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STOCK PURCHASE AGREEMENT
By and between
BNCCORP, INC.
AND
ASSOCIATED BANC-CORP
Dated as of December 6, 1999
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), dated and effective as
of December 6, 1999, is by and between BNCCORP, Inc., a Delaware corporation
(the "Seller"), and Associated Banc-Corp (the "Buyer").
W I T N E S S E T H:
WHEREAS, Seller owns all of the issued and outstanding common stock, $.01
par value per share (the "Shares"), of BNC Financial Corporation, a Minnesota
corporation (the "Company");
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to buy from
Seller, the Shares for the purchase price and subject to the terms and
conditions set forth in this Agreement; and
WHEREAS, in addition to the defined terms used herein, as used in this
Agreement, certain terms are defined in Article 9.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein and in reliance upon the undertakings,
representations, warranties and indemnities contained herein, Seller and Buyer
agree as follows:
ARTICLE 1
SALE AND PURCHASE OF SHARES; THE CLOSING
Section 1.1 Sale of Shares. Subject to the terms and conditions herein
stated, at the Closing, Seller agrees to sell to Buyer, and Buyer agrees to
purchase from Seller, the Shares, free and clear of all Liens.
Section 1.2 Purchase Price. In consideration of the sale of the Shares,
Buyer shall pay to Seller at the Closing Five Million Three Hundred Thousand and
No/100 Dollars ($5,300,000.00) (the "Purchase Price"), which shall be paid in
cash by wire transfer to an account specified by Seller prior to the Closing. In
addition, Buyer shall refinance the Company's outstanding debt at the Closing.
Section 1.3 Closing.
(a) The closing of the transactions contemplated herein (the
"Closing") will take place, assuming satisfaction or waiver of each of the
conditions set forth in Article 5, at such location and at such time and date
(the "Closing Date") as may be mutually agreed upon between the parties.
(b) At the Closing, (i) Buyer shall pay the Purchase Price to
Seller, (ii) Seller shall deliver to Buyer a certificate representing the Shares
duly endorsed to Buyer, which shall transfer to Buyer good and marketable title
to the Shares free and clear of all Liens, (iii) Seller and Buyer shall each (A)
provide to the other such certificates, agreements and instruments as are
required to be delivered pursuant to Article 5 and (B) take such other action as
is required to consummate the transactions contemplated by this Agreement.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
Section 2.1 Ownership. Seller is the record and beneficial owner of the
Shares. Seller has good and marketable title to the Shares and the absolute
right to deliver such Shares to Buyer in accordance with the terms of this
Agreement, free and clear of all Liens.
Section 2.2 Authority. Seller has the full legal right, power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the Seller
and no other corporate actions or proceedings on the part of the Seller are
necessary to authorize this Agreement or to consummate the transactions so
contemplated.
Section 2.3 Noncontravention. The execution, delivery and performance by
Seller of this Agreement and the consummation by Seller of the transactions
contemplated hereby do not and will not result in the creation or imposition of
any Lien upon the Shares held by Seller or violate any Applicable Law binding
upon Seller or the certificate of incorporation or bylaws of Seller.
Section 2.4 Consent. No consent, approval, order or authorization of, or
declaration, filing (other than routine filings required to be made after the
Closing) or registration with, any Governmental Entity or other Person is
required to be obtained or made by Seller in connection with the execution,
delivery or performance of this Agreement or the consummation by it of the
transactions contemplated hereby.
Section 2.5 Legal Proceedings. There are no Proceedings pending or, to the
knowledge of Seller, threatened seeking to restrain, prohibit or obtain damages
or other relief in connection with this Agreement or the transactions
contemplated hereby.
Section 2.6 Brokers; Other Transaction Expenses. Seller has not taken any
action that could give rise to any claim against Buyer or the Company for any
broker's, finder's or similar fee in connection with the transactions
contemplated by this Agreement, and the Company has not incurred any such
broker's or finder's fee.
Section 2.7 Corporate Organization.
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the corporate
power and authority necessary to enable it to own, lease or otherwise hold all
of its properties and assets and to carry on its business as it is now being
conducted
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(b) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Minnesota and has the corporate
power and authority necessary to enable it to own, lease or otherwise hold
all of its properties and assets and to carry on its business as it is now
being conducted.
(c) The Company possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to own, lease or
otherwise hold all of its properties and assets and to carry on its business as
it is now being conducted, except for Governmental Approvals, the absence of
which, individually or in the aggregate, would not have or be reasonably likely
to have a material adverse effect on the operations, assets or financial
position of the Company, or on the ability of Seller to perform its obligations
under this Agreement ("Material Adverse Effect").
Section 2.8 Foreign Qualification. The Company is qualified to do business
as a foreign corporation in each jurisdiction in which it is doing business
where the failure to be so qualified would have a Material Adverse Effect.
Section 2.9 Capitalization.
(a) The authorized capital stock of the Company consists of 1,000
shares of common stock, $.01 par value per share. As of the date of this
Agreement, there are 100 shares of the Company's common stock issued and
outstanding and no shares of the Company's common stock held in its treasury.
The Shares owned by Seller constitute one hundred (100%) percent of the issued
and outstanding shares of the Company's capital stock. All of the issued and
outstanding shares of the Company's common stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership thereof. The Company does
not have and is not bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase or
issuance of any shares of the Company's common stock or any other equity
security of the Company or any securities representing the right to purchase or
otherwise receive any shares of the Company's common stock or any other equity
security of the Company.
(b) The Company does not own, directly or indirectly, an equity
interest in any other business entity.
