchange Agent, for the benefit of such holders
and paid upon surrender for exchange of the Company Certificate (or compliance
with the provision with respect to lost certificate above). All such dividends
and distributions held by the Exchange Agent for payment or delivery to the
holders of unsurrendered Company Certificates unclaimed at the end of one year
from the Effective Time shall be repaid or redelivered by the Exchange Agent to
Purchaser after which time any holder of Company Certificates who has not
theretofore surrendered such Company Certificates to the Exchange Agent, subject
to applicable law, shall look only to Purchaser for payment or delivery of such
dividends or distributions, as the case may be. Any shares of Purchaser Common
Stock or amounts representing the Per Share Cash Consideration or other amounts
delivered or made available to the Exchange Agent pursuant to this Section
2.2(d) and not exchanged for Company Certificates within one year after the
Effective Time pursuant to this Section 2.2(d) shall be returned by the Exchange
Agent to Purchaser which shall thereafter act as Exchange Agent subject to the
rights of holders of unsurrendered Company Certificates hereunder.
(e) Purchaser shall cause the Exchange Agent to pay and
deliver the Merger Consideration as soon as practicable after the surrender of a
Company Certificate and the appropriate documentation as required by this
Section 2.2 by the holder thereof (or compliance with the provision with respect
to lost certificates above).
2.3 Fractional Shares. No certificates or scrip representing fractional
shares (as calculated below) of Purchaser Common Stock shall be issued upon the
surrender for exchange of Company Certificates, no dividend or distribution of
Purchaser shall relate to any fractional share, and such fractional share
interests will not entitle the owner or holder thereof to vote or assert any
rights of a stockholder of Purchaser. In lieu of any fractional share (after
taking account of all shares of Company Common Stock to be converted by a holder
in the Merger), the Exchange Agent or Purchaser, as the case may be, shall pay
to each holder of shares of Company Common Stock who otherwise would be entitled
to receive a fractional share of Purchaser Common Stock (after taking account of
all shares of Company Common Stock to be converted
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by a holder in the Merger) an amount of cash (without interest) equal to the
product achieved when such fraction is multiplied by the price equal to the
closing sales price of Purchaser Common Stock as quoted on Nasdaq on the date
which is five (5) trading days preceding the Closing Date. Purchaser shall cause
sufficient cash to be deposited from time to time with the Exchange Agent to pay
such cash amounts in lieu of fractional shares as contemplated by this Section
2.3.
2.4 List of Company Shareholders. At least three (3) business days
prior to the Effective Time, Company shall deliver a copy of a list of the
shareholders of the Company (the "Company Shareholders"), certified by the
President of the Company on behalf of the Company, to the Exchange Agent, after
which there shall be no further registrations or transfers on the stock transfer
books of Company of the shares of Company Common Stock that were outstanding
immediately prior thereto. If, after the Effective Time, Company Certificates
representing such shares are presented to Company, they shall be canceled and
exchanged as provided in this Article II.
2.5 Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, the shares of Company Common Stock outstanding immediately prior
to the Effective Time held by a holder who (i) has not voted in favor of the
Merger or consented thereto in writing, (ii) has demanded properly in writing
payment for his Company Common Stock if the Merger is consummated and (iii)
shall not have withdrawn such demand or otherwise forfeited his right to dissent
in accordance with Section 11.70 of the IBCA ("Dissenting Shareholder") shall
not be converted into or represent the right to receive the Merger Consideration
for each share of Company Common Stock held ("Dissenting Shares"). The Company
shall give Purchaser prompt notice of any demands and any withdrawals of such
demands for dissenter's rights received by the Company. Purchaser shall have the
right to participate in all negotiations and proceedings with respect to such
demand for dissenter's rights. Prior to the Effective Time, the Company shall
not, except with the prior written consent of Purchaser, make any payment with
respect to any demands for dissenter's rights, or settle, or offer to settle,
any such demands.
2.6 Share Issuance. All shares of Purchase Common Stock issued in
connection with the Merger shall be duly and validly authorized, fully paid and
non-assessable and shall be deemed to be issued and outstanding as of the
Effective Time.
2.7 Escheat. Notwithstanding anything in this Agreement to the
contrary, neither the Exchange Agent nor any party hereto shall be liable to a
former holder of Company Common Stock for any cash or securities delivered to a
public official pursuant to applicable escheat or abandoned property laws.
2.8 Special Procedures. Purchaser shall use its reasonable best
efforts, and shall use its reasonable best efforts to cause the Exchange Agent
to, implement reasonable procedures so that each holder of Company Common Stock
entitled to receive at least $1,000,000 in aggregate Merger Consideration shall,
upon delivery at least three (3) business days prior to Closing of a properly
completed letter of transmittal (or satisfactory documentation in lieu thereof
as may be determined by the Exchange Agent), have the opportunity to surrender
his or her Company Certificate(s) at the Closing and, immediately following the
Effective Time, receive the Merger Consideration in exchange therefor (all as
otherwise in accordance with this Article II). Without
7
limiting the generality of the foregoing, upon the request of any Company
Shareholder made ten (10) days prior to the Closing, Purchaser shall use its
reasonable efforts to cause to be furnished to such Company Shareholder at least
five (5) business days prior to the Closing, the letter of transmittal in usual
and customary form (or instructions for delivery prior to closing of
satisfactory documentation in lieu thereof).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB
Purchaser and Merger Sub jointly and severally represent and warrant to
the Company that as of the date of this Agreement:
3.1 Organization.
(a) Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite power and authority, corporate and otherwise, to own, operate and
lease its assets, properties and businesses, and to carry on its businesses
substantially as they have been and are now being conducted. Purchaser is duly
qualified to do business and is in good standing in each jurisdiction where the
character of the properties owned or leased by it or the nature of the business
transacted by it requires that it be so qualified, except where the failure to
so qualify would not have a material adverse effect on the business of Purchaser
and its subsidiaries, taken as a whole, or its ability to consummate the
transactions contemplated herein. Purchaser has all requisite corporate power
and authority to enter into this Agreement, and, upon the approval of the
Governmental Authorities, to consummate the transactions contemplated hereby.
Purchaser is duly registered as a unitary savings and loan holding company under
HOLA.
(b) Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois and wholly
owned by Purchaser. Merger Sub was formed for the purpose of engaging in the
Merger and has not engaged, and will not engage prior to the Merger, in any
activities other than those necessary to effectuate the terms of this Agreement.
The authorized capital stock of Merger Sub consists of 1,000 shares of common
stock, no par value per share, of which 100 shares are issued and outstanding.
(c) Mid America is a federally-chartered stock savings bank
duly organized and in existence under the laws of the United States. Mid America
is an "insured depository institution" as defined in the Federal Deposit
Insurance Act (the "FDI Act") and applicable regulations thereunder, the
deposits of which are insured by the Federal Deposit Insurance Corporation
("FDIC") through the Savings Association Insurance Fund ("SAIF") to the full
extent permitted under applicable laws.
(d) Purchaser has no direct or indirect subsidiaries other
than Merger Sub, MAF Developments, Inc., N.W. Financial Corporation, Mid America
Investment Services, Inc., Mid America Finance Corporation, Mid America
Insurance Agency, Inc., Centre Point Title Services, Inc., MAF Realty Co.,
L.L.C.-III and MAF Realty Co., L.L.C.-IV, Mid America Mortgage Securities, Inc.,
Ambria Development Corporation, Xxxxxxx Road Development
8
Corporation and Reigate Xxxxx Development Corporation (the "Purchaser Corporate
Subsidiaries") and Mid America (collectively, the "Purchaser Subsidiaries").
Each of the Purchaser Corporate Subsidiaries is either wholly-owned by Purchaser
or Mid America or by wholly-owned subsidiaries of Mid America, and is a duly
organized and validly existing corporation or limited liability company, as
applicable, in good standing under the laws of the State of Illinois or the
State of Delaware, with corporate power and authority to own, operate and lease
its assets and properties and carry on its business substantially as it has been
and is now being conducted. Each Purchaser Subsidiary holds all licenses,
certificates, permits, franchises and rights from all appropriate federal, state
or other public authorities necessary for the conduct of its and their
respective businesses, except where the failure to so hold would not have a
material adverse effect on the business of Purchaser and the Purchaser
Subsidiaries, taken as a whole.
3.2 Requisite Authority. Each of Purchaser and Merger Sub has all
requisite power and authority to enter into this Agreement and to consummate the
Merger and the transactions contemplated hereby and thereby including, with
respect to Purchaser, the power and authority to issue and deliver the shares of
Purchaser Common Stock to be issued as Merger Consideration. The respective
Boards of Directors of Purchaser and Merger Sub have adopted resolutions
approving this Agreement and such resolutions remain in full force and effect.
Purchaser, as the sole shareholder of Merger Sub, has adopted resolutions
approving and adopting this Agreement and such resolutions remain in full force
and effect. The execution and delivery by Purchaser and Merger Sub of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part of
Purchaser and Merger Sub, and this Agreement has been duly executed and
delivered by Purchaser and Merger Sub and constitutes the legal, valid and
binding obligations of Purchaser and Merger Sub, enforceable against each of
Purchaser and Merger Sub in accordance with its terms except as such
enforceability may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditor rights generally, and
(ii) general principles of equity, regardless of whether asserted in a
proceeding in equity or at law.
3.3 Conflicts. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, conflict
with or result in any violation of the Certificate of Incorporation or Articles
of Incorporation (as applicable) or Bylaws of Purchaser or Merger Sub. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, conflict with or result in any
violation, breach or termination of, or default or loss of a material benefit
under, or permit the acceleration of, any obligation or result in the creation
of any material lien, charge or encumbrance on any of the property or assets
under any provision of any mortgage, indenture, lease, agreement or other
instrument, permit, concession, grant, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Purchaser or
Merger Sub or their respective properties, other than any such conflicts,
violations or defaults which (a) individually or in the aggregate do not have a
material adverse effect on the business of Purchaser and the Purchaser
Subsidiaries, taken as a whole, or (b) will be cured or waived prior to the
Effective Time (and will continue to be cured or waived as of the Effective
Time). No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Authorities is required by or with
respect to Purchaser, Merger Sub, or Mid America in connection with the
execution and delivery of this Agreement, or the consummation
9
by Purchaser of the transactions contemplated hereby, the absence of which would
have a material adverse effect on the business of Purchaser and the Purchaser
Subsidiaries, taken as a whole, except for: (i) the filings by Purchaser or Mid
America of any applications or notices with the Office of Thrift Supervision
("OTS"), Board of Governors of the Federal Reserve System ("Federal Reserve
Board"), Illinois Office of Banks and Real Estate ("OBRE"), FDIC and any other
Governmental Authority having jurisdiction over Purchaser, Merger Sub, Mid
America, the Purchaser Corporate Subsidiaries or the transactions contemplated
hereby; (ii) the filing by Purchaser of the Registration Statement relating to
the Purchaser Common Stock to be issued pursuant to this Agreement (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") which Registration Statement shall include the proxy statement (the
"Proxy Statement") for use in connection with the Special Meeting (as defined
herein) to be called pursuant to Section 5.7 hereof; (iii) the filing of the
Articles of Merger with the Secretary of State of the State of Illinois; (iv)
any antitrust filings, consents, waivers or approvals; and (v) any filings by
Purchaser with Nasdaq relating to the issuance of additional securities.
3.4 Capitalization.
(a) As of July 2, 2001, the authorized capital stock of
Purchaser consists of the following:
CLASS OF STOCK PAR VALUE AUTHORIZED ISSUED OUTSTANDING TREASURY
Common $ .01 80,000,000 25,420,650 22,531,893 2,888,757
Preferred $ .01 5,000,000 0 0 0
All of the issued and outstanding shares of Purchaser Common Stock have been,
and all of the shares of Purchaser to be issued in the Merger will be, at the
Effective Time, duly and validly authorized and issued, and are, or upon
issuance in the Merger will be, as the case may be, fully paid and
nonassessable. None of the outstanding shares of Purchaser Common Stock has been
issued in violation of any preemptive rights and none of the outstanding shares
of Purchaser Common Stock is or will be entitled to any preemptive rights in
respect of the Merger or any of the other transactions contemplated by this
Agreement. Purchaser has reserved, and will at the Effective Time have, a number
of authorized but unissued shares of Purchaser Common Stock or shares of
Purchaser's Common Stock held in treasury sufficient to pay the Merger
Consideration in accordance with Section 2.1 hereof.
(b) As of July 2, 2001, Purchaser had reserved 3,746,795
shares of Purchaser Common Stock for issuance under stock option plans (the
"Purchaser Stock Options Plans") for the benefit of directors, employees and
former directors and employees of Purchaser and the Purchaser Subsidiaries
pursuant to which options covering 2,213,862 shares of Purchaser Common Stock
were outstanding as of July 2, 2001. Except for the Purchaser Stock Option
Plans, and except as set forth in this Section 3.4(b), there are no shares of
capital stock of Purchaser subject to options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of the capital
stock of Purchaser, or contracts, commitments, understandings, or
10
arrangements by which Purchaser is or may be bound to issue additional shares of
its capital stock or options, warrants, or rights to purchase or acquire any
additional shares of its capital stock.
3.5 Purchaser Financial Statements; Material Changes. Purchaser has
heretofore delivered to Company its audited consolidated financial statements
for the years ended December 31, 2000, December 31, 1999 and December 31, 1998
and Purchaser's unaudited consolidated financial statements for the period ended
March 31, 2001 (collectively, the "Purchaser Financial Statements"). The
Purchaser Financial Statements: (a) are true and correct in all material
respects; (b) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto and, in the case of the
unaudited consolidated financial statements, except for the absence of footnotes
and for normal and recurring year-end adjustments which are not material); and
(c) fairly present the consolidated financial position of Purchaser as of the
dates thereof and the consolidated results of its operations, stockholders'
equity and changes in financial position for the periods then ended.
3.6 Purchaser Subsidiaries. No capital stock or membership interest, as
applicable, of any of the Purchaser Subsidiaries is or may become required to be
issued (other than to Purchaser or any other Purchaser Subsidiary) by reason of
any options, warrants, scrip, rights to subscribe to, calls, or commitments of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of the capital stock of any Purchaser Subsidiary.
There are no contracts, commitments, understandings or arrangements relating to
the rights of Purchaser to vote or to dispose of shares of the capital stock or
membership interest, as applicable, of any Purchaser Subsidiary. All of the
shares of capital stock or membership interest, as applicable, of each Purchaser
Subsidiary held by Purchaser or a Purchaser Subsidiary are fully paid and
nonassessable and are owned by Purchaser or such Purchaser Subsidiary free and
clear of any claim, lien or encumbrance.
3.7 Purchaser SEC Filings. Upon request, Purchaser has previously made
available to Company true and complete copies of (a) its proxy statements on
Schedule 14A of the Securities Exchange Act relating to all meetings of
stockholders (whether special or annual) during the calendar years 1999, 2000
and 2001, and (b) all other reports, as amended, or filings, as amended, filed
under the Securities and Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the "Securities Exchange Act"), by
Purchaser with the SEC and OTS since January 1, 1998, including without
limitation reports on Forms 10-K, 10-Q and 8-K, and filings with the SEC under
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Securities Act").
3.8 Purchaser Reports. (a) Since January 1, 2000, each of Purchaser and
the Purchaser Subsidiaries has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that were required
to be filed with (a) the SEC, including, but not limited to Forms 00-X, 00-X,
0-X, and proxy statements on Schedule 14A of the Securities Exchange Act, (b)
the OTS, (c) the FDIC, (d) any applicable state banking, insurance, securities,
or other regulatory authorities (except filings which are not material), and (e)
Nasdaq (collectively, the "Purchaser Reports"). Purchaser has previously made
available to the Company true and complete copies of the Purchaser Reports
requested by the Company. As
11
of their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all of the statutes, rules, and regulations enforced or
promulgated by the authority with which they were filed and did not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
(b) Except for examinations or reviews conducted by the SEC,
Internal Revenue Service, Department of Labor, state, and local taxing
authorities, OTS or the FDIC in the regular course of the business of Purchaser
or the Purchaser Subsidiaries, no federal, state or local governmental agency,
commission or other entity has initiated any proceeding or, to the best
knowledge of Purchaser, investigation into the business or operations of
Purchaser or the Purchaser Subsidiaries within the past three years. None of
Purchaser or any Purchaser Subsidiary is subject to a written agreement (as such
term is defined pursuant to 12 U.S.C. ss.1818) with the OTS, FDIC, Federal
Reserve Board or OBRE. There is no unresolved violation, criticism or exception
by the SEC, OTS, FDIC, Federal Reserve Board or OBRE or other agency, commission
or entity with respect to any report or statement referred to herein that has
had or is expected to have a material adverse effect on the business of
Purchaser and the Purchaser Subsidiaries, taken as a whole.
