AGREEMENT AND PLAN OF MERGER dated as of May 22, 2008 by and among RURBAN FINANCIAL CORP. and RURBAN MERGER CORP. and NBM BANCORP, INCORPORATED
Exhibit
2.1
EXECUTION
COPY
AGREEMENT
AND PLAN OF MERGER
dated
as of
May
22, 2008
by
and among
and
RURBAN
MERGER CORP.
and
NBM
BANCORP, INCORPORATED
TABLE
OF CONTENTS
|
Page
|
||
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ARTICLE
ONE – THE MERGER
|
2
|
|
|
1.01.
|
Merger;
Surviving Corporation
|
2
|
|
1.02.
|
Effective
Time
|
2
|
|
1.03.
|
Effects
of the Merger
|
2
|
|
1.04.
|
Structure
of Merger
|
2
|
|
ARTICLE
TWO – CONVERSION OF SHARES; SURRENDER OF CERTIFICATES
|
3
|
|
|
2.01.
|
Conversion
of NBM Shares
|
3
|
|
2.02.
|
Surrender
of Certificates
|
3
|
|
2.03.
|
NBM
Stockholders’ Appraisal Rights
|
5
|
|
2.04.
|
Merger
Corp. Shares
|
5
|
|
ARTICLE
THREE – REPRESENTATIONS AND WARRANTIES OF NBM
|
6
|
|
|
3.01.
|
Corporate
Status
|
6
|
|
3.02.
|
Capitalization
of NBM
|
7
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|
3.03.
|
Bank
of Montpelier; No Other Subsidiaries
|
8
|
|
3.04.
|
Corporate
Proceedings
|
8
|
|
3.05.
|
Authorized
and Effective Agreement
|
9
|
|
3.06.
|
Financial
Statements of NBM
|
9
|
|
3.07.
|
Absence
of Undisclosed Liabilities
|
10
|
|
3.08.
|
Absence
of Changes
|
10
|
|
3.09.
|
Loan
Documentation
|
10
|
|
3.10.
|
Allowance
for Loan Losses
|
11
|
|
3.11.
|
Reports
and Records
|
11
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|
3.12.
|
Taxes
|
12
|
|
3.13.
|
Property
and Title
|
12
|
|
3.14.
|
Legal
Proceedings
|
13
|
|
3.15.
|
Regulatory
Matters
|
13
|
|
3.16.
|
No
Conflict
|
13
|
|
3.17.
|
Brokers
and Finders
|
14
|
|
3.18.
|
Employment
Agreements
|
14
|
|
3.19.
|
Employee
Benefit Plans
|
14
|
|
3.20.
|
Compliance
with Laws
|
16
|
|
3.21
|
Insurance
|
17
|
|
3.22.
|
Governmental
and Third-Party Proceedings
|
17
|
|
3.23.
|
Contracts
|
17
|
|
3.24.
|
Environmental
Matters
|
18
|
|
3.25.
|
Takeover
Laws
|
20
|
|
3.26.
|
Risk
Management Instruments
|
20
|
|
3.27.
|
Repurchase
Agreements
|
20
|
-
i
-
|
3.28.
|
CRA
Compliance
|
20
|
|
Investment
Securities
|
20
|
|
|
3.30.
|
Intellectual
Property
|
21
|
|
3.31.
|
NBM
Books and Records
|
21
|
|
3.32.
|
Ownership
of Rurban Shares
|
22
|
|
3.33.
|
Fairness
Opinion
|
22
|
|
3.34.
|
Internal
Controls
|
22
|
|
ARTICLE
FOUR – REPRESENTATIONS AND WARRANTIES OF RURBAN AND MERGER
CORP.
|
22
|
|
|
4.01.
|
Corporate
Status
|
22
|
|
4.02.
|
Corporate
Proceedings
|
22
|
|
4.03.
|
Authorized
and Effective Agreement
|
22
|
|
4.04.
|
No
Conflict
|
23
|
|
4.05.
|
Brokers
and Finders
|
23
|
|
4.06.
|
Governmental
and Third-Party Proceedings
|
23
|
|
4.07.
|
Financial
Ability to Perform
|
23
|
|
4.08.
|
Ownership
of NBM Shares
|
23
|
|
4.09.
|
Takeover
Law
|
24
|
|
ARTICLE
FIVE – FURTHER COVENANTS OF NBM
|
24
|
|
|
5.01.
|
Operation
of Business
|
24
|
|
5.02.
|
Notification
|
28
|
|
5.03.
|
Acquisition
Proposal
|
28
|
|
5.04.
|
Delivery
of Information
|
29
|
|
5.05.
|
Takeover
Laws
|
29
|
|
5.06.
|
Merger
of Subsidiaries
|
29
|
|
5.07.
|
Accounting
Policies
|
29
|
|
5.08.
|
No
Control
|
29
|
|
5.09.
|
Voting
Agreement
|
29
|
|
ARTICLE
SIX – FURTHER COVENANTS OF RURBAN
|
30
|
|
|
6.01.
|
Access
to Information
|
30
|
|
6.02.
|
Employees;
Employee Benefits
|
30
|
|
6.03.
|
Notification
|
31
|
|
6.04.
|
Indemnification;
Officers’ and Directors’ Liability Insurance
|
31
|
|
ARTICLE
SEVEN – FURTHER OBLIGATIONS OF THE PARTIES
|
32
|
|
|
7.01.
|
Cooperative
Action
|
32
|
|
7.02.
|
Press
Releases
|
32
|
|
7.03.
|
Proxy
Statement; NBM Meeting
|
32
|
|
7.04.
|
Regulatory
Applications
|
33
|
|
7.05.
|
Confidentiality
|
34
|
-
ii
-
|
ARTICLE
EIGHT – CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
PARTIES
|
34
|
|
|
8.01.
|
Conditions
to the Obligations of Rurban and Merger Corp.
|
34
|
|
8.02.
|
Conditions
to the Obligations of NBM
|
35
|
|
8.03.
|
Mutual
Conditions
|
36
|
|
ARTICLE
NINE – CLOSING
|
36
|
|
|
9.01.
|
Closing
|
36
|
|
9.02.
|
Closing
Deliveries Required of Rurban and Merger Corp.
|
37
|
|
9.03.
|
Closing
Deliveries Required of NBM
|
37
|
|
ARTICLE
TEN – NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS
|
37
|
|
|
10.01.
|
Non-Survival
of Representations, Warranties and Covenants
|
37
|
|
ARTICLE
ELEVEN – TERMINATION
|
38
|
|
|
11.01.
|
Termination
|
38
|
|
11.02.
|
Effect
of Termination
|
39
|
|
ARTICLE
TWELVE – MISCELLANEOUS
|
39
|
|
|
12.01.
|
Notices
|
39
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|
12.02.
|
Counterparts
|
40
|
|
12.03.
|
Entire
Agreement
|
40
|
|
12.04.
|
Successors
and Assigns
|
41
|
|
12.05.
|
Captions
|
41
|
|
12.06.
|
Governing
Law
|
41
|
|
12.07.
|
Payment
of Fees and Expenses
|
41
|
|
12.08.
|
Amendment
|
41
|
|
12.09.
|
Waiver
|
42
|
|
12.10.
|
Disclosure
Schedule
|
42
|
|
12.11.
|
No
Third Party Rights
|
42
|
|
Waiver
of Jury Trial
|
42
|
|
|
12.13.
|
Severability
|
42
|
Exhibit
A –
Form of Voting Agreement
-
iii
-
GLOSSARY
OF DEFINED TERMS
The
following terms, when used in this Agreement, have the meanings ascribed to
them
in the corresponding Sections of this Agreement listed below:
|
“Acquisition
Proposal”
|
–
|
Section
5.03
|
|
“Agreement”
|
–
|
Preamble
|
|
“Bank
Merger”
|
–
|
Preamble
|
|
“Bank
of Montpelier”
|
–
|
Preamble
|
|
“BHCA”
|
–
|
Section
3.01
|
|
“CERCLA”
|
–
|
Section
3.24
|
|
“CRA”
|
–
|
Section
3.20(a)
|
|
“Cash
Amount”
|
–
|
Section
2.01(a)
|
|
“Closing”
|
–
|
Section
9.01
|
|
“Closing
Date”
|
–
|
Section
9.01
|
|
“Code”
|
–
|
Section
3.12
|
|
“Compensation
and Benefit Plans”
|
–
|
Section
3.19(a)
|
|
“Constituent
Corporations”
|
–
|
Preamble
|
|
“Consultants”
|
–
|
Section
3.19(a)
|
|
“Continuing
Employees”
|
–
|
Section
6.02(a)
|
|
“DGCL”
|
–
|
Section
1.01
|
|
“Delaware
Secretary of State”
|
–
|
Section
1.02
|
|
“DOL”
|
–
|
Section
3.19(a)
|
|
“Directors”
|
–
|
Section
3.19(a)
|
|
“ERISA”
|
–
|
Section
3.19(a)
|
|
“ERISA
Affiliate”
|
–
|
Section
3.19(c)
|
|
“Effective
Time”
|
–
|
Section
1.02
|
|
“Employees”
|
–
|
Section
3.19(a)
|
|
“Environmental
Law”
|
–
|
Section
3.24
|
|
“Exchange
Act”
|
–
|
Section
3.19(b)
|
|
“Exchange
Agent”
|
–
|
Section
2.02(a)
|
|
“Exchange
Fund”
|
–
|
Section
2.02(a)
|
|
“FDIC”
|
–
|
Section
3.01(b)
|
|
“Financial
Impact”
|
–
|
Section
3.06
|
|
“FRB”
|
–
|
Section
3.11
|
|
“GAAP”
|
–
|
Section
3.06
|
|
“Governmental
Authority”
|
–
|
Section
3.16
|
|
“Hazardous
Material”
|
–
|
Section
3.24
|
|
“IRS”
|
–
|
Section
3.12
|
|
“Indemnified
Party”
|
–
|
Section
6.04(a)
|
|
“Information”
|
–
|
Section
7.05
|
|
“Intellectual
Property”
|
–
|
Section
3.30(c)
|
|
“knowledge”
|
–
|
Section
3.08
|
|
“Loan
Assets”
|
–
|
Section
3.09
|
|
“Loan
Documentation”
|
–
|
Section
3.09
|
|
“material”
|
–
|
Section
3.01(c)
|
-
iv
-
|
“material
adverse effect”
|
–
|
Section
3.01(c)
|
|
“Merger”
|
–
|
Preamble
|
|
“Merger
Consideration”
|
–
|
Section
2.01(a)
|
|
“Merger
Corp.”
|
–
|
Preamble
|
|
“Merger
Corp. Shares”
|
–
|
Section
2.04
|
|
“NBM”
|
–
|
Preamble
|
|
“NBM
Balance Sheet Date”
|
–
|
Section
3.06
|
|
“NBM
Certificate”
|
–
|
Section
2.01(a)
|
|
“NBM
Disclosure Schedule”
|
–
|
Preamble
|
|
“NBM
Dissenting Share”
|
–
|
Section
2.03
|
|
“NBM
Financial Statements”
|
–
|
Section
3.06
|
|
“NBM
Meeting”
|
–
|
Section
3.04(b)
|
|
“NBM
Real Estate Collateral”
|
–
|
Section
3.24(b)
|
|
“NBM
Real Properties”
|
–
|
Section
3.13
|
|
“NBM
Shares”
|
–
|
Preamble
|
|
“NBM’s
Financial Advisors”
|
–
|
Section
3.17
|
|
“OCC”
|
–
|
Section
3.01(b)
|
|
“Officers”
|
–
|
Section
3.19(a)
|
|
“PBGC”
|
–
|
Section
3.19(c)
|
|
“PCBs”
|
–
|
Section
3.24
|
|
“Pension
Plan”
|
–
|
Section
3.19(b)
|
|
“Proxy
Statement”
|
–
|
Section
7.03(a)
|
|
“Regulatory
Authorities”
|
–
|
Section
3.15
|
|
“Rurban”
|
–
|
Preamble
|
|
“SEC”
|
–
|
Section
3.03
|
|
“Securities
Act”
|
–
|
Section
3.19(b)
|
|
“State
Bank”
|
–
|
Preamble
|
|
“Subsidiary”
|
–
|
Section
3.03
|
|
“Surviving
Corporation”
|
–
|
Section
1.01
|
|
“Takeover
Laws”
|
–
|
Section
3.25
|
|
“Tax”
|
–
|
Section
3.12
|
|
“Tax
Returns”
|
–
|
Section
3.12
|
|
“Updated
NBM Disclosure Schedule”
|
–
|
Section
5.02
|
-
v
-
AGREEMENT
AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER (the “Agreement”),
dated
as of May
22,
2008, is made and entered into by and among Rurban Financial Corp., an Ohio
corporation (“Rurban”);
Rurban Merger Corp., a Delaware corporation (“Merger
Corp.”);
and
NBM Bancorp, Incorporated, a Delaware corporation (“NBM”)
(Merger Corp. and NBM are sometimes hereinafter collectively referred to as
the
“Constituent
Corporations”).
W
I T N E
S S E T H:
WHEREAS,
the Boards of Directors of NBM, Merger Corp. and Rurban have each determined
that it is in the best interests of their respective corporations and
stockholders for Merger Corp. to merge with and into NBM (the “Merger”),
and
immediately thereafter for the surviving corporation to merge with and into
Rurban, upon the terms and subject to the conditions set forth in and pursuant
to the terms of this Agreement; and
WHEREAS,
the Boards of Directors of NBM, Merger Corp. and Rurban have each approved
this
Agreement and the consummation of the transactions contemplated hereby;
and
WHEREAS,
as a result of the Merger, in accordance with the terms of this Agreement,
Merger Corp. will cease to have a separate corporate existence, Rurban will
acquire all of the issued and outstanding shares of NBM as the surviving
corporation, and stockholders of NBM will receive from Rurban in exchange for
each share of common stock, $2.50 par value per share, of NBM (the “NBM
Shares”),
an
amount in cash calculated in accordance with the terms of this Agreement;
and
WHEREAS,
promptly following the merger of the surviving corporation in the Merger with
and into Rurban, National Bank of Montpelier, a national banking association
now
wholly owned by NBM (“Bank
of Montpelier”),
will
merge (the “Bank
Merger”)
with
and into The State Bank and Trust Company, an Ohio-chartered bank wholly owned
by Rurban (“State
Bank”);
and
WHEREAS,
NBM has previously provided to Rurban a schedule disclosing additional
information about NBM (the “NBM
Disclosure Schedule”);
NOW,
THEREFORE, in consideration of the premises and the respective representations,
warranties, covenants, agreements and conditions hereinafter set forth, NBM,
Merger Corp. and Rurban, intending to be legally bound hereby, agree as
follows:
-
1
-
ARTICLE
ONE
THE
MERGER
1.01. Merger;
Surviving Corporation. Upon
the
terms and subject to the conditions of this Agreement, at the Effective Time
(as
defined in Section 1.02), Merger Corp. shall merge with and into NBM in
accordance with the General Corporation Law of the State of Delaware (the
“DGCL”).
NBM
shall be the continuing and surviving corporation in the Merger, shall continue
to exist under the laws of the State of Delaware, and shall be the only one
of
the Constituent Corporations to continue its separate corporate existence after
the Effective Time. As used in this Agreement, the term “Surviving
Corporation”
refers
to NBM immediately after the Effective Time. As a result of the Merger, the
outstanding shares of capital stock and the treasury shares of the Constituent
Corporations shall be converted in the manner provided in Article
Two.
1.02. Effective
Time. The
Merger shall become effective upon the later of: (a) the filing of the
appropriate certificate of merger with the Secretary of State of the State
of
Delaware (the “Delaware
Secretary of State”),
or
(b) such time thereafter as is agreed to in writing by Rurban, Merger Corp.
and NBM and so provided in the certificate of merger filed as set forth above.
The date and time at which the Merger shall become effective is referred to
in
this Agreement as the “Effective
Time.”
