Exhibit 10.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF SEPTEMBER 5, 2002
BY AND AMONG
NASB FINANCIAL, INC.
NASB ACQUISITION SUBSIDIARY, INC.,
AND
CBES BANCORP, INC.
Table of Contents
Page
----
ARTICLE I The Merger ...................................... 2
Section 1.1. Structure of Merger ......................... 2
Section 1.2. Effect on Shares of CBES Common Stock ....... 2
Section 1.3. Exchange Procedures ......................... 3
Section 1.4. Stock Options; Restricted Stock ............. 5
Section 1.5. Directors and Officers of CBES and Community
Bank at Effective Date .................... 5
Section 1.6. Articles of Incorporation and Bylaws of the
Surviving Corporation ..................... 6
Section 1.7. Dissenters' Rights .......................... 6
ARTICLE II Representations and Warranties .................. 6
Section 2.1. Disclosure Letters .......................... 6
Section 2.2. Standards ................................... 6
Section 2.3. Representations and Warrantees of CBES ...... 7
Section 2.4. Representations and Warrantees of NASB
Holding and Acquisition Sub ...............21
ARTICLE III Action and Conduct Pending the Merger ...........25
Section 3.1. Regulatory Application ......................25
Section 3.2. Conduct of CBES's Business Prior to the
Effective Date ............................25
Section 3.3. Forbearance by CBES .........................28
Section 3.4. Conduct of NASB Holding's and Acquisition
Sub's Business Prior to the Effective Date.32
ARTICLE IV Covenants .......................................32
Section 4.1. Acquisition Proposals .......................32
Section 4.2. Certain Policies and Actions of CBES ........34
Section 4.4. Certain Filings, Consents and Arrangements ..35
Section 4.5. Anti-takeover Provisions ....................35
Section 4.6. Additional Actions ..........................35
Section 4.7. Publicity ...................................35
Section 4.8. Stockholders' Meeting .......................36
Section 4.9. Proxy Statement .............................36
Section 4.10. Notification of Certain Matters .............36
Section 4.11. Employees ...................................37
Section 4.12. Indemnification .............................39
Section 4.13. Phase I and Phase II Environmental Assessments
of Community Bank's Primary Banking
Facility ..................................40
ARTICLE V Conditions to Consummation ......................41
Section 5.1. Conditions to Each Party's Obligations ......41
Section 5.2. Conditions to the Obligations of NASB
Holding ...................................41
Section 5.3. Conditions to the Obligations of CBES .......42
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ARTICLE VI Data Processing .................................42
Section 6.1. Sample Data .................................42
Section 6.2. Information for Check Ordering ..............43
Section 6.3. Installation of Data Circuits ...............43
ARTICLE VII Termination .....................................43
Section 7.1. Termination .................................43
Section 7.2. Termination Fee .............................44
Section 7.3. Effect of Termination .......................44
ARTICLE VIII Certain Other Matters ..........................45
Section 9.1. Certain Definitions; Interpretation .........45
Section 9.2. Survival ....................................46
Section 9.3. Waiver; Amendment ...........................46
Section 9.4. Counterparts ................................46
Section 9.5. Governing Law ...............................46
Section 9.6. Expenses ....................................46
Section 9.7. Notices .....................................47
Section 9.8. Entire Agreement; etc. ......................47
Section 9.9. Specific Performance ........................48
Section 9.10. Successors and Assigns; Assignment ..........48
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AGREEMENT AND PLAN OF MERGER
This is an Agreement and Plan of Merger, dated as of the 5th day
of September, 2002 ("Agreement"), by and among NASB Financial, Inc., a
Missouri corporation ("NASB Holding"), NASB Acquisition Subsidiary,
Inc., a Missouri corporation ("Acquisition Sub"), and CBES Bancorp,
Inc., a Delaware corporation ("CBES")
RECITALS
A. The Board of Directors of each of CBES, NASB Holding, and
Acquisition Sub (i) has determined that this Agreement and the business
combination and related transactions contemplated hereby are in the
best interests of NASB Holding and CBES, respectively, and in the best
interests of their respective stockholders and (ii) has approved, at
meetings of each of such Boards of Directors, this Agreement.
B. CBES is the beneficial owner of 100 shares of the outstanding
capital stock of Community Bank of Excelsior Springs, a Savings Bank, a
federally chartered savings bank with its principal office in Excelsior
Springs, Missouri ("Community Bank") which shares represent 100% of the
outstanding shares of capital stock of Community Bank.
C. Community Bank is the beneficial owner of 1,000 shares of the
outstanding capital stock of CBES Service Corporation ("Service
Corporation"), a Missouri corporation, which shares represent 100% of
the outstanding shares of capital stock of Service Corporation.
D. NASB Holding is the beneficial owner of 2,375,112 shares of
the outstanding common stock of North American Savings Bank, F.S.B., a
federally chartered savings bank with its principal office in
Grandview, Missouri ("NASB Bank"), which shares represent 100% of the
outstanding shares of capital stock of NASB Bank.
E. NASB Holding is the beneficial owner of 1,000 shares of the
outstanding common stock of Acquisition Sub, which shares represent
100% of the outstanding shares of capital stock of Acquisition Sub.
F. NASB Holding, CBES and Acquisition Sub desire to make certain
representations, warranties and agreements in connection with the
business combination and related transactions provided for herein and
to prescribe various conditions to such transactions.
ACCORDINGLY, in consideration of the promises, the mutual covenants and
agreements set forth herein and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
AGREEMENT
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ARTICLE I
THE MERGER
Section 1.1. Structure of the Merger. On the Effective Date (as
defined in Section 8.1 below), Acquisition Sub shall merge with and
into CBES (the "Merger"), the separate corporate existence of
Acquisition Sub shall cease and CBES shall survive and continue to as a
corporation, pursuant to the provisions of, and with the effect
provided in the Delaware General Corporate Law (the "DGCL") and The
General and Business Corporation Law of Missouri (the "GBCLM"). The
name of CBES, as the surviving corporation in the Merger, shall be CBES
Bancorp, Inc. From and after the Effective Date, CBES shall possess
all of the properties and rights and be subject to all of the
liabilities and obligations of CBES, all as more fully described in the
DGCL and the GBCLM. NASB Holding may at any time prior to the
Effective Date change the method of effecting the combination with CBES
(including the provisions of this Article I) if and to the extent it
deems such change necessary, appropriate or desirable; provided,
however, that no such change shall (i) alter or change the amount or
kind of consideration to be issued pursuant to the Merger to holders of
CBES Common Stock (as defined in Section 1.2(a) hereof) as provided for
in this Agreement or (ii) materially impede or delay consummation of
the transactions contemplated by this Agreement.
Section 1.2. Effect on Shares of CBES Common Stock.
(a) On the Effective Date of the Merger, by virtue of the Merger,
automatically and without any action on the part of the holder thereof,
each share of common stock, par value .01 per share of CBES ("CBES
Common Stock"), that is issued and outstanding at the Effective Date,
other than Excluded Shares (as defined below) and including CBES
Restricted Stock held pursuant to the CBES Restricted Stock Plan (as
defined in Section 1.4(b)), shall be cancelled and cease to be
outstanding and shall be converted into and become the right to receive
a cash payment equal to $17.50; provided, however, that such per share
amount shall be reduced if the Adjusted Stockholders' Equity (as
defined in Section 3.2(g) hereof) of CBES as of the close of business
on the last business day next prior to the Effective Date shall be
equal or greater than $13,500,000 and less than $13,900,000, then the
cash payment shall be equal to $17.05 per share; and provided, further
that if the Adjusted Stockholders' Equity is less than $13,500,000,
NASB Holding shall have the right to either (i) terminate this
Agreement pursuant to Section 7.1(g) hereof or (ii) consummate the
Merger and provide the holders of CBES Common Stock with a cash payment
of $17.05 per share (the "Merger Consideration"). After the Effective
Date, no dividends or other distributions made or payable by CBES shall
accrued for the benefit of or be payable with respect to, any CBES
Common Stock.
(b) "Excluded Shares" shall consist of (i) shares of CBES Common
Stock as to which the respective holders thereof have properly demanded
appraisal rights and have not failed to perfect, have not effectively
withdrawn and have not lost their rights to appraisal and payment
pursuant to any applicable law providing for dissenters' or appraisal
rights (the "Dissenters' Shares") and (ii) shares held by CBES as
treasury stock. After the Effective Date, no dividends or other
distributions made or payable by CBES shall accrue for the benefit of
or be payable with respect to, any Dissenters' Shares, and no interest
shall accrue with respect to
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payments due to holders of Dissenters' Shares, unless such accruals are
required by the DGCL or the GBCLM.
(c) On the Effective Date, each Excluded Share, other than
Dissenters' Shares, shall be canceled and retired and shall cease to
exist, and no exchange or payment shall be made with respect thereto.
In addition, no Dissenters' Shares shall be converted into the Merger
Consideration pursuant to this Section 1.2, but instead shall be
treated in accordance with the procedures set forth in Section 1.7 of
this Agreement.
Section 1.3. Exchange Procedures.
(a) NASB Holding shall mail appropriate transmittal materials
("Letter of Transmittal") as soon as reasonably practicable after the
Effective Date, and in no event later than five (5) business days
thereafter, to each holder of record of CBES Common Stock as of the
Effective Date. A Letter of Transmittal will be deemed properly
completed only if accompanied by certificates representing all shares
of CBES Common Stock to be converted thereby, except as provided in
Section 1.3(h) below.
(b) At and after the Effective Date, each certificate ("CBES
Certificate") representing shares of CBES Common Stock immediately
prior to the Effective Date (except as specifically set forth in
Section 1.2) shall represent only the right to receive cash in an
amount equal to the product of the Merger Consideration multiplied by
the number of shares of CBES Common Stock previously represented by the
CBES Certificate.
(c) Prior to the Effective Date, NASB Holding may select a bank
or trust company acceptable to CBES, which shall act as exchange agent
(the "Exchange Agent") for the benefit of the holders of shares of CBES
Common Stock, for exchange in accordance with this Section 1.3. If
NASB Holding elects not to select such a bank or trust company as the
Exchange Agent, then NASB Bank shall be deemed to be the Exchange Agent
for all purposes under this Agreement. At the Effective Date, NASB
Holding shall transfer to the Exchange Agent, or set aside and hold in
trust for the benefit of the stockholders of CBES if NASB Bank is the
Exchange Agent, sufficient funds to pay the Merger Consideration to all
the stockholders of CBES.
(d) The Letter of Transmittal (which shall be subject to the
reasonable approval of CBES and NASB Holding) shall (i) specify that
delivery shall be effected, and risk of loss and title to the CBES
Certificates shall pass, only upon delivery of the CBES Certificates to
the Exchange Agent, (ii) specify that the shares of CBES Common Stock
have been canceled, that the consideration to be paid for such shares
shall be paid only upon delivery and surrender of such CBES
Certificates (except as provided in Section 1.3(h) below), and that
neither dividends nor interest shall accrue on the cash consideration
payable after the Effective Date of the Merger, (iii) be in a form and
contain any other provisions as NASB Holding may reasonably determine
and (iv) include instructions for use in effecting the surrender of the
CBES Certificates in exchange for the Merger Consideration. Upon the
proper surrender of the CBES Certificates to the Exchange Agent,
together with a properly completed and duly executed Letter of
Transmittal, the holder of such CBES Certificates shall be entitled to
receive in exchange therefore, by transfer of immediately available
funds to such account at such financial institution
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as the holder shall direct, or, at the holder's option, by check drawn
on a commercial bank or a savings bank having an office in the Kansas
City metropolitan area, the amount of cash that such CBES Certificates
represent the right to receive pursuant to Section 1.3(b). CBES
Certificates so surrendered shall forthwith be canceled. As soon as
practicable, but no later than the business day next following receipt
of the properly completed Letter of Transmittal and any necessary
accompanying documentation, the Exchange Agent shall distribute cash as
provided herein. The Exchange Agent shall not be entitled to vote or
exercise any rights of ownership with respect to the shares of CBES
Common Stock held by it from time to time hereunder, except that it
shall receive and hold all dividends or other distributions paid or
distributed with respect to such shares for the account of the persons
entitled thereto. If there is a transfer of ownership of any shares of
CBES Common Stock not registered in the transfer records of CBES, the
Merger Consideration shall be issued to the transferee thereof if the
CBES Certificates representing such CBES Common Stock are presented to
the Exchange Agent, accompanied by all documents required, in the
reasonable judgment of NASB Holding and the Exchange Agent, (x) to
evidence and effect such transfer and (y) to evidence that any
applicable stock transfer taxes have been paid.
(e) From and after the Effective Date, there shall be no
transfers on the stock transfer records of CBES of any shares of CBES
Common Stock. If, after the Effective Date, CBES Certificates are
presented to NASB Holding, they shall be exchanged for the Merger
Consideration deliverable in respect thereof pursuant to this Agreement
in accordance with the procedures set forth in this Section 1.3.
(f) If NASB Bank is not acting as the Exchange Agent, any portion
of the aggregate amount of cash for the Merger Consideration, to be
paid pursuant to Section 1.2, or any proceeds from any investments
thereof that remain unclaimed by the stockholders of CBES for twelve
months after the Effective Date shall be repaid by the Exchange Agent
to NASB Holding upon the written request of NASB Holding. After such
request is made, any stockholders of CBES who have not theretofore
complied with this Section 1.3 shall look only to NASB Holding for the
Merger Consideration deliverable in respect of each share of CBES
Common Stock such stockholder holds, as determined pursuant to Section
1.2 of this Agreement, without any interest thereon. If outstanding
CBES Certificates are not surrendered prior to the date on which such
payments would otherwise escheat to or become the property of any
governmental unit or agency, the unclaimed items shall, to the extent
permitted by any abandoned property, escheat or other applicable laws,
become the property of NASB Holding (and, to the extent not in its
possession, shall be paid over to it), free and clear of all claims or
interest of any person previously entitled to such claims.
Notwithstanding the foregoing, neither the Exchange Agent nor any party
to this Agreement (or any affiliate thereof) shall be liable to any
former holder of CBES Common Stock for any amount delivered to a public
official pursuant to applicable abandoned property, escheat or similar
laws.
(g) NASB Holding and the Exchange Agent shall be entitled to rely
upon CBES's stock transfer books to establish the identity of those
persons entitled to receive the Merger Consideration, which books shall
be conclusive with respect thereto. In the event of a dispute with
respect to ownership of stock represented by any CBES Certificate, NASB
Holding and the Exchange Agent shall be entitled (i) deposit any Merger
Consideration, represented thereby in escrow with an independent third
party and thereafter be relieved with respect to any
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claims thereto, or (ii) to file a suit in interpleader against the
competing parties, deposit the Merger Consideration due with respect to
the disputed CBES Certificate with a court of competent jurisdiction,
and thereafter be discharged from any responsibility to the competing
parties.
(h) If any CBES Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person
claiming such CBES Certificate to be lost, stolen or destroyed and, if
required by the Exchange Agent, the posting by such person of a bond in
such amount as the Exchange Agent may direct as indemnity against any
claim that may be made against it with respect to such CBES
Certificate, the Exchange Agent shall pay in exchange for such lost,
stolen or destroyed CBES Certificate the Merger Consideration
deliverable in respect thereof pursuant to Section 1.2.
Section 1.4. Stock Options; Restricted Stock.
(a) At the Effective Date, each option to acquire shares of CBES
Common Stock (a "CBES Option"), whether or not then vested, granted
pursuant to the CBES's 1997 Stock Option and Incentive Plan (the "CBES
Option Plan") that is then outstanding and unexercised shall be deemed
vested and exercisable, whether or not then exercisable, and shall be
canceled and terminated and in lieu thereof the holders of such options
shall be paid by CBES in cash (from funds provided by NASB Holding) in
an amount equal to the product of (i) the number of shares of CBES
Common Stock subject to such unexercised option at the Effective Date
and (ii) the amount by which the Merger Consideration per share exceeds
the exercise price per share of such option net of any cash which must
be withheld under federal and state income and employment tax
requirements. In the event that the exercise price of a CBES Option is
greater than the Merger Consideration, then at the Effective Date such
CBES Option shall be canceled without any payment made in exchange
therefore. At the Effective Date, the CBES Option Plan shall be deemed
terminated.