3.9 Compliance With Laws. Purchaser and the Purchaser Subsidiaries are
each in compliance with all applicable federal and state laws and regulations
that regulate the business of a savings bank, including, without limitation,
HOLA and the FDI Act, and Purchaser and each of the Purchaser Subsidiaries are
in compliance with all other applicable laws and regulations, except in each
case where the failure to comply would not have a material adverse effect on the
business of Purchaser and the Purchaser Subsidiaries, taken as a whole.
3.10 Litigation. There is no suit, action, investigation or proceeding,
legal, quasi-judicial, administrative or otherwise, pending or, to the knowledge
of Purchaser, threatened against or affecting Purchaser or any Purchaser
Subsidiary, or any of their respective officers, directors, employees or agents,
in their capacities as such, which, if adversely determined, would have a
material adverse effect on the business of Purchaser and the Purchaser
Subsidiaries taken as a whole or which would materially affect the ability of
Purchaser to consummate the transactions contemplated herein or which is seeking
to enjoin consummation of the transactions provided for herein or to obtain
other relief in connection with this Agreement or the transactions contemplated
hereby or thereby.
3.11 Defaults. There has not been any default, or the occurrence of an
event which with notice or lapse of time or both would constitute a default, in
any obligation to be performed by Purchaser or any Purchaser Subsidiary under
any contract, commitment, or other material obligation to which Purchaser, any
Purchaser Subsidiary or their respective properties is subject, and neither
Purchaser nor any Purchaser Subsidiary has waived any right under any contract
or commitment, except in each case where any such default or waiver, singly or
in the aggregate with any other such defaults or waivers, would not have a
material adverse effect on the business of Purchaser and the Purchaser
Subsidiaries taken as a whole. To the knowledge of Purchaser, no other party to
any material contract or commitment is in default in any material obligation to
be performed by such party.
12
3.12 Absence of Material Adverse Change. Since December 31, 2000, there
has not been, except for the transactions as contemplated herein or matters
related thereto, any event or condition of any character (other than changes (i)
in laws, regulation, interpretations or GAAP affecting savings banks and/or
their holding companies, and (ii) changes in economic or other general
conditions affecting similarly situated savings banks and/or savings and loan
holding companies (including, without limitation, changes in interest rates))
which have had or would be reasonably expected to have a material adverse effect
on the business, financial condition or results of operations, all taken
together, of Purchaser and the Purchaser Subsidiaries, taken as a whole.
3.13 Undisclosed Liabilities. All of the obligations or liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise, whether due
or becoming due, and regardless of when asserted) arising out of transactions or
events heretofore entered into, or any action or inaction, including taxes with
respect to or based upon transactions or events heretofore occurring, that are
required to be reflected, disclosed or reserved against in the audited
consolidated financial statements in accordance with GAAP ("Liabilities") have,
in the case of Purchaser and the Purchaser Subsidiaries, been so reflected,
disclosed or reserved against in the audited consolidated financial statements
of Purchaser as of December 31, 2000 or in the notes thereto, and Purchaser and
the Purchaser Subsidiaries have no other Liabilities except Liabilities incurred
since December 31, 2000, in the ordinary course of business.
3.14 Licenses. To the Purchaser's knowledge, Purchaser and each
Purchaser Subsidiary, respectively, hold all governmental registrations,
licenses, permits or franchises (each a "Purchaser Permit") required to be held
by it and which are material with respect to the operation of their respective
businesses, except for such Purchaser Permits which, the failure to hold, would
not have a material adverse effect on the business of Purchaser and the
Purchaser Subsidiaries, taken as a whole.
3.15 Government Approvals. To Purchaser's knowledge, no fact or
condition exists with respect to Purchaser or any Purchaser Subsidiary which
Purchaser has reason to believe will prevent it from obtaining approval of the
Merger, the Bank Merger and other transactions contemplated by this Agreement by
any Governmental Authority.
3.16 Accuracy of All Representations. The representations and
warranties made by Purchaser in this Agreement do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained in such representations and warranties not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
All representations and warranties of Company made in this Agreement
are made subject to the applicable (as contemplated by Section 8.10) exceptions
noted in the schedule delivered by Company to Purchaser concurrently herewith
and identified by the parties as the "Company Disclosure Schedule." Subject to
the foregoing, Company represents and warrants to Purchaser and Merger Sub that
as of the date of this Agreement:
13
4.1 Organization.
(a) Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Illinois and has all
requisite corporate power and authority to own, operate and lease its assets,
properties and businesses and to carry on its businesses substantially as they
have been and are now being conducted. Company is duly qualified to do business
and is in good standing in each jurisdiction where the character of the
properties owned or leased by it or the nature of the business transacted by it
requires that it be so qualified except where the failure to be so qualified
would not have a material adverse effect on the business of the Company and the
Company Subsidiaries taken as a whole. Company has all requisite corporate power
and authority to enter into this Agreement, and, upon the approval of the
Company Shareholders and the Governmental Authorities, to consummate the
transactions contemplated hereby. Company is duly registered as a bank holding
company under the Bank Holding Company Act, as amended ("BHCA").
(b) Bank is duly organized and in existence under the laws of
the State of Illinois. Bank is an "insured depository institution" as defined in
the FDI Act and applicable regulations thereunder, the deposits of which are
insured by the FDIC through the Bank Insurance Fund ("BIF"), to the full extent
permitted under applicable laws.
4.2 Proper Authorization. The execution and delivery of this Agreement
and, subject to approval of the Merger by the holders of the Company Common
Stock, the consummation of the transactions contemplated by this Agreement have
been duly and validly authorized by all necessary corporate action on the part
of Company and this Agreement constitutes the legal, valid and binding
obligation of Company, enforceable against Company in accordance with its terms,
except as limited by (x) bankruptcy, insolvency, moratorium, reorganization and
other similar laws affecting creditors' rights generally, and (y) general
principles of equity, regardless of whether asserted in a proceeding in equity
or at law. The execution of this Agreement and, subject to the approval of the
Merger by the holders of the Company Common Stock, the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
do not violate the provisions of, or constitute a breach or default, or give
rise to any rights of termination, cancellation or acceleration, under (i) any
of the Articles of Incorporation or Charter (as applicable) or by-laws of
Company or any Company Subsidiary, (ii) any Material Contract (as herein
defined), of Company or any Company Subsidiary except as noted on Schedule 4.7
or 4.8 to the Company Disclosure Schedule, (iii) any material license from a
governmental authority, law, order, injunction, decree, rule, regulation or
judgment to which Company or any Company Subsidiary is a party, is bound or by
which any of their respective properties or assets is subject, except such
violations, breaches, defaults and rights (other than with respect to the
Articles of Incorporation, Charter or by-laws of Company or any Company
Subsidiary) as would not have a material adverse effect on the business of the
Company and the Company Subsidiaries taken as a whole. This Agreement has been
duly executed and delivered by Company.
14
4.3 Capital Stock. On July 2, 2001, Company has authorized, issued
and outstanding capital stock as follows:
CLASS OF STOCK AUTHORIZED ISSUED OUTSTANDING TREASURY
Common 500,000 322,626 320,528 2,098
Preferred 0 0 0 0
All of the issued and outstanding shares of Company Common Stock are duly and
validly authorized and issued, fully paid and nonassessable. None of the issued
and outstanding shares of Company Common Stock have been issued in violation of
any preemptive rights. There are no (nor will there be on the Closing Date)
shares of any class of capital stock or equity securities of Company outstanding
other than Company Common Stock and there are no (nor will there be on the
Closing Date) outstanding or existing subscriptions, options, warrants,
convertible securities, preemptive rights or other agreements, commitments or
obligations relating to the issuance by Company of additional shares of any
class of capital stock or other equity securities of Company.
4.4 Subsidiaries.
(a) Attached hereto as Schedule 4.4 to the Company Disclosure
Schedule is a list, as of the date hereof, of all entities including, without
limitation, corporations, partnerships, joint ventures, and inactive
corporations, in which Company has a direct or indirect equity or ownership
interest (each of those in which the Company directly or indirectly owns a
majority of voting equity is herein referred to as a "Company Subsidiary" and
collectively, the "Company Subsidiaries"). Neither Company nor a Company
Subsidiary has any other equity investment (other than equity securities listed
on Schedule 4.24 to the Company Disclosure Schedule) in any entity other than as
set forth on Schedule 4.4 to Company Disclosure Schedule. Schedule 4.4 to the
Company Disclosure Schedule shows for each of the Company Subsidiaries: its date
and jurisdiction of incorporation or organization; each other jurisdiction in
which it is qualified or licensed to do business; its authorized, issued and
outstanding capital stock, other equity securities and other ownership
interests; and the record owners thereof and the number of shares or other
ownership interests owned by each such owner.
(b) Each Company Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and was properly established pursuant to the
regulations and procedures of either the Federal Reserve, the FDIC, and/or the
OBRE and has all necessary corporate power to own its properties and assets and
to carry on its business as now conducted. No Company Subsidiary, other than
Bank (whose powers and activities are not governed by the BHCA), engages in any
activity that is not a permissible activity under the BHCA and regulations
promulgated thereunder. Each Company Subsidiary is duly qualified to conduct its
business and is in good standing in each jurisdiction in which the nature of the
business transacted by it requires such qualification, except for any failure to
be so qualified or in good standing which would not have a material adverse
effect on the business of the Company and the Company Subsidiaries taken as a
whole. Other than as set
15
forth on Schedule 4.4 to the Company Disclosure Schedule, all of the issued and
outstanding shares of capital stock, other equity securities and other ownership
interests of the Company Subsidiaries are duly and validly authorized and
issued, are fully paid and nonassessable, and, are owned by Company or a Company
Subsidiary, free and clear of all liens, security interests, charges, claims and
encumbrances. Other than as set forth on Schedule 4.4 to the Company Disclosure
Schedule, there are no shares of any class of capital stock, other equity
securities or other ownership interests of any Company Subsidiary outstanding
and there are no outstanding or existing subscriptions, options, warrants,
convertible securities, preemptive rights or other agreements, commitments or
obligations relating to the issuance of additional shares of any class of
capital stock, other equity securities or other ownership interests of any
Company Subsidiary.
4.5 Financial Statements. Attached hereto as Schedule 4.5 to the
Company Disclosure Schedule are (i) the audited consolidated statements of
condition of Company and the Company Subsidiaries as of December 31, 1998, 1999
and 2000, and the related consolidated statements of income, stockholders'
equity and cash flows for the fiscal years 1998 through 2000 (all such financial
statements referred to above have been examined by Xxxxx, Xxxxxx and Company
LLP, independent certified public accountants, whose report thereon is included
with such financial statements), and (ii) the unaudited consolidated statement
of condition of Company and the Company Subsidiaries at March 31, 2001, as
reported in Company's Quarterly Report of Condition filed with the Federal
Reserve (collectively, the "Company Financial Statements"). The Company
Financial Statements have been prepared in conformity with generally accepted
accounting principles, or regulatory principles in the case of the Quarterly
Report of Condition, applied on a consistent basis (except for changes, if any,
required by GAAP or regulatory principles, as the case may be), and the
statements of income and cash flows present fairly, in all material respects,
the results of operations and cash flows for the respective periods covered and
the statements of condition present fairly, in all material respects, the
consolidated financial condition of Company as of their respective dates, except
for Company's interim financial statements which are subject to (i) normal
year-end adjustments which are not material, and (ii) any other adjustments
described therein. At the dates of such consolidated statements of condition,
there were no material liabilities of Company or any Company Subsidiary (actual,
contingent or accrued) which, in accordance with generally accepted accounting
principles applied on a consistent basis, were required to have been shown or
reflected in such statements of condition or the notes thereto (to the extent
notes were required), but which are not so shown or reflected.
4.6 Taxes. Except as set forth on Schedule 4.6 to the Company
Disclosure Schedule, Company and each company or joint venture where the Company
or a Company Subsidiary owns more than 50% of the equity interest of such entity
measured by both vote and value (a "Tax Subsidiary"), (i) have duly and timely
filed (taking into account any extensions received from a relevant governmental
body) all material tax returns required heretofore to have been filed by them,
and (ii) have paid in full, or have accrued on their respective books and set up
an adequate reserve for the payment of, all deferred taxes, and all taxes,
interest and penalties that have become due and payable, including taxes shown
as due on such tax returns that are attributable directly or indirectly to it,
by law (including under the Internal Revenue Code of 1986, as amended (the
"Code)) or by contract. All tax returns filed by Company or any Tax Subsidiary
were when filed and continue to be true, correct and complete in all material
respects. There are no liens with respect to taxes (other than taxes the payment
of which is not yet due and
16
payable or which are being contested in good faith by appropriate proceedings
and for which adequate reserves have been established) upon any of the
properties or assets, real or personal, tangible or intangible, or franchises,
leases or licenses of Company or any Company Subsidiary. Neither Company nor any
Tax Subsidiary is delinquent in the payment of any tax, interest or penalties
with respect to taxes. No issues have been raised in writing by any governmental
body in connection with any audit of any federal, state, local or foreign tax
returns, except as set forth on Schedule 4.6 to the Company Disclosure Schedule.
Except as set forth on Schedule 4.6 to the Company Disclosure Schedule, the tax
returns of Company and each Tax Subsidiary have been audited by the Internal
Revenue Service or relevant governmental body or are closed by the applicable
statute of limitations for all taxable years through December 31, 1996. All tax
deficiencies proposed in writing (including interest and penalties proposed to
be assessed thereon, if any) as a result of any such audits, if any, have been
paid, reserved against, settled, or, as set forth on Schedule 4.6 to the Company
Disclosure Schedule, are being contested in good faith by appropriate
proceedings. Schedule 4.6 to the Company Disclosure Schedule describes all
adjustments to the tax returns filed by Company or any Tax Subsidiary for all
open taxable years, and the resulting deficiencies, in each case, as proposed in
writing by any governmental body. Except as set forth on Schedule 4.6 to the
Company Disclosure Schedule neither Company nor any Tax Subsidiary has given or
been given a waiver or extension (or is or would be subject to a waiver or
extension given to or by any other entity) of any statute of limitations
relating to the payment of taxes, if any, for which Purchaser or its affiliates
or Company or any Tax Subsidiary may be liable. Company has not filed any
consolidated federal income tax return with an "affiliated group" (within the
meaning of Section 1504 of the Code) where Company was not the common parent of
the group. Neither Company nor any Tax Subsidiary is, or has been, a party to
any tax allocation agreement or arrangement pursuant to which it has any
contingent or outstanding liability to anyone other than Company or a Tax
Subsidiary. Company and the Tax Subsidiaries have each complied in all material
respects with all tax laws relating to tax withholding and information return
reporting and relating to notice to be given to third persons with respect to
taxes and information returns.
4.7 Material Contracts. Schedule 4.7 to the Company Disclosure Schedule
sets forth, each contract, indenture, and other binding commitment and agreement
(not including documents evidencing, governing or related to loans or credits by
Company or any Company Subsidiary or deposits or investments held by the Bank)
that provides for the receipt or expenditure of in excess of $50,000 over the
course of any twelve-month period, or which cannot be terminated without penalty
in excess of $25,000 to which Company and/or any Company Subsidiary is a party
or to which Company and/or any Company Subsidiary or any of their properties are
subject (collectively, the "Material Contracts" and each a "Material Contract").
True copies of each Material Contract are set forth on the Schedule 4.7 to the
Company Disclosure Schedule, including all material amendments and supplements
thereto. Except as disclosed on Schedule 4.7 to the Company Disclosure Schedule,
all of the Material Contracts are binding upon Company and/or Company
Subsidiaries (as applicable) and, to Company's knowledge, the other parties
thereto. Company and the Company Subsidiaries have each duly performed in all
material respects all of its obligations under each Material Contract to which
they are a party to the extent that such obligations to perform have accrued. No
breach or default under any Material Contract by Company or any of the Company
Subsidiaries or, to Company's knowledge, any other party thereto, has occurred
which has had or which would be reasonably likely to have a material adverse
effect on the business of the Company and the Company
17
Subsidiaries taken as a whole. Except as disclosed on Schedule 4.7, none of the
Material Contracts contain an express prohibition against assignment by
operation of law or a change of control of Company or a Company Subsidiary which
would preclude Purchaser or Merger Sub from exercising and enjoying all of the
rights, remedies and obligations of Company or a Company Subsidiary, as the case
may be, under such Material Contracts.
4.8 Real and Personal Property.
(a) Company or a Company Subsidiary, as the case may be, has
good and valid title to all of the tangible assets which do not constitute real
property (other than those assets disposed in the ordinary course of business of
Company or a Company Subsidiary since December 31, 2000 and other than those
assets which are not material) reflected as owned by any of them in the December
31, 2000 audited consolidated financial statements of Company, free and clear of
any material liens or other material encumbrances, except for: (i) statutory
liens for taxes not yet due, (ii) statutory liens of landlords, liens of
carriers, warehousemen, mechanics and materialmen incurred in the ordinary
course of business for sums not yet due; (iii) liens incurred or deposits made
in the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return of money bonds and similar
obligations; and (iv) liens and other encumbrances which, in the aggregate, are
not material to the business of the Company and the Company Subsidiaries taken
as a whole.
