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AGREEMENT AND PLAN OF MERGER
By and Among
STATE FINANCIAL SERVICES CORPORATION
RBI, INC.
and
RICHMOND BANCORP, INC.
November 4, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
1.01 The Merger 1
1.02 Effective Time 1
1.03 Effect of the Merger 2
1.04 Articles of Incorporation; By-Laws 2
1.05 Directors and Officers 2
1.06 Taking Necessary Action; Further Action 2
1.07 The Closing 3
ARTICLE II
CONVERSION OF SECURITIES
2.01 Conversion of Securities 3
2.02 Dissenting Shares 6
2.03 Stock Options and Other Rights 6
2.04 Surrender of Certificates; Payment 6
2.05 Escheat 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.01 Organization and Qualification; Subsidiaries 9
3.02 Articles of Incorporation; By-Laws 10
3.03 Capitalization 11
3.04 Authority; Vote Required 11
3.05 No Conflict; Required Filings and Consents 12
3.06 Permits; Compliance 12
3.07 Reports; Financial Statements 12
3.08 Absence of Certain Changes or Events 15
3.09 Absence of Litigation 15
3.10 Contracts; No Default 16
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3.11 Employee Benefit Plans; Labor Matters 17
3.12 Taxes 18
3.13 Intellectual Property Rights 19
3.14 Certain Business Practices and Regulations 19
3.15 Insurance 19
3.16 Brokers 20
3.17 Title to Properties 20
3.18 Environmental Laws 21
3.19 Loans in Default 22
3.20 Bank Filings and Reports 22
3.21 Governmental Approvals 23
3.22 Litigation and Regulatory Matters 23
3.23 Disclosures 24
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
AND ACQUIROR SUB
4.01 Organization and Qualification; Subsidiaries 24
4.02 Authority 25
4.03 Capitalization 25
4.04 No Conflict; Required Filings and Consents 25
4.05 Ownership of Acquiror Sub; No Prior Activities 26
4.06 Financing 26
4.07 Governmental Approvals 27
4.08 Requisite Capital 27
4.09 Absence of Claims 27
4.10 Litigation and Regulatory Matters 27
4.11 Brokers 27
4.12 Disclosures 28
ARTICLE V
COVENANTS
5.01 Affirmative Covenants of the Company 28
5.02 Negative Covenants of the Company 29
5.03 Affirmative Covenants of Acquiror 31
5.04 Confidentiality Agreement 31
5.05 Acquisition Proposals 31
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ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Meeting of Shareholders 32
6.02 Appropriate Action; Consents; Filings 32
6.03 Update Disclosure; Breaches 34
6.04 Public Announcements 34
6.05 Obligations of Acquiror Sub 34
ARTICLE VII
CLOSING CONDITIONS
7.01 Conditions to Obligations of Each Party
Under This Agreement 35
7.02 Additional Conditions to Obligations
of Acquiror and Acquiror Sub 36
7.03 Additional Conditions to Obligations of the Company 40
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination 42
8.02 Effect of Termination 44
8.03 Expenses 44
ARTICLE IX
GENERAL PROVISIONS
9.01 Survival of Representations and Warranties 45
9.02 Notices 45
9.03 Amendment 47
9.04 Waiver 47
9.05 Headings 47
9.06 Severability 47
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9.07 Entire Agreement 47
9.08 Assignment 48
9.09 Parties in Interest 48
9.10 Governing Law 48
9.11 Counterparts 48
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THIS AGREEMENT AND PLAN OF MERGER dated as of November 4, 1997 (the
"Agreement"), is made and entered into among State Financial Services
Corporation, a Wisconsin corporation ("Acquiror"), RBI, Inc., an Illinois
corporation and a wholly-owned subsidiary of Acquiror ("Acquiror Sub"), and
Richmond Bancorp, Inc., an Illinois corporation (the "Company").
RECITAL
The respective Boards of Directors of Acquiror, Acquiror Sub and the
Company have determined that it is advisable and in the best interests of the
respective corporations and their shareholders that the Company be merged with
and into Acquiror Sub in accordance with the Illinois Business Corporation Law
of 1983, as amended (the "Illinois Law"), and the terms of this Agreement,
pursuant to which the Company will be the surviving corporation and will become
a wholly-owned subsidiary of Acquiror (the "Merger").
AGREEMENTS
In consideration of the representations, warranties, covenants and
agreements set forth in this Agreement, the parties agree:
ARTICLE I
THE MERGER
1.01 The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Illinois Law, at the Effective
Time, Acquiror Sub shall be merged with and into the Company. The transaction
is intended to qualify as a reverse subsidiary merger (as described in section
368(a)(2)(E) or the Internal Revenue of Code of 1986, as amended (the "Code"))
under Illinois law. As a result of the Merger, the separate corporate
existence of Acquiror Sub shall cease and the Company shall continue as the
surviving corporation of the Merger (following the effectiveness of the Merger,
the Company may be referred to as the "Surviving Corporation") and as a
wholly-owned subsidiary of Acquiror. Acquiror Sub and the Company are
sometimes collectively referred to in this Agreement as the "Constituent
Corporations."
1.02 Effective Time. As promptly as practicable after the satisfaction
or, if permissible, waiver of the conditions set forth in Article VII, the
parties shall cause the Merger to be consummated by filing articles of merger
(the "Articles of Merger") with the Secretary of State of the State of Illinois
in such form as required by, and executed in accordance with, the relevant
provisions of the Illinois Law and shall take all such further actions as may
be required by law to
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make the Merger effective upon filing of the Articles of Merger with the
Secretary of State of the State of Illinois (the date and time of such filing
being the "Effective Time" unless otherwise expressly provided in the Articles
of Merger, in which case, such time and date as expressly provided shall be the
"Effective Time").
1.03 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the Illinois Law.
Without limiting the generality of, and subject to the provisions of, the
Illinois Law, at the Effective Time, except as otherwise provided in this
Agreement, all the property, interests, assets, rights, privileges, immunities,
powers and franchises of Acquiror Sub and the Company shall vest in the
Surviving Corporation, and all debts, liabilities, duties and obligations of
Acquiror Sub and the Company shall become the debts, liabilities, duties and
obligations of the Surviving Corporation.
1.04 Articles of Incorporation; By-Laws and Name. At the Effective Time,
the Articles of Incorporation, as restated as set forth in Exhibit 1.04 (which
amendments shall become effective only at the Effective Time), and the By-Laws
also set forth in Exhibit 1.04 shall be the Articles of Incorporation and the
By-Laws of the Surviving Corporation. The name of the Surviving Corporation
shall be Richmond Bancorp, Inc.
1.05 Directors and Officers. The directors of Acquiror Sub immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Articles of
Incorporation and By-Laws of the Surviving Corporation, and the officers of
Acquiror Sub immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
1.06 Taking Necessary Action; Further Action. Acquiror, Acquiror Sub and
the Company, respectively, shall each use its reasonable efforts to take all
such action as may be necessary or appropriate to effectuate the Merger under
the Illinois Law at the time specified in section 1.02. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all properties, interests, assets, rights,
privileges, immunities, powers and franchises of either of the Constituent
Corporations, the officers of the Surviving Corporation are fully authorized in
the name of each Constituent Corporation or otherwise to take, and shall take,
all such lawful and necessary action.
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1.07 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Reinhart, Boerner,
Van Deuren, Xxxxxx & Xxxxxxxxxx, s.c., 0000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000, or at such other place as the parties hereto shall mutually
agree, and will be effective at the Effective Time.
ARTICLE II
CONVERSION OF SECURITIES
2.01 Conversion of Securities. At the Effective Time by virtue of the
Merger and without any further action on the part of Acquiror, Acquiror Sub,
the Company, the Surviving Corporation or the holders of any of the following
securities:
(a) (i) each share of the common stock, no par value, of the Company
("Company Common Stock") which is held by the Company (other than shares held
as a trustee, fiduciary, nominee or in a similar capacity) shall be canceled
and retired and shall cease to exist from and after the Effective Time, and no
cash or other consideration shall be delivered in exchange therefor and (ii)
each share of Company Common Stock which is issued and outstanding immediately
prior to the Effective Time (other than shares of Company Common Stock owned
directly or indirectly by Acquiror or Acquiror Sub and any Dissenting Shares
(as defined in section 2.02)) shall cease to be issued and outstanding shares
of the Company and shall be converted into, and shall thereafter represent a
right to receive an amount in cash (the "Cash Price Per Share") equal to the
quotient of: [a] the Merger Consideration (as defined below) divided [b] by
the number of issued and outstanding shares of Company Common Stock immediately
prior to the Effective Time.
The term "Merger Consideration" shall mean an amount equal to (x)
$10,503,000 plus (y) the sum of (I) an amount equal to the Earnings Adjustment
(as defined below) and (II) an amount equal to the Adjusted Deferred Tax Asset
(as defined below) minus (z) the sum of (I) an amount equal to the Net Worth
Adjustment (as defined below), (II) an amount equal to the Voluntary
Termination Adjustment, (III) an amount (on an assumed tax-affected basis
assuming a tax rate of 37%) equal to the D&O Insurance Adjustment (as defined
below) and (IV) an amount (on an assumed tax-affected basis assuming a tax rate
of 37%) equal to the Amortization Adjustment (as defined below). An amount
equal to the Voluntary Termination Escrow Amount shall be deposited at the time
of Closing with an escrow agent chosen by the Company and Acquiror and shall be
held pursuant to the terms of an escrow agreement (the "Escrow
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Agreement") mutually agreeable to the Company and the Acquiror. The escrow
agreement shall provide, among other things, that an amount equal to the
Voluntary Termination Adjustment shall be paid to Acquiror. The term
"Voluntary Termination Adjustment" shall mean an amount equal to any amounts
which are paid (on an after-tax basis) pursuant to sections 1(B) of the
Restated Change of Control Agreement between the Company and Xxxxx X. Xxxx, the
Restated Change of Control Agreement between the Company and Xxxxxx X. Xxxxxx
and the Change of Control Agreement between the Company and Xxxxx Xxxxxxx, in
each case in the form set forth in schedule 2.01 and without giving effect to
any revision, amendment or modification made after the Closing (the "Control
Agreements"). All funds remaining in the escrow account after payment in full
of the Voluntary Termination Adjustment to Acquiror shall be paid to the
shareholders of the Company in the manner required by this Article II not later
than 210 days after the Closing.
The term "Amortization Adjustment" shall mean an amount equal to $71,000.
The term "Earnings Adjustment" shall mean 50% of the increase in the
Company's net consolidated retained earnings determined in accordance with GAAP
(where applicable) for the period beginning August 31, 1997 and ending as of
the date of Closing and shall be calculated without giving effect to (i) the
tax effected impact of any transaction expenses incurred in connection with the
transactions contemplated by this Agreement, up to a maximum of $250,000 (not
including the cost of (iii) below and on a pretax affected basis), (ii) any
closing adjustments, including, but not limited to, any additional loan loss
provisions made to Bank's allowance for loan losses, to the extent such
adjustments are requested by Acquiror, (iii) the D&O Insurance Adjustment, (iv)
the Adjusted Deferred Tax Asset and (v) the Amortization Adjustment ((i), (ii),
(iii) and (v) may be referred to collectively as the "Excluded Adjustments").
The term "Deferred Tax Asset" shall mean the amount, if any, of the
deferred tax asset recognized in accordance with GAAP upon conversion of the
Company and Bank to corporations taxed under Subchapter C of the Code.
The term "Voluntary Termination Escrow Amount" shall mean the maximum
amount (on an assumed tax-effected basis assuming a rate of 30%) which may be
payable pursuant to sections 1B of the Control Agreements as of the time of
Closing.
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"D&O Insurance Adjustment" shall mean the cost of the director's and
officer's insurance that may be purchased by the Company and the Bank for the
benefit of their respective directors and officers.
The term "Adjusted Deferred Tax Asset" shall mean an amount equal to the
Deferred Tax Asset reduced by the amount of the Deferred Tax Asset attributable
to the adjustment required pursuant to the Statement of Financial Accounting
Standards 115.
The term "Net Worth Adjustment" shall mean the amount by which the
consolidated equity (the common stock, additional paid in capital, surplus,
retained earnings and unrealized gains and losses on any investment securities
held by the Bank) of the Company as of the date of the Closing is less than an
amount equal to (i) $4,144,000 plus (ii) the amount of the Adjusted Deferred
Tax Asset, minus (iii) the amount of the Excluded Adjustments.
