Exhibit 99.2
Agreement and Plan of Merger
among
Heartland Financial USA, Inc.,
RMB Acquisition Corporation
and
Rocky Mountain Bancorporation, Inc.
February 7, 2004
Agreement and Plan of Merger
This Agreement and Plan of Merger (this "Agreement") is
entered into as of February 6, 2004, (the "Agreement Date") among
Heartland Financial USA, Inc., a Delaware corporation
("Heartland"), Rocky Mountain Bancorporation, Inc., a Montana
corporation ("RMB"), and RMB Acquisition Corporation, a Montana
corporation and a wholly-owned subsidiary of Heartland
("Acquisition Corp").
Recitals
A. The parties to this Agreement desire to effect a
reorganization whereby Heartland desires to acquire control of
RMB through the merger (the "Merger") of Acquisition Corp with
and into RMB, with RMB being the surviving corporation as a
wholly owned subsidiary of Heartland (the "Surviving
Corporation"), followed by the immediate merger of Surviving
Corporation with and into Heartland with Heartland being the
surviving corporation.
B. Pursuant to the terms of this Agreement, each
outstanding share of the capital stock of RMB, which is comprised
of one class of common stock, no par value per share ("RMB
Common Stock"), shall be converted at the effective time of the
Merger into the right to receive (a) shares of common stock of
Heartland, $0.01 par value per share ("Heartland Common Stock"),
(b) cash or (c) a combination of Heartland Common Stock and cash,
all in the amounts set forth in this Agreement.
C. The parties desire to make certain representations,
warranties and agreements in connection with the Merger and also
agree to certain prescribed conditions to the Merger.
Agreements
In consideration of the foregoing premises and the following
mutual promises, covenants and agreements, the parties hereby
agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. In addition to those terms defined
throughout this Agreement, the following terms, when used herein,
shall have the following meanings.
(a) "Adjusted Shareholders' Equity" means the consolidated
tangible shareholders' equity of RMB, calculated in accordance
with GAAP and reflecting, among other things, the accrued income
and expenses of RMB for all periods ending on or prior to the
Determination Date, and the recognition of or accrual for all
expenses paid or incurred or projected to be paid or incurred by
RMB or Bank in connection with this Agreement and the
Contemplated Transactions, including RMB Transactional Expenses
and any Remediation Cost (as defined in Section 6.7), and
including all fees and expenses incurred in connection with
obtaining shareholder approval and any attorneys, accountants,
brokers, finders or investment bankers and any amounts paid or
payable to any director, officer or employee of RMB or any RMB
Subsidiary under any Contract or benefit plan as a result of the
Contemplated Transactions, but adjusted to exclude:
(i) any realized gains or losses resulting from
sales of investment securities effected between December 31, 2003,
and the Closing Date (as defined below);
(ii) any adjustments made in accordance
with Statement of Financial Accounting Standard No. 115;
(iii) one-half (1/2) the aggregate cost of (A) the
title policies described in Section 2.9(j); (B) the reports and
title policy commitments, if any, described in Section 6.5; (C) the
surveys described in Section 6.6; and (D) the Environmental Reports,
as defined and described in Section 6.7; and
(iv) any accounting or other adjustments made pursuant
to Section 6.18. RMB's Adjusted Shareholders' Equity shall be
calculated by RMB's independent auditors, in consultation with
Heartland's independent auditors, as of the close of business on
the Determination Date using reasonable estimates of revenues and
expenses where actual amounts are not available. For purposes of
this calculation, RMB shall assume a tax rate of 34%. Such
calculation shall be subject to verification and approval prior to
the Closing (as defined below) by Heartland's independent auditors,
which approval shall not be unreasonably withheld.
(b) "Affiliate" means with respect to:
(i) a particular individual: (A) each other member
of such individual's Family; (B) any Person that is directly or
indirectly controlled by such individual or one or more members
of such individual's Family; (C) any Person in which such
individual or members of such individual's Family hold
(individually or in the aggregate) a Material Interest; and
(D) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director,
officer, partner, executor or trustee (or in a similar capacity); and
(ii) a specified Person other than an individual:
(A) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common
control with such specified Person; (B) any Person that holds a Material
Interest in such specified Person; (C) each Person that serves as
a director, officer, partner, executor or trustee of such
specified Person (or in a similar capacity); (D) any Person in which
such specified Person holds a Material Interest; (E) any Person with
respect to which such specified Person serves as a general partner or
a trustee (or in a similar capacity); and (F) any Affiliate of any
individual described in clause (B) or (C) of this subsection (ii).
(c) "Bank" means Rocky Mountain Bank, a Montana chartered,
commercial bank with its main office located in Billings,
Montana, and a wholly-owned subsidiary of RMB.
(d) "Best Efforts" means the efforts that a prudent Person
desirous of achieving a result would use in similar circumstances
to ensure that such result is achieved as expeditiously as
possible, provided, however, that an obligation to use Best
Efforts under this Agreement does not require the Person subject
to that obligation to take actions that would result in a
materially adverse change in the benefits to such Person of this
Agreement and the Contemplated Transactions.
(e) "Breach" means with respect to a representation,
warranty, covenant, obligation or other provision of this Agreement
or any instrument delivered pursuant to this Agreement: (i) any
inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation or
other provision; or (ii) any claim (by any Person) or other
occurrence or circumstance that is or was inconsistent with such
representation, warranty, covenant, obligation or other
provision, and the term "Breach" means any such inaccuracy,
breach, failure, claim, occurrence or circumstance.
(f) "Business Day" means any day on which the trading of
stock occurs on the NASDAQ.
(g) "Call Reports" means the quarterly reports of income
and condition required to be filed with the Federal Deposit Insurance
Corporation.
(h) "Code" means the Internal Revenue Code of 1986, as
amended.
(i) "Contemplated Transactions" means all of the
transactions contemplated by this Agreement, including:
(i) the Merger;
(ii) the performance by Heartland and RMB of their
respective covenants and obligations under this Agreement;
(iii) Heartland's acquisition of control of RMB and,
indirectly, the Bank; and
(iv) Heartland's issuance of registered shares of Heartland
Common Stock and payment of cash in exchange for shares of RMB Common
Stock.
(j) "Contract" means any agreement, contract, obligation,
promise or understanding (whether written or oral and whether
express or implied) that is legally binding:
(i) under which a Person has or may acquire any rights;
(ii) under which such Person has or may become subject to
any obligation or liability; or
(iii) by which such Person or any of the assets owned or used
by such Person is or may become bound.
(k) "CRA" means the Community Reinvestment Act, as amended.
(l) "Determination Date" means the close of business on the
last Business Day preceding the Closing Date.
(m) "DGCL" means the Delaware General Corporation Law, as
amended.
(n) "Division" means the Division of Banking and Financial
Institutions of the State of Montana.
(o) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
(p) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(q) "Family" means with respect to an individual:
(i) the individual;
(ii) the individual's spouse and former spouses;
(iii) any other natural person who is related to the individual
or the individual's spouse within the second degree; and
(iv) any other natural person who resides with such individual.
(r) "FDIC" means the Federal Deposit Insurance Corporation.
(s) "Federal Reserve" means the Board of Governors of the
Federal Reserve System.
(t) "GAAP" means generally accepted accounting principles in the
United States, consistently applied.
(u) "Heartland SEC Documents" means the annual, quarterly and
other reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated
therein) filed by Heartland with the SEC.
(v) "Heartland Subsidiary" means any Subsidiary of Heartland.
(w) "Knowledge" with respect to:
(i) an individual means that such person will be deemed
to have "Knowledge" of a particular fact or other matter if: (A) such
individual is actually aware of such fact or other matter; or (B) a prudent
individual could be expected to discover or otherwise become aware of such
fact or other matter in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or other matter; and
(ii) a Person (other than an individual) means that
such Person will be deemed to have "Knowledge" of a particular fact
or other matter if any individual who is serving, or who has served
in the past twelve (12) months as a director, outside advisor, officer,
manager, partner, executor or trustee of such Person (or in any
similar capacity) has Knowledge of such fact or other matter.
(x) "Legal Requirement" means any federal, state, local,
municipal, foreign, international, multinational or other Order,
constitution, law, ordinance, regulation, rule, policy statement,
directive, statute or treaty.
(y) "Material Adverse Effect" with respect to a Person
(other than an individual) means, a material adverse effect
(whether or not required to be accrued or disclosed under Statement
of Financial Accounting Standards No. 5):
(i) on the condition (financial or otherwise),
properties, assets, liabilities, businesses or results of operations
of such Person; or
(ii) on the ability of such Person to perform its
obligations under this Agreement on a timely basis.
(z) "Material Interest" means the direct or indirect
beneficial ownership (as currently defined in Rule 13d-3 under the
Exchange Act) of voting securities or other voting interests
representing at least ten percent (10%) of the outstanding voting
power of a Person or equity securities or other equity interests
representing at least ten percent (10%) of the outstanding equity
securities or equity interests in a Person.
(aa) "MCA" means the Montana Code Annotated, as amended.
(bb) "NASDAQ" means the NASDAQ National Market.
(cc) "Old Certificates" means certificates formerly representing
shares of RMB Common Stock.
(dd) "Order" means any award, decision, injunction, judgment,
order, ruling, extraordinary supervisory letter, policy
statement, memorandum of understanding, resolution, agreement,
directive, subpoena or verdict entered, issued, made, rendered or
required by any court, administrative or other governmental
agency, including any Regulatory Authority, or by any arbitrator.
(ee) "Ordinary Course of Business" means any action taken by
a Person only if such action:
(i) is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day
operations of such Person;
(ii) is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons
exercising similar authority), other than loan approvals for customers
of a financial institution; and
(iii) is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of
directors (or by any Person or group of Persons exercising
similar authority), other than loan approvals for customers of a
financial institution, in the ordinary course of the normal day-
to-day operations of other Persons that are in the same line of
business as such Person.
(ff) "Person" means any individual, corporation (including
any non-profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association,
organization, labor union or other entity or Regulatory
Authority.
(gg) "Proceeding" means any action, arbitration, audit,
hearing, investigation, litigation or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought,
conducted or heard by or before, or otherwise involving, any
judicial or governmental authority, including a Regulatory
Authority, or arbitrator.
(hh) "Proxy Statement" means the proxy statement-prospectus
to be used by RMB in connection with the solicitation by its board of
directors of proxies for use at the meeting of its shareholders
to be convened for the purpose of voting on this Agreement and
the Merger, pursuant to Section 6.11.
(ii) "Purchase Price" means $34,500,000, increased by
the amount by which the Adjusted Shareholders' Equity exceeds
$18,150,000, or decreased by the amount by which the Adjusted
Shareholders' Equity is less than $17,450,000, determined as of the
Determination Date.
(jj) "Regulatory Authority" means any federal, state or local
governmental body, agency, court or authority that, under
applicable Legal Requirements:
(i) has supervisory, judicial, administrative, police,
enforcement, taxing or other power or authority over RMB, Heartland,
or any of their respective Subsidiaries;
(ii) is required to approve, or give its consent to
the Contemplated Transactions; or (iii) with which a filing must
be made in connection therewith, including, in any case, the
Federal Reserve, the FDIC and the Division.
(kk) "Representative" means with respect to a particular
Person, any director, officer, manager, employee, agent, consultant,
advisor or other representative of such Person, including legal
counsel, accountants and financial advisors.
(ll) "RMB Subsidiary" means any Subsidiary of RMB, but not
including any entity involuntarily dissolved.
(mm) "RMB Transactional Expenses" means all transaction
costs of RMB necessary to consummate the Contemplated Transactions,
the aggregate fees and expenses of attorneys, accountants,
consultants, financial advisors and other professional advisors
incurred by RMB in connection with this Agreement and the
Contemplated Transactions, the cost of preparing, printing and
mailing the Proxy Statement to RMB's shareholders and all other
non-payroll related costs and expenses in each case incurred or
to be incurred by RMB through the Effective Time in connection
with this Agreement and the Contemplated Transactions.
(nn) "SEC" means the Securities and Exchange Commission.
(oo) "Securities Act" means the Securities Act of 1933, as
amended.
(pp) "Subsidiary" means with respect to any Person (the
"Owner"), any corporation or other Person of which securities or
other interests having the power to elect a majority of that
corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other
than securities or other interests having such power only upon
the happening of a contingency that has not occurred) are held by
the Owner or one or more of its Subsidiaries.
(qq) "Tax" means any tax (including any income tax, capital
gains tax, value-added tax, sales tax, property tax, gift tax or
estate tax), levy, assessment, tariff, duty (including any customs
duty), deficiency or other fee, and any related charge or amount
(including any fine, penalty, interest or addition to tax),
imposed, assessed or collected by or under the authority of any
Regulatory Authority or payable pursuant to any tax-sharing
agreement or any other Contract relating to the sharing or
payment of any such tax, levy, assessment, tariff, duty,
deficiency or fee.
(rr) "Tax Return" means any return (including any
information return), report, statement, schedule, notice, form or
other document or information filed with or submitted to, or
required to be filed with or submitted to, any Regulatory Authority
in connection with the determination, assessment, collection or
payment of any Tax or in connection with the administration,
implementation, or enforcement of or compliance with any Legal
Requirement relating to any Tax.
(ss) "Threatened" means a claim, Proceeding, dispute,
action or other matter for which any demand or statement has been
made (orally or in writing) or any notice has been given (orally
or in writing), or if any other event has occurred or any other
circumstances exist, that would lead a prudent Person to conclude
that such a claim, Proceeding, dispute, action or other matter is
likely to be asserted, commenced, taken or otherwise pursued in
the future.
Section 1.2 Principles of Construction.
(a) In this Agreement, unless otherwise stated or the
context otherwise requires, the following uses apply:
(i) actions permitted under this Agreement may be
taken at any time and from time to time in the actor's reasonable
discretion;
(ii) references to a statute shall refer to the
statute and any successor statute, and to all regulations promulgated
under or implementing the statute or its successor, as in effect at
the relevant time;
(iii) in computing periods from a specified date
to a later specified date, the words "from" and "commencing on"
(and the like) mean "from and including," and the words "to,"
"until" and "ending on" (and the like) mean "to, but excluding";
(iv) references to a governmental or quasi-governmental
agency, authority or instrumentality shall also refer to a regulatory
body that succeeds to the functions of the agency, authority or
instrumentality;
(v) indications of time of day mean Dubuque,
Iowa time;
(vi) "including" means "including, but not limited
to";
(vii) all references to sections, schedules and exhibits
are to sections, schedules and exhibits in or to this Agreement
unless otherwise specified;
(viii) all words used in this Agreement will be construed
to be of such gender or number as the circumstances and context
require;
(ix) the captions and headings of articles, sections,
schedules and exhibits appearing in or attached to this Agreement
have been inserted solely for convenience of reference and shall not
be considered a part of this Agreement nor shall any of them affect
the meaning or interpretation of this Agreement or any of its
provisions; and
(x) any reference to a document or set of documents in
this Agreement, and the rights and obligations of the parties under
any such documents, shall mean such document or documents as
amended from time to time, and any and all modifications,
extensions, renewals, substitutions or replacements thereof.
(b) The Schedules referred to in this Agreement consist
of the agreements and other documentation described and referred
to in this Agreement, which Schedules were delivered by RMB to
Heartland before the Agreement Date. The disclosures in the
Schedules, and those in any supplement thereto, shall relate only
to the representations and warranties in the section of this
Agreement to which they reasonably relate and not to any other
representation or warranty in this Agreement. In the event of
any inconsistency between the statements in the body of this
Agreement and those in the Schedules (other than an exception
expressly set forth as such in the Schedules with respect to a
specifically identified representation or warranty), the
statements in the body of this Agreement will control.
(c) All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting
principles in the United States consistent with those used in the
preparation of the most recent audited consolidated financial
statements of Heartland or RMB, as the case may be ("GAAP").
(d) With regard to each and every term and condition of
this Agreement and any and all agreements and instruments subject
to the terms hereof, the parties hereto understand and agree that
the same have or has been mutually negotiated, prepared and
drafted, and that if at any time the parties hereto desire or are
required to interpret or construe any such term or condition or
any agreement or instrument subject hereto, no consideration
shall be given to the issue of which party hereto actually
prepared, drafted or requested any term or condition of this
Agreement or any agreement or instrument subject hereto.
ARTICLE 2
THE MERGER
SECTION 2.1 The Merger. Provided that this Agreement shall
not have been terminated in accordance with its express terms,
upon the terms and subject to the conditions of this Agreement
and in accordance with the applicable provisions of the DGCL and
the MCA, at the Effective Time (as defined below), Acquisition
Corp shall be merged with and into RMB pursuant to the provisions
of, and with the effects provided in, the DGCL and the MCA, the
separate corporate existence of Acquisition Corp shall cease and
RMB will be the Surviving Corporation. Immediately thereafter,
the Surviving Corporation will merge with and into Heartland with
Heartland being the surviving corporation. As a result of the
Merger, each share of RMB Common Stock issued and outstanding
immediately prior to the Effective Time, other than Dissenting
Shares (as defined below), will be converted into the right to
receive the Merger Consideration as defined and provided in
Article 3.
Section 2.2 Effective Time; Closing.