Section 2.10 Financial Condition. All financial statements of the Company
for the current year and the preceding three years delivered by Seller to Buyer
are true, correct and complete in all material respects, are in accordance with
books and records of the Company, and on that basis fairly present the financial
condition, results of operations and cash flows of the Company for the periods
presented in accordance with generally accepted accounting principles,
consistently applied.
Section 2.11 Undisclosed Liabilities. Except as set forth on Schedule
2.11, the Company does not have any liability whether fixed, contingent, or
otherwise except as (a) is reflected or reserved against on the financial
statements of the Company furnished to Buyer or (b) has been incurred since
September 30, 1999 in the ordinary course of business consistent with past
practice.
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Section 2.12 Absence of Changes or Events. Since September 30, 1999,
there has been no:
(a) change or any developments that, individually or in the aggregate, has had
or would reasonably be likely to have a Material Adverse Effect;
(b) change in the financial condition, results of operations or business of the
Company having a Material Adverse Effect;
(c) damage, destruction or loss (whether or not covered by insurance) with
respect to any material assets of the Company;
(d) change by the Company in its accounting methods, principles or practices;
(e) revaluation by the Company of any of its material assets;
(f) entry by the Company into any commitment or transaction material to the
Company, except in the ordinary course of business;
(g) declaration, setting aside or payment of any dividends or distributions in
respect of shares of the Company or redemption, purchase or other acquisition of
any of its securities; or
(h) increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option, stock
purchase or other employee benefit plan or any other increase in compensation
payable or to become payable to any officers or employees of the Company.
Section 2.13 Taxes.
(a) All Returns required to be filed on or prior to the date hereof
by or on behalf of members of the Group have been properly completed and filed
on a timely basis and in correct form. As of the time of filing, the foregoing
Returns correctly reflected the facts regarding the income, business, assets,
operations, activities, status or other matters of the Company or any other
information required to be shown thereon. In particular, the foregoing Returns
are not subject to penalties under Section 6662 of the Code (or any
corresponding provision of the state, local or foreign tax law). No extension of
time within which to file any Return has been filed or requested.
(b) With respect to all taxable periods or portions of periods ended on or
before the date hereof, all applicable tax laws and agreements have been fully
complied with, and all such amounts required to be paid by the Company to
Governmental Entities or others on or before the date hereof have been paid.
Each member of the Group has withheld and paid over all Taxes required to have
been withheld and paid over, and complied with all information reporting and
backup withholding requirements, including maintenance of required records with
respect thereto, in connection with amounts paid or owing to any employee,
creditor, independent contractor or other third party.
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(c) No issues have been raised (and are currently pending) by any
Governmental Entity in connection with any of the Returns. No waivers of
statutes of limitation with respect to the Returns have been given by or
requested from the Group.
(d) There are no Liens for Taxes (other than for current Taxes not
yet due and payable) upon the assets of the Company or the Seller.
(e) The unpaid Taxes of the Company (whether by law, agreement or
otherwise) do not exceed the reserve for Tax liability (excluding any reserve
for deferred Taxes established to reflect timing differences between the accrual
of income for financial reporting and tax purposes) set forth or included in the
Company's most recent financial statements furnished to Buyer.
(f) Section 338 Elections. If requested by Associated Banc-Corp,
Associated Banc-Corp and Sellers shall join in an election to have the
provisions of Section 338(h)(10) of the Code and similar provisions of state law
("Section 338 Elections") apply to the purchase by Associated Banc-Corp of the
Shares. Associated Banc-Corp shall be responsible for, and control, the
preparation and filing of such election. The allocation of purchase price among
the assets of Companies shall be made in accordance with Code Sections 338 and
1060 and any comparable provisions of state, or local law, as appropriate.
Sellers shall accept Associated Banc-Corp determination of such purchase price
allocations and shall report, act, file in all respects and for all purposes
consistent with such determination of Associated Banc-Corp. Sellers shall
execute and deliver to Associated Banc-Corp such documents or forms (including
Section 338 Forms, as defined below) as Associated Banc-Corp shall request or as
are required by applicable law for an effective 338(h)(10) Election. "Section
338 Forms" shall mean all returns, documents, statements, and other forms that
are required to be submitted to any federal, state, county or other local taxing
authority in connection with a 338 (h)(10) Election, including, without
limitation, any "statement of Section 338 election" and IRS Form 8023 (together
with any schedules or attachments thereto) that are required pursuant to
treasury regulations. If Sellers and Associated Banc-Corp make a Section 338
Election, Associated Banc-Corp shall pay to Sellers the excess of (a) the
aggregate amount of federal and state income taxes imposed upon Sellers on
account of the transaction described in this Agreement, over (b) the aggregate
amount of federal and state income taxes that would have been imposed upon
Sellers on account of the transaction described in this Agreement if a Section
338 Election had not been made.
Section 2.14 Benefit Plans.
(a) The Company has no Employee Plans or Benefit Arrangements other
than through its participation, and the participation of its employees, in the
Employee Plans and Benefit Arrangements of Seller. Buyer will not incur any
liability, or other obligation to, or with respect to, such Benefit Arrangement
or Employee Plan that covers or provides benefits to former or active employees
of the Company or their beneficiaries, including any fine, tax or penalty
imposed by any federal, state or local government or governmental agency or
government-owned corporation, now or at any time in the future.
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(b) None of the Company's assets is subject to any lien in favor of
or asserted by the Internal Revenue Service, the Pension Benefit Guaranty
Corporation, the Department of Labor or any other governmental authority,
agency, department or government-owned corporation. All group health plans of
Seller that are subject to Sections 601, et seq. of ERISA or analogous state law
and that cover employees of the Company have at all times fully complied with
the requirements of such statutes, including without limitation the notification
and continuation of coverage of requirements thereof.