The Merger Consideration shall not earn interest and shall be paid in the
manner provided in this Article II. The amount of the Merger Consideration and
the Cash Price Per Share shall be calculated initially by the Company's
independent certified public accountant based upon the Company's most recent
consolidated financial statements and books and records and shall be calculated
using information prepared in accordance with GAAP where applicable, and such
calculation shall be furnished to Acquiror as soon as practicable before the
date of the Closing and in no event less than five days prior to the date of
the Closing. The calculation of the Merger Consideration shall be in the form
of the calculation attached as Exhibit 2.01 and the Merger Consideration and
Cash Price Per Share shall be subject to the verification and approval by
Acquiror's independent certified public accountant prior to the date of the
Closing. If the accountants of Acquiror and the Company are unable to agree on
such calculations, they shall negotiate in good faith to resolve the dispute.
If by the third day prior to Closing, the accountants of the Company and
Acquiror cannot resolve the dispute, the accountants shall designate a third
independent public accounting firm acceptable to the accountants of the Company
and Acquiror to resolve the dispute and the determination of such firm shall be
conclusive and binding upon the Company and Acquiror. The agreed upon
calculation shall be carried forward as necessary from the date of calculation
to the date of the Closing in order to establish the amount of the Merger
Consideration and the Cash Price Per Share as of the date of the Closing.
(b) Each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time and owned by Acquiror or
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Acquiror Sub or any direct or indirect subsidiary of Aquiror or Acquiror Sub
shall be canceled and extinguished and no payment shall be made with respect
thereto.
(c) Each share of common stock, $.01 par value, of Acquiror Sub issued and
outstanding immediately prior to the Effective Time, without further action,
shall cease to be a share of Acquiror Sub and shall be converted into and shall
thereafter represent one fully paid and nonassessable share of common stock,
$.01 par value, of the Surviving Corporation ("Surviving Corporation Common
Stock").
(d) The Merger Consideration shall be paid by wire transfer, certified
check, or other form of immediately available funds, at the discretion of the
Company or the holders or the Company Common Stock, at Closing.
2.02 Dissenting Shares. To the extent appraisal rights are available to
Company shareholders pursuant to the Illinois Law, any shares held by a person
who objects to the Merger, whose shares either were not entitled to vote or
were not voted in favor of the Merger and who complies with all of the
provisions of the Illinois Law concerning the rights of such person to dissent
from the Merger and to require appraisal of such person's shares and who has
not withdrawn such objection or waived such rights prior to the Closing
("Dissenting Shares") shall not be converted pursuant to section 2.01 but shall
become the right to receive such consideration as may be determined to be due
to the holder of such Dissenting Shares pursuant to the Illinois Law; provided,
however, that each Dissenting Share held by a person at the Effective Time who
shall, after the Effective Time, withdraw the demand for appraisal or lose the
right of appraisal, in either case pursuant to the Illinois Law, shall be
deemed to be converted, as of the Effective Time, into the Cash Price Per Share
Amount, without any interest thereon.
2.03 Stock Options and Other Rights. At the Effective Time, each
outstanding option, warrant, convertible security or other right to purchase
shares of Company Common Stock or other equity securities of the Company, if
any, (a "Company Stock Option") shall be canceled and extinguished without
payment of any consideration.
2.04 Surrender of Certificates; Payment.
(a) As soon as practicable after the date on which the shareholders of the
Company approve this Agreement and the Merger, the Company shall take all
actions as shall be necessary to obtain the certificate or certificates
representing outstanding shares of Company Common Stock (the
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"Certificates") from the shareholders of the Company. The parties hereto agree
to appoint State Financial Bank as paying agent (the "Paying Agent"). The
Paying Agent shall agree to receive the Certificates and to pay appropriate
amounts to the shareholders of the Company pursuant to a Paying Agent Agreement
acceptable to each of the parties (the "Paying Agent Agreement").
(b) Immediately prior to the Effective Time (and in all events prior to
the filing of the Articles of Merger with the Secretary of State of the State
of Illinois), Acquiror shall deposit, or cause to be deposited, with the Paying
Agent, in trust for the shareholders of the Company, immediately available
funds in an amount sufficient to pay the Cash Price Per Share in respect of all
shares of Company Common Stock which may be converted pursuant to this Article
II (subject to deposit of the Voluntary Termination Escrow Amount with the
escrow agent as described in Section 2.01). All deposits with Paying Agent
pursuant to this Section 2.04 are referred to as the "Cash Price Per Share
Fund." The Cash Price Per Share Fund shall not be used for any purpose except
as expressly provided in this Agreement or the Paying Agent Agreement.
(c) As promptly as practicable after the Effective Time, Acquiror shall
cause the Paying Agent to deliver to each holder of Company Common Stock who
has surrendered to the Paying Agent such holder's Certificate or Certificates
cash in an amount equal to the product of the Cash Price Per Share and the
number of shares of Company Common Stock represented by the Certificate of
Certificates so surrendered (subject to amounts held in escrow pursuant to the
Escrow Agreement as described in Section 2.01).
(d) If any cash is to be paid to a person other than the person whose name
appears on any Certificate surrendered, it shall be a condition of the payment
thereof that the Certificate so surrendered shall be properly endorsed,
accompanied by all documents required to evidence and effect such transfer and
otherwise in proper form for transfer and that the person requesting such
payment shall pay to the Company any transfer or other taxes required by reason
of such payment to a person other than the registered holder of the Certificate
surrendered, or otherwise required, or shall establish to the satisfaction of
the Company that such tax has been paid or is not payable.
2.05 Escheat. Any portion of the Cash Price Per Share Fund deposited with
the Paying Agent which remains unclaimed by the shareholders of the Company as
of the first anniversary of the Effective Time shall be delivered to the
Surviving Corporation, upon demand of the Surviving Corporation, and such
stockholders shall thereafter look only to the Surviving Corporation for
payment of the Cash Price Per Share with respect to their shares of Company
Common Stock.
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Notwithstanding anything in this Article II or elsewhere in this Agreement to
the contrary, neither the Paying Agent nor any party hereto shall be liable to
a former holder of Company Common Stock for any cash properly delivered to a
public official pursuant to applicable escheat or abandoned property laws.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The term "Company Material Adverse Effect" as used in this Agreement shall
mean any change or effect that, is materially adverse to the condition
(financial or otherwise), results of operations, business, properties, assets
or liabilities of the Company and its Subsidiaries (as defined below), taken as
a whole.
The term "Affiliate" as used in this Agreement shall mean, with respect to
any Person, a Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
first mentioned Person. The term "control" (including the terms "controlled
by" and "under common control with") means the possession, directly or
indirectly or as trustee or executor, of the power to direct or cause the
direction of the management or policies of a Person whether through the
ownership of stock or as trustee or executor, by contract or otherwise. The
term Affiliate shall not include any Person that is controlled by the Company
or any Subsidiary in connection with, or resulting from the resolution or
repayment of debt previously contracted.
The term "Person" as used in this Agreement shall mean an individual,
corporation, partnership, association, trust, unincorporated organization,
other entity or group (as defined in section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder
(the "Exchange Act")).
The term "Subsidiary" (or its plural) as used in this Agreement shall
mean: (i) with respect to the Company, Acquiror, the Surviving Corporation or
any other person, any corporation, partnership, joint venture or other legal
entity of which the Company, Acquiror, the Surviving Corporation or such other
Person, as the case may be (either alone or through or together with any other
Subsidiary), owns, directly or indirectly, greater than 50% of the stock or
other equity interests the holders of which are generally entitled to vote for
the election of the board of directors or other governing body of such
corporation or other legal entity; and (ii) with respect to the Company,
Richmond Financial Services, Inc. ("RFS"). The term Subsidiary shall not
include any Person that is controlled by the Company or
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any Subsidiary in connection with, or resulting from the resolution or
repayment of debt previously contracted.
With respect to any representation, warranty or statement of the Company
in this Agreement that is qualified by or "to the Company's knowledge," such
knowledge shall be deemed to exist if, at the time as of which such
representation, warranty or statement was made, any of the individuals listed
on Schedule 3.00(b) had actual knowledge of the matter to which such
qualification applies or should have known of the matter to which such
qualification applies after reasonable investigation.
Except as set forth in, and subject to, the disclosure schedules delivered
by the Company to Acquiror and Acquiror Sub in accordance with the terms of
this Agreement, the Company makes the following representations and warranties
to Acquiror and Acquiror Sub. Each of such representations and warranties
shall be deemed to be independently material and relied upon by Acquiror and
Acquiror Sub, regardless of any investigation made by, or information known to,
Acquiror and Acquiror Sub.
3.01 Organization and Qualification; Subsidiaries.
(a) Except as set forth on Schedule 3.01(a), the Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of the business conducted by
it or the ownership or leasing of its properties makes such qualification
necessary.
(b) A true and complete list of all the Company's directly or indirectly
owned Subsidiaries together with the jurisdiction of incorporation or
organization of each Subsidiary and the percentage of each Subsidiary's
outstanding capital stock or other equity interest owned by the Company or
another Subsidiary of the Company, is set forth on Schedule 3.01(b). The
Company is registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended, (the "BHC Act"). All of the shares of the outstanding
capital stock of Richmond Bank (the "Bank") are owned directly by the Company.
Except as set forth on Schedule 3.01(b), no equity security of any Subsidiary
including the Bank, is or may be required to be issued by reason of any option,
warrant, scrip, right to subscribe to, call or commitment of any character
whatsoever relating to, or security or right convertible into, shares of any
capital stock of such Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any Company Subsidiary is bound to
issue additional
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shares of its capital stock, or any option, warrant or right to purchase or
acquire any additional shares of its capital stock.
(c) The Company does not have any Subsidiaries other than the Bank and
RFS. Other than the Bank and RFS, the Company does not own any capital stock
or other equity interest in any other Person. The Bank is an Illinois banking
corporation duly organized, validly existing and in good standing under the
laws of the State of Illinois. Except as set forth on Schedule 3.01(c), the
Company does not own beneficially, directly or indirectly, more than 5% of any
class of equity securities or similar interests of any corporation, bank,
business trust, association or similar organization. RFS is a corporation duly
organized, validly existing, duly qualified to do business and in good standing
under the laws of its jurisdiction of incorporation, and it has corporate power
and authority to own or lease its properties and assets and to carry on its
business as it is now being conducted.
(d) The Bank is:
(i) duly authorized to conduct the general business of banking, subject to
the supervision of the Illinois Commissioner of Banks and Real Estate (the
"Commissioner") as provided in the banking laws of the State of Illinois,
(ii) an insured bank as defined in the Federal Deposit Insurance Act of
1950, as amended, (the "FDI Act") and all deposit liabilities of the Bank are
insured by the Federal Deposit Insurance Corporation (the "FDIC") through the
Bank Insurance Fund to the fullest extent permitted by applicable law,
(iii) a state bank and not a member of the Federal Reserve System, and
(iv) a banking corporation with corporate power and authority to carry on
its business where and as now conducted.
3.02 Articles of Incorporation; By-Laws. Schedule 3.02 contains complete
and correct copies of the Articles of Incorporation or Charter, as appropriate,
and the By-Laws, as amended or restated, of the Company and each of its
Subsidiaries. Neither the Company nor any Subsidiary is in violation of any of
the provisions of its Articles of Incorporation or By-Laws, as amended or
restated.
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3.03 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock of the
Company consists solely of 10,000 shares of Company Common Stock of which 1,000
shares of Company Common Stock were issued and outstanding.
(b) Information as of the date of this Agreement relating to the amounts
of the authorized and issued and outstanding capital stock of each Subsidiary,
including the Bank, is listed on Schedule 3.03(b).