1.03. Effects
of the Merger. At
the
Effective Time:
(a) the
certificate of incorporation, as amended, of NBM as in effect immediately prior
to the Effective Time shall be the certificate of incorporation of the Surviving
Corporation;
(b) the
bylaws, as amended, of NBM as in effect immediately prior to the Effective
Time
shall be the bylaws of the Surviving Corporation, except that the number of
directors of the Surviving Corporation shall be three (3) and each such
individual shall serve as a director of the Surviving Corporation for a term
expiring at the next annual meeting of the stockholders of the Surviving
Corporation to be held after the Effective Time;
(c) the
directors of Merger Corp. immediately prior to the Effective Time shall be
the
directors of the Surviving Corporation;
(d) each
individual who is an officer of Merger Corp. immediately prior to the Effective
Time shall be an officer of the Surviving Corporation holding the same office
as
held with Merger Corp. immediately prior to the Effective Time and no other
individual shall be an officer of the Surviving Corporation after the Effective
Time; and
(e) the
Merger shall have the effects prescribed in the DGCL.
1.04. Structure
of Merger. Rurban
may at any time prior to the Effective Time change the method of effecting
the
Merger and/or the Bank Merger (including, without limitation, the provisions
of
this Article I), if and to the extent Rurban deems such change to be necessary,
appropriate or desirable; provided, however, that no such change shall (a)
alter
or change the amount or kind of consideration to which the holders of NBM Shares
are entitled in accordance with the terms and subject to the conditions of
this
Agreement or (b) materially impede or delay consummation of the transactions
contemplated by this Agreement. NBM, if requested by Rurban, shall enter into
one or more amendments to this Agreement in order to effect any such change.
-
2
-
ARTICLE
TWO
CONVERSION
OF SHARES; SURRENDER OF CERTIFICATES
2.01. Conversion
of NBM Shares. At
the
Effective Time, by virtue of the Merger and without any action on the part
of
any holder thereof:
(a) Purchase
Price; Cancellation of Shares.
Subject
to Section 2.02, each NBM Share issued and outstanding immediately prior to
the
Effective Time (other than NBM Shares held by NBM as treasury shares, NBM shares
beneficially owned by Rurban, and NBM Dissenting Shares) shall be converted
into
the right to receive in cash $113.98, subject to adjustment as provided in
Section 3.06(a) (the “Cash
Amount”).
The
“Merger
Consideration”
shall
be equal to the product of (i) the Cash Amount multiplied by (ii) the number
of
NBM Shares issued and outstanding immediately prior to the Effective Time.
After
the Effective Time, all such NBM Shares shall no longer be outstanding and
each
certificate previously representing any NBM Shares (a “NBM
Certificate”)
shall
be surrendered for the Cash Amount in consideration therefor in accordance
with
Section 2.02, without interest.
(b) Cancellation
of Treasury Shares.
All NBM
Shares held by NBM as treasury shares shall be canceled and retired and shall
cease to exist, and no cash or other consideration shall be delivered in
exchange therefor.
2.02. Surrender
of Certificates
(a) Exchange
Agent.
Rurban
shall provide to Registrar and Transfer Company (the “Exchange
Agent”),
on an
“as needed” basis following the Effective Time, the amount of cash necessary to
pay the Merger Consideration (such cash being hereinafter referred to as the
“Exchange
Fund”),
pursuant to Section 2.01 in substitution and exchange for the NBM
Shares.
(b) Surrender
Procedures.
As soon
as reasonably practicable after the Effective Time, Rurban shall cause the
Exchange Agent to mail to each holder of record of a NBM Certificate which
immediately prior to the Effective Time evidenced NBM Shares: (i) a letter
of
transmittal, which shall specify that delivery shall be effected, and risk
of
loss and title to the NBM Certificates shall pass, only upon delivery of such
NBM Certificates to the Exchange Agent, and which shall be in such form and
have
such other provisions as Rurban may reasonably specify and (ii) instructions
for
use in effecting the surrender of the NBM Certificates in exchange for the
Cash
Amount. Upon surrender by such holder of a NBM Certificate or Certificates
evidencing NBM Shares standing in such holder’s name for cancellation to the
Exchange Agent together with such letter of transmittal, duly executed, the
holder of such NBM Certificate or Certificates shall be entitled to receive
in
exchange therefor the Cash Amount by check, which such holder has the right
to
receive in respect of the NBM Certificate or Certificates surrendered pursuant
to the provisions of this Article Two, and the NBM Certificate or Certificates
so surrendered shall forthwith be canceled. In the event of a transfer of
ownership of NBM Shares which is not registered in the transfer records of
NBM,
a check in respect of the Cash Amount may be issued to a transferee if the
NBM
Certificate representing such NBM Shares is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer
and
by evidence that any applicable share transfer taxes have been paid. Until
surrendered as contemplated by this Section 2.02, each NBM Certificate shall
be
deemed at any time after the Effective Time for all corporate purposes (except
as provided in Section 2.02(c)) to represent only the right to receive upon
such
surrender the Cash Amount as contemplated by this Section 2.02, without
interest.
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(c) Lost
Certificates. If
there
shall be delivered to the Exchange Agent by any person who is unable to produce
any NBM Certificate for NBM Shares for surrender to the Exchange Agent in
accordance with this Section 2.02:
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(i)
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evidence
to the satisfaction of the Surviving Corporation or Rurban that such
NBM
Certificate has been lost, wrongfully taken or
destroyed;
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(ii)
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such
security or indemnity as may be requested by the Surviving Corporation
or
Rurban to save them harmless (which may include the requirement to
obtain
a third party bond or surety, as determined by Rurban);
and
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(iii)
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evidence
to the satisfaction of the Surviving Corporation or Rurban that such
person was the owner of the NBM Shares represented by each such NBM
Certificate claimed by such person to be lost, wrongfully taken or
destroyed and that such person is the person who would be entitled
to
present such NBM Certificate for exchange pursuant to this
Agreement;
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then
the
Exchange Agent, in the absence of actual notice to it that any NBM Shares
represented by any such NBM Certificate have been acquired by a bona fide
purchaser, shall deliver to such person the Cash Amount that such person would
have been entitled to receive upon surrender of each such lost, wrongfully
taken
or destroyed NBM Certificate.
(d) No
Further Ownership Rights in NBM Shares.
The
Cash Amount paid pursuant to this Section 2.02 shall be deemed to have been
issued in full satisfaction of all rights pertaining to such NBM Shares,
subject, however, to the Surviving Corporation’s obligation to pay any dividends
or make any other distributions with a record date prior to the Effective Time
which may have been declared or made by NBM on such NBM Shares in accordance
with the terms of this Agreement on or prior to the Effective Time and which
remain unpaid at the Effective Time. If, after the Effective Time, NBM
Certificates are presented to Rurban for any reason, they shall be canceled
and
exchanged as provided in this Article Two.
(e) Termination
of Exchange Fund.
Any
portion of the Exchange Fund which remains undistributed to the stockholders
of
NBM for six (6) months after the Effective Time shall be delivered to Rurban,
upon demand, and any stockholders of NBM who have not theretofore complied
with
this Article Two by such time shall thereafter look only to Rurban for payment
of their claims for the Cash Amount, in each case without
interest.
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(f) No
Liability.
None of
Rurban, NBM, the Exchange Agent or the Surviving Corporation shall be liable
to
any former holder of NBM Shares for cash delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
(g) Share
Transfer Books.
Unless
otherwise required by the DGCL, after the Effective Time there shall be no
further registration of transfers on the share transfer books of the Surviving
Corporation of the NBM Shares which were outstanding immediately prior to the
Effective Time.
(h) Withholding
Rights.
Rurban
or the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
NBM
Certificates such amounts as Rurban or the Exchange Agent is required to deduct
and withhold with respect to the making of such payment under the Code, or
any
other provision of domestic or foreign tax law (whether national, federal,
state, provincial, local or otherwise). To the extent that amounts are so
withheld and paid over to the appropriate taxing authority by Rurban or the
Exchange Agent, such withheld amounts shall be treated for all purposes of
this
Agreement as having been paid to the holder of the NBM
Certificates.
(i) Waiver. The
Surviving Corporation or Rurban may from time to time, in the case of one or
more persons, waive one or more of the rights provided to it in this Article
Two
to withhold certain payments, deliveries and distributions; and no such waiver
shall constitute a waiver of the Surviving Corporation’s rights thereafter to
withhold any such payment, delivery or distribution in the case of any
person.
2.03. NBM
Stockholders’ Appraisal Rights. Anything
contained in this Agreement or elsewhere to the contrary notwithstanding, if
any
holder of an outstanding NBM Share shall properly exercise appraisal rights
with
respect thereto in accordance with Section 262 of the DGCL (a “NBM
Dissenting Share”),
then:
(a) Each
such
NBM Dissenting Share shall nevertheless be deemed to be extinguished at the
Effective Time as provided elsewhere in this Agreement; and
(b) Each
person perfecting such dissenters’ rights shall thereafter have only such rights
(and shall have such obligations) as are provided in Section 262 of the DGCL,
and neither Rurban nor the Surviving Corporation shall be required to deliver
any cash payments to such person in substitution for each such NBM Dissenting
Share in accordance with this Agreement; provided, however, that, if any such
person shall have failed to perfect or shall withdraw or lose such holder’s
rights under Section 262 of the DGCL, each such holder’s NBM Dissenting Shares
shall thereupon be deemed to have been converted as of the Effective Time into
the right to receive the Cash Amount, without any interest thereon, pursuant
to
Section 2.01.
2.04. Merger
Corp. Shares. Each
common share of Merger Corp. (“Merger
Corp. Shares”)
issued
and outstanding immediately prior to the Effective Time shall be converted
into
and thereafter evidence one common share of the Surviving
Corporation.
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ARTICLE
THREE
REPRESENTATIONS
AND WARRANTIES OF NBM
NBM
represents and warrants to Rurban that each of the following statements is
true
and accurate:
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3.01.
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Corporate
Status.
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(a) NBM
is a
Delaware corporation and a bank holding company registered under the Bank
Holding Company Act of 1956, as amended (“BHCA”).
NBM
is duly organized, validly existing and in good standing under the laws of
the
State of Delaware and has the full corporate power and authority to own its
property, to carry on its business as presently conducted, and to enter into
and, subject to the required adoption of this Agreement by the NBM stockholders
and the obtaining of appropriate approvals of Governmental Authorities and
Regulatory Authorities, perform its obligations under this Agreement and
consummate the transactions contemplated by this Agreement. NBM is duly
qualified and in good standing under the laws of the State of Ohio. NBM is
not
qualified to do business in any other jurisdiction or required to be so
qualified to do business in any other jurisdiction except where the failure
to
be so qualified individually or in the aggregate would not reasonably be
expected to have a material adverse effect on NBM. True and complete copies
of
the certificate of incorporation and bylaws of NBM, in each case as amended
to
the date of this Agreement, have been delivered to Rurban by NBM.
(b) Bank
of
Montpelier is a national banking association regulated by the Office of the
Comptroller of the Currency (the “OCC”),
and
the deposits of Bank of Montpelier are insured by the Federal Deposit Insurance
Corporation (the “FDIC”).
Bank
of Montpelier is duly organized, validly existing and in good standing under
the
laws of the United States of America and has full corporate power and authority
to own its property and to carry on its business as presently conducted. Bank
of
Montpelier is not qualified to do business in any other jurisdiction or required
to be qualified to do business in any other jurisdiction, except where the
failure to be so qualified would not reasonably be expected to have a material
adverse effect on Bank of Montpelier. Copies of the articles, charter, bylaws
and other governing documents of Bank of Montpelier and all amendments are
included in Section 3.01(b) of the NBM Disclosure Schedule.
(c) As
used
in this Agreement, (i) any reference to any event, change, effect,
development, circumstance or occurrence being “material”
with
respect to any entity means an event, change, effect, development, circumstance
or occurrence that is or is reasonably likely to be material in relation to
the
financial condition, properties, assets, liabilities, businesses or results
of
operations of such entity and its subsidiaries taken as a whole, and
(ii) the term “material
adverse effect”
means,
with respect to any entity, an event, change, effect, development, circumstance
or occurrence that, individually
or together with any other event, change, effect, development, circumstance
or
occurrence, (A) has or would be reasonably likely to have a material
adverse effect on the business, condition (financial or otherwise),
capitalization, assets (tangible or intangible), liabilities (accrued,
contingent or otherwise), operations, regulatory affairs, financial performance
or prospects of such entity and its subsidiaries, taken as a whole, or
(B) materially impairs the ability of such entity to perform its
obligations under this Agreement or to consummate the Merger and the other
transactions contemplated by this Agreement; provided that “material
adverse effect”
shall
not be deemed to include the impact of (1) actions and omissions of Rurban
or Merger Corp., on the one hand, or NBM, on the other, taken with the prior
written consent of the other in contemplation of the transactions contemplated
hereby; (2) the direct effects of any expenses incurred by the parties in
consummating the transactions contemplated by this Agreement, any modifications
or changes to valuation policies and practices in connection with the Merger
to
the extent requested by Rurban, and restructuring charges requested by Rurban
and taken in connection with the Merger; or (3) changes after the date of
this Agreement in banking and similar laws of general applicability or
interpretations thereof by any Regulatory Authority or Governmental
Authority.
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3.02.
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Capitalization
of NBM.
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(a) The
authorized capital of NBM consists solely of (i) 364,000 NBM Shares, of
which 219,334 NBM Shares are issued and outstanding and 2,666 NBM Shares are
held in treasury by NBM. All outstanding NBM Shares have been duly authorized
and are validly issued, fully paid and non-assessable, and were not issued
in
violation of the preemptive rights of any person. All NBM Shares issued have
been issued in compliance with all applicable federal and state securities
laws.
(b) As
of the
date of this Agreement, except for this Agreement, there are no options,
warrants, calls, rights, commitments or agreements of any character to which
NBM
is a party or by which it is bound, obligating NBM to issue, deliver or sell,
or
cause to be issued, delivered or sold, any additional NBM Shares or obligating
NBM to grant, extend or enter into any such option, warrant, call, right,
commitment or agreement. As of the date of this Agreement, there are no
outstanding contractual obligations of NBM to repurchase, redeem or otherwise
acquire any NBM Shares.
(c) Except
as
disclosed in Section 3.02(c) of the NBM Disclosure Schedule, since January
1,
2008, NBM has not (i) issued or permitted to be issued any NBM Shares, or
securities exercisable for or convertible into NBM Shares;
(ii) repurchased, redeemed or otherwise acquired, directly or indirectly
through any Subsidiary or otherwise, any NBM Shares; or (iii) declared, set
aside, made or paid to the stockholders of NBM dividends or other distributions
on or in respect of the outstanding NBM Shares.
(d) As
of the
date of this Agreement, there are no bonds, debentures, notes or other
indebtedness of NBM, and no securities or other instruments or obligations
of
NBM, the value of which is in any way based upon or derived from any capital
or
voting stock of NBM, having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
NBM stockholders may vote are issued or outstanding.
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3.03. Bank
of Montpelier; No Other Subsidiaries.
Bank of
Montpelier is the only Subsidiary (as that term is defined in Section 3.03
below) of NBM. NBM owns beneficially and of record all of the issued and
outstanding equity securities of Bank of Montpelier. There are no options,
warrants, calls, rights, commitments or agreements of any character to which
NBM
or Bank of Montpelier is a party or by which either of them is bound obligating
NBM or Bank of Montpelier to issue, deliver or sell, or cause to be issued,
delivered or sold, any additional equity securities of Bank of Montpelier (other
than to NBM), or obligating NBM or Bank of Montpelier to grant, extend or enter
into any such option, warrant, call, right, commitment or agreement. There
are
no contracts, commitments, understandings or arrangements relating to NBM’s
right to vote or to dispose of the equity securities of Bank of Montpelier,
and
all of the equity securities of Bank of Montpelier held by NBM are fully paid
and non-assessable and are owned by NBM free and clear of any charge, mortgage,
pledge, security interest, hypothecation, restriction, claim, option, lien,
encumbrance or interest of any persons whatsoever. Except as disclosed in
Section 3.03 of the NBM Disclosure Schedule, neither NBM nor Bank of
Montpelier owns of record or beneficially, directly or indirectly, any equity
securities or similar interests of any person, or any interest in a partnership
or joint venture of any kind, other than NBM’s ownership of Bank of
Montpelier.