(b) Inasmuch as at the Effective Date, all shares of restricted
CBES Common Stock (the "CBES Restricted Stock"), held under the CBES
Recognition and Retention Plan (the "CBES Restricted Stock Plan") are
to be canceled, and in respect of such shares to be paid the Merger
Consideration in respect of such shares to be paid to the holders
thereof. At the Effective Date, the CBES Restricted Stock Plan shall
be deemed terminated.
Section 1.5. Directors and Officers of CBES and Community Bank at
Effective Date. The directors and officers of CBES, the directors of
Community Bank and designated officers of Community Bank shall resign
effective as of the Effective Date. Immediately thereafter, NASB
Holding shall appoint new officers and directors to CBES, each to hold
office in accordance with the articles of incorporation and bylaws of
CBES until their respective successors are duly elected or appointed
and qualified. The new officers and directors of CBES shall then
appoint new officers and directors of Community Bank, each to hold
office in accordance with the articles of incorporation and bylaws of
Community Bank until their respective successors are duly elected or
appointed and qualified.
Section 1.6. Articles of Incorporation and Bylaws of the
Surviving Corporation. The articles of incorporation (attached hereto
as Exhibit A) and bylaws of Acquisition Sub in
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effect immediately prior to the Effective Date shall be the articles of
incorporation and bylaws of the surviving corporation from and after
the Effective Date until amended as provided by law.
Section 1.7. Dissenters' Rights.
(a) NASB Holding shall pay for any Dissenters' Shares in
accordance with applicable law providing for dissenters' or appraisal
rights, and the holders thereof shall not be entitled to receive any
Merger Consideration; provided, that if appraisal rights under
applicable law with respect to any Dissenters' Shares shall have been
effectively withdrawn or lost, such shares will thereupon cease to be
treated as Dissenters' Shares and shall be converted into the right to
receive cash in an amount equal to the Merger Consideration multiplied
by the number of shares of CBES Common Stock previously represented
thereby.
(b) CBES shall (i) give NASB Holding prompt written notice of the
receipt of any notice from a stockholder purporting to exercise any
dissenters' rights, (ii) not settle nor offer to settle any demand for
payment without the prior written consent of NASB Holding and (iii) not
waive any failure to comply strictly with any procedural requirements
of applicable corporate statutes.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Disclosure Letters. Prior to the execution and
delivery of this Agreement, CBES and NASB Holding each shall have
delivered to the other a letter (each, its "Disclosure Letter") setting
forth, among other things, facts, circumstances and events the
disclosure of which is required or appropriate in relation to any or
all of their respective representations and warranties (and making
specific reference to the section or subsection, as the case may be, of
this Agreement to which they relate); provided, that (a) no such fact,
circumstance or event is required to be set forth in the Disclosure
Letter as an exception to a representation or warranty if its absence
is not reasonably likely to result in the related representation or
warranty being deemed untrue or incorrect under the standards
established by Section 2.2 and (b) the mere inclusion of a fact,
circumstance or event in a Disclosure Letter shall not be deemed an
admission by a party that such item represents a material exception or
that such item is reasonably likely to result in a Material Adverse
Effect (as defined in Section 2.2(b)).
Section 2.2. Standards.
(a) No representation or warranty of CBES Bank contained in
Section 2.3, and no representation or warranty of NASB Holding or
Acquisition Sub contained in Section 2.4, shall be deemed untrue or
incorrect, and no party hereto shall be deemed to have breached a
representation or warranty, on account of the existence of any fact,
circumstance or event unless, as a direct or indirect consequence of
such fact, circumstance or event, individually or taken together with
all other facts, circumstances or events inconsistent with any
paragraph of Sections 2.3 or 2.4, as applicable, there is reasonably
likely to exist a Material Adverse Effect. CBES's representations,
warranties and covenants contained in this Agreement shall not be
deemed to be
6
untrue or breached as a result of effects arising solely from actions
taken pursuant to this Agreement or in compliance with a written
request of NASB Holding.
(b) As used in this Agreement, the term "Material Adverse Effect"
means an effect which is material and adverse to the business,
financial condition or results of operations of NASB Holding,
Acquisition Sub, CBES, as the context may dictate, and its Subsidiaries
(as defined herein) taken as a whole; provided, however, that any such
effect resulting from any (i) changes in laws, rules or regulations or
GAAP or regulatory accounting requirements or interpretations thereof
that apply to either NASB Holding, Acquisition Sub, and CBES, as the
case may be, or to similarly situated financial and/or depository
institutions, (ii) changes in economic conditions affecting financial
institutions generally, including but not limited to, changes in the
general level of market interest rates, (iii) fees associated with the
transactions contemplated by this Agreement or (iv) changes to this
Agreement requested by NASB Holding shall not be considered in
determining if a Material Adverse Effect has occurred.
(c) For purposes of this Agreement, "knowledge" shall mean, with
respect to a party hereto, best knowledge after a due inquiry of any of
the CEO, Chairman, Vice Chairman, President or CFO of that party.
Section 2.3. Representations and Warranties of CBES. Subject to
Sections 2.1 and 2.2, CBES represents and warrants to NASB Holding and
Acquisition Sub that, except as disclosed in CBES's Disclosure Letter:
(a) Organization.
(i) CBES is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is
registered as a savings and loan holding company under the HOLA.
Community Bank is a stock savings association duly organized, validly
existing and in good standing under the laws of the United States of
America and is a wholly-owned Subsidiary (as defined below) of CBES.
Each Subsidiary of CBES other than Community Bank is a corporation,
limited liability company or partnership duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of CBES and its Subsidiaries has
all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. As
used in this Agreement, unless the context requires otherwise, the term
"Subsidiary" when used with respect to any party means any corporation
or other legal entity, which is consolidated with such party for
financial reporting purposes or which is controlled, directly or
indirectly, by such party through a sufficient number of shares or
other evidence of ownership of such corporation or other organization
to have the power to elect a majority of the board of directors or
otherwise to control such corporation or other organization.
(ii) CBES and each of its Subsidiaries has the requisite
corporate power and authority and is duly qualified to do business and
is in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such
qualification necessary.
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(iii) CBES's Disclosure Letter sets forth all of CBES's
Subsidiaries and all entities (whether corporations, partnerships or
similar organizations), including the corresponding percentage
ownership, in which CBES owns, directly or indirectly, 5% or more of
the ownership interests as of the date of this Agreement and indicates
for each of CBES's Subsidiaries, as of such date, its jurisdiction of
organization and the jurisdiction(s) wherein it is qualified to do
business. All such Subsidiaries and ownership interests are in
compliance with all applicable laws, rules and regulations relating to
direct investments in equity ownership interests. CBES owns, either
directly or indirectly, all of the outstanding capital stock of each of
its Subsidiaries. No Subsidiary of CBES other than Community Bank is
an "insured depository institution" as defined in the Federal Deposit
Insurance Act, as amended ("FDIA"), and the applicable regulations
thereunder. All of the shares of capital stock of CBES's Subsidiaries
are fully paid, non-assessable and not subject to any preemptive rights
and are owned by CBES or a Subsidiary of CBES free and clear of any
claims, liens, encumbrances or restrictions (other than those imposed
by applicable federal and state securities laws), and there are no
agreements or understandings with respect to the voting or disposition
of any such shares.
(iv) The deposits of Community Bank are insured by the
Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation ("FDIC") to the extent provided in the FDIA.
(b) Capital Structure.
(i) The authorized capital stock of CBES consists of
4,000,000 shares of CBES Common Stock, par value $.01 per share, and
500,000 shares of preferred stock, par value $.01 per share. As of the
date of this Agreement (A) 1,031,851 shares of CBES Common Stock had
been issued, of which 875,805 shares of CBES Common Stock were issued
and outstanding, (B) no shares of CBES preferred stock were issued and
outstanding, (C) no shares of CBES Common Stock were reserved for
issuance, except that 102,495 shares of CBES Common Stock were reserved
for issuance pursuant to the CBES Option Plan and 40,998 shares of CBES
Common Stock were reserved for issuance pursuant to the CBES Restricted
Stock Plan, (D) no shares of CBES preferred stock were held by CBES and
(E) 156,046 shares of CBES Common Stock were held by CBES in its
treasury or by its Subsidiaries. The authorized capital stock of
Community Bank consists of 4,000,000 shares of common stock, par value
$.01 per share (the "Community Bank Common Stock"), and 500,000 shares
of preferred stock. As of the date of this Agreement, 100 shares of
such common stock were outstanding, no shares of such preferred stock
were outstanding and all outstanding shares of such common stock were,
and as of the Effective Date will be, owned both legally and
beneficially by CBES. The authorized capital stock of Service
Corporation consists of 30,000 shares of common stock, par value $1.00
per share and no shares of preferred stock. As of the date of this
Agreement, 1,000 shares of such common stock were outstanding and all
outstanding shares of such common stock were, and as of the Effective
Date will be, owned both legally and beneficially by Community Bank.
All outstanding shares of capital stock of CBES, Community Bank and
Service Corporation are duly authorized and validly issued, fully paid
and non-assessable and not subject to any preemptive rights and, with
respect to shares of CBES held by CBES in its treasury or by its
Subsidiaries and shares of Community Bank and Service Corporation, are
free and clear of all liens, claims, encumbrances or restrictions
(other than those imposed by applicable federal and state securities
laws) and there are no agreements or understandings with respect to the
voting or
8
disposition of any such shares. CBES's Disclosure Letter sets forth a
complete and accurate list of all outstanding options to purchase CBES
Common Stock that have been granted pursuant to the CBES Option Plan,
including the names of the optionees, dates of grant, exercise prices,
dates of vesting, dates of termination and shares subject to each
grant.
(ii)No bonds, debentures, notes or other indebtedness of CBES
having the right to vote on any matters on which stockholders may vote
are issued or outstanding.
(iii) As of the date of this Agreement, except for options
granted pursuant to the CBES Option Plan, neither CBES nor any of its
Subsidiaries has or is bound by any outstanding subscriptions, options,
warrants, calls, rights, convertible securities, commitments or
agreements of any character obligating CBES or any of its Subsidiaries
to issue, deliver or sell, or cause to be issued, delivered or sold,
any additional shares of capital stock of CBES or any of its
Subsidiaries or obligating CBES or any of its Subsidiaries to grant,
extend or enter into any such option, warrant, call, right, convertible
security, commitment or agreement. As of the date hereof, there are no
outstanding contractual obligations of CBES or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any shares of capital stock
of CBES or any of its Subsidiaries.
(c) Authority. CBES has all requisite corporate power and
authority to enter into this Agreement, and, subject to approval of
this Agreement by the requisite vote of CBES's stockholders and receipt
of all required regulatory or governmental approvals, to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and, subject to the approval of this Agreement by CBES's
stockholders, the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate actions on the
part of CBES. This Agreement has been duly and validly executed and
delivered by CBES and constitutes a valid and binding obligation of
CBES, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general
principles of equity, whether applied in a court of law or a court of
equity.
(d) Stockholder Approval; Fairness Opinion. The affirmative vote
of a majority of the outstanding shares of CBES Common Stock entitled
to vote on this Agreement is the only vote of the stockholders of CBES
required for approval of this Agreement and the consummation of the
Merger and the related transactions contemplated hereby (the
"Stockholders Approvals"). CBES has received the written opinion of
Xxxxx Financial LLC to the effect that, as of the date hereof, the
Merger Consideration to be received by CBES's stockholders is fair,
from a financial point of view, to such stockholders.
(e) No Violations; Consents. The execution, delivery and
performance of this Agreement by CBES does not, and the consummation of
the transactions contemplated hereby will not, constitute (i) assuming
receipt of all Requisite Regulatory Approvals (as defined in Section
2.4(d)) and requisite stockholder approvals, a breach or violation of,
or a default under, any law, rule or regulation or any judgment,
decree, order, governmental permit or license to which CBES or any of
its Subsidiaries (or any of their respective properties) is subject,
(ii) a breach or violation of, or a default under, the certificate of
incorporation or bylaws of CBES or the similar organizational documents
of any of its Subsidiaries or (iii) a breach or violation of, or
9
a default under (or an event which, with due notice or lapse of time or
both, would constitute a default under), or result in the termination
of, accelerate the performance required by, or result in the creation
of any lien, pledge, security interest, charge or other encumbrance
upon any of the properties or assets of CBES or any of its Subsidiaries
under, any of the terms, conditions or provisions of any note, bond,
indenture, deed of trust, loan agreement or other agreement, instrument
or obligation to which CBES or any of its Subsidiaries is a party, or
to which any of their respective properties or assets may be subject.
The consummation by CBES of the transactions contemplated hereby will
not require any approval, consent or waiver under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or
the approval, consent or waiver of any other party to any such
agreement, or instrument, other than (x) the approval of the holders of
a majority of the outstanding shares of CBES Common Stock entitled to
vote thereon, (y) the consent of the Office of Thrift Supervision
("OTS") and (z) such other required regulatory consents. As of the
date hereof, the executive officers of CBES know of no reason
pertaining to CBES why any of the approvals referred to in this Section
2.3(e) should not be obtained without the imposition of any material
condition or restriction described in the last sentence of Section
5.1(b).
(f) Reports and Financial Statements.
(i) CBES and each of its Subsidiaries have each timely filed
all material reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were
required to file with (a) the FDIC, (b) the OTS, (c) the National
Association of Securities Dealers, Inc. ("NASD"), (d) the Missouri
Department of Insurance and (e) the Securities and Exchange Commission
("SEC") (collectively, "CBES's Reports") and, to CBES's knowledge have
paid all fees and assessments due and payable in connection therewith.
As of their respective dates, none of CBES's Reports contained any
untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. All of CBES's Reports filed with the SEC complied in all
material respects with the applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations of the SEC promulgated thereunder.
(ii) Each of the financial statements of CBES included in
CBES's Reports complied as to form, as of their respective dates of
filing with the SEC, in all material respects with applicable
accounting requirements and with the published rules and regulations of
the SEC with respect thereto and have been prepared in accordance with
GAAP applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto or, in the case of the
unaudited financial statements, as permitted by the SEC). Each of the
consolidated statements of condition contained or incorporated by
reference in CBES's Reports (including in each case any related notes
and schedules) and each of the consolidated statements of operations,
consolidated statements of cash flows and consolidated statements of
changes in stockholders' equity, contained or incorporated by reference
in CBES's Reports (including in each case any related notes and
schedules) fairly presented (a) the financial position of the entity or
entities to which it relates as of its date and (b) the results of
operations, stockholders' equity and cash flows, as the case may be, of
the entity or entities to which it relates for the periods set forth
therein (subject, in the case of unaudited interim statements, to
normal year-end adjustments that are not material in amount or effect).
10
(g) Absence of Certain Changes or Events. Except as disclosed in
CBES's Reports filed on or prior to the date of this Agreement, since
June 30, 2001, (i) CBES and its Subsidiaries have not incurred any
liability, except in the ordinary course of their business consistent
with past practice and except for the engagement letter agreements with
Xxxxx Financial LLC set forth in CBES's Disclosure Letter, (ii) CBES
and its Subsidiaries have conducted their respective businesses only in
the ordinary and usual course of such businesses consistent with their
past practices and (iii) there has not been any other event, change or
occurrence or continuance of any circumstance which has had, or is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect with respect to CBES and its Subsidiaries. To the
knowledge of CBES, there are no impending termination, expiration, or
loss of contracts, franchises, licenses, permits or other assets that,
individually or in the aggregate, are reasonably likely to have
Material Adverse Effect on CBES.
(h) Absence of Claims. No litigation, controversy, claim,
action, suit or other legal administrative or arbitration proceeding
before any court, governmental agency or arbitrator is pending against
CBES or any of its Subsidiaries and to the knowledge of CBES no such
litigation, controversy, claim, action, suit or proceeding has been
threatened or asserted in either case which is reasonably likely to
have a Material Adverse Effect with respect to CBES or its
Subsidiaries, or the transactions contemplated by this Agreement, or
upon the ability of CBES to perform its obligations under this
Agreement. To the knowledge of CBES, there are no investigations,
reviews or inquiries by any court or governmental agency pending or
threatened against CBES or any of its Subsidiaries.