(c) Except as described in this section 3.03, no shares of Company Common
Stock are reserved for any other purpose. Except as set forth on Schedule
3.03(c), since December 31, 1995, no shares of Company Common Stock have been
issued by the Company. All outstanding shares of Company Common Stock have
been duly authorized and are validly issued, fully paid and nonassessable and
are not subject to preemptive rights under the Illinois Law, the Company's
Articles of Incorporation or By-Laws or any agreement to which the Company is a
party. Except as set forth in Schedule 3.03(c), each of the outstanding shares
of capital stock of, or other equity interests in, each of the Company's
Subsidiaries (including the Bank) has been duly authorized and is validly
issued, fully paid and nonassessable and such shares or other equity interests
are owned by the Company free and clear of all security interests, liens,
claims, pledges, agreements, options, limitations on the Company's voting
rights, charges or other encumbrances or other agreements of any nature
whatsoever, subject to federal and state securities laws. There are no
options, warrants or other rights, agreements, arrangements or commitments to
which the Company or any of its Subsidiaries is a party of any character
relating to the issued or unissued capital stock of, or other equity interests
in, the Company or any of the Subsidiaries or obligating the Company or any of
the Subsidiaries to grant, issue, sell or register for sale any shares of the
capital stock of, or other equity interests in, the Company or any of the
Subsidiaries. Except as set forth on Schedule 3.03(c), as of the date of this
Agreement, there are no obligations, contingent or otherwise, of the Company or
any of its Subsidiaries to (x) repurchase, redeem or otherwise acquire any
shares of Company Common Stock, or the capital stock of, or other equity
interests in, any Subsidiary of the Company, or (y) provide funds to, or make
any investment in ( the form of a loan, capital contribution or otherwise), or
provide any guarantee with respect to the obligations of, any Subsidiary of the
Company.
3.04 Authority; Vote Required.
(a) The Company has the requisite corporate power and authority to execute
and deliver this Agreement, to perform its obligations under
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this Agreement and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate action, including such
corporate action as may be required by the Illinois Law, and no other corporate
proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated by this Agreement
(other than with respect to the approval of this Agreement by the holders of
Company Common Stock in accordance with the Illinois Law and the Company's
Articles of Incorporation and By-Laws). This Agreement has been duly executed
and delivered by the Company and constitutes the valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws relating to or affecting the rights and remedies of creditors
generally and by general principles of equity including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance, injunctive relief or other
equitable remedies, regardless of whether enforceability is considered in a
proceeding in equity or at law.
(b) The affirmative vote of the holders of at least two-thirds of the
outstanding shares of Company Common Stock is the only vote of the holders of
any class or series of capital stock of the Company necessary to approve the
Merger.
3.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company will not: (i)
violate the Articles of Incorporation, By-Laws or other Charter documents of
the Company or any of its Subsidiaries; (ii) subject to [a] obtaining the
requisite approval of this Agreement by the holders of at least two-thirds of
the outstanding shares of Company Common Stock in accordance with the Illinois
Law and the Company's Articles of Incorporation and By-Laws, [b] obtaining the
consents, approvals, authorizations and permits of, and making filings with or
notifications to, any governmental or regulatory authority, domestic or foreign
("Governmental Entities"), pursuant to the applicable requirements of Wisconsin
and Illinois law and the rules and regulations relating to the BHC Act, and [c]
giving the notices and obtaining the consents, approvals, authorizations or
permits described on Schedule 3.05(a), violate any laws applicable to the
Company or any of its Subsidiaries or by which any of their respective
properties is bound; or (iii), except as set forth on Schedule 3.05(a) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under,
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or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the properties or assets of the Company or any of its Subsidiaries pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their respective properties is bound.
(b) The execution and delivery of this Agreement by the Company do not,
and the performance of this Agreement by the Company shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entities, except for applicable requirements, if any, of
(i) the BHC Act, (ii) the consents, notices, approvals, authorizations or
permits required to be made by Acquiror and Acquisition Sub and such consents,
notices, approvals, authorizations or permits as are described on Schedule
3.05(a), and (iii) the filing and recordation of appropriate merger documents as
required by Illinois Law.
3.06 Permits; Compliance. Except as set forth on Schedule 3.06, each of
the Company and its Subsidiaries is in possession of all material franchises,
authorizations, licenses, permits, easements, variances, exemptions, consents,
certificates, approvals and orders necessary for the Company or any of its
Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits''). To the
knowledge of the Company, no suspension, revocation or cancellation of any of
the Company Permits is pending or threatened. The Company and its Subsidiaries
have complied in all material respects with all applicable federal, state and
local statutes, ordinances, regulations, rules or requirements, and neither the
Company nor its Subsidiaries is presently charged with, or to the knowledge of
the Company, under governmental investigation with respect to, any actual or
alleged material violation of any statute, ordinance, regulation or rule.
3.07 Reports; Financial Statements.
(a) Since December 31, 1995, (i) the Company and each Subsidiary has
file all forms, reports, statements and other documents required to be filed
with any applicable state or federal banking authorities; and (ii) the Company
and each of its Subsidiaries have filed all forms, reports, statements and other
documents required to be filed with any other applicable federal or state
regulatory authorities (all such forms, reports, statements and other documents
in clauses (i) and (ii) of this section 3.07(a) being collectively referred to
as the "Company Reports"). Except as set forth on Schedule 3.07, such Company
Reports do not contain any untrue statement of a material fact or omit any
material
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fact required to be stated therein or necessary to make the statements therein
not misleading.
(b) Each of the consolidated financial statements (including, in each
case, any related notes to such statements) of the Company and the Bank and of
RFS attached as Schedule 3.07(b) (i) have been prepared in all material
respects in accordance with all applicable regulatory requirements applied on a
consistent basis throughout the periods involved and (ii) are correct and
complete in all material respects and fairly represent the consolidated
financial position of each of the Company and its Subsidiaries, the Bank and
RFS as of the respective dates thereof and the consolidated results of
operations and cash flows for the periods indicated (subject to normal year-end
adjustments in the case of any unaudited interim financial statements).
(c) Except as and to the extent reflected on, or reserved against in, the
consolidated balance sheet of the Company and its Subsidiaries and of RFS at
August 31, 1997, including all notes thereto (the "Company Balance Sheet" and
the "RFS Balance Sheet," respectively), or as set forth on Schedule 3.07(c),
neither the Company nor any of its Subsidiaries has any liabilities or
obligations (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on, or reserved against in, a balance sheet of the
Company or a Subsidiary or in the notes thereto, prepared in accordance with
GAAP, except for liabilities or obligations incurred in the ordinary course of
business since August 31, 1997 that, individually or in the aggregate, would
not have a Company Material Adverse Effect.
(d) To the best knowledge of the Company, the allowance for possible loan
losses shown on the Company Balance Sheet or any subsequent month-end financial
statement delivered by the Company to Acquiror pursuant to a written request in
which Acquiror indicates that such financial statement shall be subject to this
section 3.07(d) is maintained in accordance with generally accepted accounting
principles and regulatory accounting standards, and in a manner consistent with
past practice. To the best knowledge of the Company, the loan portfolio of the
Bank, to the extent the aggregate amount thereof exceeds such allowance, at the
date of the Company Balance Sheet or any subsequent month-end financial
statement described in the first sentence of this subsection (d), was fully
collectible. Company and Bank have provided to Acquiror true and complete
information concerning the loan portfolio of the Bank, and to the knowledge of
the Company no material information with respect to Bank's loan portfolio has
been withheld from Acquiror.
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3.08 Absence of Certain Changes or Events. Except as disclosed on
Schedule 3.08 or as contemplated by this Agreement, since September 30, 1996:
(a) each of the Company and its Subsidiaries has conducted its business in
the ordinary course and consistent with prudent business practices;
(b) no event or condition has occurred that has resulted in a Company
Material Adverse Effect;
(c) neither the Company nor any Subsidiary has made any increase in
compensation to officers or key employees or any increase in any or created any
new bonus, insurance, pension or other employee benefit plan, payment or
arrangement (including, but not limited to, the granting of stock options);
(d) neither the Company nor any Subsidiary has made any loans or advances
to any officer, director, shareholder or Affiliate of the Company or of any
Subsidiary;
(e) there has not been any change in the accounting methods or practices
followed by the Company or any Subsidiary, except as required by GAAP;
(f) neither the Company nor any Subsidiary has declared, paid or set aside
for payment any dividend or other distribution in respect of its capital stock,
or redeemed, purchased or otherwise acquired any shares of its capital stock;
(g) there has not been any sale, lease, abandonment or other disposition
of any real property or personal property used or held for use in the business
of the Company or any of its Subsidiaries; and
(h) neither the Company nor any Subsidiary has entered into any commitment
or other agreement to do any of the foregoing.
3.09 Absence of Litigation.
(a) Schedule 3.09(a) lists all claims, actions, suits, litigation, or
arbitrations or, to the knowledge of the Company, investigations or proceedings
at law or in equity, which are pending or, to the knowledge of the Company,
threatened, in which the Company or its Subsidiaries is a named party
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or with respect to which the assets of the Company or any Subsidiary are
subject, (other than collection matters in the ordinary course which involve
amounts less than $30,000) including, without limitation, any such matter
involving discrimination in lending practices or violations of fair housing
laws. There is no action pending seeking to enjoin or restrain the Merger.
(b) Except as set forth on Schedule 3.09(b), neither the Company nor any
of its Subsidiaries is subject to any continuing order of, consent decree,
settlement agreement or other similar written agreement with or, to the
knowledge of the Company, continuing investigation by, any Governmental Entity.
Except as set forth on Schedule 3.09(b), the Bank is not a party to any
written agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or a subject to any order or
directive by any federal or state regulator which restricts the conduct of its
business, requires the Bank to take or refrain from taking any specified
actions, or in any manner relates to its capital adequacy, credit policies,
depository activities or management, nor has the Bank been advised by any
federal or state regulator that it is contemplating issuing or requesting any
such order, decree, agreement, memorandum of understanding, commitment letter
or similar submission.
3.10 Contracts; No Default.
(a) Schedule 3.10(a) sets forth as of the date of this Agreement a copy of
each contract or agreement of the Company or its Subsidiaries:
(i) concerning a partnership or joint venture with another Person;
(ii) involving payment by the Company or the Subsidiary (other than as
disbursement of loan proceeds to customers) of more than $20,000 in any
calendar year, or more than $30,000 when aggregated with all similar contracts
or agreements;
(iii) involving payments based on profits of the Company or the
Subsidiary;
(iv) which was not made in the ordinary course of business; or
(v) which materially affects the business or consolidated financial
condition of the Company and its Subsidiaries.
(b) Schedule 3.10(b) sets forth as of the date of this
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Agreement a copy of each contract or agreement to which the Company or any of
its Subsidiaries is a party and which materially limits the right of the
Company or any of its Subsidiaries prior to the Effective Time, or Acquiror or
any of its Subsidiaries at or after the Effective Time, to engage in, or to
compete with any Person in, any business including each contract or agreement
containing exclusivity provisions restricting the geographical area in which,
or the method by which, any business may be conducted by the Company or any of
its Subsidiaries prior to the Effective Time, or by the Acquiror or any of its
Subsidiaries after the Effective Time. For the purpose of this Agreement
"Company Contract" means the contracts and agreements listed or which should be
listed on Schedules 3.10(a) and 3.10(b).
(c) Each Company Contract is in full force and effect, each is a valid
and binding contract or agreement enforceable against the Company or the
applicable Subsidiary in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws relating to or
affecting the rights and remedies of creditors generally and by general
principles of equity, and there is no material default by the Company, or to the
knowledge of the Company by any other party, in the performance of any
obligation to be performed or paid under any such Company Contract.
3.11 Employee Benefit Plans; Labor Matters.
(a) Schedule 3.11(a) sets forth as of the date of this Agreement a list
or a description of any pension, retirement, savings, disability, medical,
dental, health, life (including any individual life insurance policy as to which
the Company is the owner, beneficiary or both), death benefit, group insurance,
profit sharing, deferred compensation, stock option, bonus, incentive, vacation
pay, severance pay, "cafeteria" or "flexible benefit" plan under section 125 of
the Internal Revenue Code of 1986 as amended (the "Code"), or other employee
benefit plan, trust, arrangement, contract, agreement, policy or commitment,
under which employees of the Company or its Subsidiaries are entitled to
participate by reason of their employment with the Company or its Subsidiaries,
(i) to which the Company or a Subsidiary is a party or a sponsor or a fiduciary
thereof or (ii) with respect to which the Company or a Subsidiary has made
payments, contributions or commitments, or has any liability (collectively, the
"Employee Benefit Plans"). Copies of the documents governing each of the
Employee Benefit Plans are attached as Schedule 3.11(a).