Section 2.15 Compliance with Applicable Laws; Governmental Approvals. The
Company complies in all material respects with all Applicable Laws. The Company
has received or been issued, as appropriate, all Governmental Approvals for the
present or currently contemplated operation of its business, except where the
failure to have received any Governmental Approval would not, individually or in
the aggregate, have or be reasonably likely to have, a Material Adverse Effect.
All Governmental Approvals are valid and in full force and effect, and no
Proceeding is pending or, to the knowledge of Seller, has been threatened to
modify, suspend, revoke or otherwise limit any Governmental Approvals, and no
administrative or governmental actions have been taken or, to the knowledge of
Seller, threatened in connection with the expiration or renewal of any
Governmental Approvals.
Section 2.16 Certain Contracts.
(a) Except as set forth in Schedule 2.16, the Company is not a party
to or bound by any contract, lease, license, indenture, agreement, commitment or
other legally binding arrangement, whether oral or written (each, a "Contract",
and, collectively, "Contracts"), that is:
(i) an employment agreement or employment contract;
(ii) a collective bargaining agreement or other Contract with
any labor organization, union or association;
(iii) a covenant not to compete or other covenant restricting
the operations, development or marketing of the Company;
(iv) a lease or a sublease, or similar Contract with any
person;
(v) (A) a continuing Contract for the future purchase of
materials, supplies or equipment, (B) a management, service, agency,
consulting or other similar Contract or (C) an advertising agreement or
arrangement, in any such case that has an aggregate future liability to
any person in excess of $10,000;
(vi) a Contract establishing a Lien upon any of the Company's
assets;
(vii) a confidentiality agreement;
(viii) a Contract (including a purchase order) involving
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payment of more than $10,000 or extending for a term more than 180 days
from the date of this Agreement (unless terminable without payment or
penalty upon no more than 30 days' notice);
(ix) a Contract (including a sales order) involving the
obligation to perform services for payment of more than $10,000 or
extending for a term more than 30 days from the date of this Agreement
(unless terminable without payment or penalty upon no more than 30 days'
notice);
(x) a Contract for the sale of any asset or the grant of any
preferential rights to purchase any asset or requiring the consent of any
person to the transfer thereof;
(xi) a Contract with any Governmental Entity; or
(xii) a Contract with or obligating the Company to any
director, officer or affiliate thereof or Seller.
(b) Except as disclosed to Buyer on Schedule 2.16,
(i) all Contracts listed in Schedule 2.16 are valid, binding
and in full force and effect and are enforceable in accordance with their
respective terms;
(ii) the Company has performed all obligations required to be
performed thereunder and, to its knowledge, the other party (ies) thereto
have performed all material obligations required to be performed
thereunder by it (them);
(iii) Seller has not received any notice of the intention of
any party to terminate any Contract nor has Seller knowledge of the
intention of any party to terminate any Contract; and
(iv) the Company is not a party to any Contract for the
employment of any person that is not terminable on 30 days' notice or that
requires the payment of severance benefits.
Section 2.17 Title to Property. The Company has good and valid title to,
or a valid leasehold interest in or license or other right to use, all of the
properties and assets, real and personal, tangible or intangible, that are and
have been used in connection with its business (excluding only those properties
and assets that have been disposed of in the ordinary course of business), in
each case free and clear of all Liens.
Section 2.18 Litigation. There is no Proceeding pending or, to the best
knowledge of the Seller, threatened against or affecting the Company that, if
determined adversely to the Company, could reasonably be expected to have a
Material Adverse Effect.
Section 2.19 Year 2000. To the best knowledge of Seller, all computer
systems and computer software used by the Company recognize or are being adapted
so that, on or prior to December 31, 1999, they shall recognize the advent of
the year A.D. 2000 without any adverse change in operation associated with such
recognition.
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Section 2.20 Insurance. The Company maintains with financially sound and
reputable insurers, insurance policies covering such perils and in such amounts
as are customarily maintained in a similar business. All such policies will be
in effect on the Closing Date. All premiums due, for which invoices have been
received, have been currently paid or provided for. The Company has not failed
to give any notice or present any claim under any such policy in a due and
timely manner. There are no outstanding unpaid claims or matters which could
reasonably be anticipated to become claims under any such policy.
Section 2.21 Intellectual Property. Neither the Company nor Seller owns
any patents or patent applications, licenses, trademarks, service marks,
copyrights, or tradenames that are used by the Company in the conduct of
business. Except for computer software, the Company does not license any
intellectual property from third parties.
Section 2.22 Books and Records . The books and records of the Company are
complete and correct and accurately reflect all transactions in which the
Company has engaged, and there are no off-balance sheet transactions or matters
for which entry has not been properly made in such books and records.
Section 2.23 Labor Matters. The Company is in compliance in all material
respects with all Applicable Laws respecting employment and employment
practices, terms and conditions of employment and wages and hours and is not
engaged in any unfair labor practice. The Company is not a party to any
collective bargaining agreement. The Company is not experiencing any work
stoppage.
Section 2.24 Accounts. Schedule 2.24 sets forth all bank or cash
accounts of the Company and the authorized signatories thereunder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 3.1 Organization. Buyer is a corporation duly organized and
validly existing under the laws of the state of its incorporation and has all
requisite corporate power and corporate authority to own its properties and
carry on its business as now being conducted.
Section 3.2 Authority; Enforceability. Buyer has the requisite corporate
power and corporate authority to execute and deliver this Agreement and to carry
out its obligations hereunder. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Buyer and no
other corporate actions or proceedings on the part of Buyer are necessary to
authorize this Agreement or to consummate the transactions so contemplated.
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Section 3.3 Consents and Approvals; Conflicts. No filing with (other than
any routine notice filings) and no permit, authorization, consent or approval
of, any Governmental Entity is necessary for the execution and delivery by Buyer
of this Agreement or the consummation by Buyer of the transactions contemplated
hereby.
