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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MUTUAL SAVINGS BANK,
OV CORP.
AND
FIRST NORTHERN CAPITAL CORP.
DATED AS OF FEBRUARY 21, 2000
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TABLE OF CONTENTS
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RECITALS 1
ARTICLE I
DEFINITIONS 1
1.1 Acquisition 2
1.2 Acquisition Proposal 2
1.3 Affiliate 2
1.4 Affiliate Letter 3
1.5 Agreement 3
1.6 Announcement 3
1.7 Bank 3
1.8 Buildings 3
1.9 CERCLA 3
1.10 Closing 3
1.11 Closing Date 3
1.12 Code 3
1.13 Confidentiality Agreement 3
1.14 Contracts 3
1.15 Control 3
1.16 Disclosure Schedules 4
1.17 Employee Benefit Plans 4
1.18 Environmental Claim 4
1.19 Environmental Laws 4
1.20 Environmental Permits 4
1.21 Equipment 4
1.22 ERISA 5
1.23 Exchange Act 5
1.24 FDIC 5
1.25 FHLB of Chicago 5
1.26 First Northern 5
1.27 First Northern Closing Certificate 5
1.28 First Northern Common Stock 5
1.29 First Northern Counsel Opinion 5
1.30 First Northern Disclosure Schedule 5
1.31 First Northern Executives 5
1.32 First Northern Existing Contracts 5
1.33 First Northern Existing Employment Agreements 5
1.34 First Northern Existing Indebtedness 6
1.35 First Northern Existing Liens 6
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1.36 First Northern Existing Litigation 6
1.37 First Northern Existing Plans 6
1.38 First Northern Meeting 6
1.39 First Northern Real Estate 6
1.40 First Northern Replacement Employment Agreement 6
1.41 First Northern Shareholders 6
1.42 First Northern Stock Option Plans 7
1.43 First Northern Stock Options 7
1.44 First Northern Subsidiaries 7
1.45 Fraction Payment 7
1.46 Hazardous Materials 7
1.47 HOLA 7
1.48 Indebtedness 7
1.49 Investment Securities 7
1.50 IRS 7
1.51 Knowledge 7
1.52 Law 8
1.53 Lien 8
1.54 Material Adverse Effect 8
1.55 Material Contract 8
1.56 Merger 9
1.57 Merger Corp 9
1.58 Mutual 9
1.59 Mutual Closing Certificate 9
1.60 Mutual Counsel Opinion 9
1.61 Mutual Disclosure Schedule 9
1.62 Mutual Existing Contracts 9
1.63 Mutual Existing Litigation 9
1.64 Mutual Real Estate 9
1.65 NASDAQ/NMS 10
1.66 OTS 10
1.67 Permits 10
1.68 Permitted Liens 10
1.69 Person 10
1.70 Proxy Statement 10
1.71 Registration Statement 10
1.72 Regulatory Approvals 10
1.73 Release 10
1.74 SAIF 10
1.75 SEC 10
1.76 Securities Act 10
1.77 Section 180.0622(2)(b) 11
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1.78 Stock Option Agreement 11
1.79 Subsidiary 11
1.80 Survivor 11
1.81 Survivor Common Stock 11
1.82 WBCL 11
1.83 Wisconsin Agency 11
1.84 Year 2000 Compliant 11
1.85 Other Defined Terms 12
ARTICLE II
THE MERGER 13
2.1 The Merger 13
2.2 Effect of the Merger 13
2.3 Effective Time 13
2.4 Articles and Bylaws of Survivor 14
2.5 Charter and Bylaws of the Bank; Offices of 14
the Bank
2.6 Directors and Officers of Survivor 14
2.7 Capital Stock of Merger Corp. 14
2.8 Conversion of First Northern Common Stock 15
2.9 Exchange of First Northern Certificates 19
2.10 Reorganization 22
2.11 No Dissenting Shares 23
2.12 Meeting of First Northern Shareholders 23
2.13 Liquidation Account and Sub-Accounts 23
2.14 Restructuring 24
2.15 Anti-Dilution Provisions 25
2.16 Alternative Structure 25
ARTICLE III
OTHER AGREEMENTS 25
3.1 Confidentiality; Access 25
3.2 Disclosure Schedules 26
3.3 Duties Concerning Representations 27
3.4 Deliveries of Information; Consultation 27
3.5 Directors' and Officers' Indemnification 28
and Insurance
3.6 Letters of Accountants 29
3.7 Legal Conditions to Merger 29
3.8 Stock Listings 30
3.9 Announcements 30
3.10 Best Efforts 30
3.11 Employee And Managerial Matters 30
3.12 Employee Benefit Matters 31
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3.13 Conformance to Reserve Policies 32
3.14 Conduct of Mutual's Business and Authorization,
Reservation and Listing of Common Stock 32
3.15 Affiliates 33
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FIRST NORTHERN 33
4.1 Organization and Qualification; Subsidiaries 33
4.2 Articles of Incorporation and Bylaws 34
4.3 Capitalization 34
4.4 Authorization: Enforceability 35
4.5 No Violation or Conflict 35
4.6 Title to Assets; Leases 35
4.7 Litigation 36
4.8 Securities and Banking Reports; Books and Records 36
4.9 Absence of Certain Changes 37
4.10 Buildings and Equipment 38
4.11 First Northern Existing Contracts 38
4.12 Investment Securities 38
4.13 Contingent and Undisclosed Liabilities 38
4.14 Insurance Policies 38
4.15 Employee Benefit Plans 39
4.16 No Violation of Law 40
4.17 Brokers 40
4.18 Taxes 41
4.19 Real Estate 41
4.20 Governmental Approvals 42
4.21 No Pending Acquisitions 42
4.22 Labor Matters 42
4.23 Indebtedness 43
4.24 Permits 43
4.25 Disclosure 43
4.26 Information Supplied 43
4.27 Vote Required 44
4.28 Opinion of Financial Advisor 44
4.29 Environmental Protection 44
4.30 Year 2000 Compliant 45
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MUTUAL AND MERGER CORP.
45
5.1 Organization and Capitalization; Business 45
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5.2 Authorization; Enforceability 46
5.3 No Violation or Conflict 46
5.4 Litigation 46
5.5 Brokers 47
5.6 Governmental Approvals 47
5.7 Disclosure 47
5.8 Information Supplied 47
5.9 Opinion of Financial Advisor 47
5.10 Cash Payment 47
5.11 Compliance with Laws 48
5.12 Consummation 48
5.13 Banking Reports; Books and Records 48
5.14 Absence of Certain Changes 48
5.15 Mutual Existing Contracts 49
5.16 Contingent and Undisclosed Liabilities 49
5.17 Taxes 49
5.18 Real Estate 50
5.19 No Pending Acquisitions 50
5.20 Environmental Protection 51
5.21 Year 2000 Compliant 51
ARTICLE VI
CONDUCT OF BUSINESS BY FIRST NORTHERN PENDING THE MERGER 52
6.1 Carry on in Regular Course 52
6.2 Use of Assets 52
6.3 No Default 52
6.4 Insurance Policies 52
6.5 Employment Matters 52
6.6 Contracts and Commitments 52
6.7 Indebtedness; Investments 53
6.8 Preservation of Relationships 53
6.9 Compliance with Laws 53
6.10 Taxes 53
6.11 Amendments 53
6.12 Issuance of Stock; Dividends; Redemptions 53
6.13 Policy Changes 53
6.14 Acquisition Transactions 53
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER 54
7.1 Conditions to Each Parties Obligations to 54
Effect the Merger 55
7.2 Conditions to Obligation of Mutual
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7.3 Conditions to Obligation of First Northern 57
ARTICLE VIII
TERMINATION; MISCELLANEOUS 59
8.1 Termination 59
8.2 Rights on Termination; Waiver 59
8.3 Survival of Representations, Warranties and
Covenants 60
8.4 Entire Agreement; Amendment 60
8.5 Expenses 60
8.6 Governing Law 61
8.7 Assignment 61
8.8 Notices 61
8.9 Counterparts; Headings 62
8.10 Interpretation 62
8.11 Severability 62
8.12 Specific Performance 62
8.13 No Reliance 62
8.14 Further Assurances 62
EXHIBITS
Exhibit 1 - Form of Affiliate's Letters
Exhibit 2 - Form of First Northern Closing Certificate
Exhibit 3 - Form of First Northern Counsel Opinion
Exhibit 4 - Form of First Northern Replacement Employment Agreement
Exhibit 5 - Form of Mutual Closing Certificate
Exhibit 6 - Form of Mutual Counsel Opinion
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of this 21st day of February,
2000 by and among MUTUAL SAVINGS BANK, OV CORP. and FIRST NORTHERN CAPITAL CORP.
RECITALS
WHEREAS, the respective Boards of Directors of Mutual, Merger Corp. and
First Northern have approved this Agreement by the requisite vote imposed by
Law, and deem it advisable and in the best interest of their respective
institutions and members or stockholders, as the case may be, to consummate the
reorganization provided for herein, pursuant to which First Northern will merge
with and into Merger Corp., the surviving institution, and in connection
therewith the stockholders of First Northern will receive Survivor Common Stock
and/or cash in exchange for their shares of First Northern Common Stock;
WHEREAS, concurrently with this Agreement and as a condition and an
inducement to the willingness of Mutual to enter into this Agreement, First
Northern and Mutual are entering into a Stock Option Agreement granting Mutual,
under the conditions set forth therein, the option to purchase shares of
newly-issued First Northern Common Stock;
WHEREAS, the Board of Directors of First Northern has directed that
this Agreement and the transactions described in this Agreement be submitted for
approval at the First Northern Meeting;
WHEREAS, the Merger will be conducted in connection with the
Restructuring; and
WHEREAS, the transactions provided herein are subject to various
regulatory approvals and other conditions specified herein;
NOW, THEREFORE, in consideration of the Recitals and of the mutual
covenants, conditions and agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed that:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the
meanings specified:
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1.1 Acquisition. "Acquisition" shall mean any of the following
involving First Northern or the Bank on the one hand, or Mutual on the other
hand, other than the Merger or the Restructuring:
(a) any merger, consolidation, share exchange, business combination or
other similar transaction;
(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 10% or more of assets in a single transaction or series of
related transactions, excluding from this calculation any such transactions
undertaken in the ordinary course of business and consistent with past practice;
(c) any sale of 10% or more of the outstanding shares of capital stock
(or securities convertible or exchangeable into or otherwise evidencing, or an
agreement or instrument evidencing, the right to acquire capital stock);
(d) any tender offer or exchange offer for 10% or more of the
outstanding shares of capital stock or the filing of a registration statement
under the Securities Act in connection therewith;
(e) In the case of First Northern, any solicitation of proxies in
opposition to approval by its shareholders of the Merger or the Stock Option
Agreement;
(f) The filing of an acquisition application (or the giving of
acquisition notice), whether in draft or final form, under HOLA with respect to
it;
(g) any person shall have acquired beneficial ownership or the
right to acquire beneficial ownership of, or any "group" (as such term is
defined under Section 13(d) of the Exchange Act and the rules and regulations of
the SEC promulgated thereunder) shall have been formed which beneficially owns
or has the right to acquire beneficial ownership of, 10% or more of the then
outstanding shares of capital stock; or
(h) any public announcement of a proposal, plan or intention to do any
of the foregoing.
1.2 Acquisition Proposal. "Acquisition Proposal" shall mean the
making of any proposal by any Person concerning an Acquisition.
1.3 Affiliate. "Affiliate" shall mean, with respect to any Person, any
other Person who directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with the first Person,
including without limitation all directors and executive officers of the first
Person.
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1.4 Affiliate Letter. "Affiliate Letter" shall mean a letter from each
Affiliate of First Northern substantially in the form of Exhibit 1 attached to
this Agreement.
1.5 Agreement. "Agreement" shall mean this Agreement and Plan of Merger,
together with the Exhibits attached hereto and together with the Disclosure
Schedules, as the same may be amended or supplemented from time to time in
accordance with the terms hereof.
1.6 Announcement. "Announcement" shall mean any public notice, release,
statement or other communication to employees, suppliers, customers, members,
stockholders, the general public, the press or any securities exchange or
quotation system relating to the negotiation and preparation of this Agreement
or the transactions contemplated hereby.
1.7 Bank. "Bank" shall mean First Northern Savings Bank, S.A., a
Wisconsin-chartered savings and loan association which is a wholly-owned
subsidiary of First Northern.
1.8 Buildings. "Buildings" shall mean all buildings, fixtures, structures
and improvements (including without limitation stand-alone automated teller
machines or similar devices) used by a Person or an Affiliate and located on the
Person's Real Estate.
1.9 CERCLA. "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as the same may be in effect from time
to time.
1.10 Closing. "Closing" shall mean the conference to be held at 10:00 A.M.,
Central Time, on the Closing Date at the offices of Xxxxxxx & Xxxxx LLP, 000
Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or such other time and place
as the parties may mutually agree to in writing, at which the transactions
contemplated by this Agreement shall be consummated.
1.11 Closing Date. "Closing Date" shall mean the date of the Effective Time
or such other date as the parties may mutually agree to in writing.
1.12 Code. "Code" shall mean the Internal Revenue Code of 1986, as the same
may be in effect from time to time.
1.13 Confidentiality Agreement. "Confidentiality Agreement" shall mean the
letter agreement regarding confidentiality and related issues between Mutual and
First Northern dated January 11, 2000.
1.14 Contracts. "Contracts" shall mean all of the contracts, agreements,
leases, relationships and commitments, written or oral, to which the relevant
Person is a party or by which it is bound.
1.15 Control. "Control," as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and
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policies of such Person, whether through the ownership of voting securities or
by contract or otherwise. "Control," as used with respect to securities or other
property, shall mean the power to exercise or direct the exercise of any voting
rights associated therewith, or the power to dispose or direct the disposition
thereof, or both.
1.16 Disclosure Schedules. "Disclosure Schedules" shall mean the First
Northern Disclosure Schedule and the Mutual Disclosure Schedule.
1.17 Employee Benefit Plans. "Employee Benefit Plans" shall mean any
pension plan, profit sharing plan, bonus plan, incentive compensation plan,
deferred compensation plan, stock ownership plan, stock purchase plan, stock
option plan, stock appreciation plan, employee benefit plan, employee benefit
policy, retirement plan, fringe benefit program, insurance plan, severance plan,
disability plan, health care plan, sick leave plan, death benefit plan, or any
other plan or program to provide retirement income, fringe benefits or other
benefits to former or current employees of the relevant Person.
1.18 Environmental Claim. "Environmental Claim" shall mean any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
directives, claims, Liens, investigations, proceedings or notices of
noncompliance or violation (written or oral) by any Person alleging potential
liability (including, without limitation, potential liability for enforcement,
investigatory costs, cleanup costs, governmental response costs, removal costs,
remedial costs, natural resources damages, property damages, personal injuries,
or penalties) arising out of, based on or resulting from: (A) the presence, or
release into the environment, of any Hazardous Materials at any location,
whether or not owned by a Person or any of its Subsidiaries; or (B)
circumstances forming the basis of any violation or alleged violation, of any
Environmental Law; or (C) any and all claims by any Person seeking damages,
contribution, indemnification, cost, recovery, compensation or injunctive relief
resulting from the presence or Release of any Hazardous Materials.
1.19 Environmental Laws. "Environmental Laws" shall mean all federal,
state, local or foreign statute, Law, rule, ordinance, code, policy, guideline,
rule of common law and regulations relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata), including, without
limitation, Laws and regulations relating to Releases or threatened Releases of
Hazardous Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.
1.20 Environmental Permits. "Environmental Permits" shall mean
environmental, health and safety permits and governmental authorizations
necessary for their operations of a Person under Environmental Laws.
1.21 Equipment. "Equipment" shall mean all equipment, boilers, furniture,
fixtures, motor vehicles, furnishings, office equipment, computers and other
items of tangible personal
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property owned by the relevant Person which are either presently used, or are
used on the Closing Date, by the relevant Person in the conduct of its business.
1.22 ERISA. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as the same may be in effect from time to time.
1.23 Exchange Act. "Exchange Act" shall mean the Securities Exchange
Act of 1934, as the same may be in effect from time to time.
1.24 FDIC. "FDIC" shall mean the Federal Deposit Insurance
Corporation.
1.25 FHLB of Chicago. "FHLB of Chicago" shall mean the Federal Home
Loan Bank of Chicago, Illinois.
1.26 First Northern. "First Northern" shall mean First Northern
Capital Corp., a Wisconsin corporation which is registered as a unitary
savings and loan holding company under HOLA and the rules and regulations
of the OTS promulgated thereunder.
1.27 First Northern Closing Certificate. "First Northern Closing
Certificate" shall mean the Closing Certificate of First Northern in
substantially the form of Exhibit 2 attached to this Agreement.
1.28 First Northern Common Stock. "First Northern Common Stock" shall
mean all of the authorized shares of common stock, $1.00 par value per
share, of First Northern.
1.29 First Northern Counsel Opinion. "First Northern Counsel Opinion"
shall mean an opinion of Xxxxxx Xxxxxx & Xxxxx in substantially the form of
Exhibit 3 attached to this Agreement.
1.30 First Northern Disclosure Schedule. "First Northern Disclosure
Schedule" shall mean the disclosure schedule, dated the date of this
Agreement, delivered by First Northern to Mutual contemporaneously with the
execution and delivery of this Agreement and as the same may be amended
from time to time after the date of this Agreement and prior to the Closing
Date in accordance with the terms of this Agreement.
1.31 First Northern Executives. "First Northern Executives" shall mean
the individuals who serve as executive officers of First Northern or the
Bank.
1.32 First Northern Existing Contracts. "First Northern Existing
Contracts" shall mean those Contracts which are listed pursuant to Section
4.11 of this Agreement on the First Northern Disclosure Schedule.
1.33 First Northern Existing Employment Agreements. "First Northern
Existing Employment Agreements" shall mean the employment agreements by and
between the Bank or
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First Northern and any of the First Northern Executives, identified on the First
Northern Disclosure Schedule.
1.34 First Northern Existing Indebtedness. "First Northern Existing
Indebtedness" shall mean all Indebtedness of First Northern and the First
Northern Subsidiaries, all of which is listed on the First Northern
Disclosure Schedule.
1.35 First Northern Existing Liens. "First Northern Existing Liens"
shall mean all Liens affecting any of the assets and properties of First
Northern or any First Northern Subsidiary except for Liens for current
taxes not yet due and payable, pledges to secure deposits and such
imperfections of title, easements and other encumbrances, if any, as do not
materially detract from the value of or substantially interfere with the
present use of the property affected thereby, all of which are listed and
briefly described on the First Northern Disclosure Schedule.
1.36 First Northern Existing Litigation. "First Northern Existing
Litigation" shall mean all pending or, to the Knowledge of First Northern,
threatened claims, suits, audit inquiries, charges, workers compensation
claims, litigation, arbitrations, proceedings, governmental investigations,
citations and actions of any kind against First Northern or any First
Northern Subsidiary, or affecting any assets or the business of First
Northern or any First Northern Subsidiary, all of which are listed and
briefly described on the First Northern Disclosure Schedule.
1.37 First Northern Existing Plans. "First Northern Existing Plans"
shall mean all Employee Benefit Plans of First Northern and the First
Northern Subsidiaries and any Employee Benefit Plans of such entities that
have been terminated since January 1, 1997, all of which are listed on the
First Northern Disclosure Schedule.
