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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
SAC RIVER VALLEY BANK
AND
LIBERTY BANCSHARES, INC.
AND
LIBERTY BANK
DATED JUNE 18, 1998
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TABLE OF CONTENTS
ARTICLE I
THE MERGER
1.1 Merger
1.2 Closing ............................................................ 2
1.3 Effective Time ..................................................... 2
ARTICLE II
TERMS OF MERGER
2.1 Charter ............................................................ 3
2.2 By-Laws ............................................................ 3
2.3 Directors .......................................................... 3
2.4 Officers ........................................................... 3
2.5 Principal Office ................................................... 4
2.6 Capital Structure .................................................. 4
ARTICLE III
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares................................................ 4
3.2 Adjustments to Exchange Ratio....................................... 5
3.3 Fractional Shares................................................... 5
3.4 Election to Receive Optional Per Share Cash Amount.................. 6
3.5 Exchange Procedures................................................. 6
3.6 Rights of Former Sac River Shareholders............................. 7
3.7 Termination of Exchange Fund........................................ 8
3.8 Lost or Destroyed Shares............................................ 8
3.9 Dissenters' Rights.................................................. 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SAC RIVER
4.1 Organization, Standing, and Power................................... 9
4.2 Subsidiaries........................................................ 9
4.3 Capital Structure................................................... 9
4.4 Authority.......................................................... 10
4.5 Financial Statements............................................... 11
4.6 Reports ........................................................... 13
4.7 Authorizations; Compliance with Applicable Laws.................... 13
4.8 Litigation and Claims.............................................. 15
4.9 Taxes.............................................................. 15
4.10 Certain Agreements................................................. 16
4.11 Benefit Plans...................................................... 17
4.12 Insurance.......................................................... 19
4.13 Absence of Certain Changes or Events............................... 19
4.14 Properties, Leases and Other Agreements............................ 21
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4.15 Votes Required..................................................... 21
4.16 Tax Matters........................................................ 22
4.17 Regulatory Impediments............................................. 22
4.18 Full Disclosure.................................................... 22
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BANCSHARES AND LIBERTY
5.1 Organization, Standing and Power................................... 22
5.2 Subsidiaries....................................................... 22
5.3 Capital Structure.................................................. 23
5.4 Authority.......................................................... 24
5.5 Bancshares Financial Statements.................................... 24
5.6 Reports............................................................ 26
5.7 Authorizations; Compliance with Applicable Laws.................... 26
5.8 Litigation and Claims.............................................. 28
5.9 Taxes.............................................................. 28
5.10 Certain Agreements................................................. 29
5.11 Benefit Plans...................................................... 30
5.12 Insurance.......................................................... 31
5.13 Absence of Certain Changes or Events............................... 32
5.14 Properties, Leases and Other Agreements............................ 33
5.15 Votes Required..................................................... 34
5.16 Tax Matters........................................................ 34
5.17 Regulatory Impediments............................................. 34
5.18 Full Disclosure.................................................... 34
ARTICLE VI
COVENANTS OF SAC RIVER
6.1 Affirmative Covenants.............................................. 34
6.2 Negative Covenants................................................. 35
6.3 Access and Information............................................. 38
6.4 Update Disclosure; Breaches........................................ 39
6.5 Tax Treatment...................................................... 39
6.6 Dissent Process.................................................... 39
6.7 Expenses........................................................... 40
6.8 Delivery of Shareholder Lists...................................... 40
6.9 Shareholder Meetings............................................... 40
6.10 Processing Contracts............................................... 40
ARTICLE VII
COVENANTS OF LIBERTY AND BANCSHARES
7.1 Affirmative Covenants.............................................. 41
7.2 Negative Covenants................................................. 42
7.3 Access and Information............................................. 44
7.4 Update Disclosure; Breaches........................................ 45
7.5 Liberty Benefit Plans.............................................. 45
7.6 Tax Treatment...................................................... 46
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ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 Filings and Approvals.............................................. 46
8.2 Registration Statement............................................. 47
8.3 Reports............................................................ 49
8.4 Brokers and Finders................................................ 49
8.5 Additional Agreements; Reasonable Efforts.......................... 49
ARTICLE IX
CONDITIONS PRECEDENT
9.1 Conditions to Each Party's Obligation
to Effect the Merger............................................... 50
9.2 Conditions to Obligations of Bancshares............................ 51
9.3 Conditions to Obligations of Sac River............................. 53
ARTICLE X
TERMINATION AND AMENDMENT
10.1 Termination........................................................ 54
10.2 Investigation and Review........................................... 55
10.3 Effect of Termination.............................................. 56
10.4 Amendment.......................................................... 56
10.5 Extension; Waiver.................................................. 56
ARTICLE XI
GENERAL PROVISIONS
11.1 Non-Survival of Representations, Warranties and
Agreements......................................................... 56
11.2 Notices............................................................ 56
11.3 Counterparts....................................................... 57
11.4 Entire Agreement; No Third Party Beneficiaries..................... 57
11.5 Governing Law...................................................... 57
11.6 Publicity.......................................................... 57
11.7 Assignment......................................................... 57
11.8 Knowledge of the Parties........................................... 58
11.9 Confidentiality.................................................... 58
Exhibit A, Agreement to Merge
Exhibit B, List of Directors of Surviving Bank
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement"), made and entered into the
18th day of June, 1998, by and among Sac River Valley Bank, a banking
corporation organized under the laws of the State of Missouri ("Sac River"),
Liberty Bank, a banking corporation organized under the laws of the State of
Missouri (hereinafter referred to as "Liberty") and Liberty Bancshares, Inc., a
Missouri corporation (hereinafter referred to as "Bancshares"), a one bank
holding company owning all of the issued and outstanding capital stock of
Liberty (all of said corporations being hereinafter sometimes referred to
collectively as the "Constituent Corporations").
W I T N E S S E T H:
WHEREAS, as of December 31, 1997, the equity capital of Sac River was
$11,140,000.00, divided into 10,000 shares of common stock, each of a par value
of $30.00 each, surplus of $500,000.00, undivided profits, including capital
reserves, of $10,315,000.00, and net unrealized holding gains on
available-for-sale securities of $25,000.00; and
WHEREAS, as of December 31, 1997, the equity capital of Liberty was
$7,603,000.00, divided into 34,000 shares of common stock, each of a par value
of $50.00 each, surplus of $5,592,000.00, and undivided profits, including
capital reserves, of $311,000.00; and
WHEREAS, Bancshares has, on the date hereof, authorized capital
consisting of 5,000,000 shares of common stock, par value of $1.00 per share (as
approved by the shareholders of Bancshares on May 19, 1998), of which on the
date hereof 511,090 shares are issued and outstanding; and
WHEREAS, subject to full due diligence and final approval by the
respective Boards of Directors of Sac River and Bancshares, the respective
Boards of Directors of Sac River and Bancshares are of the opinion that the
transactions described herein are in the best interests of the parties and their
respective shareholders. This Agreement provides for the acquisition of Sac
River by Bancshares pursuant to the merger of Sac River with and into Liberty.
At the effective time of such merger, the outstanding shares of common stock of
Sac River shall be converted into the right to receive shares of common stock of
Bancshares, cash, or a combination thereof, subject to the limitations set forth
herein. As a result, shareholders of Sac River shall become shareholders of
Bancshares, and Liberty, as the wholly owned subsidiary of Bancshares, shall
continue to conduct, under its charter, its banking business and
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the banking business formerly conducted by Sac River. The transactions described
in this Agreement are subject to the approvals of the shareholders of Sac River
and Liberty, the Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Missouri Division of Finance, and other
applicable federal and state regulatory authorities, and the satisfaction of
certain other conditions described in this Agreement. It is the intention of the
parties to this Agreement that the Merger, for federal income tax purposes,
shall qualify as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Constituent Corporations desire to make certain
representations, warranties and agreements in connection with the Merger and to
set forth the terms and conditions of the Merger;
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement,
at the Closing Date (as hereinafter defined), Sac River shall be merged with and
into Liberty (the "Merger"). Liberty shall be the surviving bank (the "Surviving
Bank") resulting from the Merger and shall operate under its charter. The
corporate identity and existence of Sac River, separate and apart from Liberty,
shall cease on consummation of the Merger.
1.2 Closing. The closing of the Merger (the "Closing") shall take
place at 9:00 a.m. on a date (the "Closing Date") to be specified by the
parties, which, unless all parties agree, shall be no later than thirty (30)
days after the latest to occur of (i) receipt of all necessary consent and
approvals from the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), the Federal Deposit Insurance Corporation (the
"FDIC"), the Missouri Division of Finance (the "Division of Finance") and any
other applicable bank regulatory or other governmental authorities and the
expiration of any waiting periods imposed by law, (ii) the date on which the
Shareholders of Sac River approve the Merger, (iii) the date on which
Bancshares, as the sole shareholder of Liberty, approves the Merger, and (iv)
the date on which all other conditions precedent to each party's obligations
hereunder shall have been satisfied and waived. The Closing shall be held at
such place as may be mutually agreed upon by the parties.
1.3 Effective Time. On or as soon as practicable after the Closing
Date, this Agreement (or, in lieu thereof, a separate merger agreement,
substantially in the form attached hereto as
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Exhibit "A", and made a part hereof by this reference (the "Merger Agreement")),
a copy of the minutes of the respective shareholders' meetings at which the
Merger was approved, with a copy of the approval of the Boards of Directors of
the Constituent Corporations, all certified and verified by the respective
secretaries of the meetings, shall be filed with the Division of Finance and in
and with such additional offices as required by RSMo. Section 362.700, and upon
such filing, the Merger shall be effective (the "Effective Time"). In the
event of any inconsistency between the Merger Agreement and this Agreement, the
terms of this Agreement shall control.
ARTICLE II
TERMS OF MERGER
2.1 Charter. The charter of Liberty in effect immediately prior to
the Effective Time shall be the charter of the Surviving Bank until otherwise
amended or repealed. The name of the Surviving Bank shall be Liberty Bank.
2.2 By-Laws. The By-Laws of Liberty in effect immediately prior to
the Effective Time shall be the By-Laws of the Surviving Bank until otherwise
amended or repealed.
2.3 Directors. The directors of Sac River and Liberty in office
immediately prior to the Effective Time, as listed on Exhibit "B" attached
hereto and made a part hereof by this reference, shall serve as the directors of
the Surviving Bank from and after the Effective Time in accordance with the
By-Laws of the Surviving Bank.
The directors of Sac River and Bancshares in office immediately prior
to the Effective Time, together with such additional persons as may thereafter
be elected, shall serve as the directors of Bancshares, from and after the
Effective Time, in accordance with the By-Laws of the Bancshares.
2.4 Officers. The officers of Bancshares in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the officers of Bancshares from and after
the Effective Time in accordance with the By-Laws of Bancshares. In addition,
Xxxxx X. Xxxxxxxx shall serve as the Executive Vice-President of Bancshares, in
accordance with the By-Laws of Bancshares.
The officers of Liberty in office immediately prior to the Effective
Time shall serve in the same capacities with the Surviving Bank from and after
the Effective Time in accordance with the By-Laws of the Surviving Bank. In
addition, Xxxxx X. Xxxxxxxx shall serve as the Executive Vice-President of the
Surviving Bank, and all current vice-presidents of Sac River shall serve as
vice-
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presidents of the Surviving Bank, in accordance with the By-Laws of the
Surviving Bank.
2.5 Principal Office. The business of the Surviving Bank shall be
conducted as its main office which shall be located at 0000 X. Xxxxxxxx,
Xxxxxxxxxxx, Xxxxxxxx, and its legally established branches, shall include all
of the existing locations of Sac River.
2.6 Capital Structure. As of the Effective Time of the Merger, the
amount of the capital stock of the Surviving Bank, surplus and undivided
profits, will be equal to the combined capital structures of Liberty and Sac
River as stated in the recitals of this Agreement, adjusted, however, for (i)
normal earnings and expenses between December 31, 1997 and the Effective Time of
the Merger (and, if applicable, purchase accounting adjustments), (ii) the
amount of the Mandatory Per Share Cash Amounts (as hereafter defined), Optional
Per Share Cash Amounts (as hereafter defined) (if any) and cash distributed in
lieu of fractional shares, and (iii) regular cash dividends paid by Sac River
and Liberty with respect to their capital stock between December 31, 1997 and
the Effective Time of the Merger. All assets as they exist at the Effective Time
of the Merger shall pass to and vest in the Surviving Bank without any
conveyance or other transfer. The Surviving Bank shall be responsible for all of
the liabilities of every kind and description of Sac River and Liberty existing
as of the Effective Time of the Merger.
ARTICLE III
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. As of the Effective Time, by virtue of
the Merger and without any action on the part of a Constituent Corporation, or
the shareholders of a Constituent Corporation, but subject to RSMo. Section
362.730 with respect to the rights of dissenting shareholders and subject to
adjustment as provided herein, the shares of the Constituent Corporations
shall be converted and exchanged as follows:
(a) Each share of common stock of Bancshares issued and
outstanding immediately prior to the Effective Time shall remain issued
and outstanding from and after the Effective Time.
(b) Each share of common stock of Liberty issued and
outstanding immediately prior to the Effective Time shall remain issued
and outstanding from and after the Effective Time.
(c) Each share of Sac River common stock issued and
outstanding at the Effective Time shall cease to be outstanding, and
shall be automatically cancelled and retired
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and shall cease to exist, and shall be converted into and exchanged for
the right to receive common stock of Bancshares, fully paid and
nonassessable, and cash from Bancshares, as follows:
(i) Cash in the amount of Four Hundred Eighty
Five Dollars & 70/100 ($485.70) per share (the "Mandatory Per
Share Cash Amount"). In no event shall the Mandatory Per Share
Cash Amounts exceed, in the aggregate, Four Million Eight
Hundred Fifty-Thousand Dollars ($4,857,000.00); and
(ii) At the election of the each shareholder of
Sac River, with respect to each share of common stock of Sac
River:
(A) Cash in the amount of One Thousand
Fifty Dollars ($1,050.00) per share (the " Optional
Per Share Cash Amount"); provided, however, that the
total cash payable by Bancshares with respect to the
Optional Per Share Cash Amount to all shareholders of
Sac River shall not exceed Two Million Eight Hundred
Thousand Dollars ($2,800,000.00), less cash
distributed in lieu of fractional shares (the
"Optional Cash Payment Limitation"); or
(B) The right to receive 35.516 shares
of common stock of Bancshares (the "Exchange Ratio").
3.2 Adjstments to Exchange Ratio. In the event Bancshares changes
the number of shares of Bancshares common stock issued and outstanding prior to
the Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefore (in
the case of a stock dividend) or the effective date thereof (in the case of a
stock split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of Sac River common stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a fraction of a
share of Bancshares common stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a shares of Bancshares
common stock multiplied by the value of one share of Bancshares common stock at
the Effective Time. For purposes of this Agreement, the value of one share of
Bancshares common stock at the Effective Time shall be $29.56 (subject to
adjustment as provided in Section 3.2 hereof). No such holder shall be entitled
to
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dividends, voting rights, or any other rights as a shareholder in respect of
any fractional shares.
3.4 Election to Receive Optional Per Share Cash Amount. Elections
by shareholders of Sac River to receive Optional Per Share Cash Amounts shall be
made by mailing or delivering to the Exchange Agent (as defined below) the Form
of Election delivered to the shareholders of Sac River with the Proxy Statement
(as defined in Section 8.2 hereof). To be effective, a Form of Election must be
properly completed, signed and submitted by the shareholder no later than the
date of the special meeting of the shareholders of Sac River held to approve the
Merger (the "Election Deadline"). In the event the special shareholders meeting
is adjourned to a specified date no longer than ninety (90) days after such
adjournment, the Election Deadline shall be such specified date (the "Extended
Electing Deadline"). Sac River and Bancshares shall mail the Form of Election
with the Proxy Statement to all holders of Sac River common stock on the record
date of the Sac River special shareholders' meeting and shall make the Form of
Election available to all persons who become holders of Sac River common stock
subsequent to such day and no later than the close of business on the business
day prior to the Extended Election Deadline. All elections by shareholders to
receive Optional Per Share Cash Amounts may be revoked or amended until the
Extended Election Deadline. If no such election is filed by a Sac River
shareholder, no Optional Per Share Cash Amount shall be made to the shareholder,
and all of the Sac River shares held by the shareholder shall be exchanged for
Bancshares common stock in accordance with the Exchange Ratio (except for the
Mandatory Per Share Cash Amount) Each Sac River shareholder who does not vote in
favor of the Merger as of the Extended Election Deadline shall be deemed,
subject to the right hereinabove provided for amendment or revocation of the
election and subject to the provisions of Section 3.9 hereof, to have made an
election to receive Optional Per Share Cash Amounts with respect to his or her
shares, regardless of the actual Forms of Election submitted by said
shareholder.
3.5 Exchange Procedures. At the Closing, Bancshares shall deposit
with Husch & Eppenberger, LLC (the "Exchange Agent"), for the benefit of the
then holders of shares of Sac River common stock, certificates dated as of the
Closing Date representing the shares of Bancshares common stock, the cash to be
paid in lieu of fractional shares, the Optional Per Share Cash Amounts (if any),
and the Mandatory Per Share Cash Amounts (such cash and certificates of
Bancshares common stock, together with any dividend or distributions with
respect thereto, being hereinafter referred to as the "Exchange Fund") to be
issued and paid pursuant to Section 3.1 hereof in exchange for the outstanding
shares of Sac River common stock. Within five (5) business days after the
Closing Date, Bancshares shall cause the Exchange Agent to mail to each holder
of record as of the Closing Date of a Sac River certificate or certificates (i)
a letter of transmittal which will
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specify that delivery shall be effective, and risk of loss and title to the Sac
River certificate(s) shall pass, only upon delivery of the Sac River
certificate(s) to the Exchange Agent and which shall be in such form and have
such other provisions as Bancshares and Sac River may reasonably specify, and
(ii) instructions for use in effecting the surrender of the Sac River
certificate(s) in exchange for a certificate representing shares of Bancshares
common stock, cash to be paid in lieu of any fractional share, the Optional Per
Share Cash Amount (if any) and the Mandatory Per Share Cash Amount. Upon
surrender of a shareholder's Sac River certificate or certificates for
cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, the holder of such Sac River certificate(s) shall be entitled to
receive in exchange therefore, within ten (10) business days following said
surrender, (1) a certificate representing the applicable number of whole shares
of Bancshares common stock, and (2) a check representing the amount of the cash
to be paid in lieu of a fractional share, if any, the Optional Per Share Cash
Amount (if any) and the Mandatory Per Share Cash Amount, and the Sac River
certificate(s) so surrendered shall forthwith be cancelled; provided, however,
that any Sac River shareholder who does not vote in favor of the Merger shall
not be entitled to receive said cash earlier than sixty (60) days after the
Effective Time. Except for said shareholders (who, except as provided in Section
3.9 hereof, shall receive interest at the rate of 9% per annum during the period
of sixty (60) days following the Effective Time), no interest will be paid on
cash in lieu of fractional shares, the Optional Per Share Cash Amount (if any),
and the Mandatory Per Share Cash Amount. Any applicable stock transfer taxes
shall be paid by Bancshares. Adoption of this Agreement by the shareholders of
Sac River and Liberty shall constitute ratification of the appointment of the
Exchange Agent.