Section 3.4 Purchase of Shares for Investment. Buyer represents and
warrants that it will acquire the Shares for investment and not with a view to,
or for resale in connection with, the distribution or other disposition thereof
in violation of the Securities Act of 1933, as amended. Buyer agrees that it
will not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or
otherwise dispose of any of the Shares (or solicit offers to buy, purchase, or
otherwise acquire or take a pledge of any of the Shares), except in compliance
with the Securities Act, the rules and regulations promulgated thereunder and
applicable state securities laws.
Section 3.5 Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of the Buyer is, or will be, entitled to any commission or
broker's or finder's fees from the any parties hereto, in connection with the
sale of Shares.
Section 3.6 Proceedings There is no action, suit or proceeding at law or
in equity, any arbitration or any administrative or other proceeding by or
before any governmental instrumentality or agency, pending or, to the knowledge
of the Buyer, threatened against or affecting the Buyer that could have a
material adverse effect on the ability of the Buyer to consummate the sale of
Shares.
Section 3.7 Investigation. Buyer acknowledges that (a) it has had the
opportunity to visit with Seller and the Company and meet with their respective
officers and other representatives to discuss the Company and the liabilities,
financial condition, cash flow and operations of the Company; and (b) it has
made its own independent examination, investigation, analysis and evaluation of
the Company, including Buyer's own estimate of the value of the Company. Such
examination, investigation, analysis and evaluation shall not in any way affect
Buyer's right to indemnification under Article 6.
ARTICLE 4
PRE-CLOSING COVENANTS
Section 4.1 Legal Requirements. Each of the parties to this Agreement
agrees to take, or cause to be taken, all reasonable actions necessary to comply
promptly with all legal requirements applicable to it with respect to the
transactions contemplated by this Agreement and will promptly cooperate with and
furnish information to each other in connection with any such requirements
imposed upon any of them.
Section 4.2 Public Statements. Prior to the Closing Date, neither of the
parties to this Agreement shall, and each party shall use its best efforts so
that none of its advisors, officers, directors or employees shall, except with
the prior written consent of the other party, publicize, announce or describe to
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any third person, except those of its advisors and employees as are reasonably
necessary to negotiate or consummate the transactions contemplated hereby, the
execution or terms of this Agreement, the parties hereto or the transactions
contemplated hereby.
Section 4.3 Review of the Company. Prior to the Closing Date, Seller will
afford the Buyer and its representatives, during regular business hours and upon
reasonable notice, such access to the properties, personnel and books and
records of the Company as the Buyer may reasonably request in connection with
the transaction contemplated by this Agreement, in accordance with the terms of
the Confidentiality Agreement dated September 1, 1999. To the extent the
obligations hereunder would not require the interruption of existing services,
the unreasonable devotion of managerial resources or attention, or materially
interfere with customer relations, Seller shall fully cooperate in locating and
affording access to all such properties, assets, books and records for the
Buyer, and shall make such properties and assets available for such inspection
by Buyer. An employee or representative of Seller, shall be entitled to be
present at any or all inspections of the Company's properties, assets and
records by Buyer or Buyer's representatives.
Section 4.4 Conduct of Business Prior to the Closing Date
(a) Seller shall conduct the operations of the Company in the
ordinary and usual course of business, preserve intact the Company and maintain
the current relationships of the Company with customers and others having
business relationships with it. In addition, the Company shall:
(i) use reasonable efforts to maintain and keep its properties in as
good repair and condition as at present, ordinary wear and tear excepted;
(ii) use reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that now
maintained by it;
(iii) perform in all material respects all obligations required to
be performed by it under all contracts, leases and documents relating to
or affecting its assets, properties and business; and
(iv) comply with and perform in all material respects all
obligations and duties imposed upon it by all Applicable Laws.
(b) Without the prior written consent of the Buyer, Seller shall not
commit or omit to do any act, and shall cause the Company not to commit or omit
to do any act, that would cause a breach of any agreement, commitment or
covenant of Seller contained in this Agreement in any material respect, or would
cause the representations and warranties contained in Section 2 to become untrue
in any material respect. In addition, the Company shall not:
(i) (A) grant any general increase in compensation to its
employees as a class or to its officers or directors;
(B) affect any change in retirement benefits to any
class of employees or officers;
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(C) enter into, amend or modify any employee benefit
plan or make any adjustments pursuant to any employee benefit plan; or
(D) enter into or amend any employment, severance or
similar agreements or arrangements with any directors or officers or
employees;
(ii) declare or pay any dividend on, or make any other
distribution in respect of, its outstanding shares of capital stock;
(iii) (A) redeem, purchase or otherwise acquire any shares of
its capital stock;
(B) merge with or into another corporation.
(C) purchase or otherwise acquire any assets or stock of
any corporation or other business;
(D) liquidate, sell, dispose of or encumber any assets
or acquire any assets other than in the ordinary course of business; or
(E) split, combine or reclassify any of its capital
stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock;
(iv) issue, deliver, award, grant or sell or authorize or
propose the issuance, delivery, award, grant or sale of any shares of any
class of its capital stock;
(v) initiate, solicit or encourage or take any other action to
facilitate any inquiries or the making of any proposal that constitutes or
may reasonably be expected to lead to a transaction with a third party for
the purchase of Shares, a merger of the Company with or into the third
party or an affiliate thereof, or a sale of all or substantially all of
the assets of the Company to such third party or an affiliate thereof;
(vi) propose or adopt any amendments to the corporate charter
or by-laws of the Company; or
(vii) incur or assume any material obligation or liability
except in the ordinary course of business.