(i) Absence of Regulatory Actions. Except as set forth in CBES's
Disclosure Letter, neither CBES nor any of its Subsidiaries has been a
party to any cease and desist order, written agreement or memorandum of
understanding with, or any commitment letter or similar undertaking to,
or has been subject to any action, proceeding, order or directive by,
or has been a recipient of any extraordinary supervisory letter from
any federal or state governmental authority charged with the
supervision or regulation of depository institutions or depository
institution holding companies or engaged in the insurance of bank
and/or savings and loan deposits (singularly a "Government Regulatory
Agency;" collectively "Government Regulatory Agencies"), or has adopted
any board resolutions at the request of any Government Regulatory
Agency, or has been advised by any Government Regulatory Agency that it
is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such action, proceeding,
order, directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter, board resolutions
or similar undertaking.
(j) Taxes. All federal, state, local and foreign tax returns
required to be filed by or on behalf of CBES or any of its Subsidiaries
have been timely filed or requests for extensions have been timely
filed and any such extension has been a permitted automatic extension
or has been granted and (in either case) has not have expired, and all
such filed returns are complete and accurate in all material respects.
All taxes shown on such returns, all taxes required to be shown on
returns for which extensions have been granted and all other taxes
required to be paid by CBES or any of its Subsidiaries have been paid
in full or adequate provision has been made for any such taxes, both
current and deferred, on CBES's balance sheet in accordance with GAAP.
For purposes of this Section 2.3(j) and Section 2.4(i), the term
"taxes" shall include all income, franchise, gross receipts, real and
personal property, real
11
property transfer and gains, wage and employment taxes. As of the date
of this Agreement, to the knowledge of CBES, there is no audit
examination, deficiency assessment, tax investigation or refund
litigation, or any threat of the foregoing, with respect to any taxes
of CBES or any of its Subsidiaries, and, to the knowledge of CBES, no
claim or threat of claim has been made by any authority in a
jurisdiction where CBES or any of its Subsidiaries do not file tax
returns that CBES or any such Subsidiary is subject to taxation in that
jurisdiction. All taxes, interest, additions and penalties due with
respect to completed and settled examinations or concluded litigation
relating to CBES or any of its Subsidiaries have been paid in full or
adequate provision has been made for any such taxes on CBES 's balance
sheet in accordance with GAAP. CBES and its Subsidiaries have not
executed an extension or waiver of any statute of limitations on the
assessment or collection of any material tax due that is currently in
effect. CBES and each of its Subsidiaries has withheld and paid all
taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party, and CBES and each of its
Subsidiaries has timely complied, in all material respects, with all
applicable information reporting requirements under Part III,
Subchapter A of Chapter 61 of the IRC and similar applicable state and
local information reporting requirements. Adequate provision for any
taxes due or to become due for CBES or any of its Subsidiaries for the
period or periods reflected on CBES's most recent financial statements
has been made and is reflected on such CBES financial statements.
Deferred Taxes of CBES and its Subsidiaries have been provided for in
accordance with GAAP. To the knowledge of CBES, there is no item of
deferred taxable income which will become taxable due to the
consummation of the Merger that is reasonably likely to have a Material
Adverse Effect on CBES or its Subsidiaries, other than as disclosed in
CBES's Disclosure Letter.
(k) Agreements.
(i) Except (w) for arrangements made in the ordinary course
of business, (x) as set forth in CBES's Disclosure Letter, (y) as
disclosed in CBES's Reports filed on or prior to the date of this
Agreement or (z) as contemplated by this Agreement, CBES and its
Subsidiaries are not bound by any material contract (as defined in Item
601(b)(10) of Regulation S-K promulgated by the SEC) to be performed
after the date hereof that has not been filed with or incorporated by
reference to CBES's Reports. Except (1) as disclosed in CBES's
Disclosure Letter, (2) as disclosed in CBES's Reports filed on or prior
to the date of this Agreement or (3) as contemplated by this Agreement,
neither CBES nor any of its Subsidiaries is a party to an oral or
written (A) consulting agreement (including data processing and
software programming contracts) not terminable on 60 days' or less
notice, (B) agreement with any present or former director, officer or
employee of CBES or any of its Subsidiaries the benefits of which are
contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving CBES or any of its Subsidiaries
of the nature contemplated by this Agreement, (C) agreement with
respect to any employee or director of CBES or any of its Subsidiaries
providing any term of employment or compensation guarantee extending
for a period longer than 60 days, (D) agreement or plan, including any
stock option plan, phantom stock or stock appreciation rights plan,
restricted stock plan or stock purchase plan, any of the benefits of
which will be increased, or the vesting or payment of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
contemplated by this Agreement or (E) agreement containing covenants
that limit the ability of CBES or any of its
12
Subsidiaries to compete in any line of business or with any person, or
that involve any restriction on the geographic area in which, or method
by which, CBES (including any successor thereof) or any of its
Subsidiaries may carry on its business (other than as may be required
by law or any regulatory agency). To the knowledge of CBES, each of
the agreements and other documents referenced in CBES's Disclosure
Letter with respect to this Section 2.3(k)(i) is a valid, binding and
enforceable obligation of the parties sought to be bound thereby,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability to general principles of equity, whether applied in a
court of law or a court of equity.
(ii) Neither CBES nor any of its Subsidiaries is in default
under (and no event has occurred which, with due notice or lapse of
time or both, would constitute a default under) or is in violation of
any provision of any note, bond, indenture, mortgage, deed of trust,
loan agreement, lease or other agreement to which it is a party or by
which it is bound or to which any of its respective properties or
assets is subject and, to the knowledge of CBES, no other party to any
such agreement (excluding any loan or extension of credit made by CBES
or any of its Subsidiaries) is in default in any respect thereunder.
(iii) CBES and each of its Subsidiaries owns or possesses
valid and binding licenses and other rights to use without payment all
patents, copyrights, trade secrets, trade names, service marks and
trademarks used in its businesses, and neither CBES nor any of its
Subsidiaries has received any notice of conflict with respect thereto
that asserts the right of others. Each of CBES and its Subsidiaries
has performed all the obligations required to be performed by it and
are not in default under any contract, agreement, arrangement or
commitment relating to any of the foregoing.
(iv) CBES's Disclosure Letter contains a summary description
of all leases, commitments, contracts, licenses, maintenance agreements
and other agreements of CBES and its Subsidiaries involving a liability
or obligation of CBES in excess of $10,000 per annum, and a true and
complete list of all letters of credit, guarantees, indemnity
agreements and all commitments to loan or discount or issue a letter of
credit which would aggregate in excess of $10,000 to any person, firm
or corporation.
(l) Labor Matters. CBES and its Subsidiaries are in material
compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and
hours, and are not engaged in any unfair labor practice. Neither CBES
nor any of its Subsidiaries is or has ever been a party to, or is or
has ever been bound by, any collective bargaining agreement, contract
or other agreement or understanding with a labor union or labor
organization with respect to its employees, nor is CBES or any of its
Subsidiaries the subject of any proceeding asserting that it has
committed an unfair labor practice or seeking to compel it or any such
Subsidiary to bargain with any labor organization as to wages and
conditions of employment nor has any such proceeding been threatened,
nor is there any strike, other labor dispute or organizational effort
involving CBES or any of its Subsidiaries pending or threatened.
(m) Employee Benefit Plans. CBES's Disclosure Letter contains a
complete and accurate list of all pension, retirement, stock option,
stock purchase, stock ownership,
13
savings, stock appreciation right, profit sharing, deferred
compensation, consulting, bonus, group insurance, severance and other
benefit plans, funds, contracts, agreements and arrangements,
including, but not limited to, "employee benefit plans," as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), incentive and welfare policies, contracts, plans and
arrangements and all trust agreements related thereto with respect to
any present or former directors, officers or other employees of CBES or
any of its Subsidiaries (hereinafter collectively referred to as the
"CBES Employee Plans"). All of the CBES Employee Plans comply in all
material respects with all applicable requirements of ERISA, the IRC
and other applicable laws; with respect to the CBES Employee Plans, no
event has occurred that would subject CBES or any of its Subsidiaries
to a material liability under ERISA, the IRC or any other applicable
law; there has occurred no "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the IRC) which is likely to
result in the imposition of any material penalties or taxes under
Section 502(i) of ERISA or Section 4975 of the IRC upon CBES or any of
its Subsidiaries; and all required contributions to the CBES Employee
Plans through the date hereof have been made. Neither CBES nor any of
its Subsidiaries has provided, or is required to provide, security to
any CBES pension plan or to any single-employer plan of an ERISA
Affiliate (as defined under Section 4001(b)(1) of ERISA or Section 414
of the IRC) pursuant to Section 401(a)(29) of the IRC. Neither CBES,
its Subsidiaries, nor any ERISA Affiliate has contributed to any
"multiemployer plan," as defined in Section 3(37) of ERISA, on or after
September 26, 1980. Each CBES Employee Plan that is an "employee
pension benefit plan" (as defined in Section 3(2) of ERISA) and which
is intended to be qualified under Section 401(a) of the IRC (a "CBES
Qualified Plan") has received a favorable determination letter from the
Internal Revenue Service ("IRS"), and CBES and its Subsidiaries are not
aware of any circumstances likely to result in revocation of any such
favorable determination letter. There is no pending or threatened
litigation, administrative action or proceeding relating to any CBES
Employee Plan. There has been no announcement or commitment by CBES or
any of its Subsidiaries to amend any CBES Employee Plan, except for
amendments required by applicable law which do not materially increase
the cost of such CBES Employee Plan; and, except as specifically
identified in CBES's Disclosure Letter, CBES and its Subsidiaries do
not have any obligations for post-retirement or post-employment
benefits under any CBES Employee Plan that cannot be amended or
terminated upon 60 days' notice or less without incurring any liability
thereunder, except for coverage required by Part 6 of Title I of ERISA
or Section 4980B of the IRC, or similar state laws, the cost of which
is borne by the insured individuals. The execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby will not result in any payment or series of payments by CBES or
any of its Subsidiaries to any person which is an "excess parachute
payment" (as defined in Section 280G of the IRC). To the best
knowledge of CBES, no breach of a fiduciary duty under ERISA Section
404 or Section 405 has occurred and with respect to which any
outstanding liability to any participant or any material excise tax or
liability exists or will exist as of the Effective Date with respect to
any of the CBES Employee Plans. Each of the CBES Employee Plans which
is a group health plan within the meaning of IRC Section 5000(b)(1) is
in compliance with the continuation of health care coverage
requirements contained in IRC Section 4980B and ERISA Section 601 et
seq. A list of participants or beneficiaries who have elected
continuation coverage in accordance with such laws is provided in
CBES's Disclosure Letter. With respect to each CBES Employee Plan,
CBES will supply to NASB Bank a true and correct copy of (A) the annual
report on the applicable form of the Form 5500 series filed with the
IRS
14
for the three most recent plan years, if required to be filed, (B) such
CBES Employee Plan, including amendments thereto, (C) each trust
agreement, insurance contract or other funding arrangement relating to
such CBES Employee Plan, including amendments thereto, (D) the most
recent summary plan description and summary of material modifications
thereto for such CBES Employee Plan, if the CBES Employee Plan is
subject to Title I of ERISA, (E) the most recent actuarial report or
valuation if such CBES Employee Plan is a CBES pension plan and any
subsequent changes to the actuarial assumptions contained therein, and
(F) the most recent determination letter issued by the IRS if such CBES
Employee Plan is a CBES Qualified Plan. With respect to Community
Bank's ESOP, CBES will supply NASB Bank a true and correct copy of (A)
the latest financial statement of the ESOP including a list of assets,
(B) a schedule of stock purchases by the ESOP, including seller,
valuation and number of shares, (C) a schedule of participant name and
amount, and (E) a schedule of the most recent contribution allocation
including participant name, compensation and share of contribution.
(n) Title to Assets. CBES's Disclosure Letter contains a
complete and accurate list of all real property owned or leased by CBES
or any of its Subsidiaries, including all properties of CBES or any of
its Subsidiaries classified as "Real Estate Owned" or words of similar
import (the "Real Property"). To the knowledge of CBES, none of the
buildings, structures or other improvements located on the Real
Property encroaches upon or over any adjoining parcel or real estate or
any easement or right-of-way. CBES and each of its Subsidiaries have
good and marketable title to their respective properties and assets
(including any intellectual property asset such as any trademark,
service xxxx, trade name or copyright) and property acquired in a
judicial foreclosure proceeding or by way of a deed in lieu of
foreclosure or similar transfer whether real or personal, tangible or
intangible, reflected on the consolidated financial statements of CBES
as of June 30, 2001 or acquired after such date, other than such items
of personal property as have been disposed of in the ordinary course of
business since June 30, 2001, in each case free and clear of any liens,
security interests, encumbrances, mortgages, pledges, restrictions,
charges or rights or interests of others, except pledges to secure
deposits and other liens incurred in the ordinary course of business.
Each lease pursuant to which CBES or any of its Subsidiaries is lessee
or lessor is valid and in full force and effect and neither CBES nor
any of its Subsidiaries, nor any other party to any such lease is in
default or in violation of any provisions of any such lease. All
material tangible properties of CBES and each of its Subsidiaries are
in a good state of maintenance and repair, conform with all applicable
ordinances, regulations and zoning laws and are considered by CBES to
be adequate for the current business of CBES and its Subsidiaries and
improvements on real property owned or leased by CBES are located
wholly within the boundaries of the property owned or leased by CBES or
its Subsidiaries. There are no unpaid charges, debts, liabilities,
claims or obligations arising from the construction, ownership or
operation of the banking premises of Community Bank which would give
rise to any mechanics' liens against any such real estate or any part
thereof, or for which CBES or Community Bank would be responsible,
except for (i) liens imposed by law and incurred in the ordinary course
of business for obligations not yet due to carriers, warehousemen,
laborers, materialmen and the like, but only to the extent the
obligation giving rise to the lien is included as a liability on CBES's
books and records and (ii) such minor encumbrances, if any, as do not
materially detract from the value of, or materially interfere with the
present use of, such properties, and which minor encumbrances do not
render the title to such property unmarketable.
15
(o) Compliance with Laws. CBES and each of its Subsidiaries has
all permits, licenses, certificates of authority, orders and approvals
of, and has made all filings, applications and registrations with, all
federal, state, local and foreign governmental or regulatory bodies
(each, a "Governmental Entity") that are required in order to permit it
to carry on its business as it is presently conducted; all such
permits, licenses, certificates of authority, orders and approvals are
in full force and effect, and, to the knowledge of CBES, no suspension
or cancellation of any of them is threatened. Since the date of its
incorporation, the corporate affairs of CBES have not been conducted in
violation in any material respect of any law, ordinance, regulation,
order, writ, rule, decree or approval of any Governmental Entity.
Neither CBES nor any of its Subsidiaries is in material violation of,
is, to the knowledge of CBES, under investigation with respect to any
material violation of, or has been given notice or been charged with
any material violation of, any law, ordinance, regulation, order, writ,
rule, decree or condition to approval of any Governmental Entity.
(p) Fees. Other than financial advisory services performed for
CBES by Xxxxx Financial LLC, neither CBES nor any of its Subsidiaries,
nor any of their respective officers, directors, employees or agents,
has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finder's fees,
and no broker or finder has acted directly or indirectly for CBES or
any of its Subsidiaries in connection with this Agreement or the
transactions contemplated hereby. CBES has provided NASB Bank with a
true and correct copy of the contract between CBES and Xxxxx Financial
LLC.
(q) Environmental Matters. There is no suit, claim, action,
demand, executive or administrative order, directive, investigation or
proceeding pending or, to the knowledge of CBES, threatened before any
court, Governmental Entity or board or other forum against CBES or any
of its Subsidiaries for alleged noncompliance (including by any
predecessor) with, or liability under, any Environmental Law (as
defined below) or relating to the presence of or release into the
environment of any Hazardous Material (as defined below), whether or
not occurring at or on a site owned, leased or operated by it or any of
its Subsidiaries. To CBES's knowledge, the properties currently owned
or operated by CBES or any of its Subsidiaries (including, without
limitation, soil, groundwater or surface water on, under or adjacent to
the properties, and buildings thereon) are not contaminated with and do
not otherwise contain any Hazardous Material other than as permitted
under applicable Environmental Law. Neither CBES nor any of its
Subsidiaries has received any notice, demand letter, executive or
administrative order, directive, request for information or other
communication (written or oral) from any federal, state, local or
foreign Governmental Entity or any third party indicating that it may
be in violation of, or liable under, any Environmental Law. To CBES's
knowledge, there are no underground storage tanks on, in or under any
properties currently owned or operated by CBES or any of its
Subsidiaries and no underground storage tanks have been closed or
removed from any properties currently owned or operated by CBES or any
of its Subsidiaries. To CBES's knowledge, during the period of CBES's
or any of its Subsidiaries' ownership or operation of any of their
respective current properties, there has been no contamination by or
release of Hazardous Materials in, on, under or affecting such
properties. To CBES's knowledge, prior to the period of CBES's or any
of its Subsidiaries' ownership or operation of any of their respective
current properties, there was no contamination by or release of
Hazardous Material in, on, under or affecting such properties.