3.6 Rights of Former Sac River Shareholders. At the Effective Time,
the stock transfer books of Sac River shall be closed as to holders of Sac River
common stock immediately prior to the Effective Time and no transfer of Sac
River common stock by any such holder shall thereafter be made or recognized.
Until surrendered for exchange in accordance with the provisions of Section 3.5
hereof, each certificate theretofore representing shares of Sac River common
stock shall from and after the Effective Time represent for all purposes only
the right to receive the consideration provided in Section 3.1 hereof in
exchange therefore, subject, however, to Bancshares' obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which have been declared or made by Sac River in respect of such
shares of Sac River common stock in accordance with the terms of this Agreement
and which remain unpaid at the Effective Time. Whenever a dividend or other
distribution is declared by Bancshares on the Bancshares common stock, the
record date for which is at or after the Effective Time, the declaration shall
include dividends or other distributions on all shares of
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Bancshares common stock issuable pursuant to this Agreement, but beginning
thirty (30) days after the Effective Time no dividend or other distribution
payable to the holders of record of Bancshares common stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of Sac River common stock issued and outstanding
at the Effective Time until such holder surrenders such certificate (or an
affidavit in lieu thereof pursuant to Section 3.8 hereof) for exchange as
provided in Section 3.5 of this Agreement. However, upon surrender of Sac River
common stock certificate, both the Bancshares common stock certificate (together
with all such undelivered dividends or other distributions without interest) and
any undelivered dividends and cash payments payable thereunder (without
interest) shall be delivered and paid with respect to each share represented by
such certificate.
3.7 Termination of Exchange Fund. Any portion of the Exchange Fund
that remains unclaimed by the shareholders of Sac River for twelve (12) months
after the Closing Date shall be paid to Bancshares. Any shareholders of Sac
River who have not theretofore complied with this Article III shall thereafter
look only to Bancshares for payment of their shares of Bancshares common stock,
cash in lieu of any fractional share of Bancshares common stock, Optional Per
Share Cash Amount (if any) and Mandatory Per Share Cash Amount, without any
interest thereon. Notwithstanding the foregoing, neither the Exchange Agent nor
Bancshares shall be liable to any former holder of shares of Sac River common
stock for any amount properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar laws.
3.8 Lost or Destroyed Shares. In the event any Sac River
certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Sac River certificate to be
lost, stolen or destroyed and, if required by the Exchange Agent, the execution
and delivery of an indemnity agreement whereby said person shall agree to
indemnify the Exchange Agent and Bancshares against any claim which may be made
against it with respect to such Sac River certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Sac River certificate the
shares of Bancshares common stock and cash in an amount as determined in
accordance with Section 3.1 hereof, deliverable in respect thereof pursuant to
this Agreement.
3.9 Dissenters' Rights. Each issued and outstanding share of Sac
River common stock, the holder of which has validly asserted dissenters' rights
pursuant to RSMo. Section 362.730 and has not effectively withdrawn or lost such
rights, shall not be converted into or represent a right to receive the
consideration specified in Section 3.1 hereof, but the holder thereof shall be
entitled only to such rights as are granted by RSMo. Section 362.730. In the
event the holder of Sac River common stock validly asserts dissenter's rights
pursuant to RSMo. Section 362.730, any cash held by the Exchange Agent
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with respect to said shareholder's shares shall be paid by the Exchange Agent to
the Surviving Bank. Each shareholder entitled, pursuant to the provisions of
RSMo. Section 362.730, to payment for his or her shares of Sac River common
stock, shall receive payment therefore from the Surviving Bank (but only after
the amount thereof shall have been agreed upon or determined pursuant to
such provisions) and such shares of Sac River common stock shall be cancelled.
If any holder of shares of Sac River common stock who asserts dissenters'
rights under RSMo. Section 362.730 effectively withdraws or loses (through
failure to perfect or otherwise) such rights, each such share of Sac River
common stock shall be converted into the right to receive the consideration
specified in Section 3.1 hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SAC RIVER
Sac River hereby represents and warrants to Liberty and Bancshares as
follows:
4.1 Organization, Standing, and Power. Sac River is a banking
corporation duly organized, validly existing, and in good standing under the
laws of the State of Missouri, and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Copies of the charter and by-laws of Sac River, as
certified by the secretary of Sac River, have heretofore been delivered to
Bancshares, and are complete and correct as of the date of this Agreement.
4.2 Subsidiaries. Sac River has no subsidiaries.
4.3 Capital Structure.
(a) As of the date hereof, the authorized capital stock of
Sac River consists of ten thousand (10,000) shares, of common stock,
par value $30.00 per share.
(b) As of the date hereof, ten thousand (10,000) shares
of common stock of Sac river are issued and outstanding, and no shares
of common stock are held in treasury.
(c) Except as set forth in the Sac River Disclosure Letter
(which is a letter delivered by Sac River to Bancshares within thirty
(30) days after the date hereof, the receipt of whereof to be
acknowledged by Bancshares, and which identifies, as to each matter
disclosed therein, the Section of this Agreement to which the matter
relates), as of the date hereof, Sac River has not issued any
outstanding bonds, debentures, notes or other indebtedness having the
right to vote (or convertible into securities having the right to vote)
on any matters on which shareholders may vote ("Voting Debt").
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All outstanding shares of Sac River capital stock are validly issued,
fully paid and non-assessable and not subject to or issued in violation
of any preemptive rights, and there are no options, warrants, calls,
rights, or agreements of any character whatsoever to which Sac River is
a party or by which it is bound obligating Sac River to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of
its capital stock or Voting Debt or obligating Sac River to grant,
extend or enter into any such option, warrant, call, right, or
agreement. Immediately after the Effective Time, there will be no
option, warrant, call, right or agreement obligating Sac River to
issue, deliver or sell, or cause to be issued, delivered or sold, any
shares of its capital stock or Voting Debt or obligating Sac River to
grant, extend or enter into any such option, warrant, call, right or
agreement.
(d) Sac River has not purchased, redeemed, cancelled or
otherwise acquired any of its capital stock or Voting Debt during the
two (2) years preceding the date hereof, and there are no obligations,
contingent or otherwise, of Sac River to repurchase, redeem or
otherwise acquire any shares of its capital stock or Voting Debt.
(e) As of December 31, 1997, Sac River had capital of
$11,140,000.00, divided into ten thousand (10,000) shares of common
stock, surplus of $500,000.00, and undivided profits, including capital
reserves, of $10,315,000.00, and net unrealized holding gains on
available-for-sale securities of $25,000.00.
4.4 Authority.
(a) Sac River has all requisite corporate power and
authority necessary to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery, and performance of this Agreement, and
the consummation of the transactions contemplated herein, including the
Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Sac River, subject
to the approval of this Agreement by the Board of Directors and the
holders of two-thirds (2/3) of the outstanding shares of Sac River
common stock, which is the only shareholder vote required for approval
of this Agreement and consummation of the Merger by Sac River. This
Agreement has been duly executed and delivered by Sac River, and
constitutes a valid and binding obligation of Sac River enforceable in
accordance with its terms, subject to such requisite Board of Directors
and shareholder approval and compliance with the provisions of RSMo.
Sections 362.610 to 362.810, inclusive (the "Missouri Bank Merger
Laws"), the Securities Act of 1933 (the "Securities Act"), the
Securities Exchange Act of 1934 (the "Exchange
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Act"), and the securities or "blue sky" laws of the various states
(collectively the "Securities Laws") and consents, authorizations or
approvals required from regulatory authorities.
(b) The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated herein, will not,
conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or
the loss of a benefit under, or the creation of a lien, pledge,
security interest or other encumbrance on assets (any such conflict,
violation, default, right of termination, cancellation or acceleration
loss or creation, a "Violation"), pursuant to the provisions of (i) the
charter or by-laws of Sac River, or (ii) any loan or credit agreement,
note, mortgage, indenture, lease, Sac River Benefit Plan (as
hereinafter defined) or other agreement, obligation, instrument,
permit, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Sac River, or its
properties or assets, which Violation would have a material adverse
effect on the business, operations, prospects or financial condition of
Sac River (a "Sac River Material Adverse Effect").
4.5 Financial Statements.
(a) The statement of financial condition of Sac River as
of December 31, 1997, and the related statements of income, cash flow
and shareholder's equity for the period ending December 31, 1997 (the
"Sac River Latest Statement Date"), in the form prepared for Sac
River's internal use, copies which have been furnished by Sac River to
Bancshares, and the statement of financial condition of Sac River, as
of March 31, 1998, and the related statements of income, cash flow and
shareholder's equity for the three (3) months then ended, in the form
prepared for Sac River's internal use, copies of which have been
furnished by Sac River to Bancshares (collectively the "Sac River
Financial Statements") have been prepared in accordance with generally
accepted accounting principles as utilized in the Sac River Financial
Statements applied on a consistent basis (except as may be indicated
therein or in the notes thereto), and present fairly the financial
position of Sac River, at the dates and results of operations, changes
in shareholder's equity and cash flows for the periods stated therein.
In the case of interim fiscal periods, all adjustments, consisting only
of normal reoccurring items, which management of Sac River believes
necessary for a fair presentation of such financial information, have
been made, subject to year end audit
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adjustments, none of which could reasonably be expected to have a Sac
River Material Adverse Effect.
(b) Except as and to the extent set forth in the statement
of financial condition of Sac River as of March 31, 1998, or in the
notes thereto, Sac River has no liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) that would
be required to be reflected on a statement of financial condition, or
in the notes thereto, prepared in accordance with generally accepted
accounting principles, except (i) for liabilities or obligations
incurred in the ordinary course of business since the Sac River Latest
Statement Date that would not, individually or in the aggregate, have a
Sac River Material Adverse Effect, or (ii) as otherwise reflected in
the Sac River Reports (as defined below) filed prior to the date of
this Agreement. Except as set forth in the Sac River Disclosure Letter,
Sac River has no liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) that are not required to be
reflected on a balance sheet, or in the notes thereto, except for
liabilities or obligations that do not, individually or in the
aggregate, have a Sac River Material Adverse Effect.
(c) Without limitation to the foregoing, Sac River's
allowance for loan losses included in the Sac River Financial
Statements as of March 31, 1998, was $854,231.02. To the knowledge of
sac River, the amount of such allowance for loan losses was adequate to
absorb reasonably expected losses in the loan portfolio of Sac River.
To the knowledge of Sac River, there are no facts which would cause it
to increase the level of such allowance for loan losses. To the
knowledge of Sac River, the documentation relating to loans made by Sac
River and relating to all security interests, mortgages and other liens
with respect to all collateral for such loans, taken as a whole is
adequate for the enforcement of the material terms of such loans and of
the related security interests, mortgages and other liens, except as
enforcement may be limited by bankruptcy or similar laws or principles
of equity. To the knowledge of Sac River, the terms of such loans and
of the related security interests, mortgages and other liens comply in
all material respects with all applicable laws, rules and regulations
(including laws, rules and regulations relating to the extension of
credit). Except as set forth in the Sac River Disclosure Letter, (i) as
of March 31, 1998, there are no loans, leases, other extensions of
credit or commitments to extend credit of Sac River that have been or
should be, in accordance with generally accepted accounting principles,
classified by Sac River as non-accrual, as restructured, as ninety days
past due, as still accruing and doubtful of collection or any
comparable classification, and (ii) Sac River has provided Bancshares
true, correct and
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complete in all material respects, such written information concerning
the loan portfolio of Sac River as requested. Notwithstanding any
provision in this Section 4.5(c) to the contrary, Sac River makes no
representation or warranty with respect to the collectability of any
loan.
4.6 Reports. Sac River has filed all reports, registrations and
statements, together with any amendments required to be made with respect
thereto, that were or are required to be filed with (i) the FDIC, (ii) the
Division of Finance, and (iii) any other applicable federal or state agencies or
bank authorities (all such reports and statements are collectively referred to
herein as the "Sac River Reports"). As of their respective dates, the Sac River
Reports filed prior to the date hereof complied in all material respects with
all of the statutes, rules and regulations enforced or promulgated by any
regulatory authority which they are filed, and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
4.7 Authorizations; Compliance With Applicable Laws.
(a) Sac River holds all authorizations, permits, licenses,
variances, exemptions, orders and approvals of all governmental
entities which are material to the operations of its business (the "Sac
River Permits"). All such Sac River Permits are in full force and
effect as of the Closing Date, and Sac River is in compliance with the
terms of the Sac River Permits, except where the failure to so comply
could not reasonably be expected to have a Sac River Material Adverse
Effect. Except as disclosed in the Sac River Reports filed prior to the
date of this Agreement or in the Sac River Disclosure Letter, the
business of Sac River is not deemed, and has not been, conducted in
violation of any domestic (federal, state or local) law, statute,
ordinance or regulation of any governmental entity (collectively
"Laws") except for possible violations which individually or in the
aggregate do not and, insofar as reasonably can be foreseen, in the
future will not, have a Sac River Material Adverse Effect. Except as
set forth in the Sac River Disclosure Letter, as of the date hereof, no
investigation or review by any governmental entity with respect to Sac
River is pending or, to the knowledge of Sac River, threatened, nor has
any governmental entity indicated an intention to conduct the same. The
deposits of Sac River are insured by the FDIC to the extent provided by
law.
(b) The Sac River Disclosure Letter identifies each parcel of
real estate currently owned, leased or otherwise possessed or
controlled by Sac River on the date of this Agreement, including real
estate owned as a result of
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foreclosure and properties managed or controlled by Sac River in
connection with its lending or fiduciary obligations (collectively, the
"Sac River Property"). Except as set forth in the Sac River Disclosure
Letter, to the knowledge of Sac River, none of the Sac River Property
owned or leased by Sac River for use in the operation of its business
is in violation of any applicable zoning ordinance or other law,
regulation or requirement relating to operation of any properties used,
including, without limitation, applicable federal, state and local
laws, rules and regulations relating to the environment or to human
health and safety associated with the environment (collectively
"Environmental Laws"), other than violations that, in the aggregate,
would not have a Sac River Material Adverse Effect; and Sac River has
not received any notice of any such violation, or the existence of any
condemnation proceeding with respect to any Sac River Property. Except
as set forth in the Sac River Disclosure Letter, to the knowledge of
Sac River, no Toxic Substances (as defined below) have been deposited
or disposed in, on or under any Sac River Property during the period in
which Sac River has owned, occupied, managed, controlled or operated
such properties, except to the extent the same would not have a
Material Adverse Effect. Except as set forth in the Disclosure Letter,
to Sac Rivers' knowledge, no portion of the Sac River Property has ever
been used as a dump or gasoline service station by any person,
including past owners, occupants and operators of such properties. To
the knowledge of Sac River, there are no underground or aboveground
storage tanks (whether or not currently in use) located on or under the
Sac River Property, and no underground tank previously located on the
Sac River Property has been removed therefrom. To the knowledge of Sac
River, there are no conditions or circumstances in connection with the
Sac River Property that could reasonably be anticipated to (i) cause
any Sac River Property to be subject to any restrictions on ownership,
occupancy, use or transferability under any applicable Environmental
laws, or (ii) materially reduce the value of any Sac River Property. To
the knowledge of Sac River, Sac River has not been identified as a
potentially responsible party in a matter arising under any
Environmental Laws. For purposes of this Agreement, (1) "Toxic
Substances" shall mean petroleum or petroleum based substance or waste,
solid waste, PCBs, pesticides, herbicides, lead, radioactive materials,
asbestos or asbestos containing materials, ureaformaldehyde foam
installation, or substances defined as "hazardous substances" or "toxic
substances" in any Environmental Laws, and (2) materials will be
considered to be deposited or disposed in, on or under any real
property if such materials have been stored, treated, recycled, used or
accidentally or intentionally spilled, released, dumped, emitted, or
otherwise placed, deposited or disposed of, or used in any
construction, in, on or under such property.
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4.8 Litigation and Claims. Except as disclosed in the Sac River
Reports filed prior to the date of this Agreement or in the Sac River Disclosure
Letter:
(a) Sac River is not subject to any continuing order of, or
written agreement or memorandum or understanding with any federal or
state banking or insurance authority or other governmental entity, or
any judgment, order, writ, injunction, decree or award of any
governmental entity or arbitrator, including, without limitation,
cease-and-desist or other orders of any banking authority,
(b) There is no action, suit, litigation, proceeding or
arbitration against or affecting Sac River, or to the knowledge of Sac
River, any directors, officers, employees or agents of Sac River (in
their respective capacities as directors, officers, employees or
agents) pending or, to the knowledge of Sac River, threatened, which
would, if adversely determined, have a Sac River Material Adverse
Effect or, to the knowledge of Sac River, any basis therefore, and
(c) There are no uncured material violations, or violations
with respect to which material refunds or restitutions may be required,
cited in any compliance report to Sac River as a result of the
examination by any bank regulatory authority.
4.9 Taxes. Sac River has filed all tax returns required to be filed by
it and has paid or has set up an adequate reserve for the payment of, all taxes
required to be paid as shown on such returns, except to the extent such
nonpayment did not result in a Sac River Material Adverse Effect. The most
recent Sac River financial statements contained in the Sac River Reports reflect
an adequate reserve for all taxes payable by Sac River accrued to the date of
such financial statements. The Sac River Disclosure Letter sets forth, as of the
date hereof, the following information with respect to Sac River:
(a) Whether there is an examination pending by the Internal
Revenue Service ("IRS") with respect to Sac River and, if so, the tax
years involved,
(b) Whether Sac River has executed or filed with the IRS any
agreement which is still in effect extending the period for assessment
and collection of any federal tax, and if so, the tax years covered by
such agreement and the expiration of such extension, and
(c) Whether there are any existing material disputes as to
state or local taxes.