(b) The Employee Benefit Plans have been operated and administered by
the Company in compliance with all applicable laws relating to
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employment, tax or labor matters, including without limitation, the Employee
Retirement Income Security Act of 1974, as amended (''ERISA") and the Code.
(c) Each Employee Benefit Plan that is intended to be tax qualified
under section 401(a) of the Code has received, or the Company has applied for or
will in a timely manner apply for, a favorable determination letter from the
Internal Revenue Service (the "IRS") stating that the Plan meets the
requirements of the Code and that any trust or trusts associated with the plan
are tax exempt under section 501(a) of the Code.
(d) Except as set forth on Schedule 3.11(a), the Company does not
maintain any defined benefit plan covering employees of the Company or its
Subsidiaries within the meaning of section 3(35) of ERISA.
(e) Neither the Company nor any of its Subsidiaries is a party to any
collective bargaining or other labor union contract.
(f) The Company has no direct or indirect, formal or informal, plan,
fund or program to change any Employee Benefit Plans.
(g) All required contributions pursuant to the Employee Benefit Plans
for all periods prior to the Effective Time have been made or will be made prior
to the Effective Time. The Company has no knowledge of the occurrence of any
event with respect to any Employee Benefit Plan which could result in a
liability of the Company or its Subsidiaries to the Pension Benefit Guaranty
Corporation. Except as set forth on Schedule 3.11, no Employee Benefit Plan
provides for any form of post retirement health benefits to retired employees of
the Company or its Subsidiaries, other than benefits required to be provided
pursuant to Code Section 4980B.
(h) Schedule 3.11(h) sets forth a list of all written employment
agreements, employment contracts or understandings relating to employment (other
than relating to "at-will" employment) to which the Company or any of its
Subsidiaries is a party.
3.12 Taxes. The Company and each Subsidiary has filed or caused to be
filed with the appropriate Governmental Entities, all federal, state,
municipal, and local income, franchise, excise, real and personal property, and
other tax returns and reports that are required to be filed and the Company and
each Subsidiary are not delinquent in the payment of any taxes shown on such
returns or response or on any assessments for any such taxes received by them
and has otherwise complied in all material respects with all legal requirements
applicable to the Company or its Subsidiaries with respect to all income,
sales, use, real or
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personal property, excise or other taxes. The Company Balance Sheet includes
adequate reserves for the payment of all accrued but unpaid federal, state,
municipal and local taxes of the Company, including, without limitation,
interest and penalties, whether or not disputed, for the year ended December
31, 1996 and for all fiscal years prior thereto. Except as set forth on
Schedule 3.12, the Company has not executed or filed with the IRS any agreement
extending the period for assessment and collection of any federal tax. The
Company is not a party to any pending action or proceeding, nor, to the
knowledge of the Company, has any action or proceeding been threatened, by any
Governmental Entity for assessment or collection of taxes, and no claim for
assessment or collection of taxes has been asserted against the Company.
The Bank has complied with the Code, and all rules and regulations
thereunder, with respect to the reporting of payments of interest, and other
payments by it, and has complied with all provisions required with respect to
withholding for income taxes on such amounts when required.
3.13 Intellectual Property Rights. Except as set forth in Schedule 3.13,
the Company and each of the Subsidiaries owns or possesses the right to use (in
the manner and the geographic areas in which they are currently used) all
trademarks, service marks, trade names, service names, slogans, registered
copyrights, trade secrets and other intellectual property rights it currently
uses, without any conflict or alleged conflict with the rights of others.
3.14 Certain Business Practices and Regulations. To the knowledge of the
Company neither the Company nor any of its Subsidiaries has (a) made or agreed
to make any contribution, payment or gift to any customer, supplier,
governmental official, employee or agent where either the contribution, payment
or gift or the purpose thereof was illegal under any law, (b) established or
maintained any material unrecorded fund or asset of the Company for any
improper purpose or made any material false entries on its books and records
for any reason, (c) made or agreed to make any contribution, or reimbursed any
political gift or contribution made by any other Person, to any candidate for
federal, state or local public office in violation of any law, or (d) engaged
in any activity constituting fraud under the laws relating to insurance.
3.15 Insurance. Schedule 3.15 sets forth as of the date of this Agreement
copies of all policies and binders of insurance for directors and officers,
property and casualty, fire, general liability, worker's compensation and other
customary matters held by or on behalf of the Company or its Subsidiaries
(''Insurance Policies"). The Insurance Policies are in full force and effect.
The Company or its Subsidiaries have not failed to give any notice of any claim
under
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any Insurance Policy in due and timely fashion, nor has any coverage for claims
been denied.
3.16 Brokers. Except as set forth on Schedule 3.16, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon any arrangements made by or on behalf of the Company.
3.17 Title to Properties.
(a) Except as set forth in Schedule 3.17(a), the Company and each
Subsidiary has good and marketable title to all assets and properties, whether
real or personal, tangible or intangible, which the Company or the Subsidiary
purports to own, including without limitation, all assets and properties
reflected in the Company Balance Sheet, the RFS Balance Sheet or acquired
subsequent thereto (except to the extent such assets and properties have been
disposed of for fair value in the ordinary course of business since the date of
such financial statements), subject to no liens, mortgages, security interests,
encumbrances or charges of any kind except (i) as noted in said financial
statements or the notes thereto, (ii) statutory liens securing payments not yet
due, (iii) security interests granted incident to borrowings by the Bank to
secure deposits of funds by federal, state or other governmental agencies, and
(iv) minor defects and irregularities in title and encumbrances which do not
materially impair the use thereof for the purposes for which they are held, and
such liens, mortgages, security interests, encumbrances and charges are not, in
the aggregate, material to the assets and properties of the Company or the
Subsidiary.
(b) All property and assets of the Company and the Subsidiaries are
usable and used in their business, and together constitute all of the property
being used in and necessary for the conduct of the business of the Company and
the Subsidiaries, as conducted by them on this date.
(c) Schedule 3.17(c) correctly sets forth the complete legal
description of all real property and improvements owned or leased by the
Company or the Subsidiaries (the "Real Property"). Except as set forth in
Schedule 3.17(c), to the knowledge of the Company there are no planned or
commenced public improvements relating to the Real Property which may result
in special assessments or area-wide charges or which might otherwise directly
and materially and adversely affect such Real Property; no regulatory or
governmental agency or court order has been issued requiring repairs,
alterations or corrections of any existing conditions of the Real Property, and
to the Company's knowledge there is no condition that could be a cause for such
an order; to the Company's knowledge, there is no planned, pending or
contemplated condemnation or similar
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action or change in any zoning or building ordinance affecting the Real
Property; there are no structural or mechanical defects in the Real Property,
nor are there any present material violations of or material nonconformance
with any law (including, without limitation, the Americans with Disabilities
Act), ordinance, rule, code or regulation requiring or calling attention to the
need for any work, repairs, construction, alteration or installation affecting
the Real Property, which in each case above, has not been reflected in the
value of the Real Property as set forth on the Company Balance Sheet or any
subsequent financial statement delivered by the Company pursuant to section
3.07(d) hereof.
(d) To the knowledge of the Company, the leases for the Real Property
described on Schedule 3.17(d) are in full force and effect and the Company holds
a valid and existing leasehold interest under each of the leases. Schedule
3.17(d) sets forth as of the date of this Agreement complete and accurate
copies of each of the leases described on Schedule 3.17(d), and none of such
leases has been modified in any respect, except to the extent that such
modifications are disclosed by the copies delivered to Acquiror. Neither the
Company nor the applicable Subsidiary is in default, and to the knowledge of the
Company no circumstances exist, including the effect of the Merger and this
Agreement, which, if unremedied, would, either with or without notice or the
passage of time or both, result in the Company's or the applicable Subsidiary's
default under any of such leases.
(e) Neither the Company nor any Subsidiary is in violation of any
applicable material zoning ordinance or other law, regulation or requirement
relating to the operation of any properties used in the operation of its
business and neither the Company nor any Subsidiary has received any notice of
any such violation, or the existence of any condemnation proceeding with respect
to any of the owned Real Property or leased Real Property.
3.18 Environmental Laws.
(a) Definition. The term "Environmental Laws" shall mean all federal,
state and local laws including statutes, regulations, ordinances, codes, rules,
orders, directives and other governmental restrictions and requirements
(including, but not limited to, those contained in or evidenced by permits,
temporary permits or exemption letters) relating to the discharge of air
pollutants, water pollutants, solid wastes, or process waste water or otherwise
relating to the environment, hazardous wastes, materials or substances, toxic
substances, asbestos or any process of the Company or the Bank that has an
impact on health or the environment, including, but not limited to, the Federal
Solid Waste Disposal Act, the Federal Clean Air Act, the Federal Clean Water
Act, the Federal Resource Conservation and Recovery Act of 1976, the Federal
Comprehensive
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Environmental Response, Compensation and Liability Act of 1980, Toxic
Substances Control Act, Federal Water Pollution Control Act, National
Environmental Policy Act, Federal Occupational Safety and Health Act,
regulations of the Environmental Protection Agency, regulations of the Nuclear
Regulatory Agency, or any applicable federal or state regulatory or
administrative agency with authority over natural resources or environmental
protection now in effect or, to the knowledge of the Company, presently
scheduled to come into effect, all as presently amended.
(b) Pending Litigation. Except as described in Schedule 3.18 (b),
neither the Company nor any Subsidiary is a party to or the subject of any
litigation or administrative proceeding nor, to the knowledge of the Company, is
any litigation or administrative proceeding threatened against the Company or a
Subsidiary, which in either case asserts or alleges that the Company or any
Subsidiary: (i) violated any Environmental Laws, (ii) is required to clean up,
remove or take remedial or other response action due to the disposal,
depositing, discharge, leaking, leaching or other release or migration of any
pollutants, contaminants, hazardous wastes, materials or substances or other
materials (collectively, "Hazardous Substances"), (iii) is required to pay all
or a portion of the cost of any past, present or future cleanup, removal or
remedial or other response action which arises out of or is related to the
disposal, depositing, discharge, leaking, leaching or other release of any
Hazardous Substances. To the knowledge of the Company, there are no conditions
existing on any of the Real Property or any real estate owned by a Subsidiary or
held by the Bank as trustee of any trust which potentially could give rise to
any such litigation or administrative proceeding.
3.19 Loans in Default. The aggregate amount on all loans made by the Bank
which, as of August 31, 1997, were 90 days or more past due in payment of
principal or interest, did not exceed 3% of the aggregate gross amount of all
loans made by the Bank as of such date. For purposes of this section 3.19,
except as set forth in Schedule 3.19, a loan shall be deemed to be past due if
it is in fact past due more than 90 days or if it would have been past due more
than 90 days under the terms of the agreement under which it was originally
created but for a refinancing of such loans or a waiver, modification or
amendment of such original agreement if such refinancing, waiver, modification
or amendment was effectuated principally because of the borrower's actual or
expected failure or inability to comply with the terms of such agreement.
3.20 Bank Filings and Reports. Except as described in Schedule 3.20,
since December 31, 1995, the Bank has made, and pending the consummation of the
transactions contemplated by this Agreement, will have made, in a timely
fashion, all filings, including call reports and other financial
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statement filings, as required of it under the applicable rules and regulations
of the FDIC and the Commissioner (referred to collectively as the "Bank
Filings"), and the Bank has not been advised by the FDIC or the Commissioner
that any of the Bank Filings are deficient or not timely filed. Except as set
forth on Schedule 3.20, each of the Bank Filings, as of the date of filing
thereof, complied in all material respects with the rules and regulations of
the FDIC or the Commissioner, as appropriate, and did not, as of the filing
date, contain any statement which, at the time and in light of the
circumstances under which it was made, was false or misleading or omitted to
state any material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not false or misleading.
Except as described in Schedule 3.20, since December 31, 1995, RFS has made,
and pending consummation of the transactions contemplated by this Agreement,
will have made, in a timely fashion, all filings, including necessary reports
and other financial statement filings as required of it under the applicable
rules and regulations of all federal, state and local authorities and RFS has
not been advised by such authorities that any of the such filings are deficient
or not timely filed. Except as set forth on Schedule 3.20, each of the RFS
filings as of the date of filing thereof, complied with the rules and
regulations of the applicable regulatory authorities, and did not, as of the
date of filing, contain any statement which, at the time and in the light of
circumstances under which it was made, was false or misleading or omitted to
state a material fact necessary to make the statements contained therein in
light of the circumstances under which they were made, not false or misleading.