For
purposes of this Agreement, “Subsidiary”
has
the
meaning ascribed to such term in Rule 1-02 of Regulation S-X
promulgated by the Securities and Exchange Commission (the “SEC”).
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3.04.
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Corporate
Proceedings.
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(a) This
Agreement has been (i) duly executed and delivered by duly authorized officers
of NBM and (ii) approved by the board of directors of NBM.
(b) The
board
of directors of NBM has duly adopted resolutions (i) approving this
Agreement and declaring that it is in the best interests of NBM’s stockholders
that NBM enter into this Agreement and consummate the Merger on the terms and
subject to the conditions set forth in this Agreement, (ii) confirming the
intention on the date of such adoption to recommend the adoption of this
Agreement by the stockholders of NBM and (iii) directing the President to
call a Special Meeting of Stockholders for the purpose of considering and acting
upon a proposal to approve and adopt the Merger Agreement (the “NBM
Meeting”),
which
resolutions have not been subsequently rescinded, modified or withdrawn in
any
way as of the date of execution of this Agreement and which will not be
subsequently rescinded, modified or withdrawn in any way prior to the Closing
Date, except that the resolutions set forth in clauses (b)(i) and (ii) above
may
be rescinded if and to the extent that the board of directors of NBM reasonably
determines in good faith after consultation with NBM’s Financial Advisors and
upon written advice of counsel to NBM that consummation of the transactions
contemplated by this Agreement could reasonably be expected to constitute a
breach of the board of directors’ fiduciary duties to the stockholders of
NBM.
(c) Subject
to the adoption of this Agreement by the NBM stockholders (by a majority of
the
outstanding NBM Shares) and to the filing of all requisite applications with
Regulatory Authorities and the receipt of all requisite approvals by
Governmental Authorities and Regulatory Authorities, NBM has all requisite
corporate power and authority to enter into this Agreement and to perform all
of
its obligations hereunder.
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3.05. Authorized
and Effective Agreement.
Assuming
the due authorization, execution and delivery by Rurban and Merger Corp., this
Agreement constitutes the legal, valid and binding obligation of NBM,
enforceable against NBM in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting the enforcement of creditors’ rights generally, by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law) and by an implied covenant of good faith and fair dealing.
NBM has the right, power, authority and capacity to execute and deliver this
Agreement and, subject to the required adoption of this Agreement by the NBM
stockholders, the obtaining of appropriate approvals by Regulatory Authorities
and Governmental Authorities and the expiration of applicable regulatory waiting
periods, to perform its obligations under this Agreement.
3.06. Financial
Statements of NBM.
Included
in Section 3.06 of the NBM Disclosure Schedule are copies of (a) the compiled
(unaudited) financial statements of NBM (parent only), consisting of balance
sheets as of June 30, 2007, 2006 and 2005, and the related statements of income,
stockholders’ equity and cash flows for the periods ended June 30, 2007, 2006
and 2005, including the related notes and the report thereon of Baden Gage
&
Xxxxxxxxx LLC, (b) the reviewed (unaudited) financial statements of National
Bank of Montpelier, consisting of balance sheets as of July 31, 2007, 2006
and
2005, including the related notes and the report thereon of Baden Gage &
Xxxxxxxxx LLC and (c) the unaudited balance sheets of NBM and National Bank
of Montpelier as of March 31, 2008 (the “NBM
Balance Sheet Date”)
and
the related unaudited statements of income and cash flows for the respective
fiscal year-to-date periods ended March 31, 2008 (collectively, all of such
financial statements are referred to as the “NBM
Financial Statements”).
The
NBM Financial Statements (i) have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”),
except
for such deviations from GAAP which, individually or in the aggregate, would
not
result in a negative Financial Impact (as defined below) of greater than
$250,000, (ii) have been prepared on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and (iii) present
fairly, in all material respects, the consolidated financial condition of NBM
as
of the dates thereof and its consolidated results of operations and cash flows
for the periods then ended (subject, in the case of the NBM Financial Statements
for interim periods, to normal year-end audit adjustments and the absence of
notes thereto). As used herein, the term “Financial
Impact”
shall
mean the amount of the change in the total stockholders’ equity of NBM at March
31, 2008 that would result from the restatement of the NBM Financial Statements
in accordance with GAAP; provided, however, that any such change which is
attributable to the determination of the allowance of loan losses reflected
on
the NBM Financial Statements shall be excluded. In the event that the
restatement of the NBM Financial Statements in accordance with GAAP would result
in a Financial Impact of greater than $250,000, then the Cash Amount payable
under Article Two shall be reduced to an amount equal to (A) $25,250,000
less
the
amount of such Financial Impact, divided by (B) 219,334.
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3.07. Absence
of Undisclosed Liabilities.
Except
as set forth in the NBM Financial Statements or in Section 3.07 of the NBM
Disclosure Schedule and except as arising under this Agreement, neither NBM
nor
Bank of Montpelier has any debts, liabilities, guarantees or obligations
(whether accrued, absolute, contingent or otherwise) as of the date hereof,
other than debts, liabilities, guarantees and obligations which, individually
or
in the aggregate, could not reasonably be expected to have a material adverse
effect on NBM and its Subsidiaries on a consolidated basis. Except as set forth
in Section 3.07 of the NBM Disclosure Schedule, all debts, liabilities,
guarantees and obligations of NBM and Bank of Montpelier incurred since the
NBM
Balance Sheet Date have been incurred in the ordinary course of business and
are
usual and normal in amount both individually and in the aggregate.
3.08. Absence
of Changes.
Except
as set forth in Section 3.08 of the NBM Disclosure Schedule, since the NBM
Balance Sheet Date: (a) there has not been any material adverse change in
the business, operations, assets or financial condition of NBM and Bank of
Montpelier taken as a whole and, to the knowledge of NBM, no fact or condition
exists which NBM believes will cause a material adverse effect in the future;
and (b) NBM has not taken or permitted any of the actions described in Section
5.01(b) of this Agreement. For purposes of this Agreement, an individual will
be
deemed to have “knowledge”
of
a
particular fact or other matter if (i) such individual is actually aware of
such
fact or other matter; or (ii) a prudent individual would be expected to discover
or otherwise become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the existence
of
such fact or other matter. NBM or Rurban will be deemed to have “knowledge”
of
a
particular fact or other matter if any individual who is serving as a director
or executive officer of such corporation or of a Subsidiary of such corporation,
has, or at any time had, knowledge of such fact or other matter.
3.09. Loan
Documentation.
The
documentation (“Loan
Documentation”)
governing or relating to the loan and credit-related assets (“Loan
Assets”)
included in the loan portfolio of Bank of Montpelier is legally sufficient
for
the purposes intended thereby and creates enforceable rights of Bank of
Montpelier in accordance with the terms of such Loan Documentation, except
for
such insufficiencies as would not reasonably be expected to have a material
adverse effect on NBM and Bank of Montpelier taken as a whole, and subject
to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
convey-ance and other similar laws relating to or affecting the enforcement
of
creditors’ rights generally, by general equitable principles (regardless of
whether enforceability is considered in a proceeding in equity or at law) and
by
an implied covenant of good faith and fair dealing, except to the extent such
enforceability may be limited by laws relating to safety and soundness of
insured depository institutions as set forth in 12 U.S.C. § 1818(b) or by
appointment of a conservator by the FDIC. Except as set forth in Section 3.09
of
the NBM Disclosure Schedule, no debtor under any of the Loan Documentation
has
asserted any claim or defense with respect to the subject matter thereof. Except
as set forth in Section 3.09 of the NBM Disclosure Schedule, neither NBM
nor Bank of Montpelier is a party to any loan, including any loan guaranty,
with
any director, executive officer or 5% stockholder of NBM or Bank of Montpelier,
or any person, corporation or enterprise controlling, controlled by or under
common control with either NBM or Bank of Montpelier. All loans and extensions
of credit that have been made by Bank of Montpelier comply with applicable
regulatory limitations and procedures.
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3.10. Allowance
for Loan Losses.
Except
as set forth in Section 3.10 of the NBM Disclosure Schedule, there is no loan
which was made by Bank of Montpelier and which is reflected as an asset of
NBM
or Bank of Montpelier on the NBM Financial Statements that (a) is 90 days
or more delinquent, (b) has been classified by examiners (regulatory or
internal) as “Substandard,” “Doubtful” or “Loss” or (c) has been designated
by management of NBM or Bank of Montpelier as “special mention.” The allowance
for loan losses reflected on the NBM Financial Statements was, as of each
respective date, determined in accordance with all rules and regulations
applicable to NBM and Bank of Montpelier and was adequate as of the respective
date thereof to provide for reasonably anticipated losses on outstanding loans,
except for such failures and inadequacies that would not reasonably be expected
to have a material adverse effect on NBM or Bank of Montpelier.
3.11. Reports
and Records.
NBM and
Bank of Montpelier have filed all reports and maintained all books and records
required to be filed or maintained by them under the rules and regulations
of
the OCC, the Board of Governors of the Federal Reserve System (the “FRB”)
and
the FDIC, except for such reports and records the failure to file or maintain
which would not reasonably be expected to have a material adverse effect on
NBM.
The books and records of NBM and Bank of Montpelier have been fully, properly
and accurately maintained in all material respects and have been maintained
in
accordance with sound business practices, there are no material inaccuracies
or
discrepancies of any kind contained or reflected therein, and they fairly
reflect the substance of events and transactions included therein. All such
documents and reports complied in all material respects with other applicable
requirements of law and rules and regulations in effect at the time such
documents and reports were filed and contained in all material respects the
information required to be stated therein.
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3.12. Taxes.
Except
as
set forth in Section 3.12 of the NBM Disclosure Schedule, NBM and Bank of
Montpelier have timely filed all returns, statements, reports and forms
(including, without limitation, elections, declarations, disclosures, claims
for
refund, schedules, estimates and information returns) (collectively, the
“Tax
Returns”)
with
respect to all federal, state, local and foreign income, gross income, gross
receipts, gains, premium, sales, use, ad valorem, transfer, franchise,
commercial activity, profits, withholding, payroll, employment, excise,
severance, stamp, occupancy, license, lease, environmental, customs, duties,
property, windfall profits and all other taxes (including, without limitation,
any interest, penalties or additions to tax with respect thereto, individually
a
“Tax,”
and
collectively, “Taxes”)
required to be filed with the appropriate tax authority. All such Tax Returns
were true, correct and complete in all material respects. NBM and Bank of
Montpelier have paid and discharged all Taxes due (whether reflected on such
Tax
Returns or otherwise), other than such Taxes that are adequately reserved as
shown on the NBM Financial Statements (excluding any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) or have
arisen in the ordinary course of business since the NBM Balance Sheet Date
and
for which adequate reserves have been established. Except as set forth in
Section 3.12 of the NBM Disclosure Schedule, neither the Internal Revenue
Service (the “IRS”)
nor
any other taxing agency or authority, domestic or foreign, has asserted, is
now
asserting or, to the knowledge of NBM, is threatening to assert against NBM
or
Bank of Montpelier any deficiency or claim for additional Taxes. There are
no
unexpired waivers by NBM or Bank of Montpelier of any statute of limitations
with respect to Taxes. No extension of time within which to file any Tax Return
(for a period with respect to which the statute of limitations has not expired)
has been filed, or has been requested or granted. The accruals and reserves
for
Taxes reflected in the NBM Financial Statements (excluding any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) are adequate for the periods covered. NBM and Bank of Montpelier have
withheld or collected and paid over to the appropriate Governmental Authorities
or are properly holding for such payment all Taxes required by law to be
withheld or collected. There are no liens for Taxes upon the assets of NBM
or
Bank of Montpelier, other than liens for current Taxes not yet due and payable.
Neither NBM nor Bank of Montpelier has agreed to make, or is required to make,
any adjustment under Section 481(a) of the Internal Revenue Code of 1986, as
amended (the “Code”).
Except as set forth in Section 3.12 of the NBM Disclosure Schedule, neither
NBM
nor Bank of Montpelier is a party to any agreement, contract, arrangement or
plan that has resulted, or could result, individually or in the aggregate,
in
the payment of “excess parachute payments” within the meaning of Section 280G of
the Code. Neither NBM nor Bank of Montpelier has ever been a member of an
affiliated group of corporations, within the meaning of Section 1504 of the
Code, other than an affiliated group of which NBM is or was the common parent
corporation. Neither NBM nor Bank of Montpelier has any liability for the Taxes
of any other person or entity under Treasury Department Regulation Section
1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise. None of the assets of NBM
or
Bank of Montpelier directly or indirectly secures any debt the interest on
which
is tax-exempt under Section 103(a) of the Code. None of the assets of NBM
or Bank of Montpelier is “tax-exempt use property” within the meaning of
Section 168(h) of the Code. Neither NBM nor Bank of Montpelier is, and none
have been, a United States real property holding corporation (as defined in
Section 897(c)(2) of the Code) during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code. No Tax is required to be withheld
pursuant to Section 1445 of the Code as a result of the transactions
contemplated by this Agreement. Neither NBM nor Bank of Montpelier is a party
to
any joint venture, partnership or other entity, agreement or contract that
could
be treated as a partnership for federal income tax purposes. Neither NBM nor
Bank of Montpelier has any excess loss account (as defined in Treasury
Department regulation Section 1.1502-19) with respect to the stock of Bank
of Montpelier. Neither NBM nor Bank of Montpelier is a party to, or bound by,
any tax allocation or sharing agreement. NBM has disclosed on its federal income
Tax Returns all positions taken therein that could give rise to a substantial
understatement of federal income tax within the meaning of Section 6662 of
the
Code.
3.13. Property
and Title.
Section
3.13 of the NBM Disclosure Schedule lists and describes all real property,
and
any leasehold interest in real property, now or formerly owned or held by NBM
or
Bank of Montpelier and used in the business of NBM or Bank of Montpelier
(collectively, the “NBM
Real Properties”).
True
and complete copies of all leases of NBM Real Properties to which NBM or Bank
of
Montpelier is a party have been provided to Rurban in Section 3.13 of the NBM
Disclosure Schedule. Such leasehold interests have not been assigned or
subleased. All NBM Real Properties which are owned by NBM or Bank of Montpelier
are free and clear of all mortgages, liens, security interests, defects,
encumbrances, easements, restrictions, reservations, conditions, covenants,
agreements, encroachments, rights of way and zoning laws, except (a) those
set forth in Section 3.13 of the NBM Disclosure Schedule; (b) easements,
restrictions, reservations, conditions, covenants, rights of way, zoning laws
and other defects and irregularities in title and encumbrances which do not
materially impair the use thereof for the purposes for which they are held;
and
(c) liens for current Taxes not yet due and payable. NBM and Bank of
Montpelier own, and are in rightful possession of, and have good title to,
all
of the other assets indicated in the NBM Financial Statements as being owned
by
NBM or Bank of Montpelier, free and clear of any charge, mortgage, pledge,
security interest, hypothecation, restriction, claim, option, lien, encumbrance
or interest of any persons whatsoever except (x) those described in the
Section 3.13 of the NBM Disclosure Schedule and (y) those assets disposed
of in the ordinary course of business consistent with past practices. All of
the
assets of NBM and Bank of Montpelier are in good operating condition, except
for
normal maintenance and routine repairs, and are reasonably adequate to continue
to conduct the respective businesses of NBM and Bank of Montpelier as such
businesses are presently being conducted.
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3.14. Legal
Proceedings.
Except
as set forth in Section 3.14 of the NBM Disclosure Schedule, there are no
actions, suits, proceedings, claims or investigations pending or appealable
or,
to the knowledge of NBM and Bank of Montpelier, threatened in any court, before
any governmental agency or instrumentality or in any arbitration proceeding
against or by NBM or Bank of Montpelier.
3.15. Regulatory
Matters.
Neither
NBM, Bank of Montpelier nor their respective properties is a party to or subject
to any order, judgment, decree, agreement, memorandum of understanding or
similar arrangement with, or a commitment letter or similar submission to,
or
extraordinary supervisory letter from, any court or federal or state
governmental agency or authority, including any such agency or authority charged
with the supervision or regulation of financial institutions (or their holding
companies) or issuers of securities or engaged in the insurance of deposits
(including, without limitation, the OCC, the FRB and the FDIC) or the
supervision or regulation of NBM or Bank of Montpelier (collectively, the
“Regulatory
Authorities”).