1.38 First Northern Meeting. "First Northern Meeting" shall mean the
special or annual meeting of the First Northern Shareholders for the
purpose of approving the Merger, this Agreement and the transactions
contemplated by this Agreement, and for such other purposes as may be
necessary or desirable.
1.39 First Northern Real Estate. "First Northern Real Estate" shall
mean the parcels of real property identified in the legal descriptions set
forth in the First Northern Disclosure Schedule.
1.40 First Northern Replacement Employment Agreement. "First Northern
Replacement Employment Agreement" shall mean an employment agreement in
substantially the form of Exhibit 4 attached to this Agreement, to be
entered into at the Closing and to be effective as of the Effective Time,
by and between the Bank and any one or more of the First Northern
Executives, all as provided in Section 3.11 of this Agreement.
1.41 First Northern Shareholders. "First Northern Shareholders" shall
mean all Persons owning shares of First Northern Common Stock on the
relevant date of inquiry.
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1.42 First Northern Stock Option Plans. "First Northern Stock Option
Plans" shall mean the First Northern Capital Corp. 1999 Stock Plan, and the
following plans of the Bank, as assumed by First Northern: 1984 Stock
Option Plan, 1989 Executive Stock Option Plan, 1989 Directors' Stock Option
Plan, 1994 Executive Stock Plan, and 1994 Directors' Stock Option Plan.
1.43 First Northern Stock Options. "First Northern Stock Options"
shall mean all options to purchase shares of First Northern Common Stock
granted pursuant to the First Northern Stock Option Plans which are
outstanding as of the relevant time of inquiry, whether or not such options
are exercisable prior to the Effective Time.
1.44 First Northern Subsidiaries. "First Northern Subsidiaries" shall
mean those Subsidiaries of First Northern listed on the First Northern
Disclosure Schedule pursuant to Section 4.1(c) of this Agreement.
1.45 Fraction Payment. "Fraction Payment" shall mean any cash paid for
fractional share interests paid pursuant to Section 2.9(e) of this
Agreement.
1.46 Hazardous Materials. "Hazardous Materials" shall mean: (A) any
petroleum or petroleum products, radioactive materials, asbestos in any
form that is or could become friable, urea formaldehyde foam insulation,
and transformers or other equipment that contain dielectric fluid
containing regulated levels of polychlorinated biphenyls (PCBs) and radon
gas; and (B) any chemicals, materials or substances which are now defined
as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes, restricted
hazardous wastes," "toxic substances," "toxic pollutants," or words of
similar import, under any Environmental Law; and (C) any other chemical,
material, substance or waste, exposure to which is now prohibited, limited
or regulated by any governmental authority.
1.47 HOLA. "HOLA" shall mean the Home Owners' Loan Act of 1933, as the
same may be in effect from time to time, including the rules and
regulations of the OTS promulgated thereunder.
1.48 Indebtedness. "Indebtedness" shall mean all liabilities or
obligations (except deposit accounts) of the relevant Person, whether
primary or secondary, absolute or contingent: (a) for borrowed money; (b)
evidenced by notes, bonds, debentures or similar instruments; or (c)
secured by Liens on any assets of the relevant Person.
1.49 Investment Securities. "Investment Securities" shall mean all
investment securities of the relevant Person permitted to be held by the
relevant Person under Law.
1.50 IRS. "IRS" shall mean the United States Internal Revenue Service.
1.51 Knowledge. "Knowledge" of a Person shall mean, for purposes of
this Agreement, when any fact or matter is stated to be "to the Knowledge"
of that Person or words of
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similar import, the actual knowledge of the existence or nonexistence of such
fact or matter by the executive officers and the Person and its Subsidiaries.
1.52 Law. "Law" shall mean any federal, state, local or other law,
rule, regulation, policy or governmental requirement of any kind, and the rules,
regulations and orders promulgated thereunder by any regulatory agencies or
other Persons.
1.53 Lien. "Lien" shall mean, with respect to any asset: (a) any
mortgage, pledge, lien, charge, claim, restriction, reservation, condition,
easement, covenant, lease, encroachment, title defect, imposition, security
interest or other encumbrance of any kind; and (b) the interest of a vendor or
lessor under any conditional sale agreement, financing lease or other title
retention agreement relating to such asset.
1.54 Material Adverse Effect. "Material Adverse Effect" shall mean any
change or effect that is or is reasonably likely to be materially adverse to the
business, operations, properties (including intangible properties), condition
(financial or otherwise), assets, liabilities (including contingent liabilities)
or prospects of the relevant Person and its Subsidiaries, taken as a whole.
1.55 Material Contract. "Material Contract" shall mean any Contract of
a Person or any of its subsidiaries which constitutes:
(a) a lease of, or agreement to purchase or sell, any capital
assets involving in excess of $50,000 as to any asset or $100,000 in the
aggregate;
(b) any management, consulting, employment, personal service,
severance, agency or other contract or contracts providing for employment or
rendition of services and which: (i) are in writing, or (ii) create other than
an at will employment relationship; or (iii) provide for any commission, bonus,
profit sharing, incentive, retirement, consulting or additional compensation;
(c) any agreements or notes evidencing any Indebtedness;
(d) a power of attorney (whether revocable or irrevocable) given
to any other person by the Person that is in force;
(e) an agreement by the Person not to compete in any business or
in any geographical area;
(f) an agreement restricting the Person's right to use or
disclose any information in its possession;
(g) a partnership, joint venture or similar arrangement;
(h) a license involving payments in excess of $1,000;
(i)an agreement or arrangement with any Affiliate which is not a
Subsidiary;
(j) an agreement for data processing services;
(k) any assistance agreement, supervisory agreement, memorandum
of understanding, consent order, cease and desist order or other regulatory
order or decree with or by the SEC, OTS, FDIC, Wisconsin Agency or any other
regulatory authority; or
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(l) any other agreement or set of related agreements or series of
agreements which: (i) involve an amount in excess of $50,000 on an annual basis
or $100,000 in the aggregate; or (ii) is not in the ordinary course of business
of the Person or any Subsidiary of the Person.
1.56 Merger. "Merger" shall mean the merger of First Northern with and
into Merger Corp. pursuant to this Agreement.
1.57 Merger Corp. "Merger Corp." shall mean OV Corp., a Wisconsin
corporation organized as a wholly-owned subsidiary of Mutual for the purpose of
effecting the transactions contemplated by this Agreement. (Merger Corp. is the
same corporate entity as Survivor, but the term "Merger Corp." is intended to be
used primarily to designate the entity prior to the Merger.)
1.58 Mutual. "Mutual" shall mean Mutual Savings Bank, a mutual savings
bank chartered under Chapter 214 of the Wisconsin Statutes, and shall include
any successor savings bank pursuant to the Restructuring.
1.59 Mutual Closing Certificate. "Mutual Closing Certificate" shall
mean the Closing Certificate of Mutual and Merger Corp. in substantially the
form of Exhibit 5 attached to this Agreement.
1.60 Mutual Counsel Opinion. "Mutual Counsel Opinion" shall mean the
opinion of Xxxxxxx & Xxxxx LLP in substantially the form of Exhibit 6 attached
to this Agreement.
1.61 Mutual Disclosure Schedule. "Mutual Disclosure Schedule" shall
mean the disclosure schedule, dated the date of this Agreement, delivered by
Mutual to First Northern contemporaneously with the execution and delivery of
this Agreement and as the same may be amended from time to time after the date
of this Agreement and prior to the Closing Date in accordance with the terms of
this Agreement.
1.62 Mutual Existing Contracts. "Mutual Existing Contracts" shall mean
those Contracts which are listed pursuant to Section 5.15 of this Agreement on
the Mutual Disclosure Schedule.
1.63 Mutual Existing Litigation. "Mutual Existing Litigation" shall
mean all pending or, to the Knowledge of Mutual, threatened claims, suits, audit
inquiries, charges, workers compensation claims, litigation, arbitrations,
proceedings, governmental investigations, citations and actions of any kind
against Mutual or any Mutual Subsidiary, or affecting any assets or the business
of Mutual or any Mutual Subsidiary, all of which are listed and briefly
described on the Mutual Disclosure Schedule.
1.64 Mutual Real Estate. "Mutual Real Estate" shall mean the parcels of
real property identified in the legal descriptions set forth in the First
Northern Disclosure Schedule.
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1.65 NASDAQ/NMS. "NASDAQ/NMS" shall mean the National Association of
Securities Dealers Automated Quotations National Market System.
1.66 OTS. "OTS" shall mean the Office of Thrift Supervision,
Department of the Treasury, or any successor agency.
1.67 Permits. "Permits" shall mean all licenses, permits, approvals,
franchises, qualifications, permissions, agreements, orders and governmental
authorizations required for the conduct of the business of the relevant Person.
1.68 Permitted Liens. "Permitted Liens" shall mean those First
Northern or Mutual Existing Liens which are expressly noted as Permitted Liens
on a Disclosure Schedule.
1.69 Person. "Person" shall mean a natural person, corporation, bank,
trust, partnership, association, governmental entity, agency or branch or
department thereof, or any other legal entity.
1.70 Proxy Statement. "Proxy Statement" shall mean the proxy statement
of First Northern to be filed with the SEC and to be distributed to the First
Northern Shareholders in connection with the First Northern Special Meeting and
the approval of the Merger by the First Northern Shareholders, which shall also
constitute the prospectus of Survivor filed as a part of the Registration
Statement.
1.71 Registration Statement. "Registration Statement" shall mean a
registration statement on Form S-4 (or other appropriate form) to be filed under
the Securities Act by Survivor in connection with the Merger for purposes of
registering any shares of Survivor Common Stock to be issued in the Merger
pursuant to this Agreement.
1.72 Regulatory Approvals. "Regulatory Approvals" shall mean all of
the approvals which are conditions precedent to consummating the Merger and the
Restructuring, as specified in Section 7.1(c) of this Agreement.
1.73 Release. "Release" shall mean any release, spill, emission,
leaking, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the atmosphere, soil, surface water, groundwater or property.
1.74 SAIF. "SAIF" shall mean the Savings Association Insurance Fund of
the FDIC.
1.75 SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
1.76 Securities Act. "Securities Act" shall mean the Securities Act of
1933, as the same may be in effect from time to time.
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1.77 Section 180.0622(2)(b). "Section 180.0622(2)(b)" shall mean WBCL
Section 180.0622(2)(b), including judicial interpretations thereof and of former
WBCL Section 180.04(6), its predecessor statute.
1.78 Stock Option Agreement. "Stock Option Agreement" shall mean the
Stock Option Agreement, of even date herewith, being entered into by and between
First Northern and Mutual concurrently with their execution and delivery of this
Agreement.
1.79 Subsidiary. "Subsidiary" shall mean any corporation, financial
institution, joint venture, partnership, limited liability company, trust or
other business entity: (i) 25% or more of any outstanding class of whose voting
interests is directly or indirectly owned by the relevant Person, or is held by
it with power to vote; (ii) the election of a majority of whose directors,
trustees, general partners or comparable governing body is controlled in any
manner by the relevant Person; or (iii) with respect to the management or
policies of which the relevant Person has the power, directly or indirectly, to
exercise a controlling influence. Subsidiary shall include an indirect
Subsidiary of the relevant Person which is controlled in any manner specified
above through one or more corporations or financial institutions which are
themselves Subsidiaries.
1.80 Survivor. "Survivor" shall have the meaning specified in Section
2.1 of this Agreement. (Survivor is the same corporate entity as Merger Corp.,
but the term "Survivor" is intended to be used primarily to designate the entity
as the surviving corporation in the Merger.)
1.81 Survivor Common Stock. "Survivor Common Stock" shall mean the
Common Stock, $.01 par value, of Survivor after the Merger.
1.82 WBCL. "WBCL" shall mean the Wisconsin Business Corporation Law.
1.83 Wisconsin Agency. "Wisconsin Agency" shall mean the Administrator
of the Division of Savings Institutions of the Wisconsin Department of Financial
Institutions, or any successor agency.
1.84 Year 2000 Compliant. "Year 2000 Compliant" shall mean, with
respect to material hardware and software systems, that such hardware and
software is designed to be used prior to, during, and after the calendar Year
2000 A.D., recognize the "leap day" therein, and such hardware and software used
during each such time period will accurately receive, provide and process
date/time data from, into and between the years 1999 and 2000, and all
subsequent years, and will not malfunction, cease to function, or provide
invalid or incorrect results as a result of date/time data, to the extent that
other hardware and software, used in combination with the hardware and software
of the affected Person, properly exchanges date/time data with the hardware and
software of the affected Person.
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1.85 Other Defined Terms. The following additional terms are defined
in the specific Section to which they relate:
TERM SECTION
---- -------
Cash Election 2.8(e)
Cash Election Shares 2.8(f)
Cash Fraction 2.8(f)(ii)(A)
Cash Percentage 2.8(a)(i)
Cash Value 2.8(a)(ii)
COBRA 3.12(e)
Conversion Notice 2.8(b)
Disclosure Schedule Change 3.2(d)
Effective Time 2.3
Election Deadline 2.8(l)
Exchange Agent 2.9(a)
Exchange Fund 2.9(a)
Exchange Ratio 2.8(a)(iii)
First Northern Approvals 4.1
First Northern Certificates 2.8(i)
First Northern Reports 4.8
Form of Election 2.8(e)
Indemnified Liabilities 3.5(a)
Indemnified Parties 3.5(a)
Initial Mailing Record Date 2.8(i)
Letter of Transmittal 2.9(b)(i)
Maximum Cash Number 2.8(a)(iv)
Maximum Stock Number 2.8(a)(v)
Merger Consideration 2.8(a)(vi)
MHC 2.14(c)
Mixed Election 2.8(e)
Mixed Election Shares 2.8(f)
Mutual Reports 5.13
Non-Election 2.8(e)
Non-Election Shares 2.8(f)(i)
Restructuring 2.14
Representative 2.8(e)
Stock Bank 2.14(d)
Stock Election 2.8(e)
Stock Election Shares 2.8(f)(i)
Stock Fraction 2.8(g)(ii)(A)
Stock Percentage 2.8(a)(vii)
Transitory 2.14(c)
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ARTICLE II
THE MERGER
2.1 The Merger. This Agreement provides for the merger of First
Northern with and into Merger Corp., whereby the stock of First Northern and
Merger Corp. outstanding as of the Effective Time will be converted as described
herein. As of the Effective Time, First Northern will be merged with and into
Merger Corp. which, as the surviving corporation ("Survivor"), shall remain a
Wisconsin business corporation and become registered under HOLA as a savings and
loan holding company and, in such capacity, shall be governed by the laws of the
State of Wisconsin and federal laws applicable to registered savings and loan
holding companies and subsidiary holding companies of federal mutual holding
companies, including rules and regulations of regulatory authorities thereunder.
The separate existence of First Northern shall thereupon cease. The Merger shall
be effected pursuant to the provisions of federal Law and the WBCL, and shall
have the effects provided in the WBCL.
2.2 Effect of the Merger.
(a) At the Effective Time, the effect of the Merger shall be as
provided in the WBCL, including the effects described in Sections 2.2(b) and
2.2(c) of this Agreement.
(b) The corporate identity, existence, purposes, powers,
franchises, privileges, assets, properties and rights of both First Northern and
Merger Corp. shall be merged into and continued in Survivor, and Survivor shall
be fully vested therewith.
(c) At the Effective Time, Survivor shall succeed to or
continue, without other transfer, and shall possess and enjoy, all the rights,
privileges, assets, properties, powers and franchises both of a public and a
private nature, and shall be subject to all the restrictions, disabilities and
duties of First Northern and Merger Corp., and all the rights, privileges,
assets, properties, powers and franchises of First Northern or Merger Corp. and
all property, real, personal and mixed, tangible or intangible, and all debts
due to First Northern or Merger Corp. on whatever account, shall be vested in
Survivor; and all rights, privileges, assets, properties, powers and franchises,
and all and every other interest shall be thereafter as effectively the property
of Survivor as they were of First Northern or Merger Corp.; and the title to or
any interest in any real estate vested by deed or otherwise in First Northern or
Merger Corp. shall not revert or be in any way impaired by reason of the Merger;
provided, however, that all rights of creditors and Liens upon any property of
either First Northern or Merger Corp. shall be preserved unimpaired, and all
debts, liabilities and duties of First Northern or Merger Corp. shall
thenceforth attach to Survivor and may be enforced against Survivor to the same
extent as if said debts, liabilities and duties had been incurred or contracted
by Survivor.
2.3 Effective Time. The consummation of the Merger shall be effected
as promptly as practicable after the satisfaction or waiver of the conditions
set forth in Article VII of this Agreement. The Merger shall become effective on
the date and time specified in Articles of Merger to be filed with the Wisconsin
Department of Financial Institutions. The date and time
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on which the Merger shall become effective is referred to in this Agreement as
the "Effective Time."
2.4 Articles and Bylaws of Survivor.
(a) The Articles of Incorporation of Merger Corp. as in effect
immediately prior to the Effective Time shall be the Articles of Incorporation
of Survivor until amended in accordance with Law. (The parties contemplate
amendment of Merger Corp.'s articles of incorporation prior to the Effective
Time to, among other things, change its name and authorize additional shares.)
(b) The Bylaws of Merger Corp. as in effect immediately prior to
the Effective Time shall be the Bylaws of Survivor until amended in accordance
with Law, except that the name of the corporation identified therein shall be
changed to as provided in Section 2.4(a) hereof.
2.5 Charter and Bylaws of the Bank; Offices of the Bank.
(a) The Charter and Bylaws of the Bank in force immediately
prior to the Effective Time initially shall be the Charter and Bylaws of the
Bank immediately following the Effective Time.
(b) The location of the main office of the Bank immediately
prior to the Effective Time initially shall continue as the main office of the
Bank immediately following the Effective Time, and the location of each of the
Bank's branch offices immediately prior to the Effective Time shall continue as
a branch location of the Bank immediately following the Effective Time.
2.6 Directors and Officers of Survivor. As of the Effective Time, the
directors of Survivor shall be: (a) the duly qualified and acting directors of
Merger Corp. immediately prior to the Effective Time (who will be the same as
the directors of Mutual at such date) plus (b) four additional directors who
shall have been directors of First Northern prior to the Effective Time and who
shall be designated in writing by Mutual to First Northern at least five
business days prior to the Effective Time. The officers of Merger Corp.
immediately prior to the Effective Time shall be the officers of Survivor, in
all cases to hold office as provided in the Bylaws of Survivor. The directors of
Survivor shall promptly thereafter take the actions described in Section 3.11(b)
hereof to elect additional officers.
2.7 Capital Stock of Merger Corp. At the Effective Time, each share of
common stock of Merger Corp. then issued and outstanding, without any action on
the part of the holder thereof, shall remain an issued and outstanding share of
Survivor Common Stock.
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2.8 Conversion of First Northern Common Stock.
(a) Definitions. As used in this Agreement:
(i) "Cash Percentage" shall mean that percentage equal to:
(A) 100%; minus (B) the Stock Percentage.
(ii) "Cash Value" shall mean $15.00.
(iii) "Exchange Ratio" shall mean 1.5.
(iv) "Maximum Cash Number" shall mean that number equal to:
(A) (1) the Cash Percentage; multiplied by (2) the
number of shares of First Northern Common Stock issued and outstanding
immediately prior to the Effective Time; minus
(B) the number of shares of First Northern Common
Stock to be exchanged for Fraction Payments.