3.21 Governmental Approvals. As of the date of this Agreement, neither
the Company nor any of its Subsidiaries is required to obtain the approval of
any Governmental Entity to consummate the transactions contemplated by this
Agreement. To the knowledge of the Company, no fact or condition exists which
will (a) prevent Acquiror or Acquiror Sub from obtaining all necessary
approvals from any Governmental Entity or (b) unduly delay receipt of such
approvals from any Governmental Entity.
3.22 Litigation and Regulatory Matters. As of the date of this Agreement,
there is no action, suit, proceeding, claim or formal written protest by any
Person or agency, or any investigation, report or agreement by or with any
regulatory authority having jurisdiction over the Company or any of its
Subsidiaries or any of their respective assets or businesses which exists or is
pending or, to the Company's knowledge, threatened against the Company or any
of its Subsidiaries, or any of their respective officers or directors in their
capacities as such, or their assets, business or goodwill which would
reasonably be expected to materially impair the Company's ability to consummate
the Merger. The Company further represents and warrants that it does not know
or have any reason to believe that there is any basis for assertion against it
or any of its Subsidiaries of
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any material claims based upon the wrongful action or inaction of either the
Company or any of its Subsidiaries, and any of their officers, directors or
employees which would reasonably be expected to materially impair the Company's
ability to consummate the Merger. Neither the Company nor any of its
Subsidiaries is subject to, or in default with respect to, nor are any of its
assets subject to, any outstanding judgment, regulatory agreement, injunction,
writ, order or decree or any other requirement of any governmental body or
court or of any governmental agency or instrumentality which would reasonably
be expected to materially impair the Company's ability to consummate the
Merger.
3.23 Disclosures. No representation or warranty made herein by the
Company contains any untrue statement of a material fact, or omits to state a
material fact necessary to make the statements contained herein under the
circumstances under which they were made not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF ACQUIROR AND ACQUIROR SUB
The term "Acquiror Material Adverse Effect" as used in this Agreement
shall mean any change or effect that, individually or when taken together with
all such other changes or effects, is materially adverse to the condition
(financial or otherwise), results of operations business, properties, assets or
liabilities of Acquiror and its Subsidiaries, taken as a whole.
Acquiror and Acquiror Sub jointly and severally represent and warrant to
the Company that:
4.01 Organization and Qualification; Subsidiaries. Each of Acquiror and
Acquiror Sub is a corporation, duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted. Acquiror
has heretofore delivered to the Company true, accurate and complete copies of
its currently effective Articles of Incorporation and By-Laws. Schedule 4.01
accurately lists all of Acquiror's banking subsidiaries and all other direct
and indirect subsidiaries of Acquiror. Each such subsidiary is a banking
association or corporation duly organized, validly existing under the laws of
the jurisdiction of its incorporation. Each subsidiary bank is duly authorized
to conduct a general banking business and is an insured bank as defined in the
Federal Deposit Insurance Act. All shares of capital stock of the subsidiaries
owned by the Acquiror are fully paid and
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nonassessable and are owned by it free and clear of any lien, claim, charge,
option, encumbrance or agreement with respect thereto.
4.02 Authority. Each of Acquiror and Acquiror Sub has the requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Acquiror and Acquiror
Sub, and the consummation by Acquiror and Acquiror Sub of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action and no other corporate proceedings on the part of Acquiror or Acquiror
Sub are necessary to authorize this Agreement or to consummate the transactions
contemplated by this Agreement. This Agreement has been duly executed and
delivered by Acquiror and Acquiror Sub and constitutes a legal, valid and
binding obligation of Acquiror and Acquiror Sub enforceable against Acquiror
and Acquiror Sub in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws relating to or
affecting the rights and remedies of creditors generally and by general
principles of equity, regardless of whether enforceability is considered in a
proceeding in equity or at law.
4.03 Capitalization. As of the date of this Agreement, the authorized
capital stock of Acquiror consists of 10,000,000 shares of Common Stock, $.10
par value, of which 3,224,935 shares were outstanding and no shares were held
as treasury stock and 100,000 shares of preferred stock, $1.00 par value none
of which have been issued. All of the outstanding shares of Acquiror are
validly issued, fully paid and nonassessable (except as provided in section
180.0622(2)(b) of the Wisconsin Law, as interpreted) and are not subject to any
preemptive rights or reserved for any options, warrants, conversion rights or
other commitments (except for options for 66,758 shares issued in connection
with services rendered to Acquiror).
4.04 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Acquiror and
Acquiror Sub do not, and the performance of this Agreement by Acquiror and
Acquiror Sub will not, (i) violate the Articles of Incorporation or By-Laws or
equivalent organizational documents of Acquiror or Acquiror Sub, (ii) subject to
obtaining the consents, approvals, authorizations and permits of, and making
filings with or notifications to, any Governmental Entities pursuant to the
applicable requirements, if any, of any stock exchange or quotation service on
which Acquiror's securities are listed or quoted, the Securities Act of 1933 and
the Securities Exchange Act of 1934, the BHC Act, and applicable state law and
the
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filing and recordation of appropriate merger documents as required by the
Wisconsin Law and Illinois Law, conflict with or violate any laws applicable to
Acquiror or Acquiror Sub or by which any of their respective properties is
bound or affected.
(b) The execution and delivery of this Agreement by Acquiror and
Acquiror Sub do not, and the performance of this Agreement by Acquiror and
Acquiror Sub shall not, require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Entities, except as
described in section 4.04(a) above.
4.05 Ownership of Acquiror Sub; No Prior Activities.
(a) Acquiror Sub was formed for the purpose of engaging in the
transactions contemplated by this Agreement.
(b) As of the Effective Time, all of the outstanding capital stock of
Acquiror Sub will be owned directly by Acquiror. As of the Effective Time,
there will be no options, warrants or other rights (including registration
rights), agreements, arrangements or commitments to which Acquiror Sub is a
party of any character relating to the issued or unissued capital stock of, or
other equity interests in, Acquiror Sub or obligating Acquiror Sub to grant,
issue or sell any shares of the capital stock of, or other equity interests in,
Acquiror Sub, by sale, lease, license or otherwise. There are no obligations,
contingent or otherwise, of Acquiror Sub to repurchase, redeem or otherwise
acquire any shares of the capital stock of Acquiror Sub.
(c) As of the date hereof and the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation or
organization and the transactions contemplated by this Agreement, Acquiror Sub
has not and will not have incurred, directly or indirectly, through any
Subsidiary or Affiliate, any obligations or liabilities or engaged in any
business activities of any type or kind whatsoever or entered into any
agreement or arrangements with any Person.
4.06 Financing. Acquiror has the ability to and intends to finance the
aggregate of the amounts payable pursuant to Article II with cash on hand and
utilization of existing credit facilities. Acquiror will use its reasonable
best efforts to ensure the continued availability of such financing and pay
such amounts in accordance with the terms of this Agreement and will not take
any action between the date hereof and the Effective Time which would impair
its ability to obtain such financing.
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4.07 Governmental Approvals. To the knowledge of the Acquiror, no fact or
condition exists which Acquiror has reason to believe will (a) prevent it (or,
to the extent that approval with respect to Acquiror Sub is required under all
applicable law, statute or regulation, Acquiror Sub) from obtaining all
necessary approvals from any Governmental Entity or (b) unduly delay receipt of
any such approvals from any Governmental Entity.
4.08 Requisite Capital. As of the date of this Agreement, Acquiror has
the necessary capital required by the regulations of all appropriate
Governmental Entities to consummate the transactions contemplated by this
Agreement.
4.09 Absence of Claims. As of the date of this Agreement, there is no
private or governmental suit, claim, action or proceeding pending or, to the
knowledge of Acquiror, threatened against Acquiror, its Subsidiaries or against
any of their respective directors or officers that would materially impair the
ability of Acquiror or Acquiror Sub to perform their respective obligations
hereunder.
4.10 Litigation and Regulatory Matters. As of the date of this Agreement,
there is no action, suit, proceeding, claim or formal written protest by any
Person or agency, or any investigation, report or agreement by or with any
regulatory authority having jurisdiction over Acquiror or any of its
Subsidiaries or any of their respective assets or businesses which exists or is
pending or, to Acquiror's knowledge, threatened against Acquiror or any of its
Subsidiaries, or any of their respective officers or directors in their
capacities as such, or their assets, business or goodwill which would
reasonably be expected to materially impair Acquiror's ability to consummate
the Merger. Acquiror further represents and warrants that it does not know or
have any reason to believe that there is any basis for assertion against it or
any of its Subsidiaries of any material claims based upon the wrongful action
or inaction of either Acquiror or any of its Subsidiaries, and any of their
officers, directors or employees which would reasonably be expected to
materially impair Acquiror's ability to consummate the Merger. Neither
Acquiror nor any of its Subsidiaries is subject to, or in default with respect
to, nor are any of its assets subject to, any outstanding judgment, regulatory
agreement, injunction, writ, order or decree or any other requirement of any
governmental body or court or of any governmental agency or instrumentality
which would reasonably be expected to materially impair Acquiror's ability to
consummate the Merger.
4.11 Brokers. Except as set forth on Schedule 4.11, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon any arrangements made by or on behalf of the Acquiror.
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4.12 Disclosures. No representation or warranty made herein by the
Acquiror contains any untrue statement of a material fact, or omits to state a
material fact necessary to make the statements contained herein under the
circumstances under which they were made not misleading, and the Acquiror has
made full disclosure of all material facts with respect to the Acquiror.
ARTICLE V
COVENANTS
5.01 Affirmative Covenants of the Company. The Company covenants and
agrees that prior to the Effective Time, unless otherwise contemplated by this
Agreement or consented to in writing by Acquiror, the Company will and will
cause each of its Subsidiaries to:
(a) operate its business in the ordinary course of business and
consistent with its past practice;
(b) use reasonable efforts to preserve intact its business
organization and assets, maintain its rights and franchises, retain the
services of its respective officers and key employees and maintain the
relationships with its respective key customers;
(c) use reasonable efforts to keep in full force and effect liability
insurance and bonds comparable in amount and scope of coverage to that currently
maintained;
(d) subject to the provisions of the Acquiror Confidentiality
Agreement (as hereinafter defined), confer with Acquiror at its reasonable
request to discuss operational matters and to report the general status of the
ongoing operations of the business of the Company and its Subsidiaries;
(e) subject to the provisions of the Acquiror Confidentiality
Agreement, from the date hereof until the Closing Date, the Company (i) will
give, and will cause each of its Subsidiaries to give, Acquiror, its counsel,
financial advisors, auditors and other authorized representatives reasonable
access to the offices, properties, books and records of the Company and its
Subsidiaries, (ii) will furnish, and will cause each Subsidiary to furnish, to
Acquiror, its counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information
relating to the Company and the Subsidiaries as such persons may reasonably
request, and (iii) will instruct the employees, counsel and financial advisors
of the Company
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and the Subsidiaries to cooperate in all reasonable respects with Acquiror in
its investigation of the Company and the Subsidiaries; provided that no
investigation pursuant to this Subsection shall affect any representation or
warranty given by the Company hereunder; and
(f) maintain an allowance for possible loan losses which is adequate
in all material respects under the requirements of generally accepted accounting
principles and regulatory accounting standards and past practice.