Neither NBM nor Bank of Montpelier has been advised by any Regulatory Authority
that such Regulatory Authority is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
judgment, decree, agreement, memorandum of understanding or similar arrangement,
commitment letter, supervisory letter or similar submission.
3.16. No
Conflict.
Except
as set forth in Section 3.16 of the NBM Disclosure Schedule, subject to the
required adoption of this Agreement by the stockholders of NBM, receipt of
the
required approvals of Governmental Authorities and Regulatory Authorities and
expiration of applicable regulatory waiting periods, the execution, delivery
and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, by NBM do not and will not (a) conflict with, or
result in a violation of, or result in the breach of or a default (or which
with
notice or lapse of time would result in a default) under, any provision of:
(i) any federal, state or local law, regulation, ordinance, order, rule or
administrative ruling of any administrative agency or commission or other
federal, state or local governmental authority or instrumentality (each, a
“Governmental
Authority”)
applicable to NBM or Bank of Montpelier or any of their respective properties;
(ii) the certificate of incorporation or bylaws of NBM or the governing
instruments of Bank of Montpelier; (iii) any material agreement, indenture
or instrument to which NBM or Bank of Montpelier is a party or by which any
of
them or of their respective properties or assets may be bound; or (iv) any
order, judgment, writ, injunction or decree of any court, arbitration panel
or
any Governmental Authority applicable to NBM or Bank of Montpelier;
(b) result in the creation or acceleration of any security interest,
mortgage, option, claim, lien, charge or encumbrance upon or interest in any
property of NBM or Bank of Montpelier, except to the extent that such creation
or acceleration will not have a material adverse effect on NBM; or
(c) violate the terms or conditions of, or result in the cancellation,
modification, revocation or suspension of, any material license, approval,
certificate, permit or authorization held by NBM or Bank of
Montpelier.
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3.17. Brokers
and Finders.
Except
for the fees paid or payable to Austin Associates LLC (“NBM’s
Financial Advisors”),
which
fees shall be paid in full by NBM and/or Bank of Montpelier prior to the
Effective Time, there are no fees or commissions of any sort whatsoever claimed
by, or payable by, NBM or Bank of Montpelier to, any broker, finder,
intermediary, attorney, accountant or any other similar person in connection
with effecting this Agreement or the transactions contemplated hereby, except
for ordinary and customary legal and accounting fees.
3.18. Employment
Agreements.
Except
as disclosed in Section 3.18 of the NBM Disclosure Schedule, neither NBM nor
Bank of Montpelier is a party to any employment, change in control, severance
or
consulting agreement not terminable at will or obligated to pay any severance
bonus or other compensation as a result of the Merger. Neither NBM nor Bank
of
Montpelier is a party to, bound by or negotiating, any collective bargaining
agreement, nor are any of their respective employees represented by any labor
union or similar organization. NBM and Bank of Montpelier are in compliance
in
all material respects with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and hours,
and neither NBM nor Bank of Montpelier has engaged in any unfair labor practice.
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3.19.
|
Employee
Benefit Plans.
|
(a) Section
3.19(a) of the NBM Disclosure Schedule contains a complete and accurate list
of
all bonus, incentive, deferred compensation, pension (including, without
limitation, Pension Plans as defined below), retirement, profit-sharing, thrift,
savings, employee stock ownership, stock bonus, stock purchase, restricted
stock, stock option, severance, welfare (including, without limitation, “welfare
plans” within the meaning of Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)),
fringe benefit plans, employment or severance agreements and all similar
practices, policies and arrangements maintained or contributed to (currently
or
within the last six years), other than those described in Department of Labor
(“DOL”)
Reg.
§§ 2510.3-1(b) through (k), 2510.3-2(d), 2510.3-3(b), by (i) NBM or Bank of
Montpelier and in which any employee or former employee (the “Employees”),
consultant or former consultant (the “Consultants”),
officer or former officer (the “Officers”),
or
director or former director (the “Directors”)
of NBM
or Bank of Montpelier participates or to which any such Employees, Consultants,
Officers or Directors are parties or (ii) any ERISA Affiliate (as defined
below) (collectively, the “Compensation and Benefit Plans”).
Neither NBM nor Bank of Montpelier has any commitment to create any additional
Compensation and Benefit Plan or to modify or change any existing Compensation
and Benefit Plan, except to the extent required by applicable law.
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(b) To
the
knowledge of NBM and Bank of Montpelier, except as described in Section 3.19(b)
of the NBM Disclosure Schedule, each Compensation and Benefit Plan has been
operated and administered in all material respects in accordance with its terms
and with applicable law, including, but not limited to, ERISA, the Code, the
Securities Act of 1933, as amended (the “Securities
Act”),
the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
the
Age Discrimination in Employment Act, or any regulations or rules promulgated
thereunder, and all filings, disclosures and notices required by ERISA, the
Code, the Securities Act, the Exchange Act, the Age Discrimination in Employment
Act and any other applicable law have been timely made. Each Compensation and
Benefit Plan which is an “employee pension benefit plan” within the meaning of
Section 3(2) of ERISA (a “Pension Plan”)
and
which is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter (including a determination that the
related trust under such Compensation and Benefit Plan is exempt from tax under
Section 501(a) of the Code) from the IRS and NBM is not aware of any
circumstances likely to result in revocation of any such favorable determination
letter. There is no material pending or, to the knowledge of NBM, threatened,
legal action, suit or claim relating to the Compensation and Benefit Plans
other
than routine claims for benefits thereunder. Neither NBM nor Bank of Montpelier
has, directly or indirectly, engaged in a transaction, or omitted to take any
action, with respect to any Compensation and Benefit Plan that would reasonably
be expected to subject NBM or Bank of Montpelier to a tax or penalty imposed
by
either Section 4975 of the Code or Section 502 of ERISA.
(c) None
of
NBM, Bank of Montpelier nor any entity which is considered one employer with
NBM
under Section 4001(a)(14) of ERISA or Section 414(b), (c) or (m) of
the Code (an “ERISA
Affiliate”)
is
currently, or has been in the six (6) years prior to the date of this Agreement,
a sponsor of, or obligated to contribute to, any Pension Plan subject to Title
IV of ERISA. There is no pending investigation or enforcement action by the
Pension Benefit Guaranty Corporation (“PBGC”),
the
DOL, the IRS or any other Governmental Authority with respect to any
Compensation and Benefit Plan.
(d) All
contributions required to be made under the terms of any Compensation and
Benefit Plan have been timely made or have been reflected on the NBM Financial
Statements.
(e) Except
as
disclosed in Section 3.19(e) of the NBM Disclosure Schedule, neither NBM nor
Bank of Montpelier has any obligations to provide retiree health or retiree
life
insurance or other retiree death benefits under any Compensation and Benefit
Plan, other than benefits mandated by Section 4980B of the Code. Except as
disclosed in Section 3.19(e) of the NBM Disclosure Schedule, there has been
no communication to Employees by NBM or Bank of Montpelier that would reasonably
be expected to promise or guarantee such Employees retiree health or retiree
life insurance or other retiree death benefits on a permanent basis.
(f) NBM
and
Bank of Montpelier do not maintain any Compensation and Benefit Plans covering
foreign Employees.
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(g) With
respect to each Compensation and Benefit Plan, if applicable, NBM has provided
or made available to Rurban, true and complete copies of: (i) the most
recently restated version of each plan document and all subsequent amendments
thereto; (ii) the most recently restated version of each trust instrument
and insurance contract and all subsequent amendments thereto; (iii) the two
most recent annual returns (Forms 5500) and financial statements; (iv) the
most
recently restated summary plan descriptions and all subsequent summaries of
material modifications; (v) forms filed with the PBGC within the twelve
consecutive months ending immediately before the date hereof (other than for
premium payments); (vi) the most recent determination letter issued by the
IRS with respect to each Compensation and Benefit Plan that is intended to
comply with Code § 401(a); (vii) any Form 5310, Form 5310A, Form 5300
or Form 5330 filed with the IRS within the twenty-four consecutive months
ending immediately before the date hereof; and (viii) the most recent
nondiscrimination tests performed under ERISA and the Code (including but not
limited to Code Section 401(k) and 401(m) tests).
(h) Except
as
disclosed in Section 3.19(h) of the NBM Disclosure Schedule, the consummation
of
the transactions contemplated by this Agreement would not, directly or
indirectly (including, without limitation, as a result of any termination of
employment prior to or following the Effective Time), reasonably be expected
to
(i) entitle any Employee, Officer, Consultant or Director to any payment
(including severance pay or similar compensation) or any increase in
compensation, (ii) result in the vesting or acceleration of any benefits
under any Compensation and Benefit Plan, except as required by law or
(iii) result in any material increase in benefits payable under any
Compensation and Benefit Plan.
(i) Except
as
disclosed on Section 3.19(i) of the NBM Disclosure Schedule, neither NBM
nor Bank of Montpelier maintains any compensation plans, programs or
arrangements the payments under which would not reasonably be expected to be
deductible as a result of the limitations under Section 162(m) of the Code
and the regulations issued thereunder.
(j) Except
as
disclosed on Section 3.19(j) of the NBM Disclosure Schedule, as a result,
directly or indirectly, of the transactions contemplated by this Agreement
(including, without limitation, as a result of any termination of employment
prior to or following the Effective Time), none of NBM, Rurban or the Surviving
Corporation, or any of their respective Subsidiaries will be obligated to make
a
payment that would be characterized as an “excess parachute payment” to an
individual who is a “disqualified individual” (as such terms are defined in
Section 280G of the Code) of NBM on a consolidated basis, regardless of
whether such payment is reasonable compensation for personal services performed
or to be performed in the future.
3.20. Compliance
with Laws.
Except
with respect to Environmental Laws and Taxes, which are subject to Sections
3.24
and 3.12, respectively, each of NBM and Bank of Montpelier:
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(a) has
been
and is in compliance with all applicable federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders or decrees
applicable thereto or to the employees conducting such business, including,
without limitation, the Equal Credit Opportunity Act, as amended, the Fair
Housing Act, as amended, the Federal Community Reinvestment Act, as amended
(“CRA”),
the
Home Mortgage Disclosure Act, as amended, the Bank Secrecy Act, as amended,
the
USA Patriot Act and all other applicable fair lending laws and other laws
relating to discriminatory business practices, except for failures to be in
compliance which, individually or in the aggregate, have not had or would not
reasonably be expected to have a material adverse effect on NBM and Bank of
Montpelier taken as a whole;
(b) has
all
permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, all Governmental Authorities
and
Regulatory Authorities that are required in order to permit it to own or lease
its properties and to conduct its business as presently conducted, except where
the failure to obtain any of the foregoing or to make any such filing,
application or registration has not had or would not reasonably be expected
to
have a material adverse effect on NBM or Bank of Montpelier; and all such
permits, licenses, certificates of authority, orders and approvals are in full
force and effect and no suspension or cancellation of any of them has been
threatened in writing, except for such failures to be in full force and effect
which, individually or in the aggregate, have not had or would not reasonably
be
expected to have a material adverse effect on NBM and Bank of Montpelier taken
as a whole; and
(c) has
received no written notification or communication from any Governmental
Authority or Regulatory Authority, (i) asserting that NBM or Bank of
Montpelier is not in compliance with any of the statutes, regulations or
ordinances which such Governmental Authority or Regulatory Authority enforces,
except as set forth in examination reports of the Regulatory Authorities; or
(ii) threatening to revoke any license, franchise, permit or governmental
authorization, which has not been resolved to the satisfaction of the
Governmental Authority or Regulatory Authority that sent such notification
or
communication. There is no event which has occurred that, to the knowledge
of
NBM, would reasonably be expected to result in the revocation of any such
license, franchise, permit or governmental authorization.
3.21 Insurance.
(a) Section
3.21 of the NBM Disclosure Schedule lists all of the insurance policies, binders
or bonds maintained by NBM or Bank of Montpelier and a description of all claims
filed by NBM and Bank of Montpelier against the insurers of NBM and Bank of
Montpelier since January 1, 2005. All such insurance policies are in full force
and effect, neither NBM nor Bank of Montpelier is in material default thereunder
and all claims thereunder have been filed in due and timely
fashion.
(b) The
savings accounts and deposits of Bank of Montpelier are insured up to applicable
limits by the FDIC in accordance with the Federal Deposit Insurance Act, and
Bank of Montpelier has paid all assessments and filed all reports required
by
the Federal Deposit Insurance Act.
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3.22. Governmental
and Third-Party Proceedings.
Except
as set forth in Section 3.22 of the NBM Disclosure Schedule, no consent,
approval, authorization of, or registration, declaration or filing with, any
court, Governmental Authority, Regulatory Authority or any other third party
is
required to be made or obtained by NBM or Bank of Montpelier in connection
with
the execution, delivery or performance by NBM of this Agreement or the
consummation by NBM of the transactions contemplated hereby, except for:
(a) filings of applications and notices, as applicable, with and the
approval of certain federal banking authorities; (b) the filing of the
appropriate certificate of merger with the Delaware Secretary of State; and
(c)
the adoption of this Agreement by the NBM stockholders. As of the date hereof,
NBM is not aware of any reason why the approvals set forth in Section 8.03(b)
will not be received without the imposition of a condition, restriction or
requirement of the type described in Section 8.03(b).
3.23. Contracts.
Section
3.23 of the NBM Disclosure Schedule sets forth a true and complete list of
all
contracts, agreements, commitments, arrangements or other instruments in
existence as of the date of this Agreement (other than those which have been
performed completely and those related to loans made by NBM or Bank of
Montpelier, deposits in Bank of Montpelier, investment securities held by NBM
or
Bank of Montpelier, borrowings by NBM or Bank of Montpelier or contracts listed
or referenced elsewhere in the NBM Disclosure Schedule): (a) which involve
the
payment by or to NBM or Bank of Montpelier of more than $10,000 in connection
with the purchase of property or goods or the performance of services; or (b)
which are not in the ordinary course of their respective businesses. True,
complete and correct copies of all such contracts have been delivered to Rurban.
Neither NBM nor Bank of Montpelier, nor, to the knowledge of NBM, any other
party thereto, is in default under any such contract, agreement, commitment,
arrangement or other instrument to which it is a party, by which its respective
assets, business or operations may be bound or affected in any way, or under
which it or its respective assets, business or operations receive benefits,
and
there has not occurred any event that, with the lapse of time or the giving
of
notice or both, would constitute such a default.
3.24. Environmental
Matters.
Except
as otherwise disclosed in Section 3.24 of the NBM Disclosure
Schedule:
(a) To
the
knowledge of NBM, NBM and Bank of Montpelier are and have been at all times
in
compliance in all material respects with all applicable Environmental Laws,
and,
to the knowledge of NBM, neither NBM nor Bank of Montpelier has engaged in
any
activity in violation of any applicable Environmental Law;
(b) (i) no
investigations, inquiries, orders, hearings, actions or other proceedings by
or
before any court, Governmental Authority or Regulatory Authority are pending
or,
to the knowledge of NBM, have been threatened or noticed in connection with
any
activities of NBM or Bank of Montpelier or any NBM Real Properties or
improvements thereon, and (ii) no investigations, inquiries, orders,
hearings, actions or other proceedings by or before any court, Governmental
Authority or Regulatory Authority are pending or, to the knowledge of NBM,
threatened or noticed in connection with any real properties in respect of
which
Bank of Montpelier has foreclosed or holds a mortgage or mortgages (hereinafter
referred to as the “NBM
Real Estate Collateral”);
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(c) to
the
knowledge of NBM, no claims are pending or threatened or noticed by any third
party against NBM or Bank of Montpelier, or with respect to the NBM Real
Properties or improvements thereon, or the NBM Real Estate Collateral or
improvements thereon, relating to damage, contribution, cost recovery,
compensation, loss, injunctive relief, remediation or injury resulting from
any
Hazardous Materials which have not been resolved to the satisfaction of the
parties involved;
(d) to
the
knowledge of NBM, no Hazardous Materials have been integrated into the NBM
Real
Properties or improvements thereon or any component thereof, or, to the
knowledge of NBM, the NBM Real Estate Collateral or improvements thereon or
any
component thereof in such manner or quantity as (i) may reasonably be expected
to or in fact would pose a threat to human health or (ii) would reasonably
be
expect to have a material adverse effect on NBM;
(e) to
the
knowledge of NBM, no portion of the NBM Real Properties or improvements thereon,
or the NBM Real Estate Collateral or improvements thereon is located within
500
feet of (i) a release of Hazardous Materials which has been reported or is
required to be reported under any Environmental Law or (ii) the location of
any site used, in the past or presently, for the disposal of any Hazardous
Materials; and
(f) neither
NBM nor Bank of Montpelier has knowledge or reason to believe that (i) any
of the NBM Real Properties or improvements thereon or the NBM Real Estate
Collateral or improvements thereon has been used for the treatment, storage
or
disposal of Hazardous Materials or has been contaminated by Hazardous Materials,
(ii) any of the business operations of NBM or Bank of Montpelier have
contaminated lands, waters or property of others with Hazardous Materials,
except routine, office-generated municipal solid waste properly disposed of
into
licensed solid waste disposal facilities, or (iii) any of the NBM Real
Properties or improvements thereon, or the NBM Real Estate Collateral or
improvements thereon have in the past or presently contain underground storage
tanks, friable asbestos materials or PCB-containing equipment.