(a) Provided that this Agreement shall not have been
terminated in accordance with its express terms, the closing of
the Merger (the "Closing") shall occur through the mail or at a
place that is mutually acceptable to Heartland and RMB, or if
they fail to agree, at the offices of Barack Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxx & Xxxxxxxxx LLC, located at 000 X. Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, at 10:00 a.m. on the date that is
ten (10) Business Days after the latest to occur of the receipt
of all required approvals or consents of the Regulatory
Authorities for the Contemplated Transactions, the expiration of
all statutory waiting periods relating to such regulatory
approvals and the receipt of the approval of the shareholders of
RMB, or at such other time and place as RMB and Heartland may
agree in writing (the "Closing Date"). Subject to the provisions
of Article 11, failure to consummate the Merger on the date and
time and at the place determined pursuant to this Section will
not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
(b) The parties hereto agree to file appropriate
articles of merger reflecting the terms of the Merger contained
in this Agreement, as contemplated by the MCA, with the Secretary
of State of the State of Montana. The Merger shall be effective on
the Closing Date and at the time stated in the articles of merger
filed with the Secretary of State of the State of Montana (the
"Effective Time").
Section 2.3 Effects of Merger. At the Effective Time, the
effect of the Merger shall be as provided in Section 35-1-817 of
the MCA. Without limiting the generality of the foregoing, at
the Effective Time, all the property, rights, privileges, powers
and franchises of Acquisition Corp and RMB shall be vested in the
Surviving Corporation, and all debts, liabilities and duties of
Acquisition Corp and RMB shall become the debts, liabilities and
duties of the Surviving Corporation.
Section 2.4 Articles of Incorporation. At the Effective
Time, the articles of incorporation of Surviving Corporation shall
be amended and restated as set forth as Exhibit A attached hereto
and shall become the articles of incorporation of the Surviving
Corporation until thereafter amended in accordance with
applicable law.
Section 2.5 Bylaws. At the Effective Time, the bylaws of
Surviving Corporation shall be amended and restated as set forth
in Exhibit B attached hereto and shall become the bylaws of the
Surviving Corporation until thereafter amended in accordance with
applicable law.
Section 2.6 Board of Directors. From and after the
Effective Time, until duly changed in compliance with applicable
law and the articles of incorporation and bylaws of the Surviving
Corporation, the board of directors of the Surviving Corporation
shall consist of the directors of Acquisition Corp immediately
prior to the Effective Time.
Section 2.7 Management. At the Effective Time, the
officers of Acquisition Corp immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation
and shall hold office until their respective successors are duly
elected or appointed and qualified in the manner provided in the
articles of incorporation and bylaws of the Surviving Corporation.
Section 2.8 Heartland's Deliveries at Closing. At the
Closing, Heartland shall deliver or cause to be delivered the
following items to or on behalf of RMB:
(a) copies of resolutions of the board of directors of
Heartland approving this Agreement and the consummation of the
Contemplated Transactions, certified as of the Closing Date by the
Secretary or any Assistant Secretary of Heartland;
(b) copies of resolutions of the board of directors and
the shareholder of Acquisition Corp approving this Agreement and the
consummation of the Contemplated Transactions, certified as of
the Closing Date by the Secretary or any Assistant Secretary of
Acquisition Corp;
(c) a good standing certificate for Acquisition Corp
issued by the Secretary of State of the State of Montana, and dated
not more than fifteen (15) Business Days prior to the Closing Date;
(d) a copy of the articles of incorporation of Acquisition
Corp certified not more than fifteen (15) Business Days prior to the
Closing Date by the Secretary of State of the State of Montana;
(e) a certificate of the Secretary or any Assistant
Secretary of Acquisition Corp dated the Closing Date certifying a
copy of the bylaws of Acquisition Corp;
(f) certificates executed by the President or Vice
President and Secretary or any Assistant Secretary of Heartland and
Acquisition Corp, dated the Closing Date, stating that:
(i) all of the representations and warranties of
Heartland or Acquisition Corp as the case may be set forth in this
Agreement, as the same may have been updated pursuant to Section 7.2,
are true and correct in all material respects with the same force
and effect as if all of such representations and warranties were
made at the Closing Date, provided, however, that to the extent such
representations and warranties expressly relate to an earlier date,
such representations shall be true and correct in all material
respects on and as of such earlier date, and provided further,
that to the extent that representations and warranties are made
in this Agreement subject to a standard of materiality or
Knowledge, such representations and warranties shall be true and
correct in all respects; and
(ii) Heartland or Acquisition Corp, as the case may be,
has performed or complied in all material respects with all of the
covenants and obligations to be performed or complied with by it under
the terms of this Agreement on or prior to the Closing Date, provided,
however, that to the extent performance and compliance with such
covenants and obligations are subject in this Agreement to a standard of
materiality, Heartland or Acquisition Corp shall have performed
and complied in all respects with such covenants and obligations;
(g) a legal opinion of Heartland's counsel dated the Closing
Date in the form attached as Exhibit C;
(h) the tax opinion described in Section 10.10; and
(i) such other documents as RMB may reasonably request.
All of such items shall be reasonably satisfactory in form and
substance to RMB and its counsel.
Section 2.9 RMB's Deliveries at Closing. At the Closing, RMB
shall deliver the following items to Heartland:
(a) a good standing certificate for RMB issued by the
Secretary of State of the State of Montana and dated not more than
fifteen (15) Business Days prior to the Closing Date;
(b) a copy of the articles of incorporation of RMB
certified not more than fifteen (15) Business Days prior to the
Closing Date by the Secretary of State of the State of Montana;
(c) a certificate of the Secretary or any Assistant
Secretary of RMB dated the Closing Date certifying a copy of the
bylaws of RMB;
(d) copies of resolutions of the board of directors and
shareholders of RMB authorizing and approving this Agreement and
the consummation of the Contemplated Transactions certified as of
the Closing Date by the Secretary or any Assistant Secretary of
RMB;
(e) a good standing certificate for the Bank issued by the
Secretary of State of the State of Montana and dated not more
than fifteen (15) Business Days prior to the Closing Date;
(f) a copy of the articles of incorporation of the Bank
certified by the Secretary of State of the State of Montana and
dated not more than fifteen (15) Business Days prior to the
Closing Date;
(g) a certificate of the Cashier of the Bank dated the
Closing Date certifying a copy of the bylaws of the Bank and stating
that there have been no further amendments to the articles of
incorporation of the Bank delivered pursuant to the immediately
preceding paragraph of this Section;
(h) a certificate executed by the Chief Executive Officer,
President or Vice President of RMB, dated the Closing Date,
stating that:
(i) all of the representations and warranties of
RMB set forth in this Agreement, as the same may have been
updated pursuant to Section 6.8, are true and correct in all
material respects with the same force and effect as if all of
such representations and warranties were made at the Closing
Date, provided, however, that to the extent such representations
and warranties expressly relate to an earlier date, such
representations shall be true and correct in all material
respects on and as of such earlier date, and provided further,
that to the extent that representations and warranties are made
in this Agreement subject to a standard of materiality or
Knowledge, such representations and warranties shall be true and
correct in all respects; and
(ii) RMB has performed or complied in all material
respects with all of the covenants and obligations to be performed
or complied with by it under the terms of this Agreement on or
prior to the Closing Date, provided, however, that to the extent
performance and compliance with such covenants and obligations
are subject in this Agreement to a standard of materiality,
RMB shall have performed and complied in all respects with such
covenants and obligations; and
(i) a list of all holders of RMB Common Stock as of
the Closing Date and a list of all Persons as of the Closing Date
who have the right at any time to acquire shares of RMB Common Stock,
certified in each case by the Secretary or any Assistant
Secretary of RMB;
(j) owner's title insurance policies, if any, issued
by First American Title Insurance Company, or such other title
insurance company as is reasonably acceptable to Heartland, in
accordance with any title commitments delivered by RMB to Heartland
in accordance with Section 6.5, and in each case, in policy amounts
at least equal to the book value of the property covered by such
policies, as shown on the books and records of RMB or the Bank;
(k) a legal opinion of RMB's counsel dated the Closing
Date in the form attached as Exhibit D;
(l) a certificate of each of RMB's legal counsel,
accountants and financial advisor or investment banker, if any,
representing that all of their respective fees and expenses relating
to the Contemplated Transactions incurred by RMB prior to and including
the Effective Time have been paid in full;
(m) at and pursuant to the request of Heartland, a
resignation from each of the directors and officers of RMB and the
Bank from such individual's position as a director and an officer of
RMB and the Bank, as the case may be; and
(n) such other documents as Heartland may reasonably
request.
All of such items shall be reasonably satisfactory in form and
substance to Heartland and its counsel.
Section 2.10 Alternative Structure. Notwithstanding anything
contained herein to the contrary, upon receipt of RMB's prior
written consent (which consent shall not be unreasonably
withheld), Heartland may specify, for any reasonable business,
tax or regulatory purpose, that, before the Effective Time,
Heartland, Acquisition Corp and RMB shall enter into transactions
other than those described in this Agreement to effect the
purposes of this Agreement, including the merger of RMB with any
Affiliate of Heartland, and the parties to this Agreement shall
take all action necessary and appropriate to effect, or cause to
be effected, such transactions; provided, however, that no such
proposed change on the structure of the transactions contemplated
in this Agreement shall delay the Closing Date (if such a date
has already been firmly established) by more than thirty (30)
Business Days or adversely affect the economic benefits, the form
of consideration or the tax effect of the Merger at the Effective
Time to the holders of RMB Common Stock.
Section 2.11 Absence of Control. Subject to any specific
provisions of this Agreement, it is the intent of the parties to
this Agreement that neither Heartland nor RMB by reason of this
Agreement shall be deemed (until consummation of the Contemplated
Transactions) to control, directly or indirectly, the other party
or any of its respective Subsidiaries and shall not exercise, or
be deemed to exercise, directly or indirectly, a controlling
influence over the management or policies of such other party or
any of its respective Subsidiaries.
ARTICLE 3
CONVERSION OF SECURITIES IN THE MERGER
SECTION 3.1 Additional Definitions. In addition to those
terms defined throughout this Agreement, the following terms,
when used herein, shall have the following meanings:
(a) "Average Closing Price" means the average closing
price of Heartland Common Stock, as recorded on NASDAQ, during the
twenty (20) Business Days immediately preceding the fifth (5th)
Business Day prior to the Effective Time.
(b) "Outstanding RMB Shares" means the number of shares
of RMB Common Stock issued and outstanding immediately prior to the
Effective Time (excluding any shares held as treasury stock).
Section 3.2 Manner of Merger. Subject to the provisions of
this Agreement, at the Effective Time, automatically by virtue of
the Merger and without any action on the part of any Person:
(a) Each share of common stock, no par value per share,
of Acquisition Corp issued and outstanding immediately prior to the
Effective Time shall be converted into one validly issued, fully
paid and non-assessable share of common stock of the Surviving
Corporation.
(b) Each share of RMB Common Stock (other than shares
held by RMB or any RMB Subsidiary (except for shares held by any of
them in a fiduciary capacity) and Dissenting Shares) shall be
converted, subject to the election of the holder as provided in,
and subject to the limitations set forth in this Article, into:
(i) that number of shares (the "Stock Consideration")
of Heartland Common Stock that is equal to the quotient of (A) the
Purchase Price, divided by (B) the Outstanding RMB Shares, and
the result divided by (C) the Average Closing Price (such
quotient, the "Exchange Ratio"); or
(ii) cash, without interest (the "Cash Consideration"),
in an amount equal to the quotient of (A) the Purchase Price,
divided by (B) the Outstanding RMB Shares. The Cash Consideration
and the Stock Consideration are referred to herein collectively as
the "Merger Consideration." Notwithstanding the foregoing, if the
Average Closing Price is greater than $21.33, the Average Closing
Price used to calculate the Stock Consideration pursuant to clause
(i) of this Section 3.2(b) shall be equal to $21.33, and if the
Average Closing Price is less than $17.33, the Average Closing Price
used to calculate the Stock Consideration pursuant to clause (i) of
this Section 3.2(b) shall be equal to $17.33.
(c) Each share of RMB Common Stock held as treasury stock
immediately prior to the Effective Time shall be canceled and
retired at the Effective Time and no consideration shall be
issued in exchange therefor.
(d) Unless otherwise elected by a holder of RMB Common
Stock in accordance with Section 3.3, the Merger Consideration into
which each share of RMB Common Stock is converted shall be
fifty percent (50%) Stock Consideration and fifty percent (50%)
Cash Consideration (the "Base Conversion Ratio"). A holder of
RMB Common Stock may elect to receive a greater percentage of
Stock Consideration in lieu of Cash Consideration upon the making
of a proper election under Section 3.3.
(e) Notwithstanding any other provision contained in this
Agreement to the contrary, a maximum of fifty percent (50%) of
the Outstanding RMB Shares shall be converted into the Cash
Consideration (assuming for purposes of this Section 3.2(e) only
that Dissenting Shares are converted into the Cash
Consideration), and the remaining Outstanding RMB Shares shall be
converted into the Stock Consideration
Section 3.3 Election Procedures
(a) An election form (an "Election Form") shall be mailed
with the Proxy Statement to each holder of record of shares of RMB
Common Stock as of the record date for the meeting of holders of
RMB Common Stock called for the purpose of considering and acting
upon this Agreement and the Contemplated Transactions. The date
the Proxy Statement is mailed to shareholders of RMB is referred
to as the "Mailing Date."
(b) The Election Form shall entitle the holder of shares
of RMB Common Stock (or the beneficial owner through appropriate and
customary documentation and instructions) to elect to receive
Stock Consideration in a greater percentage than the Base
Conversion Ratio, up to and including entirely Stock
Consideration for such holder's shares (a "Stock Election").
Holders of record of shares of RMB Common Stock who hold such
shares as nominees, trustees or in other representative
capacities (a "Share Representative") may submit multiple
Election Forms, provided that such Share Representative certifies
that each such Election Form covers all the shares of RMB Common
Stock held by that Share Representative for a particular
beneficial owner.
(c) To be effective, a properly completed Election
Form must be received by Dubuque Bank and Trust Company, an Iowa
chartered, commercial bank with its main office located in Dubuque,
Iowa (the "Exchange Agent"), on or before 5:00 p.m. on the
tenth (10th) Business Day following the date upon which the vote
of holders of RMB Common Stock is held to approve this Agreement
(the "Election Deadline"). An election shall have been properly
made only if the Exchange Agent shall have actually received a
properly completed Election Form by the Election Deadline.
Subject to the terms of this Agreement and of the Election Form,
the Exchange Agent shall have reasonable discretion to determine
whether any election has been properly or timely made and to
disregard immaterial defects in any Election Form, and any good
faith decisions of the Exchange Agent regarding such matters
shall be binding and conclusive. If a valid and timely Stock
Election is not received from a holder of RMB Common Stock, such
RMB Common Stock shall be exchanged for the Merger Consideration
at the Base Conversion Ratio.
Section 3.4 Rights as Shareholders; Stock Transfers. At the
Effective Time, holders of RMB Common Stock shall cease to be,
and shall have no rights as, shareholders of RMB, other than to
receive the Merger Consideration. After the Effective Time,
there shall be no transfers on the stock transfer books of RMB or
the Surviving Corporation of shares of RMB Common Stock.
Section 3.5 Fractional Shares. Notwithstanding any other
provision hereof, no fractional shares of Heartland Common Stock
and no certificates or scrip therefore, or other evidence of
ownership thereof, will be issued in the Merger; instead,
Heartland shall pay to each holder of RMB Common Stock who would
otherwise be entitled to a fractional share of Heartland Common
Stock (after taking into account all Old Certificates registered
in the name of such holder) an amount in cash (without interest)
determined by multiplying such fraction by the closing price of
Heartland Common Stock as reported on the NASDAQ on the Effective
Date.
Section 3.6 Exchange Procedures
(a) As soon as is reasonably practicable, but in no
event later than five (5) Business Days after the Closing Date,
the Exchange Agent shall mail to each holder of record of RMB
Common Stock instructions for use in effecting the surrender of
the certificates representing such RMB Common Stock (the "Old
Certificates") in exchange for the Merger Consideration (the
"Transmittal Letter"). Upon proper surrender of an Old
Certificate for exchange and cancellation to the Exchange Agent,
together with such properly completed and duly executed
Transmittal Letter, the holder of such Old Certificates shall be
entitled to receive in exchange therefor:
(i) a new certificate representing that number of
whole shares of Heartland Common Stock that such holder has the
right to receive pursuant to this Article;
(ii) a check representing the amount of the cash
that such holder is entitled to receive pursuant to this Article,
if any; and
(iii) a check representing the amount of any cash in
lieu of fractional shares which such holder has the right to
receive in respect of the Old Certificates surrendered pursuant
to the provisions of this Article, and the Old Certificates so
surrendered shall forthwith be cancelled.
(b) On the Closing Date Heartland shall deposit with
the Exchange Agent for the benefit of holders of Old Certificates:
(i) cash or immediately available funds equal to
the Cash Consideration; and
(ii) certificates representing the shares of
Heartland Common Stock to be issued as Stock Consideration, at
the Base Conversion Ratio, adjusted by the Stock Elections
received by the Exchange Agent prior to the Closing Date and
adjusted for anticipated payments of cash in lieu of fractional
shares permitted under this Article (the "Exchange Fund"). The
Exchange Fund shall be held by the Exchange Agent for the benefit
of holders of RMB Common Stock pursuant to the terms of an
Exchange Agent Agreement in the form of Exhibit E. After the
Closing Date, Heartland shall make additional deposits to the
Exchange Fund, and the Exchange Agent may return certificates or
funds held by the Exchange Agent, as may be necessary for the
completion of the exchange of Old Certificates for the Merger
Consideration in accordance with this Article and any Stock
Elections timely received on or after the Closing Date. All
fees, costs and expenses of the Exchange Agent shall be borne
solely by Heartland.