Section 4.5 Notification of Changes. Each of Seller and the Buyer shall
promptly notify the other of any event that causes any representation or
warranty given by either of them, respectively, in Sections 2 and 3 to become
untrue.
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ARTICLE 5
CONDITIONS TO CLOSING
Section 5.1 Conditions Applicable to All Parties. The obligations of each
of the parties hereto to consummate the transactions contemplated hereby are
subject to the satisfaction (or the waiver by the Buyer and Seller) of the
following conditions at or prior to the Closing:
(a) No judgment, order or decree shall have been issued or rendered
by any court or other governmental body to restrain or prohibit the Closing; and
(b) No action shall have been taken, nor any statute, rule or regulation shall
have been enacted by any Governmental Entity that makes the consummation of the
transactions contemplated hereby illegal; and
(c) The sale of Shares have been approved by all required regulatory
agencies, which approvals shall not contain any condition which is not
reasonably satisfactory to Buyer or Seller, all conditions required to be
satisfied prior to Closing imposed by the terms of such approvals shall have
been satisfied and all waiting periods relating to such approvals shall have
lapsed.
Section 5.2 Additional Conditions Applicable to the Buyer's Obligations.
The obligations of the Buyer to consummate the transactions contemplated hereby
are also subject to the satisfaction (or waiver by the Buyer) of the following
conditions at or prior to the Closing:
(a) The representations and warranties of Seller contained in
Section 2 that are qualified as to materiality shall be true and correct and
such representations and warranties that are not so qualified shall be true and
correct in all material respects on the Closing Date and Seller shall have
performed in all material respects all covenants required by this Agreement to
be performed by it at or prior to the Closing. Seller shall have delivered to
the Buyer on the Closing Date a certificate, dated the Closing Date and duly
executed by Seller, certifying to the fulfillment of the conditions set forth in
this Section 5.2(a).
(b) The Seller shall have delivered to Buyer certificates
representing the Shares, together with stock powers otherwise in proper form for
transfer.
(c) The Seller shall have delivered to Buyer such other certificates and
documents as the Buyer may reasonably request.
(d) The Seller shall perform in all material respects (or in all respects in the
case of any covenant or agreement as to materiality) the obligations required to
be performed by it under this Agreement prior to the Closing Date and the Buyer
shall have received a certificate to such effect signed by Seller.
(e) The Buyer shall have entered into an Employment Agreement with Xxxxxxx X.
Xxxx upon terms such as those presented to Xx. Xxxx by Buyer following Buyer's
due diligence examination.
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(f) Buyer shall have received written resignations from the officers and
directors of the Company.
(g) Seller shall purchase a participation interest in the Imprint Technologies
credit on terms mutually agreeable to the Buyer and Seller in the amount of Five
Hundred Thousand and No/Dollars ($500,000.00), which interest shall be on a
"last-out" basis and shall be subject to such other terms and conditions as are
customary in similar transactions. Buyer shall service this credit and provide
such service to Seller for a one percent (1%) fee.
(h) The Company shall make the following adjustments to its financial statements
from those previously provided to the Buyer for the period ended September 30,
1999:
(i) The loan loss provision will be increased such that the loan loss
reserve on the Closing Date shall be Two Hundred Thousand and
No/Dollars ($200,000.00) greater than the balance reflected on the
Company's financial statements for the period ended September 30,
1999.
(ii) Goodwill in the amount of Fifty-seven Thousand One Hundred
Thirty-five and No/Dollars ($57,135.00) will be written off.
(iii) The Seller shall purchase from the Company the following
miscellaneous assets for the amount recorded in the
Company's financial statements for the period ended
September 30, 1999 and reflected below:
(A) Unamortized Firstar financing costs of $18,750;
(B) Officers' and Directors' Insurance assets of $5,756;
(C) Property insurance assets of $2,991;
(D) XXX Maintenance assets of $1,560; and
(E) Car insurance receivable of $2,846.
Section 5.3 Additional Conditions Applicable to Seller's Obligations.
Seller's obligations to consummate the transactions contemplated hereby are also
subject to the satisfaction (or the waiver by Seller) of the following
conditions at or prior to the Closing:
(a) The representations and warranties of the Buyer contained in
Section 3 that are qualified as to materiality shall be true and correct and
such representations and warranties that are not so qualified shall be true and
correct in all material respects on the Closing Date and the Buyer shall have
performed in all material respects all covenants required by this Agreement to
be performed by it at or prior to the Closing. The Buyer shall have delivered to
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Seller on the Closing Date a certificate, dated the Closing Date and duly
executed by the Buyer, certifying to the fulfillment of the conditions set forth
in this Section 5.3(a).
(b) The Buyer shall have delivered to Seller such other certificates
and documents as the Seller may reasonably request.
(c) The Buyer shall perform in all material respects (or in all
respects in the case of any covenant or agreement as to materiality) the
obligations required to be performed by it under this Agreement prior to the
Closing Date and the Seller shall have received a certificate to such effect
signed by Buyer.
(d) The Buyer shall have delivered the Purchase Price to Seller as
required by Section 2.2.
ARTICLE 6
INDEMNIFICATION; SURVIVAL OF REPRESENTATIONS
Section 6.1 Indemnification. (a) After the Closing Date, subject to the
terms and conditions of this Section 6, including the limits on indemnity set
forth in Section 6.4, Seller shall indemnify and hold harmless the Buyer from,
and will pay to the Buyer the amount (net of any proceeds received by the Buyer
from any form of insurance) of, any loss, liability, judgment, damage, cost or
expense (including interest, penalties, and the reasonable fees, disbursements
and expenses of attorneys, accountants and other professional advisors)
(collectively, "Losses") arising from or in connection with (i) any breach of
any representation or warranty of Seller contained in Section 2, or (ii) a
breach of any agreement or covenant contained herein that by its terms is to be
performed by Seller after the date hereof.