5.02 Negative Covenants of the Company. Except as contemplated by this
Agreement or consented to in writing by Acquiror, from the date of this
Agreement until the Effective Time, the Company shall not do, and shall not
permit any of its Subsidiaries to do, any of the following:
(a) except as set forth on Schedule 5.02(a): (i) increase the
compensation payable to any director, officer or employee of the Company or any
of its Subsidiaries; (ii) grant any severance or termination pay to, or enter
into any severance agreement with, any director or officer; (iii) subject to
clause (i), enter into or amend any employment agreement with any director or
officer that would extend beyond the Effective Time except on an at-will basis;
or (iv) establish, adopt, enter into or amend any Employee Benefit Plan, except
as may be required to comply with applicable law;
(b) except as shown in Schedule 5.02(b), declare or pay any dividend
on, or make any other distribution in respect of, outstanding shares of capital
stock (provided, however, that Bank will be permitted to declare and pay
dividends to the Company in an amount no greater than shall be necessary to meet
the Company's existing debt service obligations to Xxxxxx Trust and Savings
Bank, Chicago, Illinois, for borrowed money together with such amounts as may be
necessary to reduce the outstanding principal of such obligations to $1,400,000,
and that the Company and Bank will be permitted to declare and pay dividends in
an amount no greater than the amount necessary to meet the federal and state tax
obligations of the shareholders of the Company (assuming the maximum rate for a
Wisconsin resident) arising as a result of the earnings of the Company and
Bank);
(c) except as set forth in Schedule 5.02(c): (i) redeem, purchase or
otherwise acquire any shares of its or any of its Subsidiaries' capital stock
or any securities or obligations convertible into or exchangeable for any
shares of its or its Subsidiaries' capital stock, or any options, warrants or
conversion or other rights to acquire any shares of its or its Subsidiaries'
capital stock; (ii) effect any reorganization or recapitalization; or (iii)
split, combine or reclassify any of its or its Subsidiaries' capital stock
(except for the issuance of shares upon the exercise of options or warrants in
accordance with their terms);
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(d) issue, deliver, award, grant or sell, or authorize the issuance,
delivery, award, grant or sale (including the grant of any security interests,
liens, claims, pledges, limitations on voting rights, charges or other
encumbrances) of, any shares of any class of its or its Subsidiaries' capital
stock, any securities convertible into or exercisable or exchangeable for any
such shares, or any rights, warrants or options to acquire any such shares
(except for the issuance of shares upon the exercise of options or warrants in
accordance with their terms), or amend or otherwise modify the terms of any
such rights, warrants or options the effect of which shall be to make such
terms more favorable to the holders thereof, except as contemplated by this
Agreement;
(e) except as set forth in Schedule 5.02(e), acquire or agree to acquire,
by merging or consolidating with, by purchasing an equity interest in or a
portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or
division thereof, or otherwise acquire or agree to acquire any assets of any
other Person (other than the purchase of assets from suppliers or vendors in
the ordinary course of business or purchases of less than $10,000);
(f) except for depositions of collateral in the ordinary course of
business, sell, lease, exchange, mortgage, pledge, transfer or otherwise
dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, any amount of any of its or its Subsidiaries' assets;
(g) adopt any amendments to its Articles of Incorporation or By-Laws;
(h) except as set forth in Schedule 5.02(h): (i) change any of its
methods of accounting in effect at December 31, 1996 (provided, however, that
the amortization of leasehold expenses shall be increased from $1,100 per month
to $2,422 per month) or (ii) make or rescind any express or deemed election
relating to taxes, settle or compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy relating to taxes,
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, 1996, except in
either case as may be required by law, the IRS, or GAAP or in the ordinary
course of business consistent with past practice;
(i) incur any obligation for borrowed money (except deposits and
borrowings of funds from the Federal Reserve Bank of Chicago in the ordinary
course of business) or purchase money indebtedness, whether or not
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evidenced by a note, bond, debenture or similar instrument, except as approved
by Acquiror in advance; or
(j) agree in writing or otherwise to do any of the foregoing.
5.03 Affirmative Covenants of Acquiror. Acquiror covenants and agrees
that prior to the Effective Time, unless otherwise contemplated by this
Agreement or consented to in writing by Company:
(a) Acquiror will and will cause each of its Subsidiaries to use
reasonable efforts to keep in full force and effect liability insurance and
bonds comparable in amount and scope of coverage to that currently maintained;
and
(b) Acquiror will use its reasonable efforts to preserve its business
organization and assets.
5.04 Confidentiality Agreement. The parties will, and will cause their
respective officers, employees, accountants, consultants, legal counsel and
other representatives to, comply with all of their respective obligations under
the Confidentiality Agreement entered into by the Company and Acquiror on July
1, 1997 concerning the Company's confidential information (the "Acquiror
Confidentiality Agreement").
5.05 Acquisition Proposals. Upon execution of this Agreement, the Company
and its Subsidiaries and their respective officers, directors, employees,
agents and advisors will immediately cease any existing discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal (as hereinafter defined). The Company shall notify
Acquiror immediately if any such request or proposal, or any inquiry or contact
with any Person with respect thereto, is made and shall provide Acquiror with a
copy of any written communication received with respect to such request or
proposal and shall keep Acquiror apprised of all related developments. Neither
the Company, nor any Company Subsidiary, nor any director, officer,
representative or agent thereof, will, directly or indirectly, solicit,
authorize the solicitation of or enter into any discussions with any
corporation, partnership, person or other entity or group (other than Acquiror)
concerning any offer or possible offer (a) to purchase any shares of common
stock, any option or warrant to purchase any shares of common stock, any
securities convertible into any shares of such common stock, or any other
equity security of the Company or any Company Subsidiary, (b) to make a tender
or exchange offer for any shares of such common stock or other equity security,
(c) to purchase, lease or otherwise acquire the assets of the Company or any
Company Subsidiary except in the ordinary course of business and except as
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may be required under this Agreement, or (d) to merge, consolidate or otherwise
combine with the Company or any Company Subsidiary. The Company or its agent
has entered into confidentiality agreements with other third parties
substantially in the form of the Acquiror Confidentiality Agreement. The
Company agrees not to release any third party from, or waive any provision of,
any confidentiality or standstill agreement to which the Company is a party.
For purposes of this section 5.05, the term "Acquisition Proposal" means any
proposal or offer for a merger, asset acquisition or other business combination
(other than the Merger contemplated by this Agreement) involving the Company or
any Subsidiary and any Potential Acquiror, or any proposal or offer to acquire
a significant equity interest in, or a significant portion of the assets of,
the Company or any Subsidiary by a Potential Acquiror.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Meeting of Shareholders. Immediately prior to execution of this
Agreement the Company shall have taken all action necessary in accordance with
the Illinois Law and its Articles of Incorporation and By-Laws to convene a
shareholders' meeting, and shall have obtained the vote or consent of
shareholders required by the Illinois Law to approve this Agreement.
6.02 Appropriate Action; Consents; Filings.
(a) Subject to the terms and conditions herein provided, the Company,
Acquiror and Acquiror Sub shall use all reasonable best efforts to (i) take, or
cause to be taken, all appropriate action, and do or cause to be done, all
things necessary, proper or advisable under applicable law or otherwise to
consummate and make effective the transactions contemplated by this Agreement
as promptly as practicable, (ii) obtain from any Governmental Entities any
consents, licenses or orders required to be obtained by Acquiror or the Company
or any of their respective Subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Merger, and (iii) make all necessary notifications and filings and thereafter
make any other required submissions with respect to this Agreement and the
Merger required under [a] the Securities Act of 1933, the Securities Exchange
Act of 1934 and any other applicable federal or state securities laws, [b] the
BHC Act, [c] Wisconsin Law, [d] Illinois Law, and [e] any other applicable law;
provided that Acquiror and the Company shall cooperate with each other in
connection with the making of all such filings. The Company and Acquiror shall
furnish to each other all information required for any application or other
filing to be made pursuant to the
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rules and regulations promulgated under any applicable law (including all
information required to be included in the notice of the meeting of the
Company's shareholders called to approve this Agreement) in connection with the
transactions contemplated by this Agreement. Notwithstanding the foregoing,
Acquiror agrees, subject to receipt of all necessary cooperation by the Company
and its Subsidiaries, to use its reasonable best efforts to make initial
filings or provide all initial notices contemplated above no later than
November 15, 1997. Acquiror shall have primary responsibility for preparation
of all applications for regulatory approval of the transactions contemplated in
this Agreement and Acquiror shall provide the Company with a copy of each
application or document filed by it with federal or state regulatory officials
to obtain such approvals. As provided above, the Company agrees to cooperate
with Acquiror and use its reasonable best efforts to assist the Acquiror in
preparing such applications and filings and in pursuit of such approvals.
(b) (i) The Company and Acquiror shall give (or cause their respective
Subsidiaries to give) any notices to third parties, and use, and cause their
respective Subsidiaries to use, all reasonable best efforts to obtain any
third-party consents, [a] necessary to consummate the transactions contemplated
in this Agreement, [b] disclosed or required to be disclosed in the disclosure
schedules to this Agreement, or [c] required to prevent a Company Material
Adverse Effect from occurring prior to the Effective Time.
(ii) In the event that any party shall fail to obtain any third-party
consent described in subsection (b)(i) above, such party shall use reasonable
best efforts, and shall take any such actions reasonably requested by the
Company and Acquiror to minimize any adverse effect upon the Company, its
Subsidiaries and its businesses resulting, or which could reasonably be
expected to result after the Effective Time, from the failure to obtain such
consent.
(c) From the date of this Agreement until the Effective Time, the Company
shall promptly notify Acquiror in writing of any pending or, to the knowledge
of the Company, threatened action, proceeding or investigation by any
Governmental Entity or any other Person (i) challenging or seeking material
damages in connection with the Merger, (ii) alleging that the consent of such
Governmental Entity or Person may be required in connection with the Merger or
this Agreement, or (iii) seeking to restrain or prohibit the consummation of
the Merger or otherwise limit the right of Acquiror or, to the knowledge of the
Company, its Subsidiaries, to own or operate all or any portion of the
businesses or assets of the Company or its Subsidiaries.
(d) From the date of this Agreement until the Effective Time, Acquiror
shall promptly notify the Company in writing of any pending or, to
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the knowledge of Acquiror, threatened action, proceeding or investigation by any
Governmental Entity or any other Person (i) challenging or seeking material
damages in connection with the Merger or (ii) seeking to restrain or prohibit
the consummation of the Merger or otherwise limit the right of Acquiror or its
Subsidiaries to own or operate all or any portion of the business or assets of
the Company or its Subsidiaries.
(e) Immediately prior to the Effective Time, the Company agrees to
cause the Bank to recognize a provision for loan losses in the amount
specified by the Acquiror.
6.03 Update Disclosure; Breaches. From and after the date of this
Agreement until the Effective Time, each party shall promptly notify the other
parties hereto by written update to its disclosure schedules ("Update
Schedule") of (i) the occurrence or non-occurrence of any event the occurrence
or non-occurrence of which would be reasonably likely to cause any condition to
the obligations of any party to effect the Merger and the other transactions
contemplated by this Agreement not to be satisfied, (ii) the failure of the
Company or Acquiror, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
pursuant to this Agreement which would be reasonably likely to result in any
condition to the obligations of any party to effect the Merger and the other
transactions contemplated by this Agreement not to be satisfied, or (iii) of
any material changes to the information contained in its disclosure schedule
(including any change to any representations or warranties herein as to which
no schedule has been created as of the date hereof but as to which a schedule
would have been required hereunder to have been created on or before the date
hereof if such change had existed on the date hereof); provided, however, that
the delivery of any Update Schedule pursuant to this section 6.04 shall not
cure any breach of any representation or warranty requiring disclosure of such
matter prior to the date of this Agreement or otherwise limit or affect the
remedies available to the party receiving such notice.
6.04 Public Announcements. The parties to this Agreement shall consult in
good faith with each other before issuing any press release or otherwise making
any public statements with respect to the Merger and shall not issue any such
press release or make any such public statement without the prior written
agreement of the other party, except as may be required by law or the
requirements of the NASDAQ National Market System.
6.05 Obligations of Acquiror Sub. Acquiror shall take all action
necessary to cause Acquiror Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.
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ARTICLE VII
CLOSING CONDITIONS
7.01 Conditions to Obligations of Each Party Under This Agreement. The
respective obligations of each party to effect the Merger and the other
transactions contemplated by this Agreement shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions, any
or all of which may be waived, in whole or in part, to the extent permitted by
applicable law:
(a) No Action or Proceeding. There shall not have been instituted and
there shall not be pending any action or proceeding by a Governmental Entity,
and no such action or proceeding shall have been approved by a Governmental
Entity with authority to institute such an action or proceeding, before any
court of competent jurisdiction or governmental agency or regulatory or
administrative body, and no order or decree shall have been entered in any
action or proceeding before such court, agency or body of competent
jurisdiction: (i) imposing or seeking to impose limitations on the ability of
Acquiror to acquire or hold or to exercise full rights of ownership of any
securities of the Company or any of its Subsidiaries; (ii) imposing or seeking
to impose limitations on the ability of Acquiror to combine and operate the
business and assets of the Company with any of Acquiror's Subsidiaries or other
operations; (iii) imposing or seeking to impose other sanctions, damages or
liabilities arising out of the Merger on Acquiror, Acquiror Sub, the Company or
any of their officers or directors; (iv) requiring or seeking to require
divestiture by Acquiror of all or any material portion of the business, assets
or property of the Company and its Subsidiaries; or (v) restraining, enjoining
or prohibiting or seeking to restrain, enjoin or prohibit the consummation of
the Merger, in each case, with respect to clauses (i) through (iv) above, which
would or is reasonably likely to result in a Company Material Adverse Effect at
or prior to or after the Effective Time or, with respect to clauses (i) through
(v) above, which would or is reasonably likely to subject any of their
respective officers or directors to any penalty or criminal liability.