(c) Neither the Exchange Agent nor any party hereto
shall be liable to any former holder of RMB Common Stock for any
amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
(d) No dividends or other distributions with respect
to Heartland Common Stock with a record date occurring after the
Effective Time shall be paid to the holder of any unsurrendered
Old Certificate representing shares of RMB Common Stock converted
in the Merger into the right to receive shares of Heartland
Common Stock until the holder of such unsurrendered Old
Certificate shall be entitled to receive a new certificate
representing shares of Heartland Common Stock in exchange
therefor in accordance with the procedures set forth in this
Section. After becoming so entitled in accordance with this
Section, the record holder thereof also shall be entitled to
receive any such dividends or other distributions by the Exchange
Agent, without any interest thereon, which theretofore had become
payable with respect to shares of Heartland Common Stock such
holder had the right to receive upon surrender of the Old
Certificates.
(e) Any portion of the Merger Consideration that
remains unclaimed by the shareholders of RMB on the first
anniversary of the Effective Time shall be paid to Heartland
to be held for the benefit of holders of unsurrendered Old
Certificates. Any shareholders of RMB who have not theretofore
complied with this Article shall thereafter look only to Heartland
for payment of the Merger Consideration, cash in lieu of any
fractional shares and unpaid dividends and distributions on
Heartland Common Stock deliverable in respect of each share of
RMB Common Stock such shareholder holds as determined pursuant
to this Agreement, in each case, without any interest thereon.
(f) If a certificate representing shares of Heartland
Common Stock or a check representing Cash Consideration is to be
issued in a name other than that in which the Old Certificate
surrendered in exchange therefor is registered, it shall be a
condition of the issuance thereof that the Old Certificate so
surrendered shall be properly endorsed, accompanied by all
documents required to evidence and effect such transfer and
otherwise in proper form for transfer and that the Person
requesting such exchange shall pay to Heartland any transfer or
other taxes required by reason of the issuance of a certificate
representing shares of Heartland Common Stock or a check
representing Cash Consideration in any name other than that of
the registered holder of the Old Certificate surrendered, or
otherwise required, or shall establish to the satisfaction of
Heartland that such tax has been paid or is not payable.
Section 3.7 Anti-Dilution Provisions.
(a) If Heartland issues additional shares of
Heartland Common Stock (other than as provided below) or
declares a stock dividend, stock split, reverse split or other
general distribution, reclassification or recapitalization of
Heartland Common Stock and the record date for such stock
dividend, stock split, distribution, reclassification or
recapitalization occurs at any time after the Agreement Date
and prior to the Effective Time, then the Exchange Ratio
shall be adjusted appropriately to give effect to the change
in Heartland capitalization. Notwithstanding the foregoing,
no adjustment shall be made to the Exchange Ratio:
(x) in the event of the issuance of additional
shares of Heartland Common Stock pursuant to the grant or sale of
shares to, or for the account of, employees of Heartland pursuant
to Heartland's stock option, qualified and non-qualified
retirement and dividend reinvestment plans; or
(y) in the event of the issuance of additional
shares of Heartland Common Stock or other securities pursuant
to a public offering, private placement or an acquisition of one
or more banks, corporations or business assets for consideration
which the board of directors, or a duly authorized committee of
the board of directors, of Heartland in its reasonable business
judgment determines to be fair and reasonable.
(b) Subject only to making any adjustment to the
Exchange Ratio and related computations prescribed by this Section,
nothing contained in this Agreement is intended to preclude Heartland
from amending its certificate of incorporation to change its
capital structure or from issuing additional shares of Heartland
Common Stock, preferred stock, shares of other capital stock or
securities that are convertible into shares of capital stock.
Section 3.8 Tax Free Reorganization. The parties to this
Agreement intend for the Merger to qualify as a nontaxable
reorganization within the meaning of Section 368 and related
sections of the Code and agree to cooperate and to take such
actions as may be reasonably necessary to ensure such result and
no party shall file any tax return or take any action or position
inconsistent therewith, except as required pursuant to any Legal
Requirement.
Section 3.9 Dissenting Shares. Notwithstanding anything to
the contrary contained in this Agreement, to the extent appraisal
rights are available to shareholders of RMB pursuant to the
provisions of any applicable Legal Requirements, including
Sections 35-1-826 through 35-1-839 of the MCA, any shares of RMB
Common Stock held by a Person who objects to the Merger, whose
shares were not voted in favor of the Merger and who complies
with and satisfies all of the provisions of the applicable Legal
Requirements concerning the rights of such Person to dissent from
the Merger and to require appraisal of such Person's shares and
who has not withdrawn such objection or waived such rights prior
to the Effective Time (collectively with respect to all such RMB
shareholders, the "Dissenting Shares"), shall not be converted
pursuant to Section 3.2, but shall become the right to receive
such consideration as may be determined to be due to the holder
of such Dissenting Shares pursuant to the applicable Legal
Requirements, including, if applicable, any costs determined to
be payable by RMB to the holders of Dissenting Shares pursuant to
an order of any court pursuant to any applicable Legal
Requirements; provided, however, that each Dissenting Share held
by a Person at the Effective Time who shall, after the Effective
Time, withdraw the demand for appraisal or lose the right of
appraisal, in either case pursuant to applicable Legal
Requirements shall be deemed to have been converted, as of the
Effective Time, into the right to receive the Merger
Consideration as is determined in accordance with Article 3.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF RMB
RMB hereby represents and warrants to Heartland that the
following are true and correct as of the date hereof, and will be
true and correct as of the Effective Time:
Section 4.1 RMB Organization. RMB: (a) is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Montana and is also in good standing in each
other jurisdiction in which the nature of the business conducted
or the properties or assets owned or leased by it makes such
qualification necessary; (b) is registered with the Federal
Reserve as a bank holding company under the federal Bank Holding
Company Act of 1956, as amended (the "BHCA"); and (c) has full
power and authority, corporate and otherwise, to operate as a
bank holding company and to own, operate and lease its properties
as presently owned, operated and leased, and to carry on its
business as it is now being conducted. Copies of the articles of
incorporation and bylaws of RMB and all amendments thereto are
set forth on Schedule 4.1 and are complete and correct. RMB has
no Subsidiaries other than the Bank and as set forth on Schedule
4.1.
Section 4.2 RMB Subsidiary Organization. The Bank is a
Montana chartered, commercial bank duly organized, validly
existing and in good standing under the laws of the State of
Montana. Each other RMB Subsidiary is duly organized, validly
existing and in good standing in its state or jurisdiction of
organization. Each RMB Subsidiary has full power and authority,
corporate and otherwise, to own, operate and lease its properties
as presently owned, operated and leased, and to carry on its
business as it is now being conducted, and is duly qualified to
do business and is in good standing in each jurisdiction in which
the nature of the business conducted or the properties or assets
owned or leased by it makes such qualification necessary. Copies
of the charter (or similar organizational documents) and bylaws
of each RMB Subsidiary and all amendments thereto are set forth
on Schedule 4.2 and are complete and correct.
Section 4.3 Authorization; Enforceability.
(a) RMB has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement.
The execution, delivery and performance of this Agreement by RMB,
and the consummation by it of its obligations under this Agreement,
have been authorized by all necessary corporate action, subject
to shareholder approval, and this Agreement constitutes a legal,
valid and binding obligation of RMB enforceable in accordance
with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other laws affecting
creditors' right generally and subject to general principles of
equity.
(b) Except for ordinary corporate requirements, no
"business combination," "moratorium," "control share" or other
state anti-takeover statute or regulation or any provisions contained
in the articles of incorporation or bylaws of RMB:
(i) prohibits or restricts RMB's ability to perform
its obligations under this Agreement, or its ability to consummate
the Contemplated Transactions;
(ii) would have the effect of invalidating or
voiding this Agreement, or any provision hereof; or
(iii) would subject Heartland to any material
impediment or condition in connection with the exercise of any of
its rights under this Agreement. The board of directors of RMB
has unanimously approved the execution of, and performance by RMB
of its obligations under, this Agreement.
Section 4.4 No Conflict. Except as set forth on Schedule 4.4,
neither the execution nor delivery of this Agreement nor the
consummation or performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice
or lapse of time):
(a) contravene, conflict with or result in a
violation of any provision of the articles of incorporation or
charter (or similar organizational documents) or bylaws, or any
resolution adopted by the board of directors or shareholders of,
RMB or any RMB Subsidiary;
(b) contravene, conflict with or result in a violation
of, or give any Regulatory Authority or other Person the valid and
enforceable right to challenge any of the Contemplated Transactions
or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which RMB or any RMB Subsidiary, or any
of their respective assets that are owned or used by them, may be
subject, except for any contravention, conflict or violation that
is permissible by virtue of obtaining the regulatory approvals
necessitated by the Contemplated Transactions, including any such
approvals under the BHCA, the Federal Deposit Insurance Act,
as amended (the "FDIA"), the Securities Act, the Exchange Act and
the MCA;
(c) contravene, conflict with or result in a violation
or breach of any provision of, or give any Person the right to
declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate or modify
any material Contract to which RMB or any RMB Subsidiary is a party
or by which any of their respective assets is bound; or
(d) result in the creation of any lien, charge or
encumbrance upon or with respect to any of the assets owned or used
by RMB or any RMB Subsidiary. Except for the approvals referred
to in Section 8.1 and the requisite approval of its shareholders,
neither RMB nor any RMB Subsidiary is or will be required to give
any notice to or obtain any consent from any Person in connection
with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions.
Section 4.5 RMB Capitalization. The authorized capital stock
of RMB currently consists exclusively of 150,000 shares of RMB
Common Stock, of which:
(a) as of the Agreement Date, 108,347.70
shares are duly issued, fully paid and non-assessable; and
(b) as of the Agreement Date, no shares are held by RMB as
treasury shares. To the Knowledge of RMB and except as disclosed in
this Agreement or on the Schedules, none of the shares of authorized
capital stock of RMB are, nor on the Closing Date will they be,
subject to any claim except pursuant to this Agreement. Except
as contemplated in this Agreement or as set forth in
Schedule 4.5, there are, as of the Agreement Date, no outstanding
subscriptions, contracts, conversion privileges, options,
warrants, calls or other rights obligating RMB or any RMB
Subsidiary to issue, sell or otherwise dispose of, or to
purchase, redeem or otherwise acquire, any shares of capital
stock of RMB or any RMB Subsidiary except for such rights held
exclusively by RMB to acquire RMB Subsidiary capital stock.
There are no outstanding securities of RMB that are convertible
into, or exchangeable for, any shares of capital stock, and
except as provided in this Section or otherwise disclosed in this
Agreement, RMB is not a party to any Contract relating to the
issuance, sale or transfer of any equity securities or other
securities of RMB. None of the shares of RMB Common Stock were
issued in violation of any federal or state securities laws or
any other Legal Requirement. RMB does not own or have any
Contract to acquire any equity securities or other securities of
any Person or any direct or indirect equity or ownership interest
in any other business except for the capital stock of the Bank
and as set forth in Schedule 4.5. Except as disclosed in or
permitted by this Agreement or as provided on Schedule 4.5, from
and including October 1, 2003, no shares of RMB capital stock
have been purchased, redeemed or otherwise acquired, directly or
indirectly, by RMB or any RMB Subsidiary and no dividends or
other distributions payable in any equity securities of RMB or
any RMB Subsidiary have been declared, set aside, made or paid to
the shareholders of RMB.
Section 4.6 RMB Subsidiary Capitalization. The authorized
capital stock of the Bank consists, and immediately prior to the
Effective Time, will consist exclusively of 12,484 shares of
capital stock, no par value per share (the "Bank Shares"), all of
which shares are, and immediately prior to the Closing will be,
duly authorized, validly issued and outstanding, fully paid and
nonassessable, except to the extent subject to assessment under
the Montana Bank Act or the FDIA. RMB is, and will be on the
Closing Date, the record and beneficial owner of one hundred
percent (100%) of the Bank Shares and all of the issued and
outstanding shares of capital stock of each other RMB Subsidiary,
and, except as set forth on Schedule 4.6, free and clear of any
lien or encumbrance whatsoever. The Bank Shares are, and will be
on the Closing Date, freely transferable and are, and will be on
the Closing Date, subject to no claim except pursuant to this
Agreement and as set forth on Schedule 4.6. There are no
unexpired or pending preemptive rights with respect to any shares
of capital stock of any RMB Subsidiary, except for such rights
held exclusively by RMB. There are no outstanding securities of
any RMB Subsidiary that are convertible into or exchangeable for
any shares of such RMB Subsidiary's capital stock, except for
such rights held exclusively by RMB and no RMB Subsidiary is a
party to any Contract relating to the issuance, sale or transfer
of any equity securities or other securities of such RMB
Subsidiary. Neither RMB nor any RMB Subsidiary owns or has any
Contract to acquire, any equity securities or other securities of
any Person or any direct or indirect equity or ownership interest
in any other business, except as set forth on Schedule 4.6.
Section 4.7 Financial Statements and Reports. True, correct
and complete copies of the following financial statements are
included in Schedule 4.7:
(a) audited Consolidated Balance Sheets for RMB as of
December 31, 2001 and 2002, and the related audited Consolidated
Statements of Income, Statements of Cash Flows and Consolidated
Statements of Changes in Shareholders' Equity of RMB for the
years ended December 31, 2001 and 2002;
(b) unaudited Consolidated Balance Sheet for RMB as of
December 31, 2003, and the related unaudited Consolidated
Statements of Income, Statements of Cash Flows and consolidated
Statements of Changes in Shareholders' Equity of RMB for the year
ended December 31, 2003; and
(c) Call Reports for the Bank as of the close of business
on December 31, 2001, 2002 and 2003.
The financial statements described in clauses (a) and (b)
have been prepared in conformity with GAAP. The financial
statements described in clause (c) above have been prepared on a
basis consistent with past accounting practices and as required
by applicable Legal Requirements and fairly present the
consolidated financial condition and results of operations at the
dates and for the periods presented. Taken together, the
financial statements described in clauses (a), (b) and (c) above
(collectively, and including the notes thereto, the "RMB
Financial Statements") are complete and correct in all material
respects and fairly and accurately present the respective
financial position, assets, liabilities and results of operations
of RMB and the Bank as at the respective dates of and for the
periods referred to in the RMB Financial Statements. The RMB
Financial Statements do not include any material assets or omit
to state any material liabilities, absolute or contingent, or
other facts, which inclusion or omission would render the RMB
Financial Statements misleading in any material respect as at the
respective dates of and for the periods referred to in the
respective RMB Financial Statements.
Section 4.8 Books and Records. The books of account, minute
books, stock record books and other records of RMB and each RMB
Subsidiary are complete and correct in all material respects and
have been maintained in accordance with RMB's business practices
and all applicable Legal Requirements, including the maintenance
of any adequate system of internal controls required by the Legal
Requirements. The minute books of RMB and each RMB Subsidiary
contain accurate and complete records in all material respects of
all meetings held of, and corporate action taken by, its
respective shareholders, board of directors and committees of the
board of directors. At the Closing, all of those books and
records will be in the possession of RMB and the RMB
Subsidiaries.
Section 4.9 Title to Properties. RMB and each RMB Subsidiary
has (except with respect to real property, in which case RMB and
each RMB Subsidiary will have, no later than the Closing Date)
good and marketable title to all assets and properties, whether
real or personal, tangible or intangible, that it purports to
own, subject to no valid liens, mortgages, security interests,
encumbrances or charges of any kind except:
(a) as noted in the most recent RMB Financial Statement
or on Schedule 4.6 or Schedule 4.9; (b) statutory liens for Taxes
not yet delinquent or being contested in good faith by appropriate
Proceedings and for which appropriate reserves have been established
and reflected on the RMB Financial Statements;
(c) pledges or liens required to be granted in connection
with the acceptance of government deposits, granted in connection
with repurchase or reverse repurchase agreements, pursuant to
borrowings from Federal Home Loan Banks or similar borrowings, or
otherwise incurred in the Ordinary Course of Business; and
(d) minor defects and irregularities in title and encumbrances
that do not materially impair the use thereof for the purposes for
which they are held (all of such exceptions in clauses (a) through (d)
are collectively referred to as "Permitted Exceptions"). Except
as set forth on Schedule 4.9, RMB and each RMB Subsidiary as lessee
has the right under valid and existing leases to occupy, use, possess
and control any and all of the respective property leased by it.
Except where any failure would not be expected to have a Material
Adverse Effect on RMB on a consolidated basis, all buildings and
structures owned by RMB and each RMB Subsidiary lie wholly within
the boundaries of the real property owned or validly leased by
it, and do not encroach upon the property of, or otherwise
conflict with the property rights of, any other Person.
Section 4.10 Condition and Sufficiency of Assets. The
buildings, structures and equipment of RMB and each RMB
Subsidiary are structurally sound, are in good operating
condition and repair, and are adequate for the uses to which they
are being put, and none of such buildings, structures or
equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material
in the aggregate in nature or in cost. Except where any failure
would not reasonably be expected to have a Material Adverse
Effect on RMB on a consolidated basis, the real property,
buildings, structures and equipment owned or leased by RMB and
each RMB Subsidiary are in compliance with the Americans with
Disabilities Act of 1990, as amended, and the regulations
promulgated thereunder, and all other building and development
codes and other restrictions, including subdivision regulations,
building and construction regulations, drainage codes, health,
fire and safety laws and regulations, utility tariffs and
regulations, conservation laws and zoning laws and ordinances.