16
"Environmental Law" means (i) any federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, directive, executive or
administrative order, judgment, decree, injunction, legal requirement
or agreement with any Governmental Entity relating to (A) the
protection, preservation or restoration of the environment (which
includes, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, structures, soil, surface land,
subsurface land, plant and animal life or any other natural resource),
or to human health or safety as it relates to Hazardous Materials, or
(B) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
release or disposal of, Hazardous Materials, in each case as amended
and as now in effect. The term Environmental Law includes all federal,
state and local laws, rules, regulations or requirements relating to
the protection of the environment or health and safety, including,
without limitation, (i) the Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act of 1986, the Federal Water Pollution
Control Act of 1972, the Federal Clean Air Act, the Federal Clean Water
Act, the Federal Resource Conservation and Recovery Act of 1976
(including, but not limited to, the Hazardous and Solid Waste
Amendments thereto and Subtitle I relating to underground storage
tanks), the Federal Solid Waste Disposal and the Federal Toxic
Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act, the Federal Occupational Safety and Health Act of 1970
as it relates to Hazardous Materials, the Federal Hazardous Substances
Transportation Act, the Emergency Planning and Community Right-To-Know
Act, the Safe Drinking Water Act, the Endangered Species Act, the
National Environmental Policy Act, the Rivers and Harbors Appropriation
Act or any so-called "Superfund" or "Superlien" law, each as amended
and as now or hereafter in effect, and (ii) any common law or equitable
doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability)
that may impose liability or obligations for injuries or damages due
to, or threatened as a result of, the presence of or exposure to any
Hazardous Material.
"Hazardous Material" means any substance (whether solid, liquid or
gas) which is or could be detrimental to human health or safety or to
the environment, currently or hereafter listed, defined, designated or
classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, under any Environmental Law, whether by type or by quantity,
including any substance containing any such substance as a component.
Hazardous Material includes, without limitation, any toxic waste,
pollutant, contaminant, hazardous substance, toxic substance, hazardous
waste, special waste, industrial substance, oil or petroleum, or any
derivative or by-product thereof, radon, radioactive material,
asbestos, asbestos-containing material, urea formaldehyde foam
insulation, lead and polychlorinated biphenyl.
(r) Loan Portfolio; Allowance; Asset Quality.
(i) With respect to each loan (including advances made
pursuant to letters of credit) owned by CBES or its Subsidiaries in
whole or in part, to CBES's knowledge (A) the note and the related
security documents are each legal, valid and binding obligations of the
maker or obligor thereof, enforceable against such maker or obligor in
accordance with their terms, (B) the note and the related security
documents, copies of which are included in the loan files, are true and
correct copies of the documents they purport to be and have not been
suspended, amended, modified, canceled or otherwise changed except as
otherwise disclosed by
17
documents in the applicable loan file and (C) CBES or one of its
Subsidiaries is the sole holder of legal and beneficial title to each
loan reflected in the consolidated financial statements of CBES except
as otherwise disclosed in the applicable loan file or on the books and
records of CBES and its Subsidiaries. To the knowledge of CBES (x) all
notes, evidences of indebtedness and agreements for the payment of
money and all related documents, instruments, papers and other
agreements for the payment of money and all related documents,
instruments, papers and other security agreements of Community Bank,
applicable thereto, are bona fide, are genuine as to signatures of all
makers, endorsers, and guarantors, and were given for valid
consideration; (y) all collateral securing such indebtedness existed at
the disbursement of the funds which created the indebtedness; and (z)
except as may be disclosed in the books and records of Community Bank
relating to its loans, Community Bank has made no affirmative or
negative oral or written commitments which would materially impair the
enforcement of any of Community Bank's loans.
(ii) The allowance for loan losses reflected in CBES's
statement of financial condition at June 30, 2002 (unaudited) was, and
the allowance for loan losses shown on the balance sheets in CBES's
Reports for periods ending after June 30, 2002 (unaudited) will be, in
the opinion of management, adequate to provide for losses inherent in
CBES's loan portfolio.
(iii) CBES's Disclosure Letter sets forth a true and complete
listing, as of June 30, 2002, of (A) all loans, leases, advances,
credit enhancements, guarantees, other extensions of credit,
commitments and interest-bearing assets of CBES and its Subsidiaries
(collectively, "Loans") that have been classified (whether regulatory
or internal) as "Special Mention," "Substandard," "Doubtful," "Loss" or
words of similar import, listed by category, including the amounts
thereof; (B) Loans (1) that are contractually past due 90 days or more
in the payment of principal and/or interest, (2) that are on a non-
accrual status, (3) where the interest rate terms have been reduced
and/or the maturity dates have been extended subsequent to the
agreement under which the Loan was originally created due to concerns
regarding the borrower's ability to pay in accordance with such initial
terms, or (4) where a specific reserve allocation exists in connection
therewith, listed by category, including the amounts thereof; and (C)
Loans with any director, executive officer or five percent or greater
stockholder of CBES or any of its Subsidiaries or any person,
corporation or enterprise controlling, controlled by or under common
control with any of the foregoing, including the amounts thereof. To
the knowledge of CBES, neither CBES nor any of its Subsidiaries is a
party to any Loan that is in violation of any law, regulation or rule
of any Governmental Entity. Any asset of CBES or any of its
Subsidiaries that is classified as "Real Estate Owned" or words of
similar import that is included in any non-performing assets of CBES or
any of its Subsidiaries is listed in CBES's Disclosure Letter and is
carried net of reserves at the lower of cost or fair value, less
estimated selling costs, based on current independent appraisals or
evaluations or current management appraisals or evaluations; provided,
however, that "current" shall mean within the past 12 months.
(s) Anti-takeover Provisions Inapplicable. CBES and its
Subsidiaries have taken all actions required to exempt CBES, NASB
Holding, NASB Bank, Acquisition Sub, the Agreement and the Merger from
any provisions of an anti-takeover nature contained in their
organizational documents, and the provisions of any federal or state
"anti-takeover," "fair price," "moratorium," "control share
acquisition" or similar laws or regulations.
18
(t) Charter Provisions. CBES and its Subsidiaries have taken all
action so that the entering into of this Agreement and the consummation
of the Merger and the other transactions contemplated by this Agreement
do not and will not result in the grant of any rights to any person
under the certificate of incorporation, bylaws, or other governing
instruments of CBES or any of its Subsidiaries or restrict or impair
the ability of NASB Bank or any of its Subsidiaries or Affiliates to
vote, or otherwise to exercise the rights of a stockholder with respect
to, shares of CBES or any of its Subsidiaries that may be directly or
indirectly acquired or controlled by it.
(u) Material Interests of Certain Persons. No officer or
director or 5% stockholder of CBES, or any "associate" (as such term is
defined in Rule 12b-2 promulgated under the Exchange Act) of any such
officer or director or stockholder, has any material interest in any
material contract or property (real or personal), tangible or
intangible, used in or pertaining to the business of CBES or any of its
Subsidiaries. CBES's Disclosure Letter describes all transactions in
which any current officer, or director, or Affiliate or Subsidiary
thereof, directly or indirectly, has borrowed from, loaned to, supplied
or provided goods or services to, purchased assets from, sold assets
to, or done business in any manner with CBES or Community Bank or is a
party to any agreement with CBES or Community Bank, and all
transactions known to management in which any current 5% stockholder or
employee of CBES or Community Bank, or any Affiliate or Subsidiary
thereof, directly of indirectly, has borrowed from, loaned to, supplied
or provided goods or services to, purchased assets from, sold assets
to, or done business in any manner with CBES or Community Bank or is a
party to any agreement with CBES or Community Bank.
(v) Insurance. CBES's Disclosure Letter contains a complete list
of all insurance policies of CBES and its Subsidiaries presently in
effect. In the opinion of management, CBES and its Subsidiaries are
presently insured for amounts deemed reasonable by management against
such risks as companies engaged in a similar business would, in
accordance with good business practice, customarily be insured. All of
the insurance policies and bonds maintained by CBES and its
Subsidiaries are in full force and effect, CBES and its Subsidiaries
are not in default thereunder and all material claims thereunder have
been filed in due and timely fashion. CBES and its Subsidiaries have
received no notice from any insurance carrier that (i) any insurance
will be canceled or that coverage thereunder will be reduced or
eliminated, or (ii) premium costs with respect to any policies of
insurance will be substantially increased.
(w) Investment Securities; Derivatives.
(i) Except for investments in Federal Home Loan Bank ("FHLB")
Stock, pledges to secure FHLB borrowings, pledges to secure deposits
and reverse repurchase agreements entered into in arms-length
transactions pursuant to normal commercial terms and conditions and
entered into in the ordinary course of business, and restrictions that
exist for securities to be classified as "held to maturity," none of
the investments held by CBES or any of its Subsidiaries as of the date
of this Agreement is, or will be at Closing, subject to any restriction
(contractual or statutory) that would materially impair the ability of
the entity holding such investment freely to dispose of such investment
at any time.
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(ii) Except (x) as set forth in CBES's Disclosure Letter, (y)
as disclosed in CBES's Reports filed on or prior to the date of this
Agreement, or (z) for adjustable-rate mortgage loans and adjustable-
rate advances, neither CBES nor any of its Subsidiaries is a party to
or has agreed to enter into an exchange-traded or over-the-counter
equity, interest rate, foreign exchange or other swap, forward, future,
option, cap, floor or collar or any other contract that is a derivative
contract (including various combinations thereof) or owns securities
that (a) are referred to generically as "structured notes," "high risk
mortgage derivatives," "capped floating rate notes" or "capped floating
rate mortgage derivatives" or (b) are likely to have changes in value
as a result of interest or exchange rate changes that significantly
exceed normal changes in value attributable to interest or exchange
rate changes.
(x) Credit Card Issuing Agreement. Neither CBES nor Community
bank has any credit card agreement which would prevent NASB Bank from
soliciting Community Bank's customers to accept a credit card issued by
or on behalf of NASB Bank or an Affiliate of NASB Bank.
(y) Indemnification. Except (i) as provided in the certificate
of incorporation or bylaws of CBES and the similar governing documents
of its Subsidiaries, or (ii) as set forth in CBES's Disclosure Letter,
neither CBES nor any Subsidiary is a party to any indemnification
agreement with any of its present or former directors, officers,
employees, agents or other persons who serve or served in any other
capacity with any other enterprise at the request of CBES and, to the
best knowledge of CBES, there are no claims for which any such person
would be entitled to indemnification under the articles of
incorporation or bylaws of CBES or the similar governing documents of
any of its Subsidiaries, under any applicable law or regulation or
under any indemnification agreement.
(z) Books and Records. The books and records of CBES and its
Subsidiaries on a consolidated basis have been, and are being,
maintained in accordance with applicable legal and accounting
requirements and reflect in all material respects the substance of
events and transactions that should be included therein.
(aa) Corporate Documents. Complete and correct copies of the
certificate of incorporation, bylaws and similar governing documents of
CBES and each of CBES's Subsidiaries, as in effect as of the date of
this Agreement, have previously been delivered to NASB Bank. The
minute books of CBES and each of CBES's Subsidiaries constitute a
complete and correct record of all actions taken by their respective
boards of directors (and each committee thereof) and their
stockholders.
(bb) Community Reinvestment Act Compliance. Community Bank is in
material compliance with the applicable provisions of the Community
Reinvestment Act, as amended ("CRA"), and the regulations promulgated
thereunder, and, as of its most recent CRA examination, Community Bank
has a CRA rating of "Satisfactory" or better. To CBES's knowledge,
there is no fact or circumstance or set of facts or circumstances that
would cause Community Bank to fail to comply with such provisions or
cause the CRA rating of Community Bank to fall below "Satisfactory."
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(cc) Undisclosed Liabilities. As of the date hereof, CBES and
its Subsidiaries have not incurred any debt, liability or obligation of
any nature whatsoever (whether accrued, contingent, absolute or
otherwise and whether due or to become due) except for (i) liabilities
reflected on or reserved against in the consolidated financial
statements of CBES as of Xxxxx 00, 0000, (xx) liabilities incurred
since June 30, 2002 in the ordinary course of business consistent with
past practice that, either alone or when combined with all similar
liabilities, have not had, and would not reasonably be expected to
have, a Material Adverse Effect on CBES and its Subsidiaries, taken as
a whole, and (iii) liabilities incurred for legal, accounting,
financial advising fees and out-of-pocket expenses in connection with a
proposed sale or merger of CBES.
Section 2.4. Representations and Warranties of NASB Holding and
Acquisition Sub. Subject to Sections 2.1 and 2.2, NASB Holding and
Acquisition Sub represent and warrant to CBES that:
(a) Organization.
(i) NASB Holding is a corporation duly organized, validly
existing and in good standing under the laws of the State of Missouri
and is registered as a savings and loan holding company under the HOLA.
NASB Bank is a stock savings association duly organized, validly
existing and in good standing under the laws of the United States of
America and is a wholly-owned Subsidiary of NASB Holding. Acquisition
Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Missouri. Each Subsidiary of
NASB Holding is a corporation, limited liability company or partnership
duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation or organization. Each of NASB
Holding and its Subsidiaries has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted.
(ii) NASB Holding, NASB Bank, Acquisition Sub and each of
their Subsidiaries have the requisite corporate power and authority and
are duly qualified to do business and are in good standing in each
jurisdiction in which the nature of their business or the ownership or
leasing of their properties makes such qualification necessary.
(b) Authority. NASB Holding and Acquisition Sub have all
requisite corporate power and authority to enter into this Agreement
and, subject to approval of this Agreement by the requisite vote of the
sole shareholder of Acquisition Sub and the receipt of all required
regulatory or governmental approvals, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and,
subject to the approval of this Agreement by Acquisition Sub's sole
shareholder, the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate actions on the
part of NASB Holding, and Acquisition Sub. This Agreement has been
duly and validly executed and delivered by NASB Holding and Acquisition
Sub and constitutes a valid and binding obligation of NASB Holding and
Acquisition Sub, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to
general principles of equity, whether applied in a court of law or a
court of equity.
21
(c) Shareholder Approval. No approval of this Agreement by the
shareholders of NASB Holding is required for the consummation of the
Merger and the related transactions contemplated hereby. The
affirmative vote of the sole shareholder of Acquisition Sub is the only
vote of the sole shareholder of Acquisition Sub required for approval
of this Agreement and the consummation of the Merger and the related
transactions contemplated hereby.
(d) No Violations; Consents. The execution, delivery and
performance of this Agreement by NASB Holding and Acquisition Sub do
not, and the consummation of the transactions contemplated hereby will
not, constitute (i) assuming receipt of all Requisite Regulatory
Approvals, a breach or violation of, or a default under, any law, rule
or regulation or any judgment, decree, order, governmental permit or
license to which NASB Holding, Acquisition Sub or any of their
respective Subsidiaries (or any of their respective properties) is
subject, (ii) a breach or violation of, or a default under, the
articles of incorporation or bylaws of NASB Holding or Acquisition Sub
or the similar organizational documents of any of their respective
Subsidiaries or (iii) a breach or violation of, or a default under (or
an event which, with due notice or lapse of time or both, would
constitute a default under), or result in the termination of,
accelerate the performance required by, or result in the creation of
any lien, pledge, security interest, charge or other encumbrance upon
any of the properties or assets of NASB Holding or Acquisition Sub or
any of their respective Subsidiaries under, any of the terms,
conditions or provisions of any note, bond, indenture, deed of trust,
loan agreement or other agreement, instrument or obligation to which
NASB Holding or Acquisition Sub or any of their respective Subsidiaries
is a party, or to which any of their respective properties or assets
may be subject. The consummation by NASB Holding and Acquisition Sub
of the transactions contemplated hereby will not require any approval,
consent or waiver under any such law, rule, regulation, judgment,
decree, order, governmental permit or license or the approval, consent
or waiver of any other party to any such agreement, or instrument,
other than (w) the approval of NASB Holding as the sole shareholder of
Acquisition Sub, (x) the approval of the OTS under the HOLA, (the
"Requisite Regulatory Approvals"), and (y) such approvals, consents or
waivers as are required under the federal and state securities or "blue
sky" laws in connection with the transactions contemplated by this
Agreement. As of the date hereof, the executive officers of NASB
Holding and Acquisition Sub know of no reason pertaining to NASB
Holding or Acquisition Sub why any of the approvals referred to in this
Section 2.4(d) should not be obtained without undue delay or the
imposition of any material condition or restriction described in the
last sentence of Section 5.1(b).