(b) Company or a Company Subsidiary, as the case may be, has
fee simple title to all of the real properties reflected as owned by any of them
on Schedule 4.8, free and clear of any material liens or other material
encumbrances, except for any minor imperfections of title and any exceptions
(the "Permitted Exceptions") set forth on Schedule 4.8 to the Company Disclosure
Schedule. Schedule 4.8 to the Company Disclosure Schedule lists (i) all real
property owned or leased by Company or any Company Subsidiary, together with the
addresses thereof, other than any real property leased solely in connection with
the operation of an automated teller machine ("ATM"), and (ii) each lease,
sublease, installment purchase or similar agreement (a "Lease") for the use or
occupancy of real property to which Company or a Company Subsidiary is a party
as a lessee (such owned or leased properties described in Parts A and C of
Schedule 4.8 to the Company Disclosure Schedule being referred to herein as
"Branch Premises"). Schedule 4.8 to the Company Disclosure Schedule contains a
copy of each Lease pertaining to Branch Premises, including all amendments
thereto. Each Lease for Branch Premises is valid and enforceable in all material
respects by Company or the respective Company Subsidiary in accordance with its
terms, except as limited by (i) bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditors' rights generally, and
(ii) general principles of equity, regardless of whether asserted in a
proceeding in equity or at law. To the Company's knowledge, there is not under
any Lease for Branch Premises any existing material default (or any event which
with notice, lapse of time or both would constitute such a material default) by
Company or any Company Subsidiary or, any other party thereto. No Lease for
Branch Premises contains any express prohibition against assignment by operation
of law or a change of control of Company or a Company Subsidiary which would
preclude Purchaser, Merger Sub or Mid America from possessing and using the
leased premises for the same purposes and upon the same rental and other terms
upon the consummation of the Merger as are
18
applicable to the possession and use by Company or a Company Subsidiary as of
the date of this Agreement. As of July 2, 2001, to the Company's knowledge, the
condition (including structural condition) of the portions of the real
properties, structures and buildings that comprise the Branch Premises is
adequate for the conduct of the business of the Company and Company Subsidiaries
as conducted therein.
(c) Company or a Company Subsidiary, as the case may be, has
fee simple title to all of the real properties other than the Branch Premises
(the "Other Real Properties") reflected as owned by any of them in the December
31, 2000 Company Financial Statements, free and clear of any material liens or
other material encumbrances, except for any minor imperfections of title and any
exceptions (the "Permitted Exceptions") set forth on Schedule 4.8 to the Company
Disclosure Schedule and except for such real property disposed of in the
ordinary course of business of Company or a Company Subsidiary since that date.
Schedule 4.8 to the Company Disclosure Schedule lists (i) all Other Real
Property owned or leased by Company or any Company Subsidiary together with the
addresses thereof and (ii) each lease, sublease, installment purchase or similar
agreement other than Leases for Branch Premises (an "Other Lease") for the use
or occupancy of real property to which Company or a Company Subsidiary is a
party, including any leases relating to the operation of ATMs. Schedule 4.8 to
the Company Disclosure Schedule contains a copy of each Other Lease, including
all amendments thereto. Each Other Lease is valid and enforceable in all
material respects by Company or the respective Company Subsidiary in accordance
with its terms, except as limited by (i) bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditors' rights generally, and
(ii) general principles of equity, regardless of whether asserted in a
proceeding in equity or at law. To the Company's knowledge, there is not under
any Other Lease any existing material default (or any event which with notice,
lapse of time or both would constitute such a material default) by Company or
any Company Subsidiary or, any other party thereto. No Other Lease contains any
express prohibition against assignment by operation of law or a change of
control of Company or a Company Subsidiary which would preclude Purchaser,
Merger Sub or Mid America from possessing and using the leased premises for the
same purposes and upon the same rental and other terms upon the consummation of
the Merger as are applicable to the possession and use by Company or a Company
Subsidiary as of the date of this Agreement.
4.9 Material Adverse Change. Since December 31, 2000, there has not
been, except for the transactions as contemplated herein, or matters related
thereto, any event or condition of any character (other than changes in (i)
laws, regulations, interpretations or GAAP affecting banks and/or their holding
companies, and (ii) changes in economic or other general conditions affecting
similarly situated banks and/or bank holding companies (including, without
limitation, changes in interest rates)) which have had or would be reasonably
expected to have a material adverse effect on the business, financial condition
or results of operations, all taken together, of the Company and the Company
Subsidiaries taken as a whole.
4.10 Investigations and Litigation. Except as set forth on Schedule
4.10 to the Company Disclosure Schedule, there is to the knowledge of the
Company no investigation by any federal, state or local governmental agency, or
any action, suit or proceeding pending or, to Company's knowledge, threatened,
against Company or any Company Subsidiary (including, without limitation, any
investigation, action, or proceeding with respect to taxes), or the assets or
business of Company or any Company Subsidiary, or against any director, officer,
employee or
19
agent of Company or any Company Subsidiary in its capacity as such a director,
officer, employee or agent, in each case which (i) has a reasonable probability
of being determined adversely to Company or any Company Subsidiary or any such
director, officer, employee or agent of Company or a Company Subsidiary in its
capacity as such a director, officer, employee or agent, and (ii) would, if so
adversely determined, involve a payment by Company or a Company Subsidiary of
more than $25,000.
4.11 Accuracy of Minute Books. The minute books of Company and each
Company Subsidiary are true, correct and complete in all material respects and
fairly and accurately reflect in all material respects all material actions of
the type (in kind and magnitude) customarily reflected in corporate minute
books, taken to this date by the respective incorporators, shareholders, and
board of directors of such corporations; provided, however, that no such action
shall be deemed omitted therefrom if otherwise disclosed to Purchaser in another
representation and warranty made by the Company in this Agreement (including by
virtue of the Company Disclosure Schedule), and provided further that if any
such actions omitted therefrom involve matters that are the subject of another
representation and warranty made by the Company in this Agreement, then the
materiality of such action shall be governed by the standard provided for
therein and in Section 6.2(a) with respect thereto.
4.12 [INTENTIONALLY LEFT BLANK]
4.13 Insurance. Company and each Company Subsidiary has in effect
insurance coverage, which in respect to amounts, types and risks insured, is
reasonably adequate for the business in which it is engaged. Schedule 4.13 to
the Company Disclosure Schedule sets forth a schedule of all material insurance
policies in effect as to Company and each Company Subsidiary. Each policy set
forth on Schedule 4.13 is in full force and effect, and all premiums with
respect thereto covering all periods up to and including the date as of which
this representation is being made have been paid (other than retrospective
premiums), and no notice of cancellation or termination has been received with
respect to any such policy. To the knowledge of Company, the insurance policies
to which Company and each Company Subsidiary is a party are sufficient for
compliance with all material requirements of law and of all material agreements
to which Company and each Company Subsidiary is a party. Except as set forth on
Schedule 4.13 to the Company Disclosure Schedule, neither Company nor any
Company Subsidiary has been refused any insurance with respect to any material
assets or operations during the last three years.
4.14 Licenses. To the Company's knowledge, Company and each Company
Subsidiary, respectively, hold all governmental registrations, licenses, permits
or franchises required to be held by it and which are material with respect to
the operation of their respective businesses, the failure to hold any of which
would have a material adverse effect on the business of the Company and the
Company Subsidiaries, taken as a whole (each, a "Permit"). Schedule 4.14 to the
Company Disclosure Schedule sets forth each such Permit.
4.15 Compliance with Law. Company and each Company Subsidiary have
conducted its business in compliance with all applicable material federal,
foreign, state and local laws, regulations and orders including, without
limitation, disclosure, usury, equal credit opportunity, equal employment, fair
credit reporting, antitrust and other laws, regulations and orders, and the
20
forms, procedures, and practices used by Company and each Company Subsidiary are
in compliance in all material respects with such laws, regulations and orders,
in each of the foregoing cases except where the failure to be in compliance
would not cause the Company or any Company Subsidiary to suffer material
liability or a material adverse effect on the business of the Company and the
Company Subsidiaries taken as a whole. Company and the Company Subsidiaries meet
or exceed all minimum Tier 1 capital, risk-based capital or other minimum
capital requirements or directives applicable to them as established by the
Federal Reserve Board, the FDIC or the OBRE.
4.16 Accuracy of Shareholder Communications. Company has provided to
Purchaser true and complete copies of all written communications sent to all
shareholders of record and all written materials sent to all shareholders of
record relating to all meetings of stockholders (whether special or annual),
during the calendar years 1999, 2000 and 2001. As of their respective dates, all
such communications were true and complete in all material respects and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
4.17 Investment Banker/Finder Fee. Except as set forth in the
engagement letter dated March 1, 2001 between Company and Xxxxx Financial, LLC
(the "Engagement Letter"), neither Company nor any Company Subsidiary nor any of
their respective affiliates has incurred or paid or will incur or pay any fee or
remuneration on behalf of the Company or any Company Subsidiary to any finder,
broker or investment banker with respect to matters provided for in this
Agreement. A copy of the Engagement Letter is set forth on Schedule 4.17 to the
Company Disclosure Schedule.
4.18 Dividends. Except as set forth on Schedule 4.18 to the Company
Disclosure Schedule, there has been, prior to the date of this Agreement, no
dividend or other distribution of assets by Company to its shareholders, whether
consisting of money, other personal property, real property or other things of
value, declared, issued or paid since December 31, 2000. All Company and Company
Subsidiary dividends or other distribution of assets to shareholders of Company
or any Company Subsidiary have been declared, issued and paid in compliance with
all applicable laws, rules and regulations of the Federal Reserve, FDIC and the
OBRE.
4.19 Employee Benefits.
(a) Schedule 4.19(a) to the Company Disclosure Schedule
identifies each and every written or, to the Company's knowledge oral,
compensation, consulting, employment, employment termination or collective
bargaining agreement, stock option, stock purchase, stock appreciation right,
life, health, accident or other benefit insurance, bonus, deferred or incentive
compensation, severance or separation or any agreement providing any
compensatory payment or benefit resulting from a change in control, vacation,
disability, profit sharing, retirement, or other employment or employee benefit
plan, policy or arrangement of any kind, oral or written, covering directors,
officers, employees, former directors or former employees of Company or any
ERISA Affiliate (as defined below) or their respective beneficiaries, including,
but not limited to, any employee benefit plans within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which Company or any
21
ERISA Affiliate maintains, to which Company or any ERISA Affiliate contributes,
or under which any present or former director, officer or employee of Company or
any ERISA Affiliate is covered or has benefit rights, and with respect to which
any liability of Company or any ERISA Affiliate exists ("Benefit Plans"). The
term "Benefit Plans" does not constitute an acknowledgment that a particular
arrangement is an employee benefit plan within the meaning of Section 3(3) of
ERISA. Without limitation of the foregoing, (i) no Benefit Plan is a
multiemployer plan within the meaning of Section 3(37) of ERISA, (ii) no Benefit
Plan is an employee pension benefit plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA, and (iii) neither Company nor any ERISA Affiliate
maintains, sponsors or has an obligation to contribute to (or has ever
maintained, sponsored or had an obligation to contribute to within the preceding
six years) any such multi-employer plan or employee pension benefit plan subject
to Title IV of ERISA or has any liability with respect to any such
multi-employer plan or employee pension benefit plan subject to Title IV of
ERISA. For the purposes of this Section 4.19(a), the terms "Company" and "ERISA
Affiliate" shall be deemed to include predecessors thereof.
(b) Each of the Benefit Plans that is intended to be a
pension, profit sharing, stock bonus, thrift, savings or employee stock
ownership plan that is qualified under Section 401(a) of the Code has been
determined by the IRS to qualify under Section 401(a) of the Code, and, to the
Company's knowledge, there exist no circumstances likely to materially adversely
affect the qualified status of any such Benefit Plan. No Benefit Plan is
currently under audit by the United States Department of Labor, the Pension
Benefit Guaranty Corporation or the IRS, and neither Company nor any ERISA
Affiliate has received written, or to the Company's knowledge, oral,
notification by one or more of such federal regulatory agencies of their
intention to audit a Benefit Plan.
(c) All accrued contributions and other payments to be made by
Company or any ERISA Affiliate to any Benefit Plan through December 31, 2000
have been made or reserves adequate for such purposes as of December 31, 2000
have been reflected in the December 31, 2000 financial statements. Neither
Company nor any ERISA Affiliate is in material default in performing any of its
respective contractual obligations under any of the Benefit Plans or any related
trust agreement or insurance contract. There are no outstanding material
liabilities of any Benefit Plan other than liabilities for benefits to be paid
to participants in such plan and their beneficiaries in accordance with the
terms of such plan and other than administrative expenses properly payable by
such Benefit Plan.
(d) Except as provided in Schedule 4.19(d) to the Company
Disclosure Schedule, there is no pending litigation or, to Company's knowledge,
any overtly threatened litigation or pending claim (other than benefit claims
made in the ordinary course) by or on behalf of or against any of the Benefit
Plans (or with respect to the administration of any of the Benefit Plans) now or
heretofore maintained by Company or any ERISA Affiliate.
(e) Company and, to the knowledge of Company, each ERISA
Affiliate and all other persons having fiduciary or other responsibilities or
duties with respect to any Benefit Plan, are and have since the inception of
each such Benefit Plan been in substantial compliance in all respects with, and
each such Benefit Plan is and has been operated substantially in accordance
with, its provisions and in substantial compliance in all respects with the
applicable
22
laws, rules and regulations governing such Benefit Plan, including the rules and
regulations promulgated by the Department of Labor, the Pension Benefit Guaranty
Corporation ("PBGC") and the IRS under ERISA, the Code or any other applicable
law, except to the extent such non-compliance would not have a material adverse
effect on the business of the Company and the Company Subsidiaries taken as a
whole. No Benefit Plan has engaged in or been a party to a non-exempt
"prohibited transaction" (as defined in Section 406 of the ERISA or 4975(c) of
the Code). All Benefit Plans which are group health plans have been operated in
substantial compliance with the group health plan continuation coverage
requirements of Section 4980B of the Code and Section 601 of ERISA.
(f) Company has delivered to Purchaser (i) a true and complete
copy of each Benefit Plan (or in the case of any Benefit Plan that is not in
written form, a complete and accurate description of the material provisions of
the Benefit Plan), including all amendments thereto, (ii) complete and current
copies of the summary plan description of each Benefit Plan that is subject to
ERISA, (iii) each trust agreement, insurance policy or other instrument relating
to the funding of any Benefit Plan, (iv) the three most recent Annual Reports
(Form 5500 series) and accompanying schedules filed with the IRS or United
States Department of Labor with respect to each Benefit Plan for which Annual
Reports are required, (v) the most recent determination letter issued by the IRS
with respect to each Benefit Plan that is intended to qualify under Section
401(a) of the Code and a complete copy of any applications pending before the
IRS or the United States Department of Labor with respect to any such Benefit
Plan, (vi) the most recent available financial statements for each Benefit Plan
that has assets, and (vii) the most recent audited financial statements for each
Benefit Plan for which audited financial statements are required by ERISA.
(g) No Benefit Plan is subject to the provisions of Part 3 of
Title I of ERISA, Section 412 of the Code or the provisions of Title IV of
ERISA. Neither Company nor any ERISA Affiliate has incurred, nor to Company's
knowledge is there a basis for believing that either Company or any ERISA
Affiliate may reasonably be expected to incur any material liability under Title
IV of ERISA in connection with any plan subject to the provisions of Title IV of
ERISA now or heretofore maintained or contributed to by it or by any ERISA
Affiliate (as that term is defined in the next sentence) of Company. The term
"ERISA Affiliate" shall mean any person which is or was a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as Company or is or was under common control (within the meaning of
Section 414(c) of the Code) with Company.
(h) Notwithstanding anything to the contrary contained herein
or in the lists and schedules hereto or the Disclosure Schedule, neither Company
nor any ERISA Affiliate has made any payments or provided any compensation or
benefits nor is a party to any agreement or any Benefit Plan that could obligate
it or any successor thereto to make any payments or provide any compensation or
benefits, the deductibility of which is limited by Section 280G or Section 4999
of the Code.
4.20 Employees. (a) Except as set forth in Schedule 4.20 to the Company
Disclosure Schedule, there are no controversies pending or threatened between,
the Company or any Company Subsidiary and any of their employees the
consequences of which could reasonably be expected to have a material adverse
effect on the business of the Company and the Company
23
Subsidiaries, taken as a whole. Neither the Company nor any Company Subsidiary
is a party to any collective bargaining agreement with respect to any of its
employees or any labor organization to which its employees or any of them
belong.
(b) Except as set forth in Schedule 4.20 to the Company
Disclosure Schedule, there is no pending litigation or to Company's knowledge
any overtly threatened litigation or pending claim against the Company or any
Company Subsidiary by an employee or former employee of the Company or any
Company Subsidiary other than benefit claims made in the ordinary course.
4.21 Environmental Matters.
(a) "Properties" as used in this Section 4.21 shall mean all
real property owned and/or operated by Company or any Company Subsidiary
(including, without limitation, real property commonly known as other real
estate owned ("OREO") but excluding all ATMs).