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There are no liens for taxes upon the assets of Sac River,
except for statutory liens for taxes not yet delinquent or the validity
of which is being contested in good faith by appropriate proceedings
and, in either case, only if adequate reserves therefor have been
established on Sac River's books in accordance with generally accepted
accounting principals. Except as disclosed in the Sac River Disclosure
Letter, Sac River is not a party to any action or proceeding by any
governmental authority for assessment and collection of taxes, and no
claim for assessment and collection of taxes has been asserted against
it. For purposes of this Agreement, the term "tax" shall include all
federal, state and local income, profits, franchise, gross receipts,
payroll, sales, employment, use, personal and real property,
withholding, excise and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions
imposed with respect to such amounts. Sac River has withheld from its
employees (and timely paid to the appropriate governmental agency)
amounts which are proper and accurate in all material respects for all
periods through the date hereof in material compliance with all tax
withholding provisions of applicable federal, state and local laws
(including, without limitation, income, social security and employment
tax withholding for all types of compensation).
4.10 Certain Agreements. Except as discussed in the Sac River
Reports filed prior to the date of this Agreement or as disclosed in the Sac
River Disclosure Letter, and except for this Agreement, Sac River is not a party
to any oral or written (i) consulting or employment agreement or other agreement
providing any term of employment, compensation guarantee, or severance benefit,
(ii) union or collective bargaining agreement, (iii) agreement or plan,
including any stock option plan, stock appreciation right plan, restricted stock
option or stock purchase plan, any of the benefits of which will be increased,
or the vesting 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 the transactions
contemplated by this Agreement, (iv) contract, agreement or understanding to
repurchase assets previously sold (or to indemnify or otherwise compensate the
purchaser in respect of such assets) (other than contracts entered into in the
ordinary course of business,), (v) contract containing covenants which limit the
liability of Sac River to compete in any line of business or with any person or
which involve any restriction of the geographical area in which, or method by
which, Sac River may carry on its business (other than as may be required by law
for applicable regulatory authorities), (vi) any contract, agreement or other
instrument or undertaking which is not terminable by Sac River without
additional payment or penalty within sixty (60) days and obligates Sac River for
payments or other consideration for a value in excess of $10,000.00, other than
loan agreements entered
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into in the ordinary course of business, or (vii) other executory material
agreement. Except as set forth in the Sac River Disclosure Letter, Sac River is
not in Violation of any loan or credit agreement, note, mortgage, indenture or
other agreement, obligation or instrument applicable to Sac River or its
properties or assets, except for any such Violations that would not,
individually or in the aggregate, have a Sac River Material Adverse Effect.
4.11 Benefit Plans.
(a) The Sac River Disclosure Letter lists (i) each employee
bonus, incentive, deferred compensation, stock purchase, stock
appreciation right, stock option, fringe benefit and severance pay
plan, (ii) each pension, profit sharing, stock bonus, thrift, savings
and employee stock ownership plan, (iii) each health, welfare,
disability, vacation, leave, perquisite or executive plan, program,
policy or practice, and (iv) every other employee benefit plan (within
the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) (collectively "Sac River Benefit
Plans"), which Sac River maintains or to which Sac River contributes on
behalf of current or former employees. Except as disclosed in the Sac
River Disclosure Letter, to the knowledge of Sac River, all of the Sac
River Benefit Plans listed in the Sac River Disclosure Letter comply
with all applicable requirements of the Internal Revenue Code, ERISA
and all other applicable federal and state laws and regulations,
including, without limitation, the reporting and disclosure
requirements of ERISA. Each of the Sac River Benefit Plans that is
intended to be a pension, profit sharing, stock bonus, thrift, savings
or employee stock ownership plan that is qualified under Code
Section 401(a), has been determined by the IRS to so qualify under Code
Section 401(a), and, except as disclosed in the Sac River Disclosure
Letter, to the knowledge of Sac River, there exists no circumstances
that would adversely affect the qualified status of any Sac River
Benefit Plan under that Section. Except as set forth in the Sac River
Disclosure Letter, there is no pending or, to the knowledge of Sac
River, threatened litigation, governmental proceeding or investigation
against or relating to any Sac River Benefit Plan, and to the
knowledge of Sac River there is no reasonable basis for any material
proceedings, claims, actions or proceedings against Sac River, any Sac
River Benefit Plan, or any fiduciary of any Sac River Benefit Plan.
Except as set forth in the Sac River Disclosure Letter, neither Sac
River nor any party in interest (as defined in Section 3(14) of ERISA
and Code Section 4975(e)) nor any Sac River Benefit Plan has engaged
in a "prohibited transaction" (as defined in Section 406 of ERISA and
Code Section 4975(c)) since the date on which said Sections became
applicable to such Plan, and no Sac River Benefit Plan has engaged in
a transaction
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involving the purchase or sale of employer securities by such Plan
from or to a "disqualified person" (within the meaning of Code Section
4975), other than pursuant to an exemption provided therein. All Sac
River Benefit Plans that are group health plans, within the meaning of
Code Section 4980B or Section 601 of ERISA, have been operated in
material compliance with the group health plan continuation coverage
requirements of Code Section 4980B and Section 601 of ERISA to the
extent such requirements are applicable.
(b) There has been no amendment to, written interpretation
of, or announcement (whether or not written) relating to, or any change
in employee participation or coverage under, any Sac River Benefit Plan
that is not reflected in the text of such Sac River Benefit Plan which
would materially increase the expense (whether or not such expense is
recognized under generally accepted accounting principles) to the
employer whose employees are covered by such Sac River Benefit Plan.
Except as expressly provided by applicable law or the terms of a Sac
River Benefit Plan, no condition exists that would prevent the
amendment or termination of any Sac River Benefit Plan with respect to
any employee. All employee and employer contributions with respect to
employees which are due and owing as of the Closing Date pursuant to
the Sac River Benefit Plans have been made or will be accrued on the
Closing Date Financial Statements and, except for such accrued
liabilities, there are as of the Closing Date no other liabilities of
Sac River with respect to the Sac River Benefit Plans.
(c) Sac River has delivered to Bancshares copies of (i) each
Sac River Benefit Plan or if no plan document exists, a written
summary of the material terms thereof, (ii) current summary plan
descriptions of each Sac River Benefit Plan for which they are
required, (iii) each trust agreement, insurance policy or other
instrument relating to the funding of any Sac River Benefit Plan, (iv)
the most recent Annual Reports (Form 5500 Series) and accompanying
schedules filed with the IRS or the United States Department of Labor
with respect to each Sac River Benefit Plan for which they are
required, (v) the most recent determination letter issued by the IRS
with respect to each Sac River Benefit Plan that is intended to
qualify under Code Section 401, (vi) the most recent available
financial statements for each Sac River Benefit Plan that has assets,
and (vii) the most recent audited financial statements for each Sac
River Benefit Plan for which audited financial statements are required
by ERISA.
(d) The Sac River Disclosure Letter describes any obligation
that Sac River has to provide health and welfare benefits to retirees
or other former employees or their dependents (other than rights
arising solely under Section 601
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of ERISA or Code Section 4980B) including information as to the number
of retirees, other former employees and dependents entitled to
such coverage and their ages.
4.12 Insurance. Sac River is presently insured, and during each of
the past five calendar years has been insured, for reasonable amounts with
financially sound and reputable insurance companies against such risks as, to
the knowledge of Sac River, companies engaged in the similar business would, in
accordance with good business practice, customarily be insured. Sac River does
not have any liability for material unpaid premiums or premium adjustments not
properly reflected on the Sac River Financial Statements and no notice of
cancellation or termination has been received by Sac River with respect to any
material insurance policy currently in effect. Within the last five years,
except as disclosed in the Sac River Disclosure Letter, Sac River has not been
refused any insurance with respect to any assets or operations, nor has any
coverage been limited in any material respect as to any assets or operations, by
any insurance carrier to which it has applied for any such insurance or with
which it has carried insurance during the last five years.
4.13 Absence of Certain Changes or Events. Except as disclosed in
the Sac River Reports filed prior to the date of this Agreement or in the Sac
River Disclosure Letter, and except as contemplated by this Agreement, from and
after January 1, 1998 through the date of this Agreement:
(a) Sac River has carried on its business in the ordinary
and usual course consistent with past practices;
(b) Sac River has not amended its charter;
(c) Sac River has not issued or sold any of its capital
stock, or issued or sold any corporate debt securities or otherwise
incurred debt which would be classified as long term debt on its
balance sheet;
(d) Sac River has not granted any option for the purchase of
its capital stock, effected any stock split, or otherwise changed its
capitalization;
(e) Sac River has not declared, set aside, or paid a dividend
or other distribution in respect of its capital stock, other than its
normal 1998 cash dividend in the amount of not more than $80.00 per
share with usual record and payment dates (except as otherwise provided
herein), or, directly or indirectly, redeemed or otherwise acquired any
of its capital stock;
(f) Sac River has not (i) incurred any material obligations
or liability (absolute or contingent), except
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obligations or liabilities incurred in the ordinary course of business,
or (ii) mortgaged, pledged, or subjected to lien, claim, security
interest, charge, encumbrance or restriction any of its assets or
properties;
(g) Sac River has not discharged or set aside any material
lien, mortgage, pledge, claim, security interest, charge, encumbrance,
or restriction or paid any material obligation or liability (absolute
or contingent), other than in the ordinary course of business;
(h) Sac River has not sold, assigned, transferred, leased,
exchanged, or otherwise disposed of, other than in the ordinary course
of business, any of its properties or assets;
(i) Sac River has not increased the rate of compensation of,
or paid any bonus to, any of its directors or officers, except merit or
promotion increases in accordance with existing policy; entered into
any new, or amended or supplemented any existing, employment,
management, consulting, deferred compensation, severance, or other
similar contract not heretofore provided to Bancshares; adopted,
entered into, terminated, amended or modified any Sac River Benefit
Plan in respect of any of its present or former directors, officers or
other employees; or agreed to any of the foregoing;
(j) Sac River has not suffered any material damage,
destruction or loss as a result of fire, accident, casualty, labor
trouble, or taking of property by any government or any agency of any
government, flood, or other similar or dissimilar casualty or event or
otherwise, and whether or not covered by insurance;
(k) Sac River has not cancelled or compromised any debt to
the extent exceeding $10,000.00 owed to Sac River or claim to an extent
exceeding $10,000.00 asserted by Sac River;
(l) Sac River has not entered, or agreed to enter, into any
agreement or arrangement granting any right of refusal or other
preferential right to purchase any of its material assets, properties
or rights or requiring the consent of any party to the transfer or
assignment of any such material assets, properties or rights;
(m) There has not been any other transaction, commitment,
dispute or other event or condition of any character (whether or not in
the ordinary course of business) individually or in the aggregate
having or which, insofar as reasonably can be foreseen, in the future
is reasonably likely to have, a Sac River Material Adverse Effect; and
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(n) There has not been any change in the method of accounting
or accounting practices of Sac River, except as may be required by law
or generally accepted accounting principles. Except as set forth in the
Sac River Disclosure Letter, Sac River has no knowledge of the
announced or anticipated resignation of any executive officer or key
employee of Sac River. From and after the date of the latest Sac River
Financial Statement, through the date of this Agreement, no customers
of Sac River have indicated to Sac River that they will stop or
decrease the rate of business done with Sac River (except for changes
in the ordinary course of business) such as to, individually or in the
aggregate, have a Sac River Material Adverse Effect.
4.14 Properties, Leases and Other Agreements. Except as may be
reflected in the Sac River Financial Statements, for any lien for current taxes
not yet delinquent, for pledges to secure deposits and for such other liens,
security interests, claims, charges, options or other encumbrances or
imperfections of title which do not materially affect the value of personal or
real property reflected in the Sac River Financial Statements or acquired since
the date of such Financial Statements and which do not materially interfere with
or impair the present and continued use of such property, Sac River has good
title, free and clear of any liens, security interests, claims, charges, options
or other encumbrances, to all of the personal and real property reflected in the
Sac River Financial Statements, and all real and personal property acquired
since the date of such Statements, except such real and personal property as has
been disposed of in the ordinary course of business. The Sac River Disclosure
Letter lists all acquisitions or dispositions of capital assets planned as of
the date of this Agreement by Sac River, other than individual transactions with
a value not in excess of $50,000.00 each. Substantially all of Sac River's
buildings and equipment in regular use (including such buildings and equipment
as are leased) have been well maintained and are in good and serviceable
condition, reasonable wear and tear excepted. The Sac River Disclosure Letter
contains a brief description, including terms, of each lease for real or
personal property to which Sac River is a party. Sac River, as lessee, has a
valid and existing leasehold interest under each of such leases, true and
correct copies of which Sac River has delivered to Bancshares. There is not,
under any of such leases relating to real property or any other material leases,
any material existing default by Sac River, or, to the knowledge of Sac River,
any other party thereto, or any event with notice or lapse of time or both would
constitute such a material default.
4.15 Votes Required. The affirmative vote of holders of two-thirds
of the outstanding shares of Sac River common stock is the only vote of the
holders of any class of Sac River capital stock necessary to approve this
Agreement and the transactions contemplated hereby.
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4.16 Tax Matters. Sac River, to its knowledge, has not taken or
agreed to take any action which would prevent the Merger from qualifying as one
or more reorganizations under Code Section 368(a)(1).
4.17 Regulatory Impediments. As of the date hereof, Sac River is
unaware of the existence of any factor that would materially delay or materially
hinder the issuance of any of the required regulatory approvals necessary to
consummate the Merger or the other transactions contemplated hereby, other than
any protest by any non-governmental parties.
4.18 Full Disclosure. The representation and warranties of Sac River
contained in this Agreement do not omit any material fact necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to Sac River which has not
been disclosed to Bancshares pursuant to this Agreement, the Sac River
Disclosure Letter and the Sac River Reports, all taken as a whole, which would
reasonably be expected to have a Sac River Material Adverse Effect on the
ability of Bancshares or Sac River to consummate the transactions contemplated
hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BANCSHARES AND LIBERTY
Bancshares and Liberty hereby represent and warrant to Sac River as
follows:
5.1 Organization, Standing and Power. Bancshares is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Missouri, and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
Liberty is a banking corporation duly organized, validly existing, and in good
standing under the laws of the State of Missouri, and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Copies of the charters and by-laws
of Bancshares and Liberty, as certified by their respective secretaries, have
heretofore been delivered to Sac River, and are complete and correct as of the
date of this Agreement.
5.2 Subsidiaries. Bancshares owns all of the issued and outstanding
shares of Liberty. Bancshares has no other subsidiaries. All of the shares of
capital stock of Liberty owned by Bancshares are fully paid and non-assessable,
and are owned by it free and clear of any claim, lien, encumbrance or agreement
with respect thereto.
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5.3 Capital Structure.
(a) As of the date hereof, the authorized capital stock
of Bancshares consists of 5,000,000 shares of common stock, par value
$1.00 per share (as approved by the shareholders of Bancshares on May
19, 1998). As of the date hereof, the authorized capital stock of
Liberty consists of 34,000 shares of common stock, par value $50.00 per
share.
(b) As of the date hereof, 511,090 shares of common stock of
Bancshares are issued and outstanding. As of the date hereof, 34,000
shares of common stock of Liberty are issued and outstanding, all of
which are held by Bancshares, and no shares of common stock of Liberty
are held in treasury.
(c) Except as set forth in the Bancshares Disclosure Letter
(which is a letter delivered by Bancshares to Sac River within thirty
(30) days after the date hereof, the receipt whereof to be acknowledged
by Sac River, and which identifies, as to each matter disclosed
therein, the Section of this Agreement to which the matter relates), as
of the date hereof, Bancshares has not issued any outstanding bonds,
debentures, notes or other indebtedness having the right to vote (or
convertible into securities having the right to vote) on any matters on
which shareholders may vote ("Voting Debt"). All outstanding shares of
Bancshares capital stock are validly issued, fully paid and
non-assessable and not subject to or issued in violation of any
preemptive rights, and there are no outstanding options, warrants,
calls, rights, commitments or agreements of any character whatsoever to
which Bancshares or Liberty is a party or by which it is bound
obligating Bancshares or Liberty to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock or any
Voting Debt securities of Bancshares or Liberty or obligating
Bancshares or Liberty to grant, extend or enter into any such option,
warrant, call, right, commitment or agreement. The shares of Bancshares
common stock to be issued pursuant to or as specifically contemplated
by this Agreement will be validly issued, fully paid and non-assessable
and not subject to preemptive rights.
(d) Bancshares has not purchased, redeemed, cancelled or
otherwise acquired any of its capital stock or Voting Debt, except as
disclosed in the Bancshares Disclosure Letter, and there are no
obligations, contingent or otherwise, of Bancshares to repurchase,
redeem or otherwise acquire any shares of its capital stock or Voting
Debt.
(e) As of December 31, 1997, Liberty had capital of
$7,603,000.00, divided into 34,000 shares of common stock, surplus of
$5,592,000.00, and undivided profits, including capital reserves, of
$311,000.00.
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5.4 Authority. Bancshares has all requisite corporate power and
authority to enter into this Agreement and the Merger and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Bancshares. This Agreement has been duly executed and delivered by Bancshares
and, subject to appropriate Board of Directors and shareholder approval and
compliance with the Missouri Bank Merger Laws and Securities Laws and consents,
authorizations and approvals from regulatory authorities, constitutes a valid
and binding obligation of Bancshares enforceable in accordance with its terms.
The execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated hereby will not, result in any Violation pursuant
to any provision of (a) the articles of incorporation, charter or by-laws of
Bancshares or Liberty or (b) any loan or credit agreement, note, mortgage,
indenture, lease, Benefit Plan maintained by Bancshares or other agreement,
obligation, instrument, permit, franchise, license, judgment, order, decree,
statute, law ordinance, rule or regulation applicable to Bancshares or Liberty
or their respective properties or assets, which Violation pursuant to this
clause (b) would have a material adverse effect on the business, operations,
prospects or financial condition of Bancshares and Liberty taken as a whole (a
"Bancshares Material Adverse Effect"). Other than in connection or in compliance
with the provisions of The General and Business Corporation Law of Missouri (the
"Missouri General Corporation Law"), the Missouri Bank Merger Laws, the
Securities Laws, and consents, authorizations, approvals, notices of exemptions
required from the FDIC, the Division of Finance, or under the federal Bank
Holding Company Act ("BHC Act"), no consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental entity is
required on the part of Bancshares or Liberty in connection with the execution
and delivery of this Agreement or the consummation by Bancshares or Liberty of
the transactions contemplated hereby and thereby, the failure to obtain which
would have a Bancshares Material Adverse Effect.