(e) Reports and Financial Statements.
(i) NASB Holding and NASB Bank has timely filed all material
reports and financial statements, together, with any amendments
required to be made with respect thereto, that they were required to
file with (a) the FDIC and (b) the OTS (collectively, the "NASB's
Reports") and, to NASB Holding's knowledge, NASB Holding and NASB Bank
have paid all taxes and assignments due and payable in connection
therewith. As of their respective dates, none of NASB's Reports
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they
were made, not misleading.
22
(ii) Each of the financial statements of NASB Bank included
in NASB's Reports has been prepared in all material respects in
accordance with GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the
case of the unaudited financial statements, as permitted by appropriate
regulatory authorities). Each of the consolidated statements of
condition contained or incorporated by reference in NASB's Reports
(including in each case any related notes and schedules) fairly
presented (A) the financial position of the entity or entities to which
it relates as of its date and (B) the results of operations,
shareholders' equity and cash flows, as the case may be, of the entity
or entities to which it relates for the periods set forth therein
(subject in the case of unaudited interim statements, to normal year-
end adjustments that are not material in amount or effect), in each
case in accordance with GAAP, except as may be noted therein.
(f) Absence of Certain Changes or Events. Except as disclosed in
NASB's Reports filed on or prior to the date of this Agreement, no
event has occurred or circumstances arisen which has had or might
reasonably be expected to have a Material Adverse Effect with respect
to NASB Holding.
(g) Absence of Claims. No litigation, proceeding, controversy,
claim, action or suit or other legal, administrative or arbitration
proceeding before any court, Governmental Entities or arbitrator is
pending or has been threatened against NASB Holding, NASB Bank,
Acquisition Sub or any of their respective Subsidiaries that would
reasonably be expected to prevent or adversely affect or which seeks to
prohibit the consummation of the transactions contemplated by this
Agreement or which would have a Material Adverse Effect with respect to
NASB Holding, NASB Bank, Acquisition Sub or their respective
Subsidiaries taken as a whole.
(h) Absence of Regulatory Actions. Neither NASB Holding, NASB
Bank, Acquisition Sub nor any of their respective Subsidiaries is a
party to any cease and desist order, written agreement or memorandum of
understanding with, or any commitment letter or similar written
undertaking to, or is subject to any action, proceeding, order or
directive by, or is a recipient of any extraordinary supervisory letter
from any Government Regulatory Agency, or has adopted any board
resolutions at the request of any Government Regulatory Agency, nor has
it been advised by any Governmental Regulator that it is contemplating
issuing or requesting (or is considering the appropriateness of issuing
or requesting) any such action, proceeding, order, directive, written
agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter, board resolutions or similar written
undertaking.
(i) Compliance with Laws. NASB Holding, NASB Bank, Acquisition
Sub and their respective Subsidiaries each have all permits, licenses,
certificates of authority, orders and approvals of, and have made all
filings, applications and registrations with, all Governmental Entities
that are required in order to permit them to carry on their business as
it is presently conducted; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect, and to
the best knowledge of NASB Holding, NASB Bank and Acquisition Sub, no
suspension or cancellation of any of them is threatened. Since the
date of its incorporation, the corporate affairs of NASB Holding, NASB
Bank and Acquisition Sub have not been conducted in violation in any
material respect of any law, ordinance, regulation, order, writ, rule,
decree or approval of any Governmental Entity. Neither NASB Holding,
NASB Bank, Acquisition Sub nor any of their respective Subsidiaries is
in material violation of, is, to the
23
knowledge of NASB Holding or Acquisition Sub, under investigation with
respect to any material violation of, or has been given notice or been
charged with any material violation of, any law, ordinance, regulation,
order, writ, rule, decree or condition to approval of any Governmental
Entity.
(j) Community Reinvestment Act Compliance. NASB Bank, and each
Subsidiary of NASB Holding that is an insured depository institution,
is in material compliance with the applicable provisions of CRA, and
the regulations promulgated thereunder, and, as of its most recent CRA
examination, NASB Bank, and each Subsidiary of NASB Holding that is an
insured depository institution, has a CRA rating of "Satisfactory" or
better. To the knowledge of NASB Holding, there is no fact or
circumstance or set of facts or circumstances that would cause NASB
Bank, or any Subsidiary of NASB Holding that is an insured depository
institution, to fail to comply with such provisions or cause the CRA
rating of NASB Bank, or any Subsidiary of NASB Holding that is an
insured depository institution to fall below "Satisfactory." Neither
NASB Holding, NASB Bank nor Acquisition Sub has received notice of or
has knowledge of any planned or threatened objection by any community
group to the transactions contemplated hereby.
(k) Fees. Neither NASB Holding, NASB Bank, Acquisition Sub nor
any of their respective Subsidiaries, nor any of their respective
officers, directors, employees or agents, has employed any broker or
finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions or finder's fees, and no broker or finder
has acted directly or indirectly for NASB Holding, NASB Bank or any of
their respective Subsidiaries in connection with this Agreement or the
transactions contemplated hereby.
(l) Availability of Funds. No later than the Closing Date, NASB
Holding will have available sufficient cash or other liquid assets or
financing pursuant to binding arrangements or commitments which may be
used to fund this transaction. NASB Holding's ability to consummate
the transactions contemplated by this Agreement is not contingent on
raising any equity capital, obtaining specific financing thereof,
consent of any lender or any other matter.
(m) Pro Forma Capital Requirements. NASB Bank is, and on a pro
forma basis giving effect for the transactions contemplated by this
Agreement and any financing/capital injection contemplated by NASB Bank
will be (i) at least "Adequately Capitalized," as defined for purposes
of the FDIA and (ii) in compliance with all capital requirements,
standards and ratios required by each state or federal regulator with
jurisdiction over NASB Bank, including without limitation, any such
higher requirement, standard or ratio as shall apply to institutions
engaging in the acquisition of insured institution deposits, assets or
branches, and no such regulator is likely to, or has indicated that it
will, condition any of the regulatory approvals upon an additional
increase in NASB Bank's capital or compliance with any capital
requirement.
(n) Anti-Trust. NASB Holding has no knowledge that it will be
required to divest deposit liabilities, branches, loans or any business
or line of business as a condition to the receipt of any of the
Regulatory Approvals.
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ARTICLE III
ACTIONS AND CONDUCT PENDING THE MERGER
Section 3.1. Regulatory Application. Within thirty (30) days of
the date of this Agreement, NASB Holding or Acquisition Sub will file
applications with OTS to merge Acquisition Sub with and into CBES.
Section 3.2. Conduct of CBES's Business Prior to the Effective
Date. Except as expressly provided in this Agreement, during the
period from the date of this Agreement to the Effective Date, CBES
shall, and shall cause its Subsidiaries to, use all reasonable efforts
to (i) conduct its business in the regular, ordinary and usual course
consistent with past practice, (ii) maintain and preserve intact its
business organization, properties, leases, employees and advantageous
business relationships and retain the services of its officers and key
employees, (iii) take no action which would adversely affect or delay
the ability of CBES or NASB Holding, NASB Bank or Acquisition Sub to
perform their respective covenants and agreements on a timely basis
under this Agreement, (iv) take no action which would adversely affect
or delay the ability of CBES, Community Bank, NASB Holding or
Acquisition Sub to obtain any necessary approvals, consents or waivers
of any governmental authority required for the transactions
contemplated hereby or which would reasonably be expected to result in
any such approvals, consents or waivers containing any material
condition or restriction, (v) take no action that results in or is
reasonably likely to have a Material Adverse Effect on CBES or
Community Bank, (vi) maintain insurance in such amounts and against
such risks and losses as are customary for companies engaged in a
similar business, (vii) confer on a regular and frequent basis with one
or more representatives of NASB Holding to discuss, subject to
applicable law, material operational matters and the general status of
the ongoing operations of CBES and its Subsidiaries, (viii) promptly
notify NASB Holding of any material change in its business, properties,
assets, condition (financial or otherwise) or results of operations,
and (ix) promptly provide NASB Holding with copies of all filings made
by CBES or any of its Subsidiaries with any state or federal court,
administrative agency, commission or other Governmental Entity in
connection with this Agreement and the transactions contemplated
hereby. Without limiting the foregoing covenants, unless the prior
written consent of NASB Holding shall have been obtained, and except as
otherwise expressly contemplated in this Agreement, CBES shall, and
shall cause each of its Subsidiaries to:
(a) Board Observers. Permit, at any time after the execution of
this Agreement, two representatives of NASB Bank to attend CBES's and
Community Bank's board of directors' meetings and all Board committee
meetings as observers only and shall give NASB Bank notice of all such
meetings concurrently with the giving of notice to other directors and
committee members; provided, however, that such observers will not be
entitled to attend the portions of any meetings that relate to any
deliberation of the transactions contemplated by this Agreement or
meetings with attorneys on other matters who recommend that such
observers not be present in order to preserve the attorney-client
privilege.
(b) Loan Policies. Reserve against, place on non-accrual, and
charge off loans and other assets as losses are recognized or future
losses become apparent, in accordance with Community Bank's past
practices, which Community Bank warrants and represents are in
25
compliance in all material respects with all applicable laws and
regulations and have not been criticized in any past examinations or
audits, while maintaining a loan loss reserve of at least .75% of total
loans outstanding;
(c) Tax Returns. Prepare, execute and file, on or before the due
date thereof if prior to the Effective Date, all federal, state and
local tax returns required of CBES or Community Bank with respect to
its operations for any period ending before the Effective Date and will
pay the appropriate tax. In addition, prior to the Effective Date,
CBES shall file, and shall cause each of its Subsidiaries to file, all
amended federal, state and local tax returns necessary to carry back
any tax losses incurred by CBES or any of its Subsidiaries to the
extent permitted by law for the purpose of obtaining all available tax
refunds.
(d) Customer Notice. Assist NASB Holding in drafting and
preparing for mailing a notice, the form and content of which shall be
established by mutual agreement of NASB Holding and CBES, to all
Community Bank's deposit and loan customers, notifying them of the sale
of CBES to NASB Holding. The notice shall be mailed by NASB Holding
after all Requisite Regulatory Approvals and Stockholders Approvals
have been obtained but no later than thirtieth day prior to the date
agreed upon by NASB Holding and CBES pursuant to Section 6.1 for the
data processing conversion.
(e) Copies of Reports. Furnish to NASB Holding, until the
Effective Date, true and complete copies of the following information
within five days after preparation or receipt:
(i) Monthly financial statements prepared with respect to
CBES and Community Bank;
(ii) Daily statements of Community Bank beginning on the date
of the final regulatory approval of the transactions contemplated by
this Agreement and continuing through the Effective Date;
(iii) Community Bank's Reports of Condition and Income to
regulatory authorities at the close of business of each calendar
quarter;
(iv) Community Bank's internal watch and problem loan
reports;
(v) Any and all board reports prepared for the use of
Community Bank's board of directors or any board committee (other than
those portions of any report which pertain to this Agreement or is
privileged information);
(vi) Any reports submitted to Community Bank by independent
certified public accountants in connection with an examination of
Community Bank's financial statements;
(vii) Notice of all actions, suits, and proceedings before
any court or Governmental Entity, commission, board, bureau, agency, or
instrumentality affecting CBES or Community Bank;
26
(viii) Any notices or communications received from any
savings and loan regulatory body with respect to the affairs or
operations of CBES or Community Bank; and
(ix) Any additional information reasonably requested by NASB
Holding for completion of any applications for regulatory approval of
the transactions contemplated by this Agreement.
(f) Liquidation Account. Cause Community Bank to establish and
maintain on its books a true and complete record of those deposit
accounts, including names of depositors, which would have liquidation
rights by reason of the conversion of Community Bank from mutual to
stock form of organization.
(g) Adjusted Stockholders' Equity. Take all efforts necessary to
reduce expenses and maintain the Stockholders' Equity of CBES,
consolidated with all of its Subsidiaries, at the close of business on
the day prior to the Effective Date, at an amount equal to or greater
than $13,900,000 after taking into account the adjustments described
below ("Adjusted Stockholders' Equity"). If the Adjusted Stockholders'
Equity is less than $13,900,000 but greater than or equal to
$13,500,000, the Merger Consideration shall be adjusted as provided for
in Section 1.2(a) hereof. If the Adjusted Stockholders' Equity is less
than $13,500,000, NASB Holding shall have the right to either (i)
terminate the Agreement pursuant to Section 7.1(g) hereof or (ii)
consummate the Merger and provide the holders of CBES Common Stock with
a cash payment of $17.05 per share. Such Adjusted Stockholders' Equity
shall be determined according to GAAP as it is applied to savings and
loan associations and savings and loan association holding companies
and in a manner consistent with CBES's past practices with the
following adjustments:
(i) All professional fees related to the Merger, including
but not limited to legal fees, investment banking fees and accounting
fees, shall not be treated as a reduction to Stockholders' Equity;
(ii) All severance payments from CBES or Community Bank to
employees terminated prior to the Effective Date, including but not
limited to cash severance payments pursuant to the Community Bank
Severance Plan, reimbursement for Welfare Benefits (as defined in the
Community Bank Severance Plan), payment of bonuses and Welfare Benefits
pursuant to the terms of Employee Bonus Agreements entered into by
Community Bank and certain key officers of Community Bank, payment of
accrued paid time off and extended leave as required by the Community
Bank Employee Manual dated January 2001, shall not be treated as a
reduction to Stockholders' Equity;
(iii) All market value adjustments required by Statement of
Financial Accounting Standards Number 115 after June 30, 2002, shall
not be treated as an adjustment to Stockholders' Equity;
(iv) If (y) Community Bank's ALLL exceeds the amount required
by applicable statutes and regulations and (z) any of Community Bank's
loan(s) or other real estate owned require subsequent write-
27
down(s), Community Bank shall be allowed to treat such write-down(s) as
a reduction of Community Bank's ALLL instead of a reduction to income
or Stockholders' Equity, to the extent allowed by GAAP and the OTS.
(v) All reductions in the value of loans of Community Bank
requested by NASB Holding shall not be treated as a reduction to
Stockholder's Equity.
(vi) The value of all assets and leasehold improvements of
the Liberty, Missouri branch of Community Bank written off of the books
of Community Bank and all expenses related to the closing of the
Liberty, Missouri branch of Community Bank shall not be treated as a
reduction to Stockholders' Equity.