The assets and properties, whether real or personal, tangible or
intangible, that RMB or any RMB Subsidiary purport to own are
sufficient for the continued conduct of the business of RMB and
each RMB Subsidiary after the Closing in substantially the same
manner as conducted prior to the Closing.
Section 4.11 Loans; Loan Loss Reserve. Except as
contemplatedas set forth in Schedule 4.11, all loans and loan
commitments extended by any RMB Subsidiary and any extensions,
renewals or continuations of such loans and loan commitments
(the "RMB Loans") were made materially in accordance with the
lending policies of such RMB Subsidiary in the Ordinary Course of
Business. The RMB Loans are evidenced by appropriate and
sufficient documentation and constitute valid and binding
obligations to such RMB Subsidiary enforceable in accordance with
their terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors'
rights generally and subject to general principles of equity.
All such RMB Loans are, and at the Closing will be, free and
clear of any encumbrance or other charge (except for liens, if
any, set forth on Schedule 4.9) and each RMB Subsidiary has
complied, and at the Closing will have complied with all Legal
Requirements relating to such RMB Loans, except where any such
failure to comply would not reasonably be expected to have a
Material Adverse Effect on RMB or any RMB Subsidiary. The
reserve for possible loan and lease losses of each RMB Subsidiary
is and will be on the Closing Date adequate in all material
respects to provide for possible or specific losses, net of
recoveries relating to loans previously charged off, and contains
and will contain an additional amount of unallocated reserves for
unanticipated future losses at an adequate level. To the
Knowledge of RMB:
(y) none of the RMB Loans is subject to any
material offset or claim of offset; and
(z) the aggregate loan
balances in excess of the Bank's reserve for loan and lease
losses are, based on past loan loss experience, collectible in
accordance with their terms and all uncollectible loans have been
charged off.
Section 4.12 Undisclosed Liabilities; Adverse Changes.
Except as set forth on Schedule 4.12, neither RMB nor any RMB
Subsidiary has any material liabilities or obligations of any nature
(whether absolute, accrued, contingent or otherwise), except for
liabilities or obligations reflected or reserved against in the
RMB Financial Statements and current liabilities incurred in the
Ordinary Course of Business since the respective dates thereof.
Except as set forth on Schedule 4.12, since October 31, 2003,
there has not been any change in the business, operations,
properties, prospects, assets or condition of RMB or any RMB
Subsidiary, and, to RMB's Knowledge, no event has occurred or
circumstance exists, that has had or would reasonably be expected
to have a Material Adverse Effect on RMB on a consolidated basis.
Section 4.13 Taxes. RMB and each RMB Subsidiary has duly
filed all material Tax Returns required to be filed by it, and each
such Tax Return is complete and accurate in all material
respects. RMB and each RMB Subsidiary has paid, or made adequate
provision for the payment of, all Taxes (whether or not reflected
in Tax Returns as filed or to be filed) due and payable by RMB or
any RMB Subsidiary, or claimed to be due and payable by any
Regulatory Authority, and is not delinquent in the payment of any
Tax, except such Taxes as are being contested in good faith and
as to which adequate reserves have been provided. There is no
claim or assessment pending or, to the Knowledge of RMB,
Threatened against RMB or any RMB Subsidiary for any Taxes owed
by any of them. No audit, examination or investigation related
to Taxes paid or payable by RMB or any RMB Subsidiary is
presently being conducted or, to the Knowledge of RMB, Threatened
by any Regulatory Authority. RMB has delivered or made available
to Heartland true, correct and complete copies of all Tax Returns
filed with respect to the fiscal years by RMB and each RMB
Subsidiary ending December 31, 2001 and 2002, and any tax
examination reports and statements of deficiencies assessed or
agreed to for any of RMB or any RMB Subsidiary for any such
fiscal years.
Section 4.14 Compliance with ERISA. Except as set forth on
Schedule 4.14, all employee benefit plans (as defined in
Section 3(3) of ERISA) established or maintained by RMB or any
RMB Subsidiary or to which RMB or any RMB Subsidiary contributes,
are in compliance with all applicable requirements of ERISA, and
are in compliance with all applicable requirements (including
qualification and non-discrimination requirements in effect as of
the Closing) of the Code for obtaining the tax benefits the Code
thereupon permits with respect to such employee benefit plans.
No such employee benefit plan has any amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA) for
which RMB or any RMB Subsidiary would be liable to any Person
under Title IV of ERISA if any such employee benefit plan were
terminated as of the Closing. Such employee benefit plans are
funded in accordance with Section 412 of the Code (if
applicable). There would be no obligations of RMB or any RMB
Subsidiary under Title IV of ERISA relating to any such employee
benefit plan that is a multi-employer plan if any such plan were
terminated or if RMB or such RMB Subsidiary withdrew from any
such plan as of the Closing.
Section 4.15 Compliance with Legal Requirements. RMB and
each RMB Subsidiary holds all licenses, certificates, permits,
franchises and rights from all appropriate Regulatory Authorities
necessary for the conduct of its respective business. Except as
set forth on Schedule 4.15, each of RMB and each RMB Subsidiary
is, and at all times since January 1, 2001, has been, in
compliance with each Legal Requirement that is or was applicable
to it or to the conduct or operation of its respective businesses
or the ownership or use of any of its respective assets, except
where the failure to comply would not reasonably be expected to
have a Material Adverse Effect on RMB or any RMB Subsidiary. No
event has occurred or circumstance exists that (with or without
notice or lapse of time): (a) may constitute or result in a
violation by RMB or any RMB Subsidiary of, or a failure on the
part of RMB or any RMB Subsidiary to comply with, any Legal
Requirement; or (b) may give rise to any obligation on the part
of RMB or any RMB Subsidiary to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature in
connection with a failure to comply with any Legal Requirement;
except, in either case, where the failure to comply or the
violation would not reasonably be expected to have a Material
Adverse Effect on RMB or any RMB Subsidiary. Except as set forth
on Schedule 4.15, neither RMB nor any RMB Subsidiary has
received, at any time since January 1, 2001, any notice or other
communication (whether oral or written) from any Regulatory
Authority or any other Person regarding:
(x) any actual, alleged, possible, or potential
violation of, or failure to comply with, any Legal Requirement; or
(y) any actual, alleged, possible, or potential
obligation on the part of RMB or any RMB Subsidiary to undertake,
or to bear all or any portion of the cost of, any remedial
action of any nature in connection with a failure to comply with
any Legal Requirement, except where any such violation, failure
or obligation would not reasonably be expected to have a
Material Adverse Effect on RMB or any RMB Subsidiary.
Section 4.16 Legal Proceedings; Orders.
(a) Schedule 4.16 is a true and correct list of all
Proceedings and Orders pending, entered into or, to the Knowledge
of RMB, Threatened against or affecting RMB or any RMB Subsidiary
or any of their respective assets or businesses, or the Contemplated
Transactions, since January 1, 2001, that has not been fully
satisfied and terminated and that would reasonably be expected to
have, a Material Adverse Effect on RMB on a consolidated basis or
that would impair RMB's ability to consummate any of the
Contemplated Transactions, and there is no fact known to RMB that
would provide a basis for any other Proceeding or Order. To the
Knowledge of RMB, no officer, director, agent or employee of RMB
or any RMB Subsidiary is subject to any Order that prohibits such
officer, director, agent or employee from engaging in or
continuing any conduct, activity or practice relating to the
businesses of RMB or any RMB Subsidiary.
(b) Neither RMB nor any RMB Subsidiary:
(i) is subject to any cease-and-desist or other
Order or enforcement action issued by, or
(ii) is a party to any written agreement, consent
agreement or memorandum of understanding with, or
(iii) is a party to any commitment letter or similar
undertaking to, or
(iv) is subject to any order or directive by, or
(v) is subject to any supervisory letter from, or
(vi) has been ordered to pay any civil money penalty,
which has not been paid, by, or
(vii) has adopted any policies, procedures or board
resolutions at the request of, any Regulatory Authority that
currently:
(w) restricts in any material respect the conduct
of its business or
(x) that in any material manner relates to its
capital adequacy, or
(y) restricts its ability to pay dividends, or
(z) limits in a material manner its credit or risk
management policies, its management or its business; nor has RMB or
any RMB Subsidiary been advised by any Regulatory Authority that it
is considering issuing, initiating, ordering or requesting any of the
foregoing.
Section 4.17 Absence of Certain Changes and Events. Except as
set forth on Schedule 4.17, since December 31, 0000, XXX and each
RMB Subsidiary has conducted its respective businesses only in
the Ordinary Course of Business. Without limiting the foregoing,
with respect to each, since December 31, 2002, there has not been
any:
(a) change in its authorized or issued capital stock,
except for redemptions or issuances of RMB capital stock on terms
and for consideration deemed fair and reasonable by the RMB board of
directors; grant of any stock option or right to purchase shares
of its capital stock; issuance of any security convertible into
such capital stock or evidences of indebtedness (except in
connection with customer deposits); grant of any registration
rights; purchase, redemption, retirement or other acquisition by
it of any shares of any such capital stock, except for
redemptions of RMB capital stock on terms and for consideration
deemed fair and reasonable by the RMB board of directors; or
declaration or payment of any dividend or other distribution or
payment in respect of shares of its capital stock, except as
reflected on the RMB Financial Statements;
(b) amendment of its articles of incorporation,
charter or bylaws or adoption of any resolutions by its board of
directors or shareholders with respect to the same;
(c) payment or increase of any bonus, salary or other
compensation to any of its shareholders, directors, officers or
employees, except for normal increases in the Ordinary Course of
Business or in accordance with any then existing RMB Employee
Benefit Plans (as defined below), or entry by it into any
employment, consulting, non-competition, change in control,
severance or similar Contract with any shareholder, director,
officer or employee, except for the Contemplated Transactions;
(d) adoption, amendment (except for any amendment
necessary to comply with any Legal Requirement) or termination of,
or increase in the payments to or benefits under, any RMB Employee
Benefit Plan;
(e) damage to or destruction or loss of any of its
assets or property, whether or not covered by insurance and where the
resulting diminution in value individually or in the aggregate is
greater than $25,000;
(f) entry into, termination or extension of, or receipt
of notice of termination of any joint venture or similar agreement
pursuant to any Contract or any similar transaction;
(g) except for this Agreement, entry into any new, or
modification, amendment, renewal or extension (through action or
inaction) of the terms of any existing, lease, Contract or
license that has a term of more than one year or that involves
the payment by RMB or any RMB Subsidiary of more than $50,000 in
the aggregate;
(h) RMB Loan or commitment to make any RMB Loan other
than in the Ordinary Course of Business;
(i) RMB Loan or commitment to make, renew, extend the
term or increase the amount of any Loan to any Person if such RMB
Loan or any other RMB Loans to such Person or an Affiliate of such
Person is on the "watch list" or similar internal report of RMB or
any RMB Subsidiary, or was classified as "substandard," "doubtful,"
"loss," or "other loans specially mentioned" or listed as a
"potential problem loan" prior to the commitment, renewal,
extension or increase; provided, however, that nothing in this
Agreement shall prohibit RMB or any RMB Subsidiary from honoring
any contractual obligation in existence on the Agreement Date;
(j) sale, lease or other disposition of any of its assets
or properties or mortgage, pledge or imposition of any lien or other
encumbrance upon any of its material assets or properties except
in the Ordinary Course of Business or for tax and other liens
that arise by operation of law and with respect to which payment
is not past due and except for pledges or liens:
(i) required to be granted in connection with the
acceptance by the Bank of government deposits;
(ii) granted in connection with repurchase
or reverse repurchase agreements; or
(iii) otherwise incurred in the Ordinary Course of
Business;
(k) incurrence by it of any obligation or liability
(fixed or contingent) other than in the Ordinary Course of Business;
(l) cancellation or waiver by it of any claims or
rights with a value in excess of $50,000;
(m) any investment by it of a capital nature exceeding
$25,000 or aggregate investments of a capital nature exceeding
$50,000;
(n) except for the Contemplated Transactions, merger or
consolidation with or into any other Person, or acquisition of
any stock, equity interest or business of any other Person;
(o) transaction for the borrowing or loaning of monies,
or any increase in any outstanding indebtedness, other than in the
Ordinary Course of Business;
(p) material change in any policies and practices with
respect to liquidity management and cash flow planning, marketing,
deposit origination, lending, budgeting, profit and tax planning,
accounting or any other material aspect of its business or
operations, except for such changes as may be required in the
opinion of the management of RMB to respond to then current
market or economic conditions or as may be required by any
Regulatory Authorities;
(q) filing of any applications for additional branches,
opening of any new office or branch, closing of any current office or
branch, or relocation of operations from existing locations;
(r) discharge or satisfaction of any material lien or
encumbrance on its assets or repayment of any material
indebtedness for borrowed money, except for obligations incurred
and repaid in the Ordinary Course of Business;
(s) entry into any Contract or agreement to buy, sell,
exchange or otherwise deal in any assets or series of assets in
a single transaction in excess of $50,000 in aggregate value,
except for sales of RMB "other real estate owned" and other
repossessed properties or the acceptance of a deed in lieu of
foreclosure;
(t) purchase or other acquisition of any investments,
direct or indirect, in any derivative securities, financial
futures or commodities or entry into any interest rate swap,
floors and option agreements, or other similar interest rate
management agreements;
(u) hiring of any employee with an annual salary in
excess of $35,000, except for employees at will who are hired
to replace employees who have resigned or whose employment has
otherwise been terminated; or
(v) agreement, whether oral or written, by it to
do any of the foregoing.
Section 4.18 Properties, Contracts and Employee Benefit
Plans. Except for Contracts evidencing Loans made by the Bank in the
Ordinary Course of Business, Schedule 4.18 lists or describes the
following with respect to RMB and each RMB Subsidiary:
(a) all real property owned by RMB and each RMB
Subsidiary and each lease of real property to which RMB and each
RMB Subsidiary is a party, identifying the parties thereto, the
annual rental payable, the expiration date thereof and a brief
description of the property covered, and in each case of either
owned or leased real property, the proper identification, if
applicable, of each such property as a branch or main office
or other office of RMB or such RMB Subsidiary;
(b) all borrowings by RMB or any RMB Subsidiary,
exclusive of deposit agreements with customers of the Bank entered
into in the Ordinary Course of Business, agreements for the purchase of
federal funds and repurchase agreements, borrowings from the
Federal Home Loan Banks and similar lenders;
(c) each Contract that involves performance of services or
delivery of goods or materials by RMB or any RMB Subsidiary after
the Agreement Date of an amount or value in excess of $25,000
under each Contract;
(d) each Contract that was not entered into in the Ordinary
Course of Business and that involves expenditures or receipts of
RMB or any RMB Subsidiary after the Agreement Date in excess of
$25,000;
(e) each Contract not referred to elsewhere in this Section
that:
(i) relates to the future purchase of goods or
services in excess of the requirements of its respective business
at current levels or for normal operating purposes; or
(ii) materially affect the business or financial
condition of RMB or any RMB Subsidiary;
(f) each lease, rental, license, installment and
conditional sale agreement and other Contract affecting the ownership
of, leasing of, title to or use of, any personal property (except
personal property leases and installment and conditional sales
agreements having a value per item or aggregate payments of less
than $50,000 and with terms, excluding any renewal terms, of less
than one year);
(g) each licensing agreement or other Contract with
respect to patents, trademarks, copyrights, or other intellectual
property (collectively, "Intellectual Property Assets"), including
agreements with current or former employees, consultants or
contractors regarding the appropriation or the non-disclosure of
any of the Intellectual Property Assets of RMB or any RMB
Subsidiary;
(h) each collective bargaining agreement and other
Contract to or with any labor union or other employee representative
of a group of employees;
(i) each joint venture, partnership and other Contract
(however named) involving a sharing of profits, losses, costs or
liabilities by RMB or any RMB Subsidiary with any other Person;
(j) each Contract containing covenants that in any way
purport to restrict the business activity of RMB or any RMB
Subsidiary or any Affiliate of any of the foregoing, or limit the
ability of RMB or any RMB Subsidiary or any Affiliate of the
foregoing to engage in any line of business or to compete with
any Person;
(k) each Contract providing for payments to or by any
Person based on sales, purchases or profits, other than direct
payments for goods;
(l) the name and annual salary of each director and
executive officer of RMB and each RMB Subsidiary, and the profit
sharing, bonus or other form of compensation (other than salary)
paid or payable by RMB, each RMB Subsidiary or a combination of
any of them to or for the benefit of each such person in question
for the year ended December 31, 2003, and for the current year, and
any employment agreement, consulting agreement, non-competition,
severance or change in control agreement or similar arrangement
or plan with respect to each such person;
(m) each profit sharing, group insurance,
hospitalization, stock option, pension, retirement, bonus,
severance, change of control, deferred compensation, stock bonus,
stock purchase, employee stock ownership or other employee welfare
or benefit agreements, plans or arrangements established,
maintained, sponsored or undertaken by RMB or any RMB Subsidiary
for the benefit of the officers, directors or employees of RMB or
any RMB Subsidiary, including each trust or other agreement with
any custodian or any trustee for funds held under any such
agreement, plan or arrangement, and all other Contracts or
arrangements under which pensions, deferred compensation or other
retirement benefits are being paid or may become payable by RMB or
any RMB Subsidiary for the benefit of the employees of RMB or any
RMB Subsidiary (collectively, the "RMB Employee Benefit Plans"),
and, in respect to any of them, the latest reports or forms, if
any, filed with the Department of Labor and Pension Benefit
Guaranty Corporation under ERISA, any current financial or
actuarial reports and any currently effective Internal Revenue
Service private rulings or determination letters obtained by or
for the benefit of RMB or any RMB Subsidiary;
(n) the name of each Person who is or would be entitled
pursuant to any Contract of RMB or RMB Subsidiaries or RMB Employee
Benefit Plan to receive any payment from Heartland, any Heartland
Subsidiary, RMB or any RMB Subsidiary as a result of the
consummation of the Contemplated Transactions (including any
payment that is or would be due as a result of any actual or
constructive termination of a Person's employment or position
following such consummation) and the maximum amount of such
payment (except for Contracts entered as required by this
Agreement);
(o) each Contract entered into other than in the
Ordinary Course of Business that contains or provides for an
express undertaking by RMB or any RMB Subsidiary to be responsible
for consequential damages;
(p) each Contract for capital expenditures in excess
of $25,000;
(q) each written warranty, guaranty or other similar
undertaking with respect to contractual performance extended by RMB
or any RMB Subsidiary other than in the Ordinary Course of Business;
and
(r) each amendment, supplement and modification (whether
oral or written) in respect of any of the foregoing.