(b) Company and each Company Subsidiary has obtained all
material permits, licenses and other authorizations which are required under any
Environmental Laws (as hereinafter defined) with respect to the operation of
their respective businesses or the Properties (such material permits, licenses
and authorizations being hereinafter referred to as "Environmental Permits").
For purposes of this Agreement, "Environmental Laws" means all federal, state
and local laws relating to pollution or protection of the environment such as
laws relating to emissions, discharges, releases or threatened releases of
hazardous, toxic or other pollutants, contaminants, chemicals or industrial
materials, substances or wastes to the environment (including, but not limited
to, ambient air, surface water, ground water or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of hazardous, toxic or other pollutants,
contaminants, chemicals or industrial materials, substances or wastes (together
with all regulations and rules adopted thereunder). Schedule 4.21 to the Company
Disclosure Schedule contains a list of all Environmental Permits which have been
obtained by Company and each Company Subsidiary. Except as identified on
Schedule 4.21 to the Company Disclosure Schedule, Company and each Company
Subsidiary is in compliance in all material respects with all terms and
conditions of all Environmental Permits required under the Environmental Laws
and is also in compliance in all material respects with all other applicable
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in the Environmental Laws.
Schedule 4.21 to the Company Disclosure Schedule contains a complete list of all
written notices known to Company received by any previous business operating on
the Properties currently owned or operated by Company or a Company Subsidiary
within the five years preceding the date of this Agreement, alleging
noncompliance with any Environmental Law, which noncompliance has not been
completely remedied, and Company has provided Purchaser with complete copies of
all such notices known to it.
(c) There is no material, civil, criminal or administrative
suit, action, demand, claim, investigation or proceeding pending or, to the
Company's knowledge, threatened in writing against Company or any Company
Subsidiary with regard to any Properties, under or
24
pursuant to the Environmental Laws except as identified on Schedule 4.21 to the
Company Disclosure Schedule.
(d) Except as set forth on Schedule 4.21 to the Company
Disclosure Schedule, to the Company's knowledge, no release, emission or
discharge into the environment of any hazardous substance (as that term is
currently defined in the Environmental Law) or petroleum or petroleum-based
substances (as those terms are defined in the Federal Storage Tank Regulations,
40 C.F.R. Part 280) which would give rise to any material liability to the
Company under any Environmental Laws has occurred or is currently occurring in
connection with the ownership or operation of any Properties by Company or any
Company Subsidiary. Except as set forth on Schedule 4.21 to the Company
Disclosure Schedule, to the Company's knowledge there are no underground storage
tanks located on any of the Properties. Except as set forth on Schedule 4.21 to
the Company Disclosure Schedule, to the Company's knowledge none of the
Properties or any other assets of Company or any Company Subsidiary includes any
equipment, machinery, device, or other apparatus that contains in violation of
Environmental Law (i) polychlorinated biphenyls (the "PCB Equipment") that is
now or ever has been leaking, or (ii) any asbestos that is in friable condition.
(e) To the Company's knowledge, neither the Company nor any
Company Subsidiary will suffer any material liability under any Environmental
Laws as a result of the Company's or a Company Subsidiary's taking ownership
through foreclosure of any real property which serves as collateral for any loan
or indebtedness in excess of $250,000 held by Company or any Company Subsidiary.
4.22 Company Facilities. To the Company's knowledge, there are no
material investigations, proceedings, or complaints by any governmental agency
pending or, to Company's knowledge, threatened in writing against Company or any
Company Subsidiary in connection with the facilities of Company or any Company
Subsidiary (including its owned and operated automatic teller machines) under
the Americans with Disabilities Act or the ATBCB Accessibility Guidelines for
Buildings and Facilities, or any other local, state or federal law concerning
accessibility for individuals with disabilities.
4.23 Loans. (a) (a) Except as specifically set forth on Schedule 4.23
to the Company Disclosure Schedule, as of May 31, 2001: (i) neither Company nor
any Company Subsidiary is a party to any loan agreement, note or other borrowing
agreement (each, a "Borrowing Agreement") under the terms of which the obligor
is more than ninety (90) days delinquent in payment of principal or interest or,
to Company's knowledge, or otherwise in material default thereof, (ii) neither
Company nor any Company Subsidiary is a party to any Borrowing Agreement which
has been classified as "substandard," "doubtful," "loss," "other loans
especially mentioned" or any comparable classifications by Company, any Company
Subsidiary or any Governmental Authority; (iii) neither Company nor any Company
Subsidiary is a party to any Borrowing Agreement, including any loan guaranty,
with any director or officer of Company or a Company Subsidiary, or, to the
Company's knowledge, any corporation or enterprise controlling, controlled by or
under common control with any of the foregoing; and (iv) to Company's knowledge,
neither Company nor any Company Subsidiary is a party to any Borrowing Agreement
in violation in any material respect of any law, regulation or rule of any
Governmental Authority.
25
(b) All loans of Company and Company Subsidiaries are
enforceable against Company or the Company Subsidiary in accordance with the
terms thereof, and to Company's knowledge are the valid and binding obligations
of the obligors, except as limited by (i) bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditors' rights generally, and
(ii) general principles of equity, regardless of whether asserted in a
proceeding in equity or at law.
4.24 Investment Securities.
(a) Schedule 4.24 to the Company Disclosure Schedule contains
a listing, which is complete and accurate in all material respects as of May 31,
2001, of the investment securities, mortgage-backed securities and securities
held for sale of Company and the Company Subsidiaries and includes security
descriptions, CUSIP numbers, pool face values and/or par values, book values,
estimated market values and coupon rates.
(b) Except as set forth on Schedule 4.24 to the Company
Disclosure Schedule and except for pledges to secure public and trust deposits,
none of the investment securities, mortgage-backed securities and securities
held for sale of Company and the Company Subsidiaries, are subject to any
restriction, whether contractual or statutory, which materially impairs the
ability of Company freely to dispose of any of such investments at any time. All
material repurchase agreements to which Company is a party have been entered
into in the ordinary course of business and consistent with standard industry
practice, and the value of the collateral securing each such repurchase
agreement equals or exceeds the amount of the debt secured by such collateral
under such agreement. Except as set forth on Schedule 4.24 to the Company
Disclosure Schedule and except for transactions which have been entered into in
the ordinary course of business consistent with past practices, Company has
neither sold nor otherwise disposed of any assets in a transaction in which the
acquiror of such assets or other person has the right, either conditionally or
absolutely, to require Company to repurchase or otherwise reacquire any such
assets.
(c) All United States Treasury securities, obligations of
other United States Government agencies and corporations, obligations of states
of the United States and their political subdivisions, and other investment
securities classified as "held to maturity" and "available for sale" held by
Company or any Company Subsidiary, as reflected in the Financial Statements,
were classified and accounted for in all material respects in accordance with
F.A.S.B. 115 and the intentions of management.
(d) All investment securities owned by Company or any Company
Subsidiary constitute lawful and permissible investments and, to Company's
knowledge, are enforceable in all material respects in accordance with the terms
thereof, except as limited by (i) bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditors' rights generally, and
(ii) general principles of equity, regardless of whether asserted in a
proceeding in equity or at law.
4.25 Intellectual Properties. Schedule 4.25 to the Company Disclosure
Schedule sets forth a complete and correct list of all material registered
trademarks, trade names, service marks and copyrights owned by or licensed to
the Company or any Company Subsidiary for use in their
26
respective businesses, and all material licenses and other agreements relating
thereto and all agreements relating to material third party Intellectual
Property that the Company or any Company Subsidiary is licensed or authorized to
use in their businesses, including without limitation, any software licenses
(collectively, the "Intellectual Property"). Except as set forth on Schedule
4.25 to the Company Disclosure Schedule, with respect to each material item of
Intellectual Property owned by the Company or any Company Subsidiary, the
Company or such Company Subsidiary possesses all right, title and interest in
and to the item, free and clear of any material lien, claim, royalty interest or
encumbrance. With respect to each item of Intellectual Property that the Company
or such Company Subsidiary is licensed or authorized to use, the license,
sublicense, agreement or permission covering such item is legal, valid, binding,
enforceable and in full force and effect and, to the knowledge of the Company,
has not been breached by any party thereto. Neither the Company nor any Company
Subsidiary has ever received (or to the knowledge of the Company, is threatened)
any charge, complaint, claim, demand or notice alleging any interference,
infringement, misappropriation or violation with or of any intellectual property
rights of a third party (including any claims that the Company or any Company
Subsidiary must license or refrain from using any intellectual property rights
of a third party). To the knowledge of the Company, neither of the Company nor
any Company Subsidiary has infringed upon or misappropriated any intellectual
property rights of third parties and no third party has infringed upon or
misappropriated any intellectual property rights of the Company or any Company
Subsidiary).
4.26 Governmental Reports. Since January 1, 1999, Company and each
Company Subsidiary has filed each report or other filing that it was required to
file with (i) the Federal Reserve, (ii) the OBRE, (iii) the FDIC, or (iv) any
applicable state banking, insurance, securities, or other regulatory authorities
(but for purposes of this clause (iv) only as to any such reports that are
material) (together, in each case, with all exhibits thereto, and all reports,
documents and schedules filed pursuant to the requirements of any state or
federal banking laws, being the "Company Reports"). As of their respective dates
each of the Company Reports was true and correct in all material respects and
complied in all material respects with applicable statutes, rules and
regulations enforced or promulgated by the authority with which they were filed
and did not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
4.27 Reserve for Possible Loan and Lease Losses. The allowance for
possible loan and lease losses shown on Company's consolidated balance sheet as
of December 31, 2000 (plus all additions to such allowance and minus all charges
against such allowance since such date) is to Company's knowledge adequate in
all material respects, based on past loss experience and reasonably expected
potential losses, to provide for all losses (after taking into account
recoveries relating to loans, leases and other extensions of credit previously
charged off) on loans, leases and other extensions of credit outstanding as of
the date hereof.
4.28 Affiliate Transactions. As of July 2, 2001, except as set forth on
Schedule 4.28 to the Company Disclosure Schedule and except for employment
relationships, fees and compensation to directors for serving as a director (in
each case which have been entered into in the ordinary course of business),
there are no contracts or other transactions between Company or any of Company
Subsidiaries, on the one hand, and any (i) executive officer or director of
27
Company or any Company Subsidiary, (ii) record or beneficial owner of five
percent or more of the voting securities of Company or (iii) affiliate (as such
term is defined in Regulation O promulgated under the Federal Reserve Act) of
any such executive officer, director or beneficial owner, on the other hand.
4.29 Government Approvals. To Company's knowledge, no fact or condition
exists with respect to Company or any Company Subsidiary which Company has
reason to believe will prevent Purchaser from obtaining approval of the Merger,
the Bank Merger and other transactions contemplated by this Agreement by the
Governmental Authorities.
4.30 Fairness Opinion. The Board of Directors of the Company has
received the written opinion of Xxxxx Financial LLC, to the effect that, as of
the date of this Agreement, the Merger Consideration to be received by
shareholders of the Company in the Merger is fair to such shareholders from a
financial point of view.
4.31 Affiliate Letters. Each of the individuals set forth in
Schedule A has executed an Affiliate Letter in the form attached hereto as
Exhibit G.
4.32 Accuracy of Representations. The representations and warranties
made by Company in this Agreement do not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained in such representations and warranties not misleading.
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
5.1 Conduct of Business by the Company. Subject to any limitations
imposed by this Agreement, from the date of this Agreement to the Effective
Time, the Company will operate its business, and cause each Company Subsidiary
to operate its business, in the ordinary course consistent with past practices.
Subject to any limitations imposed by this Agreement, the Company will use all
reasonable efforts to preserve intact the present business organizations of the
Company and each Company Subsidiary and maintain in effect all material
licenses, permits and approvals of Governmental Authorities and agencies
necessary for the conduct of its present business. Except as otherwise
contemplated by this Agreement (Section 5.8 or otherwise) or as set forth on
Schedule 5.1 hereto or as otherwise consented to or approved by Purchaser (which
consent and approval shall not be unreasonably withheld), none of the Company or
any Company Subsidiary shall:
(a) issue, sell, purchase or redeem or commit or agree to
issue, sell, purchase or redeem any shares of its capital stock, or any
indebtedness which entitles the holder or holders thereof to exercise voting
rights in connection with the election of its directors ("Voting Debt"); or
issue or create or grant any options, warrants or rights to purchase shares of
its common stock; or issue, sell or authorize the issuance or sale of securities
of any kind convertible into or exchangeable for shares of its capital stock or
any Voting Debt; or declare, set aside or pay any dividend or make any
distribution in respect of its capital stock except for regular quarterly
dividends of $1.80 per share payable in July 2001, October 2001, and to the
extent the Closing
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Date has not occurred prior thereto, January 2002 and except for a special
dividend payable immediately prior to the Effective Time in an amount equal to
the product of $1.80 per share multiplied by a fraction, the numerator of which
is the number of days elapsed from the end of calendar quarter immediately
preceding the Merger through and including the Closing and the denominator of
which is 90; provided, however, such special dividend shall be reduced in the
event and to the extent the aggregate amount of quarterly dividends paid after
January 1, 2001 and prior to the Closing exceeds 58% of the consolidated net
income earned by the Company for the same period. The calculation of the special
dividend, and the amount thereof, shall be based on estimated net income through
the date immediately preceding the Effective Time, which estimate shall be based
on a statement of consolidated net income for the period beginning on January 1,
2001 and ending on the last day of the month immediately preceding the month in
which the Closing Date occurs (or the last day of the second month immediately
preceding the month in which the Closing Date occurs if impracticable to use the
month end immediately preceding the Closing Date), such statement of
consolidated net income to be provided by the Company three (3) business days
prior to Closing and to be prepared consistent with past practices, including as
relates to conformance with generally accepted accounting principles, assuming
consolidated net income earned for the period subsequent to such month end is
equal to a pro rata amount of average monthly earnings theretofor for the year
as calculated above.