5.5 Bancshares Financial Statements.
(a) The consolidated balance sheets of Bancshares and Liberty
as of December 31, 1997 and the related consolidated statements of
income, consolidated statements of cash flows and consolidated
statements of stockholders' equity for the period ended December 31,
1997 (the "Bancshares Latest Statement Date") accompanied by the
unqualified opinion of Xxxxx, Xxxxx & Xxxxxx, copies of which have been
furnished by Bancshares to Sac River; and the unaudited consolidated
balance sheet of Bancshares and Liberty as of March 31, 1998 and the
related consolidated statement of income, consolidated statement of
cash flows and consolidated statement of stockholders' equity for the
three (3) months then ended in
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the form prepared for Bancshares internal use, copies of which have
been furnished by Bancshares to Sac River (collectively, the
"Bancshares Financial Statements"), have been prepared in accordance
with generally accepted accounting principles as utilized in the
Bancshares Financial Statements applied on a consistent basis (except
as may be indicated therein or in the notes thereto), and present
fairly the consolidated financial condition of Bancshares and Liberty
at the dates, and the consolidated results of operations, changes in
stockholders' equity and cash flows for the periods, stated therein. In
the case of interim fiscal periods, all adjustments, consisting only of
normal recurring items, which management of Bancshares believes
necessary for a fair presentation of such financial information, have
been made, subject to year-end audit adjustments, none of which could
reasonably be expected to have a Bancshares Material Adverse Effect.
(b) Except as and to the extent set forth on the consolidated
balance sheets of Bancshares and Liberty, as of March 31, 1998, or in
the notes thereto, neither, Bancshares nor Liberty has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) that would be required to be reflected on a balance sheet,
or in the notes thereto, prepared in accordance with generally accepted
accounting principles, except (i) for liabilities or obligations
incurred in the ordinary course of business since the Bancshares Latest
Statement Date that would not, individually or in the aggregate, have a
Bancshares Material Adverse Effect; or (ii) as otherwise reflected in
the Bancshares Reports (as defined below) filed prior to the date of
this Agreement. Except as disclosed in the Bancshares Disclosure
Letter, neither Bancshares nor Liberty has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) that are not required to be reflected on a balance sheet, or
in the notes thereto, except for liabilities or obligations that do
not, individually or in the aggregate, have a Bancshares Material
Adverse Effect.
(c) Without limitation to the foregoing, Bancshares'
consolidated allowance for the losses on loans included in the
Bancshares Financial Statements as of March 31, 1998 was $573,800.00.
To the knowledge of Bancshares, the amount of such allowance for losses
on loans was adequate to absorb reasonably expectable losses in the
loan portfolio of Liberty. To the knowledge of Bancshares, there are no
facts which would cause it to increase the level of such allowance for
losses on loans. To the knowledge of Bancshares, the documentation
relating to loans made by Liberty and relating to all security
interests, mortgages and other liens with respect to all collateral for
such loans, taken as a whole, is adequate for the enforcement of the
material terms of such loans and of the related security interests,
mortgages and other liens, except
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as enforcement may be limited by bankruptcy or similar laws or
principles of equity. To the knowledge of Bancshares, the terms of such
loans and of the related security interests, mortgages and other liens
comply in all material respects with all applicable laws, rules and
regulations (including laws, rules and regulations relating to the
extension of credit). Except as set forth in the Bancshares Disclosure
Letter, (i) as of March 31, 1998, there are no loans, leases, other
extensions of credit or commitments to extend credit of Liberty that
have been or should be, in accordance with generally acceptable
accounting principles, classified by Liberty as non-accrual, as
restructured, as ninety (90) days past due, as still accruing and
doubtful of collection or any comparable classification; and (ii)
Bancshares has provided to Sac River true, correct and complete in all
material respects such written information concerning the loan
portfolios of Liberty as Sac River has requested. Notwithstanding any
provision in this Section 5.5(c) to the contrary, Liberty makes no
representation or warranty with respect to the collectability of any
loan.
5.6 Reports. Bancshares and Liberty have filed all reports
registrations and statements, together with any amendments required to be made
with respect thereto, that were and are required to be filed with (i) the
Federal Reserve Board (i) the Division of Finance, (iii) the FDIC and (iv) any
other applicable federal or state banking authorities (all such reports and
statements are collectively referred to herein as the "Bancshares Reports"). As
of their respective dates, the Bancshares Reports filed prior to the date hereof
complied and will comply in all material respects with all of the statutes,
rules and regulations enforced or promulgated by the regulatory authority with
which they were filed, and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
5.7 Authorizations; Compliance with Applicable Laws.
(a) Bancshares and the Liberty hold all authorizations,
permits, licenses, variances, exemptions, orders and approvals of all
governmental entities which are material to the operation of the
businesses of Bancshares and Liberty taken as a whole (the "Bancshares
Permits"). All such Bancshares Permits are in full force and effect as
of the Closing Date, and Bancshares and Liberty are in compliance with
the terms of the Bancshares Permits, except where the failure so to
comply could not reasonably be expected to have a Bancshares Material
Adverse Effect. Except as disclosed in the Bancshares Reports filed
prior to the date of this Agreement or the Bancshares Disclosure
Letter, the businesses of Bancshares and Liberty are not being
conducted in violation of any Laws, except for
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possible violations which individually or in the aggregate do not, and,
insofar as reasonably can be foreseen, in the future will not, have a
Bancshares Material Adverse Effect. Except as set forth in the
Bancshares Disclosure Letter, as of the date hereof, no investigation
or review by a governmental entity with respect to Bancshares or to
Liberty that would cause a Bancshares Material Adverse Effect is
pending or, to the knowledge of Bancshares, threatened, nor has any
governmental entity indicated an intention to conduct the same. The
deposits of Liberty are insured by the FDIC to the extent provided by
law.
(b) The Bancshares Disclosure Letter identifies each parcel
of real estate currently owned, leased or otherwise possessed or
controlled by Bancshares or Liberty on the date of this Agreement,
including real estate owned as a result of foreclosure and properties
managed/or controlled by Liberty in connection with its lending or
fiduciary obligations (collectively the "Bancshares Property"). Except
as set forth in the Bancshares Disclosure Letter, to Bancshares'
knowledge, none of the Bancshares Property owned or leased by them for
use in the operation of their respective businesses is in violation of
any applicable zoning ordinance or other law, regulation or
requirements relating to the operation of any properties used,
including, without limitation, applicable federal, state, and local
laws, rules and regulations relating to the environment or to human
health and safety associated with the environment (collectively
"Environmental Laws"), other than violations that, in the aggregate
with any other conditions described in this Section 5.7(b), would not
have a Bancshares Material Adverse Effect; and neither Bancshares nor
Liberty has receive any notice of any such violation, or the existence
of any condemnation proceeding with respect to any Bancshares Property.
Except as set forth in the Bancshares Disclosure Letter, to the
knowledge of Bancshares, no Toxic Substances have been deposited or
disposed of in, on or under any Bancshares Property during the period
in which Bancshares or Liberty has owned, occupied, managed, controlled
or operated such properties, except to the extent the same, in the
aggregate with any other conditions described in this Section 5.7(b)
would not have a Bancshares Material Adverse Effect. Except as set
forth in the Bancshares Disclosure Letter, to Bancshares' knowledge, no
portion of the Bancshares Property has ever been used as a dump or
gasoline service station by any person, including past owners,
occupants and operators of such properties. To the knowledge of
Bancshares, there are no underground or above ground storage tanks
(whether or not currently in use) located on or under the Bancshares
Property, and no underground tanks previously located on the Bancshares
Property has been removed therefrom. To the knowledge of Bancshares,
there are no conditions or circumstances in connection with the
Bancshares Property that
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could reasonably be anticipated to (i) cause any Bancshares Property to
be subject to any restrictions on ownership, occupancy, use or
transferability under any applicable Environmental Laws; or (ii)
materially reduce the value of any Bancshares Property. To the
knowledge of Bancshares or Liberty, neither Bancshares nor Liberty has
been identified as a potentially responsible party in a matter arising
under any Environmental Laws.
5.8 Litigation and Claims. Except as disclosed in the Bancshares
Reports filed prior the date of this Agreement or in the Bancshares Disclosure
Letter, (a) neither Bancshares nor Liberty nor any Bancshares Property is
subject to any continuing order of, or written agreement or memorandum of
understanding with any federal or state banking or insurance authority or other
governmental entity, or any judgment, order, writ, injunction, decree or award
of any governmental entity or arbitrator, including, without limitation,
cease-and-desist or other orders of any banking authority; (b) there is no
action, suit, litigation, proceeding or arbitration against or affecting
Bancshares or Liberty, to the knowledge of Bancshares, any directors, officers,
employees or agents of Bancshares or Liberty (in their respective capacities as
directors, officers, employees or agents) pending or, to the knowledge of
Bancshares, threatened, which would, if adversely determined, have a Bancshares
Material Adverse Effect or, to the knowledge of Bancshares, any basis therefor;
and (c) there are no uncured material violations, or violations with respect to
which material refunds or restitutions may be required, cited in any compliance
report to Bancshares or Liberty as a result of the examination of any bank
regulatory authority.
5.9 Taxes. Bancshares and Liberty have filed all tax returns
required to be filed by them and have paid or has set up an adequate reserve
for the payment of all taxes required to be paid by them, except to the extent
which nonpayment did not result in a Bancshares Material Adverse Effect. The
most recent Bancshares financial statements contained in the Bancshares Reports
reflect an adequate reserve for all taxes payable by Bancshares and Liberty
accrued to the date of such financial statements. The Bancshares Disclosure
Letter sets forth, as of the date hereof, the following information with respect
to Bancshares and Liberty: (a) whether there is an examination pending by the
IRS with respect to such corporation and, if so, the tax years involved; (b)
whether such corporation has executed or filed with the IRS any agreement which
is still in effect extending the period for assessment and collection of any
federal tax and, if so, the tax years covered by such agreement and the
expiration date of such extension; and (c) whether there are any existing
material disputes as to state or local taxes. There are no liens for taxes upon
the assets of Bancshares or Liberty, except for statutory liens for taxes not
yet delinquent or the validity of which is being contested in good faith by
appropriate proceedings and, in either case, only if
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adequate reserves therefor have been established on Bancshares' books in
accordance with generally accepted accounting principles. Except as disclosed in
the Bancshares Disclosure Letter, neither Bancshares nor Liberty is a party to
any action or proceeding by any governmental authority for assessment and
collection of taxes, and no claim for assessment and collection of taxes has
been asserted against any of them. Bancshares and Liberty have withheld from
their employees (and timely paid to the appropriate governmental agency) amounts
which are proper and accurate in all material respects for all periods through
the date hereof in material compliance with all tax withholding provisions of
applicable federal, state, and local laws (including without limitation income,
social security and employment tax withholding for all types of compensation).
5.10 Certain Agreements. Except as discussed in the Bancshares
Reports filed prior to the date of this Agreement or as disclosed in the
Bancshares Disclosure Letter, and except for this Agreement and the agreements
expressly contemplated hereby, neither Bancshares nor Liberty is a party to any
oral or written (i) consulting or employment agreement or other agreement
providing any term of employment, compensation guarantee, or severance benefit,
(ii) union or collective bargaining agreement, (iii) agreement or plan,
including any stock option plan, stock appreciation right plan, restricted stock
option or stock purchase plan, any of the benefits of which will be increased,
or the vesting 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 the transactions
contemplated by this Agreement, (iv) any contract, agreement or other instrument
or undertaking which is not terminable by Bancshares without additional payment
or penalty within sixty (60) days and obligates Bancshares or Liberty for
payments or other consideration for a value in excess of Ten Thousand Dollars
($10,000.00), other than loan agreements entered into in the ordinary course of
business, (v) contract, agreement or understanding to repurchase assets
previously sold (or to indemnify or otherwise compensate the purchaser in
respect to such assets) (other than repurchase agreements entered into in the
normal course of business); (vi) contract containing covenants which limit the
liability of Bancshares or Liberty to compete in any line of business or with
any person or which involve any restriction of the geographical area in which,
or method by which, Bancshares or Liberty, as applicable, may carry on its
business (other than as may be required by law or applicable regulatory
authorities); or (vii) other executory material agreement. Except as set forth
in the Bancshares Disclosure Letter, neither Bancshares nor Liberty is in
Violation of any loan or credit agreement, note, mortgage, indenture or other
agreement, obligation or instrument applicable to Bancshares or Liberty or their
respective properties or assets, except for any such Violations that would not,
individually or in the aggregate, have a Bancshares Material Adverse Effect.
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5.11 Benefit Plans.
(a) The Bancshares Disclosure Letter lists (i) each
employee bonus, incentive, deferred compensation, stock purchase, stock
appreciation right, stock option, fringe benefit and severance pay
plan, (ii) each pension, profit sharing, stock bonus, thrift, savings
and employee stock ownership plan, (iii) each health, welfare,
disability, vacation, leave, perquisite or executive plan, program,
policy or practice, and (iv) every other employee benefit plan (within
the meaning of Section three (3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (collectively "Bancshares
Benefit Plans") which Bancshares or Liberty maintains or to which
Bancshares or Liberty contributes on behalf of current or former
employees. Except as disclosed in the Bancshares Disclosure Letter, to
the knowledge of Bancshares, all of the Bancshares Benefit Plans listed
in the Bancshares Disclosure Letter comply with all applicable
requirements of the Internal Revenue Code, ERISA and all other
applicable federal and state laws and regulations, including, without
limitation, the reporting and disclosure requirements of ERISA. Each of
the Bancshares Benefit Plans which is intended to be a pension, profit
sharing, stock bonus, thrift, savings or employee stock ownership plan
that is qualified under Code Section 401(a) has been determined by the
IRS who so qualify under Code Section 401(a), and, except as disclosed
in the Bancshares Disclosure Letter, to the knowledge of Bancshares,
there exists no circumstances that would adversely affect the qualified
status of any such Bancshares Benefit Plan under that Section. Except
as set forth in the Bancshares Disclosure Letter, there is no pending
or, to the knowledge of Bancshares, threatened litigation, governmental
proceeding or investigation against or relating to any Bancshares
Benefit Plan, and to the knowledge of Bancshares there is no reasonable
basis for any material proceedings, claims, actions or proceedings
against Bancshares, Liberty, any Bancshares Benefit Plan, or any
fiduciary of any Bancshares Benefit Plan. Except as set forth in the
Bancshares Disclosure Letter, neither Bancshares, Liberty nor any party
in interest (as defined in Section 3(14) of ERISA and Code Section
4975(e)) nor any Bancshares Benefit Plan has engaged in a "prohibited
transaction" (as defined in Section 406 of ERISA and Code Section
4975(c)), and no Bancshares Benefit Plan has engaged in a transaction
involving the purchase or sale of employer securities by such Plan from
or to a "disqualified person" (within the meaning of Code Section
4975), other than pursuant to an exemption provided therein. All
Bancshares Benefit Plans that are group health plans, within the
meaning of Code Section 4980B or Section 601 of ERISA, have been
operated in material compliance with the group health plan continuation
coverage requirements of Code
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Section 4980B and Section 601 of ERISA to the extent such requirements
are applicable.
(b) There has been no amendment to, written interpretation
of, or announcement (whether or not written) relating to, or any change
in employee participation or coverage under, any Bancshares Benefit
Plan that is not reflected in the text of the Bancshares Benefit Plan
which would materially increase the expense (whether or not such
expense is recognized under generally accepted accounting principles)
to the employer whose employees are covered by such Bancshares Benefit
Plan. Except as expressly provided by applicable law where the terms of
a Bancshares Benefit Plan, no condition exists that would prevent the
amendment or termination of any Bancshares Benefit Plan with respect to
any employee. All employee and employer contributions with respect to
employees which are due and owing as of the Closing Date pursuant to
the Bancshares Benefit Plans have been made or will be accrued on the
Closing Date Financial Statements and, except for such accrued
liabilities, there are as of the Closing Date no other liabilities of
Bancshares or Liberty with respect to the Bancshares Benefit Plans.
(c) Bancshares has delivered to Sac River copies of (i) each
Bancshares Benefit Plan or if no plan document exists, a written
summary of the material terms thereof, (ii) current summary plan
descriptions of each Bancshares Benefit Plan for which they are
required, (iii) each trust agreement, insurance policy or other
instrument relating to the funding of any Bancshares Benefit Plan, (iv)
the most recent Annual Reports (Form 5500 Series) and accompanying
schedules filed with the IRS or the United States Department of Labor
with respect to each Bancshares Benefit Plan for which they are
required, (v) the most recent determination letter issued by the IRS
with respect to each Bancshares Benefit Plan that is intended to
qualify under Code Section 401, (vi) the most recent available
financial statements for each Bancshares Benefit Plan that has assets,
and (vii) the most recent audited financial statements for each
Bancshares Benefit Plan for which audited financial statements are
required by ERISA.
(d) The Bancshares Disclosure Letter describes any obligation
that Bancshares or Liberty has to provide health and welfare benefits
to retirees or other former employees or their dependents (other than
rights arising solely under Section 601 of ERISA or Code Section 4980B)
including information as to the number of retirees, other former
employees and dependents entitled to such coverage and their ages.
5.12 Insurance. Bancshares and Liberty are presently insured for
reasonable amounts with financially sound and reputable
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insurance companies against such risks as, to the knowledge of Bancshares,
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. Neither Bancshares nor Liberty has any
liability for material unpaid premiums or premium adjustments not properly
reflected on the Bancshares Financial Statements and no notice of cancellation
or termination has been received by Bancshares or Liberty with respect to any
material insurance policy currently in effect. Except as disclosed in the
Bancshares Disclosure Letter, neither Bancshares nor Liberty has been refused
any insurance with respect to any assets or operations, nor has any coverage
been limited in any material respect as to any assets or operations, by any
insurance carrier to which it has applied for any such insurance or with which
it has carried insurance.