Copies of each document, plan or Contract listed and
described on Schedule 4.18 are appended to such Schedule.
Section 4.19 No Defaults. Except as set forth on
Schedule 4.19, each Contract identified or required to be
identified on Schedule 4.18 is in full force and effect and is
valid and enforceable in accordance with its terms. RMB and each
RMB Subsidiary is, and at all times since January 1, 2001, has
been, in full compliance with all applicable terms and
requirements of each Contract under which either RMB or any RMB
Subsidiary has or had any obligation or liability or by which RMB
or any RMB Subsidiary or any of their respective assets owned or
used by them is or was bound, except where the failure to be in
full compliance would not reasonably be expected to have a
Material Adverse Effect on RMB or any RMB Subsidiary. Each other
Person that has or had any obligation or liability under any such
Contract under which RMB or any RMB Subsidiary has or had any
rights is, and at all times since January 1, 2001, has been, in
full compliance with all applicable terms and requirements of
such Contract, except where the failure to be in full compliance
would not reasonably be expected to have a Material Adverse
Effect on RMB or any RMB Subsidiary. No event has occurred or
circumstance exists that (with or without notice or lapse of
time) may contravene, conflict with or result in a material
violation or breach of, or give RMB, any RMB Subsidiary or other
Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to
cancel, terminate or modify, any Contract. Except in the
Ordinary Course of Business with respect to any RMB Loan, neither
RMB nor any RMB Subsidiary has given to or received from any
other Person, at any time since January 1, 2001, any notice or
other communication (whether oral or written) regarding any
actual, alleged, possible or potential violation or breach of, or
default under, any Contract, that has not been terminated or
satisfied prior to the Agreement Date. Other than in the
Ordinary Course of Business in connection with workouts and
restructured loans, there are no renegotiations of, attempts to
renegotiate or outstanding rights to renegotiate any material
amounts paid or payable to RMB or any RMB Subsidiary under
current or completed Contracts with any Person and no such Person
has made written demand for such renegotiation.
Section 4.20 Insurance. Schedule 4.20 lists the policies and
material terms of insurance (including bankers' blanket bond and
insurance providing benefits for employees) owned or held by RMB
or any RMB Subsidiary on the date hereof. Each policy is in full
force and effect (except for any expiring policy which is
replaced by coverage at least as extensive). All premiums due on
such policies have been paid in full.
Section 4.21 Compliance with Environmental Laws. Except
as set forth on Schedule 4.21, there are no actions, suits,
investigations, liabilities, inquiries, Proceedings or Orders
involving RMB or any RMB Subsidiary or any of their respective
assets that are pending or, to the Knowledge of RMB, Threatened,
nor to the Knowledge of RMB is there any factual basis for any of
the foregoing, as a result of any asserted failure of RMB or any
RMB Subsidiary, or any predecessor thereof, to comply with any
federal, state, county and municipal law, including any statute,
regulation, rule, ordinance, Order, restriction and requirement,
relating to underground storage tanks, petroleum products, air
pollutants, water pollutants or process waste water or otherwise
relating to the environment or toxic or hazardous substances or
to the manufacture, processing, distribution, use, recycling,
generation, treatment, handling, storage, disposal or transport
of any hazardous or toxic substances or petroleum products
(including polychlorinated biphenyls, whether contained or
uncontained, and asbestos-containing materials, whether friable
or not), including, the Federal Solid Waste Disposal Act, the
Hazardous and Solid Waste Amendments, the Federal Clean Air Act,
the Federal Clean Water Act, the Occupational Health and Safety
Act, the Federal Resource Conservation and Recovery Act, the
Toxic Substances Control Act, the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980
and the Superfund Amendments and Reauthorization Act of 1986, all
as amended, and regulations of the Environmental Protection
Agency, the Nuclear Regulatory Agency and any state department of
natural resources or state environmental protection agency now or
at any time hereafter in effect (collectively, the "Environmental
Laws"). No environmental clearances or other governmental
approvals are required for the conduct of the business of RMB or
any RMB Subsidiary or the consummation of the Contemplated
Transactions. To the Knowledge of RMB, neither RMB nor any RMB
Subsidiary is the owner of any interest in real estate on which
any substances have been used, stored, deposited, treated,
recycled or disposed of, which substances if known to be present
on, at or under such property, would require clean-up, removal or
some other remedial action under any Environmental Law.
Section 4.22 Regulatory Filings. RMB and each RMB Subsidiary
have filed in a timely manner all required filings with all
Regulatory Authorities, including the Federal Reserve, the FDIC
and the Division. All such filings were accurate and complete in
all material respects as of the dates of the filings, and no such
filing has made any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they
were made, not misleading.
Section 4.23 Fiduciary Accounts. The Bank has properly
administered in all material respects all accounts for which it
acts as fiduciary, including accounts for which it serves as
trustee, agent, custodian or investment advisor, in accordance
with the material terms of the governing documents and applicable
state and federal law and regulations and common law. To the
Knowledge of RMB and Bank, none of the Bank or any of its
directors, officers or employees has committed any breach of
trust with respect to any such fiduciary account, and the
accountings for each such fiduciary account are true and correct
in all material respects and accurately reflect the assets of
such fiduciary account.
Section 4.24 Indemnification Claims. To RMB's Knowledge, no
action or failure to take action by any director, officer,
employee or agent of RMB or any RMB Subsidiary has occurred that
may give rise to a claim or a potential claim by any such Person
for indemnification against RMB or any RMB Subsidiary under any
agreement with, or the corporate indemnification provisions of,
RMB or any RMB Subsidiary, or under any Legal Requirements.
Section 4.25 Insider Interests. Except as set forth on
Schedule 4.25, no officer or director of RMB or any RMB
Subsidiary, any member of the Family of any such Person, and no
entity that any such Person "controls" within the meaning of
Regulation O of the Federal Reserve, has any loan, deposit
account or any other agreement with RMB or any RMB Subsidiary,
any interest in any material property, real, personal or mixed,
tangible or intangible, used in or pertaining to the business of
RMB or any RMB Subsidiary.
Section 4.26 Disclosure. Neither any representation nor
warranty of RMB in, nor any schedule to, this Agreement contains
any untrue statement of a material fact, or omits to state a
material fact necessary to make the statements herein or therein,
in light of the circumstances in which they were made, not
misleading. No notice given pursuant to Section 6.8 will contain
any untrue statement or omit to state a material fact necessary
to make the statements therein or in this Agreement, in light of
the circumstances in which they were made, not misleading.
Section 4.27 Brokerage Commissions. None of RMB, any RMB
Subsidiary or any of their respective Representatives has
incurred any obligation or liability, contingent or otherwise,
for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.
Section 4.28 Approval Delays. To the Knowledge of RMB, there
is no reason why the granting of any of the regulatory approvals
referred to in Section 8.1 would be denied or unduly delayed.
The Bank's most recent CRA rating is "satisfactory" or better.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF HEARTLAND AND ACQUISITION CORP
Heartland and Acquisition Corp hereby represent and warrant
to RMB that the following are true and correct as of the date
hereof, and will be true and correct as of the Effective Date:
Section 5.1 Organization. Each of Heartland and each
Heartland Subsidiary: (a) is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its organization and is also in good standing in each other
jurisdiction in which the nature of the business conducted or the
properties or assets owned or leased by it makes such
qualification necessary; and (b) has full power and authority,
corporate and otherwise, to own, operate and lease its properties
as presently owned, operated and leased, and to carry on its
business as it is now being conducted, except where the failure
to be so qualified or to have such power and authority would not
have a Material Adverse Effect on Heartland on a consolidated
basis.
Section 5.2 Authorization. Each of Heartland and Acquisition
Corp has the requisite corporate power and authority to enter
into and perform its respective obligations under this Agreement
and the execution, delivery and performance of this Agreement by
each of Heartland and Acquisition Corp and the consummation by
each of them of the transactions contemplated thereby, have been
duly authorized by all necessary corporate action. This
Agreement constitutes a legal, valid and binding obligation of
each of Heartland and Acquisition Corp enforceable in accordance
with its terms except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws and
subject to general principles of equity.
Section 5.3 No Conflict. Neither the execution nor delivery
of this Agreement nor the consummation or performance of any of
the Contemplated Transactions will, directly or indirectly (with
or without notice or lapse of time): (a) contravene, conflict
with or result in a violation of any provision of the certificate
or articles of incorporation, charter, bylaws or any resolution
adopted by the board of directors or stockholders of, Heartland
or any Heartland Subsidiary; (b) contravene, conflict with or
result in a violation of any Legal Requirement or any Order to
which Heartland or any Heartland Subsidiary, or any of the assets
that are owned or used by them, may be subject, other than any of
the foregoing that would be satisfied by compliance with the
provisions of the BHCA, the Securities Act, the Exchange Act, the
MCA and the DGCL; and (c) contravene, conflict with or result in
a violation or breach of any provision of, or give any Person the
right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate or modify any material Contract to which Heartland or
any Heartland Subsidiary is a party or by which any of their
respective assets is bound; or (d) result in the creation of any
lien, charge or encumbrance upon, or with respect to, any of the
assets owned or used by Heartland or any Heartland Subsidiary.
Except as otherwise provided in this Agreement, neither Heartland
nor any Heartland Subsidiary is or will be required to give any
notice to, or obtain any consent from, any Person in connection
with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated
Transactions.
Section 5.4 Heartland Capitalization. The authorized
capital stock of Heartland currently consists exclusively of
16,000,000 shares of Heartland Common Stock and 200,000 shares of
preferred stock, no par value per share, of which as of
December 31, 2003:
(a) 15,261,714 shares of Heartland Common Stock were
duly issued, fully paid and non-assessable;
(b) 98,211 shares of Heartland Common Stock were held by
Heartland as treasury shares; and
(c) no shares of preferred stock were issued and outstanding.
Except as disclosed in any Heartland SEC Documents filed prior to
the Agreement Date, and except with respect to the rights of the
minority stockholders of Arizona Bank and Trust, an Arizona state
bank with its main office located in Mesa, Arizona ("ABT"),
pursuant to that certain Agreement to Organize and Stockholder
Agreement dated as of February 1, 2003, among such minority
stockholders and Heartland (the "ABT Agreement"), there are, as
of the Agreement Date:
(x) no outstanding subscriptions, contracts,
conversion privileges, options, warrants, calls or
other rights obligating Heartland or any Heartland Subsidiary to
issue, sell or otherwise dispose of, or to purchase, redeem or
otherwise acquire, any shares of capital stock of Heartland or
any Heartland Subsidiaries;
(y) no outstanding securities of Heartland that
are convertible into, or exchangeable for, any shares of Heartland
Common Stock; and
(z) Heartland is not a party to any Contract relating
to the issuance, sale or transfer of any equity securities or other
securities of Heartland. None of the shares of Heartland Common Stock
were issued in violation of any federal or state securities laws or
any other Legal
Requirement.
Section 5.5 Heartland Subsidiaries. Heartland is the record
and beneficial owner of one hundred percent (100%) of all of the
issued and outstanding shares of capital stock or other equity
securities of each Heartland Subsidiary, except for ABT, free and
clear of any lien or encumbrance whatsoever. Except for rights
granted under the ABT Agreement, or as disclosed in any Heartland
SEC Documents filed prior to the Agreement Date or for such
rights held exclusively by Heartland, there are no unexpired or
pending preemptive rights with respect to any shares of capital
stock of any Heartland Subsidiary. Except as provided under the
ABT Agreement, or as disclosed in any Heartland SEC Documents
filed prior to the Agreement Date or for such rights held
exclusively by Heartland, there are no outstanding securities of
any Heartland Subsidiary that are convertible into or
exchangeable for any shares of such Heartland Subsidiary's
capital stock or other equity securities.
Section 5.6 Heartland SEC Documents; Financial Statements.
Heartland has timely filed all Heartland SEC Documents and all
such Heartland SEC Documents have complied in all material
respects, as of their respective filing dates and effective
dates, as the case may be, with all applicable requirements of
the Exchange Act. As of their respective filing dates, none of
the Heartland SEC Documents contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. Heartland has previously made available to
RMB true, correct and complete copies of:
(a) all Heartland SEC Documents filed on or after
January 1, 2001; and
(b) the unaudited, consolidated balance sheets of
Heartland and Heartland Subsidiaries as of December 31, 2003,
and the related unaudited Consolidated Statements of Income,
Statements of Cash Flows and consolidated Statements of Changes
in Shareholders' Equity of Heartland for the period ended
December 31, 2003. The financial statements presented in the
Heartland SEC Documents or described in clause (b) above:
(x) have been prepared in conformity with
GAAP;
(y) are complete and correct in all material
respects and fairly and accurately present the respective
financial position, assets, liabilities and results of operations
of Heartland and the Heartland Subsidiaries as at the respective
dates of and for the periods referred to therein; and
(z) do not include any material assets or omit to
state any material liabilities, absolute or contingent, or other
facts, which inclusion or omission would render such financial
statements misleading in any material respect as at the respective
dates of and for the periods referred to therein.
Section 5.7 Undisclosed Liabilities; Adverse Changes.
Neither Heartland nor any Heartland Subsidiary has any material
liabilities or obligations of any nature (whether known or
unknown and whether absolute, accrued, contingent or otherwise),
except for liabilities or obligations reflected or reserved
against in the Heartland SEC Documents filed on or prior to the
Agreement Date, current liabilities incurred in the Ordinary
Course of Business since the respective dates thereof and other
liabilities or obligations that in the aggregate would not
reasonably be expected to have a Material Adverse Effect on
Heartland on a consolidated basis.
Section 5.8 Legal Proceedings; Orders. Except as disclosed
in the Heartland SEC Documents, there have been no Proceedings or
Orders pending, entered into or, to the Knowledge of Heartland,
Threatened against, affecting or involving Heartland or any
Heartland Subsidiary or any of their respective assets or
businesses, or the Contemplated Transactions, since January 1,
2001, that had, or would reasonably be expected to have, a
Material Adverse Effect on Heartland on a consolidated basis or
that would impair Heartland's ability to consummate any of the
Contemplated Transactions, and there is no fact to Heartland's
Knowledge that would provide a basis for any other Proceeding or
Order involving Heartland or any Heartland Subsidiary, or any of
its respective officers or directors in their capacities as such,
or its assets, business or goodwill that would reasonably be
expected to have a Material Adverse Effect on Heartland or that
would impair Heartland's ability to consummate any of the
Contemplated Transactions.
Section 5.9 Compliance with Legal Requirements. Heartland
and each Heartland Subsidiary holds all licenses, certificates,
permits, franchises and rights from all appropriate Regulatory
Authorities necessary for the conduct of its respective business.
Except as stated in any Heartland SEC Documents filed prior to
the Agreement Date, each of Heartland and each Heartland
Subsidiary is, and at all times since January 1, 2001, has been,
in compliance with each Legal Requirement that is or was
applicable to it or to the conduct or operation of its respective
businesses or the ownership or use of any of its respective
assets, except where the failure to comply would not reasonably
be expected to have a Material Adverse Effect on Heartland on a
consolidated bases. Except as stated in the Heartland SEC
Documents filed prior to the Agreement Date, no event has
occurred or circumstance exists that (with or without notice or
lapse of time): (a) may constitute or result in a violation by
Heartland or any Heartland Subsidiary of, or a failure on the
part of Heartland or any Heartland Subsidiary to comply with, any
Legal Requirement; or (b) may give rise to any obligation on the
part of Heartland or any Heartland Subsidiary to undertake, or to
bear all or any portion of the cost of, any remedial action of
any nature in connection with a failure to comply with any Legal
Requirement; except, in either case, where the failure to comply
or the violation would not reasonably be expected to have a
Material Adverse Effect on Heartland on a consolidated basis.