(b) amend its Articles of Incorporation (in the case of
the Company or any Company Subsidiary), Charter (in the case of the Bank) or
Bylaws;
(c) make any increase in compensation or rate of compensation
payable or to become payable to hourly, salaried or commissioned employees or
officers, except for those which are normal, reasonable and consistent with past
practices, nor enter into any written or oral employment agreement which by its
terms cannot be terminated on thirty (30) days' notice or less without penalty,
(except as contemplated by Section 5.1(d) hereof);
(d) accrue, set aside, or pay to any officer or employee any
bonus, profit-sharing, severance, retirement, insurance, death, fringe benefit,
or other extraordinary compensation (except pursuant to pension, profit-sharing,
bonus and other fringe benefit plans, agreements and arrangements presently in
effect or in accordance with past practices) or adopt any new or amend in any
material respect any Benefit Plan, except to the extent required by law or to
maintain its qualified status intended to be so qualified under section 401(a)
of the Code;
(e) commit to purchase, sell, unwind or otherwise acquire or
dispose of any derivative or synthetic mortgage product or enter into any
interest rate swap transaction;
(f) acquire any business entity or substantially all of the
assets thereof, except as it relates to a foreclosure or other exercise of
creditors' rights in the usual and ordinary course of its business;
(g) enter into any contract or agreement to buy, sell,
exchange or otherwise deal in any tangible assets in a single transaction or a
series of related transactions in excess of $50,000 in aggregate value (it being
understood that this provision does not apply to real property which is the
subject of paragraph (s) below);
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(h) enter into any contract or agreement to buy, sell or
exchange readily marketable investment securities in excess of $50,000, except
for readily marketable United States Treasury bills or government agency
securities with a maturity of less than one year;
(i) make any one capital expenditure or any series of related
capital expenditures (other than emergency repairs and replacements), the amount
or aggregate amount of which (as the case may be) is in excess of $50,000;
(j) file any applications to relocate operations from
existing locations;
(k) create or incur any liabilities, in a single transaction
or a series of related transactions, in excess of $50,000, other than the taking
of deposits and other liabilities incurred in ordinary course of business and
consistent with past practices or as contemplated or permitted by or in
connection with this Agreement and the consummation of the Merger;
(l) create or incur or suffer to exist any mortgage, lien,
pledge, or security interest, against or in respect of any property or right of
the Company or any Company Subsidiary securing any obligation in excess of
$50,000, except for pledges or security interests given in connection with the
acceptance of repurchase agreements or government deposits or if in the ordinary
course of business consistent with past practice;
(m) make or become a party to any contract or commitment in
excess of $50,000, or renew, extend, amend or modify any contract or commitment
in excess of $50,000, except in the usual and ordinary course of business or as
otherwise contemplated or permitted by this Agreement;
(n) make any loan, loan commitment or renewal or extension
thereof to any individual, corporation, association, partnership, joint venture,
other entity, government or governmental department or agency (collectively, a
"Person"); provided, however, the Company or any Company Subsidiary may make
loans originated in the ordinary course of business consistent with past
practices and the Company's Credit Policy, Commercial Lending Policy, Real
Estate Lending Policy, Construction Lending Policy, Consumer Lending Policy and
Lending Authorities currently in effect applicable to the Company or any Company
Subsidiary, it being agreed that any loan ("Excess Loan") made to any Person in
an amount in excess of the lender's individual lending limit as stated in the
Credit Policy as currently in effect shall be made subject to committee
approval; provided, further, a representative of Purchaser shall be provided
applicable loan committee documentation at or prior to each of the Company's
Board Loan Committee and Officer Loan Committee meetings (and in any event
substantially at the time any such documentation is provided to the members of
such committee) at which any such Excess Loan would be approved consistent with
the Company loan and credit policy, and Purchaser shall have an opportunity to
object to the approval of such loan at any such meetings or within two (2)
business days thereafter;
(o) make any fixed rate loan, loan commitment or renewal or
extension with a term longer than ten (10) years except for any such loans
committed for sale on the secondary mortgage market or any variable loan, loan
commitment or renewal or extension that has a rate
30
adjustment period longer than five years or purchase, sell or exchange any loans
other than sales of any newly-originated fixed rate loan with a term longer than
ten (10) years;
(p) discharge or satisfy any mortgage, lien, charge or
encumbrance other than as a result of the payment of liabilities in accordance
with the terms thereof, or except in the ordinary course of business, if the
cost to the Company or any Company Subsidiary to discharge or satisfy any such
mortgage, lien, charge or encumbrance is in excess of $50,000, unless such
discharge or satisfaction is covered by general or specific reserves;
(q) other than any committed or contractual obligations or
liabilities included in the Company Disclosure Schedule, pay any obligation or
liability, absolute or contingent, in excess of $50,000 except liabilities shown
on the Company Financial Statements or except in the usual and ordinary course
of business or in connection with the transactions contemplated hereby;
(r) settle or agree to settle any claim, action or
proceeding, whether or not initiated in a court of law, involving an expenditure
in excess of $50,000;
(s) purchase any real estate, except for investments in
OREO as a result of foreclosure or deed in lieu of foreclosure;
(t) enter into or amend any continuing contract or series of
related contracts in excess of $50,000 for the purchase of materials, supplies,
equipment or services which cannot be terminated without cause with less than
ninety (90) days' notice and without payment of any amount as a penalty, bonus,
premium or other compensation for such termination except as contemplated or
permitted by this Agreement;
(u) enter into or amend any contract, agreement or other
transaction, with any key officer or director of the Company or any Affiliate of
such person (a "Company Insider") on terms that are less favorable to the
Company than could be obtained from an unrelated third party on an arms' length
basis; provided, however, Company shall not enter into or amend any loan with a
Company Insider;
(v) change in any material respect any basic policies and
practices with respect to liquidity management and cash flow planning,
marketing, deposit origination, lending, budgeting, profit and tax planning,
personnel practices, accounting or any other material aspect of its business or
operations, except for such changes as may be appropriate in the opinion of the
Chief Executive Officer of the Company or Bank or other appropriate senior
management of the Company or the Bank, as the case may be, in each case to
respond to then current business, market or economic conditions or as may be
required by the rules of the AICPA or the FASB or by Governmental Authorities or
by law;
(w) knowingly or intentionally default under the terms of any
agreement to which the Company or any Company Subsidiary is party, which default
individually or in the aggregate would have a material adverse effect on the
Company and the Company Subsidiaries taken as a whole;
31
(x) amend, modify, extend, renew, or terminate any lease or
sublease with respect to any real property, including with respect to ATMs, or
enter into any new lease or sublease or any other agreement for the use and
occupancy or purchase, sale or exchange of any real property.
5.2 Filings, Approvals and Other Actions. Purchaser will, as soon as
reasonably practicable, prepare and file all applications with Governmental
Authorities to obtain the necessary approvals with respect to the transactions
contemplated by this Agreement and the Company will cooperate in all reasonable
respects with Purchaser in connection therewith. Purchaser shall cause all
applications that it is responsible for filing with any Governmental Authority
in connection with the transactions contemplated hereby to comply in all
material respects with the provisions of applicable law, including without
limitation, applicable provisions of the HOLA, the Illinois Banking Act, the
Securities Act and the Exchange Act, except that Purchaser shall have no
obligation for information furnished by Company for inclusion in any such
filing. Each party will use all reasonable efforts and will cooperate with the
other parties in the preparation and filing, as soon as reasonably practicable,
of all other applications or other documents required to obtain all regulatory
approvals and/or consents from any other applicable governmental or regulatory
authorities for approval of the Merger and the Bank Merger contemplated by this
Agreement, and will provide copies of such applications, filings and related
correspondence to the other parties. Prior to filing each application, or other
document with the applicable regulatory authority, each party will provide the
other parties with a reasonable opportunity to review and comment on the
non-confidential portions of each such application or other document. Each party
will use all reasonable efforts and will cooperate in all reasonable respects
with the other party in taking all reasonable actions necessary to obtain all of
the foregoing regulatory approvals and consents at the earliest practicable
time, including participating in any required hearings or proceedings. Purchaser
will keep the Company reasonably informed with respect to the status of all
regulatory approvals and the applications therefore including providing copies
of all written comments and all written requests for additional information with
respect thereto. Subject to the terms and conditions herein provided, in
furtherance and not in limitation of the foregoing: (i) each party will use its
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, including, without limitation, in cooperation with the other
party to this Agreement in doing, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement; and (ii) neither party shall knowingly take or
permit any of its subsidiaries to take any action to materially and adversely
affect the ability to perform their obligations hereunder or which would result
in the failure to make effective as promptly as practicable the transactions
contemplated by this Agreement. In addition, at Purchaser's request, the parties
will use all reasonable efforts and cooperate in all reasonable respects with
each other to obtain any consents or waivers from third parties under any
contract or agreement to which the Company or any Company Subsidiary is a party
in order to prevent any breach or default from arising thereunder as a result of
the consummation of the Merger or the Bank Merger.
5.3 Acquisition Transactions.
(a) The Company will not, and will cause the Company
Subsidiaries and its and the Company Subsidiaries' respective officers,
directors, employees, agents and affiliates
32
(each of the foregoing other than the Company, including, without limitation,
the Company Subsidiaries, being a "Restricted Person") not to, directly or
knowingly indirectly, solicit, authorize, initiate or encourage submission of,
any proposal, offer, tender offer or exchange offer from any Person relating to
any Acquisition Transaction (as defined herein), or participate in any
negotiations in connection with or in furtherance of any Acquisition
Transaction, or furnish to any person other than Purchaser and its
representatives any non-public information with respect to the Company or any of
the Company Subsidiaries in connection with or in furtherance of any of the
foregoing. Notwithstanding the foregoing or anything elsewhere contained in this
Agreement, the Company and each Restricted Person may, in response to a written
proposal (unsolicited after the date hereof) from a third party regarding or
with respect to the possibility of a Superior Acquisition Proposal (as herein
defined), furnish information to, negotiate or otherwise engage in discussions
with, such third party, if the Board of Directors of the Company determines in
good faith, after consultation with its financial advisor and after considering
the written advice of its outside counsel, that failing to take such action
would be inconsistent with the fiduciary duties of such Board of Directors under
applicable law. The Company shall immediately cease and cause to be terminated
any existing activities, discussions, or negotiations with any parties (other
than the Purchaser) conducted heretofore with respect to any of the foregoing.
The Company shall promptly provide to Purchaser telephone notice of any proposal
or offer for an Acquisition Transaction received after the date of this
Agreement and shall promptly provide Purchaser with the name of any party
seeking after the date of this Agreement to engage in discussions or
negotiations, or requesting information, in connection with an Acquisition
Transaction, and, after receipt of a written offer or proposal from such party
with respect to such an Acquisition Transaction, a description of the material
economic terms and conditions of such offer or proposal, including without
limitation, as may be contained in any agreements or other related documents
with respect to such offer or proposal, except that neither the identity of the
party making any such offer or proposal or seeking to engage in such discussions
or negotiations or such information, nor such terms and conditions, shall be
required to be disclosed (except in a Superior Proposal Termination Notice (as
defined in Section 7.1 hereof)) to the extent the Board of Directors of the
Company determines in good faith, after consultation with its financial advisor
and after considering the written advice of its outside counsel, that such
disclosure would be inconsistent with the fiduciary duties of such Board of
Directors under applicable law.
(b) "Acquisition Transaction" means (i) a bona fide tender or
exchange offer for at least 25% of the then outstanding shares of any class of
capital stock of the Company by any person other than Purchaser or an affiliate
of Purchaser, (ii) a merger, consolidation or other business combination with
the Company or the Bank involving any Person other than Purchaser or an
affiliate of Purchaser, (iii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (whether in one transaction or a series of related
transactions) involving a substantial part of the Company's consolidated assets,
including stock of any of the Company Subsidiaries, to any person other than
Purchaser or an affiliate of Purchaser, (iv) the acquisition by any Person
(other than Purchaser or an affiliate of Purchaser) of beneficial ownership
(within the meaning of Rule 13d-3 under the Securities Exchange Act, but
including any shares that may be acquired pursuant to the exercise of any right,
option, warrant or other agreement regardless of when such exercise may occur)
of 25% or more of the then outstanding shares of any class of capital stock of
the Company, including shares of capital stock currently owned by such person,
(v) a proxy or consent solicitation made to shareholders of the Company seeking
proxies or consents in
33
opposition to any proposal relating to any of the transactions contemplated by
this Agreement that has been recommended by the Board of Directors of the
Company, or (vi) the making of a bona fide proposal to the Company or its
shareholders by public announcement or written communication, that is or becomes
publicly disclosed, to engage in one or more of the transactions described in
clauses (i) through (v) above.
(c) "Superior Acquisition Proposal" means a bona fide, written
proposal or offer unsolicited after the date hereof made by any Person (or
group) (other than Purchaser) with respect to an Acquisition Transaction on
financial terms which the Board of Directors of the Company determines in good
faith, after considering the advice of the Company's independent financial
advisor, is more favorable to the holders of the Company Common Stock than the
transactions contemplated hereby, including, without limitation, taking into
account issues with respect to financing.
(d) Notwithstanding anything to the contrary contained in this
Agreement, the Company and each Restricted Person may, in response to an inquiry
(unsolicited after the date hereof) by a third party related to an Acquisition
Transaction (or the possibility thereof), advise any such person of the
restrictions in this Section 5.3 and may furnish a copy of this Agreement to any
person making such an inquiry who the Board of Directors of the Company
determines in good faith, after consultation with its financial advisor, is
reasonably capable of making a Superior Acquisition Proposal.
5.4 Notification of Certain Matters.
(a) Each party shall give prompt notice to the other parties
of (i) the occurrence or failure to occur of any event or the discovery of any
information, which occurrence, failure or discovery has caused or would be
likely to cause any representation or warranty on its part contained in this
Agreement to be untrue, inaccurate or incomplete if remade at such time, but
only if such a failure to be true, accurate or complete would be likely to
result in the failure of a condition set forth in Section 6.2(a) or Section
6.3(a), as applicable, if the Closing were to occur at such time, and (ii) any
material failure of such party to comply with or satisfy any covenant or
agreement to be complied with or satisfied by it hereunder.
(b) From and after the date hereof to the Effective Time, the
Company shall deliver monthly updates to the Company Disclosure Schedule as of
each month-end and as of five (5) business days prior to the Effective Time,
("Disclosure Schedule Updates") to Purchaser to describe any matter hereafter
arising which, in the good faith judgment of the Company, would, if such matter
had existed as of the date of this Agreement, have rendered any representation
or warranty of the Company contained in Article IV of this Agreement materially
inaccurate or incomplete when made in this Agreement. The Company shall use its
reasonable efforts to provide the Disclosure Schedule Updates on or before the
25th day of each calendar month with respect to such matters existing at the end
of the preceding calendar month and as to which the Company then had knowledge.
If the Company is unable to so provide a particular Disclosure Schedule Update
by such 25th day notwithstanding its reasonable efforts, the Company shall
provide such particular Disclosure Schedule Update as soon as reasonably
practicable thereafter. Within twenty (20) days after receipt of any Disclosure
Schedule Update, Purchaser may exercise its right to terminate this Agreement
pursuant to Section 7.1(f) hereof, if
34
the information in such Disclosure Schedule Update together with the information
in any or all of the Disclosure Schedule Updates previously provided by the
Company demonstrates that the business of the Company and the Company
Subsidiaries, taken as a whole, has suffered or is reasonably likely to suffer,
as a result of such matters so disclosed on the Disclosure Schedule Updates, a
material adverse effect which cannot be cured prior to the Drop Dead Date (as
defined in Section 7.1 hereof); provided, however, in making the determination
as to such a material adverse effect, any event or condition which would not be
given effect in making the determination under Section 6.2(c) shall also not be
given effect with respect to the determination as to such a material adverse
effect under this Section 5.4 (b). Notwithstanding the foregoing, Purchaser
shall not be entitled to so exercise its termination right pursuant to Section
7.1(f) for so long as, following notice from Purchaser with respect to such
material adverse effect, the Company is using its good faith efforts to "cure"
any matters giving rise to such right.
5.5 Purchaser Access to Information; Confidentiality. Subject to
applicable law, legal privilege and the fiduciary duties of the Board of
Directors of the Company:
(a) Between the date hereof and the Effective Time, the
Company will afford, and will cause each Company Subsidiary to afford, to the
officers, accountants, attorneys and authorized representatives of Purchaser
reasonable access during normal business hours to the banking offices,
personnel, advisors, consultants, properties, examination reports, contracts,
commitments, books and records of the Company or the Company Subsidiaries,
including all attorneys' responses to auditors' request for information and
accountants' workpapers, whether such documents are located on the premises of
the Company or elsewhere. The Company shall furnish Purchaser with all such
statements (financial and otherwise), records, examination reports (to the
extent permitted or authorized by the Federal Reserve, FDIC or the OBRE) and
documents or copies thereof, and other information concerning the business and
affairs of the Company or the Company Subsidiaries as Purchaser shall from time
to time reasonably request. The Company further agrees to cause its accountants,
attorneys and such other persons as the parties shall mutually agree upon to
fully cooperate with Purchaser and its representatives in connection with the
right of access granted herein.
(b) The Company will promptly furnish to Purchaser (i) a copy
of each material report filed by it with any governmental authority, including
without limitation, any Company Report during the period after the date hereof
and prior to the Effective Time, and (ii) all other information concerning its
business, properties and personnel as Purchaser may reasonably request. Each
financial statement set forth in a Company Report so filed and each financial
statement provided by the Company to Purchaser pursuant to the next following
sentence, together with any notes or schedules thereto, will present fairly in
all material respects the information set forth therein for the period specified
therein (subject, in the case of unaudited statements, to normal year-end
adjustments and any other adjustments described therein or the applicable
principles with respect thereto), in each case in accordance with generally
accepted accounting principles, consistently applied (except that the unaudited
financial statements may not include all footnote disclosures required by
generally accepted accounting principles, consistently applied) during the
periods involved, or applicable regulatory principles, as the case may be, in
each case except as otherwise provided herein, stated therein or in the notes
thereto. Throughout the period after the date hereof and prior to the Effective
Time, the Company will provide to Purchaser, on or before the 25th day of each
calendar month, (i) the minutes from
35
each Board of Directors meeting of the Company and each Company Subsidiary, and
any written reports of management of the Company and each Company Subsidiary
submitted to the Board of Directors of the Company and each Company Subsidiary,
respectively, for the most recently available month, including to the extent
available, delinquency schedules, addition to loan loss reserves, and payroll
reports, and (ii) monthly financial statements of the Company and each Company
Subsidiary prepared by the Company consistent with past practices for the
preceding month. Throughout the period after the date hereof and prior to the
Effective Time, the Company will cause one or more of its designated
representatives to confer on a regular basis with representatives of Purchaser
and to report the general status of the ongoing operations of the Company and
each Company Subsidiary. During such period, the Company promptly will notify
Purchaser of any change in the ordinary course of business and will keep
Purchaser promptly and reasonably informed of such events and such additional
matters as Purchaser may reasonably request. During such period, the Company
will, subject to applicable law, consult with Purchaser before taking any steps
to comply with suggestions made by any bank regulatory authority which could
reasonably be considered to be material to the Company. All information obtained
by Purchaser at these meetings shall be treated in confidence as provided in
this Section 5.5.
(c) All information and documents to which Purchaser or
Company, as applicable, is given access pursuant to Section 5.5 and 5.6, or
otherwise hereunder, shall be subject to the confidentiality agreements executed
by Purchaser and Company dated February 27, 2001 and May 15, 2001 which shall
survive this Agreement.