(g) For
purposes of this Agreement, (a) “Environmental
Law”
means
all applicable local, state and federal environmental, health and safety laws
and regulations, including, without limitation, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation and
Liability Act (“CERCLA”),
the
Clean Water Act, the Federal Clean Air Act, and the Occupational Safety and
Health Act, each as amended, regulations promulgated thereunder, and state
or
local counterparts; and (b) “Hazardous
Materials”
means,
collectively, (a) any “hazardous substance” as defined by the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, and
regulations promulgated thereunder, (b) any “hazardous waste” as defined by the
Resource Conservation and Recovery Act, as amended through the date hereof,
or
regulations promulgated thereunder, and (c) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material or substance within the meaning
of any applicable federal, state or local law relating to or imposing liability
or standards of conduct concerning any hazardous, toxic or dangerous waste,
substance or material.
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3.25. Takeover
Laws.
NBM has
taken all action required to be taken by NBM in order to exempt this Agreement,
the Voting Agreement and the transactions contemplated hereby and thereby from,
and this Agreement, the Voting Agreement and the transactions contemplated
hereby and thereby are exempt from, (i) the requirements of any “moratorium,”
“control share,” “fair price,” “affiliate transaction,” “business combination”
or other antitakeover laws and regulations of any state (collectively,
“Takeover
Laws”)
applicable to it, including, without limitation, such Takeover Laws of the
State
of Delaware; and (ii) any applicable provisions of the certificate of
incorporation of NBM, the bylaws of NBM, and/or the governing documents of
Bank
of Montpelier.
3.26. Risk
Management Instruments.
Neither
NBM nor Bank of Montpelier has any material interest rate swaps, caps, floors,
option agreements, futures and forward contracts or other similar risk
management arrangements, whether entered into for NBM’s own account, or for the
account of Bank of Montpelier or any of its customers. Neither NBM nor Bank
of
Montpelier, nor to NBM’s knowledge any other party thereto, is in breach of any
of its obligations under any interest rate swap, cap, floor, option agreement,
futures or forward contract or other similar risk management arrangement as
to
which NBM or Bank of Montpelier has any interest.
3.27. Repurchase
Agreements.
Except
as set forth in Section 3.27 of the NBM Disclosure Schedule, neither NBM nor
Bank of Montpelier has purchased securities subject to an agreement to resell.
3.28. CRA
Compliance.
Neither
NBM nor Bank of Montpelier has received any notice of non-compliance with the
applicable provisions of CRA and the regulations promulgated thereunder, and
Bank of Montpelier has received a CRA rating of satisfactory or better from
the
OCC as a result of its most recent CRA examination. Neither NBM nor Bank of
Montpelier knows of any fact or circumstance or set of facts or circumstances
which would be reasonably likely to cause NBM or Bank of Montpelier to receive
any notice of non-compliance with such provisions or cause the CRA rating of
NBM
or Bank of Montpelier to fall below satisfactory.
3.29. Investment
Securities. Except
as
disclosed in Section 3.29 of the NBM Disclosure Schedule, each of NBM and Bank
of Montpelier has good title to all securities held by it (except securities
sold under repurchase agreement or held in any fiduciary or agency capacity),
free and clear of any charge, mortgage, pledge, security interest,
hypothecation, restriction, claim, option, lien, encumbrance or interest of
any
person or persons whatsoever, except to the extent such securities are pledged
in the ordinary course of business consistent with prudent banking practices
to
secure the obligations of NBM or Bank of Montpelier or as collateral for public
funds. .
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3.30. Intellectual
Property.
(a) Except
as
set forth in Section 3.30 of the NBM Disclosure Schedule, (a) NBM and Bank
of Montpelier own, or have all rights necessary to use (in each case, free
and
clear of any liens, obligations for royalties or transfer restrictions, except
for licenses for commonly available software and licenses to use interfaces
or
data that are contained in services agreements), all Intellectual Property
(as
defined below) used in or necessary for the conduct of their respective
businesses as currently conducted, except to the extent that such failure to
own
or have all rights necessary to use would not reasonably be expected to have
a
material adverse effect on NBM; (b) with respect to each item of
Intellectual Property owned or used by NBM or Bank of Montpelier immediately
prior to the Effective Time: (i) such item is not, to NBM’s knowledge,
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge to which NBM or Bank of Montpelier is a party; (ii) to NBM’s
knowledge, no action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand to which NBM or Bank of Montpelier is a party or
of
which NBM or Bank of Montpelier has knowledge is pending, or, to the knowledge
of NBM or Bank of Montpelier, is threatened, claimed or asserted which
challenges the legality, validity, enforceability, use or ownership of such
item; and (iii) neither NBM nor Bank of Montpelier has agreed to indemnify
any person for or against any interference, infringement, misappropriation
or
other conflict with respect to such item, excluding agreements to indemnify
under licenses for commonly available software and pertaining to licenses to
use
interfaces or data that are contained in services agreements; and (c) to
NBM’s knowledge, no Intellectual Property owned by NBM or Bank of Montpelier is
being used or enforced in a manner that would result in the abandonment,
cancellation or unenforceability of such Intellectual Property.
(b) To
the
extent that any Intellectual Property is held by NBM or Bank of Montpelier
pursuant to any license, sublicense, agreement or permission (excluding licenses
for commonly available software and licenses to use interfaces or data that
are
contained in services agreements): (A) such license, sublicense, agreement
or permission covering the item is legal, valid, binding, enforceable and in
full force and effect; and (B) to NBM’s knowledge, no event has occurred
which with notice or lapse of time would constitute a breach or default or
permit termination, modification or acceleration thereunder.
(c) For
purposes of this Agreement, “Intellectual
Property”
shall
mean trademarks and service marks, the goodwill associated with the foregoing
and registrations in any jurisdiction of, and applications in any jurisdiction
to register, the foregoing, including any extension, modification or renewal
of
any such registration or application; inventions and discoveries that may be
patentable, in any jurisdiction; patents, applications for patents (including,
without limitation, divisions, continuations, continuations in part and renewal
applications), and any renewals, extensions or reissues thereof, in any
jurisdiction; trade secrets; copyrightable works; and registrations or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof.
3.31. NBM
Books and Records.
True and
complete copies of all documents listed in the NBM Disclosure Schedule have
been
made available or provided to Rurban. The books of account, stock record books
and other financial and corporate records of NBM and Bank of Montpelier, all
of
which have been made available to Rurban, are complete and correct in all
material respects, except for portions of records of various meetings that
relate specifically to the consideration of the transactions contemplated by
this Agreement.
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3.32. Ownership
of Rurban Shares.
As of
the date hereof, except as otherwise disclosed in Section 3.32 of the NBM
Disclosure Schedule, neither NBM nor Bank of Montpelier nor, to the knowledge
of
NBM, any of their affiliates or associates (as such terms are defined under
the
Exchange Act), (a) beneficially owns, directly or indirectly, any shares of
Rurban or (b) is a party to any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or disposing of any shares of
Rurban.
3.33. Fairness
Opinion.
The
board of directors of NBM has received the opinion of NBM’s Financial Advisors
dated the date of this Agreement to the effect that the consideration to be
received by the NBM stockholders in the Merger is fair, from a financial point
of view, to the NBM stockholders, and such opinion has not been withdrawn or
modified.
3.34. Internal
Controls.
The
chief executive officer of NBM has evaluated internal control over financial
reporting as of the end of the periods covered by the NBM Financial Statements.
Based on such evaluation, NBM has disclosed to Rurban (i) all significant
deficiencies and material weaknesses of which NBM has knowledge in NBM’s
internal control over financial reporting and (ii) any fraud, whether or not
material, that involves management or other employees who have a significant
role in NBM’s internal control over financial reporting. NBM has provided to
Rurban access to all documentation related to NBM’s internal control over
financial reporting
ARTICLE
FOUR
REPRESENTATIONS
AND WARRANTIES OF RURBAN AND MERGER CORP.
Each
of
Rurban and Merger Corp. hereby represents and warrants to NBM that:
4.01. Corporate
Status. Rurban
is
an Ohio corporation and a bank holding company registered under the BHCA. Merger
Corp. is an Ohio corporation. Each of Rurban and Merger Corp. is duly organized,
validly existing and in good standing under the laws of the State of Ohio and
has the full corporate power and authority to own its property, to carry on
its
business as presently conducted and to enter into and, subject to the obtaining
of appropriate approvals of Governmental Authorities and Regulatory Authorities,
perform its obligations under this Agreement and consummate the transactions
contemplated by this Agreement.
4.02. Corporate
Proceedings. All
corporate proceedings of Rurban and Merger Corp. necessary to authorize the
execution, delivery and performance of this Agreement, and the consummation
of
the transactions contemplated by this Agreement, have been duly and validly
taken. This Agreement has been duly executed and delivered by duly authorized
officers of each of Rurban and Merger Corp.
4.03. Authorized
and Effective Agreement. Assuming
the due authorization, execution and delivery by NBM, this Agreement constitutes
the legal, valid and binding obligation of each of Rurban and Merger Corp.,
enforceable against them in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting the enforcement of creditors’ rights generally, by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law) and by an implied covenant of good faith and fair dealing.
Each of Rurban and Merger Corp. has the right, power, authority and capacity
to
execute and deliver this Agreement and, subject to the obtaining of appropriate
approvals by Governmental Authorities and Regulatory Authorities and the
expiration of applicable regulatory waiting periods, to perform their
obligations under this Agreement.
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4.04. No
Conflict. Subject
to the receipt of the required approvals of Governmental Authorities and
Regulatory Authorities and the expiration of applicable regulatory waiting
periods, the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, by Rurban and Merger
Corp.
do not and will not (a) conflict with, or result in a violation of, or
result in the breach of or a default (or which with notice or lapse of time
would result in a default) under, any provision of: (i) any federal, state
or local law, regulation, ordinance, order, rule or administrative ruling of
any
Governmental Authority applicable to Rurban or Merger Corp. or any of their
respective properties; (ii) the articles of incorporation or code of
regulations of Rurban or Merger Corp.; (iii) any material agreement,
indenture or instrument to which Rurban or Merger Corp. is a party or by which
either or them or their respective properties or assets may be bound; or
(iv) any order, judgment, writ, injunction or decree of any court,
arbitration panel or any Governmental Authority applicable to Rurban or Merger
Corp.; (b) result in the creation or acceleration of any security interest,
mortgage, option, claim, lien, charge or encumbrance upon or interest in any
property of Rurban or Merger Corp., except to the extent that such creation
or
acceleration will not have a material adverse effect on Rurban; or
(c) violate the terms or conditions of, or result in the cancellation,
modification, revocation or suspension of, any material license, approval,
certificate, permit or authorization held by Rurban or Merger Corp.
4.05. Brokers
and Finders. Except
for the fees paid or payable to Xxxxxx, Xxxxxxxx & Company, Incorporated,
there are no fees or commissions of any sort whatsoever claimed by, or payable
by Rurban or Merger Corp. to, any broker, finder, intermediary, attorney,
accountant or any other similar person in connection with effecting this
Agreement or the transactions contemplated hereby, except for ordinary and
customary legal and accounting fees.
4.06. Governmental
and Third-Party Proceedings. No
consent, approval, authorization of, or registration, declaration or filing
with, any court, Governmental Authority, Regulatory Authority or any other
third
party is required to be made or obtained by Rurban or Merger Corp. in connection
with the execution, delivery or performance by Rurban or Merger Corp. of this
Agreement or the consummation by Rurban or Merger Corp. of the transactions
contemplated hereby, except for: (a) filings of applications or notices, as
applicable, with and the approval of certain federal banking authorities; and
(b) the filing of the appropriate certificate of merger with the Delaware
Secretary of State. As of the date hereof, Rurban and Merger Corp. are not
aware of any reason why the approvals set forth in Section 8.03(b) will not
be received without the imposition of a condition, restriction or requirement
of
the type described in Section 8.03(b).
4.07. Financial
Ability to Perform. Rurban
and Merger Corp. have the financial wherewithal to perform their respective
obligations under this Agreement.
4.08. Ownership
of NBM Shares. As
of the
date hereof, neither Rurban nor Merger Corp., nor to the knowledge of Rurban
or
any of Rurban’s affiliates or associates (as such terms are defined under the
Exchange Act), (a) beneficially owns, directly or indirectly, any NBM
Shares or (b) is a party to any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or disposing of any NBM
Shares.
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4.09. Takeover
Laws. Rurban
has taken all action necessary to be taken by Rurban in order to comply with
any
applicable Takeover Laws in connection with this Agreement and the transactions
contemplated hereby.
ARTICLE
FIVE
FURTHER
COVENANTS OF NBM
5.01. Operation
of Business. NBM
covenants to Rurban that, throughout the period from the date of this Agreement
to and including the Closing, except as expressly contemplated or permitted
by
this Agreement or to the extent that Rurban shall otherwise consent in
writing:
(a) Conduct
of Business.
NBM’s
business, and the business of Bank of Montpelier, will be conducted only in
the
ordinary and usual course consistent with past practice. NBM will not, and
will
cause Bank of Montpelier not to, take any action that would be inconsistent
with
any representation or warranty of NBM set forth in this Agreement or which
would
cause a breach of any such representation or warranty if made at or immediately
following such action, except as may be required by applicable law or
regulation;
(b) Changes
in Business and Capital Structure.