Section 3.3. Forbearance by CBES. Without limiting the covenants
set forth in Section 3.2 hereof, except as otherwise provided in this
Agreement and except to the extent required by law or regulation or any
Governmental Entity, during the period from the date of this Agreement
to the Effective Date, CBES shall not, and shall not permit any of its
Subsidiaries to, without the prior consent of NASB Holding:
(a) unless required by applicable law or regulation or regulatory
directive, change any provisions of the articles of incorporation or
bylaws of CBES or the similar governing documents of its Subsidiaries;
(b) authorize, issue, deliver or sell any shares of its capital
stock or any securities or obligations convertible or exercisable for
any shares of its capital stock or change the terms of any of its
outstanding stock options or warrants or issue, grant or sell any
option, warrant, call, commitment, stock appreciation right, right to
purchase or agreement of any character relating to the authorized or
issued capital stock of CBES except pursuant to the exercise of stock
options or warrants outstanding as of the date of this Agreement, or
split, combine, reclassify or adjust any shares of its capital stock or
otherwise change its capitalization;
(c) make, declare or pay any cash or stock dividend or make any
other distribution on, or directly or indirectly redeem, purchase or
otherwise acquire, any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of its
capital stock;
(d) other than for fair value in the ordinary course of business
consistent with past practice, (i) acquire or sell, transfer, assign,
mortgage, encumber or otherwise dispose of any of its material
properties, leases, assets or other rights or agreements to any
individual, corporation or other entity other than a direct or indirect
wholly owned Subsidiary of CBES or (ii) cancel, release or assign any
indebtedness of any such individual, corporation or other entity or
(iii) permit Community Bank to waive any material right or cancel any
material contract, lease, license, obligation or commitment, or permit
any lien, encumbrance or charge of any material effect to attach to any
of CBES's or Community Bank's assets;
(e) except to the extent required by law or as specifically
provided for in Section 4.11(i) or elsewhere herein, increase in any
manner the compensation or fringe benefits of any of its employees or
directors; pay bonuses to its employees or directors; pay any pension
or retirement allowance not required by any existing plan or agreement
to any employees or
28
directors, or become a party to, amend or commit itself to fund or
otherwise establish any trust or account related to any CBES Employee
Plan (as defined in Section 2.3(m)) with or for the benefit of any
employee or director; voluntarily accelerate the vesting of any stock
options or other compensation or benefit; grant or award any stock
options; make any discretionary contribution to any CBES Employee Plan;
hire any employee with an annual total compensation payment in excess
of $30,000; or enter into any employment contract or other agreement or
arrangement with any director, officer or other employee;
(f) except as contemplated by Section 4.2, change its method of
accounting as in effect at June 30, 2001, except as required by changes
in GAAP as concurred in by CBES's independent auditors;
(g) commence any litigation other than in the ordinary course of
business, settle any claim, action or proceeding involving any
liability of CBES or any of its Subsidiaries for money damages in
excess of $25,000 or impose material restrictions upon the operations
of CBES or any of its Subsidiaries;
(h) acquire or agree to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to
acquire any assets, in each case which are material, individually or in
the aggregate, to CBES, except in satisfaction of debts previously
contracted or by way of foreclosure on collateral security for any such
debts;
(i) establish or commit to the establishment of any new branch or
other office facilities or file any application to relocate or
terminate the operation of any banking office, provided, however, that
if prior to September 25, 2002, CBES is unable to obtain a six (6)
month extension of the lease of the Liberty, Missouri branch of
Community Bank, CBES shall (i) provide notice to the landlord of the
Liberty, Missouri branch of Community Bank of its intent not to renew
the lease and (ii) notify the OTS of its intent to close the Liberty,
Missouri branch of Community Bank. Moreover, Community Bank may
proceed to attempt to sell the deposits of the Liberty, Missouri branch
of Community Bank to another bank or savings association at a price as
agreed to by NASB Holding;
(j) other than investments for CBES's portfolio made in
accordance with Section 3.3(k), make any investment either by purchase
of stock or securities, contributions to capital, property transfers,
or purchase of any property or assets of any other individual,
corporation or other entity;
(k) make any investment in any debt security, including mortgage-
backed and mortgage-related securities, or materially restructure or
change its investment securities portfolio, through purchases, sales or
otherwise; provided, however, that CBES shall be permitted to invest in
the following securities with final maturities no later than November
30, 2002: U.S. government and U.S. government agency securities,
securities of the FHLB, or insured jumbo certificates of deposit;
29
(l) enter into, renew, amend or terminate any contract or
agreement, or make any change in any of its leases or contracts,
provided, however, that if prior to September 25, 2002, CBES is unable
to obtain a six (6) month extension of the lease of the Liberty,
Missouri branch of Community Bank, CBES shall (i) provide notice to the
landlord of the Liberty, Missouri branch of Community Bank of its
intent not to renew the lease and (ii) notify the OTS of its intent to
close the Liberty, Missouri branch of Community Bank. Moreover,
Community Bank may proceed to attempt to sell the deposits of the
Liberty, Missouri branch of Community Bank to another bank or savings
association at a price as agreed to by NASB Holding;
(m) make, renegotiate, renew, increase, extend, modify or
purchase any loan, lease (credit equivalent), advance, credit
enhancement or other extension of credit, or make any commitment in
respect of any of the foregoing, except (i) in conformity with existing
safe and sound lending and pricing practices; (ii) loans or advances as
to which CBES has a binding obligation to make such loan or advances as
of the date hereof; and (iii) with respect to any loan or additional
advance resulting in an aggregate indebtedness to any individual
borrower of $100,000 or more for loans or advances secured by real
estate or certificates of deposit held by Community Bank, $25,000 or
more for loans secured by collateral other than real estate or
certificates of deposit held by Community Bank or $0 or more unsecured,
unless such loan has been approved in a loan committee or Board meeting
of which an authorized representative of NASB Holding was given at
least 24 hours written notice or oral notification and at which such
representative did not object, provided, however, that renewals (or
extensions) of loans of no more than six months, or one year in the
case of construction loans that have been outstanding one year or less,
may be made at the time such loans are due for renewal, if consistent
with past practices, notwithstanding such objection if the Board of
Directors or Loan and Discount Committee determines after taking into
account such objection that such renewal is necessary to protect
Community Bank's interest and such loan is current, is not a classified
asset and is not on Community Bank's watch list;
(n) except as provided in Section 3.3(m), extend or renew loans,
or advance additional sums to a borrower whose loans, in whole or in
part, have been classified or listed as special mention by any
regulatory authority or included on Community Bank's watch list unless
such extension, renewal or advance shall have been approved in advance
by the Board of Directors of Community Bank or Community Bank's Loan
and Discount Committee, and only if such extension, renewal or advance
was found by such Board or Committee to be necessary in order to
protect Community Bank's interests and in accordance with sound banking
practices at a loan committee or Board meeting of which NASB Bank was
given at least 24 hours written notice or oral notification and at
which such representative did not object;
(o) incur any additional borrowings other than short-term (six
months or less) FHLB borrowings and reverse repurchase agreements at
reasonable market interest rates consistent with past practice, or
pledge any of its assets to secure any borrowings other than as
required pursuant to the terms of borrowings of CBES or any Subsidiary
in effect at the date hereof or in connection with borrowings or
reverse repurchase agreements permitted hereunder;
(p) accept any deposits from any person on terms materially more
favorable in any respect than those available to the general public in
CBES's market area, unless such
30
deposits are accepted in accordance with a safe and sound program or
practice in existence at Community Bank prior to the date of this
Agreement;
(q) establish or impose a schedule of service charges or fees
which applies charges either substantially more or substantially less
than similar service charges and fees charged by other banks in CBES's
market areas;
(r) make any capital expenditures in excess of $5,000 per
expenditure other than pursuant to binding commitments existing on the
date hereof disclosed in the CBES Disclosure Letter and other than
expenditures necessary to maintain existing assets in good repair or to
make payment of necessary taxes;
(s) organize, capitalize, lend to or otherwise invest in any
Subsidiary;
(t) elect to any senior executive office any person who is not a
member of the senior executive officer team of CBES as of the date of
this Agreement or elect to the Board of Directors of CBES any person
who is not a member of the Board of Directors of CBES as of the date of
this Agreement;
(u) engage in any transaction that is not in the usual and
ordinary course of business and consistent with past practices;
(v) enter into any new line of business;
(w) take or omit to take any action that is intended or may
reasonably be expected to result in any of CBES's representations and
warranties set forth in this Agreement being or becoming untrue in any
material respect, or which would make any of such representations and
warranties untrue or incorrect in any material respect if made anew
after taking such action;
(x) make any equity investment or commitment to make such an
investment in real estate or in any real estate development project,
other than in connection with foreclosures, settlements in lieu of
foreclosure or troubled loan or debt restructuring in the ordinary
course of business consistent with prudent banking practices;
(y) make, renew or increase any loan or other extension of
credit, or commit to make, renew or increase any such loan or extension
of credit, to any director or officer of CBES or any of its
Subsidiaries, or any entity controlled, directly or indirectly, by any
of the foregoing; or
(z) agree or make any commitment to take any action that is
prohibited by this Section 3.3.
In the event that NASB Holding does not respond in writing to CBES
within two (2) business days of receipt by NASB Holding of a written
request for CBES to engage in any of the actions for which NASB
Holding's prior written consent is required pursuant to this Section
3.3, NASB Holding shall be deemed to have consented to such action.
Any request by CBES or response thereto by NASB Holding shall be made
in accordance with the notice provisions of
31
Section 9.7 and shall note that it is a request pursuant to this
Section 3.3 and shall state that a failure to respond within two (2)
business days shall constitute consent.
Section 3.4. Conduct of NASB Holding's and Acquisition Sub's
Businesses Prior to the Effective Date. Except as expressly provided
in this Agreement, during the period from the date of this Agreement to
the Effective Date, NASB Holding and Acquisition Sub shall, and shall
cause their respective Subsidiaries to, use their commercially
reasonable efforts to (i) conduct their business in the regular,
ordinary and usual course consistent with past practice; (ii) maintain
and preserve intact their business organization, properties, leases,
employees and advantageous business relationships; (iii) take no action
which would materially adversely affect or delay the ability of CBES,
NASB Holding, or Acquisition Sub to perform their respective covenants
and agreements on a timely basis under this Agreement and (iv) take no
action which would adversely affect or delay the ability of CBES, NASB
Holding or Acquisition Sub to obtain any necessary approvals, consents
or waivers of any Governmental Entity required for the transactions
contemplated hereby or which would reasonably be expected to result in
any such approvals, consents or waivers containing any material
condition or restriction.
ARTICLE IV
COVENANTS
Section 4.1. Acquisition Proposals. From and after the date
hereof until the termination of this Agreement, neither CBES nor
Community Bank, nor any of their respective officers, directors,
employees, representatives, agents or affiliates (including, without
limitation, any investment banker, attorney or accountant retained by
CBES or any of its Subsidiaries), will, directly or indirectly,
initiate, solicit or knowingly encourage (including by way of
furnishing non-public information or assistance), or facilitate
knowingly, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal (as defined below), or enter into or maintain or continue
discussions or negotiate with any person or entity in furtherance of
such inquiries or to obtain an Acquisition Proposal or agree to or
endorse any Acquisition Proposal, or authorize or permit any of its
officers, directors or employees or any of its subsidiaries or any
investment banker, financial advisor, attorney, accountant or other
representative retained by any of its Subsidiaries to take any such
action; provided, however, that nothing contained in this Section 4.1
shall prohibit the Board of Directors of CBES from (i) furnishing
information to, or entering into discussions or negotiations with, any
person or entity that makes an unsolicited, written, bona fide proposal
to acquire CBES pursuant to a merger, consolidation, share exchange,
business combination, tender or exchange offer or other similar
transaction, if, and only to the extent that (A) the Board of Directors
of CBES, after consultation with and based upon the advice of
independent legal counsel, determines in good faith that such action is
necessary for the Board of Directors of CBES to comply with its
fiduciary duties to stockholders under applicable law, and (B) prior to
furnishing such information to, or entering into discussions or
negotiations with, such person or entity, CBES (x) provides reasonable
notice to NASB Holding to the effect that it is furnishing information
to, or entering into discussions or negotiations with, such person or
entity and (y) receives from such person or entity an executed
confidentiality agreement in substantially the same form as the one
heretofore executed by NASB Holding (except that disclosure of the
person's identity will be permitted); (ii) complying with Rule 14e-2
promulgated under the Exchange Act with regard to a tender or exchange
offer;
32
or (iii) failing to make or withdrawing or modifying its recommendation
if there exists an Acquisition Proposal as to which the Board of
Directors of CBES has received a written opinion from its independent
financial adviser that such Proposal may be superior to the Merger from
a financial point-of-view to CBES's stockholders and, after
consultation with independent legal counsel, the Board of Directors of
CBES determines in good faith that such action is necessary for the
Board of Directors of CBES to comply with its fiduciary duties to
stockholders under applicable law (any such Acquisition Proposal as to
which the Board of Directors has received the opinion and made the
determination described in this clause (iii) being referred to herein
as a "Superior Proposal"). CBES shall notify NASB Holding orally and
in writing of any Acquisition Proposal (including, without limitation,
the terms and conditions of any such Acquisition Proposal and the
identity of the person making such Acquisition Proposal) as promptly as
practicable (but, in any event, no later than 24 hours) after the
receipt thereof and shall keep NASB Holding informed of the status and
details of any such Acquisition Proposal. For purposes of this
Agreement, "Acquisition Proposal" shall mean a proposal to enter into
or make any of the following (other than the transactions contemplated
hereunder) involving CBES or any of its Subsidiaries: (i) any merger,
consolidation, share exchange, business combination, or other similar
transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of 25% or more of the assets of CBES or Community
Bank, taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange offer for 25% or more
of the outstanding shares of capital stock of CBES or the filing of a
registration statement under the Securities Act of 1933 in connection
therewith; or (iv) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any
of the foregoing.
Section 4.2 Certain Policies and Actions of CBES.
(a) At the request of NASB Bank, CBES shall use reasonable
efforts to cause Community Bank to modify and change its loan,
litigation and real estate valuation policies and practices (including
loan classifications and levels of reserves) and investment and
asset/liability management policies and practices after the date on
which all Requisite Regulatory Approvals and stockholder approvals are
received, and after receipt of written confirmation from NASB Holding
that it is not aware of any fact or circumstance that would prevent
completion of the Merger, and prior to the Effective Date; provided,
however, that CBES shall not be required to take such action more than
30 days prior to the Effective Date; and provided, further, that such
policies and procedures are not prohibited by GAAP or any applicable
laws and regulations or, in the view of the Board of Directors of
Community Bank not in the best interests of Community Bank.
(b) CBES's representations, warranties and covenants contained in
this Agreement shall not be deemed to be untrue or breached in any
respect for any purpose as a consequence of any modifications or
changes undertaken solely on account of Section 4.2(a). NASB Bank
agrees to hold harmless, indemnify and defend CBES and its
Subsidiaries, and their respective directors, officers and employees,
for any loss, claim, liability or other damage caused by or resulting
from compliance with Section 4.2(a).
Section 4.3. Access and Information. Upon reasonable notice,
CBES shall (and shall cause its Subsidiaries to) afford NASB Holding
and its representatives (including, without
33
limitation, directors, officers and employees of NASB Holding and its
affiliates and counsel, accountants and other professionals retained by
NASB Holding) such reasonable access during normal business hours
throughout the period prior to the Effective Date to the books, records
(including, without limitation, tax returns and work papers of
independent auditors), contracts, properties, personnel and to such
other information relating to CBES and its Subsidiaries as NASB Holding
may reasonably request; provided, however, that no investigation
pursuant to this Section 4.3 shall affect or be deemed to modify any
representation or warranty made herein. CBES shall provide NASB
Holding with true and complete copies of all financial and other
information relating to the business or operations of CBES and its
Subsidiaries that is provided to directors of CBES and Community Bank
in connection with meetings of their Board of Directors or committees
thereof. In furtherance, and not in limitation of the foregoing, CBES
shall make available to NASB Holding all information necessary or
appropriate for the preparation and filing of all real property and
real estate transfer tax returns and reports required by reason of the
Merger. NASB Holding will not, and will cause its representatives not
to, remove any original documents from the Premises of CBES or
Community Bank or use any information obtained pursuant to this Section
4.3 for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. Subject to the requirements of
applicable law, NASB Holding will keep confidential, and will cause its
representatives to keep confidential, all information and documents
obtained pursuant to this Section 4.3 unless such information (i) was
already known to NASB Holding or an affiliate of NASB Holding, other
than pursuant to a confidentiality agreement or other confidential
relationship, (ii) becomes available to NASB Holding or an affiliate of
NASB Holding from other sources not known by such party to be bound by
a confidentiality agreement or other obligation of secrecy, (iii) is
disclosed with the prior written approval of CBES or (iv) is or becomes
readily ascertainable from published information or trade sources. In
the event that this Agreement is terminated or the transactions
contemplated by this Agreement shall otherwise fail to be consummated,
each party shall promptly cause all copies and abstracts of documents
received from any other party, and all extracts of or from and
materials containing information or data taken from any such document
to be returned to the party that furnished the same.