Except as stated in any Heartland SEC Document filed prior to the
Agreement Date, neither Heartland nor any Heartland Subsidiary
has received, at any time since January 1, 2001, any notice or
other communication (whether oral or written) from any Regulatory
Authority or any other Person regarding: (x) any actual,
alleged, possible, or potential violation of, or failure to
comply with, any Legal Requirement; or (y) any actual, alleged,
possible, or potential obligation on the part of Heartland or any
Heartland Subsidiary to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature in connection
with a failure to comply with any Legal Requirement, except where
any such violation, failure or obligation would not reasonably be
expected to have a Material Adverse Effect on Heartland on a
consolidated basis.
Section 5.10 Disclosure. No representation or warranty made in
this Agreement by Heartland contains any untrue statement of a
material fact, or omits to state a material fact necessary to
make the statements contained herein under the circumstances
under which they were made not misleading. Except as and to the
extent reflected or reserved against in Heartland's audited
financial statements for the year ended December 31, 2002, or
Heartland's subsequent financial statements, as filed with the
SEC, neither Heartland nor any Heartland Subsidiary has, and with
respect to Heartland's subsequent financial statements, as filed
with the SEC, will not have, any liabilities or obligations, of
any nature, secured or unsecured, (whether accrued, absolute,
contingent or otherwise) including, any Tax liabilities due or to
become due, which would reasonably be expected to have a Material
Adverse Effect on Heartland. No notice given pursuant to
Section 7.2 will contain any untrue statement or omit to state a
material fact necessary to make the statements therein, or in
this Agreement, in light of the circumstances in which they were
made, not misleading.
Section 5.11 Brokerage Commissions. None of Heartland or any
Heartland Subsidiary or any of their respective Representatives
has incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement.
Section 5.12 Approval Delays. To the Knowledge of Heartland,
there is no reason why the granting of any of the regulatory
approvals referred to in Section 8.1, the listing of Heartland
Common Stock referred to in Section 7.7 and the SEC registration
referred to in Section 8.2, would be denied or unduly delayed.
The most recent CRA rating of each of Heartland's subsidiary
banks is satisfactory or better.
ARTICLE 6
RMB'S COVENANTS
SECTION 6.1 Access and Investigation.
(a) Heartland and its Representatives shall, at all
times during normal business hours and with reasonable advance
notice prior to the Closing Date, have full and continuing access
to the facilities, operations, records and properties of RMB and
each RMB Subsidiary in accordance with the provisions of this Section.
Heartland and its Representatives may, prior to the Closing Date,
make or cause to be made such reasonable investigation of the
operations, records and properties of RMB and each RMB Subsidiary
and of their respective financial and legal condition as
Heartland shall deem necessary or advisable to familiarize itself
with such records, properties and other matters; provided,
however, that such access or investigation shall not interfere
unnecessarily with the normal operations of RMB or any RMB
Subsidiary. Upon request, RMB and each RMB Subsidiary will
furnish Heartland or its Representatives, attorneys' responses to
auditors' requests for information regarding RMB or such RMB
Subsidiary, as the case may be, and such financial and operating
data and other information reasonably requested by Heartland
(provided, with respect to attorneys, such disclosure would not
result in the waiver by RMB or any RMB Subsidiary of any claim of
attorney-client privilege), and will permit Heartland and its
Representatives to discuss such information directly with any
individual or firm performing auditing or accounting functions
for RMB or such RMB Subsidiary, and such auditors and accountants
shall be directed to furnish copies of any reports or financial
information as developed to Heartland or its Representatives. No
investigation by Heartland or any of its Representatives shall
affect the representations and warranties made by RMB. This
Section shall not require the disclosure of any information the
disclosure of which to Heartland would be prohibited by any Legal
Requirement.
(b) RMB shall allow a representative of Heartland to
attend as an observer all meetings of the board of directors and
committees of the board of directors of RMB and any RMB Subsidiary
and any meeting of the loan committee and asset liability management
committee of RMB or any RMB Subsidiary. RMB shall give
reasonable notice to Heartland of any such meeting and, if known,
the agenda for or business to be discussed at such meeting. RMB
shall provide to Heartland all information provided to the
directors on all such boards in connection with all such meetings
or otherwise provided to the directors, and shall provide any
other financial reports or other analysis prepared for senior
management of RMB or any RMB Subsidiary, in each case excluding
information which is privileged or is subject to any restriction
on disclosure. It is understood by the parties that Heartland's
representative will not have any voting rights with respect to
matters discussed at these meetings and that Heartland is not
managing the business or affairs of RMB or any RMB Subsidiary.
All information obtained by Heartland at these meetings shall be
treated in confidence as provided in Section 7.1(b).
Notwithstanding the foregoing, Heartland shall not be permitted
to attend any portion of a meeting and RMB shall not be required
to provide Heartland with any materials, in violation of
applicable law or that relates to a Competing RMB Proposal
(except for information to be provided as required by
Section 6.9), or that involve matters protected by the attorney-
client privilege or matters arising out of or related to this
Agreement.
(c) Any confidential information or trade secrets of
Heartland received by RMB, its employees or agents in the course
of the consummation of the Contemplated Transactions shall be treated
confidentially, and any correspondence, memoranda, records,
copies, documents and electronic or other media of any kind
containing either such confidential information, or trade secrets
or both shall be destroyed by RMB or, at Heartland's request,
returned to Heartland if this Agreement is terminated as provided
in Article 11. Such information shall not be used by RMB or its
agents to the detriment of Heartland or any Heartland Subsidiary.
Section 6.2 Operation of RMB and RMB Subsidiaries. Except
with the prior written consent of Heartland, between the
Agreement Date and the Closing Date, RMB will, and will cause
each RMB Subsidiary, to:
(a) conduct its business only in the Ordinary Course of
Business;
(b) use its Best Efforts to preserve intact its current
business organization, keep available the services of its current
officers, employees and agents, and maintain the relations and
goodwill with its suppliers, customers, landlords, creditors,
employees, agents and others having business relationships with
it;
(c) confer with Heartland concerning operational matters
of a material nature;
(d) enter into loan and deposit transactions only in
accordance with sound credit practices and only on terms and conditions
that are not materially more favorable than those available to the
borrower or depositor, as the case may be, from competitive
sources in arm's-length transactions;
(e) give written notice to Heartland not less than two
(2) Business Days prior to extending credit to any Person if after
giving effect to such extension of credit, the indebtedness of
such Person, including that Person's Affiliates, to RMB or any
RMB Subsidiary would exceed, in the aggregate, $1 million;
(f) consistent with the methodology set forth in
Schedule 6.2, and by no later than immediately prior to the
Determination Date,cause its reserve for possible loan and lease
losses to be adequate in all material respects to provide for possible
losses, net of recoveries relating to loans previously charged off, on
loans outstanding (including accrued interest receivable);
(g) maintain all of its assets necessary for the conduct
of its business in good operating condition and repair, reasonable wear
and tear and damage by fire or unavoidable casualty excepted, and
maintain policies of insurance upon its assets and with respect
to the conduct of its business in amounts and kinds comparable to
that in effect on the date hereof and pay all premiums on such
policies when due;
(h) not buy or sell any security held, or intended to
be held, for investment other than securities issued by the United
States or any agency thereof with maturities of less than two (2) years,
but such restriction shall not affect the buying and selling by
the Bank of Federal Funds, Federal Reserve stock or FHLB stock or
the reinvestment of dividends paid on any securities owned by the
Bank as of the Agreement Date;
(i) file in a timely manner all required filings with all
Regulatory Authorities and cause such filings to be true and
correct in all material respects; and
(j) maintain its books, accounts and records in the usual,
regular and ordinary manner, on a basis consistent with prior
years and comply with all Legal Requirements.
Section 6.3 Negative Covenant. Except as otherwise expressly
permitted by this Agreement, and as contemplated by
Schedule 4.17, between the Agreement Date and the Closing Date,
RMB will not, and will cause each RMB Subsidiary not to, without
the prior written consent of Heartland, take any affirmative
action, or fail to take any reasonable action within its control,
as a result of which (a) any of the changes or events listed in
Section 4.17 occurs or (b) a Breach of RMB's representations or
warranties occurs.
Section 6.4 Subsequent RMB Financial Statements. As
soon as available after the date hereof, RMB will furnish Heartland
copies of the quarterly unaudited (and when available, annual
audited) consolidated balance sheets, consolidated statements of
income, consolidated statements of cash flow and consolidated
statements of changes in shareholders' equity, of RMB prepared
for its internal use, and the Bank's Call Reports for each
quarterly or annual period completed after September 30, 2003,
and all other financial reports or statements submitted after the
date hereof by RMB or the Bank to any Regulatory Authority, to
the extent permitted by law (collectively, the "Subsequent RMB
Financial Statements"). Except as may be required by changes in
GAAP effective after the date hereof, the Subsequent RMB
Financial Statements will be prepared on a basis consistent with
past accounting practices and shall fairly present in all
material respects the consolidated financial condition and
results of operations for the dates and periods presented. The
Subsequent RMB Financial Statements will not include any material
assets or omit to state any material liabilities, absolute or
contingent, or other facts, which inclusion or omission would
render such Subsequent RMB Financial Statements misleading in any
material respect.
Section 6.5 Title to Real Estate.
(a) RMB shall use its Best Efforts to obtain, at its own
expense, and deliver to Heartland as soon as is reasonably
practicable, but in no event later than thirty (30) days after
the Agreement Date, with respect to all real estate owned by RMB
or the Bank (the "RMB Real Estate"), an ownership and encumbrance
or similar report of title covering a date subsequent to the
Agreement Date, issued by a title insurance company reasonably
acceptable to Heartland, showing fee simple title in RMB or the
Bank and subject to no liens, mortgages, security interests or
charges of any kind except for Permitted Exceptions ("Preliminary
Title Reports").
(b) Notwithstanding anything contained herein to the
contrary, if after Heartland's examination of the Preliminary Title
Reports, and after discussions with RMB's executive officers,
Heartland has reasonable doubt as to whether the title of RMB or
any RMB Subsidiary to any RMB Real Estate may be subject to any
material liens, mortgages, security interests, charges or other
defects other than Permitted Exceptions, Heartland may request,
and RMB will provide, for all of the RMB Real Property identified
by Heartland as to which such doubt exists, a commitment for
extended coverage title insurance issued by First American Title
Insurance Company or such other title insurance company as is
reasonably acceptable to Heartland, showing fee simple title in
such real estate in RMB or the Bank, with coverage over all
standard exceptions, and subject to no liens, mortgages, security
interests, encumbrances or charges of any kind except for
Permitted Exceptions.
Section 6.6 Surveys. RMB shall use its Best Efforts to
obtain, at its own expense, and deliver to Heartland as soon as
is reasonably practicable, but in no event later than thirty (30)
days before the Closing Date, a current ALTA survey of each
parcel of RMB Real Property disclosing no survey defects that
would materially impair the use thereof for the purposes for
which it is held or materially impair the value of such property.
Section 6.7 Environmental Investigation.
(a) Heartland may, in its reasonable discretion, within
thirty (30) Business Days of the Agreement Date, request RMB to
provide at RMB's expense a Phase 1 environmental site assessment
(the "Phase 1 Report") conducted by an independent professional
consultant reasonably acceptable to Heartland to determine if any
RMB Real Estate contains or gives evidence that any violations of
Environmental Laws have occurred on any such property. If the
Phase 1 Report discloses any material adverse environmental
conditions, or reports a reasonable suspicion thereof, then RMB
shall promptly obtain at its expense a Phase 2 environmental
report with respect to any affected property which report shall
contain an estimate of the cost of any remediation or other
follow-up work that may be necessary to address those conditions
in accordance with applicable laws and regulations (the "Phase 2
Report," and collectively referred to with the Phase 1 Report, as
the "Environmental Report"). Heartland shall have no duty to act
upon any information produced by the Environmental Report for the
benefit of RMB, any RMB Subsidiary or any other Person, but shall
provide such information to RMB as soon as practicable after such
information becomes available to Heartland.
(b) Upon receipt of the estimate of the costs of all
follow-up work to the Environmental Report, Heartland and RMB shall
attempt to agree upon a course of action for remediation of any
environmental condition suspected, found to exist, or that would
tend to be indicated by the Environmental Report. The estimated
total cost for completing all necessary work plans or removal or
remediation actions is referred to collectively as the
"Remediation Cost." If the Remediation Cost exceeds Two Hundred
Fifty Thousand Dollars ($250,000), Heartland or RMB may, at its
sole option, terminate this Agreement. If the Remediation Cost
is less than Two Hundred Fifty Thousand Dollars ($250,000), such
cost shall be taken into account when computing the Adjusted
Shareholders' Equity.
Section 6.8 Advice of Changes. Between the Agreement Date and
the Closing Date, RMB will promptly notify Heartland in writing
if RMB or any RMB Subsidiary becomes aware of any fact or
condition that causes or constitutes a Breach of any of RMB's
representations and warranties as of the Agreement Date, or if
RMB or any RMB Subsidiary becomes aware of the occurrence after
the Agreement Date of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a
Breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence
or discovery of such fact or condition. If any such fact or
condition would require any change in the Schedules if such
Schedules were dated the date of the occurrence or discovery of
any such fact or condition, RMB will promptly deliver to
Heartland a supplement to the Schedules specifying such change.
During the same period, RMB will promptly notify Heartland of the
occurrence of any Breach of any covenant of RMB in this Article
or of the occurrence of any event that might reasonably be
expected to make the satisfaction of the conditions in Article 9
impossible or unlikely.
Section 6.9 Other Offers.
(a) Until such time, if any, as this Agreement is
terminated pursuant to Article 00, XXX will not, and will cause
each RMB Subsidiary and their respective Representatives not to,
directly or indirectly solicit, initiate or encourage any inquiries
or proposals from, discuss or negotiate with, provide any non-public
information to, or consider the merits of any unsolicited
inquiries or proposals from, any Person (other than Heartland)
relating to any Acquisition Transaction (as defined below) or a
potential Acquisition Transaction involving RMB or any RMB
Subsidiary. Notwithstanding the foregoing in this Section, RMB
may provide information at the request of, or enter into
negotiations with, a third party with respect to an Acquisition
Transaction if the board of directors of RMB determines, in good
faith, that the exercise of its fiduciary duties to RMB's
shareholders under applicable law, as advised by its counsel,
requires it to take such action, and, provided further, that RMB
may not, in any event, provide to such third party any
information which it has not provided to Heartland. RMB shall
promptly notify Heartland orally and in writing in the event it
receives any such inquiry or proposal and shall provide
reasonable detail of all relevant facts relating to such
inquiries, along with a summary of the advice provided by its
counsel.
(b) "Acquisition Transaction" shall, with respect to
RMB, mean any of the following:
(i) a merger or consolidation, or any similar
transaction (other than the Merger) of any company with
either RMB or any significant subsidiary, as defined in Rule 1.2
of Regulation S-X of the SEC (a "Significant Subsidiary"), of
RMB;
(ii) a purchase, lease or other acquisition of all
or substantially all the assets of either RMB or any Significant
Subsidiary of RMB;
(iii) a purchase or other acquisition of
"beneficial ownership" by any "person" or "group" (as such terms
are defined in Section 13(d)(3) of the Exchange Act) (including
by way of merger, consolidation, share exchange or otherwise)
that would cause such person or group to become the beneficial
owner of securities representing ten percent (10%) or more of the
voting power of either RMB or any Significant Subsidiary of RMB;
(iv) a tender or exchange offer to acquire securities
representing ten percent (10%) or more of the voting power of
RMB;
(v) a public proxy or consent solicitation made to
shareholders of RMB seeking proxies in opposition to any proposal
relating to any aspect of the Contemplated Transactions that has
been recommended by the board of directors of RMB;
(vi) the filing of an application or notice with
any Regulatory Authority (which application has been accepted for
processing) seeking approval to engage in one or more of the
transactions referenced in clauses (i) through (iv) above; or
(vii) the making of a bona fide proposal to RMB or
its shareholders, by public announcement or written communication,
that is or becomes the subject of
public disclosure, to engage in one or more of the transactions
referenced in clauses (i) through (v) above.
Section 6.10 Voting Agreement. Concurrently with the execution
and delivery of this Agreement, RMB shall deliver to Heartland a
voting agreement in the form of Exhibit F, signed by all
directors of RMB who are holders of RMB Common Stock.
Section 6.11 Shareholders' Meeting. RMB shall cause a
meeting of its shareholders for the purpose of acting upon this
Agreement to be held at the earliest practicable date after the
Registration Statement (as defined below) has been declared
effective by the SEC. RMB shall send to its shareholders at
least thirty (30) days prior to such meeting, notice of such
meeting together with the Proxy Statement, which shall include a
copy of this Agreement and a copy of Sections 35-1-826 through
35-1-839 of the MCA governing the rights of dissenting
shareholders. Subject to its fiduciary duties, RMB and its board
of directors shall recommend to shareholders the approval of this
Agreement and shall solicit proxies voting only in favor thereof
from the shareholders of RMB.
Section 6.12 Information Provided to Heartland. RMB agrees
that none of the information concerning RMB or any RMB Subsidiary
that is provided or to be provided by RMB to Heartland for
inclusion or that is included in the Registration Statement or
Proxy Statement and any other documents to be filed with any
Regulatory Authority in connection with the Contemplated
Transactions will, at the respective times such documents are
filed and, in the case of the Registration Statement, when it
becomes effective and, with respect to the Proxy Statement, when
mailed, be false or misleading with respect to any material fact,
or omit to state any material fact necessary in order to make the
statements therein not misleading or, in the case of the Proxy
Statement, or any amendment thereof or supplement thereto, at the
time of the meeting of RMB's shareholders referred to above, be
false or misleading with respect to any material fact, or omit to
state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of any
proxy for the meeting in connection with which the Proxy
Statement shall be mailed. Notwithstanding the foregoing, RMB
shall have no responsibility for the truth or accuracy of any
information with respect to Heartland or any Heartland Subsidiary
or any of their Affiliates contained in the Registration
Statement or the Proxy Statement or in any document submitted to,
or other communication with, any Regulatory Authority.