(v) "Maximum Stock Number" shall mean that number equal
to: (A) the Stock Percentage; multiplied by (B) the number of shares of First
Northern Common Stock issued and outstanding immediately prior to the Effective
Time.
(vi) "Merger Consideration" shall mean the shares of
Survivor Common Stock issuable pursuant to this Section 2.8 of this Agreement
and cash payable pursuant to this Section 2.8 of this Agreement.
(vii) "Stock Percentage" shall mean that percentage selected
by Mutual in the Conversion Notice which shall be (at the option of Mutual) any
percentage between and including 40% and 70%.
(b) Conversion Notice. At least three business days prior to the
Closing Date, Mutual shall send a notice to First Northern (the "Conversion
Notice") which specifies Mutual's election as to the amounts of the Cash
Percentage and the Stock Percentage. The parties shall then proceed to close the
transactions described in this Agreement on the basis of such election
identified in the Conversion Notice.
(c) Conversion. At the Effective Time, by virtue of the Merger
and without any action on the part of Merger Corp., First Northern, Mutual or
the holders of First Northern Common Stock, each share of First Northern Common
Stock issued and outstanding at the Effective Time (except for treasury stock
which shall be canceled as described in Section 2.8(m) of this Agreement) shall
be converted into and become the right to receive:
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(i) cash in the amount of the Cash Value; or
(ii) that number of shares of Survivor Common Stock equal
to the Exchange Ratio; or
(iii) a combination of cash and shares of Survivor Common
Stock determined in accordance with the provisions of this Section 2.8 of this
Agreement.
(d) Maximum Numbers. The number of shares of First Northern
Common Stock to be converted into the right to receive Survivor Common Stock in
the Merger shall equal the Maximum Stock Number. The number of shares of First
Northern Common Stock to be converted into the right to receive cash in the
Merger shall equal the Maximum Cash Number. Notwithstanding any other provisions
of this Agreement, at least 40% of the number of shares of First Northern Common
Stock issued and outstanding immediately prior to the Effective Time shall be
converted into whole shares of Survivor Common Stock.
(e) Elections. Subject to the allocation and election procedures
set forth in this Section 2.8 of this Agreement, each record holder immediately
prior to the Effective Time of shares of First Northern Common Stock will be
entitled in respect to all of the shares of First Northern Common Stock owned by
such holder: (i) to elect to receive cash for such shares (a "Cash Election");
(ii) to elect to receive Survivor Common Stock for such shares (a "Stock
Election"); (iii) to indicate that such record holder has no preference as to
the receipt of cash or Survivor Common Stock for such shares (a "Non-Election");
or (iv) as to First Northern Shareholders holding not less than 170 shares of
First Northern Common Stock, to elect to receive a combination of cash and
Survivor Common Stock, with the percentage of such shares of First Northern
Common Stock equal to the lesser of (x) the Stock Percentage and (y) 50%
converted into Survivor Common Stock and the balance converted into cash (a
"Mixed Election"). All such elections shall be made on a form designed by
Mutual, which is reasonably satisfactory to First Northern, for that purpose (a
"Form of Election"). Holders of record of shares of First Northern Common Stock
who hold such shares as nominees, trustees or in other representative capacities
(a "Representative") may submit multiple Forms of Election, provided that such
Representative certifies that each such Form of Election covers all the shares
of First Northern Common Stock held by each Representative for a particular
beneficial owner. Shareholders who are not Representatives must make a single
election for all shares of First Northern Common Stock held by them.
(f) Cash Elections in Excess of Maximum Cash Number. If the
aggregate number of shares covered by Cash Elections (the "Cash Election
Shares") together with the portion of shares to be converted into cash pursuant
to Mixed Elections exceeds the Maximum Cash Number:
(i) each share of First Northern Common Stock covered by a
Stock Election (the "Stock Election Shares") and each share of First Northern
Common Stock covered by a Non-Election (the "Non-Election Shares") shall be
converted into the right to receive a
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number of shares of Survivor Common Stock equal to the Exchange Ratio, and each
share of First Northern Common Stock covered by a Mixed Election (the "Mixed
Election Shares") shall be converted as provided in the Mixed Election; and
(ii) each Cash Election Share shall be converted into the
right to receive:
(A) an amount in cash, without interest, equal to: (1)
the Cash Value; multiplied by (2) a fraction (the "Cash Fraction"), the
numerator of which shall be the difference between (I) the Maximum Cash Number
and (II) the product of the number of Mixed Election Shares times the Cash
Percentage and the denominator of which shall be the total number of Cash
Election Shares; and
(B) a number of shares of Survivor Common Stock equal
to: (1) the Exchange Ratio; multiplied by (2) a fraction equal to one minus the
Cash Fraction.
(C) Notwithstanding the foregoing provisions, to avoid
the ongoing expense of very small shareholder accounts, prior to the Effective
Time, Mutual and First Northern may agree that, notwithstanding the foregoing
proration, the shares of First Northern Common Stock of any First Northern
Shareholder who has made a Cash Election and who as a result of the foregoing
proration would otherwise receive fewer than 25 (or such smaller number as may
be agreed upon by Mutual and First Northern) shares of Survivor Common Stock
shall have their First Northern Common Stock converted solely into cash. In that
event, the proportions of cash and Survivor Common Stock to be received by other
First Northern Shareholders who have made a Cash Election shall be appropriately
adjusted to reflect a pro rata allocation of remaining available cash and
Survivor Common Stock among such other First Northern Shareholders.
(g) Stock Elections in Excess of Maximum Stock Number. If the
aggregate number of Stock Election Shares, together with the portion of shares
to be converted into shares of Survivor Common Stock pursuant to Mixed Elections
exceeds the Maximum Stock Number:
(i) each Cash Election Share and each Non-Election Share
shall be converted into the right to receive cash in the amount of the Cash
Value, and each Mixed Election Share shall be converted as provided in the Mixed
Election; and
(ii) each Stock Election Share shall be converted into the
right to receive:
(A) a number of shares of Survivor Common Stock equal
to: (1) the Exchange Ratio; multiplied by (2) a fraction (the "Stock Fraction"),
the numerator of which shall be the difference between (I) the Maximum Stock
Number and (II) the product of the number of Mixed Election Shares times the
Stock Percentage and the denominator of which shall be the total number of Stock
Election Shares, and
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(B) an amount in cash, without interest, equal to: (1)
the Cash Value; multiplied by (2) a fraction equal to one minus the Stock
Fraction.
(h) Other. In the event that neither Section 2.8(f) or 2.8(g) of
this Agreement is applicable: (i) each Cash Election Share shall be converted
into the right to receive cash in the amount of the Cash Value; (ii) each Stock
Election Share shall be converted into the right to receive a number of shares
of Survivor Common Stock equal to the Exchange Ratio; and (iii) each
Non-Election Share shall be converted into the right to receive shares of
Survivor Common Stock and the right to receive cash on a proportionate basis so
that the total number of shares of First Northern Common Stock converted into
the right to receive shares of Survivor Common Stock and cash, respectively,
approximate the Maximum Stock Number and the Maximum Cash Number, respectively,
as closely as possible.
(i) Initial Mailing. Mutual and First Northern will mail a Form
of Election to all holders of record of shares of First Northern Common Stock as
of a date mutually agreed to by First Northern and Mutual (the "Initial Mailing
Record Date") which shall be approximately 45 calendar days prior to the
anticipated Effective Time. Elections shall be made by holders of First Northern
Common Stock by mailing to the Exchange Agent a Form of Election. To be
effective, a Form of Election must be properly completed, signed and submitted
to the Exchange Agent and accompanied by the certificates representing the
shares of First Northern Common Stock ("First Northern Certificates") as to
which the election is being made (or by an appropriate guarantee of delivery of
such certificates as set forth in such Form of Election from a member of any
registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in the United States, provided such certificates are in fact
delivered by the time set forth in such guarantee of delivery). Mutual will have
the discretion, which it may delegate in whole or in part to the Exchange Agent,
to determine whether Forms of Election have been properly completed, signed and
submitted or revoked and to disregard immaterial defects in Forms of Election.
The decision of Mutual (or the Exchange Agent) in such matters shall be
conclusive and binding. Neither Mutual nor the Exchange Agent will be under any
obligation to notify any Person of any defect in a Form of Election submitted to
the Exchange Agent. The Exchange Agent shall also make all computations
contemplated by this Section 2.8 of this Agreement and all such computations
shall be conclusive and binding on the holders of First Northern Common Stock
absent manifest error in any such computation.
(j) Nonsubmittal. For the purposes hereof, a holder of First
Northern Common Stock who does not submit a Form of Election which is received
by the Exchange Agent prior to the Election Deadline shall be deemed to have
made a Non-Election. If Mutual or the Exchange Agent shall determine that any
purported Cash Election or Stock Election was not properly made, such purported
Cash Election or Stock Election shall be deemed to be of no force and effect and
the Person making such purported Cash Election or Stock Election shall, for all
purposes hereof, be deemed to have made a Non-Election.
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(k) Subsequent Mailings. Mutual and First Northern shall each
use its reasonable best efforts to promptly mail the Form of Election to all
Persons who become holders of First Northern Common Stock during the period
between the Initial Mailing Record Date and 10:00 a.m. New York time, on the
date ten calendar days prior to the anticipated Effective Time and to make the
Form of Election available to all Persons who become holders of First Northern
Common Stock subsequent to such day and no later than the close of business on
the third business day prior to the Effective Time.
(l) Election Deadline. A Form of Election must be received by
the Exchange Agent by the close of business on the third business day prior to
the Effective Time (the "Election Deadline") in order to be effective. All
elections will be irrevocable.
(m) Treasury Stock. Any shares of First Northern Common Stock
that are owned by First Northern or any First Northern Subsidiary, except in a
fiduciary capacity, at the Effective Time shall be canceled and retired and
cease to exist and no cash or shares of Survivor Common Stock shall be issued or
delivered in exchange therefor.
(n) Adjustment. In the event that, prior to the Effective Time,
there is a reclassification, stock split or stock dividend with respect to
outstanding Survivor Common Stock or outstanding First Northern Common Stock, an
appropriate and proportionate adjustment, if any, shall be made to any or one or
more of the Cash Value or the Exchange Ratio.
2.9 Exchange of First Northern Certificates.
(a) Exchange Agent. As of the Effective Time, Survivor shall
deposit, or shall cause to be deposited, with a bank or trust company designated
by Survivor and reasonably acceptable to First Northern (the "Exchange Agent"),
for the benefit of the holders of shares of First Northern Common Stock, for
exchange in accordance with this Article II of this Agreement through the
Exchange Agent: (i) certificates representing the aggregate number of shares of
Survivor Common Stock issuable pursuant to Section 2.8 of this Agreement; and
(ii) cash representing the aggregate amount of cash payable pursuant to Section
2.8 of this Agreement; (such certificates for shares of Survivor Common Stock,
together with any dividends or distributions with respect thereto, such cash and
any Fraction Payment, being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures.
(i) At or promptly after the Effective Time, Survivor shall
cause the Exchange Agent to mail to each holder of record of a First Northern
Certificate which immediately prior to the Effective Time of Merger represented
outstanding shares of First Northern Common Stock and which was not submitted to
the Exchange Agent with a duly executed and completed Form of Election: (A) a
letter of transmittal ("Letter of Transmittal") which shall specify that
delivery shall be effected, and risk of loss and title to the First Northern
Certificates shall pass, only upon delivery of the First Northern Certificates
to the Exchange
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Agent and which shall be in such form and have such other customary provisions
as Survivor may reasonably specify and which are reasonably acceptable to First
Northern; and (B) instructions to effect the surrender of the First Northern
Certificates in exchange for cash or shares of Survivor Common Stock, or both,
as described in this Agreement.
(ii) Upon surrender of a First Northern Certificate for
cancellation to the Exchange Agent together with either a Form of Election or a
Letter of Transmittal, in each case duly executed, and with such other documents
as the Exchange Agent may reasonably require, the holder of such First Northern
Certificate shall be entitled to receive, and Survivor shall cause the Exchange
Agent to promptly deliver in exchange therefor after the Effective Time: (A) a
certificate representing that number of whole shares of Survivor Common Stock to
which such holder is entitled to receive in respect of such First Northern
Certificate pursuant to Section 2.8 of this Agreement; and (B) a check
representing the cash that such holder is entitled to receive in respect of such
First Northern Certificate pursuant to Section 2.8 of this Agreement; and (C) a
check for any Fraction Payment. The First Northern Certificate so surrendered
shall forthwith be canceled; provided, however, that fractional share interests
of any one holder shall be aggregated to maximize the number of whole shares of
Survivor Common Stock to be issued and minimize the Fraction Payments.
(iii) In the event of a transfer of ownership of shares of
First Northern Common Stock which is not registered in the transfer records of
First Northern, a certificate representing the proper number of shares of
Survivor Common Stock, a check for the proper amount of cash that such holder is
entitled to receive in respect of such First Northern Certificate pursuant to
Section 2.8 of this Agreement and any Fraction Payment, shall be delivered to
the transferee if the First Northern Certificate which represented such shares
of First Northern Common Stock is presented to the Exchange Agent, accompanied
by all documents required to evidence and effect such transfer and by evidence
that any applicable stock transfer taxes have been paid.
(iv) No interest will be paid or accrued on the cash and
shares of Survivor Common Stock to be issued pursuant to this Agreement, the
cash in lieu of fractional shares, if any, and unpaid dividends and
distributions on the shares of Survivor Common Stock, if any, payable to First
Northern Shareholders.
(v) If any First Northern Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such First Northern Certificate to be lost, stolen or destroyed
and, if required by Survivor in its reasonable discretion, the posting by such
Person of a bond in such reasonable amount as Survivor may direct as indemnity
against any claim that may be made against it with respect to such First
Northern Certificate, the Exchange Agent will deliver in exchange for such lost,
stolen or destroyed First Northern Certificate, a certificate representing the
proper number of shares of Survivor Common Stock and a check for the cash, in
each case that such First Northern Shareholder has the right to receive pursuant
to Section 2.8 of this Agreement, and the Fraction Payment, if any, with respect
to the shares of First Northern Common Stock formerly represented
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thereby, and unpaid dividends and distributions on the shares of Survivor Common
Stock, if any, as provided in this Article II of this Agreement.
(vi) Until surrendered as contemplated by this Section 2.9
of this Agreement, each First Northern Certificate shall be deemed at all times
after the Effective Time to represent only the right to receive upon surrender
only the cash or shares of Survivor Common Stock, or both, and any Fraction
Payment.
(c) Distributions with Respect to Unexchanged Shares. If any
Survivor Common Stock is issued pursuant to the Merger, no dividends or other
distributions declared or made after the Effective Time with respect to Survivor
Common Stock with a record date after the Effective Time shall be paid to the
holder of any unsurrendered First Northern Certificate with respect to the
shares of Survivor Common Stock represented thereby, and no Fraction Payment
shall be paid to any such holder, until the holder of such First Northern
Certificate has surrendered such First Northern Certificate to the Exchange
Agent. Subject to the effect of any applicable Law, following the surrender of
any such First Northern Certificate, there shall be paid to the holder of the
surrendered First Northern Certificate, without interest: (i) promptly, any
Fraction Payment to which such holder is entitled and the amount of dividends or
other distributions with a record date after the Effective Time of Merger
theretofore paid with respect to such whole shares of Survivor Common Stock; and
(ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but prior to surrender
and a payment date occurring after surrender payable with respect to such whole
shares of Survivor Common Stock.
(d) No Further Rights in First Northern Common Stock. All shares
of Survivor Common Stock issued and cash paid upon conversion of the First
Northern Common Stock in accordance with the terms of this Agreement shall be
deemed to have been issued and paid in full satisfaction of all rights
pertaining to the First Northern Common Stock.
(e) No Fractional Shares. No fractional shares of Survivor
Common Stock shall be issued in the Merger. All fractional share interests of a
holder of more than one First Northern Certificate at the Effective Time shall
be aggregated. If a fractional share interest results after such aggregation,
each holder of a fractional interest shall be paid an amount in cash equal to
the product obtained by multiplying such fractional interest by the Cash Value.
Promptly after the determination of the amount of cash to be paid to holders of
fractional interests, the Exchange Agent shall notify Survivor and Survivor
shall deliver such amounts to such holders subject to and in accordance with the
terms of Section 2.9(c) of this Agreement.
(f) Investment of Exchange Fund. The Exchange Agent shall invest
any cash included in the Exchange Fund as directed by Survivor. Any interest and
other income resulting from such investments shall be paid to Survivor. In the
event the cash in the Exchange Fund shall be insufficient to fully satisfy all
of the payment obligations to be made by the Exchange Agent hereunder, then
Survivor shall promptly deposit cash into the Exchange Fund in an
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amount which is equal to the deficiency in the amount of cash required to fully
satisfy such payment obligations.
(g) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the First Northern Shareholders after twelve
(12) months after the Effective Time shall be delivered to Survivor, upon
demand, and any First Northern Shareholders who have not theretofore complied
with this Article II of this Agreement shall thereafter look only to Survivor
for payment of their claim for cash or shares of Survivor Common Stock, or both,
any cash in lieu of fractional share interests and any dividends or
distributions with respect thereto.
(h) No Liability. Neither the Exchange Agent nor any party to
this Agreement shall be liable to any First Northern Shareholder for any shares
of First Northern Common Stock or Survivor Common Stock (or dividends or
distributions with respect thereto) or cash delivered in accordance with
applicable Law to a public official pursuant to any abandoned property, escheat
or similar Law.
(i) Withholding Rights. Survivor shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any First Northern Shareholder such amounts as Survivor is required to deduct
and withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign tax Law. To the extent that amounts are so
withheld by Survivor, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the First Northern Shareholder in respect
of which such deduction and withholding was made by Survivor.
(j) Uncertificated Shares. Notwithstanding any other provision
of this Agreement, the Form of Election and the Letter of Transmittal may, at
the option of Survivor, provide for the ability of a holder of one or more First
Northern Certificates to elect that Survivor Common Stock to be received in
exchange for the First Northern Common Stock formerly represented by such
surrendered First Northern Certificates be issued in uncertificated form.
(k) Stock Transfer Books. At the Effective Time, the stock
transfer books of First Northern shall be closed and there shall be no further
registration of transfers of shares of First Northern Common Stock thereafter on
the records of First Northern. From and after the Effective Time, the holders of
First Northern Certificates outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such shares of First Northern
Common Stock except as otherwise provided in this Agreement or by Law.
2.10 Reorganization. The parties intend that this Agreement be a plan
of reorganization within the meaning of Section 368(a) of the Code and that the
Merger be a tax-free reorganization under Section 368(a) of the Code to the
extent that shares of First Northern Common Stock are exchanged for shares of
Survivor Common Stock as described in this Agreement. No party shall voluntarily
take or cause to be taken any action which would disqualify the Merger as a
tax-free reorganization under Section 368 of the Code.
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2.11 No Dissenting Shares. The parties acknowledge that under the WBCL,
the First Northern Shareholders are not entitled to dissent from the Merger and
are not entitled to require appraisal of their First Northern Common Stock.
2.12 Meeting of First Northern Shareholders.
(a) First Northern will promptly take all steps necessary to
cause the First Northern Meeting to be duly called, noticed, and held as soon as
practicable for the purpose of voting to approve this Agreement, the Stock
Option Agreement (if required), the Merger and all matters related thereto.
First Northern will use its best efforts to secure the required approval of its
Shareholders.