Notwithstanding the foregoing, prior to invoking the condition set forth in this
section 7.01(a), the party seeking to invoke it shall have used its reasonable
best efforts to have any such pending or approved action or proceeding withdrawn
or dismissed or such order or decree vacated.
(b) BHC Act, Wisconsin Law and Illinois Law. The applicable
approvals and any applicable waiting periods under the BHC Act and the
Wisconsin Law, Illinois Law and Wisconsin and Illinois banking laws shall
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have been received, waived or terminated and all notices required by such acts
given.
(c) Other Approvals or Notices. All other consents, waivers,
approvals and authorizations required to be obtained from, and all filings or
notices required to be made with, any Government Entity by Acquiror or the
Company or any Subsidiary prior to consummation of the transactions
contemplated in this Agreement (other than the filing and recordation of
Merger documents in accordance with the Illinois Law) shall have been obtained
from and made with all required Governmental Entities, except for such
consents, waivers, approvals or authorizations which the failure to obtain, or
such filings or notices which the failure to make, would not have a Company
Material Adverse Effect prior to or after the Effective Time or an Acquiror
Material Adverse Effect before or after the Effective Time or be reasonably
likely to subject the Company, Acquiror, Acquiror Sub or any of their
respective Subsidiaries or any of their respective officers, directors,
employees, agents or representatives to substantial penalty or criminal
liability.
(d) The Merger Consideration shall not have been reduced by more than
$100,000 solely as a result of any Net Worth Adjustment arising due to
unrealized gains and losses in the Bank's portfolio of investment securities.
7.02 Additional Conditions to Obligations of Acquiror and Acquiror Sub.
The obligations of Acquiror and Acquiror Sub to effect the Merger and the other
transactions contemplated in this Agreement are also subject to the
satisfaction at or prior to the Effective Time of the following conditions, any
or all of which may be waived, in whole or in part:
(a) Representations and Warranties. Each of the representations and
warranties of the Company contained in this Agreement shall have been true and
correct in all material respects when made and the information contained
therein, as updated by any Update Schedule, taken as a whole, shall not have
materially adversely changed; each of the representations and warranties
contained in this Agreement shall be true and correct in all material respects
as of the Effective Time. Acquiror shall have received a certificate of the
Chairman of the Board of Directors of the Company to that effect.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, except to the extent failure to perform is caused by or is
consented to by Acquiror or Acquiror Sub. Any material breach by the Company
of its obligations under sections 5.01, 5.02, 5.05, 6.01 and 6.02 shall be
deemed to
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be material noncompliance for purposes of this section 7.02(b). Acquiror shall
have received a certificate of the Chairman of the Board and Secretary of the
Company to that effect.
(c) Consents Under Agreements. The Company shall have obtained the
third-party consents described in subsection 6.02(b)(i), except those for which
the failure to obtain such consents and approvals would not have a Company
Material Adverse Effect prior to or after the Effective Time or an Acquiror
Material Adverse Effect before or after the Effective Time, other than as
contemplated by subsection 6.03(b)(i).
(d) Opinion of Counsel. The Acquiror and the Acquiror Sub shall have
received an opinion of Messrs. Barack, Ferrazano, Kirschbaum, Xxxxxxx &
Xxxxxxxxx, counsel to the Company, addressed to Acquiror and Acquiror Sub, dated
as of the Effective Time, and satisfactory in form and substance to Acquiror,
Acquiror Sub and its counsel, to the following effect:
(i) The Company is a corporation existing under the laws of the
State of Illinois and, based solely on a certificate of the Secretary of State
of Illinois, is in good standing in the State of Illinois. The Bank is an
Illinois banking corporation existing under the laws of the State of Illinois.
To the knowledge of such counsel, neither the Company nor the Bank [a] has
failed to file with the Secretary of State during its most recently completed
report year the required annual report; [b] is the subject of a proceeding
under Illinois Statutes to cause its administrative dissolution; [c] is the
subject of a determination by the Secretary of State that grounds exist for
such action with respect to the Company or any Subsidiary; [d] is the subject
of a filing with the Secretary of State for a decree of dissolution; and [e] is
the subject of Articles of Dissolution filed with the Secretary of State. To
the knowledge of such counsel, immediately prior to the Effective Time, the
Company was the sole registered holder of record of the number of shares of
stock or equity interests in its Subsidiaries as is set forth in the Agreement
and the Company Disclosure Schedule with respect to section 3.03(d). The
Company and its Subsidiaries have the corporate power to carry on their
respective businesses as currently being conducted.
(ii) The Agreement is a legal, valid and binding obligation of
the Company [a] except as the Agreement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally; and [b] subject to general
principles of equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance, injunctive relief or other equitable remedies, regardless
of whether considered in a proceeding in equity or at law. The execution,
delivery
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and performance by the Company of the Agreement have been duly authorized by
all necessary corporate action, including the requisite approval of the
shareholders of the Company. Under the Illinois Business Corporation Law and
the Company's Articles of Incorporation and By-Laws, the Company's shareholders
and Board of Directors properly approved the Merger in accordance with the
terms of the Agreement. Upon filing the Articles of Merger as contemplated by
the Agreement, the Merger shall be effective under Illinois law.
(iii) The execution and delivery of the Agreement and the performance by
the Company of its terms do not [a] contravene or conflict with any provision of
the Articles of Incorporation or By-Laws of the Company; or [b] violate any
order, judgment or decree of any Wisconsin, Illinois or federal court or
governmental instrumentality to which the Company is subject and of which such
counsel has knowledge.
(iv) The authorized capital stock of the Company consists of 10,000
shares of Company Common Stock, no par value per share, of which 1,000 shares
are issued and outstanding, fully paid and nonassessable. To the knowledge of
such counsel, the Company does not have outstanding any stock or securities
convertible into or exchangeable for any shares of capital stock or any
preemptive rights or other rights to subscribe for or to purchase, or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments, rights or claims of any
other character relating to the issuance of, any capital stock or any stock or
securities convertible into or exchangeable for any capital stock other than as
set forth in [a] the Articles of Incorporation and [b] the Agreement or the
Disclosure Schedules. To the knowledge of such counsel, except as set forth in
the Articles of Incorporation and as set forth in the Agreement or the
Disclosure Schedules, the Company is not subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares of capital
stock of the Company.
(v) To the knowledge of such counsel, there are no preemptive rights of
stockholders under the Articles of Incorporation of the Company or as a matter
of law under the Business Corporation Law of Illinois with respect to the
Agreement or the Merger.
(vi) To the knowledge of such counsel, there is no action, suit,
investigation or proceeding pending or threatened against the Company or any
properties or rights of the Company by or before any court, arbitrator or
administrative or governmental body which questions the validity of the
Agreement or any action which has been or is to be taken by the Company
thereunder.
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(e) Loan Losses. There shall not have been a material adverse change in
the anticipated losses, net of anticipated recoveries, on loans outstanding from
the Bank as compared to the allowance for loan losses shown on the Company
Balance Sheet or the latest subsequent month-end statement delivered by the
Company pursuant to section 3.07(d) hereof, to Acquiror, as required by
generally accepted accounting principles and regulatory accounting standards,
but in no event shall such allowance be maintained at a level or in a manner
which is not at least consistent with past practice .
(f) Employment Agreements. The Change of Control Agreement on behalf of
Xxxxx X. Xxxx and Xxxxxx X. Xxxxxx shall have been amended and restated in the
form attached hereto as Exhibit 7.02(f).
(g) No Change. From the date hereof to the Effective Time, there shall
not have occurred any circumstance that results in a Company Material Adverse
Effect.
(h) Employee Benefits. Upon Acquiror's written request delivered to the
Company on or prior to the Closing Date, the Company shall take all reasonable
actions necessary to ensure that the benefits payable or accruing under any
Employee Benefit Plan shall continue for one year after the Closing, all on
terms reasonably satisfactory to Acquiror.
(i) Financial Statements. The Acquiror shall have received audited
financial statements of the Company and its Subsidiaries on a consolidated basis
combined with RFS, as of September 30, 1996; and, if the Closing occurs after
December 31, 1997, the Acquiror shall have received such financial statements as
of September 30, 1997. Acquiror shall pay for the foregoing audit, and the
resulting audited financial statements and report shall be the sole property of
Acquiror, and the Company and its Subsidiaries will not be entitled to receive a
copy of such audited financial statements or to otherwise use such statements in
any manner.
(j) Other Documents. The Acquiror shall have received such other
customary documents, certificates, or instruments as the Acquiror may reasonably
request.
(k) Regulatory Approvals. The Acquiror shall have received all notices,
approvals and nonobjection letters to, or from, Governmental Entities as shall
be necessary to consummate the Merger and the other transactions contemplated by
this Agreement.
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(l) Richmond Financial Services. All of the capital stock of RFS
shall have been contributed to the Company by the holders thereof and there
shall be no outstanding capital stock or other equity interests in RFS, or any
options, warrants or other rights to acquire any of such capital stock, other
than the shares held by the Company.
7.03 Additional Conditions to Obligations of the Company. The obligation
of the Company to effect the Merger and the other transactions contemplated in
this Agreement is also subject to the satisfaction at or prior to the Effective
Time of the following conditions, any or all of which may be waived, in whole
or in part;
(a) Representations and Warranties. Each of the representations and
warranties of Acquiror contained in this Agreement: (i) with respect to those
representations and warranties that are qualified by reference to "materiality"
or "Acquiror Material Adverse Effect," shall have been true and correct when
made and shall be true and correct in all respects as of the Effective Time, as
though made on and as of the Effective Time and (ii) with respect to all other
representations and warranties shall have been true and correct when made and
shall be true and correct in all material respects as of the Effective Time, as
though made on and as of the Effective Time. The Company shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of
Acquiror to that effect.
(b) Agreements and Covenants. Acquiror and Acquiror Sub shall
have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by each
of them on or prior to the Effective Time. The Company shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of
Acquiror to that effect.
(c) Opinion of Counsel. The Company shall have received an opinion of
Messrs. Reinhart, Boerner, Van Deuren, Xxxxxx & Rieselbach, s.c., counsel to
Acquiror and Acquiror Sub, addressed to the Company, dated as of the Effective
Time, and satisfactory in form and substance to the Company and its counsel, to
the following effect:
(i) Acquiror is a corporation existing in good standing under the
laws of the State of Wisconsin, based solely on a certificate of the
Wisconsin Secretary of State. Acquiror Sub is a corporation existing in good
standing under the laws of the state of Wisconsin, based solely on a
certificate of the Wisconsin Secretary of State. Acquiror owns, directly or
indirectly, all of the
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capital stock of Acquiror Sub and all other subsidiaries set forth in
Acquiror's reports and schedules.
(ii) The execution, delivery and performance of the Agreement has been
duly authorized by all requisite corporate action on the part of Acquiror and
Acquiror Sub. The Agreement constitutes the legally valid and binding
obligations of Acquiror and Acquiror Sub, enforceable in accordance with its
terms, subject to the following qualifications: [a] the enforceability against
Acquiror or Acquiror Sub of the Agreement in accordance with its terms may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally; [b] the enforceability of the Agreement
is subject to the effect of general principles of equity and the possible
unavailability of specific performance or injunctive relief regardless of
whether considered in a proceeding in equity or at law; and [c] no opinion is
expressed as to any provision of the Agreement providing for the indemnification
of persons for liability under federal or other securities laws.