Section 6.13 Termination of Employee Benefit Plans. Upon the
written request of Heartland, RMB shall take such action as may
be necessary to terminate any RMB Employee Benefit Plan on or
before the Closing on terms reasonably acceptable to Heartland;
provided, however, that RMB or the Bank shall not be obligated to
take any such requested action that is irrevocable until
immediately prior to the Closing.
Section 6.14 Termination of Shareholder Agreements. RMB
agrees to use its Best Efforts to terminate on or before the Mailing
Date any agreements between RMB (including any predecessor of
RMB) and any RMB Shareholder obligating RMB under any
circumstances to purchase from such RMB Shareholder any equity
stock owned by him, her or it. RMB agrees to provide to
Heartland regular, periodic reports of RMB's progress in this
regard, and such other reports when and if requested by
Heartland.
Section 6.15 Data and Item Processing Agreements. RMB
agrees to consult with Heartland prior to the entry by it or any
RMB Subsidiary by either action or inaction into any new, or any
extension of any existing, data or item processing agreements.
RMB agrees to coordinate with Heartland the negotiation of any
new or extension of any existing data or item processing
agreement, with the purpose of achieving the best possible
economic and business result in light of the Merger.
Section 6.16 Tax Matters. Neither RMB nor any RMB
Subsidiary shall make any election inconsistent with prior returns
or elections or settle or compromise any liability with respect to
Taxes without prior written notice to Heartland. RMB and each
RMB Subsidiary shall timely file all Tax Returns required to be
filed prior to the Closing; provided, however, that each such Tax
Return shall be delivered to Heartland for its review at least
five (5) Business Days prior to the anticipated date of filing of
such Tax Return.
Section 6.17 Officer and Other Agreements. Concurrently
with the execution and delivery of this Agreement, and at Heartland's
direction and request, RMB shall cause to be delivered to
Heartland:
(a) an employment agreement in the form of Exhibit G,
signed by Xxxxx Xxxxxx (the "Employment Agreement"), to be effective
at the Effective Time;
(b) a Consulting and Non-Competition Agreement in the
form of Exhibit H signed by Xxxxxx Xxxxxx, to be effective at the
Effective Time; and
(c) an Indemnification Agreement in the form of Exhibit I
signed by Xxxxxx Xxxxxx, to be effective at the Effective Time.
Section 6.18 Accounting and Other Adjustments. RMB agrees
that it shall, and shall cause each RMB Subsidiary, to:
(a) make any accounting adjustments or entries to its
books of account and other financial records;
(b) make additional provisions to any allowance for
loan and lease losses;
(c) sell or transfer any investment securities held by
it;
(d) charge-off any loan or lease;
(e) create any new reserve account or make additional
provisions to any other existing reserve account;
(f) make changes in any accounting method;
(g) accelerate, defer or accrue any anticipated
obligation, expense or income item; and
(h) make any other adjustments that would affect the
financial reporting of Heartland, on a consolidated basis after the
Effective Time, in any case as Heartland shall reasonably request,
provided, however, that neither RMB nor any RMB Subsidiary shall be
obligated to take any such requested action until immediately
prior to the Closing and at such time as RMB shall have received
reasonable assurances that all conditions precedent to RMB's
obligations under this Agreement (except for the completion of
actions to be taken at the Closing) have been satisfied.
Section 6.19 Adjusted Shareholders' Equity Adjustments. RMB
agrees that prior to the Determination Date it shall, and shall
cause each RMB Subsidiary, to make the accounting adjustments or
entries specified on Schedule 6.19 (to the extent such
adjustments or entries are not made prior to the Agreement Date)
(the "Schedule 6.19 Adjustments"). The Schedule 6.19 Adjustments
shall be taken into consideration and shall be given effect in
calculating the Adjusted Shareholders' Equity as of the
Determination Date.
Section 6.20 Director and Officer Insurance. Upon the
reasonable request of Heartland, RMB shall acquire extended
coverage of acts or omissions under RMB's existing director and
officer liability policies of insurance commonly referred to as
"tail coverage." Premiums or other costs of tail coverage shall
be considered an adjustment under Section 6.18.
ARTICLE 7
HEARTLAND'S COVENANTS
SECTION 7.1 Access and Investigation.
(a) Solely for the purpose of permitting RMB to ascertain
the correctness of the representations and warranties made in this
Agreement by Heartland to RMB, RMB and its Representatives shall
at all times during normal business hours and with reasonable
advance notice prior to the Closing Date, have full and
continuing access to the facilities, operations, records and
properties of Heartland and each Heartland Subsidiary in
accordance with the provisions of this Section. RMB and its
Representatives may, prior to the Closing Date, make or cause to
be made such reasonable investigation of the operations, records
and properties of Heartland and each Heartland Subsidiary and of
their respective financial and legal condition as RMB shall deem
necessary or advisable to familiarize itself with such records,
properties and other matters, provided, however, that such access
or investigation shall not interfere unnecessarily with the
normal operations of Heartland or any Heartland Subsidiary. Upon
request, Heartland and each Heartland Subsidiary will furnish RMB
or its Representatives, attorneys' responses to auditors'
requests for information regarding Heartland or such Heartland
Subsidiary, as the case may be, and such financial and operating
data and other information reasonably requested by RMB (provided,
with respect to attorneys, such disclosure would not result in
the waiver by Heartland or the Bank of any claim of attorney-
client privilege), and will permit RMB and its Representatives to
discuss such information directly with any individual or firm
performing auditing or accounting functions for Heartland or such
Heartland Subsidiary, and such auditors and accountants shall be
directed to furnish copies of any reports or financial
information as developed to RMB or its Representatives. No
investigation by RMB or any of its Representatives shall affect
the representations and warranties made by Heartland. This
Section shall not require the disclosure of any information the
disclosure of which to RMB would be prohibited by any Legal
Requirement.
(b) Any confidential information or trade secrets of
RMB received by Heartland, its employees or agents in the course
of the consummation of the Contemplated Transactions shall be
treated confidentially, and any correspondence, memoranda,
records, copies, documents and electronic or other media of any
kind containing either such confidential information, or trade
secrets or both shall be destroyed by Heartland or, at RMB's
request, returned to RMB if this Agreement is terminated as
provided in Article 11. Such information shall not be used by
Heartland or its agents to the detriment of RMB or any RMB
Subsidiary.
Section 7.2 Advice of Changes. Between the Agreement Date
and the Closing Date, Heartland will promptly notify RMB in writing
if Heartland or any Heartland Subsidiary becomes aware of any
fact or condition that causes or constitutes a Breach of any of
Heartland's representations and warranties as of the Agreement
Date, or if Heartland or any Heartland Subsidiary becomes aware
of the occurrence after the Agreement Date of any fact or
condition that would (except as expressly contemplated by this
Agreement) cause or constitute a Breach of any such
representation or warranty had such representation or warranty
been made as of the time of occurrence or discovery of such fact
or condition. During the same period, Heartland will promptly
notify RMB of the occurrence of any Breach of any covenant of
Heartland in this Article or of the occurrence of any event that
might reasonably be expected to make the satisfaction of the
conditions in Article 10 impossible or unlikely.
Section 7.3 Information Provided to RMB. Heartland
agrees that none of the information concerning Heartland or any
Heartland Subsidiary that is provided or to be provided by
Heartland to RMB for inclusion or that is included in the
Registration Statement or Proxy Statement and any other documents
to be filed with any Regulatory Authority in connection with the
Contemplated Transactions will, at the respective times such
documents are filed and, in the case of the Registration
Statement, when it becomes effective and, with respect to the
Proxy Statement, when mailed, be false or misleading with respect
to any material fact, or omit to state any material fact
necessary in order to make the statements therein not misleading.
Notwithstanding the foregoing, Heartland shall have no
responsibility for the truth or accuracy of any information with
respect to RMB or any RMB Subsidiary or any of their Affiliates
contained in the Registration Statement or the Proxy Statement or
in any document submitted to, or other communication with, any
Regulatory Authority.
Section 7.4 Indemnification. Except as may be limited by
applicable Legal Requirements, Heartland shall honor any of RMB's
obligations in respect of indemnification and advancement of
expenses currently provided by RMB in its articles of
incorporation in favor of the current and former directors and
officers of RMB and the Bank for not less than three years from
the Effective Time with respect to matters occurring prior to the
Effective Time.
Section 7.5 Employee Benefits. Heartland agrees that all
former employees of RMB or the Bank who become employees of
Heartland or any of its Subsidiaries shall receive credit for
their past service with RMB or the Bank for purposes of
eligibility and vesting under Heartland's profit sharing plan.
Section 7.6 Authorization and Reservation of Heartland
Common Stock. The board of directors of Heartland shall, prior to
the Effective Time, authorize and reserve the maximum number of
shares of Heartland Common Stock to be issued pursuant to this
Agreement and take all other necessary corporate action to
consummate the Contemplated Transactions.
Section 7.7 Stock Exchange Listing. Heartland shall use
its Best Efforts to list on the NASDAQ, subject to official notice
of issuance, the shares of Heartland Common Stock to be issued in
the Merger.
Section 7.8 Negative Covenants. Except as otherwise expressly
permitted by this Agreement, between the Agreement Date and the
Closing Date, Heartland will not, and will cause each Heartland
Subsidiary not to, without the prior written consent of RMB:
(a) take any affirmative action, or fail to take any
reasonable action within its control, as a result of which a Breach
of Heartland's representations or warranties occurs, if such Breach
would have a Material Adverse Effect on Heartland on a
consolidated basis; or
(b) take any action to amend Heartland's certificate of
incorporation or bylaws, the effect of which would be to
materially and adversely affect the rights or powers of holders
of Heartland Common Stock generally.
ARTICLE 8
COVENANTS OF ALL PARTIES
SECTION 8.1 Regulatory Approvals. By no later than
thirty (30) days after the Agreement Date, Heartland shall make
all appropriate filings with Regulatory Authorities for approval
of the Contemplated Transactions, including the preparation of an
application or any amendment thereto or any other required
statements or documents filed or to be filed by any party with:
(a) the Federal Reserve pursuant to the BHCA;
(b) the Division pursuant to the MCA;
(c) the FDIC pursuant to the FDIA; and
(d) any other Person or Regulatory Authority pursuant
to any applicable Legal Requirement, for authority to consummate
the Contemplated Transactions. Heartland shall pursue in good faith
the regulatory approvals necessary to consummate the Contemplated
Transactions. In advance of any filing made under this Section,
RMB and its counsel shall be provided with the opportunity to
comment thereon, and Heartland agrees promptly to advise RMB and
its counsel of any material communication received by it or its
counsel from any Regulatory Authorities with respect to such
filings.
Section 8.2 SEC Registration. By no later than sixty (60)
days after the Agreement Date, Heartland shall prepare and file
with the SEC a registration statement on an appropriate form
reasonably acceptable to RMB under the Securities Act covering
the shares of Heartland Common Stock to be issued pursuant to
this Agreement and shall use all reasonable efforts to cause the
same to become effective and thereafter, until the Effective Time
or lawful termination of this Agreement, to keep the same
effective and, if necessary, amend and supplement the same (such
registration statement, and any amendments and supplements
thereto, is referred to as the "Registration Statement"). The
Registration Statement shall include the Proxy Statement for use
in connection with the meeting of the shareholders of RMB
referred to in Section 6.11, all in accordance with the rules and
regulations of the SEC. Heartland shall, as soon as practicable
after the execution of this Agreement, make all filings required
to obtain all permits, authorizations, consents or approvals
required under any applicable Legal Requirements (including all
state securities laws) for the issuance of the shares of
Heartland Common Stock to shareholders of RMB. In advance of any
filing made under this Section, Heartland and RMB and their
respective counsel shall be provided with the opportunity to
comment thereon, and Heartland and RMB each agree promptly to
advise each other and each other's counsel of any material
communication received by it or its counsel from the SEC or any
other Regulatory Authorities with respect to such filings.
Preparation and filing of the Registration Statement and Proxy
Statement- Prospectus shall be at the sole cost and expense of
Heartland, except that RMB shall be solely responsible for the
costs and expenses, including fees of RMB's accountants and legal
counsel, related to preparation and review of RMB financial
statements and RMB information required to be presented in the
Registration Statement and the costs of printing and mailing the
Proxy Statement to RMB shareholders.
Section 8.3 Necessary Approvals. Heartland and RMB agree
that Heartland's counsel will have primary responsibility for
preparation of the Registration Statement and Heartland will have
primary responsibility for the preparation of the necessary
applications for regulatory approval of the Contemplated
Transactions. Each of Heartland and RMB and their respective
Subsidiaries agree fully and promptly to cooperate with each
other and their respective counsels and accountants in connection
with any steps to be taken as part of their obligations under
this Agreement.
Section 8.4 Customer and Employee Relationships. Each of
Heartland and RMB agrees that its respective Representatives may
jointly:
(a) participate in meetings or discussions with officers
and employees of RMB and Heartland and their Subsidiaries in
connection with employment opportunities with Heartland after the
Effective Time; and
(b) contact Persons having dealings with RMB or Heartland
or any of its respective Subsidiaries for the purpose of informing
such Persons of the services to be offered by Heartland after the
Effective Time.
Section 8.5 Publicity. Prior to the Effective Time, the
parties to this Agreement will consult with each other before
issuing any press releases or otherwise making any public
statements to shareholders, customers, employees or others with
respect to this Agreement or the Contemplated Transactions and
shall not issue any such press release or make any such public
statement without the prior consent of the other parties, except
as may be required by law.
Section 8.6 Best Efforts; Cooperation. Each of Heartland
and RMB agrees to exercise good faith and use its Best Efforts to
satisfy the various covenants and conditions to Closing in this
Agreement, and to consummate the transactions contemplated hereby
as promptly as possible. Neither Heartland nor RMB will
intentionally take or intentionally permit to be taken any action
that would be a Breach of the terms or provisions of this
Agreement. Between the Agreement Date and the Closing Date, each
of Heartland and RMB will, and will cause each Heartland
Subsidiary and RMB Subsidiary, respectively, and all of their
respective Affiliates and Representatives to, cooperate with
respect to all filings that any party is required by Legal
Requirements to make in connection with the Contemplated
Transactions.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS OF HEARTLAND
The obligations of Heartland to consummate the Contemplated
Transactions and to take the other actions required to be taken
by Heartland at the Closing are subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any
of which may be waived by Heartland, in whole or in part):
Section 9.1 Accuracy of Representations and Warranties.
All of the representations and warranties of RMB set forth in this
Agreement shall be true and correct with the same force and
effect as if all of such representations and warranties were made
at the Closing Date (provided, however, that to the extent such
representations and warranties expressly relate to an earlier
date, such representations shall be true and correct on and as of
such earlier date), except for any untrue or incorrect
representations or warranties that individually or in the
aggregate do not have a Material Adverse Effect on RMB on a
consolidated basis or on Heartland's rights under this Agreement.
Section 9.2 RMB's Performance. RMB shall have performed or
complied with all of the covenants and obligations to be
performed or complied with by it under the terms of this
Agreement on or prior to the Closing Date, except where any non-
performance or noncompliance would not have a Material Adverse
Effect on RMB on a consolidated basis or on Heartland's rights
under this Agreement.
Section 9.3 Documents Satisfactory. All proceedings,
corporate or other, to be taken by RMB in connection with the
Contemplated Transactions, and all documents incident thereto,
shall be reasonably satisfactory in form and substance to counsel
for Heartland.
Section 9.4 Corporate Approval. This Agreement and the
Contemplated Transactions shall have been duly and validly
approved as necessary under applicable Legal Requirements by the
shareholders of RMB.
Section 9.5 No Proceedings. Since the Agreement Date,
there must not have been commenced or Threatened against RMB or
any RMB Subsidiary any Proceeding:
(a) involving any challenge to, or seeking damages or
other relief in connection with, any of the Contemplated
Transactions; or
(b) that may have the effect of preventing, delaying,
making illegal or otherwise interfering with any of the Contemplated
Transactions, in either case that would reasonably be expected
to have a Material Adverse Effect on RMB or its shareholders or
Heartland's rights under this Agreement.
Section 9.6 Absence of Material Adverse Changes. From the
date hereof to the Closing, there shall be and have been no event
or occurrence that had or would reasonably be expected to have a
Material Adverse Effect on RMB or any RMB Subsidiary.
Section 9.7 Consents and Approvals. Any consents or
approvals required to be secured by either party by the terms of
this Agreement shall have been obtained and shall be reasonably
satisfactory to Heartland, and all applicable waiting periods
shall have expired.
Section 9.8 No Prohibition. Neither the consummation
nor the performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time),
contravene, or conflict with or result in a violation of:
(a) any applicable Legal Requirement or Order; or
(b) any Legal Requirement or Order that has been
published, introduced, or otherwise proposed by or before any
Regulatory Authority.
Section 9.9 Registration Statement. The Registration
Statement shall have become effective and no stop order
suspending such effectiveness shall have been issued or
threatened by the SEC that suspends the effectiveness of the
Registration Statement and no Proceeding shall have been
commenced or be pending or Threatened for such purpose.