(b) Merger Corp. and First Northern will prepare and file with
the SEC the Registration Statement and the Proxy Statement, respectively, as
soon as reasonably practicable after the date of this Agreement. Merger Corp.,
Mutual and First Northern shall use reasonable best efforts to cause the Proxy
Statement to be cleared for mailing, and the Registration Statement to be
declared effective under the Securities Act as promptly as practicable after
such filing. First Northern will cause to be mailed to its Shareholders a notice
of the Meeting and the Proxy Statement as soon as practicable thereafter. Merger
Corp., Mutual and First Northern shall also take such action as may be
reasonably required to cause any shares of Survivor Common Stock issuable
pursuant to the Merger to be registered or to obtain an exemption from
registration or qualification under applicable state "blue sky" or securities
Laws; provided, however, that Merger Corp. shall not be required to qualify as a
foreign corporation or to file any general consent to service of process under
the Laws of any jurisdiction. Each party to this Agreement will furnish to the
other parties all information concerning itself as each such other party or its
counsel may reasonably request and which is required or customary for inclusion
in the Proxy Statement and the Registration Statement.
(c) The Proxy Statement shall include the recommendation of the
Board of Directors of First Northern in favor of the Merger; provided, however,
that if the Board of Directors of First Northern shall, in good faith and after
receiving the written opinion of its legal counsel, determine that to make such
a recommendation would be a violation of its fiduciary obligations under
applicable Law, then the Board of Directors of First Northern shall not be
obligated to make any such recommendation.
2.13 Liquidation Account and Sub-Accounts. The liquidation account and
sub-account balances of the Bank shall be continued for the benefit of certain
account holders of the Bank who maintain their accounts in the Bank in the event
of a complete liquidation of the Bank. The liquidation account balance shall be
subject to downward adjustment to the extent of any downward adjustment to any
sub-account balance in accordance with Section 563b.3(f) of the regulations of
the OTS. A distribution of each sub-account balance may be made only in the
event of a complete liquidation of the Bank and only out of funds available for
such purpose after payment of all creditors but before any payments to
stockholders.
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2.14 Restructuring. In connection with the Merger, Mutual and First
Northern will conduct a series of transactions, as set forth below (the
"Restructuring"):
(a) Mutual will convert from a state-chartered savings bank to a
federal savings bank.
(b) Bank will convert from a state-chartered savings and loan
association to a federal savings bank.
(c) Mutual will form a mutual holding company ("MHC"). MHC will
also form a transitory federal stock savings bank ("Transitory"). Mutual will
contribute the shares of Merger Corp. to MHC. MHC would thereupon own all of the
stock of both Merger Corp. and Transitory.
(d) Mutual will convert to a federal stock savings bank ("Stock
Bank"). Mutual's depositors would receive deposit accounts in Stock Bank with
the same terms and conditions as their deposit accounts in Mutual.
(e) Transitory would merge into Stock Bank in a transaction in
which MHC would receive all of the stock of Stock Bank.
(f) MHC would transfer the stock of Stock Bank to Merger Corp.
so that Merger Corp. would hold all of the stock of Stock Bank, and MHC would
initially own 100% of the shares of common stock of Merger Corp. The former
depositors of Mutual would hold all of the liquidation and voting interest in
MHC, for so long as, and to the extent, they continue to maintain their deposits
with Stock Bank.
(g) Simultaneously with the Merger, Survivor would issue shares
of its stock to the public and the Survivor Employee Benefit Plans for cash, at
the price to purchasers of $10.00 per share.
(h) As a result of the Merger, Survivor will be the sole
stockholder of Bank.
Therefore, as a result of the Restructuring and the Merger, Bank and
Stock Bank would become "sister" corporations owned by Survivor. MHC would own
at least 51% of the stock of Survivor, and the new public shareholders, the
former shareholders of First Northern and Survivor Employee Benefit Plans would
together own 49% or less of the stock of Survivor.
The amount of Survivor Common Stock to be offered to the public would be
determined so that the total of Survivor Common Stock issued to First Northern
Shareholders, new investors and reserved for options or the other compensation
programs for directors and employees of Survivor and its Subsidiaries would
constitute less than 50% of the total Survivor Common Stock, and the balance
would be owned by MHC.
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The Restructuring is subject to certain regulatory approvals. After the
Restructuring is effected, Mutual agrees that it will assume and timely
discharge any and all obligations, covenants and agreements of First Northern
under this Agreement which are to be performed or discharged after the Effective
Time, but which have not been fully performed or discharged as of the time the
Restructuring is effected. Mutual agrees, however, that it will not alter the
structure of the Restructuring as described herein if it would: (i) alter,
change or reduce the amount of the consideration to be paid to holders of First
Northern Common Stock or the manner or basis upon which such exchange is made;
(ii) have an adverse federal or state income tax consequence to First Northern,
or any of the shareholders of First Northern; (iii) have an adverse effect on
the shareholders of First Northern Common Stock; or (iv) would be likely to
delay or jeopardize receipt of the Regulatory Approvals or satisfaction of any
of the conditions to the Merger set forth in Article VII.
2.15 Anti-Dilution Provisions. In the event that between the date of
this Agreement and the Effective Time the issued and outstanding shares of First
Northern Common Stock shall have been changed into a different number of shares
as a result of a stock split, reverse stock split, stock dividend,
recapitalization, reclassification or other similar transaction, or in the event
the number of authorized and unissued shares of First Northern Common Stock
subject to issuance upon the exercise of outstanding First Northern Stock
Options shall have changed between the date of this Agreement and the Effective
Time as the result of the granting of additional First Northern Stock Options,
then the per share merger consideration shall be adjusted appropriately, so long
as the aggregate consideration remains the same.
2.16 Alternative Structure. Notwithstanding anything in this Agreement
to the contrary, Mutual may specify (subject to First Northern's approval, which
shall not be unreasonably withheld) that any of its or MHC's direct or indirect
subsidiaries, and First Northern and any of its direct or indirect subsidiaries
shall enter into transactions other than those described in this Article II, in
order to effect the purposes of this Agreement, and Mutual and First Northern
shall take all action necessary and appropriate to effect, or cause to be
affected, such transactions; provided, however, that (i) other than a change in
structure required by a regulatory agency having jurisdiction over the
transactions contemplated by this Agreement, no such specification shall
materially and adversely affect the timing of the consummation of the
transactions contemplated herein; or (ii) no such specifications shall
materially and adversely affect the tax effect or economic benefits of the
Merger to the holders of First Northern Common Stock or to Mutual's members or
the fundamental structure of the mid-tier holding company in the Restructuring.
Such alternative structure may include substitution of a federally chartered
holding company for Merger Corp., if required by relevant regulators.
ARTICLE III
OTHER AGREEMENTS
3.1 Confidentiality; Access. The Confidentiality Agreement shall remain
in full force and effect, except that numbered paragraph 4 thereof ("Other
Discussions") shall be superceded
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by this Agreement and of no further force and effect. Upon reasonable notice,
each of First Northern and Mutual shall afford to the other's officers,
employees, accountants, legal counsel and other representatives access, during
normal business hours, to all of its and its Subsidiaries' properties, books,
contracts, commitments and records; provided that First Northern and Mutual
shall have the right to redact any information from such materials which relates
to assessments, analyses or discussions of a possible Acquisition engaged in by
it prior to the date of this Agreement, or which, relates to matters or issues
concerning its evaluation of the Merger or its obligations under this Agreement,
or that would impair its Board of Directors' ability to discharge its fiduciary
duties.
3.2 Disclosure Schedules.
(a) Contemporaneously with the execution and delivery of this
Agreement, First Northern is delivering to Mutual the First Northern Disclosure
Schedule, which is accompanied by a certificate signed by the Chief Executive
Officer and Secretary of First Northern stating that the First Northern
Disclosure Schedule is being delivered pursuant to this Agreement and is the
First Northern Disclosure Schedule referred to in this Agreement. The First
Northern Disclosure Schedule is deemed to constitute an integral part of this
Agreement and to modify the representations, warranties, covenants or agreements
of First Northern contained in this Agreement to the extent that such
representations, warranties, covenants or agreements expressly refer to the
First Northern Disclosure Schedule.
(b) Contemporaneously with the execution and delivery of this
Agreement, Mutual is delivering to First Northern the Mutual Disclosure
Schedule, which is accompanied by a certificate signed by the Chief Executive
Officer and Secretary of Mutual stating that the Mutual Disclosure Schedule is
being delivered pursuant to this Agreement and is the Mutual Disclosure Schedule
referred to in this Agreement. The Mutual Disclosure Schedule is deemed to
constitute an integral part of this Agreement and to modify the representations,
warranties, covenants or agreements of Mutual contained in this Agreement to the
extent that such representations, warranties, covenants or agreements expressly
refer to the Mutual Disclosure Schedule.
(c) All capitalized terms used in the Disclosure Schedules shall
have the definitions specified in this Agreement. All descriptions or listings
of documents contained in the Disclosure Schedules are qualified in their
entirety by reference to the documents so described, true copies of which
heretofore have been delivered or made available to the other. Except as
expressly stated to the contrary in the Disclosure Schedules, disclosure of a
matter or document in a Disclosure Schedule shall not be deemed to be an
acknowledgment that such matter is material or outside the ordinary course of
business of the disclosing party. Disclosure of any matter or event in any of
the schedules included in Disclosure Schedule shall be deemed disclosure for
purposes of any and all other schedules included therein without the need of
specific cross reference or duplication, provided, however, that disclosure of
an agreement or other document in a listing of agreements or documents without
any summary or description of
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the substance thereof shall be deemed disclosure only for purposes of the
schedule in which such agreement or other document is listed.
(d) Updates. Prior to the Closing Date, each party shall, to the
extent a matter required to be reported occurs, update its Disclosure Schedule
on a monthly basis by written notice to the other to reflect any matters which
have occurred from and after the date of this Agreement which, if existing on
the date of this Agreement, would have been required to be described in the
Disclosure Schedule. If requested by the recipient within 14 calendar days after
receipt by it of an update to the other's Disclosure Schedule, the party
providing the update shall meet and discuss with the recipient any update to the
Disclosure Schedule which, in the reasonable judgment of the recipient, has or
may reasonably be expected to have a Material Adverse Effect on the disclosing
party or which may in any manner be materially adverse to the recipient (a
"Disclosure Schedule Change").
3.3 Duties Concerning Representations. Each party to this Agreement
shall: (a) to the extent within its control, use best efforts to cause all of
its representations and warranties contained in this Agreement to be true and
correct in all respects at the Effective Time with the same force and effect as
if such representations and warranties had been made on and as of the Effective
Time; and (b) use best efforts to cause all of the conditions precedent set
forth in Article VII of this Agreement to be satisfied. Neither party shall take
any action, nor agree to commit to take any action, which would or reasonably
can be expected to: (i) adversely affect the ability of either Mutual or First
Northern to obtain the Regulatory Approvals; (ii) adversely affect a party's
ability to perform its covenants or agreements under this Agreement; or (iii)
result in any of the conditions to the Merger set forth in Article VII not being
satisfied.
3.4 Deliveries of Information; Consultation. From time to time prior
to the Effective Time, and subject to the limitations on access rights under
Section 3.1 of this Agreement and to the Confidentiality Agreement:
(a) Deliveries. First Northern and Mutual shall furnish promptly
to the other: (i) a copy of each significant report, schedule and other document
filed by or received by it or its Subsidiaries pursuant to the requirements of
federal or state securities or financial institution Laws or any other
applicable Laws promptly after such documents are available; (ii) its
consolidated monthly financial statements (as prepared in accordance with its
normal accounting procedures) promptly after such financial statements are
available; (iii) a summary of any action taken by its, or its Subsidiaries',
Boards of Directors, or any committee thereof; and (iv) all other significant
information concerning its and its Subsidiaries' business, properties and
personnel as the other may reasonably request.
(b) Consultation. Representatives of First Northern and Mutual
shall confer and consult with one another on a regular and frequent basis to
report on operational matters and the general status of First Northern's and
Mutual's ongoing business operations.
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(c) Regulatory Matters. Representatives of First Northern and
Mutual shall discuss with one another any matters directly affecting them in
which any state or federal regulator of First Northern or Mutual or any of their
Subsidiaries, is involved.
(d) Litigation. Each party to this Agreement shall provide
prompt notice to the other party of any litigation, arbitration, proceeding,
governmental investigation, citation or action of any kind which may be
commenced, threatened or proposed by any Person concerning the legality,
validity or propriety of the transactions contemplated by this Agreement. If any
such litigation is commenced against any party to this Agreement, the parties
shall cooperate in all respects in connection with such litigation.
3.5 Directors' and Officers' Indemnification and Insurance.
(a) Survivor's Indemnification. From and after the Effective
Time, Survivor shall indemnify, defend 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, an officer, director or employee of First Northern or any First
Northern Subsidiary (the "Indemnified Parties") against all losses, claims,
damages, costs, expenses, liabilities or judgments or amounts that are paid in
settlement with the approval of Survivor (which approval shall not be
unreasonably withheld) of or in connection with any claim, action, suit,
proceeding or investigation which is based in whole or in part on or arising in
whole or in part out of the fact that such person is or was a director, officer
or employee of First Northern or any First Northern Subsidiary, whether
pertaining to any matter existing or occurring at or prior to the Effective
Time, but only if filed, initiated, asserted or claimed prior to, or at or
within five years after, the Effective Time ("Indemnified Liabilities"),
including all Indemnified Liabilities based in whole or in part, or arising in
whole or in part out of, or pertaining to, this Agreement or the transactions
contemplated hereby, in each case to the full extent First Northern would have
been permitted under the WBCL and First Northern's Articles of Incorporation and
Bylaws (as amended and in effect as of the date of this Agreement) to indemnify
such person, and Survivor shall pay expenses in advance of the final disposition
of any such action or proceeding to each Indemnified Party to the full extent
permitted by Law upon receipt of any affirmation and undertaking required by
Section 180.0853 of the WBCL. Without limiting the foregoing, in the event any
such claim, action, suit, proceeding or investigation is brought against any
Indemnified Party (whether brought before or within five years after the
Effective Time): (x) any counsel retained by the Indemnified Parties for any
period after the Effective Time shall be reasonably satisfactory to Survivor;
(y) after the Effective Time, Survivor shall pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received; and (z) after the Effective Time, Survivor will use all
reasonable efforts to assist in the vigorous defense of any such matter,
provided that Survivor shall not be liable for any settlement of any claim
effected without its written consent, which consent, however, shall not be
unreasonably withheld. Any Indemnified Party wishing to claim indemnification
under this Section 3.5, upon learning of any such claim, action, suit,
proceeding or investigation, shall notify Survivor (but the failure so to notify
Survivor shall not relieve it from any liability which it may have under this
Section 3.5 except to the extent such failure materially prejudices such party),
and shall deliver to Survivor the affirmation and undertaking,
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if any, required by Section 180.0853 of the WBCL. The Indemnified Parties as a
group may retain only one law firm to represent them with respect to each such
matter unless there is, under applicable standards of professional conduct, a
conflict on any significant issue between the positions of any two or more
Indemnified Parties.
(b) Director and Officer Insurance. Survivor shall use
reasonable efforts to obtain, after the Effective Time, directors' and officers'
liability insurance coverage for the officers and directors of Survivor, for
itself or as part of an affiliated group with MHC, to the extent that the same
is economically practicable. Such insurance shall cover directors and officers
of the Bank to the same extent as it covers directors and officers of other
subsidiaries of Survivor or MHC.
(c) Parties Benefitted. The provisions of this Section 3.5 are
intended to be for the benefit of, and shall be enforceable by, each Indemnified
Party, his or her heirs and his or her representatives, and shall survive the
Effective Time and any merger, consolidation or reorganization of Survivor,
including the Restructuring.
3.6 Letters of Accountants. First Northern shall use its best efforts
to cause to be delivered to Mutual a letter of Xxxxxx Xxxxxxx Xxxxxxxxx LLP,
First Northern's independent auditors, dated a date within three business days
before the date on which the Registration Statement is declared effective, and
addressed to Mutual, in form and substance reasonably satisfactory to Mutual and
customary in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the
Registration Statement and proxy statements similar to the Proxy Statement.
Mutual shall use its best efforts to cause to be delivered to First Northern a
letter of Ernst & Young LLP, Mutual's independent auditors, dated a date within
three business days before the date on which the Registration Statement is
declared effective, and addressed to Mutual and First Northern, in form and
substance reasonably satisfactory to Mutual and First Northern and customary in
scope and substance for letters delivered by independent public accountants in
connection with registration statements similar to the Registration Statement
and proxy statements similar to the Proxy Statement.
3.7 Legal Conditions to Merger. Each party to this Agreement will: (a)
take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on it with respect to the Merger (including
making all filings and requests in connection with the Regulatory Approvals and
furnishing all information required in connection therewith); (b) promptly
cooperate with and furnish information to the other party in connection with any
such requirements imposed upon any of them in connection with the Merger; and
(c) take all reasonable actions necessary to obtain (and will cooperate with the
other party in obtaining) any consent, authorization, order or approval of, or
any exemption by, any governmental entity or other public or private Person,
required to be obtained by the parties to this Agreement in connection with the
Merger or the taking of any action contemplated thereby or by this Agreement.
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3.8 Stock Listings. First Northern shall use its best efforts to
maintain the listing of First Northern Common Stock on the NASDAQ/NMS through
the Effective Time. It is the intention of the parties that by taking this
action First Northern Shareholders will not be entitled to any dissenters' or
appraisal rights under applicable Law as a result of the Merger and the
transactions contemplated by this Agreement.
3.9 Announcements. Subject to each party's disclosure obligations
imposed by Law, First Northern and Mutual will cooperate with each other in the
development and distribution of all news releases and other public information
disclosures with respect to this Agreement or any of the transactions
contemplated hereby and shall not issue any public Announcement or statement
with respect thereto prior to consultation with the other party.
3.10 Best Efforts. Subject to the terms and conditions of this
Agreement and subject to the fiduciary duties of the Board of Directors of each
party, each of the parties agrees to use its best efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary or
advisable to consummate the transactions contemplated by this Agreement.
3.11 Employee And Managerial Matters.
(a) Employees. The Bank will continue to employ substantially
all present employees who are employed without employment contracts as employees
at will, subject to the determinations of Bank management and the Bank's and
Survivor's boards of directors.
(b) Survivor Executive Officers. Promptly after the Effective
Time, the Survivor Board of Directors shall meet to elect additional executive
officers of Survivor so that at least 40% of the Survivor executive officers are
executive officers of First Northern prior to the Effective Time. Such
individuals shall be designated by Mutual prior to the time the Proxy Statement
is mailed to First Northern Shareholders.
(c) First Northern Replacement Employment Agreements. The Bank
shall, with respect to each of the First Northern Executives who is a party to a
First Northern Existing Employment Agreement, use its best efforts to cause them
to enter into a First Northern Replacement Employment Agreement; provided,
however, that the First Northern Existing Employment Agreement of the chief
executive officer of First Northern shall be retained subject to the provisions
of Section 7.2(h) hereof.
(d) Bank Officers and Directors. As of the Effective Time, the
directors and executive officers of the Bank shall continue to be those persons
serving in such capacities prior to the Effective Time. Promptly thereafter, the
chief executive officer of Mutual shall be elected as an additional director of
the Bank. In addition, promptly thereafter, the chief executive officer of First
Northern shall be elected as an additional director of the Stock Bank.
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3.12 Employee Benefit Matters.