Section 4.4. Certain Filings, Consents and Arrangements. NASB
Holding or Acquisition Sub shall as soon as practicable and in
cooperation with CBES (and in any event within 30 days after the date
hereof) make, or cause to be made, any filings and applications and
provide any notices required to be filed or provided in order to obtain
all approvals, consents and waivers of Governmental Entities and third
parties necessary or appropriate for the consummation of the
transactions contemplated hereby, including approvals needed for the
payment of any special dividends required to fund the Merger
Consideration. NASB Holding or Acquisition Sub and CBES each shall
provide the other and its counsel with an opportunity to review all
filings, applications and notices and related correspondence and other
documents and information prior to their being submitted to, and all
correspondence and other documents and information received from, any
governmental authority and shall provide the other with copies of all
filings, applications and notices submitted to any Governmental Entity,
in each case within two (2) business days after the submission or
receipt thereof. NASB Holding, Acquisition Sub, CBES and Community
Bank shall promptly provide all information and documents requested by
any Governmental Entity in connection with any filing, application or
notice filed or provided
34
under this Section 4.4 and shall otherwise use its best efforts to
obtain the requisite approvals, consents and waivers as promptly as is
reasonably possible.
Section 4.5. Anti-takeover Provisions. CBES and its Subsidiaries
shall take all steps required by any relevant federal or state law or
regulation or under any relevant agreement or other document to exempt
or continue to exempt NASB Holding, Acquisition Sub, the Agreement and
the Merger from any provisions of an anti-takeover nature contained in
CBES's or its Subsidiaries', certificates of incorporation and bylaws
and the provisions of any federal or state anti-takeover laws.
Section 4.6. Additional Actions. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use
all commercially reasonable efforts to take promptly, or cause to be
taken promptly, all actions and to do promptly, or cause to be done
promptly, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including the Merger, as expeditiously
as possible, including using efforts to obtain all necessary actions or
non-actions, extensions, waivers, consents and approvals from all
applicable Governmental Entities, effecting all necessary
registrations, applications and filings (including, without limitation,
filings under any applicable state securities laws) and obtaining any
required contractual consents and regulatory approvals.
Section 4.7. Publicity. CBES and NASB Holding shall jointly
develop a plan regarding press releases and other public statements
with respect to the Merger and any other transaction contemplated
hereby and in making any filings with any Governmental Entity or with
any national securities exchange with respect thereto.
Section 4.8. Stockholders Meeting. CBES shall take all action
necessary, in accordance with applicable law and its certificate of
incorporation and bylaws, to convene a meeting of its stockholders
("Stockholder Meeting") as promptly as practicable for the purpose of
considering and voting on approval and adoption of this Agreement, the
Merger and the other transactions provided for in this Agreement. CBES
shall file its preliminary proxy statement with the SEC within 15 days
of the receipt of its audited financial statements for the fiscal year
ended June 30, 2002, provided, however, that if CBES receives its
audited financial statements for the fiscal year ended June 30, 2002
prior to the date of execution of this Agreement, CBES shall file its
preliminary proxy statement with the SEC within 15 days of the date of
execution of this Agreement. Except to the extent legally required for
the discharge by the Board of Directors of its fiduciary duties as
advised by CBES's counsel, the Board of Directors of CBES shall (a)
recommend at its Stockholder Meeting that the stockholders vote in
favor of and approve the transactions provided for in this Agreement
and (b) use all reasonable efforts to solicit such approvals. CBES may
employ professional proxy solicitors to assist in contacting
stockholders in connection with soliciting favorable votes on the
Merger.
Section 4.9. Proxy Statement. For the purposes of holding the
Stockholders' Meeting of CBES, CBES shall prepare a proxy statement
satisfying in all material respects all applicable requirements of the
Exchange Act, and the rules and regulations thereunder. NASB Holding
agrees to provide for inclusion in such proxy statement all information
reasonably necessary to satisfy the requirements of the Exchange Act
and the rules and regulations
35
thereunder and such information shall not contain any untrue statements
of a material fact or omit to state any material fact required to be
stated in such proxy statement with respect to NASB Holding or its
Subsidiaries or to make the statements therein with respect to NASB
Holding or its Subsidiaries not misleading.
Section 4.10. Notification of Certain Matters. Each party shall
give prompt notice to the other of: (a) any event or notice of, or
other communication relating to, a default or event that, with notice
or lapse of time or both, would become a default, received by it or any
of its Subsidiaries subsequent to the date of this Agreement and prior
to the Effective Date, under any contract material to the financial
condition, properties, businesses or results of operations of each
party and its Subsidiaries taken as a whole to which each party or any
Subsidiary is a party or is subject; and (b) any event, condition,
change or occurrence which individually or in the aggregate has, or
which, so far as reasonably can be foreseen at the time of its
occurrence, is reasonably likely to result in a Material Adverse Effect
with respect to such party and its Subsidiaries taken as a whole. Each
of CBES and NASB Holding shall give prompt notice to the other party of
any (i) notice or other communication from any third party alleging
that the consent of such third party is or may be required in
connection with any of the transactions contemplated by this Agreement
and (ii) the occurrence or non-occurrence of any fact or event which
would be reasonably likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any respect
at any time from the date hereof to the Effective Date or to cause any
covenant, condition or agreement under this Agreement not to be
complied with or satisfied in all material respects.
Section 4.11. Employees.
(a) All persons who are employees of Community Bank immediately
prior to the Effective Date and whose employment is not specifically
terminated at or prior to the Effective Date (a "Continuing Employee")
shall, at the Effective Date, remain employees of Community Bank. All
of the Continuing Employees shall be employed at the will of Community
Bank and no contractual right to employment shall inure to such
employees because of this Agreement. NASB Holding will use its best
efforts to retain all of the employees of Community Bank, subject to
the qualifications of such employees and the needs of NASB Holding. At
any time after the receipt of the Requisite Regulatory Approvals and
Stockholder approval for the transactions contemplated by this
Agreement, or by mutual consent prior thereto, CBES shall (i) allow
NASB Holding to conduct interviews with the existing employees of CBES
and Community Bank and to communicate with the employees regarding the
terms of their employment which will be in effect on or after the
Effective Date and (ii) allow NASB Bank to conduct training sessions
for employees of CBES and its Subsidiaries at NASB Bank's or Community
Bank's facilities. All such training sessions shall be scheduled so as
to have minimal impact upon the employees' performance of their normal
daily duties.
(b) Immediately following the Effective Date, each Continuing
Employee shall be eligible to participate in NASB Holding's or NASB
Bank's benefit plans on the same basis as a new employee of NASB
Holding's or NASB Bank's (it being understood that inclusion of
Continuing Employees in NASB Holding's or NASB Bank's benefit plans may
occur at different times with respect to different plans). Service
with CBES or its Subsidiaries shall be treated as service with NASB
Holding or NASB Bank for purposes of satisfying any waiting
36
periods, evidence of insurability requirements, or the application of
any preexisting condition limitation with respect to any NASB Holding
or NASB Bank "welfare benefit plan", as defined in Section 3(1) of
ERISA. Each Continuing Employee shall receive credit for service with
CBES or its Subsidiaries for purposes of any employee benefit plans or
computing vacation pay benefits.
(c) CBES shall retain all existing life insurance policies owned
by CBES.
(d) CBES shall not encourage the further exercise of any CBES
Options and shall advise optionees as to the payments to which they
will be entitled hereunder.
(e) Prior to September 30, 2002, Community Bank shall fund the
CBES Employee Stock Ownership Plan (the "ESOP") with the scheduled
contribution of Twenty Four Thousand Nine Hundred Sixty Five and 80/100
Dollars ($24,965.80) to provide the ESOP funds to pay the principal and
interest due on the CBES loan to the ESOP from CBES; provided, however,
that the amount of such payment from Community Bank to the ESOP may be
adjusted if the total amount of scheduled interest due on the loan to
CBES changes due to a variation in the adjustable interest rate of the
loan; and provided, further, that if the Effective Date of the Merger
occurs after December 31, 2002, Community Bank shall fund the CBES ESOP
with the scheduled contribution payment necessary to provide the ESOP
funds to pay the principal and interest due on the CBES loan to the
ESOP from CBES.
(f) Prior to the Effective Date, the ESOP shall be amended to
state that any Merger Consideration remaining after repayment of the
loan between CBES and the ESOP shall be allocated as investment
earnings of the ESOP to the ESOP accounts of employees of Community
Bank or any of its Subsidiaries who are ESOP participants and
beneficiaries ("ESOP Participants") in accordance with the terms of the
ESOP as amended with respect to such termination and as in effect on
the Effective Date. All ESOP Participants shall fully vest and have a
non-forfeitable interest in their accounts under the ESOP determined as
of the Effective Date. As soon as practicable after the Effective
Date, any loan between CBES and the ESOP shall be repaid in full from
the Merger Consideration received by the ESOP for unallocated shares of
CBES Common Stock held by the ESOP upon the conversion of such shares
into cash pursuant to this Agreement. As soon as reasonably
practicable after the ESOP loan has been repaid, NASB Holding shall
terminate the ESOP and shall file an application for determination with
the Internal Revenue Service ("IRS") as to the tax qualified status of
the ESOP upon its termination under Section 401(a) and 4975(e)(7) of
the IRC (the "Determination Letter"). As soon as reasonably
practicable after the receipt of a favorable Determination Letter from
the IRS, NASB Holding shall instruct the ESOP Trustee to make
distributions of the benefits under the ESOP to the ESOP Participants
in accordance with the provisions of the ESOP.
(g) NASB Holding agrees to honor the terms and conditions of all
Director Emeritus Agreements by and between Community Bank and certain
directors of Community Bank, a copy of each of which is attached to
CBES's Disclosure Letter, and NASB Holding agrees that the benefits to
be paid to each affected director shall be the amount accrued on the
books and records of Community Bank as of the last day of the calendar
month preceding the Closing Date, which amount shall not be less than
the amount shown in CBES's Disclosure Letter.
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(h) NASB Holding agrees to honor the terms and conditions of all
Salary Continuation Agreements by and between Community Bank and
certain employees of Community Bank, a copy of each of which is
attached to CBES's Disclosure Letter, and NASB Holding agrees that the
benefits to be paid to each affected employee shall be the amount
accrued on the books and records of Community Bank as of the last day
of the calendar month preceding the Closing Date, which amount shall
not be less than the amount shown in CBES's Disclosure Letter.
(i) NASB Holding agrees to honor the terms and conditions of (i)
the Community Bank Severance Plan, which Severance Plan shall not be
revoked, terminated, modified or amended by NASB Holding or its
Subsidiaries or its successors and assigns, (ii) the Employee Bonus
Agreements by and between Community Bank and certain employees of
Community Bank, (iii) the Severance Agreement, as amended, by and
between Xxxxxx X. Xxxxxxx and Community Bank and (iv) the Severance
Agreement , as amended, by and between Xxxxxxxx X. Xxxxxxxxx and
Community Bank; a copy of each of which is attached to CBES's
Disclosure Letter.
Section 4.12. Indemnification. Unless prohibited by law or
regulation in effect at the time a Claim (as defined below) is pending
and except as provided in Section 4.12(b) below, from the Effective
Date through six (6) years after the Effective Date, NASB Holding (and
any successor) agrees to indemnify each director, officer and employee
of CBES and Community Bank serving in such capacities as of the date of
this Agreement (each, an "Indemnified Party"), from and against
Indemnified Payments and Indemnified Expenses (as both terms are
defined below) incurred in connection with Claims brought against any
Indemnified Party, arising out of matters existing or occurring at or
prior to the Effective Date (including the transactions contemplated by
this Agreement), whether asserted or claimed prior to, at or after the
Effective Date, provided that in the case of any Claims asserted prior
to the Effective Date NASB Holding has been notified of such Claims
prior to Closing. NASB Holding further agrees, subject to applicable
regulatory restrictions, to advance any reasonable Indemnified Expenses
to such Indemnified Party as they are from time to time incurred
provided that the Indemnified Party to whom expenses are being advanced
provides a written undertaking to repay such expenses if it is
ultimately determined that such person is not entitled to
Indemnification.
(a) As used herein, the foregoing terms have the following
meanings:
(i) A "Claim" is any threatened, pending or completed action,
suit, investigation or proceeding (whether civil, criminal,
administrative or investigative) which relates to services rendered
prior to the Effective Date by an Indemnified Party on behalf of CBES
or its Subsidiaries.
(ii) "Indemnified payments" shall mean judgments, fines and
amounts paid in settlement of Claims.
(iii) "Indemnified expenses" shall mean all costs and
expenses (including but not limited to attorneys' fees) actually and
reasonably incurred by an Indemnified Party in connection with
defending against such Claims.
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(b) NASB Holding shall not be required to indemnify any
Indemnified Party from and against Indemnified expenses and/or
Indemnified payments if (i) a final non-appealable order is entered by
a court or administrative tribunal having jurisdiction pursuant to a
Claim brought by a person other than the OTS that such Indemnified
Party's conduct was knowingly fraudulent, deliberately dishonest, or
willful misconduct and the Claim giving rise to the entry of such order
was brought by a third party; or (ii) a final non-appealable order is
issued by an administrative tribunal or court having jurisdiction
pursuant to a Claim brought by the OTS or a settlement agreement is
entered into between the Indemnified Party and the OTS: (x) imposing a
civil money penalty against the Indemnified Party; (y) removing the
Indemnified Party from office or prohibiting such person from
participating in the conduct of NASB Holding; or (z) directing the
Indemnified Party to cease and desist taking any of the actions set
forth in Section 8(b) of the FDIA (12 U.S.C. Section 1818(b)).
(c) Any Indemnified Party wishing to claim indemnification under
Section 4.12, must (i) upon learning of any such Claim, promptly notify
NASB Holding thereof and provide to NASB Holding copies of all written
materials related to the Claim and any other information related to
such Claim; (ii) consent to the defense of any such Claim by competent
counsel chosen by NASB Holding; and (iii) cooperate in the defense of
any such matter by offering testimony and by complying with all
reasonable requests made by NASB Holding or by counsel hired by NASB
Holding. NASB Holding shall not be liable for any settlement effected
by an Indemnified Party without its prior written consent, which
consent may not be withheld unless such settlement is unreasonable in
light of such Claims against, or defenses available to, such
Indemnified Party. If NASB Holding assumes the defense of any such
Claim pursuant to this Section 4.12(c), NASB Holding shall not be
liable to such Indemnified Party for any legal expenses of additional
counsel subsequently incurred by such Indemnified Party in connection
with the defense thereof. If NASB Holding does not elect to assume
such defense within thirty days from the date NASB Holding receives
notice of the Claim, the Indemnified Party may retain counsel
satisfactory to such Indemnified Party, and NASB Holding shall remain
responsible for the reasonable fees and expenses of such counsel as set
forth above.
(d) NASB Holding shall pay all reasonable costs, including
attorneys' fees and expenses, that may be incurred by any Indemnified
Party in successfully enforcing the indemnity and other obligations
provided for in this Section 4.12 to the fullest extent permitted by
law. The rights of each Indemnified Party under this paragraph (d)
shall be in addition to any other right of indemnification under this
Section 4.12.
(e) If NASB Holding or any of its successors or assigns (i)
consolidates with or merges into any other person or entity and shall
not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any person or entity,
then, and in each such case, to the extent necessary, proper provision
shall be made so that the successors and assigns of NASB Holding assume
the obligations set forth in this Section 4.12.
(f) NASB Holding shall pay up to $50,000 for premiums to provide
reporting endorsement coverage under CBES's and Community Bank's
current director and officer insurance policies for each director,
officer and employee of CBES and Community Bank for a period of three
(3) years.
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(g) The provisions of this Section 4.12 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party and
the heirs, executors, and administrators of such Indemnified Party.
Section 4.13. Phase I and Phase II Environmental Assessments of
Community Bank's Primary Banking Facility. CBES hereby agrees that
NASB Holding may cause to be performed a Phase I and Phase II
environmental assessment of the real property on which Community Bank's
primary banking facility is located (1001 North Xxxxx Xxxxx Road,
Excelsior Springs, Missouri 64024). If as a result of such assessment
it is determined that environmental clean-up costs would exceed
$500,000, then NASB Holding may elect to terminate this Agreement
pursuant to Section 7.1(h).