Section 9.10 Dissenting Shares. The total number of Dissenting
Shares shall be no greater than twenty percent (20%) of the
number of Outstanding RMB Shares.
Section 9.11 Employment Agreement. The Employment Agreement
shall be in full force and effect, and Xxxxx Xxxxxx shall be an
active employee of RMB.
Section 9.12 Tax Opinion. Heartland and RMB shall have
received the opinion described in Section 10.10.
Section 9.13 Minimum Shareholders' Equity. RMB's Adjusted
Shareholders' Equity (as calculated immediately prior to the
Closing Date) shall not be less than $17,050,000.
Section 9.14 RMB Capitalization. The issued and outstanding
capital stock of RMB shall consist exclusively of no more than
108,347.70 shares of RMB Common Stock.
Section 9.15 Transactional Expenses. Heartland shall have
received proof satisfactory to it that RMB has paid or fully
accrued for as of the Determination Date all of the RMB
Transactional Expenses.
Section 9.16 Loan Loss Reserve. Consistent with the
methodology set forth in Schedule 6.2, RMB shall have a
consolidated reserve for possible loan and lease losses which is
adequate in all material respects to provide for possible losses,
net of recoveries relating to loans previously charged off, on
loans outstanding (including accrued interest receivable).
ARTICLE 10
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF RMB
RMB's obligation to consummate the Contemplated Transactions
and to take the other actions required to be taken by RMB at the
Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be
waived by RMB, in whole or in part):
Section 10.1 Accuracy of Representations and Warranties. All
of the representations and warranties of Heartland set forth in
this Agreement shall be true and correct with the same force and
effect as if all of such representations and warranties were made
at the Closing Date (provided, however, that to the extent such
representations and warranties expressly relate to an earlier
date, such representations shall be true and correct on and as of
such earlier date), except for any untrue or incorrect
representations or warranties that individually or in the
aggregate do not have a Material Adverse Effect on Heartland on a
consolidated basis or on RMB's rights under this Agreement.
Section 10.2 Heartland's Performance. Heartland shall have
performed or complied with all of the covenants and obligations
to be performed or complied with by it under the terms of this
Agreement on or prior to the Closing Date, except where any non-
performance or noncompliance would not have a Material Adverse
Effect on Heartland on a consolidated basis or on RMB's rights
under this Agreement.
Section 10.3 Documents Satisfactory. All proceedings,
corporate or other, to be taken by Heartland in connection with
the Contemplated Transactions, and all documents incident
thereto, shall be reasonably satisfactory in form and substance
to counsel for RMB.
Section 10.4 Corporate Approval. This Agreement and the
Contemplated Transactions shall have been duly and validly
approved as necessary under applicable Legal Requirements by the
shareholders of RMB.
Section 10.5 No Proceedings. Since the Agreement Date,
there must not have been commenced or Threatened against Heartland
or any Heartland Subsidiary any Proceeding:
(a) involving any challenge to, or seeking damages or
other relief in connection with, any of the Contemplated
Transactions; or
(b) that may have the effect of preventing, delaying,
making illegal or otherwise interfering with any of the Contemplated
Transactions, in either case that would reasonably be expected to
have a Material Adverse Effect on Heartland or its stockholders or
RMB's rights under this Agreement.
Section 10.6 Absence of Material Adverse Changes. From the
date hereof to the Closing, there shall be and have been no event
or occurrence that had or would reasonably be expected to have a
Material Adverse Effect on Heartland or any Heartland Subsidiary.
Section 10.7 Consents and Approvals. Any consents or
approvals required to be secured by either party by the terms of
this Agreement shall have been obtained and shall be reasonably
satisfactory to RMB, and all applicable waiting periods shall
have expired.
Section 10.8 No Prohibitions. Neither the consummation nor
the performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time),
contravene, or conflict with or result in a violation of:
(a) any applicable Legal Requirement or Order; or
(b) any Legal Requirement or Order that has been
published, introduced, or otherwise proposed by or before any
Regulatory Authority.
Section 10.9 Registration Statement; Listing. The
Registration Statement shall have become effective and no stop
order suspending such effectiveness shall have been issued or
threatened by the SEC that suspends the effectiveness of the
Registration Statement and no Proceeding shall have been
commenced or be pending or Threatened for such purpose; and the
shares of Heartland Common Stock to be issued in the Merger shall
have been approved for quotation on NASDAQ (or such other
exchange on which the Heartland Common Stock may become listed).
Section 10.10 Tax Opinion. At Heartland's expense,
Heartland and RMB shall have received the written opinion of Barack
Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx & Xxxxxxxxx LLC, in form and
substance reasonably satisfactory to Heartland and RMB and
substantially in the form attached as Exhibit J dated as of the
date of the Registration Statement and updated through the
Closing Date, substantially to the effect that the Merger will
constitute a tax free reorganization under Section 368 of the
Code.
ARTICLE 11
TERMINATION
SECTION 11.1 Reasons for Termination and Abandonment. This
Agreement, by prompt written notice given to the other parties
prior to or at the Closing, may be terminated:
(a) by mutual consent of the boards of directors of
Heartland and RMB;
(b) by Heartland if:
(i) any of the conditions in Article 9 has
not been satisfied as of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the
failure of Heartland to comply with its obligations under this
Agreement); and
(ii) Heartland has not waived such condition on
or before the Closing Date;
(c) by RMB if:
(i) any of the conditions in Article 10 has not
been satisfied as of the Closing Date or if satisfaction of such
a condition is or becomes impossible (other than through the
failure of RMB to comply with its obligations under this
Agreement); and
(ii) RMB has not waived such condition on or
before the Closing Date;
(d) by Heartland or RMB in accordance with the
provisions of Section 6.7; or
(e) by either Heartland or RMB if the Closing has not
occurred (other than through the failure of any party seeking
to terminate this Agreement to comply fully with its obligations
under this Agreement) by the date which is ten (10) months after
the Agreement Date, or such later date as the parties may agree
(the "Termination Date").
Notwithstanding anything contained herein to the contrary, this
Agreement shall automatically terminate without action by any
party hereto if the Average Closing Price is $13.87 or less.
Section 11.2 Effect of Termination. Except as provided in
Sections 11.3, 11.4 and 11.5, if this Agreement is terminated
pursuant to Section 11.1, this Agreement shall forthwith become
void, there shall be no liability under this Agreement on the
part of Heartland, RMB or any of their respective
Representatives, and all rights and obligations of each party
hereto shall cease; provided, however, that, subject to
Sections 11.3, 11.4 and 11.5, nothing herein shall relieve any
party from liability for the Breach of any of its covenants or
agreements set forth in this Agreement.
Section 11.3 Expenses. Except as provided below, all Expenses
(as defined below) incurred in connection with this Agreement and
the Contemplated Transactions shall be paid by the party
incurring such expenses, whether or not the Merger is
consummated. "Expenses" as used in this Agreement shall consist
of all out-of-pocket expenses (including all fees and expenses of
counsel, accountants, investment bankers, experts and consultants
to a party hereto and its Affiliates) incurred by a party or on
its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this
Agreement, the solicitation of shareholder approvals and all
other matters related to the consummation of the Merger.
Section 11.4 RMB Termination Payments.
(a) If this Agreement is terminated by:
(i) Heartland because:
(A) RMB committed a Breach of its covenants
or agreements under this Agreement (but not a Breach of its
representations or warranties); or
(B) there is a Breach of RMB's representations
or warranties as of the Agreement Date, unless, in either case,
such Breach is a result of the failure by Heartland to perform and
comply in all material respects with any of its material obligations
under this Agreement which are to be performed or complied with by
it prior to or on the date required hereunder, or because of the
failure of the condition in Section 9.13, or such Breach or Breaches
would not individually or in the aggregate be reasonably expected
to have a Material Adverse Effect on either Heartland or RMB on a
consolidated basis (in each case described in clauses (A) or (B),
an "RMB Breach Termination"); or
(ii) Heartland or RMB because RMB's shareholders
fail to approve the Contemplated Transactions and this Agreement
on or before the Termination Date (an "RMB Shareholder
Termination");
and provided in the case of both clauses (i) and (ii), Heartland
is in material compliance with all of its material obligations
under this Agreement, then in the event of an XXX Xxxxxx
Xxxxxxxxxxx, XXX shall pay to Heartland, upon its written demand,
an amount equal to the sum of Heartland's Expenses, but not in
excess of Five Hundred Thousand Dollars ($500,000), plus an
amount equal to Seven Hundred Fifty Thousand Dollars ($750,000),
and in the event of an XXX Xxxxxxxxxxx Xxxxxxxxxxx, XXX shall pay
to Heartland, upon its written demand, an amount equal to the sum
of Heartland's Expenses, but not in excess of Five Hundred
Thousand Dollars ($500,000).
(b) In addition to any payments described in Section
11.4(a), if there is an RMB Breach Termination or an RMB Shareholder
Termination, and within eighteen (18) months after such
termination of this Agreement RMB enters into a Contract with any
party other than Heartland providing for the acquisition of
control of RMB or the Bank by such other party, then:
(i) if the prior termination of this Agreement
was an XXX Xxxxxx Xxxxxxxxxxx, XXX shall pay to Heartland, upon
its written demand, the additional sum of One Million
Dollars ($1,000,000); or
(ii) if the prior termination of this
Agreement was an XXX Xxxxxxxxxxx Xxxxxxxxxxx, XXX shall pay to
Heartland, upon its written demand, the additional sum of One
Million Seven Hundred Fifty Thousand Dollars ($1,750,000);
provided, however, that in each such case, the provisions of this
Section shall in no way limit Heartland's rights against any such
third party.
(c) For purposes of this Section, the phrase "control
of RMB or the Bank" means the acquisition by any such third party of:
(x) legal or beneficial ownership (as defined by Rule
13d-3 promulgated under the Exchange Act) of greater than twenty
percent (20%) of the then issued and outstanding voting stock of
RMB or the Bank through any transaction to which RMB, the Bank or
any Affiliate of RMB or the Bank is a party (other than by
transfers among or between members of a Family, caused by
redemptions or repurchases of RMB capital stock by RMB or by
issuance of shares of RMB Common Stock or other securities to
holders of record of RMB Common Stock as of the Agreement Date);
or
(y) all or substantially all of the assets of RMB
or the Bank (except transfers to an Affiliate of RMB or Bank).
(d) The sums payable by RMB under this Section 11.4 shall
constitute liquidated damages and Heartland's receipt thereof
shall be Heartland's sole and exclusive remedy under this
Agreement for all Breaches of this Agreement by RMB or failure by
its shareholders to approve this Agreement.
Section 11.5 Heartland Termination Payments. If this Agreement
is terminated by RMB because:
(a) Heartland committed a Breach of its covenants or
agreements under this Agreement (but not a Breach of its
representations or warranties); or
(b) there is a Breach of Heartland's representations or
warranties as of the Agreement Date;
unless, in either case, such Breach is a result of the failure by
RMB to perform and comply in all material respects with any of
its material obligations under this Agreement which are to be
performed or complied with by it prior to or on the date required
hereunder, or such Breach or Breaches would not individually or
in the aggregate be reasonably expected to have a Material
Adverse Effect on either Heartland or RMB on a consolidated
basis, and provided that RMB is in material compliance with all
of its material obligations under this Agreement, Heartland shall
pay to RMB, upon its written demand, an amount equal to the sum
of RMB's Expenses, but not in excess of Five Hundred Thousand
Dollars ($500,000), plus an amount equal to Seven Hundred Fifty
Thousand Dollars ($750,000). The sums payable by Heartland under
this Section 11.5 shall constitute liquidated damages and RMB's
receipt thereof shall be RMB's sole and exclusive remedy under
this Agreement for all Breaches of this Agreement by Heartland.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1 Governing Law. All questions concerning the
construction, validity and interpretation of this Agreement and
the performance of the obligations imposed by this Agreement
shall be governed by the internal laws of the State of Iowa
applicable to Contracts made and wholly to be performed in such
state without regard to conflicts of laws.
Section 12.2 Assignments, Successors and No Third Party
Rights. None of the parties to this Agreement may assign any of its
rights under this Agreement without the prior consent of the
other parties. Subject to the preceding sentence, this Agreement
and every representation, warranty, covenant, agreement and
provision hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and
permitted assigns. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the
parties to this Agreement any legal or equitable right, remedy or
claim under or with respect to this Agreement or any provision of
this Agreement.
Section 12.3 Waiver. Except as provided in Section 11.3,
the rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any
delay by any party in exercising any right, power or privilege
under this Agreement or the documents referred to in this
Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of
such right, power or privilege or the exercise of any other
right, power or privilege. To the maximum extent permitted by
applicable law:
(a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by
the other party;
(b) no waiver that may be given by a party will
be applicable except in the specific instance for which it is
given; and
(c) no notice to or demand on one party will be deemed
to be a waiver of any obligation of such party or of the right of
the party giving such notice or demand to take further action
without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
Section 12.4 Confidentiality. Between the Agreement Date and
the Closing Date, each of Heartland and RMB will maintain in
confidence, and will cause each of its respective Representatives
to maintain in confidence, and not use to the detriment of the
other or its Subsidiaries any written, oral, or other information
obtained in confidence from the other of any of its Subsidiaries
in connection with this Agreement or the Contemplated
Transactions, unless:
(a) such information is already known to
such party or to others not bound by a duty of confidentiality or
such information becomes publicly available through no fault of
such party;
(b) the use of such information is necessary or
appropriate in making any filing or obtaining any consent or
approval required for the consummation of the Contemplated
Transactions; or
(c) the furnishing or use of such information is
required by or necessary or appropriate in connection with any
legal proceedings. If the Contemplated Transactions are not
consummated, each party will return or destroy as much of such
written information as the other party may reasonably request.
Section 12.5 Notices. All notices, consents, waivers and
other communications under this Agreement must be in writing (which
shall include telecopier communication) and will be deemed to
have been duly given if delivered by hand or by nationally
recognized overnight delivery service (receipt requested), mailed
by registered or certified U.S. mail (return receipt requested)
postage prepaid or telecopied, if confirmed immediately
thereafter by also mailing a copy of any notice, request or other
communication by U.S. mail as provided in this Section:
If to Heartland, to:
Heartland Financial USA, Inc.
0000 Xxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xx. Xxxx X. Xxxxxxx
Executive Vice President and Chief
Financial Officer
with copies to:
Barack Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx & Xxxxxxxxx LLC
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
If to RMB, to:
Rocky Mountain Bancorporation, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxx
Executive Vice President
with copies to:
Xxxxxxxxx Xxxxxx Xxxxx & Xxxxxxxx, PLLC
000 X. Xxxxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
or to such other Person or place as RMB shall furnish to
Heartland or Heartland shall furnish to RMB in writing. Except
as otherwise provided herein, all such notices, consents, waivers
and other communications shall be effective:
(a) if delivered by hand, when delivered;
(b) if mailed in the manner provided in
this Section, five (5) Business Days after deposit with the
United States Postal Service;
(c) if delivered by overnight express delivery service,
on the next Business Day after deposit with such service; and
(d) if by telecopier, on the next Business
Day if also confirmed by mail in the manner provided in this
Section.
Section 12.6 Entire Agreement. This Agreement and any
documents executed by the parties pursuant to this Agreement and
referred to herein, and that certain Confidentiality Agreement
dated as of October 29, 2003, between Heartland and RMB,
constitute the entire understanding and agreement of the parties
hereto and supersede all other prior agreements and
understandings, written or oral, relating to such subject matter
between the parties.
Section 12.7 Modification. This Agreement may not be amended
except by a written agreement signed by each of RMB and
Heartland. Without limiting the foregoing, RMB and Heartland may
by written agreement signed by each of them:
(a) extend the time for the performance of any of the
obligations or other acts of the parties hereto;
(b) waive any inaccuracies in the representations or
warranties contained in this Agreement or in any document delivered
pursuant to this Agreement; and
(c) waive compliance with or modify, amend or supplement
any of the conditions, covenants, agreements, representations or
warranties contained in this Agreement or waive or modify performance
of any of the obligations of any of the parties hereto, which are for
the benefit of the waiving party; provided, however, that no such
modification, amendment or supplement agreed to after
authorization of this Agreement by the shareholders of RMB shall
affect the rights of RMB's shareholders in any manner which is
materially adverse to such Persons.
Section 12.8 Severability. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of
this Agreement unless the consummation of the Contemplated
Transactions is adversely affected thereby.
Section 12.9 Further Assurances. The parties agree:
(a) to furnish upon request to each other such further
information;
(b) to execute and deliver to each other such other
documents; and
(c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this
Agreement.
Section 12.10 Survival. The representations, warranties
and covenants contained herein shall not survive beyond the Closing.
Section 12.11 Counterparts. This Agreement and any amendments
thereto may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together
shall constitute one and the same agreement.
[This Space Left Intentionally Blank]
In Witness Whereof, the parties hereto have caused this
Agreement to be executed by their respective officers on the day
and year first written above.
Rocky Mountain Bancorporation, Inc. Heartland Financial USA, Inc.
By: /s/Xxxxx Xxxxxx By: /s/Xxxx X. Xxxxxx
____________________________ _________________________
Xxxxx Xxxxxx Xxxx X. Xxxxxx
Executive Vice President Chairman, President and
Chief Executive Officer
RMB Acquisition Corporation
By: /s/Xxxx X. Xxxxxx
______________________________
Xxxx X. Xxxxxx
President