(a) First Northern Stock Option Plans. Prior to the Effective
Time, First Northern shall take any and all actions necessary so that, effective
as of the Effective Time, the First Northern Stock Option Plans will be
terminated, there shall be no outstanding stock options of First Northern (other
than the Stock Option Agreement), and any and all shares reserved for issuance
in connection with the exercise of options granted under any such First Northern
Stock Option Plan (including those reserved for issuance upon the exercise of
First Northern Stock Options granted prior to, and outstanding as of, the
Effective Time) shall be free of all restrictions associated with such
reservation and shall constitute authorized and unissued shares of First
Northern Common Stock; provided, however, that any and all shares subject to
First Northern Stock Options that are exercised prior to the Effective Time
shall not be deemed to constitute authorized and unissued shares of First
Northern Common Stock.
(b) First Northern 401(k) Plan. The First Northern 401(k)
Retirement Plan shall continue, except to the extent inconsistent with Law,
after the Merger for employees of Bank until such time as it is combined with,
or replaced by, a retirement or similar benefit plan covering employees of all
Affiliates of MHC. For purposes of determining eligibility to participate and
vesting under the Survivor's 401(k) plan or a 401(k) plan covering employees of
all Affiliates of MHC, service with First Northern or an Affiliate of First
Northern shall be treated as service with MHC; provided, however, that such
service shall not be recognized to the extent that such recognition would result
in a duplication of benefits.
(c) Health and Welfare Benefits. After the Merger, Survivor
shall continue, except to the extent not consistent with Law, the Bank's health
and welfare benefit plans, programs, insurance and policies, until such time as
they are replaced by programs or benefits common to all employees of Affiliates
of MHC; provided, however, no coverage of any of the Bank's continuing employees
or their dependents shall terminate under any of the Bank's health and welfare
benefit plans, programs, insurance and policies prior to the time such employees
and dependents become eligible to participate in the programs and benefits
common to substantially all employees of Affiliates of MHC and their dependents.
(d) Replacement. With respect to each employee and health and
welfare benefit plan or program that replaces a First Northern Existing Plan,
for purposes of determining eligibility to participate and vesting, service with
First Northern or an Affiliate of First Northern shall be treated as service
with Survivor; provided, however, that such service shall not be recognized to
the extent that such recognition would result in a duplication of benefits. Such
service shall also apply for purposes of satisfying any waiting periods,
actively-at-work requirements, and evidence of insurability requirements. No
pre-existing condition limitations will apply to any of the Bank's employees or
their dependents who were participants in the First Northern Existing Plans
comparable to the plan in question at the Closing Date. Each of the Bank's
continuing employees and their dependents shall be given credit for amounts paid
under a corresponding benefit plan during the same period for purposes of
applying deductibles,
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co-payments and out-of-pocket maximums as though such amounts had been in
accordance with the terms and conditions of the corresponding First Northern
Existing Plan.
(e) COBRA. Until the Effective Time, First Northern shall be
liable for all obligations for continued health coverage pursuant to Section
4980B of the Code and Sections 601 through 609 of ERISA ("COBRA") with respect
to each First Northern qualifying beneficiary (as defined in COBRA) who incurs a
qualifying event (as defined in COBRA) before the Effective Time. Survivor shall
be liable for (i) all obligations for continued health coverage under COBRA with
respect to each First Northern qualified beneficiary (as defined in COBRA) who
incurs a qualifying event (as defined in COBRA) from and after the Effective
Time, and (ii) for continued health coverage under COBRA from and after the
Effective Time for each First Northern qualified beneficiary who incurs a
qualifying event before the Effective Time.
3.13 Conformance to Reserve Policies. First Northern shall cause the
Bank to establish such additional accruals and reserves as may be necessary, in
the reasonable judgment of Mutual, to conform the Bank's general valuation
allowances to Mutual's asset classification policy, as well as to reflect the
costs and expenses of First Northern with respect to the Merger and the other
transactions contemplated by this Agreement; provided, however, that First
Northern shall not be required to cause the Bank to take any such action until
the Regulatory Approvals have been received, shareholders have approved this
Agreement and the Merger at the meeting specified in Section 2.12 of this
Agreement and First Northern is reasonably satisfied that the Merger will be
consummated. First Northern's representations, warranties and covenants
contained in this Agreement shall not be deemed to be untrue or breached in any
respect for any purpose nor shall any condition set forth in Section 7.2 of this
Agreement be considered unsatisfied as a consequence of any modification or
changes undertaken by the Bank, after notice to and non-objection by Mutual, in
order for First Northern to comply with the requirements of this Section 3.13.
3.14 Conduct of Mutual's Business and Authorization, Reservation and
Listing of Common Stock. Mutual will maintain its corporate existence in good
standing and conduct its business so as to be able to consummate the
transactions contemplated by the Agreement. Mutual shall, in the event it
becomes aware of the impending or threatened occurrence of any event or
condition which would cause or constitute a breach (or would have caused or
constituted a breach had such event occurred or been known prior to the date
hereof) of any of its representations, warranties, covenants or agreements
contained or referred to herein or which would or would be reasonably likely to
cause Mutual not to be able to satisfy any condition set forth in Sections 7.1
or 7.3 of this Agreement, give prompt written notice thereof to First Northern
and use its best efforts to prevent or promptly remedy the same. By appropriate
resolution, the Board of Directors of Survivor shall, prior to the Effective
Time, authorize and reserve the required number of shares of Survivor Common
Stock to be issued pursuant to this Agreement. Survivor also shall use all
reasonable efforts to cause the shares of Survivor Common Stock to be issued
pursuant to this Agreement to be approved for listing on the NASDAQ/NMS subject
to official notice of issuance, prior to the Effective Time.
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3.15 Affiliates. Not later than 10 calendar days after the date of the
First Northern Meeting, First Northern shall deliver to Mutual a letter
identifying, to the best of First Northern's Knowledge, all Persons who were
Affiliates at the date of the First Northern Meeting. First Northern shall
furnish such information and documents as Mutual may reasonably request for the
purposes of reviewing such list. First Northern shall advise the Affiliates of
the resale restrictions imposed by applicable securities Laws and shall use
reasonable best efforts to obtain from the Affiliates an executed Affiliate
Letter for delivery to Mutual prior to or at the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FIRST NORTHERN
First Northern hereby represents and warrants to Mutual and Merger
Corp. that:
4.1 Organization and Qualification; Subsidiaries.
(a) First Northern is a corporation duly organized, validly
existing and in active status under the Laws of the State of Wisconsin, and is a
registered savings and loan holding company under HOLA. The Bank is a Wisconsin
capital stock savings and loan association duly organized, validly existing and
in good standing under the Laws of the state of Wisconsin. The deposits of the
Bank are insured by the SAIF of the FDIC as permitted by federal Law, and the
Bank has paid all premiums and assessments required thereunder. The Bank is a
member in good standing of the FHLB of Chicago. Each of the other First Northern
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the state of its incorporation. Each of First Northern and the First
Northern Subsidiaries has the requisite corporate power and authority and is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders ("First Northern
Approvals") necessary to own, lease and operate its properties and to carry on
its business as it is now being conducted, including appropriate authorizations
from the OTS, the FDIC and the Wisconsin Agency, except where a failure to be so
organized, existing and in good standing or to have such power, authority and
First Northern Approvals would not, individually or in the aggregate, have a
Material Adverse Effect on First Northern, and neither First Northern nor any
First Northern Subsidiary has received any notice of proceedings relating to the
revocation or modification of any First Northern Approvals.
(b) First Northern and each First Northern Subsidiary is duly
qualified or licensed as a foreign corporation to conduct business, and is in
good standing (or the equivalent thereof) in each jurisdiction where the
character of the properties it owns, leases or operates or the nature of the
activities it conducts make such qualification or licensing necessary, except
for such failures to be so duly qualified and licensed and in good standing that
would not, either individually or in the aggregate, have a Material Adverse
Effect on First Northern.
(c) A true and complete list of all Subsidiaries of First
Northern (the "First Northern Subsidiaries"), together with (i) First Northern's
direct or indirect percentage ownership
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of each First Northern Subsidiary; (ii) the jurisdiction in which the First
Northern Subsidiaries are incorporated; and (iii) a description of the principal
business activities conducted by each First Northern Subsidiary, is set forth in
the First Northern Disclosure Schedule. Except as set forth in the First
Northern Disclosure Schedule, First Northern and/or one or more of the First
Northern Subsidiaries owns beneficially and of record all of the outstanding
shares of capital stock of each of the First Northern Subsidiaries. Except for
the Subsidiaries identified in the First Northern Disclosure Schedule, First
Northern does not directly or indirectly own any equity or similar interests in,
or any interests convertible into or exchangeable or exercisable for any equity
or similar interest in, any corporation, partnership, limited liability company,
joint venture or other business association or entity other than in the ordinary
course of business, and in no event in excess of 10% of the outstanding equity
or voting securities of such entity.
4.2 Articles of Incorporation and Bylaws. First Northern heretofore has
furnished to Mutual a complete and correct copy of the Articles of Incorporation
and Bylaws, as amended or restated, of First Northern and of each First Northern
Subsidiary. Such Articles of Incorporation and Bylaws are in full force and
effect. Neither First Northern nor any First Northern Subsidiary is in violation
of any of the provisions of its Articles of Incorporation or Bylaws.
4.3 Capitalization. The authorized capital stock of First Northern
consists of 30,000,000 shares of First Northern Common Stock and 10,000,000
shares of cumulative preferred stock, par value $1.00 per share. As of February
15, 2000, (a)8,586,308 shares of First Northern Common Stock are issued and
outstanding, all of which are duly authorized, validly issued, fully paid and
non-assessable, except as otherwise provided by Section 180.0622(2)(b), and not
issued in violation of any preemptive right of any First Northern Shareholder,
(b) 548,427 shares of First Northern Common Stock are held in the treasury of
First Northern, (c) 755,900 shares of First Northern Common Stock are subject to
issuance pursuant to outstanding First Northern Stock Options, and (d) 753,000
shares of First Northern Common Stock are reserved for future issuance pursuant
to the First Northern Stock Option Plans, and there has been no change in such
amounts thereafter except for changes resulting from the exercise or termination
after such date, if any, of First Northern Stock Options included in (c) above.
As of the date of this Agreement, no shares of First Northern's preferred stock
are issued and outstanding. Except as set forth in clauses (c) and (d) above, as
of the date of this Agreement First Northern has not granted any options,
warrants or other rights, agreements, arrangements or commitments of any
character, including without limitation voting agreements or arrangements,
relating to the issued or unissued capital stock of First Northern or any First
Northern Subsidiary or obligating First Northern or any First Northern
Subsidiary to issue or sell any shares of capital stock of, or other equity
interests in, First Northern or any First Northern Subsidiary. All shares of
First Northern Common Stock subject to issuance as described in the foregoing,
upon issue on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable, except as otherwise provided in Section 180.0622(2)(b), and will
not be issued in violation of any preemptive right of any First Northern
Shareholder. Except as described in the First Northern Disclosure Schedule,
there are no obligations, contingent or otherwise, of First Northern or any
First Northern Subsidiary to repurchase, redeem or otherwise acquire any shares
of First Northern Common Stock or the
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capital stock of any First Northern Subsidiary or to provide funds to or make
any investment (in the form of a loan, capital contribution or otherwise) in any
First Northern Subsidiary or any other entity. Each of the outstanding shares of
capital stock of each First Northern Subsidiary is duly authorized, validly
issued, fully paid and nonassessable, except, where applicable, as provided in
Section 180.0622(2)(b), and such shares owned by First Northern or another First
Northern Subsidiary are owned free and clear of all security interests, liens,
claims, pledges, agreements, limitations of First Northern's voting rights,
charges or other encumbrances of any nature whatsoever.
4.4 Authorization: Enforceability. The entering into, execution,
delivery and performance of this Agreement and all of the documents and
instruments required by this Agreement to be executed and delivered by First
Northern are within the corporate power of First Northern, and: (a) have been
duly and validly authorized by the requisite vote of the Board of Directors of
First Northern; and (b) upon the approval of the First Northern Shareholders and
receipt of all Regulatory Approvals, shall be duly and validly authorized by all
necessary corporate action. This Agreement is, and the other documents and
instruments required by this Agreement to be executed and delivered by First
Northern or the Bank will be, when executed and delivered by First Northern and
the Bank, the valid and binding obligations of First Northern and the Bank,
enforceable against each of them in accordance with their respective terms,
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar Laws generally affecting the
rights of creditors and subject to general equity principles.
4.5 No Violation or Conflict. Subject to the receipt of the Regulatory
Approvals, the execution, delivery and performance of this Agreement and all of
the documents and instruments required by this Agreement to be executed and
delivered by First Northern do not and will not conflict with or result in a
breach of any Law, the Articles of Incorporation or Bylaws of First Northern, or
the Articles of Incorporation or Bylaws of the Bank or any other First Northern
Subsidiary, constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any First Northern
Existing Contract or any First Northern Permit, or the creation of any Lien upon
any of the properties or assets of First Northern or any First Northern
Subsidiary, in each case which would have a Material Adverse Effect on First
Northern.
4.6 Title to Assets; Leases. Except for the First Northern Existing
Liens, the Permitted Liens on the Closing Date, Liens for current taxes not yet
due and payable, pledges to secure deposits and such imperfections of title,
easements and other encumbrances, if any, as do not materially detract from the
value of or substantially interfere with the present use of the property
affected thereby, First Northern owns good and marketable title to the assets
and properties which it owns or purports to own, free and clear of any and all
Liens. There is not, under any leases pursuant to which First Northern or any of
the First Northern Subsidiaries leases from others real or personal property,
any default by First Northern, any First Northern Subsidiary or, to the best of
First Northern's Knowledge, any other party thereto, or any event
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which with notice or lapse of time or both would constitute such a default in
each case which would have a Material Adverse Effect on First Northern.
4.7 Litigation. Except for the First Northern Existing Litigation: (a)
neither First Northern nor any First Northern Subsidiary is subject to any
material continuing order of, or written agreement or memorandum of
understanding with, or, to the Knowledge of First Northern, any continuing
material investigation by, any federal or state savings and loan or insurance
authority or other governmental entity, or any judgment, order, writ,
injunction, decree or award of any governmental entity or arbitrator, including,
without limitation, cease and desist or other orders of any savings and loan
regulatory authority; (b) there is no claim, litigation, arbitration,
proceeding, governmental investigation, citation or action of any kind pending
or, to the Knowledge of First Northern, proposed or threatened, against or
relating to First Northern or any First Northern Subsidiary, nor to the
Knowledge of First Northern is there any basis known for any such material
action; (c) there are no actions, suits or proceedings pending or, to the
knowledge of First Northern, proposed or threatened, against First Northern by
any Person which question the legality, validity or propriety of the
transactions contemplated by this Agreement; and (d) there are no uncured
material violations or violations with respect to which material refunds or
restitutions may be required, cited in any compliance report to First Northern
or any First Northern Subsidiary as a result of an examination by any regulatory
authority.
4.8 Securities and Banking Reports; Books and Records.
(a) Since January 1, 1997, First Northern and the Bank have filed
all reports, registration statements, definitive proxy statements and
prospectuses, together with any amendments required to be made with respect
thereto, that were and are required to be filed under the Securities Act,
Exchange Act or any other Law with: (i) the SEC; (ii) the OTS; (iii) the FHLB of
Chicago; (iv) the FDIC; (v) the Wisconsin Agency; and (vi) any other applicable
state securities or savings and loan authorities (all such reports, statements
and prospectuses are collectively referred to herein as the "First Northern
Reports"). When filed, each of the First Northern Reports complied as to form
and substance in all material respects with the requirements of applicable Laws.
(b) Each of the consolidated audited financial statements and
consolidated unaudited interim financial statements (including, in each case,
any related notes thereto) of First Northern included in the First Northern
Reports filed with the SEC have been or will be, as the case may be, prepared in
accordance with generally accepted accounting principles applied on a consistent
basis (except as may be indicated therein or in the notes thereto and except
with respect to consolidated unaudited interim statements as permitted by SEC
Form 10-Q) and each fairly presents the consolidated financial condition of
First Northern as of the respective dates thereof and the consolidated income,
equity and cash flows for the periods then ended, subject, in the case of the
consolidated unaudited interim financial statements, to normal year-end and
audit adjustments and any other adjustments described therein.
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(c) The minute books of First Northern and the First Northern
Subsidiaries contain accurate and complete records of all meetings and actions
taken by written consent by their respective shareholders and Boards of
Directors (including all committees of such Boards), and all signatures
contained therein are the true signatures of the Persons whose signatures they
purport to be. The share transfer books of First Northern are correct, complete
and current in all respects. The accounting books and records of First Northern:
(i) are in all material respects correct and complete; (ii) are current in a
manner consistent with past practice; and (iii) have recorded therein all the
properties and assets and liabilities of First Northern.
4.9 Absence of Certain Changes. Except as set forth in the First
Northern Disclosure Schedule, since December 31, 1999 there has not been any:
(a) change in the financial condition, properties, business or
results of operations of First Northern or any First Northern Subsidiary having
a Material Adverse Effect on First Northern;
(b) damage, destruction or loss (whether or not covered by
insurance) with respect to any assets of First Northern or any First Northern
Subsidiary having a Material Adverse Effect on First Northern;
(c) transactions by First Northern or any First Northern
Subsidiary outside the ordinary course of their respective businesses or
inconsistent with past practices, except for the transactions contemplated by
this Agreement;
(d) except for regular quarterly cash dividends of $0.11 per
share on First Northern Common Stock with usual record and payment dates,
declaration or payment or setting aside the payment of any dividend or any
distribution in respect of the capital stock of First Northern or any direct or
indirect redemption, purchase or other acquisition of any such stock by First
Northern;
(e) allocations to the accounts of any directors, officers or
employees of First Northern or of any First Northern Subsidiary pursuant to any
of the First Northern Existing Plans other than in the normal course and in
accordance with the terms of the First Northern Existing Plans (none of which
have been amended or established subsequent to December 31, 1999);
(f) contribution to, increase in, or establishment of any
Employee Benefit Plan (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards or restricted stock
awards), or any other increase in the compensation payable or to become payable
to any officers, directors or key employees of First Northern or any First
Northern Subsidiary other than in the normal course and in accordance with the
terms of the First Northern Existing Plans (none of which have been amended or
established subsequent to December 31, 1999); or
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(g) change in the method of accounting or accounting practices of
First Northern or any First Northern Subsidiary.
4.10 Buildings and Equipment. Except as set forth in the First Northern
Disclosure Schedule: (a) the Buildings and the Equipment of First Northern and
the First Northern Subsidiaries are in good operating condition and repair,
reasonable wear and tear excepted; (b) are adequately insured for the nature of
First Northern's business with the self-insured retentions specified on the
First Northern Disclosure Schedule; (c) such assets and their use conform in all
material respects to applicable Laws; and (d) no notice of any violation of any
building, zoning or other Law relating to such assets or their use has been
received by First Northern or any First Northern Subsidiary.
4.11 First Northern Existing Contracts. The First Northern Disclosure
Schedule lists and briefly describes each Material Contract (the "First Northern
Existing Contracts") to which First Northern or a First Northern Subsidiary is a
party or by which its assets are bound. First Northern and each First Northern
Subsidiary has fully performed each term, covenant and condition of each First
Northern Existing Contract which is to be performed by it at or before the date
hereof, except where such non-performance would not have a Material Adverse
Effect on First Northern.