5.6 Company Access to Information. Subject to applicable law,
legal privilege and the fiduciary duties of the Board of Directors of
Purchaser:
(a) Between the date hereof and the Effective Time, the
Purchaser will, subject to any restrictions under applicable law, afford to the
officers, accountants, attorneys and authorized representatives of the Company
reasonable access during normal business hours to senior executive officers and
the books and records of the Purchaser or the Purchaser Subsidiaries, whether
such documents are located on the premises of the Purchaser or elsewhere. The
Purchaser shall make available to the Company, solely for the purposes of
evaluating an investment in Purchaser's Common Stock pursuant to the terms of
the Merger, such statements (financial and otherwise), records, examination
reports (to the extent permitted or authorized by the OTS or FDIC) and documents
or copies thereof, and other information concerning the business and affairs of
the Purchaser or the Purchaser Subsidiaries as the Company may reasonably
request for purposes thereof. The Purchaser further agrees to cause its
accountants, attorneys and such other persons as the parties shall mutually
agree upon to fully cooperate with Company and its representatives in connection
with the right of access granted herein.
(b) The Purchaser will promptly furnish to the Company (i) a
copy of each report and statement filed with the SEC and each material report
filed by it with any Governmental Authority, including without limitation, any
Purchaser Report during the period after the date hereof and prior to the
Effective Time, and (ii) all other information concerning its business,
properties and personnel as Company may reasonably request. Each financial
statement set forth in a Purchaser Report so filed and each financial statement
provided by the Purchaser to, together with any notes or schedules thereto, will
present fairly in all material
36
respects the information set forth therein for the period specified therein
(subject, in the case of unaudited statements, to normal year-end adjustments
and any other adjustments described therein or the applicable principles with
respect thereto), in each case in accordance with generally accepted accounting
principles, consistently applied (except that the unaudited financial statements
may not include all footnote disclosures required by generally accepted
accounting principles, consistently applied) during the periods involved or
applicable regulatory principles, as the case may be.
Registration Statements; Shareholder Approval; and Related Matters. (a)
(a) As soon as practicable after the date hereof, Purchaser shall prepare in
proper form and file with the SEC a Registration Statement on Form S-4 covering
the Purchaser Common Stock to be issued to holders of Company Common Stock in
the Merger, which Registration Statement shall include the Proxy Statement for
use in soliciting proxies for the Special Meeting (as defined herein), and
Purchaser shall use its best efforts to cause the Registration Statement to
become effective as soon as possible under the Securities Act and remain
effective until completion of the distribution of Purchaser Common Stock in
connection with the Merger. The Company shall furnish all information concerning
it and the holders of its capital stock as the Purchaser may reasonably request
in connection with the Registration Statement.
(b) The Company will take all steps necessary to duly call,
give notice of, convene and hold a meeting of its shareholders, as soon as
practicable, but in no event later than forty-five (45) days, after the date the
SEC declares the Registration Statement effective and Purchaser has provided the
Company with reasonable evidence thereof, for the purpose of obtaining
shareholder approval of this Agreement and the Merger (the "Special Meeting");
provided, however, that the Proxy Statement shall not be mailed to the holders
of Company Common Stock until Xxxxx Financial, LLC has, if so requested by the
Board of Directors of the Company, delivered to the Board of Directors of the
Company for inclusion in the Proxy Statement an opinion, dated the mailing date,
to the effect that the Merger Consideration is fair to the shareholders of the
Company from a financial point of view in standard industry form with respect to
transactions of this nature. Subject to the fiduciary duties of the Board of
Directors of the Company, after the Board has considered the advice of outside
counsel, the Proxy Statement will include the recommendation by the Board of
Directors of the Company that the shareholders of the Company approve this
Agreement and the Merger.
(c) The Company shall furnish from time to time such
information concerning the Company as is necessary in order to cause the
Registration Statement (including the Proxy Statement contained therein),
insofar as it relates to the Company, to be prepared in accordance with
applicable law and to contain no untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, at the time it
becomes effective, in light of the circumstances under which they are made, not
misleading. The Company agrees promptly to advise the Purchaser if at any time
prior to the Special Meeting any information provided by Company for inclusion
in the Proxy Statement is or becomes incorrect, incomplete or misleading in any
material respect, and to provide to Purchaser the information needed to correct
such inaccuracy or omission. The Purchaser shall supply for inclusion in the
Registration Statement (including the Proxy Statement contained therein) such
information relating to Purchaser or Purchaser Subsidiaries as is necessary in
order to cause the Registration Statement (including the Proxy Statement
contained therein) to be prepared in accordance with applicable law and to
37
contain no untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in light of the circumstances
under which they are made, not misleading. The Purchaser agrees promptly to
advise the Company if at any time prior to the Effective Time any information in
the Registration Statement is or becomes incorrect, incomplete or misleading in
any material respect, and in that case or the case of any corrected information
furnished by the Company, to cause the Registration Statement (including the
Prospectus contained therein) to be corrected, filed with the SEC and
disseminated to the holders of the Company Common Stock as soon as practicable,
in each case as and to the extent required by law.
(d) Purchaser shall use its reasonable best efforts to have
authorized, as soon as practicable, for listing on the Nasdaq Stock Market, upon
official notice of issuance, the shares of Purchaser Common Stock to be issued
in the Merger.
5.8 Employee Benefits. From and after the date hereof and until the
Effective Time, the Company and Purchaser shall cooperate in effecting the
following treatment of the Benefit Plans, except as mutually agreed upon by
Purchaser and the Company prior to the Effective Time, and from and after the
Effective Time Purchaser shall, and shall cause its subsidiaries and affiliates,
to comply with the provision of this Section 5.8.
(a) At the Effective Time, Purchaser or any Purchaser
Subsidiary shall, to the extent required by Purchaser, be substituted for the
Company or any Company Subsidiary as the sponsoring employer under those Benefit
Plans with respect to which Company or any Company Subsidiary is a sponsoring
employer immediately prior to the Effective Time, and shall assume and be vested
with all of the powers, rights, duties, obligations and liabilities previously
vested in Company or Company Subsidiary with respect to each such plan. Except
as otherwise provided herein, each such plan and any Benefit Plan sponsored by
the Company or any Company Subsidiary shall be continued in effect by Purchaser
or any applicable subsidiary of Purchaser after the Effective Time without a
termination or discontinuance thereof as a result of the Merger, subject to the
power reserved to Purchaser or any applicable subsidiary of Purchaser under each
such plan to subsequently amend or terminate the plan, which amendments or
terminations shall be limited by and otherwise comply with the terms of such
plan and applicable law. The Company, each Company Subsidiary and Purchaser will
use all reasonable efforts (i) to effect said substitutions and assumptions, and
such other actions contemplated under this Agreement, and (ii) to amend such
plans to the extent necessary to provide for said substitutions and assumptions,
and such other actions contemplated under this Agreement.
(b) After the Effective Time, to the extent the Purchaser or a
Purchaser Subsidiary makes available one or more of its employee benefit plans
or programs (the "Purchaser Benefit Plans") to employees of the Company or any
Company Subsidiary as of the Effective Time ("Company Employees") it shall (i)
grant credit for service with the Company or any Company Subsidiary under the
Purchaser Benefit Plans with respect to the participation and vesting of such
employees in such Purchaser Benefit Plans, (ii) waive waiting periods and
preexisting condition exclusions under the Purchaser Benefit Plans to extent
that such periods are longer or restrictions impose a greater limitation than
the periods or limitations imposed under the Benefit Plans of the Company or a
Company Subsidiary, (iii) credit expenses treated as satisfying deductible and
co-pay requirements in the Benefit Plans of the Company or a Company Subsidiary
as satisfying similar requirements in the Purchaser Benefit Plans for the
38
year in which such expenses are incurred, and (iv) shall otherwise provide for
participation in such Purchaser Benefit Plans on the same terms and conditions
as other similarly-situated employees of Purchaser or Purchaser Subsidiary.
Nothing in the preceding sentence shall obligate Purchaser to provide or cause
to be provided any benefits duplicative to those provided under any Benefit Plan
continued pursuant to subparagraph (a) above. Except as otherwise provided in
this Agreement, the power of Purchaser or Company or any subsidiary of Purchaser
to amend or terminate any benefit plan or program, including any Benefit Plan,
shall not be altered or affected, but shall remain subject to any limitations
provided in such plans or under applicable law.
(c) From and after the Effective Time, and for a period of at
least one year thereafter, employees of the Company or any ERISA Affiliates
shall be eligible for severance benefits on terms no less favorable than that
policy of the Bank as of the date hereof ( a copy of which has been provided to
Purchaser), modified as set forth on Schedule 5.8(c) of the Purchaser Disclosure
Schedule.
(d) The Company and Purchaser shall take actions with respect
to certain Benefit Plans as set forth on Schedule 5.8(d) of the Purchaser
Disclosure.
(e) Nothing in Section 5.8 is intended, nor shall it be
construed, to confer any express or implied third party beneficiary rights in
any person including present or former employees of the Company or any Company
Subsidiary and any beneficiaries or dependents thereof.
5.9 D&O Indemnification.
(a) Purchaser and Merger Sub hereby agree that for six (6)
years after the Effective Time, Purchaser and the Surviving Corporation shall
cause to be maintained in effect the Company's and Company Subsidiary's current
policy of officers' and directors' liability insurance with respect to actions
and omissions occurring on or prior to the Closing Date; provided, however, that
Purchaser or the Surviving Corporation may substitute therefore policies of at
least the same coverage containing terms and conditions which are no less
advantageous to the covered persons provided that such substitution shall not
result in any lapses in coverage with respect to matters occurring on or prior
to the Effective Time; provided, further, that Purchaser or the Surviving
Corporation shall not be required to pay an annual premium in excess of 200% of
the last annual premium paid by the Company and/or the Company Subsidiaries
prior to the date hereof (which premium is disclosed in Schedule 5.9 to the
Company Disclosure Schedule) and if the Purchaser and the Surviving Corporation
are unable to obtain the insurance required by this Section 5.9, they shall
obtain as much comparable insurance as possible for an annual premium equal to
such maximum amount.
(b) From and after the Effective Time through the sixth
anniversary of the Effective Time, the Purchaser and Mid America (each an
"Indemnifying Party" and together the "Indemnifying Parties") jointly and
severally agree to indemnify and hold harmless each person who is now or has
been at any time prior to the date hereof or who becomes prior to the Effective
Time a director, officer, employee or agent of the Company or a Company
Subsidiary, or trustee of any benefit plan of the Company or any Company
Subsidiary (the "Indemnified Parties"),
39
against any costs or expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages or liabilities incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of matters involving the Company,
and/or any Company Subsidiary existing or occurring at or prior to the Effective
Time, including in connection with the transaction contemplated by this
Agreement, whether asserted or claimed prior to, at or after the Effective Time,
to the fullest extent to which the Company or the applicable Company Subsidiary
is or was permitted or required by law or their respective Articles of
Incorporation and Bylaws to indemnify such Indemnified Parties and in the manner
to which it could indemnify such parties under the Articles of Incorporation and
Bylaws of such entity, in each case as in effect on the date hereof, or under
applicable law; provided, however, that all rights to indemnification in respect
to any claim asserted or made within such period shall continue until the final
disposition of such claim.
(c) Any Indemnified Party wishing to claim indemnification
under Section 5.9(b), upon learning of any such claim, action, suit, proceeding
or investigation, shall promptly notify the appropriate Indemnifying Party
thereof, but the failure to so notify shall not relieve the Indemnifying Party
of any liability it may have to such Indemnified Party except to the extent that
such failure materially prejudices the Indemnifying Party. In the event of any
such claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) the Indemnifying Party shall have the right to
promptly and timely assume, the defense thereof with counsel reasonably
acceptable to such Indemnified Party and the Indemnifying Party shall not be
liable to such Indemnified Party for any legal expenses of other counsel or any
other expenses subsequently incurred by such Indemnified Parties in connection
with the defense thereof, except that if the Indemnifying Party elects not to,
or fails to promptly and timely, assume such defense, or to appropriately defend
such claim once assumed (except with respect to any settlement contemplated
below), the Indemnified Parties may retain counsel which is reasonably
satisfactory to Purchaser to handle such defense and the Indemnifying Party
shall pay, promptly as statements therefore are received, the reasonable fees
and expenses of all such counsel for an Indemnified Party (which may not exceed
one firm in any jurisdiction for an Indemnified Party), and notwithstanding any
assumption of such defense by the Indemnifying Party, an Indemnified Party may
retain counsel of its own choosing to monitor such defense (with the Indemnified
Party assuming any and all expenses as a result of hiring such counsel); (ii)
the Indemnified Parties will cooperate in the defense of any such matter; (iii)
the Indemnifying Party shall not be liable for any settlement effected without
its prior written consent, which consent shall not be unreasonably withheld, and
(iv) the Indemnifying Party shall not make any settlement of any such claim
without the prior written consent on an Indemnified Party, which consent shall
not be unreasonably withheld.
(d) Purchaser and Merger Sub expressly acknowledge any
exculpation, indemnification, advancement of expenses and like obligations of
the Company and Bank and any other Company Subsidiary contained in their
respective Articles of Incorporation and Articles of Association, as the case
may be, or By-Laws with respect to Indemnified Parties and hereby expressly
agree to honor in accordance with their terms all such obligations.
(e) If the Surviving Corporation or any of its successors or
assigns or any entity which is subject to this Section 5.9 or any portion hereof
(i) consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such
40
consolidation or merger, or (ii) transfers or conveys all or substantially all
of its properties and assets to any person, then, and in each such case, as a
condition to such transaction proper provision shall be made so that the
successors and assigns of the Surviving Corporation and each such continuing or
surviving corporation and each such transferee and conveyee, as the case may be,
shall expressly assume in writing, for the benefit of the persons entitled to
the benefits of this Section 5.9, the obligations set forth in this Section 5.9.
(f) The provisions of this Section 5.9 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party and his or
her heirs, beneficiaries and representatives and are in addition to any other
rights to indemnification or contribution or any similar rights (including, in
each case and without limitation, the right to advancement of expenses) such
person may have by law, contract or otherwise. Purchaser and/or the Surviving
Corporation shall pay upon request all expenses, including reasonable attorneys
fees and expenses that an Indemnified Party may incur in successfully enforcing
its rights under this Section 5.9.
5.10 Further Assurances; Form of Transaction.
(a) In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each party to this Agreement shall take all
such necessary action.
(b) If necessary to expedite the Closing of the Merger, the
Bank Merger or any other transactions contemplated by this Agreement, the
parties agree that each will take or perform any additional reasonably necessary
or advisable steps to restructure the transactions contemplated hereby provided,
however, that any such restructuring will not result in any change in the Merger
Consideration, or result in any adverse consequences to the Purchaser, the
Company or the Company Shareholders.
5.11 Environmental Matters.
(a) Purchaser has engaged Xxxxxxx Environmental Consulting,
Inc. ("Xxxxxxx") to conduct a mutually acceptable Phase II environmental
assessment (the "Phase II") of the property located at 0000 Xxxxx Xxxxx Xxxxxx
(the "2036 Property") in accordance with the Access Agreement previously
executed in connection with the transaction contemplated hereby (the "Access
Agreement") and to complete and deliver to Purchaser and the Company the Phase
II report by July 13, 2001 or as soon as practicable thereafter, but in no event
later than July 31, 2001. If any further environmental investigation, sampling,
analysis, or other follow-up work is necessary after the date hereof but prior
to July 31, 2001 in order to complete the Phase II and issue such report by July
31, 2001, then Purchaser shall engage Xxxxxxx to expeditiously complete said
work. The fees and expenses of the consultant with respect to the Phase II shall
be paid by Purchaser. Prior to the Closing, Purchaser shall keep the results of
the Phase II confidential and shall not disclose those results to any third
party other than its advisors, affiliates, lenders, and attorneys, except with
the prior written consent of the Company or to the extent required to be
disclosed to the Illinois Environmental Protection Agency ("IEPA") or other
governmental authority in order to proceed as contemplated under this Section
5.11 or otherwise required by law. If the Phase II does not discover materials
in concentrations which
41
exceed the Inhalation/Ingestion Remediation Objectives for Industrial/Commercial
Properties (35 IAC 742-Appendix B - Table B) for the materials being tested for
in accordance with the Access Agreement (the "Standard"), Purchaser agrees that
the discovery of materials being tested for in accordance with the Access
Agreement and this Section 5.11 shall not be deemed material or give rise to any
rights or remedies under this Section 5.11 or for any purposes of this Agreement
and Purchaser shall have no further rights, and Seller shall have no further
obligations, under this Section 5.11; provided, however, notwithstanding the
results of the Phase II, the Company shall use its reasonable efforts to cause
the removal and disposal of the heating oil tank and its contents and to close
in place the gasoline tank beneath the portion of the 2036 Property leased to
Xxxx Xxxxx Audio (if not previously filled with gravel), all in accordance with
the requirements therefor of any applicable Environmental Laws, as soon as
practicable, but failure to accomplish the foregoing shall not be a condition of
closing provided the Company has so used its reasonable efforts in good faith.