(b) After the Closing Date, subject to the terms and conditions of
this Section 6, including the limits on indemnity set forth in Section 6.4, the
Buyer shall indemnify and hold harmless Seller from, and will pay to Seller the
amount (net of any proceeds received by Seller from any form of insurance) of,
any Losses arising from or in connection with (i) any breach of any
representation or warranty of the Buyer contained in Section 3 or (ii) a breach
of any agreement or covenant contained herein that by its terms is to be
performed by the Buyer after the date hereof.
Section 6.2 Notice and Defense of Claims. (a) A Person seeking
indemnification under this Section 6 (the "Indemnified Person") shall give
prompt written notice to the indemnifying person or persons, or successors
thereto (the "Indemnifying Person"), of any matter with respect to which the
Indemnified Person seeks to be indemnified (the "Indemnity Claim"). Such notice
shall state the nature of the Indemnity Claim and, if known, the amount of the
Loss. If the Indemnity Claim arises from a claim of a third party, the
Indemnified Person shall give such notice within a reasonable time after the
Indemnified Person has actual notice of such claim, and in the event that a suit
or other proceeding is commenced, within 10 days after receipt of written notice
by the Indemnified Person thereof. Notwithstanding anything in this paragraph to
the contrary, the failure of an Indemnified Person to give timely notice of an
Indemnity Claim shall not bar such Indemnity Claim except and to the extent that
the failure to give timely notice has impaired the ability of the Indemnifying
Person to defend the Indemnity Claim.
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(b)If the Indemnity Claim arises from the claim or demand of a
third party, the Indemnifying Person shall assume its defense, including the
hiring of counsel and the payment of all fees and expenses. The Indemnified
Person shall have the right to employ separate counsel and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Person unless both the Indemnified Person and the
Indemnifying Person are named as parties and the Indemnified Person shall in
good faith determine that representation by the same counsel is inappropriate.
In the event that the Indemnifying Person, within 30 days after notice of any
such action or claim, fails to assume the defense thereof, the Indemnified
Person shall have the right to undertake the defense, compromise or settlement
of such action, claim or proceeding for the account of the Indemnifying Person,
subject to the right of the Indemnifying Person to assume the defense of such
action, claim or proceeding at any time prior to the settlement, compromise or
final determination thereof. Anything in this Section 6 to the contrary
notwithstanding, the Indemnifying Person shall not, without the Indemnified
Person's prior consent, settle or compromise any action or claim or consent to
the entry of any judgment with respect to any action, claim or proceeding for
anything other than money damages paid by the Indemnifying Person. The
Indemnifying Person may, without the Indemnified Person's prior consent, settle
or compromise any such action, claim or proceeding or consent to entry of any
judgment with respect to any such action or claim that requires solely the
payment of money damages by the Indemnifying Person and that includes as an
unconditional term thereof the release by the claimant or the plaintiff of the
Indemnified Person from all liability in respect of such action, claim or
proceeding.
(c) If the Indemnity Claim does not arise from the claim or demand
of a third party, the Indemnifying Person shall have 30 days after receipt of
written notice of such Indemnity Claim to object to such claim by giving written
notice to the Indemnified Person specifying the reasons for such objection or
objections. If the Indemnifying Person has not so objected to the Indemnity
Claim as of the close of business on such thirtieth day, the total amount of the
Indemnity Claim shall thereupon become chargeable to and payable by the
Indemnifying Person in accordance with the terms and conditions of this section.
If the Indemnifying Person objects to the Indemnity Claim and the parties are
unable to settle any such dispute, the parties shall have all rights and
remedies at law or in equity, and either the Indemnifying Person or the
Indemnified Person may commence an action or proceeding to resolve such dispute
and determine any amounts due hereunder from the Indemnifying Person.
Section 6.3 Survival of Representations and Warranties. The right to
indemnification under Section 6.1 for any breach of the representations and
warranties made by each party herein shall survive until the date that is the
second anniversary date of the Closing Date and the representations set forth in
Sections 2.1, 2.9 and 2.13, shall survive indefinitely.
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Section 6.4 Limitations. Notwithstanding anything to the contrary in this
Agreement:
(a) Neither Seller, on the one hand, nor the Buyer, on the other
hand, shall have any obligation to make indemnification payments with respect
to Indemnity Claims arising under Sections 6.1(a)(i) or 6.1(b)(i) until the
aggregate of all claims against it hereunder exceeds and then only to the extent
the aggregate of such claims exceeds $50,000.
(b) In no event shall any recovery under this Agreement include the
loss of anticipated profits, loss of managerial time, lost opportunity or other
consequential damages of any type.
(c) In the absence of common law fraud, this Section 6 shall serve
as the sole and exclusive remedy of the Buyer and Seller for Losses and for any
other claims (other than those arising under Section 7) in any way relating to
this Agreement to the exclusion of all other statutory or common law remedies,
whether based on contract, tort, strict liability or otherwise.
ARTICLE 7
POST-CLOSING COVENANTS
Section 7.1 Record Retention. The Buyer agrees that, for a period of five
years following the Closing, it shall not, and shall cause the Company not to,
destroy, discard, deface or otherwise alter any of the books, records or other
data of the Company in its possession covering or prepared during the period
ending on the Closing Date, without furnishing prior notice to Seller and a
reasonable opportunity for Seller, at its cost, to take custody of such books,
records or other data. The Seller agrees that for a period of five (5) years
following the closing, it shall not destroy, discard, deface or otherwise alter
any of the books, records or other data with respect to the Company which is not
delivered to Buyer without furnishing prior notice to Buyer and a reasonable
opportunity for Buyer, at its cost, to take custody of such books, records or
other data.