4.12 Investment Securities. Except as set forth on the First Northern
Disclosure Schedule, First Northern and the First Northern Subsidiaries do not
own, and does not have any right or obligation to acquire, any Investment
Securities.
4.13 Contingent and Undisclosed Liabilities. First Northern and the
First Northern Subsidiaries have no material liabilities of any nature
(contingent or otherwise) except for those which: (a) are disclosed in the First
Northern Reports or in the First Northern Disclosure Schedule or in this
Agreement; or (b) arise in the ordinary course of business since December 31,
1999 and are not required to be disclosed in the First Northern Reports or
pursuant to this Agreement or the First Northern Disclosure Schedule.
4.14 Insurance Policies. All real and personal property owned or leased
by First Northern or any First Northern Subsidiary has been and is being insured
against, and First Northern or the respective First Northern Subsidiary
maintains liability insurance against, such insurable risks and in such amounts
as set forth in the First Northern Disclosure Schedule. Such Insurance Policies
constitute all insurance coverage owned by First Northern or any First Northern
Subsidiary and are in full force and effect and First Northern or any First
Northern Subsidiary has not received notice of and is not otherwise aware of any
cancellation or threat of cancellation of such insurance. Except as described in
the First Northern Disclosure Schedule, no property damage, personal injury or
liability claims have been made, or are pending, against First Northern or any
First Northern Subsidiary that are not covered by insurance. Within the past two
(2) years, no insurance company has canceled any insurance (of any type)
maintained by First Northern or any First Northern Subsidiary. Neither First
Northern nor any First Northern Subsidiary has any liability for unpaid premiums
or premium adjustments for any
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insurance policy. To the Knowledge of First Northern, the cost of any insurance
currently maintained by First Northern or any First Northern Subsidiary will not
increase significantly upon renewal other than increases consistent with the
general upward trend in the cost of obtaining insurance.
4.15 Employee Benefit Plans.
(a) Except for the First Northern Existing Plans, First
Northern does not maintain, nor is it bound by, any Employee Benefit Plan. First
Northern has furnished Mutual with a complete and accurate copy of each First
Northern Existing Plan and a complete and accurate copy of each material
document prepared in connection with each such First Northern Existing Plan,
including, without limitation and where applicable, a copy of (i) each trust or
other funding arrangement, (ii) the most recent summary plan description and all
summaries of material modifications applicable thereto, (iii) the most recently
filed IRS Form 5500, (iv) the most recently received IRS determination letter,
and (v) the most recently prepared actuarial report and financial statement.
(b) Except as indicated on the First Northern Disclosure
Schedule, no member of First Northern's "controlled group," within the meaning
of Section 4001(a)(14) of ERISA, maintains or contributes to, or within the two
years preceding the Effective Time has maintained or contributed to, an employee
pension benefit plan subject to Title IV of ERISA. Except as indicated on the
First Northern Disclosure Schedule, none of the First Northern Existing Plans or
First Northern Existing Contracts obligates First Northern or any First Northern
Subsidiary to pay material separation, severance, termination or similar-type
benefits solely as a result of any transaction contemplated by this Agreement or
as a result of a "change in control," within the meaning of such term under
Section 280G of the Code. Except as indicated on the First Northern Disclosure
Schedule, none of the First Northern Existing Plans or First Northern Existing
Contracts provides for or promises retiree medical, disability or life insurance
benefits to any current or former employee, officer or director of First
Northern or any First Northern Subsidiary. Each of the First Northern Existing
Plans is subject only to the Laws of the United States or a political
subdivision thereof.
(c) Each First Northern Existing Plan has always been operated
in material compliance with the requirements of all applicable Law, and all
persons who participate in the operation of such First Northern Existing Plans
and all First Northern Existing Plan "fiduciaries" (within the meaning of
Section 3(21) of ERISA) have always acted in material compliance with the
provisions of all applicable Law. First Northern and all of the First Northern
Subsidiaries have performed in all material respects all obligations required to
be performed by any of them under, are not in any material respect in default
under or in violation of, and have no knowledge of any material default or
violation by any party to, any First Northern Existing Plan. No legal action,
suit or claim is pending or, to the knowledge of First Northern, threatened with
respect to any First Northern Existing Plan (other than claims for benefits in
the ordinary course) and no fact or event exists to the knowledge of First
Northern that could give rise to any such action, suit or claim.
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(d) Except as set forth on the First Northern Disclosure
Schedule, each First Northern Existing Plan that is intended to be qualified
under Section 401(a) of the Code or Section 401(k) of the Code has received a
favorable determination letter from the IRS that it is so qualified, and to the
Knowledge of First Northern no fact or event has occurred since the date of such
determination letter from the IRS to adversely affect the qualified status of
any such First Northern Existing Plan. No trust maintained or contributed to by
First Northern or any First Northern Subsidiary is intended to be qualified as a
voluntary employees' beneficiary association or is intended to be exempt from
federal income taxation under Section 501(c)(9) of the Code.
(e) There has been no non-exempt prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Code) with
respect to any First Northern Existing Plan. First Northern and each of the
First Northern Subsidiaries has not incurred any liability for any excise tax
arising under Section 4972 or 4980B of the Code and no fact or event exists that
could give rise to any such liability.
(f) All contributions, premiums or payments required to be
made with respect to any First Northern Existing Plan have been made on or
before their due dates. There is no accumulated funding deficiency, within the
meaning of ERISA or the Code, in connection with the First Northern Existing
Plans and no reportable event, as defined in ERISA, has occurred in connection
with the First Northern Existing Plans. First Northern and the First Northern
Subsidiaries are not contributing to, and have not contributed to any
multi-employer plan, as defined in ERISA.
(g) No representation and warranty set forth in this Section
4.15 shall be deemed to be breached unless such breach, individually or in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect on
First Northern.
4.16 No Violation of Law. Except as set forth in the First Northern
Disclosure Schedule, neither First Northern, any First Northern Subsidiary nor
any of the assets of First Northern or the First Northern Subsidiaries
materially violate or conflict with any Law, any First Northern Permits, or any
decree, judgment or order, or any zoning, building line restriction, planning,
use or other similar restriction, in each case which would have a Material
Adverse Effect on First Northern.
4.17 Brokers. Except for fees to Xxxxx, Xxxxxxxx & Xxxxx, Inc.,
First Northern's financial advisor, neither First Northern nor any First
Northern Subsidiary has incurred any brokers', finders', financial advisor or
any similar fee in connection with the transactions contemplated by this
Agreement. The First Northern Disclosure Schedule contains a list of all fees to
be paid to such advisor in connection with the transactions contemplated by this
Agreement.
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4.18 Taxes.
(a) Except as disclosed in the First Northern Disclosure
Schedule and except as may arise as a result of the transactions contemplated by
this Agreement: First Northern and the First Northern Subsidiaries have timely
and properly filed all federal, state, local and foreign tax returns (including
but not limited to income, franchise, sales, payroll, employee withholding and
social security and unemployment) which were required to be filed except where
the failure to have filed timely or properly would not have a Material Adverse
Effect on First Northern; First Northern and the First Northern Subsidiaries
have paid or made adequate provision, in reserves reflected in its financial
statements included in the First Northern Reports in accordance with generally
accepted accounting principles, for the payment of all taxes (including interest
and penalties) and withholding amounts owed by them or assessable against them;
no tax deficiencies have been assessed or proposed against First Northern or any
First Northern Subsidiary and to the Knowledge of First Northern there is no
basis in fact for the assessment of any tax or penalty tax against First
Northern or any First Northern Subsidiary.
(b) As of the date of this Agreement, except as disclosed in
the First Northern Disclosure Schedule, there are no fiscal years of First
Northern currently under examination by the IRS or the Wisconsin Department of
Revenue, and none of the open years has been examined by the IRS or the
Wisconsin Department of Revenue. First Northern and the First Northern
Subsidiaries have not consented to any extension of the statute of limitation
with respect to any open tax returns.
(c) There are no tax Liens upon any property or assets of
First Northern or any First Northern Subsidiary except for Liens for current
taxes not yet due and payable.
(d) As soon as practicable after the date of this Agreement,
First Northern and the First Northern Subsidiaries will deliver to Mutual
correct and complete copies of all tax returns and reports of First Northern
filed for all periods not barred by the applicable statute of limitations. No
examination or audit of any tax return or report for any period not closed by
audit or not barred by the applicable statute of limitations has occurred, no
such examination is in progress and, to the Knowledge of First Northern, no such
examination or audit is planned.
(e) Except where the failure to withhold, pay or file would
not have a Material Adverse Effect on First Northern, First Northern and the
First Northern Subsidiaries have properly withheld and timely paid all
withholding and employment taxes which they were required to withhold and pay
relating to salaries, compensation and other amounts heretofore paid to their
employees or other Persons. All Forms W-2 and 1099 required to be filed with
respect thereto have been timely and properly filed.
4.19 Real Estate. The First Northern Real Estate: (a) constitutes
all real property and improvements (or interest therein, including without
limitation easements, licenses or similar arrangements authorizing First
Northern or a First Northern Subsidiary to place, maintain, operate and/or use
an automated teller machine or similar device on real property of a third-
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party) leased or owned by First Northern or any First Northern Subsidiary; (b)
other than with respect to First Northern or any First Northern Subsidiary as
lessee, is not subject to any leases or tenancies of any kind; (c) is not in the
possession of any adverse possessors; (d) has direct access to and from a public
road or street; (e) except for violations that would not have a Material Adverse
Effect on First Northern, is used in a manner which is consistent with
applicable Law; (f) is, and has been since the date of possession thereof by
First Northern or any First Northern Subsidiary, in the peaceful possession of
First Northern or any First Northern Subsidiary; (g) is served by all water,
sewer, electrical, telephone, drainage and other utilities required for the
normal operations of the Buildings of First Northern and the First Northern
Subsidiaries and the First Northern Real Estate; (h) except as disclosed in the
First Northern Disclosure Schedule, to the Knowledge of First Northern, is not
located in an area designated as a flood plain or wetland; (i) is not subject to
any outstanding special assessment; (j) is not subject to any zoning, ordinance,
decrees or other Laws which would materially restrict or prohibit Mutual from
continuing the operations presently conducted thereon by First Northern or any
First Northern Subsidiary; (k) is not subject to any interest of any Person
under an easement, contract, option or mineral rights or other agreements which
would have a Material Adverse Effect on First Northern; (l) is not subject to
any presently pending condemnation proceedings, nor to First Northern's
Knowledge, are such proceedings threatened against the First Northern Real
Estate.
4.20 Governmental Approvals. No permission, approval, determination,
consent or waiver by, or any declaration, filing or registration with, any
governmental or regulatory authority is required in connection with the
execution, delivery and performance of this Agreement by First Northern or any
First Northern Subsidiary, except for the Regulatory Approvals and except for
consent the failure of which to obtain would not, individually or in the
aggregate, have a Material Adverse Effect on First Northern.
4.21 No Pending Acquisitions. Except for this Agreement, First Northern
is not a party to or bound by any agreement, undertaking or commitment with
respect to an Acquisition on the date of this Agreement.
4.22 Labor Matters.
(a) Except as disclosed on the First Northern Disclosure Schedule
(or in an updated First Northern Disclosure Schedule with respect to vacations
in (iii) below), there is no present or former employee of First Northern or any
First Northern Subsidiary who has any claim against any of such entities
(whether under Law, under any employee agreement or otherwise) on account of or
for: (i) overtime pay, other than overtime pay for the current payroll period;
(ii) wages or salaries, other than wages or salaries for the current payroll
period; or (iii) vacations, sick leave, time off or pay in lieu of vacation,
sick leave or time off, other than vacation, sick leave or time off (or pay in
lieu thereof) earned in the twelve-month period immediately preceding the date
of this Agreement or incurred in the ordinary course of business and appearing
as a liability on the most recent financial statements included in the First
Northern Reports.
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(b) There are no pending and unresolved claims by any Person
against First Northern or any First Northern Subsidiary arising out of any Law
relating to discrimination against employees or employee practices or
occupational or safety and health standards. There is no pending or, to the
knowledge of First Northern, threatened, nor has First Northern or any First
Northern Subsidiary, since January 1, 1995, experienced any, labor dispute,
strike or work stoppage which affected, affects or may affect the business of
First Northern or any First Northern Subsidiary or which did, may or would
interfere with the continued operation of First Northern or any First Northern
Subsidiary.
(c) Neither First Northern nor any First Northern Subsidiary
is a party to any collective bargaining agreement. There is not now pending or,
to the Knowledge of First Northern, threatened, any charge or complaint against
First Northern or any First Northern Subsidiary by or before the National Labor
Relations Board or any representative thereof, or any comparable state agency or
authority. No union organizing activities are in process, or to First Northern's
Knowledge contemplated, and no petitions have been filed for union organization
or representation of employees of First Northern or any First Northern
Subsidiary, and First Northern and the First Northern Subsidiaries have not
committed any unfair labor practices which have not heretofore been corrected
and fully remedied.
4.23 Indebtedness. Except for the First Northern Existing
Indebtedness, First Northern has no Indebtedness.
4.24 Permits. The Permits described on the Disclosure Schedule
constitute all Permits which First Northern and the First Northern Subsidiaries
currently have and need for the conduct of their respective businesses as
currently conducted, except for such Permits the failure of which to have would
not have a Material Adverse Effect on First Northern.
4.25 Disclosure. No statement of fact by First Northern contained
in this Agreement, the First Northern Disclosure Schedule, or any other document
furnished or to be furnished by First Northern contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements herein or therein contained, in
the light of the circumstances under which they were made, not misleading as of
the date to which it speaks.
4.26 Information Supplied. None of the information supplied or to
be supplied by First Northern for inclusion or incorporation by reference in the
Registration Statement or the Proxy Statement will, at the date the Registration
Statement becomes effective, the date(s) the Proxy Statement is mailed to the
First Northern Shareholders and at the time(s) of the First Northern Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations of the SEC
thereunder.
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4.27 Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of First Northern Common Stock is the only
vote of the holders of any class or series of capital stock or other securities
of First Northern necessary to approve the Merger, this Agreement and the
transactions contemplated by this Agreement.
4.28 Opinion of Financial Advisor. First Northern has received the
opinion of Xxxxx, Xxxxxxxx & Xxxxx, Inc. as of the date of this Agreement, to
the effect that the consideration to be received in the Merger by the First
Northern Shareholders is fair to the First Northern Shareholders from a
financial point of view.
4.29 Environmental Protection.
(a) Except as set forth in the First Northern Disclosure
Schedule, First Northern and the First Northern Subsidiaries: (i) are in
material compliance with all applicable Environmental Laws; and (ii) have not
received any communication (written or oral), from a governmental authority or
other Person, that alleges that First Northern is not in compliance with
applicable Environmental Laws.
(b) Except as set forth in the First Northern Disclosure
Schedule, First Northern and the First Northern Subsidiaries have obtained all
Environmental Permits, and all such Environmental Permits are in good standing
and First Northern and the First Northern Subsidiaries are in material
compliance with all terms and conditions of their Environmental Permits.
(c) Except as set forth in the First Northern Disclosure
Schedule, there is no Environmental Claim pending or, to the Knowledge of First
Northern, threatened against First Northern, any First Northern Subsidiary or
against any Person whose liability for any Environmental Claim First Northern or
any First Northern Subsidiary has or may have retained or assumed either
contractually or by operation of Law, or against any real or personal property
or operations which First Northern or any First Northern Subsidiary owns, leases
or manages.
(d) Except as set forth in the First Northern Disclosure
Schedule, there have been no Releases of any Hazardous Material by First
Northern or by any Person on real property owned (including REO properties of
the Bank), used, leased or operated by First Northern or any of the First
Northern Subsidiaries.
(e) No real property at any time owned (including REO
properties of the Bank), operated, used or controlled by First Northern or any
First Northern Subsidiary is currently listed on the National Priorities List or
the Comprehensive Environmental Response, Compensation and Liability Information
System, both promulgated under the CERCLA, or on any comparable state list, and,
except as described in the First Northern Disclosure Schedule, First Northern
has not received any written notice from any Person under or relating to CERCLA
or any comparable state or local Law relating to potential listing on such
lists.
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(f) Except as set forth in the First Northern Disclosure
Schedule, to the Knowledge of First Northern, no off-site location at which
First Northern or any First Northern Subsidiary has disposed or arranged for the
disposal of any waste is listed on the National Priorities List or on any
comparable state list and neither First Northern nor any First Northern
Subsidiary has received any written notice from any Person with respect to any
off-site location, of potential or actual liability or a written request for
information from any Person under or relating to CERCLA or any comparable state
or local Law.
4.30 Year 2000 Compliant. All of the material computer hardware and
software systems of, or used by, First Northern and the First Northern
Subsidiaries (including, without limitation, those related to their facilities,
equipment, quality control activities, accounting and bookkeeping records and
record keeping activities) are Year 2000 Compliant, except where the failure to
be Year 2000 Compliant would not have a Material Adverse Effect on First
Northern.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MUTUAL AND MERGER CORP.
Mutual and Merger Corp. hereby jointly and severally represent and
warrant to First Northern that:
5.1 Organization and Capitalization; Business.
(a) Mutual is a mutual savings bank duly organized, validly
existing and in good standing under Chapter 214 of the Wisconsin Statutes. The
deposits of Mutual are insured by the SAIF of the FDIC as permitted by federal
Law, and Mutual has paid all premiums and assessments required thereunder.
Mutual is a member in good standing of the FHLB of Chicago.
(b) Mutual has full corporate power and authority and those
Permits necessary to carry on its business as it is now conducted and to own,
lease and operate its assets and properties.
(c) Merger Corp. is a corporation duly organized, validly
existing and in active status under the Laws of the State of Wisconsin. Prior to
the date of this Agreement, Merger Corp. engaged in no business other than
matters necessary to the organization and incorporation of Merger Corp. and to
authorize Merger Corp. to enter into, execute and deliver this Agreement. The
authorized capital stock of Merger Corp. consists of 9,000 shares of common
stock, $.01 par value per share. As of the date of this Agreement, 100 shares of
Merger Corp.'s common stock are issued and outstanding, all of which are duly
authorized, validly issued, fully paid, and non-assessable, except as otherwise
provided by Section 180.0622(2)(b), and are owned by Mutual.
(d) Prior to Closing, the Articles of Incorporation of Merger
Corp. will be changed so that the authorized capital stock of Survivor may
include shares of preferred stock,
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$.01 par value, and will include at least a sufficient number of shares of
Survivor Common Stock to permit the Merger and the Restructuring. Upon
completion of the Restructuring, not less than 51% of shares of Survivor Common
Stock will be owned by MHC. All the outstanding shares of Survivor Common Stock,
and all shares of Survivor Common Stock to be issued in the Merger, will be duly
authorized, validly issued, fully paid and non-assessable, except as otherwise
provided by Section 180.0622(2)(b).
(e) Copies of the Articles of Incorporation and Bylaws of
Mutual and of Merger Corp. have been delivered to First Northern. Such copies
are complete and correct copies of such documents, and are in full force and
effect. Neither Mutual nor Merger Corp. are in violation of any of the
provisions of their Articles of Incorporation or Bylaws.