5.13 Absence of Certain Changes or Events. Except as disclosed in
the Bancshares Reports filed prior to the date of this Agreement or in the
Bancshares Disclosure Letter, and except as contemplated by this Agreement, from
and after January 1, 1998 through the date of this Agreement: (a) Bancshares and
Liberty have conducted their respective businesses only in the ordinary and
usual course consistent with past practice, (b) neither Bancshares nor Liberty
have amended their respective charters, (c) Bancshares has not granted any
option for the purchase of its capital stock, effected any stock split, or
otherwise changed its capitalization, (d) Bancshares has not declared, set aside
or paid any dividend or other distribution in respect to any of its capital
stock, (e) neither Bancshares, nor Liberty has issued or sold any of its capital
stock, or issued or sold any corporate debt securities or otherwise incurred
debt which would be classified as long term on the balance sheet, (f) Bancshares
has not (i) incurred any material obligations or liability (absolute or
contingent), except obligations or liabilities incurred in the ordinary course
of business, or (ii) mortgaged, pledged, or subjected to lien, claim, security
interest, charge, encumbrance or restriction any of its assets or properties,
(g) Bancshares has not discharged or set aside any material lien, mortgage,
pledge, claim, security interest, charge, encumbrance, or restriction or paid
any material obligation or liability (absolute or contingent), other than in the
ordinary course of business (h) Bancshares has not sold, assigned, transferred,
leased, exchanged, or otherwise disposed of, other than in the ordinary course
of business, any of its properties or assets, (i) Bancshares has not increased
the rate of compensation of, or paid any bonus to, any of its directors or
officers, except merit or promotion increases in accordance with existing
policies; entered into any new, or amended or supplemented any existing,
employment, management, consulting, deferred compensation, severance, or other
similar contract not heretofore provided to Sac River; adopted, entered into,
terminated, amended or modified any Bancshares Benefit Plan in respect to any of
its present or former directors, officers or other employees; or agreed to any
of the foregoing, (j) Bancshares has not suffered any material damage,
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destruction or loss as a result of fire, accident, casualty, labor trouble, or
taking of property by any government or any agency of any government, flood, or
other similar or dissimilar casualty or event or otherwise, and whether or not
covered by insurance (k) neither Bancshares nor Liberty has cancelled or
compromised any debt to the extent exceeding Ten Thousand Dollars ($10,000.00)
owed to Bancshares or Liberty or claim to an extent exceeding Ten Thousand
Dollars ($10,000.00) asserted by Bancshares or Liberty, (l) neither Bancshares
nor Liberty has entered, or agreed to enter, into any agreement or arrangement
granting any right of refusal or other preferential right to purchase any of its
material assets, properties or rights or requiring the consent of any party to
the transfer or assignment of any such material assets, properties or rights,
(n) there has not been any transaction, commitment, dispute or other event or
condition of any character (whether or not in the ordinary course of business)
individually or in the aggregate having or which, insofar as reasonably can be
foreseen, in the future is reasonably likely to have, a Bancshares Material
Adverse Effect (m) there has not been any material change in the method of
accounting or accounting practices of Bancshares and Liberty, except as required
by law or generally accepted accounting principles. Except as set forth in the
Bancshares Disclosure Letter, Bancshares has no knowledge of the announced or
anticipated resignation of any executive officer or key employee of Bancshares
or Liberty. From and after the date of the latest Bancshares Financial
Statement, through the date of this Agreement, no customers of Liberty have
indicated to Liberty that they will stop or decrease the rate of business done
with Liberty (except for changes in the ordinary course of business) such as to,
individually or in the aggregate, have a Bancshares Material Adverse Effect.
5.14 Properties, Leases and Other Agreements. Except as may be
reflected in the Bancshares Financial Statements, for any lien for current taxes
not yet delinquent, for pledges to secure deposits and for such other liens,
security interests, claims, charges, options or other encumbrances and
imperfections of title which do not materially affect the value of personal or
real property reflected in the Bancshares Financial Statements or acquired since
the date of such Financial Statements and which do not materially interfere with
or impair the present and continued use of such property, Bancshares and Liberty
have good title, free and clear of any liens, security interests, claims,
charges, options or other encumbrances, to all of the personal and real property
reflected in the Bancshares Financial Statements, and all personal and real
property acquired since the date of such Statements, except such personal and
real property as has been disposed of in the ordinary course of business. The
Bancshares Disclosure Letter lists all acquisitions or dispositions of capital
assets planned as of the date of this Agreement by Bancshares or Liberty, other
than individual transactions with a value not in excess of $50,000.00 each.
Substantially all Bancshares' and
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Liberty's buildings and equipment in regular use (including such buildings and
equipment as are leased) have been well maintained and are in good and
serviceable condition, reasonable wear and tear excepted. The Bancshares
Disclosure Letter contains a brief description, including terms, of each lease
for real or personal property to which Bancshares or Liberty is a party.
Bancshares or Liberty, as lessee, has a valid and existing leasehold interest
under each of such leases, true and correct copies of which Bancshares has
delivered to Sac River. There is not, under any of such leases relating to real
property or any other material leases, any material existing default by
Bancshares, Liberty or, to the knowledge of Bancshares, any other party thereto,
or any event with notice or lapse of time or both would constitute such a
material default.
5.15 Vote Required. The affirmative vote of holders of two-thirds
(2/3) fof the outstanding shares of Liberty common stock is the only
vote of the holders of Liberty common stock necessary to approve the
Agreement and the transactions contemplated hereby.
5.16 Tax Matters. To the knowledge of Bancshares, neither Bancshares
nor any of its affiliates has through the date hereof taken or agreed to take
any action that would prevent the Merger from qualifying as one or more
reorganizations under Code Section 368(a)(1).
5.17 Regulatory Impediments. As of the date hereof, Bancshares is
unaware of the existence of any factor that would materially delay or materially
hinder the issuance of any of the required regulatory approvals necessary to
consummate the Merger or the other transactions contemplated hereby, other than
any protests by an nongovernmental parties.
5.18 Full Disclosure. The representations and warranties of
Bancshares contained in this Agreement do not omit any material fact necessary
to make the statements contained therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to Bancshares which
has not been disclosed to Sac River pursuant to this Agreement, the Bancshares
Disclosure Letter and the Bancshares Reports, all taken together as a whole,
which would reasonably be expected to have a Bancshares Material Adverse Effect
or a material adverse effect on the ability of Bancshares or Sac River to
consummate the transactions contemplated hereby.
ARTICLE VI
COVENANTS OF SAC RIVER
6.1 Affirmative Covenants. Sac River hereby covenants and agrees
with Liberty and Bancshares that prior to the Effective Time or until the
earlier termination or abandonment of this Agreement in accordance with its
terms, unless the prior written consent of
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Liberty shall have been obtained (which consent shall not be unreasonably
withheld) and except as otherwise contemplated herein, it will:
(a) operate its business only in the usual, regular and
ordinary course consistent with past practices;
(b) preserve substantially intact its business organization
and assets (except for acquisitions and dispositions of assets in the
ordinary course of business consistent with past practices, unless
otherwise required by the terms of this Agreement), and maintain its
rights and franchises, and use its reasonable best efforts to retain
the services of its officers and key employees (except that it shall
have the right to terminate the employment of any officer or key
employee in accordance with established employment procedures) and
maintain its relationships with customers;
(c) maintain its corporate existence in good standing and
maintain all books and records in accordance with accounting principals
and practices as utilized in the Sac River Financial Statements
supplied on a consistent basis, except as may be required to implement
changes in the generally accepted accounting principles;
(d) maintain and keep its properties in as good repair and
condition as at present, except for depreciation due to ordinary wear
and tear;
(e) keep in full force and effect, insurance and bonds
comparable in amount and scope of coverage to that now maintained by
it;
(f) perform in all material respects all obligations required
to be performed by it under all material contracts, leases, and
documents relating to or affecting its assets, properties, and
business; and
(g) conduct its business in a manner but does not violate any
Laws, except for possible violations which individually or in the
aggregate do not, and, insofar as reasonably can be foreseen, in the
future will not, have a Sac River Material Adverse Effect.
6.2 Negative Covenants. Except as specifically contemplated by this
Agreement, from the date hereof unto the Effective Time, Sac River shall not do,
without the prior written consent of Bancshares (which shall not be unreasonably
withheld), any of the following:
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(a) incur any material liabilities or material obligations,
whether directly or by way of guaranty, including any obligation for
borrowed money whether or not evidenced by a note, bond, debenture or
similar instrument, except in the ordinary course of business
consistent with past practice;
(b) (i) grant any general increase in compensation to its
employees as a class, or to its officers or directors, except in
accordance with past practice or as required by law, or increases which
are not material, (ii) effect any change in retirement benefits to any
class of employees or officers (unless any such change shall be
required by applicable law) which would increase its retirement benefit
liabilities, (iii) adopt, enter into, amend or modify any Benefit Plan,
or (iv) enter into or amend any employment, severance or similar
agreements or arrangements with any directors or officers or former
directors or officers;
(c) declare or pay any dividend on, or make any other
distribution in respect to its outstanding shares of capital stock,
except its normal 1998 cash dividend not to exceed $80.00 per share,
with usual record and payment dates (provided, however, that the normal
dividend payable in December, 1998, may be paid immediately prior to
the Effective Date, if the Effective Date occurs prior to normal
December dividend payment date);
(d) (i) 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, or any options,
warrants, conversion or other rights to acquire any shares of its
capital stock or any such securities or obligations; (ii) merge with or
into any other corporation or bank, permit any other corporation or
bank to merge into it or consolidate with, any other corporation or
bank, or effect any reorganization or recapitalization; (iii) purchase
or otherwise acquire any substantial portion of the assets, or more
than 5% of any class of stock, of any corporation, bank, or other
business; (iv) liquidate, sell dispose of, or encumber any assets or
acquire any assets, except in the ordinary course of its business
consistent with past practice; or (v) split, combine or reclassify any
of its capital stock or issue or authorize or propose the issuance of
any other securities in respect of, in lieu of or in substitution for
shares of its capital stock;
(e) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale of, any shares of
its capital stock of any class (including shares held in treasury), any
Voting Debt or any securities convertible into, or any rights, warrants
or options to
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acquire, any such shares, Voting Debt or convertible securities;
(f) propose or adopt any amendments to its charter or by-laws
in any way adverse to Bancshares or Liberty;
(g) authorize, recommend, propose or announce an intention to
authorize, recommend or propose, or enter into an agreement in
principle with respect to any acquisition of a material amount of
assets or securities or any release or relinquishment of any material
contract rights not in the ordinary course of business;
(h) with respect to properties leased by Sac River, renew,
exercise an option to extend, cancel or surrender any lease of real
property or allow any such lease to lapse, without prior consultation
with Liberty;
(i) change any of its methods of accounting in effect at
December 31, 1997, or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns for the taxable year
ending December 31, 1997, except as may be required by law or generally
accepted accounting principles;
(j) take action which would or is reasonably likely to (i)
adversely affect the ability of Sac River, Bancshares or Liberty to
obtain any necessary approvals of governmental authorities required for
the transactions contemplated hereby; (ii) adversely affect Sac River's
ability to perform its covenants and agreements under this Agreement;
or (iii) result in any of the conditions to the Merger set forth in
Article VIII hereof not being satisfied;
(k) change the lending, investment, liability management and
other material policies concerning the banking business of Sac River,
unless required by Law or order or unless such change does not cause a
Sac River Material Adverse Effect;
(l) (A) make, or agree to make, any loan or increase any
existing loan to any one borrower, (1) in the amount of $250,000.00; or
(2) would result in the aggregate indebtedness of said borrower to be
in excess of $500,000.00, unless said loan is made pursuant to a
properly documented and legally enforceable commitment of Sac River to
the borrower made prior to the date of this Agreement; (B) make or
agree to make, any new loan or advance on any existing loan, except of
in conformity with Sac River's current loan policies; (C) make any
change with respect to the terms of any existing loan, except in the
ordinary course of business; or (D) make or commit to make any further
advances on any loan which is
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either in default or classified, whether such classification is a
result of a federal or state bank regulatory examination or internal
classification of substandard or lower by Sac River's officers or
directors, unless Sac River is under a legal obligation to do so. With
respect to any Bancshares consent required by this Section 6.2(l),
Bancshares shall provide advice of its consent within three business
days after Bancshares has received the request for consent and
accompanying information necessary for Bancshares to consider the
request (the provisions of part A of this section shall not apply to
renewals of existing loans, advances under existing loans or increases
to existing loans for an amount below the applicable limits set forth
in part A);
(m) purchase any equity securities not in the ordinary course
of business; or
(n) agree in writing or otherwise to do any of the foregoing.
6.3 Access and Information. Except where prohibited by law, upon
reasonable prior notice, Sac River shall afford to Bancshares' officers,
employees, accountants, counsel and other representatives, access, from time to
time during normal business hours during the period prior to the Effective
Time, to all books, papers and records relating tot he assets, stock,
properties, operations, obligations and liabilities of Sac River, including
without limitation all books of account, tax records, minute books of
directors' and stockholders' meetings, contracts and agreements, filings with
any regulatory authority, accountants' work papers, litigation files (other
than attorney work product or materials protected by any attorney-client
privilege), documents relating to assets and title thereto, plans affecting
employees, securities transfer records and stockholder lists, and any books,
papers and records relating to other assets, business activities or prospects
in which Bancshares may have a reasonable interest, including without
limitation, its interest in planning for integration and transition with
respect to the business of Sac River. During such period, Sac River will cause
one or more of its representatives to confer on a regular and frequent basis
with representatives of Liberty, to report on the general status of its ongoing
operations and to consult as to the making of any decisions or the taking of
any actions in matters other than in the ordinary course of business. During
such period, Sac River shall, except where prohibited by law, furnish promptly
to Bancshares (i) Sac River Report filed or received by it during such period
pursuant to the requirements of any federal or state banking laws promptly
after such documents are available, (ii) the monthly financial statements of
Sac River (as prepared by Sac River in accordance with its normal accounting
procedures) promptly after such financial statements are available, (iii) a
summary of any action taken by the Board of Directors, or any committee
thereof,
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of Sac River, (iv) minutes of the Sac River Board of Directors meetings and the
reports of management of Sac River customarily provided to its Board of
Directors, and (v) all other information concerning its business, properties and
personnel as Bancshares may reasonably request. During such period, Sac River
shall instruct its officers, employees, counsel and accountants to be available
for, and respond to any questions of Bancshares' officers, employees,
accountants, counsel and other representatives at reasonable hours and with
reasonable notice by Bancshares to such individuals, and to cooperate fully with
Bancshares in planning for the integration of the business of Sac River with the
business of Bancshares and Liberty.
6.4 Update Disclosure; Breaches.
(a) From and after the date hereof until the Effective Time,
Sac River shall promptly, but not less frequently than monthly, update
the Sac River Disclosure Letter by notice to Bancshares to reflect any
matters which have occurred from and after the date hereof which, if
existing on the date hereof, would have been required to be described
therein; provided, however, that no such update shall affect the
conditions to the obligation of Bancshares to consummate the
transactions contemplated hereby, except as provided herein, and any
and all changes reflected in any such update shall be considered in
determining whether such conditions have been satisfied.
(b) Sac River shall, in the event it becomes aware of the
impending or threatened occurrence of any event or condition which
would cause or constitute a material breach (or would have caused or
constituted a breach had such even occurred or been known prior to the
date hereof) of any of its representations or agreements contained or
referred to herein of which would cause any of the conditions to the
obligations of any party set forth in Article IX hereof not to be
satisfied, give prompt written notice thereof to Bancshares and use its
best efforts to prevent or promptly remedy the same.
6.5 Tax Treatment. Sac River will use its best efforts to cause the
Merger to qualify as one or more reorganizations under Code Section 368(a)(1).
6.6 Dissent Process. Sac River will give to Bancshares prompt
notice of its receipt of any written notice relating to the exercise of
dissenters' rights granted under RSMo. ss.362.730, including the name of the
dissenting stockholder and the number of shares of stock to which the dissent
relates. Bancshares will have the right to participate in all negotiations and
proceedings with the Sac River stockholders relating to any such notice or the
exercise of such rights, and except as required by law, Sac River will not make
any payment with respect to, or settle or offer to
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settle, any dissent demands without the prior written consent of Bancshares.
6.7 Expenses.
(a) "Expenses" as used in this Agreement shall include all
reasonable out-of-pocket expenses (including all fees and expenses of
counsel, accountants, experts and consultants to the party and its
affiliates) incurred by a party or on its behalf in connection with the
consummation of the transactions contemplated by this Agreement.
(b) Except as otherwise provided herein or by law, all
Expenses incurred by Bancshares and Sac River in connection with or
related to the authorization, preparation and execution of this
Agreement and the Merger, the solicitation of stockholder approvals and
all other matters related to the closing of the transactions
contemplated hereby, including all fees and expenses of agents,
representatives, counsel and accountants employed by either such party
or its affiliates, shall be borne solely and entirely by the party
which has incurred the same, except that Bancshares shall pay the
expense of printing the S-4 and the Proxy Statement (as defined below)
and the expense of all SEC and other regulatory filing incurred in
connection herewith.
6.8 Delivery of Shareholder Lists. Sac River shall deliver to
Bancshares or its designee, from time to time prior to the Closing Date, a true
and complete list setting forth the names and addresses of all its shareholders
of record, their holdings of such stock as of the latest practicable date, and
such other shareholder information as is reasonably available that Bancshares
may reasonably request.
6.9 Shareholder Meetings. Sac River shall call a special meeting of
its shareholders for the purpose of voting upon the Merger and related matters,
and deliver notice of such meeting, as part of the Proxy Statement (as defined
below) to Sac River shareholders in accordance with applicable law. Sac River
shall coordinate and cooperate with Bancshares with respect to the timing of
such meeting and shall use its best efforts to hold such meeting as soon as
practicable after the date hereof, and in compliance with the Missouri Bank
Merger Laws. Unless otherwise required by law, Sac River shall not, at such
shareholders' meeting, submit any other matter for approval of its shareholders
(except with the prior written consent of Bancshares). Sac River will (i)
recommend to its shareholders approval of such matters, (ii) not withdraw,
modify or amend such recommendation, and (iii) use its best efforts to obtain
such shareholder approval.
6.10 Processing Contracts. As soon as reasonably practicable after
the approval of this Agreement by the Board of Directors of
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Sac River, Sac River will give notice to the other parties under such of Sac
River's agreements for credit card and merchant processing services and data
processing services as Bancshares may designate as to the intended termination
of such parties' respective agreements as soon as reasonably practicable after,
and contingent on, the Merger. Sac River will cooperate with Bancshares in using
its best efforts to minimize any termination penalties under such agreements.
ARTICLE VII
COVENANTS OF LIBERTY AND BANCSHARES
7.1 Affirmative Covenants. Liberty and Bancshares hereby covenant
and agree with Sac River that prior to the Effective Time, unless the prior
written consent of Sac River shall have been obtained (which consent shall not
be unreasonably withheld) and except as otherwise contemplated herein, they
will:
(a) operate their business only in the usual, regular and
ordinary course consistent with past practices;
(b) preserve substantially intact their business organization
and assets (except for acquisitions and dispositions of assets in the
ordinary course of business consistent with past practices unless
otherwise required by the terms of this Agreement), and maintain their
rights and franchises, and use their reasonable best efforts to retain
the services of their officers and key employees (except that they
shall have the right to terminate the employment of any officer or key
employee in accordance with established employment procedures) and
maintain their relationships with customers.