(b) If the Phase II discovers the presence of materials which
exceed the Standard, Purchaser shall obtain from a mutually acceptable
consultant, a good faith estimate of the cost to enter the 2036 Property in the
IEPA's Site Remediation Program 415 ILCS 5/58 et. seq. and to obtain a No
Further Remediation Letter (an "NFR Letter") pursuant to the most cost effective
commercially reasonable manner for industrial/commercial use, it being
understood that the use of the 2036 Property is intended to continue in the
manner as of the date hereof (the "Estimate"). Purchaser shall cause the
Estimate to be prepared in good faith and simultaneously delivered to the
Company and Purchaser as soon as practicable, but within ten (10) days of the
completion of the Phase II. The consultant shall take engineered barriers,
institutional controls and risk-based objectives into account when calculating
the Estimate. Purchaser expressly acknowledges that the IEPA may issue an NFR
Letter without requiring that materials which emanated from the tanks, if any,
be remediated.
(c) Upon receipt of an Estimate which exceeds $200,000 to
obtain the NFR Letter, the parties shall attempt in good faith to agree that the
Estimate is accurate under the circumstances or that another estimate amount is
appropriate. If the parties are unable to agree in good faith that the Estimate
is accurate or that another amount is appropriate, then the Company may elect to
cause the determination of the amount of costs to obtain an NFR Letter in
accordance with subsection (a) above to be determined in good faith, after a
presentation of the facts and circumstances by the parties, by a mutually
acceptable environmental consultant who did not prepare the Estimate, which
determination shall be final and binding. The Estimate, if mutually accepted by
the parties, or another estimate amount agreed to as appropriate pursuant to the
first sentence of this subsection as appropriate, or the amount determined by
the environmental consultant referred to in the immediately preceding sentence,
as the case may be, is hereinafter referred to as the "Final Estimate."
(d) If the Final Estimate is below $100,000, Purchaser agrees
that the discovery of materials being tested for in accordance with the Access
Agreement shall not be deemed material or give rise to any rights or remedies
under this Section 5.11 or for any purposes of this Agreement. If the Final
Estimate is more than $100,000 and less than $200,000, Purchaser agrees that the
discovery of materials being tested for in accordance with the Access Agreement
shall not be deemed material or give rise to any rights or remedies under this
Section 5.11 or for any purposes of this Agreement, the aggregate Merger
Consideration shall be
42
reduced in an amount by which the Final Estimate exceeds $100,000 and the
per-share amount of the Merger Consideration as contemplated hereby shall be
automatically adjusted to give effect to such adjustment (provided that the
determination of how such reduction shall be applied to the cash and/or stock
portion shall be in the Company's sole discretion).
(e) If the Final Estimate exceeds $200,000, Purchaser agrees
that the discovery of materials being tested for in accordance with the Access
Agreement shall not be deemed material or give rise to any rights or remedies of
Purchaser under this Section 5.11 or for any purposes of this Agreement, and the
Company, in its sole discretion, may thereafter elect to: (i) reduce the
aggregate Merger Consideration in an amount by which the Final Estimate exceeds
$100,000, and the per-share amount of the Merger Consideration as contemplated
hereby shall be automatically adjusted to give effect to such adjustment
(provided that the determination of how such reduction shall be applied to the
cash and/or stock portion shall be in the Company's sole discretion), or (ii)
terminate this Agreement pursuant to Section 7.1(i).
(f) If the Phase II discovers materials that exceed the
Standard, Purchaser may elect to commence to obtain an NFR Letter, and the
Company shall provide the Purchaser reasonable cooperation and access to the
2036 Property as necessary to enable Purchaser to proceed in obtaining the NFR
Letter as contemplated herein. Notwithstanding the foregoing, if Purchaser
elects to access the 2036 Property prior to Closing, it shall execute the access
agreement attached hereto as Exhibit I. In addition: (i) obtaining an NFR Letter
is not a condition to Purchaser's obligation to close the transaction
contemplated hereby, and (ii) the Company shall have no obligation to obtain an
NFR Letter, before Closing or, without limiting Purchaser's obligations below,
subsequent to Closing, with respect to the 2036 Property. If not obtained prior
to Closing, Purchaser agrees to use its best efforts to obtain the NFR Letter as
contemplated herein subsequent to the Closing, including making aggregate
expenditures (whether made before or after Closing) up to an amount equal to the
Final Estimate.
(g) From and after the Effective Time, until such time as the
NFR Letter is issued, those persons entitled to indemnification pursuant to
Section 5.9 of this Agreement shall have the right to enforce Purchaser's
obligations to use best efforts to obtain the NFR Letter under Section 5.11(f);
provided, however, nothing provided in this Section 5.11 shall obligate
Purchaser to expend an aggregate amount in excess of the Final Estimate.
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligations of Each Party. The respective
obligations of each party to effect the Merger shall be subject to the
fulfillment at or prior to and as of the Effective Time of each of the following
conditions:
(a) Shareholder Approval. The Merger shall have been
approved by the requisite vote of the shareholders of Company;
(b) Regulatory Approvals. The transactions contemplated by
this Agreement, including but not limited to, the Bank Merger, shall have been
approved by all Governmental
43
Authorities, such approvals shall be in effect and shall not contain any
conditions which would be unusual for the transactions contemplated hereby and
which would adversely affect, in any material respect, the benefits to Purchaser
of the Merger, and all applicable waiting periods in connection therewith shall
have expired or been terminated;
(c) No Injunctions, etc. No Governmental Authority or court of
competent jurisdiction shall have entered any order which is then in effect and
has the effect of making illegal or prohibiting the Merger or the Bank Merger
and no statute, rule or regulation shall have been enacted in the United States
by any Governmental Authority of competent jurisdiction which prohibits or makes
illegal the consummation of the Merger or the Bank Merger.
(d) Registration Statement. The Registration Statement shall
have been declared effective under the Securities Act and no stop order shall be
in effect with respect thereto and no proceedings for such purpose shall be
pending or threatened by the SEC.
(e) Nasdaq Listing. Purchaser's Common Stock, when issued
as Merger Consideration, shall be included for trading on Nasdaq.
6.2 Additional Conditions to Obligations of Purchaser and Merger Sub.
The obligations of Purchaser and Merger Sub to effect the Merger shall be
subject to the fulfillment on the Closing Date and as of the Effective Time of
each of the following conditions (any one or more of which may be waived by
Purchaser and Merger Sub, but only in writing):
(a) Accuracy of Representations and Warranties. All of the
representations and warranties of Company contained in this Agreement shall have
been true and correct in all material respects on the date of this Agreement and
shall remain true and correct in all material respects as of the Effective Time
as though made at and as of the Effective Time (except that representations and
warranties which are limited to a specific date shall be true and correct as of
such date only). For purposes of this Section 6.2(a), the representations and
warranties made by the Company in Sections 4.4(a), 4.6, 4.7, 4.8(c), 4.10, 4.13,
4.16, 4.19(a), (c), (d), (e), (f), and (h), 4.20(b), 4.21(b), 4.23(b), 4.24(c)
and (d), 4.25 and 4.27 shall be deemed to be true and correct in all material
respects as of the date of this Agreement, and the representations and
warranties made by the Company in Sections 4.4(a), 4.6, 4.7, 4.8(c), 4.10, 4.13,
4.16, 4.19, 4.20, 4.21, 4.22, 4.23, 4.24(c), 4.24(d), 4.25, 4.26 and 4.27 shall
be deemed to be true and correct in all material respects as of the Effective
Time and as of any such specific date, unless in each case the failure to be so
true and correct, either individually or in the aggregate, and without giving
effect to any qualification set forth in such representation and warranty as to
materiality or as to having a material adverse effect on the business, financial
condition or results of operation, all taken together, of the Company and the
Company Subsidiaries taken as a whole, has had or is reasonably likely to have
following the Effective Time a material adverse effect on the business,
financial condition or results of operation, all taken together, of the Company
and the Company Subsidiaries taken as a whole; provided, however, that in making
the determination as to the accuracy of such representations and warranties as
of the Effective Time, any event or condition which would not be given effect in
making the determination under Section 6.2(c) below shall also not be given
effect with respect to the determination of the accuracy of such representations
and warranties as of the Effective Time under this Section 6.2(a).
44
(b) Performance by Company. Company shall have performed and
satisfied in all material respects or otherwise complied in all material
respects with, or caused such performance and satisfaction of and compliance
with, all material covenants and agreements required by this Agreement to be
performed or otherwise complied with by Company or any Company Subsidiary on or
prior to the Effective Time.
(c) No Adverse Material Change. Since July 2, 2001, there has
not been, except for the transactions as contemplated herein, or matters related
thereto any event or condition of any character (other than changes in (i) laws,
regulations, interpretations or GAAP affecting banks and/or their holding
companies, and (ii) changes in economic or general conditions affecting
similarly situated banks and/or bank holding companies (including, without
limitation, changes in interest rates)) which have had or would be reasonably
expected to have a material adverse effect on the business, financial condition
or results of operations, all taken together, of the Company and the Company
Subsidiaries, taken as a whole.
(d) Officer's Certificate. There shall be delivered to
Purchaser a certificate (dated as of the Closing Date and signed by the
President of the Company on behalf of Company) stating that to the best of his
knowledge the conditions set forth in clauses (a) through (c) above have been
satisfied.
(e) Secretary's Certificate. All action required to be taken
by or on the part of Company to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby shall have been duly and validly taken by the Board of
Directors and the shareholders of Company, and Purchaser shall have received
certified copies of the resolutions evidencing such authorization.
(f) Legal Opinion. Purchaser shall have received an
opinion, dated the Closing Date, of Altheimer & Xxxx, counsel for Company,
substantially in the form of Exhibit E.
(g) Agreements. Purchaser shall have received on or prior to
the Effective Time copies of the Agreements in the forms of Exhibit A and B and
executed by Company (as applicable) and the individuals identified in Schedule A
hereto (it being understood that Shareholder Voting Agreements in the form of
Exhibit A hereto representing in the aggregate at least 51% of the issued and
outstanding shares of Company Common Stock executed by the parties identified on
the attached Schedule A and Non-Competition Agreements in the form of Exhibit B
hereto executed by the parties identified on the attached Schedule A have been
delivered simultaneously with the execution hereof).
(h) Resignations. Company shall have procured and delivered to
Purchaser the resignations of each of the directors of Company and the Company
Subsidiaries in form and substance reasonably acceptable to Purchaser (none of
which resignations shall prejudice or limit any rights such persons would
otherwise have).
(i) Consents. To the extent any material lease, license, loan
or financing agreement or other contract or agreement to which Company of any
Company Subsidiary, as the case may be, is a party requires the consent of or
waiver from the other party thereto as a result of the transactions contemplated
by this Agreement, such consent or waiver shall have been
45
obtained, unless the failure to obtain such consent or waiver would not have a
material adverse effect on the business of the Company and the Company
Subsidiaries taken as a whole.
(j) Accountant's Letter. To the extent financial information
of the Company is required to be included in the Registration Statement, Company
shall have caused to be delivered to Purchaser a letter from Company's
independent public accountants, Xxxxx, Xxxxxx and Company LLP dated the date on
which the Registration Statement shall become effective and addressed to
Purchaser and Company, with respect to Company's consolidated financial position
and results of operations, and applying described procedures which shall be
consistent with applicable professional standards for "comfort" letters
delivered by independent accountants in connection with comparable transactions
involving the acquisition of a non-public company which has not been required to
prepare financial statements in conformance with Regulation S-X promulgated by
the SEC.
6.3 Additional Conditions to Obligations of Company. The obligations of
Company to effect the Merger shall be subject to the fulfillment on the Closing
Date and as of the Effective Time of each of the following conditions (any one
or more of which may be waived by Company, but only in writing):
(a) Accuracy of Representations and Warranties. All of the
representations and warranties of Purchaser and Merger Sub contained in this
Agreement shall be true and correct in all material respects at and as of the
Effective Time, as though such representations and warranties were made at and
as of the Effective Time (except that representations and warranties which speak
as of the date of this Agreement or some other date shall be true and correct as
of such date only). For purposes of this Section 6.3(a), the representations and
warranties made by the Purchaser in Sections 3.8(b), 3.9, 3.11, 3.12, 3.13 and
3.14 shall be deemed to be true and correct in all material respects unless the
failure to be so true and correct, either individually or in the aggregate, and
without giving effect to any qualification set forth in such representation and
warranty as to materiality or as to having a material adverse effect on the
business, financial condition or results of operation, all taken together, of
the Company and the Company Subsidiaries taken as a whole, has had or is
reasonably likely to have following the Effective Time a material adverse effect
on the business, financial condition or results of operation, all taken
together, of Purchaser and the Purchaser Subsidiaries taken as a whole;
provided, however, that in making the determination as to the accuracy of such
representations and warranties as of the Effective Time, any event or condition
which would not be given effect in making the determination under Section 6.3(c)
below shall also not be given effect with respect to the determination of the
accuracy of such representations and warranties as of the Effective Time under
this Section 6.3(a).
(b) Performance by Purchaser and Merger Sub. Purchaser and
Merger Sub shall have performed and satisfied in all material respects or
otherwise complied in all material respects with, or caused such performance and
satisfaction of and compliance with, all material covenants and agreements
required by this Agreement to be performed or otherwise complied with by
Purchaser or Merger Sub on or prior to the Effective Time.
(c) No Material Adverse Change. Since July 2, 2001, there has
not been, except for the transactions as contemplated herein, or matters related
thereto any event or
46
condition of any character (other than changes in (i) laws, regulations,
interpretations or GAAP affecting banks and/or their holding companies, and (ii)
changes in economic or general conditions affecting similarly situated savings
banks and/or savings and loan holding companies (including, without limitation,
changes in interest rates) which have had or would be reasonably expected to
have a material adverse effect on the business, financial condition or results
of operations of the Purchaser and the Purchaser Subsidiaries, taken as a whole.
(d) Officers' Certificates. There shall be delivered to
Company certificates (dated as of the Closing Date and signed by the Chairman of
the Board or President of Purchaser and by the President of Merger Sub) stating
that to the best knowledge of the signers thereof, the conditions set forth in
clauses (a) through (c) above have been satisfied.
(e) Secretary's Certificate. All action required to be taken
by or on the part of Purchaser and Merger Sub to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly and validly taken and
Company shall have received certified copies of resolutions evidencing such
authorization.
(f) Legal Opinion. Company shall have received an opinion,
dated the Closing Date of Vedder, Price, Xxxxxxx & Kammholz, in substantially
the form of Exhibit F.
ARTICLE VII
TERMINATION OF AGREEMENT
7.1 Termination. This Agreement may be terminated prior to
the Effective Time:
(a) by mutual consent of the Boards of Directors of Purchaser
and Company; or
(b) by either Purchaser or Company, if any of the conditions
to such party's obligation to consummate the transactions contemplated in this
Agreement shall have become impossible to satisfy if, but only if, such party
has used its reasonable best efforts and acted in good faith in attempting to
satisfy all such conditions in its control and if such party is not then in
material breach of this Agreement; or
(c) by the Board of Directors of Purchaser if (i) there has
been a breach in any material respect by Company of any representation or
warranty or in the observance of its covenants and agreements contained in this
Agreement (and such breach would result in the failure of the conditions set
forth in Section 6.2(a) or Section 6.2(b)) of which notice has been given in
writing by Purchaser to the Company and that has not been cured by the Company
within thirty (30) days of receipt of such notice (provided, however,
notwithstanding the providing of any such notice and lapse of time Purchaser
shall not have the option to so terminate this Agreement pursuant to this
Section 7.1(c)(i) until two (2) business days prior to the Drop Dead Date, if
and so long as following such notice the Company is using its good faith efforts
to cure such breach prior to the Drop Dead Date); or (ii) the Effective Time has
not occurred on or prior to March 31, 2002 (the "Drop Dead Date"), without
material fault on the part of Purchaser; or (iii) a public announcement with
respect to a proposal, plan or intention to
47
effect an Acquisition Transaction shall have been made by any Person other than
Purchaser or an affiliate of Purchaser and the Board of Directors of Company
shall have (A) failed to publicly reject or oppose such proposed Acquisition
Transaction within ten (10) business days of the public announcement of such
proposal, plan or intention or (B) in response thereto modified or amended in a
manner materially adverse to Purchaser or withdrawn its recommended approval of
this Agreement and the Merger to the Company's shareholders; or (iv) the Board
of Directors of the Company shall fail to recommend in the Company's Proxy
Statement when mailed that the shareholders of the Company approve this
Agreement and the Merger; or
(d) by the Board of Directors of Company if (i) there has been
a breach in any material respect by Purchaser of any representation or warranty
or in the observance of its covenants and agreements contained in this Agreement
(and such breach would result in the failure of the conditions set forth in
Section 6.3(a) or Section 6.3(b)) of which notice has been given in writing by
the Company to Purchaser and that has not been cured by Purchaser within thirty
(30) days of receipt of such notice (provided, however, notwithstanding the
providing of any such notice and lapse of time the Company shall not have the
option to so terminate this Agreement pursuant to this Section 7.1(d)(i) until
two (2) business days prior to the Drop Dead Date, if and so long as following
such notice the Purchaser is using its good faith efforts to cure such breach
prior to the Drop Dead Date); (ii) the Effective Time has not occurred on or
prior to the Drop Dead Date, without material fault on the part of Company, or
(iii) the Company receives a proposal or offer for an Acquisition Transaction
which constitutes a Superior Acquisition Proposal, provided, however, that the
Company shall not be permitted to terminate this Agreement pursuant to this
clause (d)(iii) unless (x) the Company has provided Purchaser with five (5)
business days' prior written notice (or, if there are less than five (5)
business days remaining prior to the Closing, written notice prior to the
Closing) (any such required written notice being a "Superior Proposal
Termination Notice") of its intent to so terminate this Agreement (together,
with a summary of the terms of such Superior Acquisition Proposal); (y) at the
expiration of such five (5) business day period (or such lesser period as
provided above), the Board of Directors of the Company continues to believe such
proposal or offer for an Acquisition Transaction constitutes a Superior
Acquisition Proposal; and (z) the Company accepts such Superior Acquisition
Proposal in connection with the termination of this Agreement;
(e) by the Board of Directors of either Purchaser or Company
at any time after the date that (i) the shareholders of Company fail to approve
this Agreement and the Merger by an affirmative vote of the holders of the
majority of the outstanding shares of the Company Common Stock at a meeting
actually held for such purpose or if the Company, in willful violation of its
obligations hereunder, has failed to hold a meeting for such purpose at least
two (2) days prior to the Drop Dead Date; or (ii) if any one of the Governmental
Authorities has denied approval for the Merger and such denial has become final
and nonappealable, provided, neither party may exercise its termination right
under this Section 7.1(e)(ii) unless it has used its reasonable best efforts and
acted in good faith in attempting to obtain such approvals (including any
applicable appeals);
(f) by the Board of Directors of Purchaser in accordance
with and subject to, and under the circumstances described in, Section 5.4(b);
48
(g) by the Board of Directors of Company pursuant to written
notice given under the circumstances and subject to the conditions set forth in
Section 2.1(b);or
(h) notwithstanding any exercise by Purchaser of its option to
provide additional consideration under Section 2.1(b), by the Board of Directors
of the Company if the condition set forth in Section 6.3(c) is not satisfied at
the time such option is exercised or at any time thereafter.