NBM
will not, and will cause Bank of Montpelier not to:
(i) sell,
transfer, mortgage, pledge or subject to any lien or otherwise encumber any
of
the assets of NBM or Bank of Montpelier, tangible or intangible, which are
material, individually or in the aggregate, to NBM on a consolidated basis,
except in the ordinary course of business for full and fair consideration
actually received;
(ii) make
any
capital expenditure or capital additions or improvements which individually
exceed $5,000 or exceed $25,000 in the aggregate;
(iii) become
bound by, enter into, or perform any material contract, commitment or
transaction that would be reasonably likely to (A) have a material adverse
effect on NBM on a consolidated basis, (B) impair in any material respect the
ability of NBM to perform its obligations under this Agreement or (C) prevent
or
materially delay the consummation of the transactions contemplated by this
Agreement;
(iv) declare,
pay or set aside for payment any dividends or make any distributions on NBM
Shares other than regular quarterly dividends to be paid in an amount and manner
consistent with NBM’s historical dividend payment practices;
(v) purchase,
redeem, retire or otherwise acquire any shares of its capital
stock;
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(vi) issue
or
grant any option or right to acquire any shares of its capital stock;
(vii) amend
or
propose to amend any of the governing documents of NBM or Bank of Montpelier
except as otherwise expressly contemplated by this Agreement;
(viii) effect,
directly or indirectly, any share split, recapitalization, combination, exchange
of shares, readjustment or other reclassification;
(ix) acquire
any real property or all or any portion of the assets, business, deposits or
properties of any other entity other than in the ordinary and usual course
of
business consistent with past practice (A) by way of foreclosures or (B) by
acquisitions of control in a bona fide fiduciary capacity or in satisfaction
of
debts previously contracted in good faith;
(x) enter
into, establish, adopt or amend any pension, retirement, stock option, stock
purchase, savings, profit-sharing, deferred compensa-tion, consulting, bonus,
group insurance or other employee benefit, incentive or welfare contract, plan
or arrangement, or any trust agreement (or similar arrangement) related thereto,
in respect of any Director, Officer, Consultant or Employee of NBM or Bank
of
Montpelier, or take any action to accelerate the vesting or exercisability
of
stock options, restricted stock or other compensation or benefits payable
thereunder; provided, however, that NBM or Bank of Montpelier may take such
actions in order to satisfy either applicable law or contractual obligations,
including those arising under its benefit plans, existing as of the date hereof
and disclosed in the NBM Disclosure Schedule, or regular annual renewals of
insurance contracts;
(xi) hire
any
full-time employee, other than replacement employees for positions then
existing, announce or pay any general wage or salary increase or bonus, or
enter
into or amend or renew any employment, consulting, severance or similar
agreements or arrangements with any Officer, Director or Employee of NBM or
Bank
of Montpelier, except, in each case, for changes that are required by applicable
law, to satisfy contractual obligations existing as of the date hereof that
are
disclosed in the NBM Disclosure Schedule, or to pay pre-announced compensation
set forth in the NBM Disclosure Schedule;
(xii) borrow
or
agree to borrow any funds, including but not limited to repurchase transactions,
or indirectly guarantee or agree to guarantee any obligations of others, except
for amounts as may be obtained with the right of prepayment at any time without
penalty or premium, borrowings on an overnight or daily basis, and deposit
taking in the ordinary course of its business;
(xiii) enter
into or terminate any contract, other than a loan or deposit contract, requiring
the payment or receipt of $10,000 or more in any 12-month period or $25,000
in
the aggregate or amend or modify in any material respect any of its existing
material contracts, except as set forth in the NBM Disclosure
Schedule;
(xiv) implement
or adopt any change in its accounting principles, practices or methods, other
than as may be required by GAAP;
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(xv) waive
or
cancel any right of material value or material debts, except in the ordinary
course of business consistent with past practices;
(xvi) make
or
change any Tax election or Tax accounting period, adopt or change any Tax
accounting method, file any amended Tax Return, enter into any closing
agreement, settle any Tax claim or assessment relating to NBM or Bank of
Montpelier, surrender any right to claim a refund of Taxes, consent to any
extension or waiver of the limitation period applicable to any Tax claim or
assessment relating to NBM or Bank of Montpelier, or take any other similar
action relating to the filing of any Tax Return or the payment of any Tax,
if
such election, adoption, change, amendment, agreement, settlement, surrender,
consent or other action would have the effect of increasing the Tax liability
of
NBM or Bank of Montpelier for any period ending after the Effective Time or
decreasing any Tax attribute of NBM or Bank of Montpelier existing as of the
Effective Time;
(xvii) originate
or issue a commitment to originate any loan secured by real estate in a
principal amount of $150,000 or more or any other loan in a principal amount
of
$25,000 or more;
(xviii) establish
any new lending programs or make any changes in its policies concerning which
persons may approve loans;
(xix) enter
into any securities transactions for its own account or purchase or otherwise
acquire any investment security for its own account, other than U.S. Government
and U.S. agency obligations;
(xx) enter
into any interest rate swaps or derivative or hedge contracts;
(xxi) increase
or decrease the rate of interest paid on time deposits or certificates of
deposits, except in a manner and consistent with past practices in relation
to
rates prevailing in Bank of Montpelier’s market;
(xxii) foreclose
upon or otherwise take title to or possession or control of any real property
or
entity thereon without first obtaining a Phase I Environmental Site Assessment
performed pursuant to ASTME 1527-05 thereon which indicates that the property
is
free of Hazardous Material; provided, however, that no such report shall be
required to be obtained with respect to single family residential real property
of one acre or less to be foreclosed upon unless NBM or Bank of Montpelier
has
reason to believe such real property may contain any such Hazardous
Material;
(xxiii) purchase
or otherwise acquire any interest in a loan held by a third party;
(xxiv) open
any
new branches or loan production officers or close or relocate any branches
or
loan production offices in existence on the date of this Agreement;
(xxv) take
any
action that would result in (A) any of its representations or warranties
contained in this Agreement being or becoming untrue in any material respect
at
any time at or prior to the Effective Time, (B) any of the conditions to the
Merger set forth in Article Eight not being satisfied or (C) a violation of
any
provision of this Agreement except, in each case, as may be required by
applicable law or regulation;
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(xxvi) cause
any
material adverse change in the amount or general composition of deposit
liabilities other than in the ordinary course of business; or
(xxvii) enter
into any agreement to do any of the foregoing.
(c) Maintenance
of Property.
NBM
shall, and shall cause Bank of Montpelier to, use their commercially reasonable
efforts to maintain and keep their respective properties and facilities in
their
present condition and working order, ordinary wear and tear
excepted.
(d) Performance
of Obligations.
NBM and
Bank of Montpelier shall perform all of their respective obligations under
all
material agreements relating to or affecting their respective properties, rights
and businesses.
(e) Maintenance
of Business Organization.
NBM
shall, and shall cause Bank of Montpelier to, use their commercially reasonable
efforts to maintain and preserve their respective business organizations intact,
to retain present key Employees, and to maintain the respective relationships
of
customers, suppliers and others having business relationships with them.
(f) Insurance.
NBM
shall, and shall cause Bank of Montpelier to, maintain insurance coverage with
reputable insurers, which in respect of amounts, premiums, types and risks
insured, were maintained by them as of the date of this Agreement, and upon
the
renewal or termination of such insurance, NBM and Bank of Montpelier will use
their commercially reasonable efforts to renew or replace such insurance
coverage with reputable insurers, in respect of the amounts, premiums, types
and
risks insured or maintained by them as of the date of this
Agreement.
(g) Access
to Information.
NBM
shall, and shall cause Bank of Montpelier to, afford to Rurban and to its
officers, employees, investment bankers, attorneys, accountants and other
advisors and representatives reasonable and prompt access during normal business
hours during the period prior to the Effective Time or the termination of this
Agreement to all of the respective properties, assets, books, contracts,
commitments, directors, officers, employees, attorneys, accountants, auditors,
other advisors and representatives and records of NBM and Bank of Montpelier
and, during such period, NBM and Bank of Montpelier shall make available to
Rurban on a prompt basis (i) a copy of each report, schedule, form, statement
and other document filed or received by it during such period pursuant to the
requirements of domestic or foreign (whether national, federal, state,
provincial, local or otherwise) laws and (ii) all other information concerning
its business, properties and personnel as Rurban may reasonably request
(including the financial and Tax work papers of independent auditors and
financial consultants); provided, however, that Rurban shall not unreasonably
interfere with the business operations of NBM or Bank of
Montpelier.
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(h) Payment
of Taxes.
NBM
will, and will cause Bank of Montpelier to, timely file all Tax Returns required
to be filed on or before the Effective Time, and accrue and reserve for, and
pay, any Tax (whether or not shown on a Tax Return) due on or before the
Effective Time.
(i) Risk
Management.
Except
as required by applicable law or regulation or by the OCC or any other
Regulatory Authority, neither NBM nor Bank of Montpelier will (i) implement
or adopt any material change in its interest rate risk management and other
risk
management policies, procedures or practices; (ii) fail to follow its
existing policies or practices with respect to managing its exposure to interest
rate and other risks; or (iii) fail to use commercially reasonable means to
avoid any material increase in its aggregate exposure to interest rate
risk.
5.02. Notification.
Between
the date of this Agreement and the Closing Date, NBM will promptly notify Rurban
in writing if NBM obtains knowledge of any fact or condition that
(a) causes or constitutes a breach of any of NBM’s representations and
warranties or (b) would (except as expressly contemplated by this
Agreement) cause or constitute a breach of any such representation or warranty
had such representation or warranty been made as of the time of occurrence
or
discovery of such fact or condition. Should any such fact or condition require
any change in the NBM Disclosure Schedule, NBM will promptly deliver to Rurban
a
supplement to the NBM Disclosure Schedule specifying such change (“Updated
NBM Disclosure Schedule”);
provided, however, that the disclosure of such change in the Updated NBM
Disclosure Schedule shall not be deemed to constitute a cure of any breach
of
any representation or warranty made pursuant to this Agreement unless consented
to in writing by Rurban. During the same period, NBM will promptly notify Rurban
of (i) the occurrence of any uncured breach of any of the covenants of NBM
contained in this Agreement, (ii) the occurrence of any event that may make
the
satisfaction of the conditions in this Agreement impossible or unlikely or
(iii)
the occurrence of any event that is reasonably likely, individually or taken
with all other facts, events or circumstances known to NBM, to result in a
material adverse effect with respect to NBM and its Subsidiaries on a
consolidated basis.
5.03. Acquisition
Proposal. From
and
after the date hereof, NBM will not, directly or indirectly through any of
its
Officers, Directors, Employees, agents or advisors, solicit, initiate or
knowingly encourage, including by means of furnishing information, any
proposals, offers or inquiries from any person or entity, or discuss or
negotiate with any such person or entity, regarding any acquisition or purchase
of all or a material amount of the assets or deposits, or any equity securities,
of NBM or Bank of Montpelier, or any merger, tender or exchange offer,
consolidation or business combination involving, NBM or Bank of Montpelier
(collectively, “Acquisition
Proposals”).
The
foregoing sentence shall not apply, however, to the consideration, negotiation
and consummation of an Acquisition Proposal not solicited or initiated by NBM
or
Bank of Montpelier or any of their respective Officers, Directors, agents or
affiliates if, and to the extent that, the board of directors of NBM determines
in good faith after consultation with NBM’s Financial Advisors and upon written
advice of legal counsel to NBM that failure to consider such Acquisition
Proposal could reasonably be expected to constitute a breach of its fiduciary
duties to the NBM stockholders under applicable law; provided, however, that
NBM
shall give Rurban prompt notice of any such Acquisition Proposal and keep Rurban
promptly informed regarding the substance thereof and the response of the NBM
board of directors thereto. NBM shall immediately cease and cause to be
terminated any activities, discussions or negotiations conducted prior to the
date of this Agreement with any parties other than Rurban with respect to any
Acquisition Proposal and shall use its reasonable best efforts to enforce any
confidentiality or similar agreement relating to an Acquisition
Proposal.
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5.04. Delivery
of Information. NBM
shall
furnish to Rurban promptly after such documents are available (a) all
reports, proxy statements or other communications by NBM to its stockholders
generally and (b) all press releases relating to any transactions.
5.05. Takeover
Laws. NBM
shall
take all necessary steps to (a) comply with (or continue to comply with)
the requirements of any applicable Takeover Law and provisions under its
certificate of incorporation and bylaws, as applicable, by action of the board
of directors of NBM or otherwise, and (b) assist in any challenge by Rurban
to the validity, or applicability to the Merger, of any Takeover
Law.
5.06. Merger
of Subsidiaries. In
the
event that Rurban shall request, NBM shall take such actions, and shall cause
Bank of Montpelier to take such actions, as may reasonably be required in order
to effect, at or after the Effective Time, the Bank Merger; provided, however,
that the Bank Merger shall not take effect until after (a) the Merger and (b)
the merger of the Surviving Corporation with and into Rurban.
5.07. Accounting
Policies.
After
the stockholders of NBM have approved the Merger and after the receipt of
necessary regulatory approvals, on or before the Effective Time and at the
request of Rurban, NBM shall cause Bank of Montpelier to promptly (a) establish
and take such reserves and accruals to conform Bank of Montpelier’s loan,
accrual and reserve policies to State Bank’s policies; (b) establish and take
such accruals, reserves and charges in order to implement such policies in
respect of excess facilities and equipment capacity, severance costs, litigation
matters, write-off or writedown of various assets and other appropriate
accounting adjustments; and (c) recognize for financial accounting purposes
such
expenses of the Merger and restructuring charges related to or to be incurred
in
connection with the Merger, to the extent permitted by law and consistent with
GAAP and the fiduciary duties of the Officers and Directors of NBM and Bank
of
Montpelier; provided, however, that neither NBM nor Bank of Montpelier shall
be
obligated to make any such changes or adjustments until the satisfaction of
all
unwaived conditions set forth in Sections 8.02 and 8.03.
5.08. No
Control.
Nothing
contained in this Agreement shall give Rurban, directly or indirectly, the
right
to control or direct the operations of NBM or Bank of Montpelier prior to the
Effective Time. Prior to the Effective Time, each of NBM and Rurban shall
exercise, consistent with the terms of this Agreement, complete control and
supervision over its and its subsidiaries respective operations.
5.09. Voting
Agreement.
Concurrently with the execution and delivery of this Agreement, and as a
condition and material inducement to Rurban’s willingness to enter into this
Agreement, each of the directors of NBM and Bank of Montpelier shall enter
into
a Voting Agreement in the form attached hereto as Exhibit
A.
If any
person shall become a director of NBM and Bank of Montpelier after the date
of
this Agreement and until the Effective Time, NBM shall cause each such person
to
execute a Voting Agreement.
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ARTICLE
SIX
FURTHER
COVENANTS OF RURBAN
6.01. Access
to Information. Rurban
shall furnish to NBM promptly after such documents are available (a) all
reports, proxy statements or other communications by Rurban to its shareholders
generally and (b) all press releases relating to any
transactions.
6.02. Employees; Employee
Benefits.
(a) All
employees of NBM and Bank of Montpelier who are actively employed at the
Effective Time and who are offered employment by State Bank or another
Subsidiary of Rurban (“Continuing
Employees”)
at the
Effective Time and who are not currently covered by a written employment or
severance agreement with NBM or Bank of Montpelier, shall be employed as at-will
employees of NBM or such other Subsidiary of Rurban. Continuing Employees will
continue to participate in the NBM Compensation and Benefit Plans, including
health benefit plans unless and until Rurban, in its sole discretion, shall
determine that all or some of the NBM Compensation and Benefit Plans shall
be
terminated or merged into certain employee benefit plans of Rurban or a Rurban
Subsidiary. Following the termination or merger of all or some of the NBM
Compensation and Benefit Plans, Rurban will, or will cause its Subsidiaries
to,
provide each Continuing Employee with employee benefits to replace those
programs that have been terminated or merged (other than equity or equity-based
plans and programs) that are no less than the benefits provided to similarly
situated employees of Rurban and its Subsidiaries. At such time as the
Continuing Employees shall participate in any employee benefit plans of Rurban
pursuant to the foregoing, each such Continuing Employee shall be credited
with
years of service with NBM or Bank of Montpelier and, to the extent credit would
have been given by NBM or Bank of Montpelier for years of service with a
predecessor (including any organization acquired by NBM or Bank of Montpelier),
years of service with a predecessor of NBM or Bank of Montpelier, for purposes
of eligibility and vesting in the employee benefit plans of Rurban, including
for purposes of seniority under vacation and sick pay plans and programs.
Continuing Employees, however, will not be entitled to prior service credit
with
respect to the accrual of benefits or allocation of employer contributions
under
Rurban’s 401(k) plan, ESOP, or any other plan that provides for the accrual of
benefits. Subject to any non-waivable limitations under its group health plans,
Rurban shall cause any and all pre-existing condition limitations (to the extent
such limitation did not apply to a pre-existing condition under NBM’s or Bank of
Montpelier’s equivalent plan) and eligibility waiting periods under group health
plans with respect to Continuing Employees and their eligible dependents to
be
waived. For the remainder of the year ending December 31, 2008, Rurban will
provide to each Continuing Employee, with pay, the accrued vacation and sick
days listed in Section 6.02(a) of the NBM Disclosure Schedule to the extent
not
used by the Continuing Employee prior to Closing.