5.2 Authorization; Enforceability. The entering into, execution,
delivery and performance of this Agreement and all of the documents and
instruments required by this Agreement to be executed and delivered by Mutual or
Merger Corp. are within the corporate power of Mutual or Merger Corp., as the
case may be, and: (a) have been duly and validly authorized by the requisite
vote of the Board of Directors of Mutual and, where required, by the Board of
Directors and sole shareholder of Merger Corp.; and (b) upon receipt of all
Regulatory Approvals, shall be duly and validly authorized by all necessary
corporate action on the part of both Mutual and Merger Corp. This Agreement is,
and the other documents and instruments required by this Agreement to be
executed and delivered by Mutual or Merger Corp. will be, when executed and
delivered by Mutual or Merger Corp., as the case may be, the valid and binding
obligations of Mutual or Merger Corp., as the case may be, enforceable against
Mutual or Merger Corp., as the case may be, in accordance with their respective
terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar Laws generally
affecting the rights of creditors and subject to general equity principles.
5.3 No Violation or Conflict. Subject to the receipt of the
Regulatory Approvals, the execution, delivery and performance of this Agreement
and all of the documents and instruments required by this Agreement to be
executed and delivered by Mutual or Merger Corp. do not and will not conflict
with or result in a breach of any Law or the Articles of Incorporation or Bylaws
of Mutual or Merger Corp. or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any Contract
of Mutual or Merger Corp. or any Permit held by or the creation of any Lien upon
any of the properties or assets of Mutual or Merger Corp.
5.4 Litigation. Except for the Mutual Existing Litigation: (a)
neither Mutual nor any Mutual Subsidiary is subject to any continuing order of,
or written agreement or memorandum of understanding with, or, to the Knowledge
of Mutual, any continuing material investigation by, any federal or state
savings and loan or insurance authority or other governmental entity, or any
judgment, order, writ, injunction, decree or award of any governmental entity or
arbitrator, including, without limitation, cease and desist or other orders of
any savings and loan regulatory authority; (b) there is no claim, litigation,
arbitration, proceeding, governmental investigation,
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citation or action of any kind pending or, to the Knowledge of Mutual, proposed
or threatened, against or relating to Mutual or any Mutual Subsidiary, nor is to
the Knowledge of Mutual is there any basis for any such material action; (c)
there are no actions, suits or proceedings pending or, to the Knowledge of
Mutual, proposed or threatened, against Mutual by any Person which question the
legality, validity or propriety of the transactions contemplated by this
Agreement; and (d) there are no uncured material violations or violations with
respect to which material refunds or restitutions may be required, cited in any
compliance report to Mutual or any Mutual Subsidiary as a result of an
examination by any regulatory authority.
5.5 Brokers. Except for fees to Xxxx, Xxxx & Co. and RP Financial,
L.L.C., Mutual's marketing and financial advisors, neither Mutual nor Merger
Corp. has incurred any brokers', finders', financial advisor or any similar fee
in connection with the transactions contemplated by this Agreement. The Mutual
Disclosure Schedule contains a list of all agreements with such advisors, copies
of which have been provided to First Northern.
5.6 Governmental Approvals. Other than the Regulatory Approvals, no
permission, approval, determination, consent or waiver by, or any declaration,
filing or registration with, any governmental or regulatory authority is
required in connection with the execution, delivery and performance of this
Agreement by Mutual or Merger Corp.
5.7 Disclosure. No statement of fact by Mutual contained in this
Agreement, the Omaha Disclosure Schedule or any other document furnished or to
be furnished by Mutual contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements herein or therein contained, in the light of the
circumstances under which they were made, not misleading as of the date to which
it speaks.
5.8 Information Supplied. None of the information supplied or to be
supplied by Mutual for inclusion or incorporation by reference in the
Registration Statement or the Proxy Statement will, at the date the Registration
Statement becomes effective, the date(s) the Proxy Statement is mailed to the
First Northern Shareholders and at the time(s) of the First Northern Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
5.9 Opinion of Financial Advisor. Mutual has received the opinion of
RP Financial, L.L.C., as of the date of this Agreement, to the effect that the
consideration to be paid in the Merger by Mutual is fair to Mutual and its
members from a financial point of view.
5.10 Cash Payment. Mutual has sufficient funds or has financing
arranged as part of the Restructuring to pay the cash payment required under
Section 2.8 of this Agreement and such payment will not cause Mutual or Survivor
to fail to meet any regulatory capital requirements to which it is subject.
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5.11 Compliance with Laws. Mutual is in compliance in all material
respects with all applicable Laws.
5.12 Consummation. Mutual has no reason to believe that it will be
unable to obtain the Regulatory Approvals.
5.13 Banking Reports; Books and Records.
(a) Since January 1, 1997, Mutual has filed all reports,
together with any amendments required to be made with respect thereto, that were
and are required to be filed under any Law with: (i) the OTS; (ii) the FHLB of
Chicago; (iii) the FDIC; (iv) the Wisconsin Agency; and (v) any other applicable
state securities or savings bank authorities (all such reports and other
documents are collectively referred to herein as the "Mutual Reports"). When
filed, each of the Mutual Reports complied as to form and substance in all
material respects with the requirements of applicable Laws.
(b) Each of the consolidated audited financial statements and
consolidated unaudited interim financial statements (including, in each case,
any related notes thereto) of Mutual included in the Mutual Reports have been or
will be, as the case may be, prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be indicated
therein or in the notes thereto and except with respect to consolidated
unaudited interim statements) and each fairly presents the consolidated
financial condition of Mutual as of the respective dates thereof and the
consolidated income, equity and cash flows for the periods then ended, subject,
in the case of the consolidated unaudited interim financial statements, to
normal year-end and audit adjustments and any other adjustments described
therein.
(c) The minute books of Mutual and the Mutual Subsidiaries
contain accurate and complete records of all meetings and actions taken by
written consent by their respective shareholders and Boards of Directors
(including all committees of such Boards), and all signatures contained therein
are the true signatures of the Persons whose signatures they purport to be. The
accounting books and records of Mutual: (i) are in all material respects correct
and complete; (ii) are current in a manner consistent with past practice; and
(iii) have recorded therein all the properties and assets and liabilities of
Mutual.
5.14 Absence of Certain Changes. Except as set forth in the Mutual
Disclosure Schedule, since December 31, 1998 there has not been any:
(a) change in the financial condition, properties, business or
results of operations of Mutual or any Mutual Subsidiary having a Material
Adverse Effect on Mutual;
(b) damage, destruction or loss (whether or not covered by
insurance) with respect to any assets of Mutual or any Mutual Subsidiary having
a Material Adverse Effect on Mutual;
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(c) transactions by Mutual or any Mutual Subsidiary outside
the ordinary course of their respective businesses or inconsistent with past
practices, except for the transactions contemplated by this Agreement; or
(d) change in the method of accounting or accounting practices
of Mutual or any Mutual Subsidiary.
5.15 Mutual Existing Contracts. The Mutual Disclosure Schedule
lists and briefly describes each Material Contract (the "Mutual Existing
Contracts") to which Mutual or a Mutual Subsidiary is a party or by which its
assets are bound. Mutual and each Mutual Subsidiary has fully performed each
term, covenant and condition of each Mutual Existing Contract which is to be
performed by it at or before the date hereof, except where such non-performance
would not have a Material Adverse Effect on Mutual.
5.16 Contingent and Undisclosed Liabilities. Mutual and the Mutual
Subsidiaries have no material liabilities of any nature (contingent or
otherwise) except for those which: (a) are disclosed in the Mutual Reports or in
the Mutual Disclosure Schedule or in this Agreement; or (b) arise in the
ordinary course of business since December 31, 1998 and are not required to be
disclosed in the Mutual Reports or pursuant to this Agreement or the Mutual
Disclosure Schedule.
5.17 Taxes.
(a) Except as disclosed in the Mutual Disclosure Schedule and
except as may arise as a result of the transactions contemplated by this
Agreement: Mutual and the Mutual Subsidiaries have timely and properly filed all
federal, state, local and foreign tax returns (including but not limited to
income, franchise, sales, payroll, employee withholding and social security and
unemployment) which were required to be filed except where the failure to have
filed timely or properly would not have a Material Adverse Effect on Mutual;
Mutual and the Mutual Subsidiaries have paid or made adequate provision, in
reserves reflected in its financial statements included in the Mutual Reports in
accordance with generally accepted accounting principles, for the payment of all
taxes (including interest and penalties) and withholding amounts owed by them or
assessable against them; no tax deficiencies have been assessed or proposed
against Mutual or any Mutual Subsidiary and to the Knowledge of Mutual there is
no basis in fact for the assessment of any tax or penalty tax against Mutual or
any Mutual Subsidiary.
(b) As of the date of this Agreement, except as disclosed in
the Mutual Disclosure Schedule, there are no fiscal years of Mutual currently
under examination by the IRS or the Wisconsin Department of Revenue, and none of
the open years has been examined by the IRS or the Wisconsin Department of
Revenue. Mutual and the Mutual Subsidiaries have not consented to any extension
of the statute of limitation with respect to any open tax returns.
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(c) There are no tax Liens upon any property or assets of
Mutual or any Mutual Subsidiary except for Liens for current taxes not yet due
and payable.
(d) As soon as practicable after the date of this Agreement,
Mutual and the Mutual Subsidiaries will deliver to First Northern correct and
complete copies of all tax returns and reports of Mutual filed for all periods
not barred by the applicable statute of limitations. No examination or audit of
any tax return or report for any period not closed by audit or not barred by the
applicable statute of limitations has occurred, no such examination is in
progress and, to the Knowledge of Mutual, no such examination or audit is
planned.
(e) Except where the failure to withhold, pay or file would
not have a Material Adverse Effect on Mutual, Mutual and the Mutual Subsidiaries
have properly withheld and timely paid all withholding and employment taxes
which they were required to withhold and pay relating to salaries, compensation
and other amounts heretofore paid to their employees or other Persons. All Forms
W-2 and 1099 required to be filed with respect thereto have been timely and
properly filed.
5.18 Real Estate. The Mutual Real Estate: (a) constitutes all real
property and improvements (or interest therein, including without limitation
easements, licenses or similar arrangements authorizing Mutual or a Mutual
Subsidiary to place, maintain, operate and/or use an automated teller machine or
similar device on real property of a third-party) leased or owned by Mutual or
any Mutual Subsidiary; (b) other than with respect to Mutual or any Mutual
Subsidiary as lessee, is not subject to any leases or tenancies of any kind; (c)
is not in the possession of any adverse possessors; (d) has direct access to and
from a public road or street; (e) is used in a manner which is consistent with
applicable Law; (f) is, and has been since the date of possession thereof by
Mutual or any Mutual Subsidiary, in the peaceful possession of Mutual or any
Mutual Subsidiary; (g) is served by all water, sewer, electrical, telephone,
drainage and other utilities required for the normal operations of the Buildings
of Mutual and the Mutual Subsidiaries and the Mutual Real Estate; (h) except as
disclosed in the Mutual Disclosure Schedule, to the Knowledge of Mutual, is not
located in an area designated as a flood plain or wetland; (i) is not subject to
any outstanding special assessment; (j) is not subject to any zoning, ordinance,
decrees or other Laws which would materially restrict or prohibit Mutual from
continuing the operations presently conducted thereon by Mutual or any Mutual
Subsidiary; (k) is not subject to any interest of any Person under an easement,
contract, option or mineral rights or other agreements which would have a
Material Adverse Effect on Mutual; (l) is not subject to any presently pending
condemnation proceedings, nor to Mutual's Knowledge, are such proceedings
threatened against the Mutual Real Estate.
5.19 No Pending Acquisitions. Except for this Agreement, Mutual is
not a party to or bound by any agreement, undertaking or commitment with respect
to an Acquisition on the date of this Agreement.
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5.20 Environmental Protection.
(a) Except as set forth in the Mutual Disclosure Schedule,
Mutual and the Mutual Subsidiaries: (i) are in material compliance with all
applicable Environmental Laws; and (ii) have not received any communication
(written or oral), from a governmental authority or other Person, that alleges
that Mutual is not in compliance with applicable Environmental Laws.
(b) Except as set forth in the Mutual Disclosure Schedule,
Mutual and the Mutual Subsidiaries have obtained all Environmental Permits and
all such Environmental Permits are in good standing and Mutual and the Mutual
Subsidiaries are in material compliance with all terms and conditions of their
Environmental Permits.
(c) Except as set forth in the Mutual Disclosure Schedule,
there is no Environmental Claim pending or, to the Knowledge of Mutual,
threatened against Mutual, any Mutual Subsidiary or against any Person whose
liability for any Environmental Claim Mutual or any Mutual Subsidiary has or may
have retained or assumed either contractually or by operation of Law, or against
any real or personal property or operations which Mutual or any Mutual
Subsidiary owns, leases or manages.
(d) Except as set forth in the Mutual Disclosure Schedule,
there have been no Releases of any Hazardous Material by Mutual or by any Person
on real property owned (including REO properties of Mutual), used, leased or
operated by Mutual or any of the Mutual Subsidiaries.
(e) No real property at any time owned (including REO
properties of Mutual), operated, used or controlled by Mutual or any Mutual
Subsidiary is currently listed on the National Priorities List or the
Comprehensive Environmental Response, Compensation and Liability Information
System, both promulgated under the CERCLA, or on any comparable state list, and,
except as described in the Mutual Disclosure Schedule, Mutual has not received
any written notice from any Person under or relating to CERCLA or any comparable
state or local Law relating to potential listing on such lists.
(f) Except as set forth in the Mutual Disclosure Schedule, to
the Knowledge of Mutual, no off-site location at which Mutual or any Mutual
Subsidiary has disposed or arranged for the disposal of any waste is listed on
the National Priorities List or on any comparable state list and neither Mutual
nor any Mutual Subsidiary has received any written notice from any Person with
respect to any off-site location, of potential or actual liability or a written
request for information from any Person under or relating to CERCLA or any
comparable state or local Law.
5.21 Year 2000 Compliant. All of the material computer hardware and
software systems of, or used by, Mutual and the Mutual Subsidiaries (including,
without limitation, those related to their facilities, equipment, quality
control activities, accounting and bookkeeping
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records and record keeping activities) are Year 2000 Compliant, except where the
failure to be Year 2000 Compliant would not have a Material Adverse Effect on
Mutual.
ARTICLE VI
CONDUCT OF BUSINESS BY FIRST NORTHERN PENDING THE MERGER
From and after the date of this Agreement and until the Effective Time,
except as required by this Agreement, or as required for the Merger or the
Restructuring, without the prior written consent of an executive officer of
Mutual, First Northern and the First Northern Subsidiaries shall:
6.1 Carry on in Regular Course. Diligently carry on their business in
the regular course and substantially in the same manner as heretofore conducted
and shall not make or institute any unusual or novel methods of lending,
investing, purchasing, selling, leasing, managing, accounting or operating.
6.2 Use of Assets. Use, manage, operate, maintain and repair all of
their assets and properties in a normal business manner.
6.3 No Default. Not do any act or omit to do any act, or permit any act
or omission to act, which will cause a breach of any of the First Northern
Existing Contracts, except where such breach would not have a Material Adverse
Effect on First Northern and the First Northern Subsidiaries taken as a whole.
6.4 Insurance Policies. Use reasonable efforts to maintain all of its
Insurance Policies in full force and effect, except as mutually agreed to by
First Northern and Mutual.
6.5 Employment Matters. Not: (a) except as described in the First
Northern Disclosure Schedule, grant any increase in the rate of pay of any of
their employees that exceeds $10,000 individually or $100,000 in the aggregate;
(b) institute or amend any Employee Benefit Plan, except as expressly
contemplated under this Agreement; (c) enter into or modify any written
employment arrangement with any Person except as described in Sections 3.11, 7.2
and 7.3; (d) make any discretionary contributions to any of the First Northern
Existing Plans; or (e) make any allocation to the account of any participant(s)
in any of the First Northern Existing Plans, other than in the normal course and
in accordance with the terms of the relevant First Northern Existing Plan or
except as expressly contemplated by this Agreement.
6.6 Contracts and Commitments. Not enter into any contract or
commitment or engage in any transaction not in the usual and ordinary course of
business and consistent with First Northern's normal business practices and not
purchase, lease, sell or dispose of any capital asset, except for such capital
asset transactions which individually do not involve a dollar amount in excess
of $50,000 and which together do not involve an aggregate dollar amount in
excess of $100,000.
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6.7 Indebtedness; Investments. Not create, incur, invest in or assume
any Indebtedness or Investment Securities not in the usual and ordinary course
of business; and not, without the prior written consent of Mutual, incur costs
and expenses in connection with the transactions contemplated by this Agreement
which materially exceed the estimate set forth in the First Northern Disclosure
Schedule pursuant to Section 8.5 of this Agreement.
6.8 Preservation of Relationships. Use their best efforts to preserve
their business organizations intact, to retain the services of their present
officers and key employees and to preserve the goodwill of depositors, borrowers
and other customers, suppliers, creditors and others having business
relationships with First Northern.
6.9 Compliance with Laws. Comply with all applicable Laws, except for
such noncompliances which would not individually or in the aggregate have a
Material Adverse Effect on First Northern and the First Northern Subsidiaries
taken as a whole.
6.10 Taxes. Timely and properly file all federal, state, local and
foreign tax returns which are required to be filed, and shall pay or make
provision for the payment of all taxes owed by it as reflected on such returns.
6.11 Amendments. Not amend First Northern's Articles of Incorporation
or Bylaws, or the Articles of Incorporation or Bylaws of the Bank or any other
First Northern Subsidiary, except as mutually agreed to by First Northern and
Mutual or as required by Law.
6.12 Issuance of Stock; Dividends; Redemptions. Not: (a) issue any
additional shares of stock of any class or grant any warrants, options
(including any options pursuant to any First Northern Stock Option Plan) or
rights to subscribe for or acquire any additional shares of stock of any class
other than the issuance of First Northern Common Stock issuable upon exercise of
First Northern Stock Options outstanding as of the date of this Agreement; (b)
except as provided below, declare or pay any dividend or make any capital or
surplus distributions of any nature, except for First Northern's regular
quarterly cash dividends not exceeding $0.11 per share for each outstanding
share of First Northern Common Stock; or (c) recapitalize or reclassify any of
their capital stock or liquidate in whole or in part.
6.13 Policy Changes. Not make a material change in any lending,
investment, liability, management or other material policies concerning their
business or operations, except as required by Law or as required by the Board of
Directors of First Northern in the exercise of its fiduciary duties.
6.14 Acquisition Transactions. Promptly following the execution of this
Agreement, First Northern shall take affirmative steps necessary to discontinue,
and thereafter not initiate, solicit or knowingly encourage (including by way of
furnishing any information or assistance), or take any other action to
facilitate, any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal, or negotiate with
any person in furtherance of such inquires or to obtain an Acquisition Proposal,
or agree to endorse, or endorse,
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any Acquisition Proposal, or authorize or permit any of its officers, directors
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by First Northern or any of the First Northern
Subsidiaries to take any such action, and First Northern shall promptly notify
Mutual orally, and confirm in writing, subject to disclosure being consistent
with the fiduciary duties of the Board of Directors of First Northern, all of
the relevant details relating to all inquiries and proposals which First
Northern or a First Northern Subsidiary may receive relating to any of such
matters; provided, however, that nothing contained in this Section 6.14 shall
prohibit the Board of Directors of First Northern from: (a) furnishing or
permitting any of its officers, directors, employees, investment bankers,
financial advisors, attorneys, accountants or other representatives to furnish
information to any party that requests information as to First Northern and/or
the Bank or take any other action if (i) the Board of Directors of First
Northern, upon the written opinion of its legal counsel, determines in good
faith that such action is required for the Board of Directors of First Northern
to comply with its fiduciary duties to shareholders imposed by applicable Laws,
(ii) prior to furnishing such information to such party, First Northern receives
from such party an executed confidentiality agreement in reasonably customary
form, and (iii) First Northern gives Mutual prior written notice that
information will be furnished; or (b) complying with Rules 14d-2 and 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal.