(c) maintain their corporate existence in good standing and
maintain all books and records in accordance with accounting principles
and practices as utilized in the Bancshares and Liberty Financial
Statements applied on a consistent basis, except as may be required to
implement changes in generally accepted accounting principles;
(d) maintain and keep their properties in as good repair and
condition as at present, except for depreciation due to ordinary wear
and tear;
(e) keep in full force and effect, insurance and bonds
comparable in amount and scope of coverage to that now maintained by
them;
(f) perform in all material respects all obligations required
to be performed by them under all material contracts,leases, and
documents relating to or affecting their assets, properties, and
business; and
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46
(g) conduct their business in a manner that does not violate
any Laws, except for possible violations which individually or in the
aggregate do not, and, insofar as reasonably can be foreseen, in the
future will not, have a Bancshares Material Adverse Effect.
7.2 Negative Covenants. Except as specifically contemplated by this
Agreement, from the date hereof until the Effective Time, Liberty and Bancshares
shall not do, or agree or commit to do, without the prior written consent of Sac
River (which shall not be unreasonably withheld) any of the following:
(a) incur any material liabilities or material obligations,
whether directly or by way of guaranty, including any obligation for
borrowed money whether or not evidenced by a note, bond, debenture or
similar instrument, except in the ordinary course of business
consistent with past practice;
(b) (i) grant any general increase in compensation to its
employees as a class, or to its officers or directors, except in
accordance with past practice or as required by law, or increases which
are not material, (ii) effect any change in retirement benefits to any
class of employees or officers (unless any such change shall be
required by applicable law) which would increase its retirement benefit
liabilities, (iii) adopt, enter into, amend or modify any Benefit Plan,
or (iv) enter into or amend any employment, severance or similar
agreements or arrangements with any directors or officers or former
directors or officers;
(c) declare or pay any dividend on, or make any other
distribution in respect to its outstanding shares of capital stock,
except normal cash dividends declared and paid by Liberty to
Bancshares;
(d) (i) 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, or any options,
warrants, conversion or other rights to acquire any shares of its
capital stock or any such securities or obligations; (ii) merge with or
into any other corporation or bank, permit any other corporation or
bank to merge into it or consolidate with, any other corporation or
bank, or effect any reorganization or recapitalization; (iii) purchase
or otherwise acquire any substantial portion of the assets, or more
than 5% of any class of stock, of any corporation, bank, or other
business; (iv) liquidate, sell dispose of, or encumber any assets or
acquire any assets, except in the ordinary course of its business
consistent with past practice; or (v) except as provided herein, split,
combine or reclassify any of its capital stock or issue or authorize or
propose the
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issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;
(e) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale of, any shares of
its capital stock of any class (including shares held in treasury), any
Voting Debt or any securities convertible into, or any rights, warrants
or options to acquire, any such shares, Voting Debt or convertible
securities;
(f) propose or adopt any amendments to its charter or by-laws
in any way adverse to Sac River or Liberty;
(g) authorize, recommend, propose or announce an intention
to authorize, recommend or propose, or enter into an agreement in
principle with respect to any acquisition of a material amount of
assets or securities or any release or relinquishment of any material
contract rights not in the ordinary course of business;
(h) with respect to properties leased by Liberty or
Bancshares, renew, exercise an option to extend, cancel or surrender
any lease of real property or allow any such lease to lapse, without
prior consultation with Sac River;
(i) change any of its methods of accounting in effect at
December 31, 1997, or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns for the taxable year
ending December, 1997, except as may be required by law or generally
accepted accounting principles;
(j) take action which would or is reasonably likely to (i)
adversely affect the ability of Sac River, Bancshares or Liberty to
obtain any necessary approvals of governmental authorities required for
the transactions contemplated hereby; (ii) adversely affect Bancshares'
or Liberty's respective ability to perform its covenants and agreements
under this Agreement; or (iii) result in any of the conditions to the
Merger set forth in Article VIII hereof not being satisfied;
(k) change the lending, investment, liability management and
other material policies concerning the banking business of Liberty,
unless required by Law or order or unless such change does not cause a
Bancshares Material Adverse Effect;
(l) (A) make, or agree to make, any loan or increase any
existing loan to any one borrower, (1) in the amount of $250,000.00; or
(2) would result in the aggregate indebtedness of said borrower to be
in excess of $500,000.00, unless said
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loan is made pursuant to a properly documented and legally enforceable
commitment of Liberty to the borrower made prior to the date of this
Agreement; (B) make or agree to make, any new loan or advance on any
existing loan, except of in conformity with Liberty's current loan
policies; (C) make any change with respect to the terms of any existing
loan, except in the ordinary course of business; or (D) make or commit
to make any further advances on any loan which is either in default or
classified, whether such classification is a result of a federal or
state bank regulatory examination or internal classification of
substandard or lower by Liberty's officers or directors, unless Liberty
is under a legal obligation to do so. With respect to any Sac River
consent required by this Section 7.2(l), Sac River shall provide advice
of its consent within three business days after Sac River has received
the request for consent and accompanying information necessary for Sac
River to consider the request (the provisions of part A of this section
shall not apply to renewals of existing loans, advances under existing
loans or increases to existing loans for an amount below the applicable
limits set forth in part A);
(m) purchase any equity securities not in the ordinary course
of business; or
(n) agree in writing or otherwise to do any of the foregoing.
7.3 Access and Information. Except where prohibited by law, upon
reasonable prior notice Bancshares shall ( and shall cause Liberty to) afford to
Sac River's officers, employees, accountants, counsel and other representatives,
access, from time to time during normal business hours during the period prior
to the Effective Time, to all books, papers and records relating to the assets,
stock, properties, operations, obligations and liabilities of Bancshares and
Liberty, including without limitation all books of account tax records, minute
books of directors' and stockholders' meetings, contracts and agreements,
filings with any regulatory authority, accountants' work papers, litigation
files (other than attorney work product or materials protected by any
attorney-client privilege), documents relating to assets and title thereto,
plans affecting employees, securities transfer records and stockholder lists,
and any books, papers and records relating to other assets, business activities
or prospects in which Sac River may have a reasonable interest. During such
period, Bancshares will cause one or more of its representatives to confer on a
regular and frequent basis with representatives of Sac River, to report on the
general status of its ongoing operations and to consult as to the making of any
decision or the taking of any actions in matters other than in the ordinary
course of business. During such period, Bancshares shall (and shall cause
Liberty to), except where prohibited by law, furnish promptly to Sac River (i) a
copy of each Xxxxxxxxxx
00
00
Report filed or received by it during such period pursuant to the requirements
of the BHC Act and any other federal or state banking laws promptly after such
documents are available; (ii) the monthly financial statements of Bancshares and
Liberty (as prepared by Bancshares in accordance with its normal accounting
procedures) promptly after such financial statements are available; (iii) a
summary of any action taken by the Board of Directors, or any committee thereof,
of Bancshares; (iv) minutes of the Bancshares Board of Directors meetings and
the reports of management of Bancshares and Liberty customarily provided to
their respective Boards of Directors; and (v) all other information concerning
its business, properties and personnel as Sac River may reasonably request.
During such period, Bancshares shall, and shall cause Liberty to, instruct its
officers, employees, counsel and accountants to be available for, and respond to
any questions of, Sac River's officers, employees, accountants, counsel and
other representatives at reasonable hours and with reasonable notice by Sac
River to such individuals, and to cooperate fully with Sac River in planning for
the integration of the business of Sac River with the business of Bancshares and
Liberty.
7.4 Update Disclosure; Breaches.
(a) From and after the date hereof until the Effective Time,
Bancshares shall promptly, but not less frequently than monthly, update
the Bancshares Disclosure Letter by notice to Sac River to reflect any
matters which have occurred from and after the date hereof which, if
existing on the date hereof, would have been required to be described
therein; provided, however, that no such update shall affect the
conditions to the obligation of Sac River to consummate the
transactions contemplated hereby, except as provided herein, and any
and all changes reflected in any such update shall be considered in
determining whether such conditions have been satisfied.
(b) Bancshares shall, in the event it becomes aware of the
impending or threatened occurrence of any event or condition which
would cause or constitute a material breach (or would have caused or
constituted a breach had such event occurred or been known prior to the
date hereof) of any of its representations or agreements contained or
referred to herein or which would cause any of the conditions to the
obligations of any party set forth in Article IX to be satisfied, give
prompt written notice thereof to Sac River and use its best efforts to
prevent or promptly remedy the same.
7.5 Liberty Benefit Plans. Liberty shall provide to retained
employees of Sac River all corporate-wide employee retirement, health, dental,
life and long-term disability benefits that Liberty provides to its similarly
situated employees, subject to the age and eligibility requirements for such
benefits. Each such employee's last continuous period of service prior to the
Effective
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Time with Sac River shall count for purposes of determining eligibility and
vesting for all such benefits. If such coverage under the Liberty benefits is
not provided immediately after the Effective Time, Liberty shall continue the
Sac River plans until coverage is effective under Liberty's plans so that no
lapse in benefits occurs. Without limiting the generality of the foregoing, no
preexisting condition limits shall be applied to participants in Benefit Plans
upon their eligibility for such Liberty benefits (except for continuation of any
such limits that were in effect under the applicable Benefit Plans). For the
purpose of determining each employees's benefit for the year in which the Merger
occurs under the Liberty vacation program, vacation taken by an employee in the
year in which the Merger occurs will be deducted from the total Liberty benefit.
7.6 Tax Treatment. Bancshares will use its best efforts to cause
the Merger to qualify as one or more reorganizations under Code ss.368(a)(1).
Following the Merger, Bancshares and Liberty will not take any action the effect
of which will prevent the Merger from qualifying as one or more reorganizations
under Code Section 368(a)(1).
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 Filings and Approvals.
(a) Each party will use all reasonable efforts and will
cooperate with the other in the preparation and filing, as soon as
practicable, of all applications or other documents required to obtain
the requisite approvals of and consents to the Merger and other
transactions contemplated by this Agreement, from the Federal Reserve
Board, the Division of Finance and the FDIC as applicable, and from any
other applicable bank regulatory authorities and provide copies of
nonconfidential portions of such applications, filings and related
correspondence to the other parties. Prior to filing each application,
notice or other documents with the applicable regulatory authority,
each party will provide the other party with an opportunity to review
and comment on the nonconfidential portions of each such application,
notice or other document. Each party shall ensure that none of the
information supplied or to be supplied by it for inclusion or
incorporation by reference in any documents to be filed with the
Federal Reserve Board, the Division of Finance, the FDIC or any other
regulatory agency in connection with the transactions contemplated
hereby will, at the time of filing, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein. Subject to the terms and conditions herein provided, each
party will use all reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary,
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51
proper or advisable to cause the conditions herein provided, each party
will use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to cause the conditions set forth in Article IX to be
satisfied, including participating in any required hearings or
proceedings, and to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement. Each party
shall keep the other advised of all material regulatory developments in
a timely manner.
(b) In the event of a restraining order or injunction which
prevents the Closing by reason of the operation of Section 9.1(a), Sac
River and Bancshares shall use their respective best efforts to cause
such order or injunction to be lifted and the Closing to be consummated
as soon as reasonably practicable.
8.2 Registration Statement.
(a) For the purposes of (i) holding a meeting of the
stockholders of Sac River to approve this Agreement and the Merger (the
"Meeting") and (ii) registering the Bancshares common stock to be
issued to holders of Sac River common stock in connection with the
Merger with the Securities and Exchange Commission (the "SEC") and with
applicable state securities authorities, the parties hereto shall
cooperate in the preparation of an appropriate registration statement
(such registration statement, together with all and any amendments and
supplements thereto, being herein referred to as the "S-4"), which
shall include a joint prospectus of Bancshares and proxy statement of
Sac River (the "Proxy Statement") that shall satisfy all applicable
requirements of the Securities Act, the Exchange Act, applicable state
securities laws and the rules and regulations thereunder.
(b) Bancshares shall furnish such information concerning
Bancshares as is necessary in order to cause the Proxy Statement,
insofar as it relates to Bancshares to be prepared in accordance with
Section 8.2(a) hereof. Bancshares agrees promptly to advise Sac River
if any time prior to the Meeting any information provided by Bancshares
in the Proxy Statement becomes incorrect or incomplete in any material
respect, and to provide the information needed to correct such
inaccuracy or omission. At the time the S-4 becomes effective and at
the time the Proxy Statement is mailed to the shareholders of Sac River
and at all times subsequent to such mailing up to and including the
time of the Meeting, the S-4 and such Proxy Statement (including any
amendments or supplements thereto), with respect to all information set
forth therein relating to Bancshares (including Liberty) and the
Bancshares common stock, this Agreement, the Merger and all other
transactions
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contemplated hereby, will (a) comply in all material respects with
applicable provisions of the Securities Act and the Exchange Act, and
(b) not contain any untrue statement of material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which
they are made, not misleading.
(c) Sac River shall furnish Bancshares with such information
concerning Sac River as is necessary in order to cause the Proxy
Statement, insofar as it relates to Sac River, to be prepared in
accordance with Section 8.2(a) hereof. Sac River agrees promptly to
advise Bancshares if at any time prior to the Meeting any information
provided by Sac River in the Proxy Statement become incorrect or
incomplete in any material respect, and to provide Bancshares with the
information needed to correct such inaccuracy or omission. At the time
the S-4 become effective and at the time the Proxy Statement is mailed
to the shareholders of Sac River and at all times subsequent to such
mailings up to and including the time of the Meeting, the S-4 and the
Proxy Statement (including any supplements thereto), with respect to
all information set forth therein relating to Sac River and its
shareholders, Sac River common stock, this Agreement, the Merger and
all other transactions contemplated hereby will (a) comply in all
material respects with applicable provisions of the Securities Act and
the Exchange Act, and (b) not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they are made, not misleading.
(d) Bancshares shall file the S-4 with the SEC and applicable
state securities agencies. Bancshares shall use best efforts to cause
the S-4 to become effective under the Securities Act and applicable
state securities laws at the earliest practicable date. Sac River
authorizes Bancshares to utilize in the S-4 the information concerning
Sac River provided to Bancshares for the purpose of inclusion in the
Proxy Statement. Sac River shall have the right to comment on and
approve the form of the proxy statement included in the S-4. Bancshares
shall advise Sac River promptly when the S-4 has become effective and
of any supplements or amendments thereto, and Bancshares shall furnish
Sac River with copies of all such documents. Prior to the Effective
Time or the termination of this Agreement, each party shall consult
with the other with respect to any material (other than the Proxy
Statement) that might constitute a "prospectus" relating to the Merger
within the meaning of the Securities Act.
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8.3 Reports.
(a) Prior to the Effective Time, (i) Sac River shall prepare
and file as and when required all Sac River Reports and (ii) Bancshares
and Liberty shall prepare and file as and when required all Bancshares
and Liberty Reports.
(b) Bancshares, Liberty and Sac River shall prepare such
Reports such that (i) they comply in all material respects with all of
the statutes, rules and regulations enforced or promulgated by the
regulatory authority with which they are filed and do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made,not misleading, and (ii) with respect to any Report containing
financial information of the type included in the Sac River Financial
Statements or the Bancshares Financial Statements, respectively, the
financial information (A) is prepared in accordance with generally
accepted accounting principles as utilized in the Sac River Financial
Statements or the Bancshares Financial Statements, as of the case may
be, applied on a consistent basis (except as stated therein or in the
notes thereto), (B) presents fairly the consolidated financial
condition of Sac River and Bancshares, as the case may be, at the
dates, and the consolidated results of operations and cash flows for
the periods, stated therein and (C) in the case of interim fiscal
periods, reflects all adjustments, consisting only of normal recurring
items, subject to year-end audit adjustments.
8.4 Brokers or Finders. Each of Sac River and Bancshares
represents, as to itself, its subsidiaries and its affiliates, that no agent,
broker, investment banker, financial advisor or other firm or person is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee in connection with nay of the transactions contemplated by this Agreement,
and each of Sac River and Bancshares respectively agree to indemnify and hold
the other harmless from and against any and all claims, liabilities or
obligations with respect to any other fees, commissions or expenses asserted by
any person on the basis of any act or statement alleged to have been made by
such party or its affiliate.
8.5 Additional Agreements; Reasonable Efforts. Subject to the terms
and conditions of this agreement, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, subject to the appropriate vote of the shareholders of Sac River
described in Section 9.1 hereof, including cooperating fully with the other
party. In case at any
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time after the Effective Time any further action is reasonably necessary or
desirable to carry out the purposes of this Agreement or to vest Liberty with
full title to all properties, assets, rights approvals, immunities and
franchises of Sac River, the proper officers and directors of each party to this
Agreement shall take all such necessary action.
ARTICLE IX
CONDITIONS PRECEDENT
9.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the satisfaction prior to the Closing Date of the following conditions:
(a) Corporate Approval.
(i) The Merger shall have been approved and
adopted by the requisite vote of the holders of the outstanding
shares of Sac River common stock and Liberty common stock.
(ii) The Board of Directors of Bancshares shall
have approved an increase in the number of directors of its
Board to seventeen (17) directors, and the Board of Directors
of Liberty shall have approved an increase in the number of
directors of its Board to sixteen (16) directors, and both
Boards shall have taken such action necessary to effectuate
such increases.
(iii) The Board of Directors and shareholders of
Bancshares shall have approved the following:
(1) Amending the articles of
incorporation of Bancshares to provide for the
elimination of preemptive rights of shareholders
effective as of the Effective Time of the Merger;
and
(2) Terminating the Bancshares
Shareholders Agreement dated May 1, 1995, effective
as of Effective Time of the Merger.
(b) Regulatory Approvals. This Agreement and the Merger shall
have been approved by the Federal Reserve Board, the Division of
Finance and the FDIC, as applicable and any other applicable bank
regulatory authorities without any condition not reasonably
satisfactory to Bancshares and Sac River, all conditions required to be
satisfied prior to the Effective Time imposed by the terms of such
approvals shall have been satisfied and all waiting period relating to
such approvals shall have expired.
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(c) S-4: Securities Laws. The S-4 shall have become
effective under the Securities Act and shall not be the subject of any
stop order or proceedings seeking a stop order. Bancshares shall
have received all state securities or "blue sky" permits or exemptions
necessary to issue the Bancshares common stock in exchange for the Sac
River common stock and to consummate the Merger.
(d) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect.