(iii) To the knowledge of such counsel, there is no action, suit,
investigation or proceeding pending or threatened against the Acquiror or any
properties or rights of Acquiror by or before any court, arbitrator or
administrator or governmental body which questions the validity of the Agreement
or any action which has been or is to be taken by Acquiror thereunder.
(d) Payment of Purchase Price. The Company shall have received written
evidence of the delivery by Acquiror to the Paying Agent of all of the funds
necessary to purchase all the Company Common Stock in accordance with the terms
of this Agreement.
(e) Regulatory Approvals. The Company shall have received copies of all
notices, approvals and nonobjection letters to, or from, Governmental Entities
as shall be necessary to consummate the Merger and the other transactions
contemplated in this Agreement.
(f) Other Documents. The Company shall have received such other customary
documents, certificates, or instruments as the Company may reasonable request.
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of this Agreement and the
Merger by the shareholders of the Company:
(a) by mutual written consent of Acquiror and the Company;
(b) by Acquiror in the event the conditions to Acquiror's obligations
under Article VII shall not have been met or waived by Acquiror on or prior to
December 31, 1997 (provided, however, that this date may be extended by the
Company by written notice to Acquiror for not more than 60 days thereafter if
the Merger shall not have been consummated as a direct result of the Company's
having failed (i) to satisfy the conditions in subsection 7.01(b) or (c), (ii)
to resolve any action or proceeding as required by subsection 7.01(a), or (iii)
to cure any failure by the Company to perform in all material respects any
other covenant or agreement required by this Agreement to be performed or
complied with by the Company prior to the Effective Time which is capable of
being cured), but only if Acquiror has not caused the condition giving rise to
termination through its own action or inaction;
(c) by the Company in the event the conditions to the Company's
obligations under Article VII shall not have been met or waived by the Company
on or prior to December 31, 1997 (provided, however, that this date may be
extended by Acquiror by written notice to the Company for not more than 60 days
thereafter if the Merger shall not have been consummated as a direct result of
the Acquiror's having failed (i) to satisfy the conditions in subsection
7.01(b) or (c), (ii) to resolve any action or proceeding as required by
subsection 7.01(a), or (iii) to cure any failure by Acquiror to perform in all
material respects any other covenant or agreement required by this Agreement to
be performed or complied with by Acquiror prior to the Effective Time which is
capable of being cured), but only if the Company has not caused the condition
giving rise to termination through its own action or inaction;
(d) by either Acquiror or the Company if any decree, permanent
injunction, judgment, order or other action by any court of competent
jurisdiction or any Governmental Entity preventing or prohibiting consummation
of the Merger shall have become final and nonappealable;
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(e) by Acquiror, if (i) the Board of Directors of the Company withdraws,
modifies or changes in a manner materially adverse to Acquiror its
recommendation of this Agreement or Merger or shall have resolved to do any of
the foregoing, or (ii) the Board of Directors of the Company shall have
recommended to the shareholders of the Company any proposed acquisition of the
Company by any Person or any "group" (as such term is defined under section
13(d) of the Exchange Act) other than Acquiror and its Affiliates by [a] merger,
consolidation, share exchange, business combination or other similar
transaction, [b] purchase of all or a substantial part of the assets of the
Company and its Subsidiaries, taken as a whole, or [c] the acquisition of more
than 50% of the Company's outstanding equity securities (a "Competing
Transaction") or resolved to do so, or (iii) a tender offer or exchange offer
for 50% or more of the outstanding shares of capital stock of the Company is
commenced, the Board of Directors of the Company, within 10 business days after
such tender offer or exchange offer is so commenced, either fails to recommend
against acceptance of such tender offer or exchange offer by its shareholders or
takes no position with respect to the acceptance of such tender offer or
exchange offer by its shareholders;
(f) by Acquiror, if any Update Schedule contains material disclosures of
any fact or condition which makes materially untrue, or shows to have been
materially untrue, any representation or warranty by the Company in this
Agreement, unless concurrently with the delivery of the Update Schedule, the
Company represents and warrants that the disclosed fact or condition can and
will be corrected prior to the Effective Time; provided, however, Acquiror may
not terminate this Agreement pursuant to this Section 8.01(f) unless the fact or
condition so disclosed would constitute a material breach of the applicable
representation or warranty;
(g) by the Company, if any Update Schedule contains material disclosures
of any fact or condition which makes materially untrue, or shows to have been
materially untrue, any representation or warranty by Acquiror in this Agreement,
unless concurrently with the delivery of the Update Schedule, Acquiror
represents and warrants that the disclosed fact or condition can and will be
corrected, prior to the Effective Time; provided, however, the Company may not
terminate this Agreement pursuant to these Section 8.01(g) unless the fact or
condition so disclosed would constitute a material breach of the applicable
representation or warranty; or
(h) by the Company, if Acquiror fails to comply with the obligations set
forth in the third sentence of section 6.02(a) of this Agreement.
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8.02 Effect of Termination. Subject to the remedies of the parties set
forth in section 8.03, in the event of the termination of this Agreement
pursuant to section 8.01, this Agreement shall forthwith become null and void,
and, subject to sections 8.03(c) and (d), there shall be no liability under
this Agreement on the part of Acquiror, Acquiror Sub or the Company or any of
their respective officers or directors and all rights and obligations of each
party hereto shall cease. The Acquiror's Confidentiality Agreement shall
survive any termination of this Agreement.
8.03 Expenses.
(a) Except as provided in section 8.03(c), all Expenses incurred by
the parties shall be borne solely and entirely by the party which has incurred
the same.
(b) "Expenses" as used in this Agreement shall include all reasonable
out-of-pocket expenses (including, without limitation, all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to a party
and its Affiliates) incurred by a party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of this Agreement, the preparation printing and mailing of the
shareholder meeting notice, and any registration statement, the solicitation of
shareholder approvals and all other matters related to the closing of the
transactions contemplated by this Agreement.
(c) If the transactions contemplated herein are not consummated
because the Agreement is terminated as a result of an Intentional Breach (as
defined in subsection (e) of this Section 8.03) by Acquiror and at the time of
such termination, the Company has delivered to Acquiror a written notice
specifying the Intentional Breach as grounds for such termination ("Company
Termination Notice"), then Acquiror shall pay to the Company, upon the
Company's written demand (but in no event later than the third business day
following Acquiror's receipt of the Company Termination Notice), the sum of
$300,000. Such sum shall constitute liquidated damages and the receipt
thereof shall be the Company's sole and exclusive remedy for such breach, or
failure, by Acquiror and the resulting termination of this Agreement.
(d) If the transactions contemplated hereunder are not consummated
because the Agreement is terminated as a result of an Intentional Breach (as
defined in subsection (e) of this Section 8.03) by the Company and at the time
of such termination, the Acquiror has delivered to the Company a written notice
specifying the Intentional Breach as grounds for such termination ("Acquiror
Termination Notice") then the Company shall pay to Acquiror, upon
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Acquiror's written demand (but in no event later than the third business day
following the Company's receipt of the Acquiror Termination Notice), the sum of
$300,000. The Company further agrees that if within one year after the
Company's receipt of the Acquiror Termination Notice or the termination of this
Agreement pursuant to section 8.01(e) the Company enters into an agreement with
any party other than Acquiror providing for a Competing Transaction and the
Competing Transaction contemplated by such agreement is consummated at any time
thereafter then, upon Acquiror's written demand, in addition to the $300,000
paid by the Company following receipt of the Acquiror Termination Notice as
provided above, the Company shall pay to Acquiror, within thirty (30) days
following consummation of such Competing Proposal, an amount equal to 50% of
the amount by which the aggregate consideration to be received in a Competing
Transaction exceeds the Merger Consideration. Such sum, together with any
payment which may be made pursuant to the first sentence of this section
8.03(d), shall constitute liquidated damages under this Agreement and the
receipt thereof shall be Acquiror's sole and exclusive remedy for such breach,
or failure, by the Company or as a result of the Competing Transaction and the
resulting termination of this Agreement, provided, however, that the provisions
of this section shall in no way limit Acquiror's rights against any such third
party.
(e) For purposes of this section 8.03, the term "Intentional Breach"
shall mean any willful breach by the Company or Acquiror, as the case may be, of
any of its representations, warranties or covenants under this Agreement or a
willful failure by the Company or Acquiror, as the case may be, to cure a breach
of any of its representations, warranties or covenants hereunder to the extent
it is within the power of the Company or Acquiror, as the case may be, to cure
such breach, provided that the failure of any condition in Article VII hereof
shall not by itself constitute an Intentional Breach.
ARTICLE IX
GENERAL PROVISIONS
9.01 Survival of Representations and Warranties. The respective
representations and warranties of the parties in this Agreement shall survive
consummation of the Merger or termination of this Agreement for a period of two
years; provided, however, that the representations provided in sections 3.01,
3.03 and 3.04 shall survive indefinitely. This section 9.01 shall have no
effect upon any other obligations of the parties hereto, whether to be
performed before or after consummation of the Merger.
9.02 Notices. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been
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duly given or made upon receipt, if delivered personally, on the third business
day following deposit in the U.S. mail if mailed by registered or certified
mail (postage prepaid, return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like changes of address) or when sent by electronic transmission to the
telecopier number specified below with receipt acknowledged:
(a) If to Acquiror or Acquiror Sub:
State Financial Services Corporation
00000 Xxxx Xxxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxx Xxxxxxx, XX 00000-0000
Telecopier No: 414-425-8939
Attention: Xxxxxxx X. Xxxxx, President
With a copy to:
Reinhart, Boerner, Van Deuren,
Xxxxxx & Xxxxxxxxxx, s.c.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
X.X. Xxx 00000
Xxxxxxxxx, XX 00000-0000
Telecopier No: 414-298-8097
Attention: Xxxxx Xxxxx, Xx., Esq.
Xxxxx X. Xxxxxx, Esq.
(b) If to the Company:
Richmond Bank
00000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Telecopier No: 000-000-0000
Attention: Xxxxxxx X. Wonderlic, Chairman
With a copy to:
Barack, Ferrazzano, Kirschbaum, Xxxxxxx & Xxxxxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopier No: 000-000-0000
Attention: Xxxxx X. del Hierro, Esq.
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9.03 Amendment. This Agreement may be amended by the parties by action
taken by or on behalf of their respective Boards of Directors at any time prior
to the Effective Time; provided, however, that after approval of this Agreement
by the shareholders of the Company, no amendment may be made without further
approval of such shareholders, if such amendment would reduce the amount or
change the type of consideration into which each share of Company Common Stock
shall be converted pursuant to this Agreement upon consummation of the Merger.
This Agreement may not be amended except by an instrument in writing signed by
each of the parties hereto.
9.04 Waiver. At any time prior to the Effective Time, any party may (a)
extend the time for the performance of any of the obligations or other acts of
any other party, (b) waive any inaccuracies in the representations and
warranties of any other party contained in this Agreement or in any document
delivered pursuant to this Agreement, and (c) waive compliance by any other
party with any of the agreements or conditions contained in this Agreement.
Notwithstanding the foregoing, no failure or delay by either party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by a party or parties to be bound
thereby.
9.05 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
9.06 Severability. If any term or other provision of this Agreement is
finally adjudicated by a court of competent jurisdiction to be invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
9.07 Entire Agreement. This Agreement (together with the Acquiror's
Confidentiality Agreement, the Exhibits, the disclosure schedules to
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this Agreement and the other documents delivered pursuant hereto), constitutes
the entire agreement of the parties and supersedes all prior agreements and
undertakings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof.
9.08 Assignment. This Agreement shall not be assigned, whether by
operation of law or otherwise.
9.09 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of and be enforceable by each party and its respective
successors, and nothing in this Agreement, express or implied, other than
pursuant to section 2.04 and section 6.06 or the right to receive the
consideration payable in the Merger pursuant to Article II, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
9.10 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Wisconsin, regardless of the laws
that might otherwise govern under applicable principles of conflicts of law.
9.11 Counterparts. This Agreement may be executed by facsimile and in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
STATE FINANCIAL SERVICES CORPORATION
BY /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx, President &
Chief Executive Officer
RBI, INC.
BY /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx, President &
Chief Executive Officer
RICHMOND BANCORP, INC.
BY /s/ Xxxxxxx X. Wonderlic
-----------------------------------
Xxxxxxx X. Wonderlic, Chairman
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