Section 7.2 Mail and Other Communications.
(a) Seller hereby authorizes Buyer after the Closing Date to receive
and open all mail and other communications addressed to Seller received by Buyer
and to act with respect to such mail and other communications in such manner as
Buyer may elect if such mail and other communications relate to the Company and
related rights and obligations of Buyer under this Agreement, or if such mail
and other communications do not so relate, to forward such mail and other
communications promptly to Seller.
(b) After the Closing, Seller shall promptly deliver to Buyer the
original of any mail or other communication received by it pertaining to the
Company and related rights and obligations of Buyer under this Agreement, and
any monies, checks or other instruments of payment to which Buyer is entitled,
and Buyer shall promptly deliver to Seller any monies, checks or instruments of
payment to which Seller is entitled.
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Section 7.3 Covenants Concerning Employee Matters.
(a) (i) Effective as of the Closing, the Company shall cease to be a
participating employer in all of Seller's Employee Plans or Benefit
Arrangements, and Seller shall take all such action as is necessary to effect
such cessation of participation.
(ii) Effective as of the Closing, employees of the Company
shall cease to participate in Seller's non-pension Benefit Arrangements and
Employee Plans (the "Welfare Benefit Plans"). Seller shall retain responsibility
under the Welfare Benefit Plans for all costs of coverage and all amounts
payable by reason of claims incurred by the employees of the Company prior to
the Closing including claims which are not submitted until after the Closing. A
claim shall be deemed to have been incurred on the date of the occurrence of (A)
death or dismemberment in the case of claims under life insurance and accidental
death and dismemberment benefits, (B) the date of the initial disability in the
case of claims under disability benefits, or (C) the date on which the charge or
expense giving rise to such claim is incurred in the case of all other claims.
For purposes of Section 7.3(a)(ii), a claim shall be deemed to have been
incurred on the date that the first charge or expense in a course of treatment
giving rise to such claim has been incurred.
(iii) Seller shall remain responsible for all record keeping
and welfare benefits with respect to any employees or former employees of the
Company who are, as of the Closing or as a result of this Agreement: (A) on or
eligible for COBRA continuation coverage or (B) on long term disability leave
and covered under Seller's Welfare Benefit Plans. Immediately following the
Closing, Seller will notify all employees of the Company of their entitlement to
a continuation of health coverage provided by Seller to such employees under
Seller's group health plan prior to the Closing.
(b) Following the Closing, the Buyer shall, in its sole discretion,
cause the employees of the Company to be eligible to participate in an "employee
welfare benefit plan" and "employee pension benefit plan" (within the meaning of
Section 3(1) and Section 3(2) of ERISA, respectively) of the Buyer or subsidiary
or affiliate of the Buyer, or such other benefit plan, fund or program that the
Buyer may wish to establish for such employees on or after the Closing, provided
that nothing herein shall prevent the Buyer from terminating the employment of
any such employee or modifying or terminating such plans from time to time. For
purposes of any length of service (but not benefit accrual) requirements,
waiting periods, vesting periods or differential benefits based on length of
service in any such plan for which such an employee may be eligible after
Closing, the Buyer shall ensure that service by such employee with the Company
prior to the Closing shall be deemed to be service with the Buyer, shall, if
acceptable to any applicable insurance or reinsurance carrier, waive any waiting
period for participation or coverage in any welfare benefit plans or policies
and, to the extent such employee was a participant in Seller's medical benefits
plan and such condition was covered under such plan, shall waive any
pre-existing medical condition provision of such plan or policy to the extent
required by law.
(c) In addition to its obligations under Section 6, from and after
the Closing, Seller shall indemnify and hold harmless Buyer and the Company from
any and all liabilities that either Buyer or the Company incurs or that arises
with respect to Seller's Employee Plans or Benefit Arrangements.
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Section 7.4 Covenant Not to Compete .
(a) Seller agrees that for a period of two (2) years after the
Closing Date, neither Seller nor any Affiliate of Seller shall conduct or engage
in the asset lending business in the markets where the Company conducts its
business as of the Closing Date.
(b) Seller agrees that for a period of two (2) years after the
Closing Date, Seller shall not advertise directly to or specifically solicit the
Company's customers for Seller's products and services.
ARTICLE 8
TERMINATION
Section 8.1 Termination. This Agreement may, by notice given at or
prior to the Closing, be terminated:
(a) By the mutual written consent of Seller and Buyer.
(b) By the Buyer or Seller if there has been a material breach by
the other of any covenant contained in this Agreement that is not or cannot be
cured within 45 days after written notice of such breach is given to the party
committing such breach, provided that the right to effect such cure shall not
extend beyond the date set forth in subparagraph (c) below.
(c) By the Buyer or Seller if (i) any condition to Closing required
by Section 5 has not been met or waived by each party entitled to grant such
waiver by December 31, 1999, (ii) any such condition cannot be met by such date
and has not been waived by each party in whose favor such condition runs or
(iii) the Closing has not occurred by such date; provided, however, that the
right to terminate this Agreement pursuant to this paragraph shall not be
available to a party if its failure to fulfill or perform any obligation under
this Agreement has been a substantial cause of, or has substantially resulted
in, the failure of the Closing to occur or be capable of occurring on or before
such date.
Section 8.2 Effect of Termination; Survival. Upon termination of this
Agreement pursuant to this Section 8, this Agreement shall be void and there
shall be no liability by reason of this Agreement, or the termination thereof,
on the part of any party or their respective directors, officers, employees,
agents or shareholders except for any liability of a party hereto arising out of
a breach of this Agreement prior to the date of termination.