(e) Tax Opinion. An opinion of Husch and Eppenberger, LLC, in
a form satisfactory to Sac River, to the Boards of Directors of Sac
River and Bancshares, to the effect that (i) the Merger will be
treated for federal income tax purposes as one or more reorganizations
within the meaning of Code Section 368(a), (ii) each Constituent
Corporation will be a party to that reorganization within the meaning
of Code Section 368(b) and (iii) no gain or loss will be recognized by
the shareholders of Sac River upon the receipt solely of Bancshares
common stock in the Merger in exchange for their shares of Sac River
common stock, dated on or about the dates that are each two business
days prior to the date the Proxy Statement is first mailed to
stockholders of Sac River, shall have been delivered to Sac River and
to Bancshares and shall not have been withdrawn or modified in any
material respect. The opinion shall specifically state that it may be
relied upon by the shareholders of Sac River. Husch and Eppenberger,
LLC, may request that it be provided with certain representations,
warranties and assumptions from Bancshares, Liberty and Sac River upon
which it will be expressly authorized to rely in issuing said opinion.
9.2 Conditions to Obligations of Bancshares. The obligation of
Bancshares to effect the Merger are subject to the satisfaction of the following
conditions, unless waived in writing by Bancshares:
(a) Representations and Warranties. (i) Each of the
representations and warranties of Sac River set forth in this
Agreement, without giving effect to any update to the Sac River
Disclosure Letter or notice to Bancshares under Section 6.5 hereof,
shall be true and correct in all material respects as of the date of
this Agreement, and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as
though made on and as of the Closing Date, and (ii) Bancshares shall
have received a certificate to such effect signed on behalf of Sac
River by its chief executive officer.
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(b) Performance of Obligations of Sac River. Sac River shall
have performed in all material respects each of the obligations
required to be performed by it under this Agreement at or prior to the
Closing Date, and Bancshares shall have received a certificate to such
effect signed on behalf of Sac River by its chief executive officer.
(c) Consents Under Agreements. Sac River shall have obtained
the consent or approval of each person whose consent or approval shall
be required in order to permit the succession by Liberty pursuant to
the Merger to any obligation, right or interest of Sac River under any
loan or credit agreement, note, mortgage, indenture, lease or other
agreement or instrument, except those for which failure to obtain such
consents and approvals would not, individually or in the aggregate,
have a Sac River Material Adverse Effect, whether prior to or following
the consummation of the transactions contemplated hereby.
(d) No Material Adverse Change. There shall have been no
material adverse change since the date of this Agreement in the
business, operations, prospects or financial condition of Sac River
other than any such change attributable to or resulting from any change
in law, regulation or generally accepted accounting principles which
impairs both Sac River and Liberty in a substantially similar manner,
and Bancshares shall have received a certificate to such effect signed
on behalf of Sac River by its chief executive officer.
(e) No Proceeding or Litigation. No material action, suit or
proceeding before any court or any governmental or regulatory authority
shall be pending against Bancshares, Liberty, Sac River or any
affiliate, associate, officer or director of any of them seeking to
restrain, enjoin, prevent, change or rescind the transactions
contemplated hereby or questioning the validity or legality of any such
transactions.
(f) Allowance for Losses on Loans. If Bancshares believes
that Sac River's allowance for loan losses is inadequate, it will
within ten (10) days prior to the Closing recommend to the Board of
Directors of Sac River an adjustment in the amount of such allowance
which, if reasonable and consistent with prudent banking practices,
shall be approved by such Board.
(g) Outstanding Common Stock. As of the Closing Date, the
number of outstanding shares of Sac River common stock shall not be
greater than ten thousand (10,000), and the Optional Per Share Cash
Amounts elected by the Sac River shareholders shall not have exceeded
the Optional Cash Payment
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Limitation at the time of the Election Deadline (or, if applicable, the
Extended Election Deadline).
9.3 Conditions to Obligations of Sac River. The obligation of Sac
River to effect the Merger is subject to the satisfaction of the following
conditions, unless waived by Sac River:
(a) Representations and Warranties. (i) Each of the
representations and warranties of Bancshares set forth in this
Agreement, without giving effect to any update to the Bancshares
Disclosure Letter or notice to Sac River pursuant to Section 7.4, shall
be true and correct in all material respects as of the date of this
Agreement and (except to the extent such representations speak as of an
earlier date) as of the Closing Date as though made on and as of the
Closing Date, and (ii) Sac River shall have received a certificate to
such effect signed on behalf of Bancshares by its chief executive
officer.
(b) Performance of Obligations of Bancshares. Bancshares
shall have performed in all material respects each of the obligations
required to be performed by it under this Agreement at or prior to the
Closing Date, and Sac River shall have received a certificate to such
effect signed on behalf of Bancshares by its chief executive officer.
(c) Consents Under Agreements. Bancshares shall have obtained
the consent or approval of each person whose consent or approval shall
be required in connection with the transactions contemplated hereby
under any loan or credit agreement, note, mortgage, indenture, lease or
other agreement or instrument, except those for which failure to obtain
such consents and approvals would not, individually or in the
aggregate, have a Bancshares Material Adverse Effect whether prior to
or following the consummation of the transactions contemplated hereby.
(d) No Material Adverse Change. There shall have been no
material adverse change since the date of this Agreement in the
business, operations, prospects or financial condition of Bancshares or
Liberty other than any such change attributable to or resulting from
any change in law, regulation or generally accepted accounting
principles which impairs both Sac River and Liberty in a substantially
similar manner, and Sac River shall have received a certificate to such
effect signed on behalf of Bancshares by its chief executive officer.
(e) No Proceeding or Litigation. No material action, suit or
proceeding before any court or any governmental or regulatory authority
shall be pending against the Bancshares, Liberty, Sac River or any
affiliate, associate, officer or director or any of them seeking to
restrain, enjoin, prevent,
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change or resend the transactions contemplated hereby or questioning
the validity or legality of any such transactions.
(f) Allowance for Losses on Loans. If Sac River believes that
Bancshares' allowance for loan losses is inadequate, it will within ten
(10) days prior to the Closing recommend to the Board of Directors of
Liberty an adjustment in the amount of such allowance which, if
reasonable or consistent with prudent banking practices, shall be
approved by such Board.
(g) Optional Cash Payment Limitation. The Optional Per Share
Cash Amounts elected by the Sac River shareholders shall not have
exceeded the Optional Cash Payment Limitation at the time of the
Election Deadline (or, if applicable, the Extended Election Deadline).
(h) Tax Treatment. Sac River reasonably believes, as of the
Closing Date, that the Merger will qualify as one or more
reorganizations under Code Section 368(a)(1).
ARTICLE X
TERMINATION AND AMENDMENT
10.1 Termination. This Agreement and the Merger may be terminated at
any time prior to the Effective Time, whether before or after approval of the
matters presented in connection with the Merger by the shareholders of Sac
River:
(a) by mutual consent of the Board of Directors of Bancshares
and the Board of Directors of Sac River;
(b) by Bancshares or Sac River (i) if there has been a breach
in any material respect of any representation, warranty, covenant or
agreement on the part of Sac River, on the one hand, or Bancshares, on
the other hand, set forth in this Agreement, or (ii) if the
representations and warranties of Sac River, on the one hand, or
Bancshares, on the other hand, shall be discovered to have become
materially untrue in the aggregate, in either case which breach or
other condition has not been cured within thirty (30) business days
following receipt of the non-terminating party of notice of such breach
or other condition;
(c) by Bancshares, on the one hand, or Sac River, on the
other hand, if any permanent injunction preventing the consummation of
the Merger shall be become final and nonappealable;
(d) subject to Section 1.2 hereof, by the Board of Directors
of Bancshares or the Board of Directors of Sac River if the Merger
shall not have been consummated before March 31,
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1999, for a reason other than the failure of the terminating party to
comply with its obligations under this Agreement;
(e) by the Board of Directors of Bancshares or the Board of
Directors of Sac River if (i) the Federal Reserve Board, the Division
of Finance, the FDIC or other applicable bank regulatory authority has
denied approval of the Merger and neither Bancshares nor Sac River has,
within thirty (30) days after the entry of the order denying such
approval, filed a petition seeking review of such order as provided by
applicable law or (ii) any such petition for review has been denied;
(f) by Sac River or Bancshares, if (i) this Agreement and the
Merger are not duly approved by the shareholders of Sac River or
Liberty after a vote thereon at a meeting of Sac River's or Liberty's
shareholders (or any adjournment thereof) duly called and held for such
purpose;
10.2 Investigation and Review.
(a) Subject to the next following sentence, at any time on or
prior to the 20th day following the receipt of the Sac River Disclosure
Letter, Bancshares may, by action of its Board of Directors, elect to
terminate this Agreement on behalf of Bancshares. Nothing in this
Section 10.2(a) shall be construed (i) to limit the period of time
during which Bancshares may conduct its investigation and review of Sac
River, (ii) to limit any duty to Sac River otherwise to cooperate with
the investigation and review by Bancshares subsequent to the period
established pursuant to the first sentence of this subsection (a), or
(iii) to limit or qualify in any respect the representations and
warranties of Sac River to Bancshares set forth in this Agreement as a
result of any such investigation and review.
(b) Subject to the next following sentence, at any time on or
prior to the 20th day following receipt of the Bancshares Disclosure
Letter, Sac River may, by action of its Board of Directors, elect to
terminate this Agreement on behalf of Sac River. Nothing in this
Section 10.2(b) shall be construed (i) to limit the period of time
during which Sac River may conduct its investigation and review of
Bancshares and Liberty; (ii) to limit any duty of Bancshares otherwise
to cooperate with the investigation and review by Sac River subsequent
to the period established pursuant to the first sentence of this
subsection (b); or (iii) to limit or qualify in any respect the
representations and warranties of Bancshares to Sac River set forth in
this Agreement as a result of such investigation and review.
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10.3 Effect of Termination. In the event of termination of this
Agreement by Sac River or Bancshares as provided in Sections 10.1 or 10.2
hereof, this Agreement and the Merger shall forthwith become void and there
shall be no liability or obligation on the part of Bancshares or Sac River or
their respective officers or directors except (a) with respect to Sections 6.7
and 8.4 hereof, and (b) to the extent that such termination results from the
willful breach by a party hereto of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
10.4 Amendment. Subject to the last sentence of this Section 10.4,
this Agreement may be amended by the parties hereto by action taken or
authorized by their respective Boards of Directors at any time before or after
approval of the matters presented in connection with the Merger by the
shareholders of Sac River and Liberty, but after any such approval by the
shareholders of Sac River and Liberty, no amendment shall be made which changes
in any manner adverse to such shareholders the consideration to be provided to
such shareholders pursuant to this Agreement. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
10.5 Extension; Waiver. At any time prior to the Effective Time,
Bancshares and Sac River, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of the other party
hereto, (ii) waive any inaccuracies in the representations and warranties of the
other contained herein or in any document delivered by the other pursuant
hereto, and (iii) waive compliance by the other with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party.
ARTICLE XI
GENERAL PROVISIONS
11.1 Non-Survival of Representations, Warranties and Agreements.
None the representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time, except for the agreements and instruments contained or specified in
Sections 2.3 and 2.4, Article III, Sections 6.4, 6.7, 7.4, 7.5, 7.6, 8.5, and
9.1(e), the last sentence of Section 10.4, and this Article XI.
11.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by nationally
recognized overnight courier service, telecopied (with receipt confirmed) or
mailed by registered or certified mail (return receipt requested) to the parties
at the
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following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Bancshares and/or Liberty: Xx. Xxxx X. Xxxxxxx
President
Liberty Bank
0000 X. Xxxxxxxx
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
(b) if to Sac River: Xx. Xxxxx X. Xxxxxxxx
President
Sac River Valley Bank
X.X. Xxx X
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
11.3 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
11.4 Entire Agreement; No Third Party Beneficiaries. This Agreement
(including the documents and the instruments referred to herein) (a) constitutes
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof (b) except as expressly provided herein, is not intended to confer upon
any person other than the parties hereto any rights or remedies hereunder.
11.5 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Missouri.
11.6 Publicity. The parties hereto agree that they will consult with
each other concerning any proposed press release or public announcement
pertaining to the Merger and use their best efforts to agree upon the text of
such press release or public announcement prior to the publication of such press
release or the making of such public announcement.
11.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
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11.8 Knowledge of the Parties. Wherever in this Agreement any
representation or warranty is made upon the knowledge of a party hereto that is
not an individual, such knowledge shall include the knowledge, after due
inquiry, of any executive officer of such party or an executive officer of any
subsidiary thereof.
11.9 Confidentiality. Except for information that is available to
the public, all information concerning Sac River and its customers made
available to or in the possession of Bancshares shall be kept as confidential.
Except for information that is available to the public, all information
concerning Bancshares, Liberty and their customers made available to or in the
possession of Sac River shall be kept as confidential.
IN WITNESS WHEREOF, Bancshares, Liberty and Sac River have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
(Corporate Seal) LIBERTY BANCSHARES, INC.
ATTEST:
By /s/ Xxxx X. Xxxxxxx
-------------------------------------
/s/ Xxx X. Xxxxxxx Xxxx X. Xxxxxxx, President
-----------------------------
Secretary/Assistant Secretary "Bancshares"
(Corporate Seal) LIBERTY BANK
ATTEST:
By /s/ Xxxx X. Xxxxxxx
/s/ Xxx X. Xxxxxxx -------------------------------------
----------------------------- Xxxx X. Xxxxxxx, President
Secretary/Assistant Secretary
"Liberty"
(Corporate Seal) SAC RIVER VALLEY BANK
ATTEST:
By /s/ Xxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxx -------------------------------------
----------------------------- Xxxxx X. Xxxxxxxx, President
Secretary/Assistant Secretary
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STATE OF MISSOURI )
) ss.
COUNTY OF Xxxxxx )
On this 18th day of June, 1998, before me personally appeared Xxxx X.
Xxxxxxx, to me personally known, who being duly sworn, did say that he is the
President of Liberty Bancshares, Inc. (the "Corporation"), that the seal affixed
to this instrument is the corporate seal of the Corporation, and that the said
instrument was signed and sealed on behalf of the Corporation by authority of
its Board of Directors and the said Xxxx X. Xxxxxxx acknowledged said instrument
to be the free act and deed of the Corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal, at my office in Springfield, the day and year first above
written.
/s/ Xxx X. Xxxxxxx
----------------------------------
Notary Public
My commission expires: 11-14-2000
STATE OF MISSOURI )
) ss.
COUNTY OF Xxxxxx )
On this 18th day of June, 1998, before me personally appeared Xxxx X.
Xxxxxxx, to me personally known, who being duly sworn, did say that he is the
President of Liberty Bank (the "Corporation"), that the seal affixed to this
instrument is the corporate seal of the Corporation, and that the said
instrument was signed and sealed on behalf of the Corporation by authority of
its Board of Directors and the said Xxxx X. Xxxxxxx acknowledged said instrument
to be the free act and deed of the Corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal, at my office in Springfield, the day and year first above
written.
/s/ Xxx X. Xxxxxxx
------------------------------------
Notary Public
My commission expires: 11-14-2000
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STATE OF MISSOURI )
) ss.
COUNTY OF Cedar )
On this 18th day of June, 1998, before me personally appeared Xxxxx X.
Xxxxxxxx, to me personally known, who being duly sworn, did say that he is the
President of Sac River Valley Bank (the "Corporation"), that the seal affixed to
this instrument is the corporate seal of the Corporation, and that the said
instrument was signed and sealed on behalf of the Corporation by authority of
its Board of Directors and the said Xxxx X. Xxxxxxx acknowledged said instrument
to be the free act and deed of the Corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal, at my office in Stockton, MO, the day and year first above
written.
/s/ Xxxxx X. Xxxxxx
------------------------------------
Notary Public
My commission expires: 8/14/01
XXXXX X. XXXXXX
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
CEDAR COUNTY
MY COMMISSION EXPIRES AUG. 14, 2001
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EXHIBIT "A"
AGREEMENT TO MERGE
SAC RIVER VALLEY BANK
WITH AND INTO
LIBERTY BANK
UNDER THE CHARTER OF
LIBERTY BANK
WITH THE TITLE OF
"LIBERTY BANK"
THIS AGREEMENT TO MERGE (hereinafter called this "Agreement"), dated
the ______ day of _______________, 1998, by and among Liberty Bancshares, Inc.,
a Missouri corporation with its principal place of business located at 0000 Xxxx
Xxxxxxxx, Xxxxxxxxxxx, Xxxxxxxx, 00000 ("Bancshares"); Liberty Bank, a Missouri
chartered bank and wholly owned subsidiary of Bancshares with its main office
located at 0000 Xxxx Xxxxxxxx, Xxxxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxx ("Liberty");
and Sac River Valley Bank, a Missouri chartered bank with its main office
located in Stockton, Cedar County, Missouri ("Sac River"). (Liberty and Sac
River are sometimes hereinafter collectively referred to as the "Constituent
Banks").
W I T N E S S E T H:
WHEREAS, Liberty has an authorized capitalization consisting of
thirty-four thousand (34,000) shares of common stock, par value Fifty Dollars
($50.00) per share, all of which are issued and outstanding and are owned of
record and beneficially by Bancshares as of the date hereof; and
WHEREAS, Sac River has an authorized capitalization consisting of ten
thousand (10,000) shares of common stock, par value Thirty Dollars ($30.00) per
share, all of which are issued and outstanding as of the date hereof; and
WHEREAS, as of December 31, 1997, the equity capital of Liberty was
Seven Million Six Hundred Three Thousand Dollars ($7,603,000.00) divided into
thirty-four thousand (34,000) shares of common stock, of a par value of Fifty
Dollars ($50.00) each, surplus of Five Million Five Hundred Ninety-Two Thousand
Dollars ($5,592,000.00) and undivided profits, including capital reserves, of
Three Hundred Eleven Thousand Dollars ($311,000.00); and
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WHEREAS, as of December 31, 1997, the equity capital of Sac River was
Eleven Million One Hundred Forty Thousand Dollars ($11,140,000.00), divided into
ten thousand (10,000) shares of common stock, each of a par value of Thirty
Dollars ($30.00) each, surplus of Five Hundred Thousand Dollars ($500,000.00),
undivided profits, including capital reserves, of Ten Million Three Hundred
Fifteen Thousand Dollars ($10,315,000.00), and net unrealized holding gains
unavailable for sale securities of Twenty Five Thousand Dollars ($25,000.00);
and
WHEREAS, Bancshares has, on the date hereof, authorized capital
consisting of 5,000,000 shares of common stock, par value of $1.00 per share (as
approved by the shareholders of Bancshares on May 19, 1998), of which on the
date hereof 511,090 shares are issued and outstanding; and
WHEREAS, the Boards of Directors of Sac River, Liberty and Bancshares
deem it advisable to merge Sac River in and into Liberty (the "Merger") in
accordance with the provisions of RSMo. Sections 362.610 to 362.810, inclusive;
and
WHEREAS, Sac River, Liberty and Bancshares have entered into an
Agreement and Plan of Merger dated as of June 18, 1998 (the "Reorganization
Agreement"), providing for the Merger; and
WHEREAS, the Board of Directors and the shareholders of Sac River have
approved this Agreement and the Merger in accordance with the provisions of
RSMo. Sections 362.610 to 362.810, inclusive; and
WHEREAS, the Board of Directors and the sole shareholder of Liberty
have approved this Agreement and the Merger in accordance with RSMo.