(b) Any
employee of NBM or Bank of Montpelier immediately before the Effective Time
who
is not currently covered by a written employment or severance agreement with
NBM
or Bank of Montpelier and who is not offered employment by State Bank or another
Subsidiary of Rurban at the Effective Time shall receive: (i) a severance
payment equal to the product of one (1) week of such employee’s then current
salary multiplied by the number of total years of service as an employee of
NBM
or Bank of Montpelier (up to a maximum of 20 weeks’ salary); and (ii) payment
for vacation and sick time that is unused and accrued consistent with the terms
of NBM’s or Bank of Montpelier’s vacation and sick time policies in effect on
the date of this Agreement. Additionally, any such employee who is not retained
after the Effective Time shall be entitled to elect so-called “COBRA” in
accordance with, and subject to, the provisions of Code Section 4980B(f).
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(c)
As
of the
date of this Agreement, Xx Xxxxx shall enter into a Change of Control Agreement
and a SERP Agreement with Rurban and/or State Bank, and each of such agreements
shall become effective at the Effective Time if the Closing occurs.
(d) The
covenants in this Section 6.02 shall survive the Merger.
6.03. Notification. Between
the date of this Agreement and the Closing Date, Rurban will promptly notify
NBM
in writing if Rurban becomes aware of any fact or condition that (a) causes
or constitutes a breach of any of the representations and warranties of Rurban
and Merger Corp. or (b) would (except as expressly contemplated by this
Agreement) cause or constitute a breach of any such representation or warranty
had such representation or warranty been made as of the time of occurrence
or
discovery of such fact or condition. During the same period, Rurban will
promptly notify NBM of (i) the occurrence of any material breach of any of
the covenants of Rurban or Merger Corp. contained in this Agreement, or
(ii) the occurrence of any event that may make the satisfaction of the
conditions in this Agreement impossible or unlikely.
6.04. Indemnification;
Officers’ and Directors’ Liability Insurance.
(a) For
a
period of four (4) years after the Effective Time, Rurban shall indemnify each
person who served as a director or officer of NBM or Bank of Montpelier on
or
before the Effective Time, to the fullest extent provided by the certificate
of
incorporation and bylaws of NBM or the governing documents of Bank of Montpelier
(each, an “Indemnified
Party”),
from
and against expenses, including attorneys’ fees, judgments, fines and amounts
paid in settlement in connection with any threatened, pending or completed
action, suit or proceeding by reason of the fact that such person was a director
or officer of NBM or Bank of Montpelier; provided, however, that any such
indemnification shall be subject to compliance with the provisions of applicable
state and federal laws, including, without limitation, the provisions of 12
U.S.C. § 1828(k) and Part 359 of the FDIC’s regulations (12 C.F.R. Part
359). No Indemnified Party shall be entitled to such indemnification with
respect to a claim (i) if such Indemnified Party fails to cooperate in the
defense and investigation of such claim as to which indemnification may be
made,
or (ii) if such person fails to deliver such notices as may be required
under any applicable directors’ and officers’ liability insurance policy to
preserve any possible claims of which the Indemnified Party is aware, to the
extent such failure results in the denial of payment under such
policy.
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(b) For
a
period of three (3) years from the Effective Time, Rurban shall contract for
the
provision of that portion of directors’ and officers’ liability insurance that
serves to reimburse the present and former Officers and Directors of NBM and
Bank of Montpelier (determined as of the Effective Time) with respect to claims
against such Officers and Directors arising from facts or events which occurred
before the Effective Time, on terms no less favorable than those in effect
on
the date hereof; provided, however, that Rurban may substitute therefor policies
providing at least comparable coverage containing terms and conditions no less
favorable than those in effect on the date hereof; and provided further,
however, that in no event shall Rurban be required to expend more than 150%
of
the current amount expended by NBM and Bank of Montpelier to maintain or procure
such directors’ and officers’ liability insurance (and, if Rurban is unable to
maintain or obtain the insurance called for by this Section 6.04(b) for such
amount, Rurban shall obtain as much comparable insurance as is available for
such amount).
ARTICLE
SEVEN
FURTHER
OBLIGATIONS OF THE PARTIES
7.01. Cooperative
Action. Subject
to the terms and conditions of this Agreement, each of NBM, Merger Corp. and
Rurban agrees to use its reasonable best efforts in good faith to satisfy all
conditions to this Agreement and to cause the consummation of the transactions
contemplated by this Agreement, and to take, or cause to be taken, all necessary
actions and to execute all additional documents, agreements and instruments
that
may be reasonably required, in the opinion of counsel for NBM and counsel for
Rurban, to satisfy all applicable state and federal legal requirements, so
that
this Agreement and the transactions contemplated hereby will become effective
as
promptly as practicable.
7.02. Press
Releases. Neither
Rurban (and Merger Corp.) nor NBM shall make any press release or other public
announcement concerning the transactions contemplated by this Agreement without
the consent of the other party hereto as to the form and contents of such press
release or public announcement, except to the extent that such press release
or
public announcement may be required by law or the rules of The Nasdaq Stock
Market to be made before such consent can be obtained.
7.03. Proxy
Statement; NBM Meeting.
(a) As
promptly as reasonably practical following the date hereof, NBM shall prepare,
in consultation with Rurban and with Rurban’s cooperation, mutually acceptable
proxy materials (including all amendments or supplements thereto, the
“Proxy
Statement”)
relating to the matters to be submitted to the NBM stockholders at the NBM
Meeting. Prior to filing or mailing the Proxy Statement (or any amendment or
supplement thereto) to NBM stockholders, NBM (i) shall provide Rurban with
a reasonable opportunity to review and comment on such document or response,
(ii) shall include in such document or response all comments reasonably
proposed by Rurban, and (iii) shall not file or mail such document prior to
receiving Rurban’s approval, which approval shall not be unreasonably withheld
or delayed.
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(b) Each
of
NBM and Rurban agrees, as to itself and its Subsidiaries, that none of the
information to be supplied by it for inclusion or incorporation by reference
in
the Proxy Statement and any amendment or supplement thereto will, as of the
date
such Proxy Statement is mailed to stockholders of NBM and up to and including
the date of the NBM Meeting, contain any untrue statement of a material fact
or
omit to state any material fact required to be stated therein or necessary
to
make the statements therein in light of the circumstances under which they
were
made not misleading. All information about NBM and Bank of Montpelier included
in the Proxy Statement will be deemed to have been supplied by NBM. All
information about Rurban and its Subsidiaries included in the Proxy Statement
will be deemed to have been supplied by Rurban.
(c) Each
of
NBM and Rurban agrees, if it shall become aware prior to the Effective Time
of
any information furnished by it that would cause any of the statements in the
Proxy Statement to be false or misleading with respect to any material fact,
or
to omit to state any material fact necessary to make the statements therein
not
false or misleading, to promptly inform the other party thereof and to cooperate
in taking the necessary steps to correct the Proxy Statement.
(d) NBM
shall, as promptly as practicable following the date of this Agreement,
establish a record date for, duly call, give notice of, convene and hold the
NBM
Meeting, regardless of whether the board of directors of NBM determines at
any
time that this Agreement or the Merger is no longer advisable or recommends
that
the stockholders of NBM reject this Agreement or the Merger. The NBM board
of
directors shall recommend to its stockholders that they adopt this Agreement,
and shall include such recommendation in the Proxy Statement, unless the board
of directors of NBM reasonably determines in good faith after consultation
with
NBM’s Financial Advisors and upon written advice of counsel to NBM that such a
recommendation would constitute a breach of its fiduciary duties to the
stockholders of NBM.
7.04. Regulatory
Applications. Rurban
and NBM and their respective Subsidiaries shall cooperate and use their
respective reasonable best efforts to prepare all documentation, to timely
effect all filings and to obtain all permits, consents, approvals and
authorizations of all third parties and Governmental Authorities and Regulatory
Authorities necessary to consummate the transactions contemplated by this
Agreement. Each of Rurban and NBM shall promptly provide all information
required from them in order to enable the other to make necessary filings.
Rurban and NBM shall make or cause to be made all necessary regulatory filings
within thirty (30) days of the date of this Agreement, unless delay is caused
by
others not a party to this Agreement. Each of Rurban and NBM shall have the
right to review in advance, and to the extent practicable, each will consult
with the other, in each case subject to applicable laws relating to the exchange
of information, with respect to, and shall be provided in advance so as to
reasonably exercise its right to review in advance, all material written
information submitted to any third party or any Governmental Authority or
Regulatory Authority in connection with the transactions contemplated by this
Agreement. In exercising the foregoing right, each of the parties hereto agrees
to act reasonably and as promptly as practicable. Each party hereto agrees
that
it will consult with the other party hereto with respect to the obtaining of
all
material permits, consents, approvals and authorizations of all third parties
and Governmental Authorities and Regulatory Authorities necessary or advisable
to consummate the transactions contemplated by this Agreement and each party
will keep the other apprised of the status of material matters relating to
completion of the transactions contemplated hereby. Each party agrees, upon
request, to furnish the other party with all information concerning itself,
its
Subsidiaries, directors, officers and stockholders and such other matters as
may
be reasonably necessary or advisable in connection with any filing, notice
or
application made by or on behalf of such other party or of its Subsidiary to
any
third party or Governmental or Regulatory Authority.
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7.05. Confidentiality.
The
parties to this Agreement acknowledge the confidential and proprietary nature
of
the information as hereinafter described which has heretofore been exchanged
and
which will be received from each other hereunder (the “Information”)
and
agree to hold and keep the same confidential. Such Information will include
any
and all financial, technical, commercial, marketing, customer or other
information concerning the business, operations and affairs of a party that
may
be provided to the other, irrespective of the form of the communications, by
such party’s employees or agents. Such Information shall not include information
that is or becomes generally available to the public other than as a result
of a
disclosure by a party or its representatives in violation of this Agreement,
or
Information which is required to be furnished or used in connection with legal
proceedings. The parties agree that the Information will be used solely for
the
purposes contemplated by this Agreement and that such Information will not
be
disclosed to any person other than employees and agents of a party who are
directly involved in evaluating the transaction. The Information shall not
be
used in any way detrimental to a party, including use directly or indirectly
in
the conduct of the other party’s business or enterprise in which such party may
have an interest, now or in the future, and whether or not now in competition
with such other party. Upon the written request of the disclosing party, upon
termination of this Agreement, the other parties will promptly return or destroy
Information in their possession and certify to the disclosing party that the
party has done so.
ARTICLE
EIGHT
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
8.01. Conditions
to the Obligations of Rurban and Merger Corp. The
obligations of Rurban and Merger Corp. under this Agreement shall be subject
to
the satisfaction, or written waiver by Rurban and Merger Corp. prior to the
Closing Date, of each of the following conditions precedent:
(a) The
representations and warranties of NBM set forth in this Agreement (without
giving effect to any material adverse effect, materiality or similar qualifiers)
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date as though such representations and
warranties were also made as of the Closing Date, except that those
representations and warranties which by their terms speak as of a specific
date
shall be true and correct as of such date; and Rurban and Merger Corp. shall
have received a certificate, dated the Closing Date, signed on behalf of NBM
by
the chief executive officer of NBM to such effect.
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(b) NBM
shall
have performed in all material respects all of its covenants and obligations
under this Agreement to be performed by it on or prior to the Closing Date,
including those relating to the Closing and the closing deliveries required
by
Section 9.03 of this Agreement; and Rurban and Merger Corp. shall have received
a certificate, dated the Closing Date, signed on behalf of NBM by the chief
executive officer of NBM to such effect.
(c) NBM
shall
have obtained the consent or approval of each person (other than Governmental
Authorities and Regulatory Authorities) whose consent or approval shall be
required in connection with the transactions contemplated hereby under any
loan
or credit agreement, note, mortgage, indenture, lease, license or other
agreement or instrument, except those for which failure to obtain such consents
and approvals would not, individually or in the aggregate, have a material
adverse effect, after the Effective Time, on Rurban on a consolidated
basis.
(d) From
the
date of this Agreement, there shall not have occurred any material adverse
effect on NBM and its Subsidiaries on a consolidated basis, or any change,
condition, event or development that, individually or in the aggregate, would
reasonably be expected to result in a material adverse effect on NBM and its
Subsidiaries on a consolidated basis.
(e) With
respect to each loan by Bank of Montpelier in excess of $250,000 which has
a
USDA/FSA guarantee, NBM shall have delivered or caused to be delivered to Rurban
a written confirmation by the USDA or other evidence reasonably satisfactory
to
Rurban that affirms that such guarantee remains in full force and
effect.
8.02. Conditions
to the Obligations of NBM. The
obligations of NBM under this Agreement shall be subject to satisfaction, or
written waiver by NBM prior to the Closing Date, of each of the following
conditions precedent:
(a) The
representations and warranties of Rurban and Merger Corp. set forth in this
Agreement (without giving effect to any material adverse effect, materiality
or
similar qualifiers) shall be true and correct in all material respects as of
the
date of this Agreement and as of the Closing Date as though such representations
and warranties were also made as of the Closing Date, except that
representations and warranties which by their terms speak as of a specific
date
shall be true and correct as of such date; and NBM shall have received a
certificate, dated the Closing Date, signed on behalf of Rurban by the chief
executive officer and the chief financial officer of Rurban to such
effect.
(b) Each
of
Rurban and Merger Corp. shall have performed in all material respects all of
their covenants and obligations under this Agreement to be performed by them
on
or prior to the Closing Date, including those related to the Closing and the
closing deliveries required by Section 9.02 of this Agreement; and NBM shall
have received a certificate, dated the Closing Date, signed on behalf of Rurban
by the chief executive officer and the chief financial officer of Rurban to
such
effect.
(c) Rurban
and Merger Corp. shall have obtained the consent or approval of each person
(other than Governmental Authorities and Regulatory Authorities) whose consent
or approval shall be required in connection with the transactions contemplated
hereby under any loan or credit agreement, note, mortgage, indenture, lease,
license or other agreement or instrument, except those for which failure to
obtain such consents and approvals would not, individually or in the aggregate,
have a material adverse effect, after the Effective Time, on Rurban on a
consolidated basis.
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8.03. Mutual
Conditions. The
obligations of NBM, Rurban and Merger Corp. under this Agreement shall be
subject to the satisfaction, or written waiver by NBM, Rurban and Merger Corp.
prior to the Closing Date, of each of the following conditions
precedent:
(a) The
stockholders of NBM shall have duly adopted this Agreement by the required
vote.
(b) All
approvals of Governmental Authorities and Regulatory Authorities required to
consummate the transactions contemplated by this Agreement shall have been
obtained and shall remain in full force and effect and all statutory waiting
periods in respect thereof shall have expired and no such approvals or statute,
rule or order shall contain any conditions, restrictions or requirements that
would reasonably be expected to have a material adverse effect after the
Effective Time on the present or prospective consolidated financial condition,
business or operating results of Rurban on a consolidated basis.
(c) No
temporary restraining order, preliminary or permanent injunction or other order
issued by a court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect. No
Governmental Authority or Regulatory Authority of competent jurisdiction shall
have enacted, issued, promulgated, enforced, deemed applicable, threatened,
commenced a proceeding with respect to or entered any statute, rule, regulation,
judgment, decree, injunction or other order prohibiting consummation of the
transactions contemplated by this Agreement or making the Merger
illegal.
ARTICLE
NINE
CLOSING
9.01. Closing. The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall
be held at the offices of Rurban, 000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000,
at
(a) 10:00, local time, on a date designated by Rurban, which date shall not
be
earlier than the third business day to occur after the last of the conditions
set forth in Article Eight shall have been satisfied or waived in accordance
with the terms of this Agreement (excluding conditions that, by their terms,
cannot be satisfied until the Closing Date) or later than the last business
day
of the month in which such third business day occurs, provided that no such
designation shall cause the Closing to occur on a date after that specified
in
Section 11.01(b)(i) of this Agreement or after the date or dates on which any
Governmental Authority or Regulatory Authority approval or any extension thereof
expires; or (b) such other time and date to which the parties agree in
writing. The date of the Closing is sometimes herein called the “Closing
Date.”
9.02. Closing
Deliveries Required of Rurban and Merger Corp. At
the
Closing, Rurban and Merger Corp. shall cause all of the following to be
delivered to NBM:
(a) A
certificate of merger duly executed by Merger Corp. in accordance with the
DGCL
and in appropriate form for filing with the Delaware Secretary of
State.
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(b) The
certificates of Rurban and Merger Corp. contemplated by Section 8.02(a) and
(b)
of this Agreement.