ARTICLE V
CONDITIONS TO CONSUMMATION
Section 5.1. Conditions to Each Party's Obligations. The
respective obligations of each party to effect the Merger and any other
transactions contemplated by this Agreement shall be subject to the
satisfaction of the following conditions:
(a) This Agreement shall have been approved by the requisite vote
of CBES's stockholders in accordance with applicable laws and
regulations.
(b) The Requisite Regulatory Approvals, the consent of the OTS
and any other waivers with respect to this Agreement and the
transactions contemplated hereby shall have been obtained and shall
remain in full force and effect, and all statutory waiting periods
shall have expired; and all other consents, waivers and approvals of
any third parties which are necessary to permit the consummation of the
Merger and the other transactions contemplated hereby shall have been
obtained or made except for those the failure to obtain which would not
have a Material Adverse Effect (i) on CBES and its Subsidiaries taken
as a whole or (ii) on NASB Holding and its Subsidiaries taken as a
whole. No such approval or consent shall have imposed any condition or
requirement that would so materially and adversely impact the economic
or business benefits to NASB Holding or CBES of the transactions
contemplated hereby that, had such condition or requirement been known,
such party would not, in its reasonable judgment, have entered into
this Agreement.
(c) No party hereto shall be subject to any order, decree, ruling
or injunction of a court or agency of competent jurisdiction which
enjoins or prohibits the consummation of the Merger or any other
transactions contemplated by this Agreement and no Governmental Entity
shall have instituted any proceeding for the purpose of enjoining or
prohibiting the consummation of the Merger or any transactions
contemplated by this Agreement.
(d) No statute, rule or regulation shall have been enacted,
entered, promulgated, interpreted, applied or enforced by any
Governmental Entity which prohibits, restricts or makes illegal
consummation of the Merger or any other transactions contemplated by
this Agreement.
40
(e) No litigation, claim, action, suit or other legal or
administrative proceeding challenging the Merger shall be pending
against any party hereto or any of their Subsidiaries, directors or
officers, which in the opinion of counsel for NASB Holding is likely to
result in the incurring of damages and defense costs not covered by
insurance by NASB Holding or any of its Subsidiaries or by any person
or persons whom NASB Holding would be required to indemnify in an
aggregate amount exceeding $250,000.
Section 5.2. Conditions to the Obligations of NASB Holding. Each
of the obligations of CBES required to be performed by it at or prior
to the Closing pursuant to the terms of this Agreement shall have been
duly performed and complied with in all material respects and the
representations and warranties of CBES contained in this Agreement
shall be true and correct, subject to Sections 2.1 and 2.2, as of the
date of this Agreement and as of the Effective Date as though made at
and as of the Effective Date (except as to any representation or
warranty which specifically relates to an earlier date), and NASB
Holding shall have received a certificate to the foregoing effect
signed by the chief executive officer and the president of CBES.
Section 5.3. Conditions to the Obligations of CBES. The
obligations of CBES to effect the Merger and any other transactions
contemplated by this Agreement shall be further subject to the
satisfaction of the following additional conditions:
(a) Each of the obligations of NASB Holding or Acquisition Sub
required to be performed by it at or prior to the Closing pursuant to
the terms of this Agreement shall have been duly performed and complied
with in all material respects and the representations and warranties of
NASB Holding or Acquisition Sub contained in this Agreement shall be
true and correct, subject to Sections 2.1 and 2.2, as of the date of
this Agreement and as of the Effective Date as though made at and as of
the Effective Date (except as to any representation or warranty which
specifically relates to an earlier date), and CBES shall have received
a certificate to the foregoing effect signed by the chief executive
officer and the chief financial or principal accounting officer of NASB
Holding and Acquisition Sub.
(b) NASB Holding shall have provided to the Exchange Agent
sufficient cash to pay the aggregate Merger Consideration and CBES
shall have received a certificate from the Exchange Agent to such
effect.
ARTICLE VI
DATA PROCESSING
Section 6.1. Sample Data. CBES shall cause Community Bank to
provide to NASB Bank, a machine-readable data tape of all of Community
Bank's loan and deposit accounts, together with a written description
of the file, record, and field data types and formats, to allow NASB
Bank to prepare for a data processing conversion, at a date prior to
Closing agreed upon between NASB Bank and CBES. Representatives of
NASB Bank shall have reasonable access to Community Bank's IT staff or
other pertinent personnel during normal business hours to facilitate
the accurate and proper mapping or conversion of all customer accounts
to NASB Bank's data processing system. If this Agreement is terminated
for any reason,
41
customer information will either be promptly returned to Community Bank
or destroyed by NASB Bank at the option of Community Bank. At the
request of Community Bank, NASB Holding shall cause NASB Bank to enter
into an agreement with Community Bank to ensure compliance with Section
502(b)(2) of the Xxxxx-Xxxxx-Xxxxxx Act (15 U.S.C. Section 6802(b)(2))
and to ensure the confidentiality and security of nonpublic personal
information of Community Bank's consumer customers. In addition, at
the request of Community Bank, NASB Holding shall cause NASB Bank to
enter into an agreement with Community Bank required to ensure that, if
this Agreement is terminated, NASB Bank will not use the customer data
provided to it for competitive purposes and to ensure that NASB Bank
will not directly and purposefully solicit business with any of the
customers included in the customer data provided by Community Bank.
Section 6.2. Information for Check Ordering. After receipt of
the Requisite Regulatory Approvals of the transactions contemplated by
this Agreement, CBES shall provide to NASB Bank a machine-readable data
tape of all of Community Bank's deposits, including all customer name
and address information, to enable NASB Bank to begin ordering checks,
deposit slips, and other transaction items for use by its customers.
Section 6.3. Installation of Data Circuits. After the Effective
Date of this Agreement, CBES shall cause Community Bank to give NASB
Bank reasonable access to Community Bank's locations during normal
business hours for the purposes of installing and testing data circuits
and data processing equipment, provided that the location,
installation, and testing of said circuits and equipment shall not be
permitted to disrupt Community Bank's normal daily functions and
operation. In the event that this Agreement is terminated without
consummation of the planned transactions, NASB Holding shall cause NASB
Bank to remove its data processing equipment and circuits within 30
days after the termination and shall repair promptly any damage done to
Community Bank's property during the installation or removal, all at
NASB Bank's sole expense.
ARTICLE VII
TERMINATION
Section 7.1. Termination. This Agreement may be terminated, and
the Merger abandoned, at or prior to the Effective Date, either before
or after any requisite stockholder approval:
(a) by the mutual consent of NASB Holding and CBES in a written
instrument, if the Board of Directors of each so determines by vote of
a majority of the members of its entire Board; or
(b) by NASB Holding or CBES, if its Board of Directors so
determines by vote of a majority of the members of its entire Board, in
the event of the failure of the stockholders of CBES to approve the
Agreement at the Stockholder Meeting; or
(c) by NASB Holding or CBES, by written notice to the other
party, if either (i) any approval, consent or waiver of a Government
Regulatory Agency required to permit consummation of the transactions
contemplated hereby shall have been denied or (ii) any
43
Governmental Entity of competent jurisdiction shall have issued a
final, unappealable order enjoining or otherwise prohibiting
consummation of the transactions contemplated by this Agreement; or
(d) by NASB Holding or CBES, if its Board of Directors so
determines by vote of a majority of the members of its entire Board, in
the event that the Merger is not consummated by January 31, 2003,
unless the failure to so consummate by such time is due to the breach
of any representation, warranty or covenant contained in this Agreement
by the party seeking to terminate; or
(e) by NASB Holding or CBES (provided that the party seeking
termination is not then in material breach of any representation,
warranty, covenant or other agreement contained herein), in the event
of (i) a failure to perform or comply by the other party with any
covenant or agreement of such other party contained in this Agreement,
which failure or non-compliance is material in the context of the
transactions contemplated by this Agreement, or (ii) subject to Section
2.2(a), any inaccuracies, omissions or breach in the representations,
warranties, covenants or agreements of the other party contained in
this Agreement the circumstances as to which either individually or in
the aggregate have, or reasonably could be expected to have, a Material
Adverse Effect on such other party; in either case which has not been
or cannot be cured within 30 calendar days after written notice thereof
is given by the party seeking to terminate to such other party; or
(f) by CBES, if the Board of Directors of CBES reasonably
determines by vote of a majority of the members of its entire Board
that a proposal made by a third party to acquire, directly or
indirectly, including pursuant to a tender offer, exchange offer,
merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, for consideration
consisting of cash and/or securities, more than 50% of the combined
voting power of the shares of CBES Common Stock then outstanding or all
or substantially all of the assets of CBES constitutes a Superior
Proposal and that such proposal must be accepted in order to comply
with the Board of Directors' fiduciary duties to stockholders under
applicable law; provided, however, that prior to any such termination,
CBES shall use its reasonable efforts to negotiate in good faith with
NASB Holding to make such adjustments in the terms and conditions of
this Agreement that would enable CBES to proceed with the transactions
contemplated herein; or
(g) by NASB Holding, if the Adjusted Stockholders' Equity of
CBES, as defined in Section 3.2(g) hereof, is less than $13,500,000.
(h) by NASB Holding, if the Phase I and Phase II environmental
assessments permitted by Section 4.13 hereof determine that
environmental clean-up costs would exceed $500,000.
Section 7.2. Termination Fee. In the event that CBES terminates
this Agreement pursuant to Section 7.1(f) and, within six (6) months
after the termination of this Agreement, CBES or Community Bank enters
into a definitive agreement with the person that made the Superior
Proposal then CBES shall, within 10 business days following written
demand by NASB Holding pay to NASB Holding $250,000 in cash.
43
Section 7.3. Effect of Termination. In the event of termination
of this Agreement by either NASB Holding or CBES prior to the
consummation of the Merger as provided in Section 7.2, this Agreement
shall forthwith become void and have no effect except (i) the
obligations of the parties under Sections 4.3 (with respect to
confidentiality and the return of information), 7.2 and 9.6 shall
survive any termination of this Agreement and (ii) that notwithstanding
anything to the contrary contained in this Agreement, no party shall be
relieved or released from any liabilities or damages arising out of its
willful breach of any provision of this Agreement.
ARTICLE VIII
CLOSING AND EFFECTIVE DATE
Section 8.1. Effective Date. The closing of the transactions
contemplated hereby ("Closing") shall take place at the offices of
Xxxxxxx Xxxxxxxx Xxxxxx LLP, 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx
Xxxx, Xxxxxxxx, unless another place is agreed to by NASB Bank and
CBES, on a date designated by NASB Holding and CBES ("Closing Date")
that is no later than fifteen (15) days following the date on which the
expiration of the last applicable waiting period in connection with the
notices to and the approvals of Governmental Entities shall occur and
all conditions to the consummation of this Agreement are satisfied or
waived or on such other date as may be agreed to by the parties. Prior
to the Closing Date, CBES and Community Bank shall each execute a
Certificate of Merger in accordance with all appropriate legal
requirements, which shall be filed as required by law on the Closing
Date, and the Merger provided for therein shall become effective upon
such filing or on such date as may be specified in such Certificate of
Merger. The date of such filing or such later effective date as
specified in the Certificate of Merger is herein referred to as the
"Effective Date."
Section 8.2. Deliveries at Closing. Subject to the provisions of
Article V and Article VII, on the Closing Date there shall be delivered
to NASB Holding and CBES the documents and instruments required to be
delivered under Article V.
ARTICLE IX
CERTAIN OTHER MATTERS
Section 9.1. Certain Definitions; Interpretation. As used in
this Agreement, the following terms shall have the meanings indicated:
"Affiliate" means any person (a) which directly or indirectly
controls, or is controlled by, or is under common control with any
other person or any Subsidiary of that other person; (b) which directly
or beneficially owns or controls 5% or more of any class of voting
stock of another person or any Subsidiary of that other person; or (c)
of which 5% or more of any class of voting stock is owned directly or
beneficially by any other person or any Subsidiary of that other
person.
"Material" means material to NASB Holding or CBES (as the case may
be) and its respective Subsidiaries, taken as a whole.
44
"Person" includes an individual, corporation, limited liability
company, partnership, association, trust or unincorporated
organization.
When a reference is made in this Agreement to Sections, Exhibits
or Schedules, such reference shall be to a Section of, Exhibit or
Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for ease of
reference only and shall not affect the meaning or interpretation of
this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed followed
by the words "without limitation." Any singular term in this Agreement
shall be deemed to include the plural, and any plural term the
singular. Any reference to gender in this Agreement shall be deemed to
include any other gender.
Section 9.2. Survival. Only those agreements and covenants of
the parties that are by their terms applicable in whole or in part
after the Effective Date, including Section 4.3, Section 4.11 and
Section 4.12 of this Agreement, shall survive the Effective Date. All
other representations, warranties, agreements and covenants shall be
deemed to be conditions of the Agreement and shall not survive the
Effective Date.
Section 9.3. Waiver; Amendment. Prior to the Effective Date, any
provision of this Agreement may be (i) waived in writing by the party
benefited by the provision or (ii) amended or modified at any time
(including the structure of the transaction) by an agreement in writing
between the parties hereto except that, after the vote by the
stockholders of CBES, no amendment or modification may be made that
would reduce the amount or alter or change the kind of consideration to
be received by holders of CBES Common Stock or contravene any provision
of the DGCL or the federal banking laws, rules and regulations.
Section 9.4. Counterparts. This Agreement may be executed in
counterparts each of which shall be deemed to constitute an original,
but all of which together shall constitute one and the same instrument.
Section 9.5. Governing Law. This Agreement shall be governed by,
and interpreted in accordance with, the laws of the State of Missouri,
without regard to conflicts of laws principles.
Section 9.6. Expenses. Each party hereto will bear all expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby.
Section 9.7.Notices. All notices, requests, acknowledgments and
other communications hereunder to a party shall be in writing and shall
be deemed to have been duly given when delivered by hand, overnight
courier or facsimile transmission (confirmed in writing) to such party
at its address or facsimile number set forth below or such other
address or facsimile transmission as such party may specify by notice
(in accordance with this provision) to the other party hereto.
If to CBES, to:
CBES Bancorp, Inc.
000 Xxxx Xxxxxxx Xxxxx
00
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxx X. Xxxxxx
With copies to:
C. Xxxxxx Xxxxxx, Esq.
Xxxxxxx Xxxxxxxx Xxxxxx LLP
0000 Xxxxxx Xxxxxx, Xxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
If to NASB Holding or Acquisition Sub, to:
NASB Financial, Inc.
00000 Xxxxx 00 Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxx X. Xxx
With copies to:
Xxxxxx X. Xxxxxx, Xx., Esq.
Xxxxxxxxxx Xxxxxxx & Xxxxx, P.C.
Suite 1100
000 Xxxxx 0xx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Section 9.8. Entire Agreement; etc. This Agreement, together
with the Disclosure Letters, represents the entire understanding of the
parties hereto with reference to the transactions contemplated hereby
and supersedes any and all other oral or written agreements heretofore
made. All terms and provisions of this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Except for Sections 4.11 and 4.12
which confer rights on the parties described therein, nothing in this
Agreement is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 9.9. Specific Performance. NASB Holding and CBES agree
that the franchise value of Community Bank represents a unique asset
and that the failure of either party to perform the terms of this
Agreement would cause irreparable harm for which monetary damages would
be totally inadequate. Therefore, either party shall be entitled to
specific performance of the terms of this Agreement. Nothing contained
in this Agreement, however, shall be deemed as granting to NASB Holding
control over CBES or Community Bank prior to the Effective Date. Until
the Requisite Regulatory Approvals and CBES's Stockholders Approvals
have been received, a breach of this Agreement by either party may be
remedied only by an action for money damages.
Section 9.10. Successors and Assigns; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided, however, that
this Agreement may not be assigned by either party hereto without the
written consent of the other party.
47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized officers as of the date first
above written.
NASB FINANCIAL, INC.
By:/s/ Xxxxx X. Xxx
Name: Xxxxx X. Xxx
Title: President
NASB ACQUISITION SUBSIDIARY, INC.
By:/s/ Xxxxx X. Xxx
Name: Xxxxx X. Xxx
Title: President
CBES BANCORP, INC.
By:/s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: CEO
48