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
7.1 Conditions to Each Parties Obligations to Effect the Merger. The
respective obligations of Mutual and First Northern to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing and as of the Effective Time of the following conditions
precedent:
(a) No Litigation. No suit, action or other proceeding shall
be pending or overtly threatened before any court in which the consummation of
the transactions contemplated by this Agreement is restrained or enjoined or in
which the relief requested is to restrain, enjoin or prohibit the consummation
of the transactions contemplated by this Agreement and, in either case, where in
the reasonable judgment of either Mutual or First Northern, such suit, action or
other proceeding, is likely to have a material adverse effect with respect to
such party's interest.
(b) Approval of First Northern Shareholders. This Agreement
and the Merger shall have received the requisite approval and authorization of
the First Northern Shareholders.
(c) Regulatory Approvals.
(i) The Merger, this Agreement, the transactions
contemplated hereby, shall have been approved by the OTS, the FDIC, the
Wisconsin Agency, and any other governmental entities whose approval is
necessary, all conditions required to be satisfied prior to the Effective Time
imposed by the terms of such approvals shall have been satisfied, and all
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waiting periods relating to such approvals shall have expired. The
Restructuring, except for the step set forth in Section 2.14(b) of this
Agreement which shall not be a condition precedent to completion of the Merger,
also shall have been approved by the OTS, the FDIC and the Wisconsin Agency, and
any other governmental entity whose approval is necessary in order for Mutual to
proceed with the Restructuring.
(ii) No permission, approval, determination, consent
or waiver received pursuant to Section 7.1(c)(i) of this Agreement shall contain
any condition applicable to Mutual which is, in the reasonable judgment of
Mutual, materially burdensome upon the conduct of Mutual's business or which
would so adversely impact the economic and business benefits of the Merger or
the Restructuring to Mutual so as to render it inadvisable to proceed with the
Merger or the Restructuring.
(d) Restructuring. The Restructuring shall have occurred,
except for any part thereof which can occur only simultaneously with or
subsequent to the Merger and the step set forth in Section 2.14(b) of the
Agreement which shall not be a condition precedent to completion of the Merger.
All such events which shall occur simultaneously with the Closing shall occur
simultaneously with Closing.
(e) Tax Matters. Mutual and First Northern shall have received
(a) an opinion of Xxxxxxx & Xxxxx LLP, counsel to Mutual, or a private letter
ruling from the Internal Revenue Service, to the effect that (i) the transfer by
First Northern of its assets to Merger Corp. pursuant to the Merger and, as
described in the definition of the Restructuring, the transfer by MHC of the
stock of Stock Bank to Merger Corp. and the issuance of shares of stock of
Merger Corp. to the public for cash will be treated for federal income tax
purposes as a transaction within the provisions of ss. 351(a) of the Code and
(b) an opinion of Xxxxxxx & Xxxxx LLP that the Merger will constitute a
reorganization within the meaning of ss. 368(a) of the Code.
(f) NASDAQ/NMS. Shares of Survivor Common Stock shall have
been approved for quotation on the NASDAQ/NMS.
7.2 Conditions to Obligation of Mutual. The obligation of Mutual to
effect the transactions contemplated by this Agreement shall be subject to the
fulfillment at or prior to the Closing and as of the Effective Time of the
following additional conditions precedent:
(a) Compliance with Agreement. First Northern shall have
performed and complied in all material respects with all of its covenants,
agreements and other obligations under this Agreement which are to be performed
or complied with by it prior to or on the Closing Date and as of the Effective
Time.
(b) Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incident thereto, shall be reasonably
satisfactory in form and substance to Mutual, and First Northern shall have made
available to Mutual for examination the originals or true and
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correct copies of all documents Mutual may reasonably request in connection with
the transactions contemplated by this Agreement.
(c) Representations and Warranties of First Northern. Each of
the representations and warranties of First Northern contained in Article IV of
this Agreement, after giving effect to any update to the First Northern
Disclosure Schedule Change, shall be true and correct, as of the Effective Time
with the same force and effect as though made on and as of the Effective Time,
except for those representations and warranties which address matters only as of
a particular date (which shall remain true and correct as of such date), and
except for those breaches which individually or in the aggregate do not or would
not be reasonably likely to have a Material Adverse Effect on First Northern.
(d) No Material Adverse Change. During the period from the
date of this Agreement to the Closing Date and as of the Effective Time there
shall not have occurred, and there shall not exist on the Closing Date and as of
the Effective Time, any condition(s) or fact(s) having individually or in the
aggregate a Material Adverse Effect (irrespective of whether any such condition
or fact was disclosed in a First Northern Disclosure Schedule Change) on First
Northern.
(e) Deliveries at Closing. First Northern shall have delivered
to Mutual the following documents, each properly executed and dated the Closing
Date: (i) the First Northern Closing Certificate; and (ii) the First Northern
Counsel Opinion.
(f) Other Documents. First Northern shall have delivered to
Mutual such certificates and documents of officers of First Northern and public
officials as shall be reasonably requested by Mutual to establish the existence
of First Northern and the due authorization of this Agreement and the
transactions contemplated by this Agreement by First Northern.
(g) Accountant Letters. Mutual shall have received a copy of
each of the following letters from Xxxxxx Xxxxxxx Xxxxxxxxx LLP, each of which
shall be in form and substance reasonably satisfactory to Mutual and shall
contain information concerning the financial condition of First Northern: (i)
the letter described in Section 3.6 of this Agreement; (ii) a similar letter
dated the Closing Date.
(h) First Northern Replacement Employment Agreements. Except
with respect to First Northern's chief executive officer and up to two
additional First Northern Executives, First Northern shall have delivered to
Mutual, with respect to each of the First Northern Executives who have First
Northern Existing Employment Agreements in effect on the Closing Date, a First
Northern Replacement Employment Agreement in each case dated as of the Closing
Date and executed on behalf of the Bank by a duly authorized officer and by the
appropriate First Northern Executive. The Chief Executive Officer of First
Northern shall have delivered to the Bank and Mutual a waiver, reasonably
acceptable in form and substance to Mutual, of the provisions of his First
Northern Existing Employment Agreement, which would create severance or other
accelerated benefits thereunder as a result of the Merger and the
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transactions relating thereto, and shall have entered into a non-competition
agreement with provisions substantially identical to those of Article III of the
First Northern Replacement Employment Agreement.
(i) Stock Listing. First Northern Common Stock shall continue
to have been listed on the NASDAQ/NMS.
(j) First Northern Stock Options. First Northern shall have,
prior to the Closing Date and with the written consent (if necessary) of the
First Northern Stock Option holder, cashed out each of such holder's First
Northern Stock Options without the exercise thereof at a price equal to the
difference between the Cash Value and the exercise price of such option. In the
event that a holder of a First Northern Stock Option fails to take any action,
the holder of such First Northern Stock Option shall be deemed to have agreed to
have his or her First Northern Stock Option cashed out in accordance with this
subsection 7.2(j). In recognition of the requirement that such options be
converted to cash without an ability to elect stock and not be carried forward
into the Survivor, to the extent that options are cashed out pursuant to this
section 7.2(j), First Northern may provide an additional payment equal to not
more than 25% of such difference between the Cash Value and the exercise price
of any such option; provided, however, that in no event shall the net total
amount of such additional payments, after the expected corporate tax deduction,
to all holders of First Northern Stock Options exceed $755,000. In any event, as
of the Closing Date there shall be no outstanding First Northern Stock Options
other than the Stock Option Agreement.
7.3 Conditions to Obligation of First Northern. The obligation of First
Northern to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing and as of the Effective
Time of the following additional conditions precedent:
(a) Compliance with Agreement. Mutual and Merger Corp. each
shall have performed and complied in all material respects with all of its
covenants, agreements and other obligations under this Agreement which are to be
performed or complied with by it prior to or on the Closing Date and as of the
Effective Time.
(b) Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incident thereto, shall be reasonably
satisfactory in form and substance to First Northern, and Mutual shall have made
available to First Northern for examination the originals or true and correct
copies of all documents which First Northern may reasonably request in
connection with the transactions contemplated by this Agreement.
(c) Representations and Warranties of Mutual and Merger Corp.
Each of the representations and warranties of Mutual and Merger Corp. contained
in Article V of this Agreement, after giving effect to any Mutual Disclosure
Schedule Change, shall be true and correct as of the Effective Time with the
same force and effect as though made on and as of the
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Effective Time, except for those representations and warranties which address
matters only as of a particular date (which shall remain true and correct as of
such date), and except for those breaches which individually or in the aggregate
do not or would not be reasonably likely to have a Material Adverse Effect on
Mutual.
(d) No Material Adverse Change. During the period from the
date of this Agreement to the Closing Date and as of the Effective Time there
shall not have occurred, and there shall not exist on the Closing Date and as of
the Effective Time, any condition(s) or fact(s) having individually or in the
aggregate a Material Adverse Effect (irrespective of whether any such condition
or fact was disclosed in a Mutual Disclosure Schedule Change) on Mutual.
(e) Deliveries at Closing. Mutual shall have delivered to
First Northern the following documents, each properly executed and dated the
Closing Date: (i) the Mutual Closing Certificate; and (ii) the Mutual Counsel
Opinion.
(f) Other Documents. Mutual shall have delivered to First
Northern such certificates and documents of officers of Mutual and of public
officials as shall be reasonably requested by First Northern to establish the
existence of Mutual and the due authorization of this Agreement and the
transactions contemplated by this Agreement by Mutual.
(g) Opinion of Financial Advisor. First Northern shall have
received the opinion of Xxxxx, Xxxxxxxx & Xxxxx, Inc. dated the date on which
the First Northern Proxy Statement is first mailed to First Northern
Shareholders, to the effect that the consideration to be received in the Merger
by the First Northern Shareholders is fair to the First Northern Shareholders
from a financial point of view and such option shall not have been withdrawn as
of the Closing Date.
(h) First Northern Replacement Employment Agreements. Pursuant
to Section 3.11 of this Agreement, the Bank shall have offered to each of the
First Northern Executives who have a First Northern Existing Employment
Agreement a First Northern Replacement Employment Agreement, in each case dated
as of the Closing Date, except as contemplated by Section 7.2(h).
(i) Accountant Letters. First Northern shall have received a
copy of each of the following letters from Ernst & Young LLP, each of which
shall be in form and substance reasonably satisfactory to First Northern and
shall contain information concerning the financial condition of Mutual: (i) the
letter described in Section 3.6 of this Agreement; (ii) a similar letter dated
the Closing Date.
(j) Non-Competition Agreement. The Chief Executive Officer of
Mutual shall have entered into a non-competition agreement with Mutual with
provisions substantively identical to those of Article III of the First Northern
Replacement Employment Agreement, but substituting "Milwaukee County" for "Xxxxx
County."
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ARTICLE VIII
TERMINATION; MISCELLANEOUS
8.1 Termination. This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time prior to the Closing
(whether before or after approval of this Agreement by the First Northern
Shareholders), as follows:
(a) by mutual written agreement of Mutual and First Northern;
(b) by Mutual if any of the conditions set forth in Sections
7.1 or 7.2 of this Agreement shall not have been fulfilled by the Closing, or
within 30 days after receipt of a First Northern Disclosure Schedule Change
indicating a First Northern Material Adverse Effect which cannot be reasonably
expected to be cured;
(c) by First Northern if any of the conditions set forth in
Sections 7.1 or 7.3 of this Agreement shall not have been fulfilled by the
Closing, or within 30 days after receipt of a Mutual Disclosure Schedule Change
indicating a Mutual Material Adverse Effect which cannot be reasonably expected
to be cured;
(d) by either Mutual or First Northern if the Closing has not
occurred on or before 11:59 p.m. on January 16, 2001.
(e) by First Northern, upon five days' prior written notice to
Mutual, if, as a result of an Acquisition Proposal by a Person other than Mutual
or an Affiliate of Mutual, the Board of Directors of First Northern determines
in good faith and upon the written opinion of its legal counsel that its
fiduciary duties to shareholders require that such Acquisition Proposal be
accepted, but in such case subject to all of Mutual's rights hereunder and under
the Stock Option Agreement.
8.2 Rights on Termination; Waiver. The representations, warranties,
covenants, agreements and other obligations of the parties set forth in this
Agreement shall terminate upon the termination of this Agreement pursuant to
Section 8.1 hereof, except that the agreements set forth in Section 3.1, and
Article VIII of this Agreement shall survive any such termination indefinitely,
and each party to this Agreement shall retain any and all remedies which it may
have for breach of contract provided by Law based on another party's willful
failure to comply with the terms of this Agreement. If any of the conditions set
forth in Sections 7.1 and 7.2 of this Agreement have not been satisfied, Mutual
may nevertheless elect to proceed with the consummation of the transactions
contemplated by this Agreement and if any of the conditions set forth in
Sections 7.1 and 7.3 of this Agreement have not been satisfied, First Northern
may nevertheless elect to proceed with the consummation of the transactions
contemplated by this Agreement. Any such election to proceed shall be evidenced
by a certificate signed on behalf of the waiving party by an officer of that
party.
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8.3 Survival of Representations, Warranties and Covenants. The
representations, warranties, covenants, agreements and other obligations of the
parties set forth in this Agreement shall terminate at the Effective Time,
except the covenants, agreements, and other obligations of the parties which by
their terms or nature are contemplated to be performed after the Effective Time
shall survive the Effective Time indefinitely.
8.4 Entire Agreement; Amendment. This Agreement, the Stock Option
Agreement, the Confidentiality Agreement and the other documents referred to in
this Agreement and required to be delivered pursuant to this Agreement
constitute the entire agreement among the parties pertaining to the subject
matter of this Agreement, and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions of the parties, whether
oral or written, and there are no warranties, representations or other
agreements between the parties in connection with the subject matter of this
Agreement, except as specifically set forth in this Agreement. This Agreement
may be amended by the parties at any time before or after approval of this
Agreement by the First Northern Shareholders, except that after such approval no
amendment shall be made without the further approval of the First Northern
Shareholders if such amendment: (a) reduces the consideration to be received by
First Northern Shareholders; or (b) otherwise materially adversely affects the
rights of the First Northern Shareholders. No amendment, supplement,
modification, waiver or termination of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision of this Agreement, whether or not similar, nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
8.5 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses. The First Northern Disclosure Schedule and
Mutual Disclosure Schedule includes an estimate by First Northern and Mutual,
respectively, of all costs and expenses incurred or to be incurred by each in
connection with the transactions contemplated by this Agreement. Notwithstanding
the foregoing, in the event Mutual terminates this Agreement pursuant to Section
8.1(b) on account of First Northern having willfully breached one or more of the
conditions set forth in Section 7.2(a) or 7.2(c) of this Agreement, or if First
Northern terminates this Agreement pursuant to Section 8.1(c) hereof on account
of Mutual having willfully breached one or more of the conditions set forth in
Section 7.3(a) or 7.3(c) of this Agreement, then, in addition to any other
rights or remedies such party (the "non-breaching party") shall have against the
other party (the "breaching party") under this Agreement or at law or in equity,
the non-breaching party shall have the right to recover from the breaching
party, up to $500,000 in the case of First Northern's expenses and up to $1.4
million in the case of, Mutual's expenses, all reasonable and necessary expenses
incurred by the non-breaching party exclusively for the purpose of entering into
this Agreement and consummating the transactions contemplated hereby. In
addition, Mutual shall be reimbursed for its expenses, as provided above, in
addition to its other remedies in the event that First Northern terminates this
Agreement pursuant to Section 8.1(e) hereof.
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8.6 Governing Law. This Agreement shall be construed and interpreted
according to the Laws of the State of Wisconsin.
8.7 Assignment. This Agreement and the Stock Option Agreement shall
not be assigned by operation of law or otherwise, except that each of Mutual and
Merger Corp. may assign all or any of its rights hereunder and thereunder to any
Affiliate in connection with the Restructuring or as provided in Section 2.16
hereof, provided that no such assignment shall relieve Mutual or Merger Corp. of
its obligations hereunder.
8.8 Notices. All communications or notices required or permitted by
this Agreement shall be in writing and shall be deemed to have been given at the
earlier of the date when actually delivered to an officer of a party by personal
delivery or telephonic facsimile transmission (receipt electronically confirmed)
or two days after deposited in the United States mail, certified or registered
mail, postage prepaid, return receipt requested, and addressed as follows,
unless and until any of such parties notifies the others in accordance with this
Section of a change of address:
IF TO MUTUAL OR MERGER CORP.: Mutual Savings Bank
Attn: Xxxxxxx X. Xxxxxxx, Xx.
President and Chief Executive Officer
0000 Xxxx Xxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Fax No: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxx LLP
Attention: Xxxxx X. Xxxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax No: (000) 000-0000
IF TO FIRST NORTHERN: First Northern Capital Corp.
Attn: Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
000 X. Xxxxxx Xxxxxx
Xxxxx Xxx, XX 00000
Fax No: (000) 000-0000
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with a copy to:
Xxxxxx Xxxxxx & Xxxxx
Attn: Xxxxxxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
8.9 Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
8.10 Interpretation. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular,
and all words in any gender shall extend to and include all genders.
8.11 Severability. If any provision, clause, or part of this Agreement,
or the application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby unless such
invalidity materially impairs the ability of the parties to consummate the
transactions contemplated by this Agreement. If, however, any provision of this
Agreement is held invalid by a court of competent jurisdiction, then the parties
hereto shall in good faith amend this Agreement to include an alternative
provision that accomplishes a result which is not materially different.
8.12 Specific Performance. The parties agree that the assets and
business of First Northern as a going concern constitute unique property. There
is no adequate remedy at Law for the damage which any party might sustain for
failure of the other parties to consummate the Merger and the transactions
contemplated by this Agreement, and accordingly, each party shall be entitled,
at its option, to the remedy of specific performance to enforce the Merger
pursuant to this Agreement.
8.13 No Reliance. Except for the parties to this Agreement, any
Indemnified Parties under Section 3.5 of this Agreement and any assignees
permitted by Section 8.7 of this Agreement: (a) no Person is entitled to rely on
any of the representations, warranties and agreements of the parties contained
in this Agreement; and (b) the parties assume no liability to any Person because
of any reliance on the representations, warranties and agreements of the parties
contained in this Agreement.
8.14 Further Assurances. If, at any time after the Effective Time,
any further action is necessary or desirable to carry out the purposes of this
Agreement and to vest Survivor with full
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right, title and possession to all assets, properties, rights, privileges,
powers and franchises of either Merger Corp. or First Northern, the officers of
Survivor are fully authorized to take any such action in the name of Merger
Corp. or First Northern.
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IN WITNESS WHEREOF, the parties have caused this Agreement and Plan of
Merger to be duly executed as of the day and year first above written.
MUTUAL SAVINGS BANK
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
President and Chief Executive Officer
Attest:
/s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------------------
Xxxxxx X. Xxxxxx, Xx., Secretary
OV CORP.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
President
Attest:
/s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------------------
Xxxxxx X. Xxxxxx, Xx., Secretary
FIRST NORTHERN CAPITAL CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Attest:
/s/ Xxxxx X. Xxxx
-----------------------------------------------
Xxxxx X. Xxxx, Secretary
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