(c) Copies
of
all resolutions adopted by the directors of Rurban and Merger Corp. and by
the
stockholder of Merger Corp. approving and adopting this Agreement and
authorizing the consummation of the transactions described herein, accompanied
by a certificate of the secretary or the assistant secretary of Rurban and
Merger Corp., dated as of the Closing Date, and certifying (i) the date and
manner of adoption of each such resolution; and (ii) that each such
resolution is in full force and effect, without amendment or repeal, as of
the
Closing Date.
9.03. Closing
Deliveries Required of NBM. At
the
Closing, NBM shall cause all of the following to be delivered to
Rurban:
(a) A
certificate of merger duly executed by NBM in accordance with the DGCL and
in
appropriate form for filing with the Delaware Secretary of State.
(b) The
certificates of NBM contemplated by Sections 8.01(a) and (b) of this
Agreement.
(c) Copies
of
all resolutions adopted by the directors and the stockholders of NBM approving
and adopting this Agreement and authorizing the consummation of the transactions
described herein, accompanied by a certificate of the secretary or the assistant
secretary of NBM, dated as of the Closing Date, and certifying (i) the date
and manner of the adoption of each such resolution; and (ii) that each such
resolution is in full force and effect, without amendment or repeal, as of
the
Closing Date.
(d) A
statement executed on behalf of NBM, dated as of the Effective Date, certifying
that the NBM Shares do not represent U.S. real property interests within the
meaning of Section 897 of the Code and the Treasury Department regulations
promulgated thereunder.
ARTICLE
TEN
NON-SURVIVAL
OF REPRESENTATIONS, WARRANTIES AND COVENANTS
10.01. Non-Survival
of Representations, Warranties and Covenants. The
representations, warranties and covenants of Rurban, Merger Corp. and NBM set
forth in this Agreement, or in any document delivered pursuant to the terms
hereof or in connection with the transactions contemplated hereby, shall not
survive the Closing and the consummation of the transactions referred to herein,
other than covenants which by their terms are to survive or be performed after
the Effective Time (including, without limitation, those set forth in Article
Six, this Article Ten, Article Eleven and Article Twelve); except that no
such representations, warranties or covenants shall be deemed to be terminated
or extinguished so as to deprive Rurban or NBM (or any director, officer or
controlling person thereof) of any defense in law or equity which otherwise
would be available against the claims of any person, including, without
limitation, any stockholder or former stockholder of either NBM or
Rurban.
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ARTICLE
ELEVEN
TERMINATION
11.01. Termination. This
Agreement may be terminated, and the Merger may be abandoned, at any time prior
to the Effective Time, whether prior to or after this Agreement has been adopted
by the stockholders of NBM:
(a) By
mutual
written agreement of NBM, Merger Corp. and Rurban duly authorized by action
taken by or on behalf of their respective boards of directors;
(b) By
either
NBM or Rurban and Merger Corp., duly authorized by action taken by or on behalf
of their respective boards of directors, upon written notification to the
non-terminating party by the terminating party, if:
(i) at
any
time after December 31, 2008, the Merger shall not have been consummated on
or
prior to such date and such failure to consummate the Merger is not caused
by a
breach of this Agreement by the terminating party; or
(ii) any
event
occurs which, in the reasonable opinion of either Rurban and Merger Corp. or
NBM, would preclude satisfaction of any of the conditions set forth in Section
8.03 of this Agreement;
(c) By
Rurban
and Merger Corp., duly authorized by action taken by or on behalf of their
boards of directors, by providing written notice to NBM, if:
(i) prior
to
the Closing Date, any representation and warranty of NBM shall have become
untrue such that the condition set forth at Section 8.01(a) would not be
satisfied and which breach has not been cured within thirty (30) days following
receipt by NBM of written notice of breach or is incapable of being cured during
such time period;
(ii) NBM
shall
have failed to comply in any material respect with any covenant or agreement
on
the part of NBM contained in this Agreement required to be complied with prior
to the date of such termination, which failure to comply shall not have been
cured within thirty (30) days following receipt by NBM of written notice of
such
failure to comply or is incapable of being cured during such time period;
or
(iii) in
the
event that the restatement of the NBM Financial Statements in accordance with
GAAP would result in a negative Financial Impact of greater than
$1,000,000.
(d) By
NBM,
duly authorized by action taken by or on behalf of its board of directors,
by
providing written notice to Rurban and Merger Corp.:
(i) if,
prior
to the Closing Date, any representation and warranty of Rurban or Merger Corp.
shall have become untrue such that the condition set forth at
Section 8.02(a) would not be satisfied and which breach has not been cured
within thirty (30) days following receipt by Rurban and Merger Corp. of written
notice of breach or is incapable of being cured during such time
period;
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(ii) if
Rurban
or Merger Corp. shall have failed to comply in any material respect with any
covenant or agreement on the part of Rurban or Merger Corp. contained in this
Agreement required to be complied with prior to the date of such termination,
which failure to comply shall not have been cured within thirty (30) days
following receipt by Rurban and Merger Corp. of written notice of such failure
to comply or is incapable of being cured during such time period;
or
(iii) if
an
Acquisition Proposal has been made, provided NBM made the determination as
set
forth in Section 5.03 and complied with its obligations under Section 5.03,
and provided further that NBM’s ability to terminate pursuant to this
subsection (d)(iii) is conditioned upon the payment by NBM to Rurban of any
amounts owed by NBM to Rurban pursuant to Section 11.02(b).
11.02. Effect
of Termination.
(a) If
this
Agreement is validly terminated by either NBM or Rurban pursuant to
Section 11.01, this Agreement will forthwith become null and void and there
will be no liability or obligation on the part of either NBM or Rurban, except
(i) that the provisions of Sections 5.03, 7.02, 7.05 and 12.07 and
this Section 11.02 will continue to apply following any such termination,
(ii) that nothing contained herein shall relieve any party hereto from
liability for breach of its representations, warranties, covenants or agreements
contained in this Agreement and (iii) as provided in paragraph (b)
below.
(b) In
the
event that any person or group shall have made an Acquisition Proposal prior
to
termination, and (i) after receipt of such Acquisition Proposal this
Agreement is terminated by the NBM board of directors or the stockholders of
NBM
fail to approve the Merger and (ii) within twelve (12) months thereafter
any Acquisition Proposal is accepted by the NBM board of directors or an
Acquisition Proposal is consummated, then NBM shall pay to Rurban, by wire
transfer of same day funds, within five (5) business days thereafter, a
termination fee of $1,000,000. After such payment, neither Rurban nor Merger
Corp. shall have any further right to payment from NBM or Bank of Montpelier
in
connection with this Agreement.
ARTICLE
TWELVE
MISCELLANEOUS
12.01. Notices. All
notices, requests, demands and other communications required or permitted to
be
given under this Agreement shall be given in writing and shall be deemed to
have
been duly given (a) on the date of delivery if delivered by hand or by telecopy
or facsimile, upon confirmation of receipt, (b) on the first business day
following the date of dispatch if delivered by a recognized next-day courier
service, or (c) on the third business day following the date of mailing if
sent
by certified mail, postage prepaid, return receipt requested. All notices
thereunder shall be delivered to the following addresses:
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|
If
to NBM, to:
|
|
NBM
Bancorp, Incorporated
|
|
0000
Xxxx Xxxx Xx.
|
|
Xxxxxxxxxx,
Xxxx 00000
|
|
Attn:
Xx Xxxxx
|
|
Facsimile
No: (000) 000-0000
|
|
with
a copy to:
|
|
Xxxxxxx
X. Xxxxxxx
|
|
Xxxxxxx
& Associates, LTD.
|
|
0000
Xxxxxxx Xxxxxx
|
|
Xxxxx
000
|
|
Xxxxxx,
Xxxx 00000
|
|
Facsimile
No. (000) 000-0000
|
|
If
to Rurban or Merger Corp., to:
|
|
000
Xxxxxxx Xxxxxx
|
|
X.X.
Xxx 000
|
|
Xxxxxxxx,
Xxxx 00000
|
|
Attn:
Xxxxxxx X. Xxxxx, President and CEO
|
|
Facsimile
No: (000) 000-0000
|
|
with
a copy to:
|
|
Vorys,
Xxxxx, Xxxxxxx and Xxxxx LLP
|
|
00
Xxxx Xxx Xxxxxx
|
|
X.X.
Xxx 0000
|
|
Xxxxxxxx,
Xxxx 00000-0000
|
|
Attention:
Xxxxxxx X. Xxxx
|
|
Facsimile
No: (000) 000-0000
|
Any
party
to this Agreement may, by notice given in accordance with this Section 12.01,
designate a new address for notices, requests, demands and other communications
to such party.
12.02. Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed to be a duplicate original, but all of which taken together shall be
deemed to constitute a single instrument.
12.03. Entire
Agreement. This
Agreement (including the exhibits, documents and instruments referred to herein)
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement.
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12.04. Successors
and Assigns
This
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns (including successive, as well as immediate, successors
and assigns) of the parties hereto. This Agreement may not be assigned by any
party hereto without the prior written consent of the other
parties.
12.05. Captions
The
captions contained in this Agreement are included only for convenience of
reference and do not define, limit, explain or modify this Agreement or its
interpretation, construction or meaning and are in no way to be construed as
part of this Agreement.
12.06. Governing
Law
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Ohio without giving effect to principles of conflicts or choice
of
laws (except to the extent that mandatory provisions of federal law are
applicable).
12.07. Payment
of Fees and Expenses
Except
as
otherwise agreed in writing, each party hereto shall pay all of its own costs
and expenses, including legal and accounting fees, and all expenses relating
to
its performance of, and compliance with, its undertakings herein. All fees
to be
paid to Governmental Authorities and Regulatory Authorities in connection with
the transactions contemplated by this Agreement shall be borne by
Rurban.
12.08. Amendment
From
time
to time and at any time prior to the Effective Time, this Agreement may be
amended only by an agreement in writing executed in the same manner as this
Agreement, after authorization of such action by the boards of directors of
each
of the Constituent Corporations and Rurban; except that after the NBM Meeting,
this Agreement may not be amended if it would violate the DGCL.
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12.09. Waiver
The
rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power or privilege under this Agreement or the documents referred to
in
this Agreement will operate as a waiver of such right, power or privilege,
and
no single or partial exercise of any such right, power or privilege will
preclude any other or further exercise of such right, power or privilege or
the
exercise of any other right, power or privilege.
12.10. Disclosure
Schedule. In
the
event of any inconsistency between the statements in the body of this Agreement
and those in the NBM Disclosure Schedule (other than an exception expressly
set
forth in the NBM Disclosure Schedule with respect to a specifically identified
representation or warranty), the statements in the body of this Agreement will
control.
12.11. No
Third-Party Rights. Except
as
specifically set forth herein, nothing expressed or referred to in this
Agreement will be construed to give any person other than the parties to this
Agreement any legal or equitable right, remedy or claim under or with respect
to
this Agreement or any provision of this Agreement. This Agreement and all of
its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and assigns.
12.12. Waiver
of Jury Trial.
Each of
the parties hereto irrevocably waives any and all right to trial by jury in
any
legal proceeding arising out of or related to this Agreement or the transactions
contemplated hereby.
12.13. Severability. If
any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain
in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to
the
extent not held invalid or unenforceable.
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42
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IN
WITNESS WHEREOF, this Agreement and Plan of Merger has been executed on behalf
of Rurban, Merger Corp. and NBM to be effective as of the date set forth in
the
first paragraph above.
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By:
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/s/
Xxxxxxx X. Xxxxx
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Name:
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Xxxxxxx
X. Xxxxx
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Title:
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President
and Chief Executive Officer
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RURBAN
MERGER CORP.
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By:
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/s/
Xxxxxxx X. Xxxxx
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Name:
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Xxxxxxx
X. Xxxxx
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Title:
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President
and Chief Executive Officer
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NBM
BANCORP, INCORPORATED
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By:
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/s/
Xx Xxxxx
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Name:
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Xx
Xxxxx
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Title:
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President
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43
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EXHIBIT
A
Form
of Voting Agreement
THIS
VOTING AGREEMENT (this “Agreement”) is entered into as of this ____ day of May,
2008, between the undersigned Stockholder (the “Stockholder”) of NBM Bancorp,
Incorporated, a Delaware corporation (“NBM”), and Rurban Financial Corp., an
Ohio corporation (“Rurban”).
RECITALS
A. The
Stockholder serves as a member of the Board of Directors of NBM and owns or
has
the power to vote, other than in a fiduciary capacity, ___________ common
shares, par value $2.50 per share, of NBM (together with all other shares of
NBM
that the Stockholder may subsequently acquire or obtain the power to vote,
other
than in a fiduciary capacity, the “Shares”).
B. NBM
has
entered into an Agreement and Plan of Merger by and between Rurban and NBM
of
even date herewith (the “Merger Agreement”).
C. The
parties to the Merger Agreement have made it a condition to their entering
into
the Merger Agreement that certain Stockholders of NBM, including the
Stockholder, agree to vote their shares of NBM in favor of the adoption of
the
Merger Agreement.
AGREEMENT
Accordingly,
the parties hereto agree as follows:
1. Agreement
to Vote.
Subject
to Section 2 below, the Stockholder agrees that, during the time this Agreement
is in effect, at any meeting of stockholders of NBM, however called, and in
any
action by consent of the stockholders of NBM, such stockholder will vote the
Shares as follows:
(a) in
favor
of the adoption of the Merger Agreement (as amended from time to
time);
(b) against
the approval of any proposal relating to a competing merger or business
combination involving an acquisition of NBM or Bank of Montpelier or the
purchase of all or a substantial portion of the assets of NBM or Bank of
Montpelier by any person or entity other than Rurban or an affiliate of Rurban;
and
(c) against
any other transaction which is inconsistent with the obligations of NBM under
the Merger Agreement.
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2. Limitation
on Voting Power.
It is
expressly understood and acknowledged that nothing contained herein is intended
to restrict the Stockholder from voting on any matter, or otherwise from acting,
in the Stockholder’s capacity as a director or officer of NBM with respect to
any matter including, but not limited to, the management or operation of
NBM.
3. Termination.
This
Agreement shall terminate on the earlier of (a) the date on which the Merger
Agreement is terminated in accordance with Article Eleven of the Merger
Agreement, (b) the date on which the merger contemplated by the Merger Agreement
is consummated, or (c) the death of the Stockholder.
4. Representations,
Warranties, and Additional Covenants of the Stockholder.
The
Stockholder hereby represents and warrants to Rurban that (a) the Stockholder
has the capacity and all necessary power and authority to vote the Shares and
(b) this Agreement constitutes a legal, valid, and binding obligation of the
Stockholder, enforceable in accordance with its terms, except as may be limited
by bankruptcy, insolvency, or similar laws affecting enforcement of creditors
rights generally. The Stockholder further agrees that, during the term of this
Agreement, the Stockholder will not, without the prior written consent of
Rurban, which consent shall not be unreasonably withheld, sell, pledge, or
otherwise voluntarily dispose of any of the Shares which are owned by the
Stockholder or take any other voluntary action which would have the effect
of
removing the Stockholder’s power to vote the Shares or which would be
inconsistent with this Agreement.
5. Specific
Performance.
The
undersigned hereby acknowledges that damages would be an inadequate remedy
for
any breach of the provisions of this Agreement and agrees that the obligations
of the Stockholder shall be specifically enforceable and that Rurban shall
be
entitled to injunctive or other equitable relief upon such a breach by the
Stockholder. The Stockholder further agrees to waive any bond in connection
with
obtaining any such injunctive or equitable relief. This provision is without
prejudice to any other rights that Rurban may have against the Stockholder
for
any failure to perform his obligations under this Agreement.
6. Governing
Law.
This
Agreement shall be construed and enforced in accordance with the laws of the
State of Ohio without regard to any of its conflict of laws
principles.
7. Capitalized
Terms.
Capitalized terms used herein without definition shall have the meanings
attributed to such terms in the Merger Agreement.
IN
WITNESS WHEREOF, the undersigned have executed or caused to be executed this
Agreement as of the day and year first above written.
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By:
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Print Name:
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Title:
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