(i) by the Board of Directors of the Company pursuant to
written notice given under the circumstances and subject to the conditions set
forth in Section 5.11.
7.2 Effect of Termination.
(a) If this Agreement is terminated for any reason, no party
shall have any further liability hereunder to the other parties or otherwise
with respect to any claims related to the matters or transactions contemplated
hereby, provided, however, that notwithstanding the foregoing, (i) this Section
7.2(a) shall not preclude liability from attaching to a party who has caused the
termination hereof by willful misconduct in violation of this Agreement (or, in
such circumstances, prevent the other party from pursuing its rights and
remedies with respect to such willful misconduct); and (ii) the termination of
this Agreement shall not affect the provisions of this Agreement in Section 5.7
(with respect to confidentiality), this Section 7.2 or Section 8.1 (with respect
to the payment of expenses).
(b) If this Agreement is terminated by the Purchaser pursuant
to Section 7.1(c)(iii), 7.1(c)(iv), or 7.1(e)(i), or by the Company pursuant to
Section 7.1(d)(iii) then in such case Company shall pay to Purchaser in
immediately available funds not later than two (2) business days after demand
therefor an amount equal to Three Million Dollars ($3,000,000) (the "Termination
Payment"); provided, however, Purchaser shall not entitled to the Termination
Payment pursuant to this Section 7.2(b), for a termination pursuant to Section
7.1(e)(i) in the event the Company has used its reasonable best efforts and
acted in good faith in attempting to obtain such shareholder approval of this
Agreement and the Merger.
(c) If this Agreement is terminated by the Purchaser pursuant
to Section 7.1(c)(i), then in such case Company shall pay the Purchaser in
immediately available funds not later than two (2) business days after demand
therefor an amount equal to all expenses incurred by Purchaser in connection
with this Agreement or the Merger.
(d) If this Agreement is terminated by the Company pursuant to
Section 7.1(d)(i), then in such case Purchaser shall pay the Company in
immediately available funds not later than two (2) business days after demand
therefore an amount equal to all expenses incurred by Company in connection with
this Agreement or the Merger
(e) Other than in connection with fraud or bad faith by the
Company, the right of Purchaser to receive the Termination Payment under
circumstances where Purchaser could receive the Termination Payment is the
exclusive remedy of Purchaser for any damages suffered as a result of the
failure of the Merger to occur and the Company shall have no other duty to
Purchaser or Merger Sub on account of the failure to the Merger to occur.
49
ARTICLE VIII
GENERAL PROVISIONS
8.1 Expenses. Except as otherwise expressly provided herein, each party
shall pay its own expenses incurred in connection with the transactions
contemplated by this Agreement, and the parties agree that the proper allocation
of the fees and out-of-pocket expenses listed below is as indicated:
(a) all fees and disbursements of their counsel, advisors and
accountants shall be paid by Purchaser and Merger Sub;
(b) all fees and disbursements of its counsel, investment
bankers, consultants and accountants shall be paid by Company; and
(c) filing fees and out-of-pocket expenses in connection with
securing approval of the transactions contemplated in this Agreement by all the
Applicable Governmental Authorities and any other banking or other regulatory
authority shall be paid by Purchaser.
(d) taxes on the transfer of real property, if any, relating
to the transactions contemplated by this Agreement shall be paid by the party
designated in the appropriate statute or ordinance.
8.2 Publicity. Purchaser and Merger Sub, on the one hand, and Company,
on the other hand, shall coordinate all publicity relating to the transactions
contemplated by this Agreement and, except as otherwise required by law, neither
party shall issue any press release, publicity statement or other public notice
relating to this Agreement or any of the transactions contemplated hereby
without obtaining the prior consent of the other, which consent shall not be
unreasonably withheld; provided, however, that Purchaser and Company shall issue
a press release promptly following the execution of this Agreement, the form and
content of which shall be substantially to the effect of Exhibit H attached
hereto; provided, further, the Purchaser and Company shall agree to a mutually
agreeable form of notice to the employees of Company and the Company
Subsidiaries promptly following the execution of this Agreement.
8.3 Assignment. Neither this Agreement nor any rights, duties or
obligations hereunder shall be assignable by Company, Purchaser or Merger Sub in
whole or in part, and any attempted assignment in violation of this prohibition
shall be null and void. This Agreement shall, however, be assignable by
Purchaser to a wholly-owned affiliate of Purchaser without the consent of
Company; provided, however, that Purchaser shall remain fully liable hereunder
and such assignee shall agree to be bound by all of Purchaser's obligations
hereunder. Subject to the foregoing, all of the terms and provisions hereof
shall be binding upon, and inure to the benefit of, the successors and assigns
of the parties hereto.
8.4 Governing Law. This Agreement is made and shall be governed by and
construed in accordance with the laws of the State of Illinois (without regard
to the application of that state's conflict-of-laws provisions which could
result in the application of the law of any other State to this Agreement and
the transactions contemplated hereby) and of the United States of America.
50
8.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same instrument
with the same force and effect as though all of the parties had executed the
same document.
8.6 Amendment. Any of the terms or conditions of this Agreement may be
waived, amended or modified in whole or in part at any time to the extent
authorized by applicable law, by a writing signed by Company, Purchaser and
Merger Sub; provided, however, that following approval by the shareholders of
Company of the Merger no such amendment or modification shall be made without
the further approval of such shareholders if such amendment or modification
would violate Section 11.05 of the IBCA.
8.7 Non-Survival. The respective representations and warranties of the
parties hereto shall not survive the Effective Time but shall terminate as of
such time.
8.8 Notice. Any notice of communication required or permitted hereunder
shall be sufficiently given it in writing and when delivered in person, by
nationally recognized overnight air courier or, by confirmed facsimile or by
certified or registered mail, postage prepaid, as follows:
If to Purchaser or Merger Sub, addressed to:
MAF Bancorp, Inc.
55th &. Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx,
Chairman and Chief Executive Officer
Facsimile: (000) 000-0000
With a copy addressed to:
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Xxxxxx X. XxXxx, XX, Esq.
Facsimile: (000) 000-0000
If to Company, addressed to:
Mid Town Bancorp, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx,
President and Chief Executive Officer
Facsimile: (000) 000-0000
51
With a copy addressed to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
8.9 Performance. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed by the parties in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to seek such an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having competent jurisdiction, this being in addition
to any other remedy to which it is entitled at law or in equity.
8.10 Entire Agreement; Construction. This Agreement (including the
Company Disclosure Schedule, the Purchaser Disclosure Schedule and any such
exhibits hereto and thereto and that certain Access Agreement among the parties
dated July 2, 2001, and any supplemental Access Agreement entered into by the
parties pursuant to Section 5.11) and the Confidentiality Agreements referenced
in Section 5.5(c) constitute the entire agreement among the parties hereto with
respect to the matters contained herein and therein and supersede all prior
agreements and understandings between the parties with respect thereto. Any
matter that is disclosed in any portion of the Company Disclosure Schedule is
deemed to have been disclosed for the purposes of all relevant provisions of
this Agreement (including as contemplated by the cover letter of the Company
Disclosure Schedule). Neither the inclusion of any item in a Disclosure Schedule
nor the use of any dollar amounts herein or therein is evidence of the
materiality of such item or for the purposes hereof or thereof. The parties have
and make no representations or warranties or agreements with or to each other,
except as contained in this Agreement and the Confidentiality Agreements, and
any and all prior agreements or representations and warranties made by any party
or its representatives, whether orally or in writing, are deemed to have been
merged into this Agreement, it being intended that no such prior agreements or
representations or warranties shall survive the execution and delivery of this
Agreement. Each party acknowledges that it has conducted an independent due
diligence investigation in making its determination to enter into the
transaction contemplated by this Agreement. No party shall assert in any respect
with respect to any of such party's rights or remedies under this Agreement any
matter which constitutes a breach of a representation and warranty or which
could rise to a failure of a closing condition in Section 6.2(a) or 6.3(a), as
the case may be, and as to which such party has knowledge (to the extent and
severity as known or as to which it is known by such party that such matter
would be reasonably likely to occur as of the date of this Agreement) as of the
date of this Agreement. As used in this Agreement, the word "including" and
words of similar import means "including, without limitation" and the words
"herein" and "hereof" mean "in this Agreement" and "of this Agreement,"
respectively.
52
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
MAF BANCORP, INC.
/s/ XXXXX X. XXXXXXX
----------------------------------------------
By: Xxxxx X. Xxxxxxx
Its: Chairman and Chief Executive Officer
LINCOLN ACQUISITION CORP.
/s/ XXXXX X. XXXXXXX
----------------------------------------------
By: Xxxxx X. Xxxxxxx
Its: President
MID TOWN BANCORP, INC.
/s/ XXXX X. XXXXXX
----------------------------------------------
By: Xxxx X. Xxxxxx
Its: President and Chief Executive Officer
53
SCHEDULE A
----------
================================================================================
VOTING AGREEMENTS
-----------------
--------------------------------------------------------------------------------
--------------------------------------------- ----------------------------------
PARTY NUMBER OF SHARES
----- ----------------
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
RAM Partners, L.P. 42,131
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
Financial Partners, L.P. 30,004
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
XXX Investment Partners, L.P. 43,730
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
Zemans Partners, L.P. 63,000
------
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
Total: 178,865
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
NON-COMPETITION AGREEMENTS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Xxxxx Xxxxxxxxx
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Xxxx Xxxxxx
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Miles Xxxxxx
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxx
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
AFFILIATE LETTERS
-------------------------------------------------------------------------------
Xxxxx Xxxxxxxxx
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Xxxxxx Xxxxxx
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Xxxx Xxxxxx
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Xxxxxx Xxxxxx
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Miles Xxxxxx
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxx
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
RAM Partners, L.P.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Financial Partners, L.P.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
XXX Investment Partners, L.P.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Xxxxx Partners, L.P.
===============================================================================
S-1
EXHIBIT A
FORM OF SHAREHOLDER VOTING AGREEMENT
SHAREHOLDER VOTING AGREEMENT
SHAREHOLDER VOTING AGREEMENT (this "Voting Agreement"), dated as of July 2,
2001, by and among MAF Bancorp, Inc., a Delaware corporation ("Purchaser"),
Lincoln Acquisition Corp., an Illinois corporation and wholly-owned subsidiary
of Purchaser ("Merger Sub"), and the undersigned, solely in its capacity as a
shareholder, (the "Shareholder") of Mid Town Bancorp, Inc., an Illinois
corporation (the "Company").
RECITALS
WHEREAS, concurrently herewith, Purchaser, Merger Sub and the Company
entered into an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"), pursuant to which Purchaser agreed to acquire the common
stock, par value $2.50 per share (the "Common Stock"), of the Company pursuant
to a merger (the "Merger") of Merger Sub with and into the Company. Capitalized
terms used but not separately defined herein shall have the meanings given to
such terms in the Merger Agreement.
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Purchaser has required that Shareholder agree, and Shareholder has
agreed, among other things, to vote in favor of the Merger with respect to the
number of shares of Common Stock of such Shareholder set forth hereto, and any
shares hereafter acquired (referred to herein as the "Shares"), on the terms and
conditions provided for herein.
WHEREAS, the Board of Directors of the Company has approved this Voting
Agreement, the Merger Agreement and the transactions contemplated hereby and
thereby.
NOW, THEREFORE, in consideration of the premises and mutual covenants,
representations, warranties and agreements contained herein, Purchaser, Merger
Sub and Shareholders agree as follows:
1. Shareholder hereby agrees that at any meeting of the shareholders of the
Company however called, and in any action by written consent of the shareholders
of the Company, such Shareholder shall vote the Shares (a) in favor of the
Merger and the transactions contemplated by the Merger Agreement; (b) against
any Acquisition Transaction; (c) against any action or agreement which would
result in a material breach of any covenant, representation or warranty or any
other obligation of the Company under the Merger Agreement; and (d) against any
action or agreement which would impede or interfere with the transactions
contemplated by the Merger Agreement.
2. Shareholder agrees not to vote or execute any written consent to rescind
or amend in any manner any prior vote or written consent to approve or adopt the
Merger Agreement and the transactions contemplated thereby.
3. Each party shall execute and deliver such additional instruments and
documents and shall take such further action as may be necessary to effectuate
and comply with their respective obligations under this Voting Agreement.
4. Prior to the Effective Time (as defined in of the Merger Agreement),
Shareholder will not sell, assign, transfer or otherwise dispose of, or permit
to be sold, assigned, transferred or otherwise disposed of, any Shares owned of
record or beneficially by such Shareholder, whether such shares of Common Stock
are owned of record or beneficially by such Shareholder on the date of this
Voting Agreement or are subsequently acquired, except (i) for transfers by will
or operation of law (in which case this Voting Agreement shall bind the
transferee); (ii) for transfers to an organization qualified under Section
501(c)(3) of the U.S. Internal Revenue Code (so long as the transferee agrees to
be bound by this Voting Agreement); (iii) for transfers pursuant to a
distribution made under and pursuant to the terms of any trust agreement or
partnership agreement (in which case this Voting Agreement shall bind the
transferee) or (iv) as Purchaser may otherwise agree in writing.
5. Shareholder represents that (i) Shareholder has the complete and
unrestricted power and the unqualified right to enter into and perform the terms
of this Voting Agreement and the Voting Agreement does not conflict with the
terms of any agreement, understanding or document to which Shareholder is a
party; (ii) this Voting Agreement constitutes a valid and binding agreement with
respect to Shareholder, enforceable against such Shareholder in accordance with
its terms; and (iii) such Shareholder has sole and unrestricted voting power
with respect to such Shares.
6. It is a condition to the effectiveness of this Voting Agreement that the
Merger Agreement shall have been executed and delivered.
7. Subject to Section 6 above, notwithstanding anything herein to the
contrary, this Voting Agreement shall remain in full force and effect until and
shall terminate upon the earlier of (i) the consummation of the Merger; or (ii)
the termination of the Merger Agreement in accordance with Article VII of the
Merger Agreement.
8. The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Voting Agreement were not performed by
the Shareholder in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that Purchaser shall be entitled to seek such
an injunction or injunctions to prevent breaches of this Voting Agreement by the
Shareholder and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having competent jurisdiction, this
being in addition to any other remedy to which it is entitled at law or in
equity.
9. Notices may be provided to Purchaser in the manner specified in Section
8.8 of the Merger Agreement.
10. This Voting Agreement is to be governed by and construed in accordance
with the laws of the State of Illinois. If any provision hereof is deemed
unenforceable, the enforceability of the other provisions shall not be affected.
-2-
IN WITNESS WHEREOF, this Voting Agreement has been executed by or on behalf
of each of the parties hereto, all as of the date first above written.
MAF BANCORP, INC. LINCOLN ACQUISITION CORP
By: ____________________________ By: ____________________________
Name: ______________________ Name: ______________________
Title: _____________________ Title: _____________________
SHAREHOLDER: Number of Shares of Common Stock, subject
to this Voting Agreement:
________________________________ ___________
____________________
-3-