Sections 362.610 to 362.810, inclusive, the Board of Directors of Bancshares has
approved this Agreement and the Merger in accordance with The General and
Business Corporation Law of Missouri and no action by the shareholders of
Bancshares is required under The General and Business Corporation Law of
Missouri in order to approve this Agreement and the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, mutual covenants and agreements herein contained,
the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 Subject to and in accordance with the provisions of this Agreement,
Sac River shall be merged with and into Liberty (being sometimes referred to
herein as the "Surviving Association") under the charter of Liberty. The time
the Merger becomes effective is hereinafter referred to as the "Effective Date."
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1.2 The name of the Surviving Association shall be "Liberty Bank".
1.3 From and after the Effective Date, the Surviving Association shall
be considered the same business and corporate entity as the Constituent Banks,
with all of the rights, powers, duties and liabilities of the Constituent Banks.
Pursuant to the Merger, all assets of Sac River as of the Effective Date shall
pass to and vest in the Surviving Association, and all liabilities of Sac River
as of the Effective Date shall attach to and become liabilities of the Surviving
Association, without any conveyance or other action.
1.4 Prior to and after the Effective Date, Bancshares, Liberty and Sac
River shall take all such actions as may be necessary or appropriate in order to
effect the Merger. If at any time after the Effective Date any further action is
necessary or desirable to carry out the purposes of this Agreement and to vest
the Surviving Association with full title to all properties, assets and rights
of Sac River as of the Effective Date, the officers of Bancshares, Liberty and
Sac River shall take all such further action.
ARTICLE II
TERMS OF CONVERSION AND EXCHANGE OF SHARES
2.1 On the Effective Date, by virtue of the Merger and without any
action on the part of any holder of any share of Liberty common stock or any
share of Sac River common stock, but subject to RSMo. Section 362.730 with
respect to the rights of dissenting shareholders, the following shall occur:
(a) Each issued and outstanding share of Liberty common stock
on the Effective Date shall remain issued and outstanding and shall be
unchanged by the Merger.
(b) Each issued and outstanding share of Sac River common
stock issued and outstanding after the Effective Date shall cease to be
outstanding, and shall be automatically cancelled and retired and shall
cease to exist, and shall be converted into and exchanged for the right
to receive common stock of Bancshares, fully paid and non-assessable,
and cash from Bancshares, as follows:
(i) Cash in the amount of Four Hundred Eighty-Five
Dollars & 70/100 ($485.70) per share (the "Mandatory Per Share
Cash Amount"). In no event, however, shall the Mandatory Per
Share Cash Amounts exceed, in the aggregate, Four Million
Eight Hundred Fifty-Seven Thousand Dollars ($4,857,000.00);
and
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(ii) At the election of each shareholder of Sac
River, with respect to each share of Sac River common stock:
(A) Cash in the amount of One Thousand Fifty
Dollars ($1,050.00) per share (the "Optional Per
Share Cash Amount"); provided, however, that the
total cash payable by Bancshares with respect to the
Optional Per Share Cash Amount to all shareholders of
Sac River shall not exceed Two Million Eight Hundred
Thousand Dollars ($2,800,000.00), less cash
distributed in lieu of fractional shares (the
"Optional Cash Payment Limitation"); or
(B) The right to receive 35.516 shares of
common stock of Bancshares (the "Exchange Ratio").
2.2 In the event Bancshares changes the number of shares of Bancshares
common stock issued and outstanding prior to the Effective Date as a result of a
stock split, stock dividend, or similar recapitalization with respect to such
stock and the record date therefore (in the case of a stock dividend) or the
effective date thereof (in the case of a stock split or similar recapitalization
for which a record date is not established) shall be prior to the Effective
Date, the Exchange Ratio shall be proportionately adjusted.
2.3 Notwithstanding any other provision of this Agreement, each holder
of shares of Sac River common stock exchanged pursuant to the Merger who would
otherwise have been entitled to receive a fraction of a share of Bancshares
common stock (after taking into account all certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest) in an amount
equal to such fractional part of a shares of Bancshares common stock multiplied
by the value of one share of Bancshares common stock at the Effective Date. For
purposes of this Agreement, the value of one share of Bancshares common stock at
the Effective Date shall be $29.56 (subject to adjustment as provided in Section
2.2 hereof). No such holder shall be entitled to dividends, voting rights, or
any other rights as a shareholder in respect of any fractional shares.
2.4 Elections by shareholders of Sac River to receive Optional Per
Share Cash Amounts shall be made by mailing or delivering to the Exchange Agent
(as defined below) the Form of Election delivered to the shareholders of Sac
River with the Proxy Statement (as defined in the Reorganization Agreement). To
be effective, a Form of Election must be properly completed, signed and
submitted by the shareholder no later than the date of the special meeting of
the shareholders of Sac River held to approve the Merger (the "Election
Deadline"). In the event the special
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shareholders meeting is adjourned to a specified date no longer than ninety (90)
days after such adjournment, the Election Deadline shall be such specified date
(the "Extended Election Deadline"). Sac River and Bancshares shall mail the Form
of Election with the Proxy Statement to all holders of Sac River common stock on
the record date of the Sac River special shareholders' meeting and shall make
the Form of Election available to all persons who become holders of Sac River
common stock subsequent to such day and no later than the close of business on
the business day prior to the Extended Election Deadline. All elections by
shareholders to receive Optional Per Share Cash Amounts may be revoked or
amended until the Extended Election Deadline. If no such election is filed by a
Sac River shareholder, no Optional Per Share Cash Amount shall be made to the
shareholder, and all of the Sac River shares held by the shareholder shall be
exchanged for Bancshares common stock in accordance with the Exchange Ratio
(except for the Mandatory Per Share Cash Amount). Each Sac River shareholder who
does not vote in favor of the Merger as of the Extended Election Deadline shall
be deemed, subject to the right hereinabove provided for amendment or revocation
of the election and subject to the provisions of Section 2.9 hereof, to have
made an election to receive Optional Per Share Cash Amounts with respect to his
or her shares, regardless of the actual Form of Election submitted by said
shareholder
2.5 At the closing of the Merger (the "Closing" or "Closing Date"),
Bancshares shall deposit with Husch & Eppenberger, LLC (the "Exchange Agent"),
for the benefit of the then holders of shares of Sac River common stock,
certificates dated as of the Closing Date representing the shares of Bancshares
common stock, the cash to be paid in lieu of fractional shares, the Optional Per
Share Cash Amounts (if any), and the Mandatory Per Share Cash Amounts (such cash
and certificates of Bancshares common stock, together with any dividend or
distributions with respect thereto, being hereinafter referred to as the
"Exchange Fund") to be issued and paid pursuant to Section 2.1 hereof in
exchange for the outstanding shares of Sac River common stock. Within five (5)
business days after the Closing Date, Bancshares shall cause the Exchange Agent
to mail to each holder of record as of the Closing Date of a Sac River
certificate or certificates (i) a letter of transmittal which will specify that
delivery shall be effective, and risk of loss and title to the Sac River
certificate(s) shall pass, only upon delivery of the Sac River certificate(s) to
the Exchange Agent and which shall be in such form and have such other
provisions as Bancshares and Sac River may reasonably specify, and (ii)
instructions for use in effecting the surrender of the Sac River certificate(s)
in exchange for a certificate representing shares of Bancshares common stock,
cash to be paid in lieu of any fractional share, the Optional Per Share Cash
Amount (if any) and the Mandatory Per Share Cash Amount. Upon surrender of a
shareholder's Sac River certificate or certificates for cancellation to the
Exchange Agent together with such letter of transmittal, duly
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executed, the holder of such Sac River certificate(s) shall be entitled to
receive in exchange therefore, within ten (10) business days following said
surrender, (1) a certificate representing the applicable number of whole shares
of Bancshares common stock, and (2) a check representing the amount of the cash
to be paid in lieu of a fractional share, if any, the Optional Per Share Cash
Amount (if any) and the Mandatory Per Share Cash Amount, and the Sac River
certificate(s) so surrendered shall forthwith be cancelled; provided, however,
that any Sac River shareholder who does not vote in favor of the Merger shall
not be entitled to receive said cash earlier than sixty (60) days after the
Effective Date. Except for said shareholders (who, except as provided in Section
2.9 hereof, shall receive interest at the rate of 9% per annum during the period
of sixty (60) days following the Effective Date), no interest will be paid on
the cash in lieu of fractional shares, if any, the Optional Per Share Cash
Amount (if any), and the Mandatory Per Share Cash Amount. Any applicable stock
transfer taxes shall be paid by Bancshares. Adoption of this Agreement by the
shareholders of Sac River and Liberty shall constitute ratification of the
appointment of the Exchange Agent.
2.6 At the Effective Date, the stock transfer books of Sac River shall
be closed as to holders of Sac River common stock immediately prior to the
Effective Time and no transfer of Sac River common stock by any such holder
shall thereafter be made or recognized. Until surrendered for exchange in
accordance with the provisions of Section 2.5 hereof, each certificate
theretofore representing shares of Sac River common stock shall from and after
the Effective Time represent for all purposes only the right to receive the
consideration provided in Section 2.1 hereof in exchange therefore, subject,
however, to Bancshares' obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Date which have been
declared or made by Sac River in respect of such shares of Sac River common
stock in accordance with the terms of this Agreement and which remain unpaid at
the Effective Date. Whenever a dividend or other distribution is declared by
Bancshares on the Bancshares common stock, the record date for which is at or
after the Effective Date, the declaration shall include dividends or other
distributions on all shares of Bancshares common stock issuable pursuant to this
Agreement, but beginning thirty (30) days after the Effective Date no dividend
or other distribution payable to the holders of record of Bancshares common
stock as of any time subsequent to the Effective Date shall be delivered to the
holder of any certificate representing shares of Sac River common stock issued
and outstanding at the Effective Date until such holder surrenders such
certificate (or an affidavit in lieu thereof pursuant to Section 2.8 hereof) for
exchange as provided in Section 2.5 of this Agreement. However, upon surrender
of Sac River common stock certificate, both the Bancshares common stock
certificate (together with all such undelivered dividends or other distributions
without interest) and any undelivered dividends and cash payments payable
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thereunder (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
2.7 Any portion of the Exchange Fund that remains unclaimed by the
shareholders of Sac River for twelve (12) months after the Closing Date shall be
paid to Bancshares. Any shareholders of Sac River who have not theretofore
complied with this Article II shall thereafter look only to Bancshares for
payment of their shares of Bancshares common stock, cash in lieu of any
fractional share of Bancshares common stock, Optional Per Share Cash Amount (if
any) and Mandatory Per Share Cash Amount, without any interest thereon.
Notwithstanding the foregoing, neither the Exchange Agent nor Bancshares shall
be liable to any former holder of shares of Sac River common stock for any
amount properly delivered to a public official pursuant to any applicable
abandoned property, escheat or similar laws.
2.8 In the event any Sac River certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Sac River certificate to be lost, stolen or destroyed and, if
required by the Exchange Agent, the execution and delivery of an indemnity
agreement whereby said person shall agree to indemnify the Exchange Agent and
Bancshares against any claim which may be made against it with respect to such
Sac River certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Sac River certificate the shares of Bancshares common stock
and cash in an amount as determined in accordance with Section 2.1 hereof,
deliverable in respect thereof pursuant to this Agreement.
2.9 Each issued and outstanding share of Sac River common stock, the
holder of which has validly asserted dissenters' rights pursuant to RSMo.
Section 362.730 and has not effectively withdrawn or lost such rights, shall
not be converted into or represent a right to receive the consideration
specified in Section 2.1 hereof, but the holder thereof shall be entitled only
to such rights as are granted by RSMo. Section 362.730. In the event the holder
of Sac River common stock validly asserts dissenters' pursuant to RSMo.
Section 362.730, any cash held by the Exchange Agent with respect to said
shareholder's shares shall be paid by the Exchange Agent to the Surviving
Association. Each shareholder entitled, pursuant to the provisions of RSMo.
Section 362.730, to payment for his or her shares of Sac River common stock,
shall receive payment therefore from the Surviving Association (but only after
the amount thereof shall have been agreed upon or determined pursuant to such
provisions) and such shares of Sac River common stock shall be cancelled. If
any holder of shares of Sac River common stock who asserts dissenters' rights
under RSMo. Section 362.730 effectively withdraws or loses (through failure to
perfect or otherwise) such rights, each such share of Sac River common stock
shall be converted into the right to receive the consideration specified in
Section 2.1 hereof.
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ARTICLE III
CONDUCT OF BUSINESS
3.1 The business of the Surviving Association shall be that of a
Missouri banking association.
3.2 The business of the Surviving Association shall be conducted at the
Surviving Association's main office, located at 0000 Xxxx Xxxxxxxx, Xxxxxxxxxxx,
Xxxxxxxx 00000, and at its legally established branches, as approved by the
Missouri Commissioner of Finance (the "Commissioner of Finance").
ARTICLE IV
ARTICLES OF ASSOCIATION AND BY-LAWS
4.1 From and after the Effective Date until they are duly amended, the
Articles of Association of the Surviving Association shall read in their
entirety as set forth in Schedule "1", attached hereto and made a part hereof by
this reference.
4.2 The By-Laws of Liberty immediately prior to the Merger shall be the
By-Laws of the Surviving Association from and after the Effective Date until
they are duly amended.
ARTICLE V
DIRECTORS AND OFFICERS
5.1 The directors of the Constituent Banks in office immediately prior
to the Effective Date, as listed on Schedule "2", attached hereto and made a
part hereof by this reference, shall serve as the directors of the Surviving
Association from and after the Effective Time in accordance with By-Laws of the
Surviving Association.
5.2 The officers of Liberty in office immediately prior to the
Effective Date shall serve in the same capacities with the Surviving Association
from and after the Effective Date in accordance with the By-Laws of the
Surviving Association. In addition, Xxxxx X. Xxxxxxxx shall serve as the
Executive Vice-President of the Surviving Association, and all current vice
presidents of Sac River shall serve as vice presidents of the Surviving
Association.
ARTICLE VI
EFFECTIVE DATE
6.1 The Effective Date of the Merger shall be at such time as this
Agreement, a copy of the minutes of the respective
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shareholders' meetings at which the Merger was approved, with a copy of the
approval of the Boards of Directors of the Constituent Banks, all certified and
verified by the respective secretaries of the meetings, shall be filed with the
Commissioner of Finance and in and with such additional offices as required by
the provisions of RSMo. Sections 362.610 to 362.810, inclusive.
ARTICLE VII
TERMINATION
7.1 This Agreement shall automatically terminate and the Merger shall
be abandoned upon termination of the Reorganization Agreement by Liberty or Sac
River in accordance with the provisions of Article X of the Reorganization
Agreement.
ARTICLE VIII
AMENDMENT
8.1 Subject to the last sentence of this Section 8.1, this Agreement
may be amended by the parties hereto by action taken or authorized by the
respective Boards of Directors at any time before or after approval of the
matters presented in connection with the Merger by the shareholders of Sac River
and Liberty, but after any such approval by the shareholders of Sac River and
Liberty, no amendment shall be made which changes in any manner adverse to such
shareholders the consideration to be provided to such shareholders pursuant to
this Agreement. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
ARTICLE IX
MISCELLANEOUS
9.1 This Agreement may be executed in counterparts, each of which when
so executed shall be deemed to be an original and such counterparts shall
constitute but one and the same instrument.
9.2 This Agreement shall be governed and construed in accordance with
the laws of the State of Missouri.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first above written.
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(Corporate Seal) LIBERTY BANCSHARES, INC.
ATTEST:
By__________________________________
_____________________________ Xxxx X. Xxxxxxx, President
Secretary/Assistant Secretary
"Bancshares"
(Corporate Seal) LIBERTY BANK
ATTEST:
By__________________________________
_____________________________ Xxxx X. Xxxxxxx, President
Secretary/Assistant Secretary
"Liberty"
(Corporate Seal) SAC RIVER VALLEY BANK
ATTEST:
By__________________________________
_____________________________ Xxxxx X. Xxxxxxxx, President
Secretary/Assistant Secretary
STATE OF MISSOURI )
) ss.
COUNTY OF ____________ )
On this _______ day of __________________, 1998, before me personally
appeared Xxxx X. Xxxxxxx, to me personally known, who being duly sworn, did say
that he is the President of Liberty Bancshares, Inc. (the "Corporation"), that
the seal affixed to this instrument is the corporate seal of the Corporation,
and that the said instrument was signed and sealed on behalf of the Corporation
by authority of its Board of Directors and the said Xxxx X. Xxxxxxx acknowledged
said instrument to be the free act and deed of the Corporation.
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IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal, at my office in _____________________________, the day and year
first above written.
__________________________
Notary Public
My commission expires:___________________________
STATE OF MISSOURI )
) ss.
COUNTY OF ____________ )
On this _______ day of __________________, 1998, before me personally
appeared Xxxx X. Xxxxxxx, to me personally known, who being duly sworn, did say
that he is the President of Liberty Bank (the "Corporation"), that the seal
affixed to this instrument is the corporate seal of the Corporation, and that
the said instrument was signed and sealed on behalf of the Corporation by
authority of its Board of Directors and the said Xxxx X. Xxxxxxx acknowledged
said instrument to be the free act and deed of the Corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal, at my office in _____________________________, the day and year
first above written.
__________________________
Notary Public
My commission expires:___________________________
STATE OF MISSOURI )
) ss.
COUNTY OF ____________ )
On this _______ day of __________________, 1998, before me personally
appeared Xxxxx X. Xxxxxxxx, to me personally known, who being duly sworn, did
say that he is the President of Sac River Valley Bank (the "Corporation"), that
the seal affixed to this instrument is the corporate seal of the Corporation,
and that the said instrument was signed and sealed on behalf of the Corporation
by authority of its Board of Directors and the said Xxxx X. Xxxxxxx acknowledged
said instrument to be the free act and deed of the Corporation.
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IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal, at my office in _____________________________, the day and year
first above written.
___________________________
Notary Public
My commission expires:___________________________
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EXHIBIT "B"
LIST OF DIRECTORS OF SURVIVING BANK
Xxxxxxx X. Xxxx
Xxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxx Xxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxx
C. Xxx Xxxxxx, Xx.
Xxxxx Xxxxxx
C. W. "Xxxx" Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxxx Xxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx Xxxxxx
13