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ARTICLE 9
DEFINED TERMS
Section 9.1 Definitions. In addition to the other defined terms used
herein, as used in this Agreement, the following terms when capitalized have the
meanings indicated.
"Affiliate" shall mean, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, has the
right to control (in fact or by agreement), is controlled by, or is under common
control with, such Person.
"Agreement" shall mean this Stock Purchase Agreement, including the
schedules hereto, all as amended or otherwise modified from time to time.
"Applicable Law" shall mean any statute, law, rule or regulation or any
judgement, order, writ, injunction or decree of any Governmental Entity to which
a specified Person or its property is subject.
"Benefit Arrangement" shall mean any employment, severance or similar
contract, or any other contract, plan, policy or arrangement providing for
compensation, bonus, profit-sharing, stock option or other stock related rights
or other forms of incentive or deferred compensation, insurance coverage
(including any self-insured arrangement), health or medical benefits, disability
benefits, and post-employment and retirement benefits, other than Employee
Plans.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Employee Plan" means (a) a plan or arrangement as defined in Section 3(3)
of ERISA that (i) is maintained, administered or contributed to by the Company,
Seller or any ERISA Affiliate (ii) covers any employee or former employee of the
Company, Seller or any ERISA Affiliate, and (b) a plan or arrangement as defined
in Section 3(37) and Section 4001(a)(3) of ERISA that covers, or covered at any
time during the five year period prior to the Closing Date, any employee or
former employee of the Company, Seller or any ERISA Affiliate.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any Person within the "controlled group" of
corporations with respect to the Company, or Seller, as defined in Section
414(b) of the Code and the regulations promulgated thereunder, and all trades or
businesses that are under "common control" with respect to the Company, or
Seller, as defined in Section 414(c) of the Code and the regulations promulgated
thereunder.
"Governmental Approval" means any franchise, licenses, permit,
authorization, consent or approval of any Governmental Entity.
"Governmental Entity" shall mean any court or tribunal in any jurisdiction
or any public, governmental or regulatory body, agency, department, commission,
board, bureau or other authority or instrumentality.
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"Group" shall mean, individually and collectively, (a) the Company, (b)
Seller, and (c) any individual, trust, corporation, partnership or any entity as
to which the Company is liable for Taxes incurred by such individual or entity
either as a transferee, pursuant to Treasury Regulations Section 1.1502-6, or
pursuant to any other provision of federal, territorial, state, local or foreign
law or regulations.
"Liens" shall mean pledges, liens, defects, leases, licenses, equities,
conditional sales contracts, charges, claims, encumbrances, security interests,
easements, restrictions, chattel mortgages, mortgages or deeds of trust, of any
kind or nature whatsoever.
"Person" shall mean an individual, firm, corporation, general or limited
partnership, limited liability company, limited liability partnership, joint
venture, trust, governmental authority or body, association, unincorporated
organization or other entity.
"Proceedings" means any suit, action, proceeding, dispute or claim before
or investigation by any Governmental Entity.
"Returns" means all returns, declarations, reports, statements,
information and other documents required to be filed in respect of Taxes,
including a consolidated return for any group of entities that includes the
Company, and the term "Return" means any one of the foregoing.
"Taxes" (or "Tax" where the context requires) means all federal, state,
county, local, and other taxes, levies or similar governmental charges or
assessments (including, without limitation, net income, alternative or add-on
minimum, profits, premium (including Pension Benefit Guaranty Corporation
premiums), estimated, excise, sales, use, occupancy, gross income, gross
receipts, franchise, ad valorem, stamp, severance, capital levy, production,
transfer, withholding, license, employment, payroll, property, environmental,
windfall profits, custom and import duties) imposed by any Governmental Entity
responsible for the imposition thereof, whether attributable to statutory or
nonstatutory rules and whether or not measured in whole or in part by net
income, and including interest, additions to tax, and interest on penalties or
additions to tax.
ARTICLE 10
MISCELLANEOUS
Section 10.1 Expenses. Each of Seller and Buyer shall pay their respective
expenses incurred in connection with this Agreement and the transactions
contemplated hereby and no expenses may be charged to the Company.
Section 10.2 Notices. All notices hereunder must be in writing and shall
be deemed to have been given upon receipt of delivery by: (a) personal delivery
to the designated individual, (b) certified or registered mail, postage prepaid,
return receipt requested, (c) a nationally recognized overnight courier service
(against a receipt therefor) or (d) facsimile transmission with confirmation of
receipt. All such notices must be addressed as follows or such other address as
to which any party hereto may have notified the other in writing:
21
If to Seller, to:
BNCCORP, Inc.
000 X. Xxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxxxx
Facsimile: 000-000-0000
If to Buyer, to:
Associated Banc-Corp
0000 Xxxxxx Xxxx
X.X. Xxx 00000
Xxxxx Xxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxx
Facsimile: 000-000-0000
Section 10.3 Entire Agreement; No Third Party Beneficiaries. This
Agreement (including the documents, schedules and instruments referred to
herein) (a) constitutes the entire agreement and supersedes all prior
agreements, and understandings and communications, both written and oral, among
the parties with respect to the subject matter hereof, and (b) is not intended
to confer upon any person other than the parties hereto any rights or remedies
hereunder.
Section 10.4 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of North Dakota without regard to any
applicable principles of conflicts of law.
Section 10.5 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties.
Section 10.6 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by reason of any
rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect.
Section 10.7 Mutual Drafting. This Agreement is the mutual product of the
parties hereto and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of each of the parties, and shall not be
construed for or against any party hereto.
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first written above.
SELLER:
BNCCORP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Title: President
BUYER:
ASSOCIATED BANC-CORP
By: /s/ X.X. Xxxxxx
Title: Chairman/CEO
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